http://www.ethanolrfa.org/ en Copyright 2013 2013-05-23T17:34:42+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 http://www.ethanolrfa.org/exchange/entry/phillips-66-may-find-the-renewable-fuel-standard-unstoppable/ http://www.ethanolrfa.org/exchange/entry/phillips-66-may-find-the-renewable-fuel-standard-unstoppable/ Phillips 66 CEO Greg Garland took some shots at the Renewable Fuel Standard (RFS) at a recent ConocoPhillips shareholder meeting. He said the RFS was “unworkable”. That’s just silly talk. The RFS is a proven success having stimulated investment, created jobs, and significantly lowered our dependence on foreign oil. Darn impressive results for the first seven years of a seventeen-year program. Garland also claimed there was broad agreement that the RFS was an issue. Really?  A national poll taken in January of this year found that 64 percent of Americans queried supported the RFS over fossil fuels in order to reduce our dependence upon foreign oil and greenhouse gas emissions. Enough already with oil companies thinking they represent the average, hard-working American. The Average Joe doesn’t make $2.1 billion a year and hasn’t yet fallen victim to Stockholm Syndrome despite a lifetime of being held captive by a petroleum monopoly at the fuel station.  Phillips 66 and its Big Oil brethren are desperate to stop the advance of ethanol. Demand for gasoline has steadily decreased and ethanol now represents 10 percent plus of a shrinking market. Ethanol is no longer a quaint Corn Belt nuisance; it is now a viable fuel choice that offers drivers lower costs and a cleaner environment. Does the fear mongering by Phillips 66 make more sense now? Of course, a petroleum CEO is going to pledge to a roomful of shareholders that oil companies will stop anything and anyone that gets in the way of profits and dividends. Make no mistake about it; Big Oil will fight dirty and desperately to protect its monopoly. Let’s talk about how desperate the attempts to stop ethanol have become. For many years, a ConocoPhillips franchisee, Zarco 66 in Kansas, offered E85 at its stations. E85 was blended on site using a blender pump to mix 15 percent gasoline with 85 percent ethanol. That offering didn’t really bother the oil companies who treated E85 as a gimmick knowing that only flex-fuel cars could use the product.  No threat to the monopoly. But shortly after this same franchisee became the first fueling station in the nation to offer E15, the oil industry suddenly changed its tune. ConocoPhillips quickly threatened to terminate Zarco 66’s franchise agreement and charge it hundreds of thousands of dollars in penalties unless it started offering “premium” gasoline. This requirement in effect ended Zarco 66’s ability to blend either E85 or E15 at the station… and hurt business. While premium gasoline is not in high demand in rural Kansas (~3 percent of sales), consumers do want choice at the pump, like E15 and E85, which represented more than 30 percent of this marketer’s sales. It is one thing to mock the law that created the Renewable Fuel Standard, but it is quite another to strong arm a franchisee to a point that may run afoul of the Sherman Anti-Trust Act, the Gasohol Competition Act of 1980, and the Petroleum Marketing Practices Act. This is one small business owner in one state. What happens to the “little guy” as E15 rolls out in Nebraska, Iowa, Wisconsin, Illinois and Missouri? The success of the RFS is undeniable. The promise of ethanol is unstoppable. And based on the true story above, it appears that only ConocoPhillips and its Big Oil brethren are “unworkable”. E15, Ethanol, Oil, Renewable Fuel Standard 2013-05-09T15:18:28+00:00 http://www.ethanolrfa.org/exchange/entry/the-real-reason-meat-groups-oppose-the-rfs/ http://www.ethanolrfa.org/exchange/entry/the-real-reason-meat-groups-oppose-the-rfs/ As part of its ongoing review of the Renewable Fuel Standard (RFS), the House Energy & Commerce Committee recently asked stakeholders to comment on the impact of the RFS on the agriculture sector. One of the questions posed by the Committee asked whether, and to what extent, ethanol and the RFS have impacted corn prices. Our response to the Committee on that question? Yes, of course ethanol expansion has added value to corn prices—that was the point! Stimulating demand and enhancing the value of local crops was the principal motivation for the tens of thousands of farmers and other rural Americans who invested their hard earned money in the development of ethanol plants in their communities. And the role of the RFS was to create an environment of certainty that gave those investors the assurance and confidence they needed to finance the creation of a new distinctly American energy industry. This does not mean, however, the RFS and ethanol expansion are the only drivers—or even the most significant drivers—of corn prices in recent years. Some meat groups and grocery manufacturers, who benefited for decades from corn prices below the cost of production, have incorrectly attributed all of the increase in grain prices since 2006 to ethanol expansion and the RFS. They conveniently ignore or downplay the dozens of other economic, policy, and weather factors (e.g., last year’s historic drought) that have contributed to higher prices for all agricultural commodities. In any case, farmers aren’t the only beneficiaries of more valuable crops—U.S. taxpayers are reaping billions in savings annually thanks to the transition of the grain sector from a stagnating, surplus-driven marketplace to one that is vibrant, high-tech, and demand-driven. Federal farm program payments to corn growers are down dramatically since adoption of the RFS2, and farmers are now earning their income from the marketplace, not from the government. Not surprisingly, those critics who blame ethanol and the RFS for the entire corn price increase fail to simultaneously “blame” ethanol and the RFS for the big reduction in government spending on the farm program. Between 1990 and 2006, producing corn was a losing business proposition. In all but one of those 17 years, the average farmer’s cost of producing corn was higher than the returns earned from selling the corn. In other words, corn cost more to produce than it was worth. As a result, U.S. grain farmers became increasingly reliant on government payments as a source of income—and as a means of survival. Due in part to the emergence of the ethanol industry and the certainty provided by the RFS, this dynamic has changed. Figure 1 below, based on detailed USDA data, shows the corn farmer’s average cost of production (orange line) compared to the price received for corn at harvest (blue line). We broke the production costs down on a per-bushel basis for the sake of simplicity. The market price for corn exceeded the cost of production only once (1996) between 1990 and 2006. In some years (e.g., 1993, 1998-2000, 2005), the cost of production was nearly $1 per bushel higher than the harvest price paid to the farmer. Enlarge this chart. Source: USDA-ERS Commodity Costs & Returns Due to sustained negative returns and artificially low corn prices from 1990-2006, many American farmers became reliant on federal farm program payments to stay afloat. As shown in Figure 2 below, government payments to corn farmers (depicted by the red line on a per bushel basis) often bridged the gap between steep financial losses and just breaking even (the blue line is profit/loss before accounting for govt. payments). In some years (e.g., 1998, 1999, 2005) farmers still took sizeable losses even after receiving large government payments. Ironically, and as explained in this study by Tufts University, the primary beneficiary of crop subsidies during this time was not the farmer receiving the payment—rather, it was the livestock and poultry industries who were feeding corn priced well below the cost of production. The Tufts study found that from 1997-2005, government payments to corn farmers equated to a subsidy of $11.25 billion to the broiler chicken industry and $8.5 billion to the hog industry. The Tufts study shows companies like Tyson, Pilgrim’s Pride, Smithfield, Goldkist and Conagra saved billions of dollars in feed costs at the taxpayer’s expense. No wonder the livestock and poultry groups want to return to the days of $2 corn! Enlarge this chart. Source: USDA-ERS Commodity Costs & Returns; USDA-FSA CCC Budget Essentials So, what’s happened since passage of the Energy Independence and Security Act (EISA) and expansion of the RFS in 2007? The figures above show two clear trends since 2007: 1) corn prices have been above the cost of production, and 2) as a result, government payments have fallen precipitously.  Though not reflected in the above figures (due to lack of 2012 cost of production data), government payments to corn farmers in 2012 are forecast to be their lowest in 18 years and less than one-quarter of 2006’s outlays. As a consequence of the grain sector’s economic resurgence, Congress is now considering sweeping changes to the Farm Bill that would further reduce the program’s impact on taxpayers and the federal budget. Again, the RFS and ethanol industry can’t take 100% of the credit for these positive developments. But it is indisputable that the RFS and the emergence of biofuels have played a tremendously important role in this success story.  As stated in our comments to the Committee, “Girded by the RFS, ethanol has become the single most important value-added market for American grain farmers, stimulating investment in agricultural technology and enhancing economic opportunities for rural communities across the country. As a result, the net impacts of the RFS and ethanol production on the agriculture sector have been decidedly positive…” Corn prices, Ethanol, Renewable Fuel Standard, USDA 2013-05-06T13:25:12+00:00 http://www.ethanolrfa.org/exchange/entry/march-exports-imports-ethanol-shuffle-with-brazil-alive-and-well/ http://www.ethanolrfa.org/exchange/entry/march-exports-imports-ethanol-shuffle-with-brazil-alive-and-well/ The U.S. remained a net exporter in March by a very slim margin, as imports from Brazil jumped to their highest level of the year and the “ethanol shuffle” proved to be alive and well. March U.S. exports of ethanol (denatured and undenatured, non-beverage) totaled 58.8 million gallons (mg), up 38% from February, according to government data released today. Canada was again the leading destination for U.S. product, receiving 24.9 mg (42% of total shipments). Brazil (9.3 mg) was a distant second, while the United Arab Emirates (6.9 mg) ranked as the month’s third-largest customer. Year-to-date ethanol exports stand at 164.9 mg, implying an annualized total of 660 mg. Exports of denatured ethanol for fuel use tallied 33.3 mg, up 19% from February. All 24.9 mg of product shipped to Canada in March was denatured for fuel use; Peru (3.3 mg), Jamaica (2.1 mg), Ecuador (2.1 mg), and Brazil (0.7 mg) were other leading importers of denatured ethanol for fuel use. Meanwhile, shipments of undenatured ethanol for fuel use jumped to 24.7 mg—nearly double February’s total and the highest since July 2012. Brazil was the top destination for undenatured fuel ethanol, receiving 8.6 mg. UAE followed with 6.9 mg, while the Philippines (5.2 mg), Mexico (2.8) and the Netherlands (1.2 mg) rounded out the top five. Exports of denatured and undenatured ethanol for non-fuel use totaled 791,705 gallons. March fuel ethanol imports surged to 52.7 mg, more than double February’s total. Brazil sent 33.5 mg directly to the U.S. in March—that’s six times larger than February shipments from the country. The remainder of March imports came from the CBI nations of Jamaica (8.4 mg), El Salvador (5.6 mg), and Costa Rica (5.2 mg). Year-to-date imports stood at 119.1 mg, implying an annual total of 476 mg. That’s far below the 650-750 mg of imports that would likely be needed to meet the proposed 2013 RFS advanced biofuel standard. Distillers grains exports fell 4% from February to 591,688 metric tons (mt). China was again the top customer for U.S. DDG exports, bringing in 179,557 mt. Mexico (88,543 mt), Japan (52,542 mt), Canada (33,717 mt), and Thailand (31,916 mt) were other top destinations. Year-to-date DDG exports totaled 1.795 million mt, implying an annualized total of 7.2 million mt. Enlarge this chart. DDGS, Brazil, Ethanol, Exports 2013-05-02T16:46:56+00:00 http://www.ethanolrfa.org/exchange/entry/iers-response-to-politico-op-ed-smells-like-a-skunk/ http://www.ethanolrfa.org/exchange/entry/iers-response-to-politico-op-ed-smells-like-a-skunk/ In a new post on the Institute for Energy Research (IER) blog, Robert Murphy suggests that I mislead Politico readers in a recent op-ed about the Renewable Fuel Standard (RFS), RIN credits, and gas prices. IER claiming that I misrepresented the facts on the RFS is a bit like a skunk saying a rose smells bad. IER is, of course, just another front group for Big Oil—its president formerly lobbied Congress on behalf of the National Petrochemical Refiners Association and Koch Industries. Rather than engage in a serious, fact-based discussion on what RINs are, how they are generated, how they are used by refiners to demonstrate RFS compliance, or who can own and trade RINs, Murphy simply regurgitates Big Oil’s false argument that the RFS is driving up fuel costs. There’s not a shred of evidence to support that notion, but that’s never stopped these folks before. Murphy apparently takes issue with my characterization that the overwhelming majority of RINs are obtained for “free” by refiners. So, once again, here are the facts to support that characterization: 1. A RIN is generated every time a gallon of ethanol is produced. 2. Every gallon of ethanol sold to a blender or refiner comes with a RIN attached. 3. So, when a refiner or blender spends $2.48 for a gallon of ethanol (yesterday’s price in Chicago), they are also getting a RIN along with the gallon. 4. The refiner separates the RIN from the gallon and turns it in to EPA to prove it blended a gallon of ethanol. If the refiner has more RINs than it needs to comply with the RFS, it can sell the extras to oil companies who are short. That’s why I say the RIN is “free.” Most refiners have stockpiled millions of RINs that they obtained for free when they purchased ethanol over the past several years. When Murphy refers to RIN prices “over $1,” he’s talking about two days in March when the thinly traded open market for RINs saw some inexplicable volatility. How many RINs were actually sold at that price? No one knows for sure due to the opacity of the market, but my guess would be not that many. Incidentally, the average price for a RIN on the open market this year has been around 45 cents. In any case, the important point to remember—and one that is obviously lost on IER—is that a refiner doesn’t have to buy a RIN on the open market. It could instead buy and blend a physical gallon of ethanol that comes with the “free” RIN. Now, one could certainly argue that the RIN has its own value that is “built in” to the price paid for a gallon of ethanol. Fine, I can appreciate that concept. But even so, the price of one gallon of ethanol and its attached RIN is still far less than the price of a gallon of gasoline (CBOB gasoline was $3.02 per gallon in Chicago yesterday—$0.54 per gallon more than ethanol plus a RIN). So, based on yesterday’s prices, a gallon of E10 (10% ethanol blended with 90% gasoline) is going to be at least 5.4 cents per gallon cheaper than unblended gasoline at the retail pump (this simple pump savings calculation does not include the much larger economic benefits of using ethanol). Murphy attempts to downplay this savings for consumers by highlighting that ethanol’s energy density is lower than gasoline’s. The energy density routine is the oldest trick in Big Oil’s well-greased playbook. The fact is refiners don’t use ethanol primarily for its energy content; rather, they use ethanol for its exceptionally high octane content. And, by the way, ethanol is undeniably the cheapest and cleanest source of octane on the market today. Far from “mak[ing] refining costs higher,” ethanol is being used by refiners in lieu of other octane sources to reduce gasoline production costs. This effect is well documented; a recent Department of Energy (DOE) analysis found that the value of ethanol to refiners is ~110% the price of gasoline because of its high octane content (DOE’s Energy Information Administration also recently wrote about ethanol’s octane value to refiners here.) So, please, spare us the energy density nonsense. IER’s contention that gas prices are going up as a result of higher RIN prices is downright absurd. Retail gasoline prices have clearly been impervious to RIN prices. After peaking in mid-February, gas prices have been steadily sliding. Indeed, when RIN prices spiked in March, gas prices were tumbling. The myth that RINs are affecting gas prices was recently disproven by an Informa Economics analysis. Further, there isn’t a single mention of ethanol, RINs, or the RFS in two separate EIA analyses on recent retail gas price volatility (here and here). Murphy brashly suggests that if I truly believe ethanol is more cost-effective for consumers, then I should call for repeal of the RFS. Well, for the record, I absolutely believe that ethanol is more cost effective than gasoline for American consumers. Not only that, I happen to believe ethanol is better for the environment, better for human health, and better for the economy than gasoline. In a truly free and open energy market, ethanol would be allowed to compete with gasoline on a level playing field. But even Mr. Murphy must admit that the energy market is anything but free and open—petroleum’s stranglehold on the market is the result of a century of fossil fuel subsidies, a regulatory landscape that protects incumbent fossil fuels against competition, and Big Oil’s virtually limitless financial resources to quash real competition. Murphy’s hypocritical plea to get government intervention “out of the energy sector” is almost laughable given the billions of taxpayer dollars that end up in Big Oil’s pocket every year. Even though ethanol makes economic sense for consumers and refiners, I have no doubt that oil companies would take a short-term financial loss if it meant eliminating a long-term threat to continued dominance of the fuel market. THAT’s why we need the RFS. The truth is, ethanol and the RFS are loosening the century-long stranglehold on the fuel market and introducing real competition.  And the oil companies—and their surrogates at IER—don’t like it one bit.  Ethanol, Environment, Gas Prices, Renewable Fuel Standard 2013-04-23T17:19:39+00:00 http://www.ethanolrfa.org/exchange/entry/letter-to-the-editor-bob-dinneen-responds-to-wsj/ http://www.ethanolrfa.org/exchange/entry/letter-to-the-editor-bob-dinneen-responds-to-wsj/ The following letter was submitted to the Wall Street Journal. If the editorial writers of the Wall Street Journal consider themselves students of mine, “An Ethanol Spring,” (April 17), I am saddened to report to you that you’ve failed.  Apparently, you skipped too many classes.  You missed, for example, the lesson about gasoline economics, where you might have learned that ethanol today is $0.60-0.70 cheaper than gasoline and that it is driving down the price of fuel all across the country.  That is just one important benefit of the growth of renewable fuels in the U.S. and the success of the Renewable Fuel Standard. While you get extra credit for observing that the volume of renewable fuel now requires more than 10 percent ethanol to be used, you fail again to recognize that the RFS was always going to require these new fuels to move beyond just being a blend component in gasoline.  Congress didn’t create a 36 billion gallon requirement so that refiners could conveniently add octane.  They created the program to provide meaningful alternatives to oil. You also missed the lesson on consumer choice, where the benefit of real competition and open markets empowers consumers to make the right decisions for their vehicles and their pocketbooks.  It seems inexplicably counter-intuitive that the WSJ would argue so vociferously (and inaccurately) about legally allowed and well-tested fuels like E15 and E85 when merely allowing these fuels access to the gas pump would end the debate.  Those fuels are denied market access today by an incumbent industry that wants to protect its monopoly.  The RFS was designed to end the oil companies’ monopoly and drive innovation and diversity in liquid transportation fuels.  It is doing just that.  That is why I remain very confident the RFS will be preserved.  Until the WSJ starts paying attention to the energy, environmental, and economic cost of our addiction to oil, you will continue to fail. Bob Dinneen President and CEO of the Renewable Fuels Association Ethanol, Gas Prices, Renewable Fuel Standard 2013-04-19T17:20:56+00:00 http://www.ethanolrfa.org/exchange/entry/forbes-should-be-advocating-for-increased-competition/ http://www.ethanolrfa.org/exchange/entry/forbes-should-be-advocating-for-increased-competition/ To the Editor: What’s there about lower prices at the pump, less pollution and reduced reliance on imported oil that Robert Bradley, Jr., doesn’t like (“It’s Time to Repeal the Renewable Fuel Standard,” April 17)? Thanks to the Renewable Fuel Standard (RFS), U.S. ethanol reduced wholesale gasoline prices by an average of $1.09 per gallon in 2011, saving the average American family $1,200. Using ethanol results in a 48 to 59 percent reduction in greenhouse gas emissions compared with gasoline. And American ethanol displaces the amount of gasoline that would have been refined from 462 million barrels of imported crude oil — more than we import from Saudi Arabia. Claiming that “Last year alone, the Standard diverted 40 percent of all U.S. corn toward ethanol production” is misleading. Ethanol production doesn’t use sweet corn (which people eat), and U.S. ethanol production uses only 3 percent of the total global grain supply. Moreover, the American ethanol industry generated 37 million metric tons of feed in 2012 — enough to produce seven quarter-pound hamburger patties for every person on the planet. Nor has ethanol increased food prices. Only 14 percent of the average household’s food bill pays for raw agricultural ingredients such as corn. Eighty-six percent of their food bill pays for energy, transportation, processing, packaging, marketing and other supply chain costs. Contrary to Mr. Bradley, 15 percent blends of ethanol with gasoline (E15) don’t damage engines. The U.S. Environmental Protection Agency (EPA) has approved E15 for cars, light-duty trucks and SUVs built in 2001 or later — more than 62 percent of the vehicles on the road. The EPA subjected E15 to more than 6.5 million miles of testing — equivalent to 12 round trips to the moon. The oil companies are refusing to invest in the facilities to blend more ethanol with gasoline and provide consumers with more choices and lower prices at the pump. Forbes Magazine — which used to promote itself as a “Capitalist Tool” — should be advocating for, not arguing against, increased competition. Bob Dinneen President and CEO, Renewable Fuels Association (RFA) The Renewable Fuels Association is the trade association of the American ethanol industry. E15, Ethanol, Renewable Fuel Standard 2013-04-18T19:27:47+00:00 http://www.ethanolrfa.org/exchange/entry/letter-from-ceo-of-rfa-in-response-to-palm-beach-post/ http://www.ethanolrfa.org/exchange/entry/letter-from-ceo-of-rfa-in-response-to-palm-beach-post/ Bob Dinneen, President and CEO of the Renewable Fuels Association, penned the following letter in response to a recent Palm Beach Post ethanol editorial. Some say “where there is smoke, there is not always fire.”  When reading Frank Cerabino’s April 15th editorial, one might say “where there is opinion, there is not always fact.” Cerabino tries to fuel the flames against ethanol by stoking a fight with small engines, but the reality is small engines have adapted over time to the current 10 percent ethanol fuel mix and will do so again for the new 15 percent blend.  The process takes time as can currently be seen through the collection of varying recommendations from equipment owner’s manuals from over the years.  It should be noted that all gasoline is designed for its primary intended use, the automobile. In fact, the standard industry specification for gasoline is titled Standard Specification for Automotive Spark Ignition Engine Fuel. Little consideration is given to the needs of small engine manufacturers and thus they find themselves designing around whatever fuels are made for automotive use.  The real issue is whether Florida drivers should be deprived a cost-saving, renewable fuel choice at the pump.  Ethanol is credited with helping reduce our national dependence on foreign oil to 41 percent in 2012 — the lowest since 1995. Without ethanol, oil import dependence would have been 48 percent.  Ethanol reduces greenhouse gas emissions by 40 to 50 percent when compared directly to gasoline.  Ethanol is the cleanest, most affordable source of octane — key to high quality race car performance — available on the market today.  The fuel alternative the Palm Beach Post appears to encourage is expensive, environmentally damaging, often sourced from hostile foreign countries petroleum with toxic and carcinogenic additives.  As the gas station owners quoted by Mr. Cerabino prove, customers when given the choice don’t want pay more for pure gas with no ethanol.  “I have about three people that use it in their cars.”  “So, it is usually just landscapers and boat owners who buy the ethanol-free gas.”  Should Florida drivers really be held hostage to the whims of weed trimmers and chainsaws? Another fact missing from the editorial is the fact that a co-product of ethanol production is a high quality, high protein, highly in demand livestock feed known as distillers grains.  Plain and simple, ethanol production uses industrial field corn, a grain that must be chemically altered in order for humans to digest. Ethanol does not use sweet corn, a vegetable that is consumed by humans.  One third of every bushel of corn processed returns to the market as animal feed and another third produces CO2 which beverage companies use to make drinks bubbly or dry ice frequently used to transport organs for lifesaving transplants.  Last year, the ethanol industry generated 37 million metric tons of livestock feed — enough to produce seven quarter-pound hamburger patties for every person on the planet.  The readers of the Palm Beach Post deserve the facts and they deserve a money-saving, environment-friendly, domestically-made fuel choice.  They also deserve the economic opportunities that come with being a state that takes pride and leadership in its energy future.  Again, are weed trimmers and chainsaws, Big Oil and tired myths, really worth risking the 400 construction jobs and 60 full time jobs that the new INEOS Bio cellulosic ethanol plant in Vero Beach is creating?  Sincerely, Bob Dinneen President and CEO of the Renewable Fuels Association DDGS, E15, Ethanol, Food 2013-04-16T21:06:27+00:00 http://www.ethanolrfa.org/exchange/entry/u.s.-continues-as-net-exporter-of-ethanol-despite-sizable-plunge-in-februar/ http://www.ethanolrfa.org/exchange/entry/u.s.-continues-as-net-exporter-of-ethanol-despite-sizable-plunge-in-februar/ U.S. ethanol exports in February dropped significantly from January levels, scaling back by a third as shipments of denatured and undenatured (non-beverage) ethanol totaled 42.5 million gallons (mg), according to government data released Friday. U.S. monthly ethanol exports have been below this level only once in the last two years. Year-to-date exports are running 30% lower than this time last year, and the U.S. is on pace to export 637 mg in calendar year 2013. However, for the second month in a row, the U.S. was a net exporter of ethanol. Notably, exports to the European Union were virtually non-existent in February. Shipments of denatured ethanol for fuel use totaled 28.1 mg, a 33% decrease from January. Canada was again the leading destination for denatured product, receiving 21.6 mg (77%) of February exports. The remaining volumes went to the United Arab Emirates (5.0 mg), Peru (1.1 mg), and the Netherlands (0.4 mg). Exports of undenatured ethanol for fuel use experienced a similar drop, down 32% from January to 13.3 mg. Brazil took the lead as the largest recipient of undenatured product for fuel use with 5.9 mg (44%), followed by the Philippines (3.9 mg), and Mexico (3.4 mg). Shipments of denatured and undenatured ethanol for non-fuel, non-beverage use fell 42% in February to 1.2 mg. Meanwhile, the data showed 20.0 mg of fuel ethanol imports in February, a 57% decrease from January levels and the lowest level since May 2012. Nearly half of imports came from Jamaica (9.3 mg), with the remainder from El Salvador (5.5 mg) and Brazil (5.3 mg). Exports of distillers grains bumped 6% over January levels to 617,894 metric tons (mt) — on par with 2012 average monthly exports. China returned to take the lead as the top destination with a quarter of the February U.S. DDGS export market (148,256 mt). Mexico was second (81,301 mt), followed by Turkey (55,046 mt), South Korea (40,329 mt), and Vietnam (35,084 mt). View a larger version of this chart. DDGS, Ethanol, Exports 2013-04-09T15:06:30+00:00 http://www.ethanolrfa.org/exchange/entry/big-oils-choice-complain-about-70-cent-rins-or-invest-6-cents/ http://www.ethanolrfa.org/exchange/entry/big-oils-choice-complain-about-70-cent-rins-or-invest-6-cents/ Later today, American Fuel & Petrochemical Manufacturers (AFPM) President Charlie Drevna will hold a conference call with reporters in which he will outrageously claim the Renewable Fuel Standard (RFS) is “adding $13 billion to the cost of gasoline” because of higher prices for RINs (Renewable Identification Numbers). We’ve already addressed the absurdity of that myth here, showing why the impact of RINs on gasoline prices would be no more than a fraction of a penny per gallon of gasoline. Still, all this rhetoric from Big Oil about the economic impacts of RINs and the so-called “blend wall” got us thinking about a simple question: If oil refiners and gasoline marketers actually decided to invest in the modern fuel distribution infrastructure needed to dispense greater than E10 blends, what would it cost them in comparison to the wild “compliance cost" claims they make today? The Regulatory Impact Analysis that accompanied the RFS2 final rule includes a detailed assessment of the costs to modernize fuel distribution infrastructure to accommodate higher-level ethanol blends under the RFS. Notably, the analysis is based on input from petroleum terminal operators, the rail industry, the marine transport sector, the trucking industry, retail gas station owners, manufacturers of fuel storage and dispensing equipment, and other industry sources. One scenario in the analysis examined the cost of upgrading the fuel distribution system from handling a baseline of 13.2 billion gallons of ethanol annually to accommodating 33.2 billion gallons of ethanol—a 20-billion-gallon increase. The results of this scenario indicated a total capital investment of $9.9 billion would be necessary to modernize the terminal, fuel transportation and retail infrastructure. According to the analysis, that works out to just 6 cents of capital investment per gallon of additional ethanol use over the baseline. When amortized over total gasoline sales, the infrastructure costs would be fractions of a cent per gallon. These costs include construction of new rail cars, new tank barges, new tank trucks, new and retrofitted storage tanks and blending equipment at petroleum terminals, unit train receiving infrastructure, manifest rail receipt facilities, and marine terminal infrastructure. Additionally, the estimate includes the costs to outfit retail stations for higher-level blends, including installation of new dispensers, hanging hardware, refueling island hardware, automatic tank gauging equipment, canopy installation, underground storage tanks, and other retail infrastructure. All of this means the higher-ethanol blend infrastructure necessary to bridge the gap between the infamous E10 "blend wall" (approximately 13.3 billion gallons) and the 2013 RFS requirement of 13.8 billion gallons would cost about $30 million—or $0.00023 per gallon of expected 2013 gasoline sales.  So, the oil industry is howling about “billions” in fictitious “compliance costs,” when if they would just invest two one-hundreths of a penny of profit per gallon in infrastructure, no one would be talking about the “blend wall” or high RIN prices today. And, more importantly, consumers would be enjoying greater choice and lower prices at the pump. Ethanol, Oil, Renewable Fuel Standard 2013-03-22T12:38:22+00:00 http://www.ethanolrfa.org/exchange/entry/response-to-ft-e10-blend-wall-is-fiction/ http://www.ethanolrfa.org/exchange/entry/response-to-ft-e10-blend-wall-is-fiction/ In regard to your recent editorial (“Bloated biofuels,” March 20), you don’t need Bill Gates’ IQ to really understand what is going on with the so-called “ethanol blend wall” and Big Oil’s calls for repeal of the Renewable Fuel Standard (RFS). Like a child who breaks all of his pencils and then tells his parents he can’t do his homework, the oil industry has deliberately taken steps to block the use of more renewable fuels so it can claim the RFS is unachievable. The editorial incorrectly states 10 percent (E10) is the “maximum” level of ethanol approved by regulators for use in U.S. automobiles. In fact, regulators have approved 15 percent ethanol blends for use in roughly 75 percent of vehicles. In addition, about half of the new vehicles made by American automakers today are approved to use up to 85 percent ethanol blends (E85). Clearly, automakers responded to the signals sent by the RFS program when it was enacted six years ago. Meanwhile, oil refiners sat on their hands and whistled Dixie, refusing to invest in infrastructure. In short, the E10 “blend wall” is a fiction. There are legal and economical ways for refiners to meet their renewable fuel blending obligations. Instead, however, the oil industry continues to refuse to blend more ethanol. They would rather bid up the price of RIN credits to avoid using more ethanol, then complain to Congress that they can’t break through a wall built with bricks from their own kiln. In the end, because ethanol remains 70 cents per gallon cheaper than gasoline, U.S. consumers are the losers in this battle for the barrel. Big Oil’s self-inflicted blend wall is denying drivers the opportunity for greater savings at the pump. E15, Ethanol, Renewable Fuel Standard 2013-03-21T15:47:03+00:00 http://www.ethanolrfa.org/exchange/entry/washington-times-defends-irresponsible-big-oil-scare-tactic/ http://www.ethanolrfa.org/exchange/entry/washington-times-defends-irresponsible-big-oil-scare-tactic/ To the Editor: Conservatives believe in competition. But the Washington Times’ editorial, (“The Ethanol Bubble,” March 15), sides with a would-be monopoly, Big Oil, against its leading competitor, American ethanol. Ethanol costs $0.75 per gallon less than gasoline, offering lower prices at the pump. But Big Oil would rather shut out competitors and shortchange consumers. That is why the big oil companies are refusing to move to higher ethanol-gasoline blends, such as the 15 percent blend (E15) that has been approved by the U.S. Environmental Protection Agency (EPA) for vehicles built after 2001. Instead, the oil companies are buying Renewable Identification Number (RIN) credits for not meeting the Renewable Fuel Standard for blending biofuels with gasoline. By selling these credits to each other, they’re bidding up the costs of RINs — needlessly, irresponsibly as a scare tactic. The RIN program was designed to meet any shortages of renewable fuels, not to allow oil companies to avoid blending ethanol with gasoline. In fact, there is no shortage of ethanol in the marketplace. Ethanol stocks are high, while production-capacity utilization is an unusually low 85 percent. The problem is that Big Oil is refusing to blend more ethanol — and punishing American motorists in the process. Contrary to the editorial’s claims, the Renewable Fuel Standard does promote environmental quality and energy security. According to a study published by Yale University’s Journal of Industrial Ecology, ethanol reduces greenhouse gas emissions by 48 to 59 percent, compared to gasoline. And ethanol has reduced American dependence on imported oil from 60 percent in 2005 to 41 percent in 2012. If we give it a chance at the nation’s fuel pumps, competition really can work wonders. Sincerely, Bob Dinneen Bob Dinneen is president and CEO of the Renewable Fuels Association (RFA), the trade association of the American ethanol industry. Ethanol, Oil, Renewable Fuels 2013-03-18T21:17:05+00:00 http://www.ethanolrfa.org/exchange/entry/stop-the-rinsanity-fact-checking-big-oils-claims-on-rin-price-effects/ http://www.ethanolrfa.org/exchange/entry/stop-the-rinsanity-fact-checking-big-oils-claims-on-rin-price-effects/ Oil companies have suggested that increased prices for conventional ethanol RINs (Renewable Identification Numbers) are leading to higher gasoline prices at the pump. Some have even deceptively claimed RINs are adding as much as $0.10 per gallon to the retail price of gasoline. This assertion is completely absurd and is easily disproven with a series of very simple calculations. Truth be told, ethanol continues to sell at a discount to gasoline and continues to offer savings at the pump, even when the impact of higher RIN prices is considered.   The Renewable Fuel Standard (RFS) requires the use of 13.8 billion gallons of “renewable fuel” in 2013. Based on history, we assume obligated parties (typically oil refiners and gasoline blenders) will primarily use grain-based ethanol to meet the “renewable fuel” requirement because it is the most economical option. The Energy Information Administration (EIA) projects 2013 grain ethanol production at 13.1 billion gallons. We assume approximately 600 million gallons of ethanol will be exported. Because exported ethanol cannot be used to satisfy RFS requirements, approximately 12.5 billion gallons of ethanol will be available for RFS compliance in 2013. This means obligated parties would need to use 1.3 billion surplus RINs to bridge the gap between physical ethanol use and the 2013 RFS requirement. It is estimated that 2.3-2.5 billion surplus RINs are available, meaning there is ample supply to facilitate 2013 RFS compliance. An important caveat is that this assumes gasoline demand for 2013 remains at the levels projected by EPA when it sets the final 2013 Renewable Volume Obligations (RVOs)—i.e., if 2013 gasoline demand turns out to be lower than projected by EPA, then the actual blending obligation will be somewhat lower than 13.8 billion gallons.   The year-to-date average RIN price has been $0.32, according to OPIS. The March average has been $0.84. For the sake of argument, we will aggressively assume RINs average $0.80 for the entire compliance year of 2013. Therefore, the total cost of the 1.3 billion RINs needed for 2013 compliance would be $1.04 billion. When spread across projected gasoline consumption of 133.8 billion gallons, the RIN cost would be $0.0078 per gallon (less than eight-tenths of a cent). That’s a far cry from the oil industry’s wild claims of $0.10 per gallon. It should be noted that $0.0078 per gallon is a worst case scenario that assumes: 1) the full cost of the RIN is passed through to the consumer, 2) obligated parties had to purchase RINs at an average of $0.80, rather than using banked RINs that were obtained at far lower prices (e.g., the average RIN price in 2012 was $0.03), 3) EIA is correct that only 13.1 billion gallons are produced in 2013, 4) obligated parties continue to refuse to offer E15 in meaningful quantities, 5) actual 2013 gasoline demand is consistent with projections at the time the RVO was set, and 6) ethanol stocks remain relatively steady at roughly 800 million gallons.   Further, ethanol continues to sell at a considerable discount to gasoline. Year-to-date, ethanol has traded for $0.58 per gallon less than gasoline. This means a gallon of E10 (10% ethanol/90% gasoline) would cost $0.058 less than a gallon of unblended gasoline (100% gasoline). Therefore, even when a worst-case RIN price is included, ethanol-blended gasoline still offers significant savings to U.S. consumers. If RIN prices average $0.80 and the ethanol discount to gasoline averages $0.58 per gallon, and if both impacts are fully passed through to retail, E10 would still be $0.05 per gallon cheaper than unblended gasoline.   This $0.05 savings is based on simple blending economics and does not include the larger economic effect that ethanol has on gasoline prices. Because ethanol extends gasoline supplies and reduces oil demand, it exerts significant downward pressure on gasoline prices. According to a detailed econometric analysis by economists at the University of Wisconsin and Iowa State University, this effect resulted in gasoline prices being an average of $1.09 per gallon less in 2011 than they would have been without ethanol.     E15, Ethanol, Gas Prices 2013-03-12T19:33:38+00:00 http://www.ethanolrfa.org/exchange/entry/since-when-does-the-wall-street-journal-cheer-monopolies/ http://www.ethanolrfa.org/exchange/entry/since-when-does-the-wall-street-journal-cheer-monopolies/ Once again, despite the facts, the Wall Street Journal sides with Big Oil and its monopoly against ethanol, Big Oil’s direct competitor. This time the issue is about the purchase of special credits called RINs and Big Oil’s latest scapegoat for higher gasoline prices. Ethanol costs $0.75 per gallon less than gasoline, thus adding more ethanol would reduce consumer costs. But oil companies are refusing to move to higher ethanol gasoline blends. In other words, they’ve gone on strike. The RIN program was designed to meet any shortages of renewable fuels, not to allow oil companies to avoid blending ethanol with gasoline. Now, oil companies have simply bid up the price of RIN’s instead of buying ethanol. There is no shortage of ethanol in the marketplace today. Ethanol stocks are high while production capacity utilization is down at the unusually low rate of 85 percent. Further, a number of ethanol plants are not operating because of Big Oil’s refusal to blend more ethanol. Much of the idle capacity could be brought back online quickly if oil companies chose to meet RFS obligations with E85 and mid-level blends rather than stockpiled RINs. Big Oil’s manipulation of the system is preventing competition in the fuels marketplace, an activity that should be anathema in any free, competitive market. If this were happening in any other industry, the Journal would probably be jeering, not cheering, the wanna-be monopolists. Bob Dinneen   E15, Ethanol 2013-03-12T19:22:47+00:00 http://www.ethanolrfa.org/exchange/entry/ethanol-and-distillers-grains-exports-snap-back-in-january1/ http://www.ethanolrfa.org/exchange/entry/ethanol-and-distillers-grains-exports-snap-back-in-january1/ U.S. ethanol exports increased 16 percent over December, as shipments of denatured and undenatured (non-beverage) ethanol totaled 63.6 million gallons (mg), according to government data released yesterday. Ethanol exports have not been that sizeable in six months, although the January total is still more than a third lower than average 2011 exports. U.S. exports to the EU totaled 5.4 mg in January, a 52 percent drop from December and 63 percent under 2012 average exports to the region. Given the anti-dumping duty that went into effect in February, exports to the EU could see a more pronounced decline going forward. January marked the first time in six months that the U.S. was a net exporter of ethanol. Shipments of denatured ethanol for fuel use totaled 42.1 mg, a negligible increase over December. Canada was again the leading destination for denatured product, receiving 23.9 mg — or 57 percent of the total. The UAE (9.8 mg), Peru (5.2 mg), and Brazil (2.4 mg) followed. Exports of undenatured ethanol for fuel use increased to 19.5 mg, up 60 percent from December, a third higher than last year’s average exports. The UAE was the leading recipient of undenatured ethanol for fuel use with 5.2 mg, followed by Brazil (4.0 mg), Mexico (3.3 mg), the Netherlands (2.6 mg), and the Philippines (2.4 mg). Shipments of denatured and undenatured ethanol for non-fuel, non-beverage use totaled 2.0 mg. Meanwhile, the data showed 46.4 mg of fuel ethanol imports in January, a 44 percent decrease from December levels. The majority of imports came directly from Brazil (26.7 mg), while the remainder came via Costa Rica (8.6 mg), Jamaica (6.9 mg), and El Salvador (4.2 mg). Exports of distillers grains jumped in January. Monthly shipments of DDGS totaled 585,237 metric tons (mt), up 10 percent over December. For the third straight month, Mexico (114,081 mt) was the top destination with nearly a fifth of the U.S. DDGS export market. China, the long-running top recipient of U.S. DDGS, was second (108,224 mt), followed by Turkey (55,460 mt) and Canada (51,991 mt). View a larger version. Ethanol, Exports 2013-03-08T19:03:00+00:00 http://www.ethanolrfa.org/exchange/entry/big-oils-self-inflicted-blend-wall-and-its-impact-on-rin-pricing/ http://www.ethanolrfa.org/exchange/entry/big-oils-self-inflicted-blend-wall-and-its-impact-on-rin-pricing/ Prices for conventional renewable fuel RINs (Renewable Identification Number)[1] have increased significantly in recent weeks. Oil companies and various media outlets have suggested the increase in RIN prices is due to the arrival of the E10 “Blend Wall” and the supposed inability of obligated parties to meet Renewable Fuel Standard (RFS) obligations with physical volumes of renewable fuels. Some representatives of the oil industry have even gone as far as to suggest higher RIN prices will lead to higher gasoline prices at the pump—despite the fact that ethanol remains at a considerable discount to gasoline. The truth is, the E10 “Blend Wall” was erected by the oil companies themselves, and it is little more than a convenient excuse for their refusal to move to higher-level ethanol blends. Here are the facts about Big Oil’s self-inflicted blend wall and its impact on the RIN market: EPA’s RIN banking and rollover provisions under the RFS were intended to “…protect against potential renewable fuel supply shortfalls…” and benefit oil companies “…who need a guaranteed supply in order to meet their regulatory obligations under this program.”[2] The provisions were not intended to allow oil companies to avoid blending physical gallons of renewable fuels to meet their annual RFS obligations, which is exactly what they are doing today. There is no shortage of ethanol in the marketplace today, as stocks remain at elevated levels. Further, ethanol capacity utilization is hovering around an unusually low rate of 85%, and a number of ethanol plants have idled due to artificially constrained demand. Much of the idle capacity could be brought back online quickly if oil companies chose to meet RFS obligations with higher level ethanol blends rather than stockpiled RINs. Congress enacted the RFS2 in 2007 with the express purpose of transforming and diversifying the U.S. fuels market. However, oil companies have blatantly ignored the law, refusing for more than five years to make any meaningful investments in infrastructure that would allow the sale of E85 or other blends above E10.  When it comes to RFS compliance, oil companies have a choice: purchase a gallon of ethanol (with a RIN attached) or purchase a detached RIN from third parties or other oil companies who previously blended more ethanol than required. Unfortunately, oil companies are choosing to purchase detached RINs and bank them rather than increasing their use of ethanol. This is occurring despite the existence of practical and economical options for increasing ethanol use. Viable options exist for breaking through the E10 “Blend Wall” and meeting RFS requirements with physical volumes. E15 and E85 blends are legally approved and offer a workable pathway for meeting increased RFS volumetric requirements. Only slight increases in E15 consumption would be needed in 2013 to satisfy this year’s RFS obligations with physical gallons rather than banked RINs. If E15 accounted for just 1% of total gasoline sales in 2013, the RFS requirement for renewable fuel could be met strictly with physical gallons of ethanol.[3] Ignoring all the data demonstrating the efficacy of E15 use in automobiles (including decades of E25 use in Brazil), oil companies and their surrogates have raised concern about a lack of automaker warranty coverage for E15.  But the current automotive fleet is absolutely capable of consuming the marginally higher levels of ethanol that the RFS requires in 2013 even if warranty coverage is not extended to the existing fleet. Approximately 15 million flex-fuel vehicles are on the roadways today, and 30-35% of model year (MY) 2013 light duty vehicles include explicit coverage of blends up to E15 in their warranty statements and owners’ manuals. By the end of 2013, there will be more than 20 million vehicles on the road that are unequivocally approved by the auto manufacturers themselves for E15 or E85 use—this represents almost 10% of total registered light duty vehicles. Further, EPA’s E15 waiver approval applied to MY2001 and newer vehicles. MY2001 and newer vehicles represent approximately 75% of the U.S. light duty automotive fleet and 85% of vehicle miles traveled.  Less than half of these vehicles are still covered by a vehicle warranty in any case. Ethanol prices remain at a significant discount to gasoline prices, meaning there is a strong economic incentive to maximize ethanol blending. Yet, oil companies have so far avoided increasing their use of ethanol, and have instead chosen to stockpile excess RINs. In recent weeks, a gallon of ethanol (with a RIN attached) has sold for roughly 50 cents/gallon less than a gallon of gasoline. For 2012, ethanol’s discount to gasoline averaged approximately 60 cents/gallon. Futures prices for ethanol and RBOB gasoline indicate an average discount of 67 cents/gallon persisting through December 2014. Thus, the argument that prices for ethanol (and attached RINs) are somehow contributing to higher gasoline prices is patently false. In fact, U.S. consumers are missing out on an opportunity for lower gasoline prices due to the oil industry’s refusal to move to blends above E10. With ethanol priced 60 cents per gallon less than gasoline, a gallon of E10 would be at least 6 cents per gallon cheaper at the pump than a gallon of unblended gasoline. Meanwhile, a gallon of higher-octane E15 would be 9 cents per gallon cheaper.   [1] A RIN is a numbered credit generated by a biofuel producer attached to each gallon of renewable fuel sold under the RFS.  When obligated parties under the RFS (typically oil refiners and fuel blenders) buy a gallon of renewable fuel, they also obtain the RIN credit associated with that gallon. The RIN is then used by the obligated party to demonstrate compliance with their obligation to blend renewable fuel. RINs can be banked or traded (detached) by refiners to enhance program flexibility. [2] See EPA Summary and Analysis Comments for RFS, EPA420-R-07-006, April 2007. [3] Assumes gasoline demand of 133.8 billion gallons, 13.38 billion gallons of ethanol use at E10, and 200 million gallons of ethanol use at E85. Thus, 220 million gallons of ethanol would need to be consumed as E15 to meet the 13.8 billion gallon RFS requirement for “renewable fuel.” This means 1.47 billion gallons of E15 would need to be consumed, which equates to 1.09% of projected gasoline demand. Does not account for impact of sugarcane ethanol imports that may be used to meet advanced biofuel standard. E15, Ethanol, Renewable Fuel Standard 2013-03-07T21:12:24+00:00 http://www.ethanolrfa.org/exchange/entry/as-prices-at-the-pump-go-up-up-up/ http://www.ethanolrfa.org/exchange/entry/as-prices-at-the-pump-go-up-up-up/ If you've been paying more at the pump for gasoline, you aren't alone. And, if it weren't for U.S. ethanol, you'd be paying even more. All across America, as of February 19, gasoline prices had been climbing for 32 days, reaching a four-month high. In fact, since January 17, the national average retail gasoline price had soared by 43 cents - or 13 percent - all the way up to $3.73 a gallon. According to EIA, last week's national average was the highest on record for the month of February. From now through Memorial Day, which kicks off the summer driving season, gasoline prices will likely keep going up, up, up. Over the past five years, gasoline prices have risen an average of $0.51 per gallon between New Year's Day and the Memorial Day weekend. That means we could be looking at prices well above $4 per gallon as summer begins and families hit the road for vacation.  Gas prices are skyrocketing despite an increase in domestic oil production. Oil companies tell us more domestic drilling and fracking will help keep oil prices down and gas prices in check - well, guess not.  The fact is, the oil market is global in nature, and decisions made half a world away still impact what we pay for gasoline here in the U.S. Recently, oil prices have been under pressure due in no small part to Middle East tensions over Iran's nuclear program and OPEC's decision not to increase oil output even as all signs point to higher global demand. Many of these statistics about the surge in gas prices come from - hold your breath - the Automobile Association of America (AAA), which just might reconsider some of its recent attacks on American-made ethanol. After all, one of the few factors exerting a downward pressure on gasoline prices is ethanol, which makes up 10 percent of the nation's gasoline pool.  Today, ethanol is about $0.75 per gallon cheaper than gasoline at the wholesale level. Yet, the retail savings resulting from increased ethanol use go far beyond simple blending economics. America's growing use of domestically-produced ethanol reduced wholesale gasoline prices by an average of $1.09 per gallon in 2011, the most recent year for which complete statistics are available, according to a recent study conducted by economics professors at the University of Wisconsin and Iowa State University for the Center for Agricultural Research and Rural Development (CARD)."Growth in US ethanol production has added significantly to the volume of fuel available in the US," says Professor Dermot Hayes, one of the study's authors. "It's as if the U.S. oil refining industry had found a way to extract 10% more gasoline from every barrel of oil."  Since the average American household bought 1,124 gallons of gasoline in 2011, ethanol reduced average annual household spending at the pump by more than $1,200. One reason why American ethanol helps to hold down gasoline prices is that it replaces foreign oil which has become even more expensive because of the unrest in the Middle East and speculation in commodities markets. From 2005 through 2012, American dependence on imported petroleum products declined from 60 percent to 41 percent.  All of this is something Members of Congress need to consider as they assess legislation promoted by the oil industry to repeal or reform the Renewable Fuels Standard (RFS).  The RFS is working to expand domestic energy supply, encourage investment in new technologies, and reduce gasoline prices at the pump.  Don't mess with the RFS! Gas Prices 2013-02-21T13:54:42+00:00 http://www.ethanolrfa.org/exchange/entry/response-to-recent-land-use-change-in-the-western-corn-belt-threatens/ http://www.ethanolrfa.org/exchange/entry/response-to-recent-land-use-change-in-the-western-corn-belt-threatens/ A recently published study by C.K. Wright & M.C. Wimberly in the Proceedings of the National Academies of Science suggests that native grasslands in Iowa, Minnesota, Nebraska, North Dakota, and South Dakota have been converted to cropland to facilitate increased corn and soybean plantings between 2006 and 2011.[1] The study's findings stand in stark contrast to U.S. Department of Agriculture (USDA) acreage data, which show increased corn and soybean acres in the region have occurred via crop switching, not cropland expansion. Further, the extremely high rate of error associated with the satellite imagery used by the authors renders the study's conclusions highly questionable and irrelevant to the biofuels policy debate. Readers of the recent PNAS paper should give strong consideration to the following points: Current law strictly prohibits the conversion of sensitive ecosystems to cropland. At least once a year, farmers must certify that they are complying with the highly erodible land conservation and wetland conservation requirements (the so-called "sodbuster" and "swampbuster" provisions) of the Farm Bill. Most producers strictly adhere to conservation plans that are often developed with technical assistance from the Natural Resources Conservation Service. Further, the provisions of the Energy Independence and Security Act require that corn and other feedstocks used to produce biofuels for the Renewable Fuel Standard (RFS) may only be sourced from land that was actively engaged in agricultural production in 2007, the year of the bill's enactment. Feedstock from lands converted to cropland after 2007 would not qualify for the RFS, and thus the program strongly discourages cropland expansion.  The study's authors themselves acknowledge that the converted lands they classify as "native grasslands" might actually have been land planted to hay, grass pasture, or idled cropland enrolled in the CRP program. They write, "One shortcoming of the present study was our inability to...distinguish between different types of grassland conversion, i.e. to separate native prairie conversion from change involving CRP, hay lands, or grass pasture." Thus, the authors' conclusion that increased corn and soybean acres are coming at the expense of "native prairie" is highly suspect. In fact, USDA data shows decreased hay acres in the region, strongly suggesting that much of the increase in corn and soybean acres came on land previously planted to hay. At the same time, CRP enrollments in the region have declined slightly, suggesting that farmers are bringing some idled cropland back into production. Data from USDA show that the increase in corn and soybean acres in the five-state region was primarily achieved via crop switching rather than cropland expansion. That is, farmers increased corn/soybean plantings on land previously planted to hay, wheat, and other crops. Indeed, USDA shows total crop acres in the five-state region actually declined 2.1% from 2006 to 2011.  (Note: Total crop acres include planted acres for corn, sorghum, oats, barley, rye, winter wheat, Durum wheat, other spring wheat, rice, soybeans, peanuts, sunflower, cotton, dry edible beans, potatoes, sugarbeets, canola, proso millet, and harvested acres for all hay, tobacco, and sugarcane). In fact, total planted cropland in the five states in 2011 was the lowest since 1995. Total planted acres in 2011 for the five-state area were 3.6% below the 10-year average (2001-2010). While North Dakota planted 540,000 more acres to corn in 2011 than in 2006, total acres planted to all crops in the state actually fell 3.25 million acres (15%) between 2006 and 2011. Total planted crop acres in 2011 were also lower in Minnesota. This strongly suggests the expansion in corn area took place on land previously planted to other crops. While a useful tool for analyzing potential trends, the USDA Cropland Data Layer (CDL) system utilized by the authors to estimate land conversions has demonstrated a high level or error in differentiating between grasslands and land planted to hay and other crops. USDA itself acknowledges that, "Unfortunately, the grassland-related categories have traditionally had very low classification accuracy in the CDL." For example, USDA accuracy data shows the CDL tool mischaracterized North Dakota acreage for alfalfa, other hay, and idle/fallow cropland more than half the time in 2012. When the facts are on the table, it becomes clear that readers of the new PNAS study should exercise great caution and skepticism when interpreting the authors' conclusions. After all, as eloquently stated by Meade County (South Dakota) Farm Service Agency director James R. Neill, "...farmers and ranchers are the best conservationists in the world as they have a vested interest in conserving the agricultural resources for today and future generations."   [1] See http://www.pnas.org/content/early/2013/02/13/1215404110.full.pdf+html?with-ds=yes Land Use 2013-02-20T20:21:41+00:00 http://www.ethanolrfa.org/exchange/entry/2012-ethanol-exports-total-739-million-gallons/ http://www.ethanolrfa.org/exchange/entry/2012-ethanol-exports-total-739-million-gallons/ The U.S. exported 55.0 million gallons (mg) of ethanol in December 2012, the highest monthly total since July, according to newly released government data. December’s shipments brought the 2012 annual total to 738.7 mg, the second-highest export total on record. Still, exports in 2012 were down some 38 percent over the record-setting export volumes in 2011. Further, net exports totaled just 183.7 mg, as the U.S. imported substantial volumes of sugarcane ethanol from Brazil in the second half of 2012. Of the December total, 42 mg was denatured ethanol for fuel use, while 12.2 mg was undenatured ethanol intended for fuel use. Denatured and undenatured ethanol for uses other than fuel totaled roughly 800,000 gallons. Canada was the leading destination for exports in December, receiving 34.9 mg. The Netherlands followed with 4.6 mg. Brazil (3.8 mg), Sweden (3.3 mg), Finland (2.4 mg), and Peru (2.1 mg) were other top importers in December. For the entire year, Canada was the top destination for U.S. ethanol exports, receiving 235.8 mg—almost one-third of total exports. The United Kingdom was second with 65.2 mg, while Brazil imported 59.5 mg. The Netherlands (39.7 mg), United Arab Emirates (31.5 mg), Mexico (27.4 mg) and Peru (26.7 mg) were other top importers of U.S. ethanol in 2012. Meanwhile, December ethanol imports totaled 82.8 mg. Brazil shipped 58.3 mg directly to the U.S., while the remainder came through the CBI countries of Jamaica (13.2 mg), El Salvador (6.7 mg), and Costa Rica (4.6 mg). Total imports for 2012 tallied at 555 mg, with 459.2 mg (83 percent) coming directly from Brazil. Imports via Jamaica totaled 54.6 mg, while imports via El Salvador were 25 mg. Imports via Costa Rica for 2012 were 8.5 mg, while limited quantities were imported via Guatemala and Nicaragua. See a larger version of this chart. See a larger version of this chart. Ethanol, Exports 2013-02-11T18:52:18+00:00 http://www.ethanolrfa.org/exchange/entry/2012-food-price-increases-were-second-lowest-in-20-years/ http://www.ethanolrfa.org/exchange/entry/2012-food-price-increases-were-second-lowest-in-20-years/ Food prices rose just 1.8% in 2012, the second-lowest annual rate in the last 20 years, according to recently released consumer price index (CPI) data. The new data demonstrates the absurdity of the alarmist rhetoric coming from Big Food about the impact of ethanol and the Renewable Fuel Standard (RFS) on consumer food prices. Indeed, annual food inflation has averaged 2.8% since the RFS was first enacted in 2005, compared to a 25-year average (1988-2012) of 2.92%. Other interesting facts from the December CPI: Food inflation in 2012 was barely higher than general inflation, which totaled 1.7% for the year. Prices for “food at home” (i.e., groceries) in 2012 were just 1.3% higher than in 2011. Prices for “food away from home” (i.e., restaurants) were 2.5% higher, indicating that restaurants marked food prices up at nearly twice the rate as grocers. Prices for cereals and bakery products were just 0.8% higher. Meats, poultry, fish and egg prices were just 1.5% higher in 2012, less than the overall food inflation rate and the general inflation rate. Pork prices were actually lower in 2012 than in 2011. Spending on meats, poultry, fish and eggs comprised about 2% of overall expenses for the average American family. Prices for dairy and related products increased just 0.5% last year.  Use these facts the next time Big Food and Big Oil sound their bogus alarm bells about “skyrocketing” food prices and the effects of the RFS on food prices.   To view a larger version of this chart, click here. Ethanol, Food, Renewable Fuel Standard 2013-01-31T21:03:36+00:00 http://www.ethanolrfa.org/exchange/entry/gasoline-quality-greatly-affects-fuel-systems-not-ethanol-content/ http://www.ethanolrfa.org/exchange/entry/gasoline-quality-greatly-affects-fuel-systems-not-ethanol-content/ EPA’s decision to grant the use of E15 in 2001 and newer automobiles and light duty vehicles was based on multiple-year, multiple-aspect testing of more than 88 vehicles.  The testing included evaluations of engines, fuels, lubricants, vehicle performance, durability and emissions.  Each year, EPA receives nearly 500 fuel additive applications, identical to the E15 application, and has approved thousands of applications since the approval program started in 1974.  No fuel additive in history has been studied to the rigorous degree as E15.  More than 67 specific studies have been completed, with another 23 technical documents in support, leading EPA to make a sound decision to allow the use of E15.  With our participation and peer review restricted by CRC, we were not involved in this test program.   As a new party to the information, the fact is, it is difficult to glean any game changing information from this new version of the fuel system components report.  In fact, I’m curious why the original report release in December 2011 didn’t garner an API press release.  Further, CRC has already studied fuel system-related problems and confirmed sulfur species present in gasoline as fatal toward fuel system components, yet sulfur isn’t even mentioned in the report.  It’s almost as if the 2009 work that commenced after hundreds or thousands of stranded motorists with empty fuel tanks, and dashboard gauges reading “full,” don’t exist.  This report should have acknowledged that aggressive test fuels would be highly reactive to fuel system components. Additional questions remain as it is impossible to determine the failing criteria on these fuel system components when regular gasoline was not included in the test matrix. E10 now represents nearly 95 percent of all regular unleaded gasoline. Today’s API press release announced the availability of the CRC Advanced Vehicles, Fuels and Lubricants (AVFL) report number 15a. This test program is more of a tale of Jekyll and Hyde.  The initial AVFL 15 program (Report Number 662, released December 2011) compared an aggressive E20 (20 percent ethanol / 80 percent gasoline with acids and water added), E10 and gasoline with no ethanol on multiple models of fuel senders, pumps, dampers and complete rigs.  Time and again throughout the report, no negative effects on the fuel systems were deemed significant, except one of the acid laced test fuels, which was expected due to the sulfur poison of the fuel.  The follow up AVFL 15a program (Report Number 664, released January 2013) was restricted to no ethanol, 15 percent and aggressive 15 percent ethanol fuel blends on a severely reduced number of fuel pumps and senders only.  In the figures of the report, specifically Figures 3, 4, 5, the performance loss of these fuel system components was the greatest with either the gasoline with no ethanol or equal to the unannounced, singular E10 inclusion.  Several of the models identified in the AVFL 15a study are listed on the National Highway Traffic Safety Administration website for manufacturer recall.  It is unclear how this affects the outcome of the study. The greatest flow loss exhibited was due to exposure to gasoline only.  Figures 3, 4, and 5 of the AVFL 15a (No. 664) report confirm that there is great variability in component selection by vehicle manufacturers; pump type “M” showed the greatest flow loss on the acid and sulfur laced E15 test fuel at 20 percent, while pump type “N” showed the greatest flow loss on gasoline with no ethanol at more than 25 percent and pump type “L” showed a loss of nearly 15 percent also on gasoline with no ethanol.  The AVFL-15 project was duplicated by Minnesota State University back in 2008 also using an aggressive E20 test fuel on fuel system components.  Conclusions of the report stated “E20 was found to have a similar effect as E10 and gasoline on fuel pumps and sending units.”  This study acknowledged the support of engine manufacturers such as General Motors, Ford, Toyota, Briggs and Stratton. The aggressive test fuel formulation and level of ethanol concentration is highly questionable.  There has been no correlation of real world fuels to the aggressive formula, which dates back to 1993.  Fuel properties have significantly changed in the nearly three decades since this publication.  In the same time frame as this CRC project, CRC studied the failure of fuel system components due to poor gasoline quality, which left Florida and Georgia residents stranded on highways. With the completion of that research, a wealth of information has been gained on severe corrosion effects from the sulfur compounds found in gasoline, specifically CRC report “Silver Fuel Level Sensor Corrosion Program.” (2009 Report No. 653)  These “global field problems” were finally acknowledged after many years of customer complaints of inaccurate readings of the amount of fuel in the tank. An interesting final note, the original AVFL 15 program evaluated three fuels with 15 fuel system designs and was classified as a “scoping study” with numerous disclaimers that “…different vehicle designs could have different results” or “…more testing is needed...”  Yet in the follow up program AVFL 15a, three fuels evaluated five possible fuel systems — a reduced number of fuel system candidates — yet there is no disclaimer, or multiple disclaimers, about misinterpreting the results.  Lastly, there are several elementary flaws in the report, including an incorrect sulfur detection method used for E15 analysis, lack of corrosion and sulfur reporting for the E15 test fuels, non-standard test methods reported for sulfate and chloride reporting for E15, and a complete omission of the protocol used to determine the pass/fail criteria for the fuel pump testing.  The Minnesota Fuel Pump study clearly states the SAE J1537 Validation Testing of Electric Fuel Pumps for Gasoline Fuel Injection Systems was followed.  Today’s events leave me scratching my head with many unanswered questions.  E15, Engines, Ethanol 2013-01-29T20:28:33+00:00 http://www.ethanolrfa.org/exchange/entry/bob-dinneen-responds-to-wsj-factually-tortured-ethanol-editorial/ http://www.ethanolrfa.org/exchange/entry/bob-dinneen-responds-to-wsj-factually-tortured-ethanol-editorial/ To the editor: The spy thriller “Zero Dark Thirty” has been criticized for depicting the use of interrogations in the war on terror. The editorial “Zero Dark Ethanol” (January 29) tortures the facts to support the Journal’s war on biofuels — a journalistic jihad that has launched at least a dozen editorials over the past 18 months. In the latest episode of the Journal’s reign of terror about ethanol, the editorial distorts the D.C. Circuit Court’s decision, the progress and potential for cellulosic ethanol, the federal incentives for advanced biofuels, and the past century of subsidies for Big Oil. In spite of the Journal’s victory dance, the D.C. Circuit Court’s decision was narrow and mixed. The court rejected broad-brushed attempts to roll back the federal Renewable Fuel Standard (RFS), refused to accept the American Petroleum Institute’s arguments that the Environmental Protection Agency (EPA) can’t consider information from cellulosic (non-grain) biofuel producers in setting its projections, and gave EPA flexibility in setting cellulosic biofuel projections for the future. I suspect that the Journal and its allies in Big Oil are really alarmed by advanced biofuels’ progress, not its supposed problems. The cellulosic biofuels sector now has facilities under development in more than 20 states. Over the last decade, enzyme costs have been reduced by 80 percent, and now cellulosic biofuels are being produced for $2.00 per gallon or less. This progress has been possible because federal incentives have been flexible, targeted, and somewhat successful in leveling a playing field that is still heavily tilted to fossil fuels. Looking beyond the Journal’s fantasies, here are the facts: Because of the flexibility of the RFS, the EPA has waived 98 percent of the cellulose requirement. From 2010 through 2012, EPA has required only 22.95 million gallons of the 850 million gallons specified by federal law. And, yes, the EPA was right to maintain two percent of this statutory requirement as an incentive for investors to commercialize this crucial technology.    While Big Oil and the Journal shed gushers of crocodile tears about “waiver credits,” over the past three years these credits have cost — now hold your breath — a grand total of $25 million. That’s about 53-thousandths of one percent of the gross profits for the five largest oil companies. While the Journal channels Milton Friedman when editorializing about ethanol incentives, federal policies continue to play Santa Claus for fossil fuels, with nary a peep of protest from the free market fantasists at the Journal. From 1950 to 2010, oil and natural gas received 58 percent — or $490 billion — of the $837 billion in taxpayer subsidies to all forms of energy. In fact, fracking has been heavily subsidized, through the Section 29 production tax credit for unconventional gas. Federal subsidies should encourage the development of emerging technologies, such as advanced biofuels, not established industries, such as Big Oil. American ethanol agreed to the abolition of the major incentive for grain ethanol at the end of 2011, while Big Oil continues to drill for subsidies from the federal fisc. Instead of torturing the facts about ethanol, the Journal’s editorial writers should direct their drones at fossilized subsidies for fossil fuels. Bob Dinneen President and CEO, Renewable Fuels Association (The Renewable Fuels Association is the trade association of the U.S. ethanol industry.) EPA, Renewable Fuel Standard 2013-01-29T18:30:05+00:00 http://www.ethanolrfa.org/exchange/entry/who-are-you-going-to-believe-big-oil-or-10000-miles-of-truth/ http://www.ethanolrfa.org/exchange/entry/who-are-you-going-to-believe-big-oil-or-10000-miles-of-truth/ The comedian Richard Pryor used to ask, “Who are you going to believe — me or your lying eyes?” That question comes to mind whenever I think about the American Petroleum Institute (API)’s study, which claims to prove that 15 percent ethanol blends (E15) will damage your automobile’s engine. So who are you going to trust — Big Oil or a Kansas motorist who’s driven 10,000 miles on three vehicles fueled by E15? The oil companies want you to ignore a comprehensive three-year, 88-vehicle, six-million-miles-driven study of E15 conducted by the U.S. Department of Energy using protocols established by the Environmental Protection Agency, and look only at their own American Petroleum Institute-funded study of eight vehicles, some of which had fuel pumps that happened to be under recall.  The only thing one can glean about E15 from the API study is if you test E15 in a vehicle that has been recalled then you just might have some problems. Surprise! Now, guess what API and AAA don’t mention when they warn motorists about E15: If you test other aging autos with similar problems — and fuel them with gasoline without any ethanol at all (Call it E-Zero) — you get the same kind of problems. That’s what their study says. But don’t hold your breath waiting for API to warn motorists against using unblended gasoline — E-Zero. Instead, they want consumers to worry about ever-more-unlikely “hazards,” not only in the long-term but in the short-term, too. For instance, API and its allies like AAA have warned motorists about the supposed dangers of “residual volumes” of E15 in gas pump hoses. They claim to be concerned that, if you fuel your car with E10, you could really be getting gasoline blended with more than 10 percent ethanol. Why? Because the previous customer fueled up with E15 — and some of that 15 percent blend was left in the hose. Have they ever tested this theory with a real vehicle and a real gasoline pump? So what happens when you fuel a working vehicle — not one that’s straight from the showroom, just one that has some miles on it but hasn’t been recalled — with E15? Since mid-July, I’ve been one of the fortunate customers with E15 available locally — in Eastern Kansas. Once this fuel debuted, I’ve used it exclusively on my three vehicles — a Jeep and two Chevrolets, none of them flex-fuel. By now, I’ve logged more than 10,000 total miles. Not once has my “check engine” light lit up. Not once have I noticed any drivability or performance issues. Not once have my vehicles acted any differently than they do on E10. And, despite AAA’s “warnings,” not once did any of my three vehicles break down on the side of the road, leaving me stranded. Instead, I’ve enjoyed a higher-octane product at a lower cost with lower overall emissions. And I’m proud to be gassing up my vehicles with a fuel that now contains 50 percent more of a locally produced, job-creating, economy-boosting product — American ethanol. In addition to “warning” motorists about damage to their vehicles, Big Oil has one more scare tactic: If you use E15, it will void your warranty. In fact, before a claim could be denied, an automaker would have to prove that the fuel caused the damage. That’s provided by federal law — the Magnuson-Moss Warranty Act of 1975. Once again, my experience is instructive. I recently had a warranty claim — not fuel-related — on my personal 2011 Chevrolet. Even though my Chevy runs on E15, the claim was processed without incident — and at no cost to me. So who are you going to believe? Big Oil? Or a motorist who’s logged 10,000 miles on E15? E15 2013-01-29T13:24:47+00:00 http://www.ethanolrfa.org/exchange/entry/tar-and-feathers-coalition-fumbles-again/ http://www.ethanolrfa.org/exchange/entry/tar-and-feathers-coalition-fumbles-again/ Anxious that Americans won’t eat as many chicken wings at Super Bowl parties next weekend as they chowed down on last year, the National Chicken Council is serving up a heaping helping of half truths about the supposed impact of U.S. ethanol on poultry prices and supplies. Surprisingly, they downplay the drought of 2012 and its disastrous impact on all crops and the feed market. In a recent news release, the chicken-producers’ trade association crows that Americans will eat more than 1.23 billion wing portions at this year’s get-togethers but clucks about an anticipated decline in consumption of one percent — 12.3 million fewer wings — compared to 2012. Big Oil and the Chicken Pluckers (otherwise known as the “Tar (Sands) and Feathers” Coalition) blame biofuels for almost every problem known to humanity, but this is the first time I’ve heard American ethanol called a Super Bowl party pooper. It’s true that 2012 chicken production was slightly lower (0.7 percent) than in 2011. But what the NCC failed to mention in its outrageous press release is that 2011 was a record year for chicken meat production. In fact, 2012 chicken output will go down as the second-largest on record trailing only last year! Simply put, it’s an outright fallacy that Americans are eating considerably less chicken today than in the past. The average American consumed 80.3 pounds of chicken in 2012, according to USDA. Ten years ago, when the Tampa Bay Buccaneers crushed the Oakland Raiders in Super Bowl XXXVII, the average American consumed 80.7 pounds of chicken. Twenty years ago, when the Dallas Cowboys destroyed the Buffalo Bills in Super Bowl XXVII, average chicken consumption was 75.3 pounds per person — seven percent less than today. The bottom line is, ethanol production has little impact on food prices and no discernible impact on chicken supplies. The chicken lobby knows this, and so do their Big Oil cohorts. But they’ll stop at nothing to tar and feather ethanol and the RFS. Chicken producers also understand that ethanol production generates distillers grains and other feed products, which contribute to the poultry industry’s supply of animal feed. One-third of every bushel of grain that is processed into ethanol is enhanced and returned to the animal feed market in the form of distillers grains, corn gluten feed and corn gluten meal. These co-products are fed to poultry, beef cattle, dairy cows, hogs and fish here in the U.S. and around the world. During the 2010/11 marketing year, the U.S. ethanol industry generated 39 million metric tons of high-quality feed — enough to produce one normal-sized chicken breast for every American to eat every day of the year. As for food prices, including Super Bowl snacks, only 16 percent of the average household’s food bill pays for raw agricultural ingredients such as corn. Eighty-four percent of their food bill pays for energy, transportation, processing, packaging, marketing and other supply chain costs. Corn prices, Food, Renewable Fuel Standard 2013-01-25T16:11:33+00:00 http://www.ethanolrfa.org/exchange/entry/professor-flunks-ethanol-101/ http://www.ethanolrfa.org/exchange/entry/professor-flunks-ethanol-101/ Flint, Mich., is known throughout the world as the birthplace of General Motors. When an economist from Flint gets the facts about motor fuels all wrong, it’s time to assign him some remedial homework. In an op-ed in The Flint Journal on January 16, Mark J. Perry, an economics professor at University of Michigan-Flint, earned a failing grade in Ethanol 101. Here’s why Professor Perry needs to hit the books about biofuels: Warning against E15 blends (15 percent ethanol, 85 percent gasoline), Perry claims that ethanol “can damage automobile engines and fuel systems.” In fact, E15 is the most tested fuel in history. Coordinated by the U.S. Department of Energy and its affiliated National Laboratories, the tests have driven the equivalent of six round-trips to the moon and have included vehicle drivability, catalyst durability, fuel pumps and sealing units, outboard diagnostic systems, and automotive fuel system components. The verdict: The U.S. Environmental Protection Administration (EPA) has approved 15 percent ethanol blends for cars, light-duty trucks and SUVs built in 2001 or later — approximately 62 percent of the light-duty vehicles on the road today. While Perry writes that “40% of the U.S. corn crop is used to produce ethanol,” that statement is misleading. Ethanol production doesn’t use sweet corn (which is intended for human consumption), and U.S. ethanol production uses only three percent of the total global grain supply. Moreover, ethanol uses only the starch in the grain, with the protein, fat and fiber made into animal feed for beef and dairy cattle, hogs, poultry, and fish around the world. In fact, the American ethanol industry generated 37 million metric tons of feed in 2012 — enough to produce seven quarter-pound hamburger patties for every person on the planet. Perry is also wrong when he contends that ethanol “has increased retail food prices and strained family budgets.” In fact, only 14 percent of the average household’s food bill pays for raw agricultural ingredients such as corn. Eighty-six percent of their food bill pays for energy, transportation, processing, packaging, marketing and other supply chain costs. Nor is it true that “ethanol costs about 70 cents a gallon more than gasoline on an energy-equivalent basis.” In fact, the use of ethanol reduced wholesale gasoline prices by an average of $1.09 per gallon in 2011, according to research by economics professors at the University of Wisconsin and Iowa State University. If ethanol doesn’t pack the punch to power our cars, then why do so many professional racecar drivers fuel their  vehicles with … ethanol? Meanwhile, Professor Perry makes sophomoric mistakes. He writes about “a 51-cent-per gallon tax credit” for biofuels, even though the credit expired, with the industry’s approval, at the end of 2011. He asks policymakers “to halt the production of E15,” even though E15 is blended, not produced, from ethanol and gasoline. (Would he demand no more “production” of coffee with milk and sugar?) And he seems unaware that, in approving E15, the EPA was offering Americans a choice at the pump, not a mandate. While he concludes that cellulosic (non-grain) ethanol is “still not viable,” at least eight commercial advanced ethanol plants are under construction or commissioning. U.S. ethanol, including E15 blends, offers our nation’s motorists a cost-saving, American-made, environmentally-friendly alternative to foreign oil, as well as a pathway to the next generation of biofuels. As for Professor Perry, he needs to take Ethanol 101 all over again. Corn, E15 2013-01-18T19:51:32+00:00 http://www.ethanolrfa.org/exchange/entry/letter-to-the-editor-rfa-responds-to-ethanol-scam-driving-up-food-prices/ http://www.ethanolrfa.org/exchange/entry/letter-to-the-editor-rfa-responds-to-ethanol-scam-driving-up-food-prices/ To the Editor: The late Sen. Daniel P. Moynihan, a native of Tulsa, famously said we’re all entitled to our own opinions but not our own facts. In his column, “Ethanol Scam Driving Up Food Prices,” (Tulsa World, January 11), Andrew P. Morriss presents his own opinions and his own facts.   Contrary to Mr. Morriss, ethanol production doesn’t “drive up food prices.” Food inflation rates have averaged 2.95 percent per year since 2005, the year Congress first adopted the Renewable Fuel Standard encouraging the use of ethanol. Annual food inflation was 3.47 percent from 1980 through 2004. In fact, only 14 percent of the average household’s food bill pays for raw agricultural ingredients such as corn. Eighty-six percent of their food bill pays for energy, transportation, processing, packaging, marketing and other supply chain costs. Moreover, it’s misleading to say “40 percent of the U.S. corn crop is now used for ethanol rather than food.” Ethanol production doesn’t use sweet corn (which is intended for human consumption). And one-third of every bushel of grain processed into ethanol is enhanced for use as animal feed for cattle, poultry and pigs. Nor does ethanol production require “roughly as much energy as the ethanol contains.” In fact, for every one unit of energy invested in producing ethanol, 1.9 to 2.3 units of energy are created. “Vastly inferior to gasoline”? “Harm[s] the environment”? The Environmental Protection Agency has approved 15 percent ethanol blends for cars, light-duty trucks and SUVs built in 2001 or later. Ethanol reduces greenhouse gas emissions by 40 to 60 percent compared to gasoline, and because ethanol contains 35 percent oxygen, it causes more complete fuel combustion, reducing harmful tailpipe pollution. Further, ethanol is the cheapest, cleanest source of octane available to gasoline refiners today. And, yes, ethanol does enhance national security. From 2000 through 2012, as ethanol increased from 1 percent to 10 percent of gasoline supply, U.S. dependence on foreign crude oil and products fell from 60 percent to 41 percent. That makes our nation less reliant on imported oil from hostile or unstable countries. Bash biofuels with fabricated “facts” — that’s the real “ethanol scam.” Bob Dinneen President and CEO, Renewable Fuels Association (The Renewable Fuels Association is the trade association of the U.S. ethanol industry.) E15, Ethanol, Energy, EPA, Food 2013-01-14T23:00:53+00:00 http://www.ethanolrfa.org/exchange/entry/ethanol-and-distillers-grains-exports-tumble-in-november/ http://www.ethanolrfa.org/exchange/entry/ethanol-and-distillers-grains-exports-tumble-in-november/ U.S. ethanol exports fell to their lowest level of the year in November, as shipments of denatured and undenatured (non-beverage) ethanol totaled 40.4 million gallons (mg), according to government data released today. The monthly total was down 25 percent from October and the lowest since November 2010. November exports of both ethanol and distillers grains reflect the difficult operating environment following last summer’s historic drought. Still, year-to-date exports tallied 683.7 mg through November, indicating an annualized total of 745.8 mg for the 2012 calendar year. Shipments of denatured ethanol for fuel use totaled 31.8 mg, up slightly from October. Canada was again the leading destination for denatured product, receiving 28.6 mg — or 90 percent of the total. Peru (2.5 mg) and the Netherlands (660,636 gals.) followed. Exports of undenatured ethanol for fuel use plummeted to 7.3 mg, down 68 percent from October and the lowest since June 2011. Mexico was the leading recipient of undenatured ethanol for fuel use with 3.4 mg, followed by Finland (2.4 mg), Sweden (789,076 gals.) and Peru (779,901 gals.). Shipments of denatured and undenatured ethanol for non-fuel, non-beverage use totaled 1.3 mg. Meanwhile, the data showed 83.2 mg of fuel ethanol imports in November. The majority of imports came directly from Brazil (63.9), while most of the remainder came via the CBI nations of Jamaica (10.1 mg) and El Salvador (9.2 mg). Through November, 2012 U.S. fuel ethanol imports stood at 466.5 mg.   To view a larger version of this chart, click here. Exports of distillers grains also fell in November. Monthly shipments of DDGS totaled 518,396 metric tons (mt), down 16 percent and the lowest of the year. For the first time this year, Mexico (126,635 mt) was the top destination for DDGS exports. China, the long-running top recipient of U.S. DDGS, was second (92,925 mt), followed by Canada (42,984 mt), Japan (39,843 mt) and Thailand (35,169 mt). Year-to-date exports stood at 6.89 million mt, implying an annualized total of 7.52 million mt — if realized, this total would be slightly lower than 2011 exports of 7.64 million mt. DDGS, Ethanol, Exports 2013-01-11T21:09:40+00:00 http://www.ethanolrfa.org/exchange/entry/dont-believe-everything-you-read.-fact-check-on-nyts-guatemala-corn-ethanol/ http://www.ethanolrfa.org/exchange/entry/dont-believe-everything-you-read.-fact-check-on-nyts-guatemala-corn-ethanol/ “Don’t believe everything you read.” Never have truer words been spoken. Here is a fact check of the January 6th New York Times article “As Biofuel Demand Grows, So Do Guatemala’s Hunger Pangs” by Elisabeth Rosenthal: NYT: In the tiny tortillerias of this city, people complain ceaselessly about the high price of corn. Just three years ago, one quetzal — about 15 cents — bought eight tortillas; today it buys only four. And eggs have tripled in price because chickens eat corn feed. Tortillas in Guatemala are made from white corn, while U.S. ethanol is produced from No. 2 yellow corn. Very little white corn is grown in the U.S., but acres dedicated to white corn have not been reduced since passage of the RFS. These two types of corn have distinctly different global markets, demand drivers, and price pressures. It is entirely disingenuous to suggest stronger demand and tighter supplies of No. 2 yellow corn in the U.S. are significantly influencing local white corn prices in Guatemala. According to U.N. FAO, food prices in Guatemala increased more slowly than normal in 2012. The Guatemalan consumer food price index increased an average of 0.5% per month in 2012, compared with 0.8% in 2011 and 0.6% in 2010. Average food price inflation was 1.0% per month or higher in 2008, 2004 and 2001 and has averaged 0.7% per month since January 2000. NYT: Meanwhile, in rural areas, subsistence farmers struggle to find a place to sow their seeds. Guatemalan farmers are harvesting more corn than in the past. Guatemala harvested 850,000 hectares of corn in 2012, the second-highest level in history, according to USDA. Over the past five years, harvested corn acres have been 32% higher, on average, than in the preceding 10 years. NYT: Recent laws in the United States and Europe that mandate the increasing use of biofuel in cars have had far-flung ripple effects, economists say, as land once devoted to growing food for humans is now sometimes more profitably used for churning out vehicle fuel. Corn acreage (presumably for white corn) has increased significantly in Guatemala since 2000, according to USDA. NYT: With its corn-based diet and proximity to the United States, Central America has long been vulnerable to economic riptides related to the United States’ corn policy. Now that the United States is using 40 percent of its crop to make biofuel, it is not surprising that tortilla prices have doubled in Guatemala, which imports nearly half of its corn. Guatemala is part of CAFTA (Central American Free Trade Agreement), and many of the participating countries put high tariffs on imported corn. Guatemala’s current tariff rate on corn and other grains is near 10%, which significantly discourages imports. According to the non-profit agricultural organization Semilla Nueva, “…for the most part Guatemala’s corn is from Guatemala.” NYT: At the same time, Guatemala’s lush land, owned by a handful of families, has proved ideal for producing raw materials for biofuels. Suchitepéquez Province, a major corn-producing region five years ago, is now carpeted with sugar cane and African palm. The field Mr. Alvarado used to rent for his personal corn crop now grows sugar cane for a company that exports bioethanol to Europe. USDA data shows that while sugarcane area planted increased an average of 3.7% per year from 2007 to 2011, sugarcane area (241,000 Ha) is still far smaller than corn area (850,000 Ha) and there is no statistical evidence that farmers are switching away from planting corn to sugar on a large scale. NYT: In a country where most families must spend about two thirds of their income on food, “the average Guatemalan is now hungrier because of biofuel development,” said Katja Winkler, a researcher at Idear, a Guatemalan nonprofit organization that studies rural issues. Roughly 50 percent of the nation’s children are chronically malnourished, the fourth-highest rate in the world, according to the United Nations. NYT: But many worry that Guatemala’s poor are already suffering from the diversion of food to fuel. “There are pros and cons to biofuel, but not here,” said Misael Gonzáles of C.U.C., a labor union for Guatemala’s farmers. “These people don’t have enough to eat. They need food. They need land. They can’t eat biofuel, and they don’t drive cars.” USDA data show consumption of white corn in Guatemala has grown in recent years and set a new record in 2012. U.N. FAO data shows “maize food supply” grew 20% between 2000 and 2009 (the latest data available). Per capita maize consumption increased 3% from 2004 to 2009, according to the same data. NYT: In 2011, corn prices would have been 17 percent lower if the United States did not subsidize and give incentives for biofuel production with its renewable fuel policies, according to an analysis by Bruce A. Babcock, an agricultural economist at Iowa State University. The World Bank has suggested that biofuel mandates in the developed world should be adjusted when food is short or prices are inordinately high. Prof. Babcock’s analysis examined the impacts of U.S. biofuel policies on No. 2 yellow corn—the type used for ethanol production—not white corn used for tortillas. In any case, Babcock’s analysis showed that corn prices wouldn’t have been a bit different in 2010 with or without U.S. biofuels policies in place, and only 2-7% lower in 2005-2009. The analysis also shows prices for several basic consumer food items, including eggs, wouldn’t have been any different with or without the RFS in place from 2005 to 2010. NYT: Once nearly self-sufficient in corn production, Guatemala became more dependent on imports in the 1990s as a surplus of subsidized American corn flowed south. Guatemalan farmers could not compete, and corn production dropped roughly 30 percent per capita from 1995 to 2005, Mr. Wise said. USDA data shows that the percentage of Guatemalan maize consumption comprised by imports has been relatively steady since 2000. In fact, the share of consumption comprised by imports was smaller in 2012 than in each year from 1999 to 2006. NYT: Production of sugar cane, long a mainstay Guatemalan crop, has also skyrocketed as biofuels opened new market opportunities. Pantaleon Sugar Holdings, which once exported only food products, now uses 13 percent of its production for fuel. Local sugar prices have doubled. According to USDA-FAS, Guatemalan sugarcane production has increased just 6.6% between 2007 and 2011. To see charts illustrating points made in this post, click here. Corn, Corn prices, Ethanol 2013-01-07T18:05:26+00:00 http://www.ethanolrfa.org/exchange/entry/e15-questions-for-aaa-from-the-auto-channel/ http://www.ethanolrfa.org/exchange/entry/e15-questions-for-aaa-from-the-auto-channel/ Today, Marc Rauch of THE AUTO CHANNEL, wrote to AAA with questions resulting from recent claims against E15. Hello Michael - Yesterday, I was made aware of a video story produced by Melissa Francis and FOX News that was based upon either the above titled AAA editorial written by your organization's CEO, or a very similar earlier AAA editorial that was released on or about November 30, 2012. By the way, please feel free to share this email with Robert Darbelnet and any other AAA staff member. In the video, Ms. Francis introduced a guest, Lauren Fix, to comment on and explain the "warnings" made in your editorial. Although neither Ms. Francis nor Ms. Fix identified Ms. Fix as an official AAA spokesperson, she seems to have virtually acted in that capacity. You can view the video at: http://video.foxbusiness.com/v/2000862202001/warnings-not-to-use-e15-gas-in-your-car/ . I found almost everything that Ms. Fix had to say about ethanol to be either a gross lie or a recitation of typical bad propaganda that has been spread by the oil industry and its lackeys over the past 80+ years. In a separate email, I made my opinion known to both Ms. Fix and Ms. Francis. My comments to them are as follows: I am writing to you concerning the recent video story that Melissa Francis did with Lauren Fix regarding E15. I am co-owner of THE AUTO CHANNEL and THE AUTOCHANNEL.com. We are the Internet's largest automotive information resource. We are completely independent and not sponsored by any fuel producer. The information provided by Lauren Fix about E15 is almost completely untrue. Lauren's explanation of phase-separation and the food-price argument about corn are preposterously puerile. In fact, if you live in a cold climate and your fuel tank and lines have a tendency to collect condensation (water), which would then freeze and cause real damage, the solution is to put Dry Gas in the fuel tank. Dry Gas is alcohol. Alcohol is ethanol. Ethanol "absorbs" the water moisture. Fuel left in an unused engine for an extended period of time can break down and cause a starting or running problem. This is true of all fuels, including and especially gasoline, which leaves gummy varnish like deposits. Sta-Bil, another product used to stabilize the gasoline left in dormant engines also contains alcohol to help prevent the gummy build up. And again, alcohol is ethanol. E15 will not damage the engines of vehicles older than 2012. It has been extensively tested. It can be safely used in all modern gasoline-powered vehicles manufactured since the early 1990's, whether they are "flex-fuel" vehicles or not. Incidentally, when the EPA conducted their tests on E15 and gave their "clean bill of health," they also tested E20 and had the same positive conclusions. I have been test driving vehicles for 25 years and have regularly used various blend levels of gasoline and ethanol with no negative reactions. Furthermore, I own and drive a non-flex fuel 2002 Ford Taurus that I run on high blend levels of gasoline and ethanol. My vehicle suffers from no problems that are not normally associated with all gasoline-powered vehicles. Michael, I would imagine that unless you can confirm Ms. Fix as an official spokesperson for AAA that you will not have any comments to make regarding her comments, and that's fine since the point of this email is not to get the AAA reaction to her comments. I'm simply including this episode as background for the questions that I do have regarding the above mentioned AAA editorial. My questions to you are: 1. What oil-industry-independent "research-to-date" was Mr. Darbelnet citing that "...raises serious concerns that E15...could cause accelerated engine wear and failure, (and) fuel system damage...?" 2. What information do you have, other than unsupported oil-industry claims, that the EPA did not conduct tests sufficient to determine the safety of using E15 in gasoline-powered passenger vehicles manufactured in the past two decades? 3. Does AAA not consider that the independent E15 testing conducted by Ricardo (findings released September 2010) to be significant confirmation that E15 is safe for all modern gasoline-powered vehicles? 4. In paragraph 8 of the editorial, Mr. Darbelnet states that "Some of those supporting E15 admit the fuel may cause damage," and you give the example that "...some underground storage tank systems, both new and used, exhibited reduced levels of safety and performance when exposed to E15." Given that all fuel underground storage tank systems routinely experience problems, what information do you have - other than any oil-industry anti-ethanol biased research - that shows that E15 underground storage tanks experience problems that are greater and/or more frequent than underground storage tanks that are used for diesel, E10 gasoline, E85, or gasoline that contains no ethanol? 5. In addition, in regard to paragraph 8, how does this potential problem relate to vehicle engine damage, and wouldn't it be fair to say that combining the two points is just an irrelevant red-herring warning? 6. Does AAA agree with the overall level of warning that FOX News issued - which they based upon the AAA editorial - about E15, or did they overstate your concerns? I look forward to your reply and any instructive information you can provide. Thank you for your time. Very truly yours, Marc J. Rauch Exec. Vice President THE AUTO CHANNEL LLC www.theautochannel.com E15, Ethanol 2013-01-04T20:17:48+00:00