http://www.ethanolrfa.org/ en Copyright 2012 2012-02-03T15:10:02+00:00 http://www.ethanolrfa.org/exchange/entry/nec-scholarship-recipient-essay-rises-above-the-rest/ http://www.ethanolrfa.org/exchange/entry/nec-scholarship-recipient-essay-rises-above-the-rest/ For the past three years, the Renewable Fuels Association (RFA) and Renewable Fuels Foundation (RFF) have held a scholarship competition for higher education students to enter for a chance to win a free registration to the annual National Ethanol Conference (NEC). Attending the conference provides the students a chance to meet and network with ethanol leaders, policy makers and industry experts to see what opportunities there are for them in the ethanol industry. The level of interest students show in attending the NEC continues to prevail year after year. Applicants were asked to explain how this scholarship will assist them in achieving their academic and/or career goals in 500 words or less. They were also asked to include two letters of recommendation, a current resume and an official school transcript. Each year, numerous students apply for this scholarship, and while all the recipients demonstrate an interest in moving forward in the industry, there are some that stand out above the rest. This year, two exemplary essays were submitted, and we would like to showcase them. You can find the other essay here. Ted Elverson is majoring in Agriculture and Biosystems Engineering at South Dakota State University.  He grew up on a farm and has strong roots in agriculture.  Ethanol is a large part of agriculture and has affected him for most of his life.  This has led him into an internship with POET and a career focus in the biofuels. “The National Ethanol Conference is a great opportunity for advancing my career in the ethanol industry.  Policy has a huge impact on the industry.  Governmental mandates and funding has been a hot topic this last year with the debt ceiling and budget reform.  I would like to learn from the industry leaders how these policies will affect the industry and what can be done to benefit the industry.  Networking with leaders and experts will allow me to make an impact within the industry as I pursue a career in ethanol. My interest in the ethanol industry stemmed from my agricultural background.  I grew up on a farm and have worked alongside my father and grandfather from childhood.  We invested in an ethanol plant, Dakota Ethanol in Wentworth, South Dakota who is attending the conference, and have hauled corn there for years. I am in the Agricultural and Biosystems Engineering program at South Dakota State University.  Within my major, I am pursuing an emphasis in Biomaterials Processing.  This emphasis focuses on ethanol and bio-fuel production.  My curriculum pertains to the production of ethanol.  I took the Principles of Biomaterial Processing course offered by the department last fall.  In the lab, we compared different properties of biological materials which are applicable to the preparation of feedstock to be used to create ethanol.  The Agricultural and Biosystems Engineering department is very supportive and has offered to pay for airfare to get to the conference. Last summer I was an engineering intern at POET.  I worked in the corporate office under the Plant Management division and was introduced to the ethanol production process.  I was able to spend time at plants and become familiar with different processes.  I worked with improving plant efficiency and troubleshooting issues.  During the internship, I was exposed to the advantages of bio-fuels and the opposition the ethanol industry faces. I want to be a part of the future of ethanol.  The ethanol industry has become a viable industry and I would like to see it expand.  It has established itself as a real alternative to fossil fuels.  Lately, it has become a target with opposition from the food, petroleum and environmental interests.  I recently attended a presentation from the Department of the Navy which has committed to convert half of its energy to bio-fuel.  This support is something that needs to be common throughout the United States to lower our dependence on foreign energy.  I would hope to hear more on the legislation and regulation which may shape the industry in the future.  With this knowledge, I could begin to support bio-fuels through local, state and federal representatives. This conference would be a great opportunity for me to meet industry leaders and hear from some of the best experts in the bio-fuel industry.  The networking opportunities presents an opportunity to learn what other companies and plants are exploring across the country.  The experience would increase my knowledge and possibly introduce some new or developing processes to strengthen the industry.” Education, National Ethanol Conference 2012-02-03T15:10:02+00:00 http://www.ethanolrfa.org/exchange/entry/outstanding-essay-from-nec-scholarship-recipient/ http://www.ethanolrfa.org/exchange/entry/outstanding-essay-from-nec-scholarship-recipient/ The Renewable Fuels Association (RFA) and Renewable Fuels Foundation (RFF) believe it is important for students interested in the biofuels and renewable fuels industry to have an opportunity to explore what the industry has to offer them by meeting with and talking to experts and industry leaders at the National Ethanol Conference. For the third consecutive year, the RFA and RFF offered scholarships to students in higher education for a chance to receive a complementary registration at the 17th Annual National Ethanol Conference. Applicants were asked to explain how this scholarship will assist them in achieving their academic and/or career goals in 500 words or less. They were also asked to include two letters of recommendation, a current resume and an official school transcript. Each year, numerous students apply for this scholarship, and while all the recipients demonstrate an interest in moving forward in the industry, there are some that truly stand out. Below is one that stood out above the rest this year. You can find the other outstanding essay here. Karen Lewis is from a fifth generation family farm in Michigan that was settled in 1876.  She is currently a Ph.D. student at Arizona State University in the Morrison School of Agribusiness and Resource Management. Her research area of interest is agricultural policy analysis.   “The National Ethanol Conference Scholarship will assist me in achieving my academic and career goals. I am currently a PhD student at Arizona State University (ASU) in the Morrison School of Agribusiness and Resource Management where I research agricultural policy. Attending the National Ethanol Conference will update my understanding of the current direction of ethanol policy and help my research endeavors at ASU. While my future career is still uncertain, my options include becoming a university professor, being an agricultural advocate, working for the government or working for an agribusiness industry. Therefore, the National Ethanol Conference will assist me in gaining insight into both my educational aspirations and my future career path. In addition to studying agricultural policy at ASU, I also researched ethanol production while I was a Graduate Research Assistant at Michigan State University (MSU). I received my Master’s Degree from MSU in 2010 from the Department of Agriculture, Food and Resource Economics. While at MSU I researched ethanol production and its impact on corn markets in the Midwestern United States. My Master’s Thesis was titled, “The Impact of Ethanol on Corn Market Relationships and Corn Price Basis Levels.” From my Master’s Thesis, I published an article, titled "The Impact of Ethanol Production on Spatial Grain Market,” in the peer-reviewed academic journal titled the International Food and Agribusiness Management Review, Volume 14, Issue 4. A second article from my Master’s Thesis is currently under review at a peer-reviewed academic journal. I am the lead author for both journal articles and my MSU major professor, Dr. Glynn Tonsor, is my co-author. Attending the National Ethanol Conference is also of interest to me because I grew up on a fifth generation family farm in Michigan which was settled in 1876. On our family farm we grow corn, sugarbeets, wheat and soybeans on 1,100 acres of land. On our farm we also feed 700 head of beef cattle, and a primary feed input for our cattle are distiller’s grains that come from the ethanol plant located in Marysville, Michigan. Learning about the direction of future ethanol production and policy at the National Ethanol Conference is of great interest to me because I have previous experience with federal level legislation. During the summer of 2007 I was an intern for the American Sugarbeet Growers Association (ASGA) when the 2008 Farm Bill was being considered and passed by the United States House of Representatives. Headquartered in Washington, D.C., the ASGA is a lobbyist organization that represents all of the sugarbeet growers in the U.S. I would be grateful for the opportunity to see how the Ethanol Industry plans to shape future ethanol policy at the National Ethanol Conference. Attending the National Ethanol Conference would be an excellent and valuable addition to my educational and life experiences concerning ethanol production. Networking at the National Ethanol Conference will not only assist my educational goals, but it will also be beneficial to my future career in the agribusiness field.” Education, National Ethanol Conference 2012-02-03T15:06:53+00:00 http://www.ethanolrfa.org/exchange/entry/another-record-breaking-month-for-ethanol-exports/ http://www.ethanolrfa.org/exchange/entry/another-record-breaking-month-for-ethanol-exports/ U.S. exports of denatured and undenatured (non-beverage) ethanol set a new monthly record of 152.5 million gallons (mg) in November, according to government data released this morning. Brazil was the leading destination for U.S. product and accounted for nearly half of total shipments for the month. Year-to-date total exports through November stood at 1.02 billion gallons (bg), meaning exports were on pace for a 2011 calendar year total of 1.11 bg. Notably, these exports did not qualify for the ethanol blender’s tax credit, as the ethanol was not blended with gasoline prior to exportation. Denatured ethanol exports totaled 115.4 mg in November, eclipsing the previous monthly record of 104.6 mg set in July. Brazil was the leading destination with 45 mg of imports. Canada followed with 27 mg of imports. Notably, India tallied its first major shipment of U.S. ethanol for the year, bringing in 10 mg of denatured product. Undenatured (non-beverage) ethanol exports registered at 37.1 mg in November, edging out October’s total of 36.9 mg to establish a new monthly record. Most of the November undenatured shipments (72%) went to Brazil, as that nation took in some 27 mg. Jamaica, Mexico, and the Netherlands were among other top destinations. Data for November U.S. ethanol imports were not yet available, but anecdotal evidence suggests the “Ethanol Shuffle” continued in November. November exports of distillers dried grains with solubles (DDGS) totaled 538,174 metric tons (mt), the lowest monthly tally of the year. China was the top market (140,741 mt), followed by Mexico (117,108 mt), and Canada (53,458 mt). Year-to-date exports of DDGS stood at 7.08 million mt, meaning exports are on pace for 7.72 million mt for the calendar year. That total would be down 14% from 2010’s record exports of 9.03 million mt.   Ethanol, Exports 2012-01-13T15:07:55+00:00 http://www.ethanolrfa.org/exchange/entry/ethanol-remains-a-bargain/ http://www.ethanolrfa.org/exchange/entry/ethanol-remains-a-bargain/ The end of the Volumetric Ethanol Excise Tax Credit (VEETC) was a non-event for America’s ethanol industry.  Domestic ethanol producers and marketers had long been preparing for the end of this tax incentive that in today’s market is no longer as necessary as it once was. Unfortunately, the same kind of misinformation and uninformed bloviating that characterized opposition to the tax incentive is coming to dominate discussions about what the end of VEETC truly means.  In recent weeks, many headlines have trumpeted the argument that gas prices will be higher as a result of expiration of the VEETC. As is often the case, a quick review of the facts tells the story. The VEETC was an incentive for blenders of ethanol into gasoline.  It allowed these companies to take a $0.45 tax credit for each gallon of ethanol they blended.  Each gallon of gasoline these companies produce is subject to an 18.4 cent federal excise tax against which they could apply VEETC.  As such, an ethanol blender benefited from a 4.5 cent tax reduction for each gallon of E10 sold, effectively lowering the tax on gasoline producers and consumers.  When the tax credit still existed, some critics argued that the 4.5 cent benefit was kept in the pocket of the blender and not allowed to trickle downstream to consumers at the pump; ironically, some of those same critics are now saying expiration of the tax credit will directly lead to a 4.5-cent increase in pump prices for consumers. In any case, with VEETC gone, taxes on blends of ethanol across the board have gone up and gasoline blenders and oil companies will likely pass the increased tax burden on to consumers at the pump. Critics of ethanol and reporters unfamiliar with how gasoline is priced have been quick to jump on this and point the finger of blame at ethanol for raising gas prices.  While taxes on ethanol blends have been raised, ethanol remains at a significant discount to gasoline. As the chart below shows, ethanol has traded at an average discount to gasoline of 25 cents per gallon at the wholesale level for the past four years.  At times, such as the spring of 2010, ethanol has been close to $1/gallon cheaper than gasoline. In recent weeks, ethanol prices have been 60 cents per gallon lower than gasoline. As such, E10 ethanol blends have been 6 cents per gallon cheaper than old-fashioned 100% gasoline—even without the tax credit.     Additionally, ethanol’s ability to significantly extend oil supplies exerts downward pressure on oil and gasoline prices.  Fully 10% of America’s gasoline supply is now coming from a less expensive, domestic source that is beyond the reach of Mahmoud Ahmadinejad and other tyrannical petro-dictators, meaning oil and gasoline prices are being kept in check by ethanol.  A study by noted economists from Iowa State University and the University of Wisconsin concluded that ethanol’s presence in the market in 2010 lowered gasoline prices by $0.89 per gallon from where they would have been and an average of $0.25 per gallon in the past decade.  Moreover, the study found that removing ethanol would likely result in a 41-92% increase in the price of gasoline.  That means if consumers woke up tomorrow morning and ethanol was gone—which is precisely the aim of some of the industry’s critics—gas prices would rise to $5-$6.75 per gallon. Ouch. VEETC was a highly successful initiative that accomplished what all subsidies and incentives should:  help build an industry, get it to stand on its own two feet, and then expire.   This model stands in stark contrast to the hundreds of billions of dollars in direct, indirect, and hidden support the oil industry receives courtesy of the American tax payer that keep us addict to foreign oil and disguise the true cost of that addiction. In fact, a recent report from a Yale University economist and DBL Investors shows that subsidies for oil & gas averaged $4.86 billion per year from 1918 to 2009—that’s a total of nearly $450 billion! In contrast, the authors say biofuels subsidies—which are now gone—averaged $1.08 billion from 1980 to 2009 for a total of about $31 billion.   Remember, every time you pull up to the pump, you are most likely filling up with 10 percent ethanol.  Keep in mind the domestic ethanol you are using is likely cheaper than the gasoline in the gallon and does not require the protection of America’s 5th Naval Fleet to make it to the pump. Ethanol, VEETC 2012-01-10T22:06:23+00:00 http://www.ethanolrfa.org/exchange/entry/understanding-california-court-decision-and-the-lcfs/ http://www.ethanolrfa.org/exchange/entry/understanding-california-court-decision-and-the-lcfs/ On Thursday, December 29, 2011, Judge Lawrence D. O’Neill of the U.S. District Court for the Eastern District of California issued a decision finding that California’s Low Carbon Fuel Standard (LCFS) is unconstitutional on the grounds it violates the Commerce Clause of the United States Constitution.  According to press accounts, California’s Air Resources Board (CARB) will immediately appeal the decision to the U.S. Court of Appeals for the 9th Circuit and intends to seek a stay of the ruling to allow CARB to continue implementing the LCFS. To date, CARB has not filed its appeal. Background: On December 24, 2009, the RFA, together with other plaintiffs including Growth Energy, filed for Summary Judgment and Preliminary Injunction against the LCFS in U.S. District Court for the Eastern District of California.  The RFA argued the LCFS was unconstitutional and unlawful on four points: The LCFS discriminates against interstate commerce in ethanol because it assigns worse carbon-intensity scores to Midwest ethanol than to California ethanol (in part because Midwest ethanol has to be shipped to California and because CARB assumed Midwest ethanol would be produced with electricity generated by burning coal); That the LCFS attempts to regulate conduct occurring wholly outside the borders of the state of California and is thus impermissibly extraterritorial; That the benefits of the LCFS are nil and thus outweighed by their substantial burdens; That the LCFS impermissibly interferes with federal laws protecting the domestic corn ethanol industry. The Ruling: Judge O’Neill ruled that the LCFS unlawfully sought to regulate commerce occurring outside the state and discriminated against Midwestern ethanol.  Judge O’Neill specifically noted that CARB “cannot take ‘legal and political responsibility’ of commerce occurring outside of California, even if the products of that commerce ultimately are sold in California.” Based on his ruling, Judge O’Neill issued a preliminary injunction against further implementation of the LCFS until the litigation is completed.  Judge O’Neill wrote: “[Because the RFA] established a likelihood of success on the merits of [its] Commerce Clause claim, and raise[d] serious questions related to [its] preemption claim, likelihood of irreparable harm, and the balance of the equities so tips in their favor, this Court GRANTS the ... preliminary injunction motion and ENJOINS enforcement of the LCFS during the pendency of this litigation.” Frequently Asked Questions:  What does this ruling mean?  This is a significant ruling in favor of American ethanol producers.  It upholds the claims made by RFA that CARB had unlawfully sought to regulate the way in which businesses not based in California operate and penalized ethanol by imposing significant carbon penalties based upon commerce occurring outside the state of California.  As a result, CARB must halt implementation of the LCFS.  The RFA has worked tirelessly with CARB to point out the inherent overreach and discrimination in the LCFS and the flawed scientific theory on which the discrimination is based.  To date, CARB has not shown a willingness to address all the issues raised by the RFA and thus made this lawsuit and this ruling necessary and unavoidable. Why does it matter?  California is the single largest market for U.S. ethanol at nearly 1.5 billion gallons a year.  As it was being implemented, the LCFS would eventually exclude grain-based ethanol from most ethanol producers outside the state of California.  In addition, the unsubstantiated carbon accounting schemes employed by CARB would have encouraged the import of Brazilian ethanol at the expense of U.S. produced ethanol from all feedstocks.  This perversion would have both made the U.S. more dependent on imported oil and resulted in an increase in the carbon emissions CARB was trying to reduce as U.S. ethanol would be exported to Brazil to fill the void being created by Brazilian imports to California.  What are the next steps?  CARB has stated that it plans to appeal the decision.  The RFA will monitor CARB’s action and act accordingly to defend the result achieved at the District Court level.  CARB’s actions and the ruling on the appeal will determine if additional action will occur.  What is the end game for this litigation?  The RFA is hopeful the decision by Judge O’Neill will be upheld and the LCFS will continue to be stopped.  It unlawfully regulates out of state activities and discriminates against ethanol on a geographic basis and would close off the largest market for U.S. ethanol (the state of California) for virtually all grain-based ethanol producers.  The RFA is not opposed to carbon-reducing programs but believes any such initiative should be undertaken at the national level, thus avoiding a state-by-state patchwork of unworkable and possibly unconstitutional policies.  If based on the best available science and grounded in real world perception, a national low carbon fuel strategy that complements the Renewable Fuel Standard would be something the RFA and its members would support. Brazil, Ethanol, Land Use 2012-01-04T22:16:18+00:00 http://www.ethanolrfa.org/exchange/entry/the-2012-crystal-ball/ http://www.ethanolrfa.org/exchange/entry/the-2012-crystal-ball/ As we noted before Christmas, 2011 was an exciting year for American ethanol production.  Evolutions in the marketplace, advancements in technology, and progress in policy have all set the stage for a new era in American ethanol production.  Gone is the tax incentive that helped build the industry and then was allowed to expire after it had served its purpose.  Also gone is the tariff on imported ethanol.  Still in place, however, are the Renewable Fuel Standard (RFS) and a marketplace that is now comprised of 10 percent ethanol and growing.  With this backdrop, here are five stories to watch for in 2012, in the humble opinion of the RFA: 1.       First commercial availability of E15 blends for MY2001 and newer vehicles.  The RFA is working very hard to finalize federal requirements to certify E15 blends.  Once completed, getting E15 blends into the marketplace becomes a state-by-state march, with some states like Iowa and Illinois ready to go as soon as the federal requirements are completed.  When E15 gallons are first legally available is still up in the air, but we are betting it happens in the first half of 2012. 2.       Free and fair trade of ethanol.  In addition to being the world’s largest producer, consumer, and exporter of ethanol, American ethanol producers are also the lowest cost producer.  With this emergence, new challenges from ethanol interests in other nations have arisen.  Whether it is the European Union anti-dumping investigation or the vacillating ethanol policies in Brazil, a fair resolution to trade challenges will be important to the continued growth and evolution of domestic ethanol production. 3.       “You want the truth?  You can’t handle the truth!”  The upcoming year promises to see a great deal of legal activity surrounding American ethanol use.  The recent ruling by a federal judge that California’s Low Carbon Fuel Standard (LCFS) is unconstitutional will be appealed.  And, arguments in the oil/food processing/environmental lobbying industry lawsuit against EPA’s approval of E15 have yet to be heard.  All of this, as well as international litigation, promises to keep legal beagles busy in the year and years to come. 4.       Wave on wave of RFS challenges.  The conventional wisdom is Congress will accomplish even less in 2012 than it did last year – with it being an election year and all.  While this may prove to be true, it will not stop those who oppose American renewable fuels from seeking to dismantle the RFS.  We expect the barrage of unsubstantiated attacks on the RFS to continue and even intensify as the tax credit that long served as the boogeyman for anti-ethanol interests has expired. 5.       Answering cellulosic ethanol challengers.  Construction is slated to begin on commercial scale cellulosic ethanol biorefineries with production to follow in early 2013.  These facilities would be the first commercial-scale project of their kind in the world.  In order to assure these efforts are successful, Congress must renew key tax provisions for cellulosic ethanol producers before they expire at year’s end.  The RFA, and its partner organization, the Advanced Ethanol Council, will make extending these policies a top legislative priority.    Obviously, there are a host of issues with regard to America’s ethanol and energy sector that will deserve our attention.  Eliminating unnecessary subsidies for the petroleum industry and accurately accounting for carbon emissions from transportation fuels are good examples.  But we believe these five storylines will have the most lasting impact on ethanol production in the U.S. E15, Engines, Ethanol, Exports, Land Use, Production 2012-01-03T18:56:23+00:00 http://www.ethanolrfa.org/exchange/entry/top-5-ethanol-stories-for-2011/ http://www.ethanolrfa.org/exchange/entry/top-5-ethanol-stories-for-2011/ America’s ethanol industry has been in a state of rapid evolution since the beginning of 2000.  Record-setting production, policy development, and market expansion have all moved forward with dramatic speed and helped to create the world’s largest, most efficient, most cost effective renewable fuels industry. However, developments in 2011 have set the stage for a new chapter in American ethanol history.  Here are the Top 5 stories of 2011 as seen through the eyes of the Renewable Fuels Association. 1.        EPA gives final approval to E15 for MY2001 and newer vehicles.  For the first time ever, Americans driving conventional vehicles will be provided the opportunity to choose ethanol blends in excess of 10 percent.  While a strong argument could be made for the end of the tax incentive as the year’s top story, the impact of an expanded market through E15 blends will have an exponentially greater impact on the U.S. ethanol market than the temporary adjustment caused by the end of VEETC.  2.       End of VEETC and the secondary tariff.  Without protest, U.S. ethanol producers allowed the $0.45 per gallon tax incentive for ethanol blending to expire.  The offsetting secondary tariff on imported ethanol will also expire.  The domestic ethanol industry has evolved, policy has progressed, and the market has changed making now the right time for the incentive to expire.  Ethanol producers never intended for the tax incentive to be permanent.  Like all incentives, it was put in place to help build an industry and when successful, it should sunset.  Unfortunately, the same mentality does not extend to century-old tax subsidies supporting 20th century petroleum technologies. 3.       U.S. exports set all-time highs.  As the U.S. worked to move beyond artificial barriers in the domestic market, new international markets emerged as opportunities for domestic ethanol producers.  An estimated one billion gallons of denatured and undenatured ethanol – gallons never blended with gasoline or eligible for the tax incentive – were exported in 2011.  Additionally, U.S. exports of ethanol feed co-products, largely distillers grains, also surged.  An estimated 8-9 million metric tons of this high value livestock feed was exported in 2011. 4.       Restarting the advanced and cellulosic ethanol engine.  Weathering the economic collapse of 2008, advanced and cellulosic ethanol producers made big strides in 2011 to bring these promising technologies to commercial production.  A number of advanced and cellulosic ethanol companies, including Abengoa, Coskata, and Mascoma are beginning construction on ethanol biorefineries that will expand America’s ability to fuel its economy with a broader range of renewable feedstocks.  (An RFA side note:  The formation of the Advanced Ethanol Council in partnership with the RFA was a pivotal step forward in forcefully and effectively advocating for the accelerated commercialization of advanced and cellulosic ethanol technologies.) 5.       Emergence of the integrated biorefinery model.  Ethanol production is far more than fuel and feed.  Today, approximately 40 percent of all ethanol facilities are capturing and selling corn oil.  An ever-increasing number of ethanol producers are also deploying technologies to produce proteins, biochemicals and other co-products that can further displace oil in marketplace.  Anything made from oil can be made from biomass.  It is matter of know-how and American ethanol producers are proving that it can be done and be done at scale. It is these five developments that defined 2011 and are setting the stage for 2012 and beyond.  In the first week of January, the RFA will be publishing a companion piece to this that looks at the Top 5 stories to watch for U.S. ethanol in 2012. Until then, Happy Holidays from the dedicated staff of the Renewable Fuels Association! DDGS, E15, Ethanol, Energy, Exports, Fuel 2011-12-21T22:15:30+00:00 http://www.ethanolrfa.org/exchange/entry/ethanol-growth-not-leading-to-cropland-expansion-new-usda-report-shows/ http://www.ethanolrfa.org/exchange/entry/ethanol-growth-not-leading-to-cropland-expansion-new-usda-report-shows/ An in-depth analysis of U.S. land use patterns released today by the U.S. Department of Agriculture shows total cropland decreased by 34 million acres from 2002 to 2007, the lowest level since USDA began collecting this data 1945. The USDA report also shows significant increases in forestland, grassland and rangeland during the five-year period. The Renewable Fuels Association (RFA) said the new report is one more addition to the mounting body of evidence that proves increased ethanol production has not resulted in expansion of total U.S. cropland or a decline in grassland and forest. Using real data from the real world, this report from USDA shows yet again that U.S. cropland is not expanding in response to increased ethanol demand. The report also shows that forest and grassland increased dramatically during a period when ethanol production more than tripled. This is more proof that the wild predictions of ethanol causing cropland expansion and conversion of forest and grassland are just plain wrong. Meanwhile, the report shows land dedicated to urban areas and special-use areas (roads, industrial areas, rural residences, etc.) increased dramatically. It is ironic that the land use debate has fixated on biofuels, when the actual culprit of land conversion has clearly been urban and suburban sprawl. Subdivisions full of mini-mansions, big box stores, shopping malls, and parking lots are encroaching on productive farmland across the country. According to the authors, “Urban land acreage quadrupled from 1945 to 2007, increasing at about twice the rate of population growth over this period. Land in urban areas was estimated at 61 million acres in 2007, up almost 2 percent since 2002 and 17 percent since 1990 (after adjusting the 1990 estimate for the new criteria used in the 2000 Census).” The estimated acreage of grassland pasture and range increased by 27 million acres (almost 5 percent) between 2002 and 2007, while forest-use land increased 20 million acres (3 percent) from 2002 to 2007, “continuing a trend that became evident in 2002 and reversing an almost 50-year downward trend.” RFA encourages the policymakers and regulators responsible for penalizing crop-based biofuels for indirect land use change to take a close look at the new USDA report. There is simply no substitute for real data. Our renewable energy policies and regulations should be based on what is actually happening on the ground, not on hypothetical results from black box economic models. The USDA report is available here.   *Special-use areas include highways, railroads, airports, defense, industrial, parks and other land uses. Agriculture, Land Use, Research, USDA 2011-12-21T21:06:37+00:00 http://www.ethanolrfa.org/exchange/entry/the-ethanol-shuffle/ http://www.ethanolrfa.org/exchange/entry/the-ethanol-shuffle/ There’s a hot new craze called the “Ethanol Shuffle” that’s sweeping seaports from Sao Paulo to Los Angeles and Houston to Maceio. It’s not a new dance for longshoremen and ship captains; no, this is a shuffle of an entirely different sort. This shuffle is all about the confounded realignment of the global ethanol trade. The rearrangement is occurring exclusively as the result of state and Federal fuel regulations that treat Brazilian sugarcane ethanol as if it were the Holy Grail of biofuels. Both the California Air Resources Board (CARB) and U.S. EPA have decided that producing sugarcane ethanol results in fewer lifecycle greenhouse gas emissions than producing corn ethanol. They’ve bought into the hype that sugarcane ethanol is somehow better and cleaner than corn ethanol, and they’ve used questionable analyses to support their positions. For example, EPA’s land use change analysis for the Renewable Fuel Standard (RFS2) mysteriously concluded that sugarcane ethanol expansion won’t induce any land use change emissions in Brazil, despite the fact that sugarcane acreage there has doubled in the past decade (an issue we discussed in detail here). Meanwhile, EPA’s analysis suggested about two-thirds of the land use change emissions hypothetically resulting from U.S. corn ethanol expansion come from land conversions in Brazil. Go figure. CARB’s analysis of sugarcane ethanol is full of similarly questionable assumptions. For instance, CARB allows Brazilian ethanol producers to claim that their sugarcane was mechanically harvested, when much of the sugarcane crop is still manually harvested after burning the field (a practice that releases significant GHG emissions). CARB also assumes sugarcane ethanol is transported from remote sugar mills to export terminals exclusively by rail and pipeline, when everyone knows trucks carry the majority of cane ethanol to market (this is important because emissions from transportation of the fuel are included in the overall carbon footprint, and shipping ethanol by rail and pipeline emits far fewer GHGs than shipping it by truck). So, under CARB’s Low Carbon Fuels Standard (LCFS), sugarcane ethanol generates far more credits for compliance than corn ethanol. And EPA considers sugarcane ethanol to be an “advanced biofuel,” meaning it is one of only two options available to obligated parties today for compliance with the RFS2 advanced biofuels requirement (biodiesel being the other). In short, the LCFS and RFS2 strongly compel regulated parties (typically oil refiners) to import sugarcane ethanol to meet their regulatory obligations. But here’s the rub: sugarcane ethanol is in short supply after consecutive disappointing sugar crops in Brazil. Sugarcane yields in 2011 were about 19% below the 30-year trend and on par with average yields from the mid-1980s. USDA’s attaché on the ground in Brazil estimates the country will produce just 5.8 billion gallons of ethanol in 2011/12, down 20% from last year’s 7.2 billion gallons. The shortage of sugar resulting from three consecutive years of declining cane yields means Brazil’s ethanol output hasn’t been able to keep up with domestic demand—let alone demand from traditional cane ethanol importers like the European Union. In fact, Brazil cut its mandatory nationwide ethanol inclusion level from a 25% blend to 20% because the domestic supply just isn’t there and sugarcane ethanol prices have been sky-high. Certainly, the subtext of Brazil’s cut to its blend rate is that they simply don’t want to dramatically increase imports of U.S. ethanol—apparently, they’d rather import (lots) more gasoline. Given the sugar/ethanol shortage situation in Brazil, one wouldn’t expect to see the country exporting much—if any—sugarcane ethanol to the U.S., right? They need to keep every drop for themselves, right?  Wrong…the U.S. imported nearly 40 million gallons of sugarcane ethanol for fuel use from Brazil from July through October, with much of the product coming in through the ports of Los Angeles and San Francisco. The volumes were imported strictly for compliance with RFS2 Advanced Biofuel standard and the California LCFS, as there would be absolutely no economic reason to import sugarcane ethanol otherwise. Meanwhile, the U.S. exported 123 million gallons of corn ethanol to Brazil during the same four months to offset the volumes they sent to us and to meet additional demand resulting from their shortage situation. So, that’s how the “Ethanol Shuffle” works. California imports sugarcane ethanol from Brazil rather than corn ethanol from Nebraska or Kansas; and in turn, corn ethanol from the Midwest travels to Houston or Galveston via rail, then is shipped to Brazil via tanker to “backfill” the volumes they sent to the U.S. Picture the irony of a tanker full of U.S. corn ethanol bound for Brazil passing a tanker full of cane ethanol bound for Los Angeles or Miami along a Caribbean shipping route. Remember, this is all being done in the name of reducing GHG emissions. But what are the real GHG implications of the shuffle? And what are the economic impacts? Fuel Prices Despite the ridiculously misleading claims of the Brazilian sugar industry (and most recently the Brazil-U.S. Business Council), Brazilian sugarcane ethanol has been far more expensive than U.S. corn ethanol over the past two years. According to the California Energy Commission (CEC), Brazilian sugarcane ethanol was, on average, $1.56/gallon more expensive than corn ethanol delivered from the Midwest through the first eight months of 2011 and $1.04/gallon more expensive in 2010 (see slide 13). In April, Brazilian ethanol was running $3/gallon higher than U.S. corn ethanol even before transportation costs are factored in! The CEC data means E10 made with imported Brazilian ethanol would theoretically be nearly 16 cents/gallon more expensive on average in California than E10 made with ethanol from the Midwest. In other words, a one-day supply of E10 made from Brazilian sugarcane ethanol would cost the state’s drivers $5.8 million more than the same amount of E10 made from Midwest corn ethanol (the state burns through about 38 million gallons of E10 per day). Looked at another way, the average California household would spend about $130 more on gasoline over the course of a year if that gasoline was E10 made with sugarcane ethanol rather than U.S. corn ethanol. Yet, the Brazil-U.S. Business Council furtively says importing more cane ethanol would somehow result in “…increased savings at the gas pump for U.S. drivers.” Hmmm, how does that work? As a result of tightening annual LCFS carbon intensity targets, CARB expects much less corn ethanol will be used in California in coming years and substantially more cane ethanol will be imported. If the current pricing differential between U.S. ethanol and Brazilian ethanol continues (or widens), the cost to California drivers of the transition to cane ethanol could be tremendous. GHG Emissions Some in California may argue that the GHG reductions associated with using more cane ethanol in the state would justify the incremental cost to consumers. Of course this argument ignores the fact that GHG emissions are global in nature; that is, the net impact to atmospheric CO2 levels is really no different whether the sugarcane ethanol is used in L.A. or in Rio de Janeiro. In fact, using the sugarcane ethanol in L.A. instead of in Rio is actually worse for the climate because of the additional emissions associated with transporting the product from Brazil to California and backfilling the volume with U.S. corn ethanol. Using CARB’s own transportation distances and emissions factors, we looked at the emissions impacts of two scenarios: one in which California demand is met with corn ethanol from Nebraska and Brazilian demand is met with Brazilian sugarcane ethanol (Scenario A), and one in which California demand is satisfied with Brazilian ethanol and Brazilian demand is met with U.S. ethanol (Scenario B). We find that transportation-related GHG emissions more than double in the scenario where California imports Brazilian cane ethanol and Brazil “backfills” with U.S. corn ethanol imports (Scenario B). And the miles traveled in Scenario B are more than eight times the miles traveled in Scenario A. (Note: Again, CARB curiously assumes cane ethanol travels only by rail (50%) and pipeline (50%) inside of Brazil. While we disagree with this assumption, we’ve adopted it here for the ease of comparison.) Scenario A: Rational Market   Miles CO2e emissions (g/megajoule) California demand met with corn ethanol from central Nebraska  Rail (NE ethanol plant to CA terminal) 1,350 1.96 Truck (Distribution from CA terminal)      50 0.40 Subtotal 1,400 2.36       Brazil demand met with sugarcane ethanol from Center-South, Brazil     Pipeline (50% of ethanol from sugar mill to terminal) [500 x .5 = 250] 250 0.22 Rail (50% of ethanol from sugar mill to terminal) [500 x .5 = 250] 250 0.36 Truck (Distribution from terminal)   50 0.40 Subtotal 550 0.99       Grand Total Scenario A 1,950 3.35       Scenario B: “LCFS Shuffling”       Miles CO2e emissions (g/megajoule) California demand met with sugarcane ethanol from Center-South, Brazil Pipeline (50% of ethanol from mill to port terminal) [500 x .5 = 250] 250 0.22 Rail (50% of ethanol from sugar mill to port terminal) [500 x .5 = 250] 250 0.36 Ocean Tanker (Port Santos to Port of Los Angeles)* 8,420 2.03 Truck (Distribution from port) 150 1.21 Subtotal 9,070 3.82       Brazil demand met with corn ethanol from central Nebraska     Rail (NE ethanol plant to port of Houston) 880 1.28 Ocean Tanker (Port of Houston to Port Santos)* 6,280 1.51 Truck (Distribution from port) 150 1.21 Subtotal 7,310 4.00       Grand Total Scenario B 16,380 7.82 *distances from http://www.portworld.com/map/ Now, we’re not afraid of free and fair trade or a little competition. And this whole thing might not be such a big deal if Brazil’s cane ethanol supply was increasing in balance with demand and if cane ethanol prices were closer to corn ethanol. But that’s not the case. Brazil’s domestic demand is outstripping an already short supply and the RFS2 and LCFS are just exacerbating pressure. So, while U.S. Federal and state fuels policies continue to roll out the red carpet for Brazilian imports based on subjective and unsettled lifecycle GHG analyses, the Brazilians discretely erect trade barriers to U.S. ethanol—even though they desperately need the product! This dichotomy was the subject of a letter RFA sent to the Brazil-U.S. Business Council earlier this week in response to the egregious claims in the council’s Nov. 30 letter, referenced earlier. Check out the RFA letter here. And in the meantime, put on your shufflin’ shoes! Brazil, Engines, Ethanol, Exports 2011-12-12T14:38:01+00:00 http://www.ethanolrfa.org/exchange/entry/october-ethanol-exports-just-short-of-monthly-record/ http://www.ethanolrfa.org/exchange/entry/october-ethanol-exports-just-short-of-monthly-record/ U.S. exports of denatured and undenatured (non-beverage) ethanol totaled 121.4 million gallons (mg) in October, just shy of the record of 127.4 mg established in June, according to government data released this morning. Brazil was the leading destination for U.S. exports, receiving a total of 50 mg. Canada and the EU continued to be other top export markets. Through the first 10 months of 2011, U.S. exports stood at 867.9 mg, more than double the 2010 export total. The U.S. is on pace to export more than 1 billion gallons in the calendar year.  October exports included 84.5 mg of denatured product and 36.9 mg (a new monthly record) of undenatured ethanol. Canada was the top importer of denatured ethanol in October, taking in some 22.9 mg. Brazil followed closely with 22.4 mg, while the Netherlands (16.9 mg), United Kingdom (11.0 mg) and Finland (5.0 mg) rounded out the top five. Year-to-date, Canada has been the leading importer with 233.4 mg, followed by Brazil with 156.3 mg. As for undenatured ethanol, Brazil received the lion’s share of exported product in October, bringing in 25.6 mg. The Philippines (4.3 mg), the Netherlands (2.4 mg), Nigeria (2.2 mg), and Mexico (2.0 mg) were other top destinations. On a year-to-date basis, Brazil has been the top importer of undenatured ethanol, receiving 93.7 mg. Meanwhile, the U.S. imported 13.1 mg of ethanol for fuel use from Brazil in October, presumably for compliance with the Renewable Fuel Standard’s (RFS) advanced biofuel requirement and California’s Low Carbon Fuel Standard (LCFS). Imports of sugarcane ethanol from Brazil have picked up significantly in recent months at the same time U.S. exports of corn ethanol to Brazil have grown. This “shuffling effect” is the subject of an extensive analysis and blog post the RFA will be releasing early next week. Ethanol 2011-12-09T18:03:02+00:00 http://www.ethanolrfa.org/exchange/entry/ethanol-exports-surge-in-september-while-distillers-grains-exports-slide/ http://www.ethanolrfa.org/exchange/entry/ethanol-exports-surge-in-september-while-distillers-grains-exports-slide/ Ethanol exports rebounded sharply in September, as shipments to Brazil hit their highest level since April. According to U.S. government data released today, a total of 105.8 million gallons (mg) of denatured and undenatured (non-beverage) ethanol were exported in September, with nearly half of the shipments going to Brazil. September exports were the third highest on record. Year-to-date exports stood at 746.5 mg at the end of September, almost double the amount exported in the entire 2010 calendar year. The U.S. remains on pace to export between 900 mg and 1 billion gallons in 2011. Denatured ethanol exports totaled 74.1 mg for the month, with Brazil receiving 31.1 mg. Canada (28.9 mg) followed closely, while the United Kingdom (5.2 mg), Jamaica (4.0 mg) and the Netherlands (3.2 mg) were other top destinations for denatured product in September. On a year-to-date basis, denatured ethanol exports stand at 573 mg, or about 77 percent of total shipments. As for undenatured ethanol, total exports amounted to 31.8 mg in September, the highest monthly total of the year. Brazil was the leading destination, taking in 15.8 mg. Finland (4.6 mg), Mexico (4.5 mg), the Netherlands (3.7 mg), and the OPEC nation Nigeria (3.0 mg) rounded out the top five for the month. Year-to-date 2011 exports of undenatured ethanol stand at 173.3 mg, or 23 percent of total exports. Through the first nine months of the year, Canada and Brazil remain neck-and-neck as the leading markets for U.S. ethanol exports. Canada has imported 210 mg of U.S. ethanol, while Brazil has received 202 mg. Together, these two markets have account for 55 percent of total U.S. export demand. After hitting an annual high in August, distillers grains (DG) exports dipped 17 percent in September. U.S. exports of DG totaled 685,483 metric tons (mt), down from 829,489 mt in August. For the first time this year, China was the leading destination for DG exports, receiving 180,069 mt. That is up 19 percent from August and the highest level of exports to China since November 2010. Mexico, which had been the leading market for U.S. DDGS exports in the first eight months of the year, dropped to second with 122,444 mt. Canada, Vietnam and Taiwan were other top markets in September. Year-to-date exports of DG stand at 5.94 million mt, meaning the U.S. is on pace to export nearly 8 million mt in 2011, down about 11 percent from 2010.     DDGS, Ethanol, Exports 2011-11-10T17:16:33+00:00 http://www.ethanolrfa.org/exchange/entry/ethanol-and-water-hold-the-ice/ http://www.ethanolrfa.org/exchange/entry/ethanol-and-water-hold-the-ice/ Recent claims from some marine engine manufacturers that E15 ethanol blends will ruin marine engines are meant solely to incite fear and not meaningful discussion.  A meaningful discussion would note that E15 is illegal for use in marine engines, that the testing being cited is not comprehensive, and that the ethanol industry has repeatedly extended olive branches to work on the concerns boaters and others have raised. As ethanol blended fuel has become more ubiquitous across the nation, the Renewable Fuels Association has worked diligently to inform all potential users about the characteristics of the fuel.  That includes passenger vehicle owners, boaters, lawn equipment users, and more. In fact, in many cases, the RFA has provided more information than is likely necessary for the safe, effective, and legal use of ethanol blends.  This is especially true of the marine engine community.  The RFA has always listened to the concerns of the marine and small engine community.  We appreciate that marine engines may face unique challenges with operating environment and fuel storage concerns.  That is why the RFA has responsibly and repeatedly made efforts to educate boat owners on the proper use and storage of ethanol blends. Because of this good faith effort, the recent touting by Mercury Marine and other marine engine lobbyists of their testing that purports to show their engines failing on E15 blends seems to run counter to what had been a constructive dialogue.  The testing being touted is not definitive nor is being presented in full context. Let’s review the context. First, it must be noted that it is illegal to use E15 in a marine engine from Mercury or anyone else.  The RFA believes the EPA’s labeling and misfueling mitigation plans clearly presents the information consumers need to use E15 legally and appropriately.  We also believe that consumers are savvy enough to know what is right and what is wrong for their equipment. Beyond this important point, the testing and the promotion of the results are incomplete.  From a purely statistical point of view, the small number of engines included in the study precludes making any definitive statements about the effect of E15 on all marine engines.  It is also quite relevant to note that one of the engines tested on E15, a marine motor from Volvo, did not fail. More to the point, however, is that marine engines are made to run on a certified fuel containing no ethanol.  These engines are built to run on old fashioned gasoline.  So, it should come as no surprise that a 15% increase in the amount of ethanol in the fuel would cause some abnormalities in the functioning of engines not designed for cleaner alternative fuels.  The point here is that the results being touted are not a surprise to anyone.  Rather, they underscore the need for marine engine manufacturers to update their engineering to produce motors designed for at least E10.  As designed, these engines are optimized for gasoline (E0) but can, and often do, run on E10. In fact, Mercury Marine makes that point very clear on its website noting, “Fuels containing up to 10 percent ethanol are considered acceptable for use in Mercury engines.”  By modernizing engine designs to be optimized for at least E10, such engines could handle E15 with ease.  This technology is by no means foreign to Mercury or other marine engine makers.  Currently, Mercury Marine sells certain models in Brazil where the fuel contains as much as 25% ethanol.  While regulations in Brazil are different, it highlights the point that the engineering acumen not only exists, but is being put to use.   The RFA has fully supported the path taken by EPA with respect to E15 and small and marine engine platforms.  We appreciate their unique concerns.  That is why we continue to supply updated materials for the proper use and storage of ethanol blends for these kinds of engines. Like it or not, however, higher level blends of ethanol will be fuels in the future.  We would enthusiastically embrace a constructive relationship with marine engine makers to ensure the engines they are building for the future anticipate changes in fuel blends rather than having to react with opposition when blends change.  Safety, E15, Ethanol, Fuel 2011-11-04T15:21:15+00:00 http://www.ethanolrfa.org/exchange/entry/america-needs-more-fiascos-like-ethanol/ http://www.ethanolrfa.org/exchange/entry/america-needs-more-fiascos-like-ethanol/ If you were to listen only to critics of ethanol, you would believe that ethanol is responsible for nearly every trouble the world is facing.  Food riots in corrupt nations where nearly half of food supplies sit and rot?  Ethanol did that.  Black market loggers and subsistence farmers in Brazil clear cut rainforests?  That’s ethanol in the good ol’ US of A.  And the list goes on and on – engines fail because of poor design.  Ethanol.  Gummy bear prices rise in Germany.  Ethanol.  (this really happened) All of ethanol’s critics share a common flaw when it comes to their claims – they cherry-pick the topics on which they opine and ignore very relevant facts.  The most recent example is this rant from Dave Juday in The Weekly Standard.  Mr. Juday is a frequent critic of ethanol.  In fact, that seems to be the only topic on which he will opine for The Weekly Standard.  Therefore, attempting to change his mind by arguing his selected points would be an exercise in futility. Rather, it would be far more worthwhile to readers to provide all of the facts about ethanol with the proper context.  Let’s start with the oldest of the canards – ethanol takes more energy to produce than it yields. According to the most recent analysis of ethanol’s energy balance, researchers at USDA demonstrate that ethanol returns between 1.7-2.3 units of energy for every unit of fossil energy put into the process.  This is consistent with other research and trends in ethanol production.  For example, between 2001 and 2008, ethanol biorefineries reduced energy requirements by 28 percent on average.  Efficiency gains were also made in electricity use (down 32 percent) and ethanol yields (up 5.3 percent).    Then, there is the most famous of the canards – ethanol is using up the world’s food.  On a net basis, US ethanol production uses just 3 percent of the world’s grain supply.  On a US scale, ethanol production uses just 25 percent of the nation’s corn supply on a net basis.  That is a far cry from the 40 percent numbers to which critics of ethanol desperately cling.  Let’s be clear:  the net here is extraordinarily important.  Critics of ethanol often refuse to acknowledge the contribution ethanol production makes to the feed market by returning one-third of every bushel of corn back to the market in the form of feed and displacing some soybeans in the feed market as well.    Ethanol feed production will grow to nearly 40 million metric tons this year – enough feed for some 50 billion quarter-pounders (with or without cheese).  A recent analysis from USDA determined that a metric ton of ethanol feed replaces 1.22 metric tons of tradition feed rations composed of corn AND soybean meal.  That means that those commodities are free to be used elsewhere in the market. Let’s not forget ethanol’s contribution to ending America’s reliance on imported oil.  In 2010, the use of 13 billion gallons of ethanol reduced the need for oil imports by 445 million barrels – more oil than we import from Saudi Arabia.  That saved some $34 billion in direct oil purchases and countless billions in indirect costs that are associated with increasingly harmful sources of petroleum, like tar sands.  It also needs to be mentioned that ethanol is an extraordinary economic opportunity for thousands of rural communities.  Ethanol production helps give 400,000 Americans a job to get to in the morning.  It adds value to crops produced by local farmers in the form of a high-octane fuel and highly nutritious animal feed.   All of this helped increase household incomes by $16 billion in 2010 and added even more to local economies as farmers, truckers, machinery dealers, and auto retailers all have more economic opportunities.  This is on top of the $0.89 per gallon that ethanol helped save all American families at the pump, according to research from Iowa State University and the University of Wisconsin.  All of these benefits are a direct result of America’s commitment to ethanol and renewable fuels.  It is true that a very targeted tax incentive for the use of ethanol helped grow the industry today.  It didn’t cost Americans a dime – it was simply a tax credit that end users of ethanol could take that ultimately lowered the price of gasoline blended with ethanol at the pump.  But that tax incentive expires at the end of the year.  So, too, does the tariff on imported ethanol that exists only to offset the value of the tax credit which is available to every gallon of ethanol blended in the US, regardless of its origin.  America’s antiquated fuel system and regulations have created a situation in which the market for ethanol is artificially constrained.  This fact, combined with the fact that US ethanol is the most cost-competitive motor fuel in the market today, has created export opportunities.  The ethanol industry would much prefer to use every gallon of ethanol we produce domestically.  But, that cannot happen until regulations are modernized.  That is why E15 ethanol blends – and higher ethanol levels designed for use in flexible fuel vehicles (FFVS) – are so critical. The US EPA has determined that, after testing vehicles for the equivalent distance of 6 round trips to the moon, E15 is safe for cars, trucks, and SUVs made in 2001 and since.  Now, some critics of ethanol have cried foul (or fowl, depending upon who is crying) asserting that this split of the market will create refueling “chaos”.  The ethanol industry believes that these lobbies are shortchanging their customers.  Not only is EPA’s testing more than sufficient to support the decision they made, their labeling and misfueling mitigation plan provides consumers with the factual information they need to use, or not use, E15 according to the vehicle or boat or weed whacker they are refueling. Ethanol is not the perfect fuel; that fuel does not exist.  Nor are the policies encouraging greater reliance on domestically-produced biofuels.  But, they are leaps and bounds ahead of anything relating to petroleum or other fossil fuels and are laying the cornerstones of an even more aggressive, forward looking energy strategy that, to borrow a phrase from Amory Lovin’s new book, will turn petroleum into whale oil. If more domestic jobs, reduced reliance on imported oil, and cleaner air is a "fiasco," then America needs more "fiascos." DDGS, Ethanol, Food, Jobs, Tariff 2011-10-28T19:35:31+00:00 http://www.ethanolrfa.org/exchange/entry/august-ethanol-exports-dip-ddgs-exports-set-record-high/ http://www.ethanolrfa.org/exchange/entry/august-ethanol-exports-dip-ddgs-exports-set-record-high/ After setting a new monthly record in July, U.S. ethanol exports were down sharply in August, according to government data released today. Exports of denatured and undenatured (non-beverage) ethanol totaled 52.1 million gallons (mg) in August, down from 127.4 mg in July and the lowest monthly total of the year. Still, year-to-date (Jan.-Aug.) ethanol exports stand at 640.7 mg, nearly triple the amount exported during the same period last year. The United States remains on pace to export more than 900 mg in 2011. Exports of denatured ethanol totaled 43.3 million gallons in August, with Canada receiving 26.4 million gallons. The United Kingdom (10.5 mg) and the Netherlands (5.1 mg) were other top destinations. Notably, Brazil and the United Arab Emirates, which have been leading markets for ethanol exports in 2011, did not import any U.S. product in August. The U.S. exported 8.9 million gallons of undenatured ethanol in August, with Mexico (3.9 mg), the Netherlands (2.3 mg) and Singapore (2.2 mg) accounting for 94% of total shipments. While ethanol shipments swooned in August, distillers grains (DDGS) exports hit their highest level of the year. DDGS exports for the month totaled 829,489 metric tons (mt), up 29% from July. Mexico was the leading destination for U.S. DDGS exports, receiving 196,685 mt (24% of total shipments). China was second with 151,204 mt. This marks the highest level of exports to China since December 2010. Canada, Japan, ad Ireland rounded out the top five DDGS export customers in August. Year-to-date DDGS exports stand at 5.25 million mt, and the industry is on pace to ship nearly 8 million mt in 2011.     DDGS, Ethanol, Exports 2011-10-13T19:30:56+00:00 http://www.ethanolrfa.org/exchange/entry/fowl-policy-why-corn-stocks-to-use-ratio-doesnt-work-as-rfs-policy-foundati/ http://www.ethanolrfa.org/exchange/entry/fowl-policy-why-corn-stocks-to-use-ratio-doesnt-work-as-rfs-policy-foundati/ Reps. Bob Goodlatte (R-VA) and Jim Costa (D-CA) are pushing legislation that would require the EPA to waive a portion of the annual Renewable Fuel Standard (RFS) when the corn stocks-to-use ratio falls below 10 percent. The ratio is a simple measure of ending stocks (corn left over after all demands are met) divided by total demand. The stocks-to-use ratio has been used by participants in the marketplace as rough gauge of prevailing supply-demand conditions. But history shows the ratio is, at best, a crude and highly volatile indicator of market conditions that is not fit to serve as a mechanism for important public policy decision-making. Under the Goodlatte/Costa proposal, the amount of the waivered volume would depend on the stocks-to-use ratio at the time EPA sets RFS standards for the following year. If the ratio is above 10 percent, no waiver is required; a ratio of 7.5-10 percent would result in lowering the RFS for renewable fuel by 10 percent; a ratio of 6.0-7.49 percent would trigger a 15 percent waiver; a ratio of 5.0-5.99 would trigger a 25 percent waiver; and a ratio of less than 5.0 percent would result in a 50 percent waiver. This type of approach to waiving the RFS is dangerous and misguided for a number of reasons, but a primary concern is the fact that a decision with annual implications would be made based on a highly volatile and imprecise ratio that can change dramatically from month as supply-demand conditions change. Further, USDA has a history of underestimating new crop ending stocks with early estimates. USDA’s first estimate of stocks-to-use has been significantly lower than final estimate in each of last three complete crop years (2007/08-2009/10).     As an example of the month-to-month volatility of the estimate, the 2007/08 ending stocks estimate fluctuated by more than 1 billion bushels in just five months. And the 2009/10 ending stocks estimate fluctuated by 460 million bu. in just one month.   Such fluctuations beg a very simple yet serious question:  How can estimates with such variability be relied upon for a policy decision with year-long implications? The only answer is they can’t.  The stocks-to-use ratio provides a snapshot in time – nothing more or nothing less.  Changes in this ratio, as we have seen, can be quite large from month to month and can lead to gross misrepresentations of actual market dynamics. University of Illinois economist Darrell Good cautions that stocks-to-use ratio should only be considered as “a starting point (for estimating potential price impacts) since very different supply and demand conditions in individual years can lead to similar ratios of stocks-to-use but very different prices.”[1] Because of this, Good writes, “…the relationship between stocks-to-use and price is not consistent over time.” Such a crude indicator of potential market conditions should not be used as the basis for policy. Put simply, the stocks-to-use ratio from a single month is not an appropriate metric for an annual policy decision with very real implications for the American fuels market.  Congress should ignore this bill for no other reason than it is based on an idea that has no real world supporting data.  [1] Good, D. July 2004. Corn: Large Crop, Strong Demand. University of Illinois/Purdue University Grain Price Outlook: 2004—No. 5. Renewable Fuels Standard 2011-10-05T14:28:13+00:00 http://www.ethanolrfa.org/exchange/entry/a-fresh-look-at-corn-stocks-co-products-and-ethanol-production/ http://www.ethanolrfa.org/exchange/entry/a-fresh-look-at-corn-stocks-co-products-and-ethanol-production/ According to the USDA quarterly grain stocks report released this morning, end stocks of corn for the 2010/2011 marketing year stand at 1.13 billion bushels.  That is nearly 200 million bushels higher than many experts were predicting and an indication that the market is working to ensure sufficient supplies of corn remain available for all uses. Pushing corn stocks back above one billion bushels is important for the psyche of the market.  Having more corn available should somewhat ease supply concerns brought on by poor growing conditions this year and provide more of a buffer until farmers complete the harvest of this year’s crop.  Despite this temporary tightness in the corn market, it is clear that with the proper market signals American farmers can and will ensure enough corn is available for all uses. As the chart below demonstrates, the livestock feed produced at US ethanol biorefineries (known as distillers grains or DDGS) provides a substantial amount of supply to the feed market.  On a net basis, ethanol production consumes 25 percent of the nation’s corn crop.  When the amount of corn used for ethanol feed co-products is combined with feed and residual demand, total feed demand becomes 6.35 billion bushels, or 47 percent of expected use in 2011/12. Much has been made of the smaller than usual carryover in corn supplies and the impact this may have on corn prices.  Predictably, many of the critics of ethanol including fast food chains, corporate livestock and meat processors, and food manufacturers have eagerly sought to blame ethanol production for higher prices.  As the RFA has pointed out time and again, such claims simply lack any fundamental statistical evidence.  As the chart below notes, corn prices hovered between $3-4/bushel and were actually trending downward during the period of high growth for ethanol production (1/09 to 8/10). Ethanol use was flat or declining in the period when corn prices spiked to $6/bushel and then to $7/bushel. The bottom line remains that ethanol’s influence on corn prices is marginal and has been greatly exaggerated by our critics.  Corn prices and retail food prices increase for a host of reasons, not the least of which is the price of oil. Speaking of ethanol production, monthly data from the Energy Information Administration is available and shows that through July, the US industry had produced 8.028 billion gallons. Based on these numbers, the industry is on pace to supply more than 13.8 billion gallons for calendar year 2011.  However, it is important to note that ethanol production in August and September has shown a slight downward trend as noted by the weekly ethanol production data.  As the RFA noted on Wednesday, the current 4-week average for ethanol production would yield 13.5 billion gallons of ethanol over a full 52-week year.  The RFA is predicting 2011 ethanol production to be approximately 13.7 billion gallons.  To see complete year to date ethanol production, import, and export data, click here. Agriculture, DDGS, Ethanol, Food, Production 2011-09-30T16:48:28+00:00 http://www.ethanolrfa.org/exchange/entry/another-record-month-for-u.s.-ethanol-exports/ http://www.ethanolrfa.org/exchange/entry/another-record-month-for-u.s.-ethanol-exports/ U.S. ethanol exports in July set a new monthly record, according to government data released today. Exports of denatured and undenatured (non-beverage) ethanol totaled 127.4 million gallons in July, edging out the April total of 120.1 million gallons to set a new record. July exports were nearly double the amount exported in June. Top destinations in July were Canada, Brazil, and European Union. Through the first seven months of 2011, the United States has exported 588.5 million gallons of ethanol, or roughly 7.5% of total output during that same period. Year-to-date exports in 2011 are already more than the combined total of 2009 and 2010 exports. The U.S. ethanol industry remains on pace to export 800-900 million gallons of ethanol for the entire 2011 calendar year. Exports of denatured ethanol in July topped 100 million gallons for the first time ever, coming in at 104.6 million gallons. For context, this is equivalent to the annual output of a typical large ethanol facility. Canada was the top export destination in July, receiving 33.8 million gallons of denatured product. Brazil imported 16.1 million gallons, while the United Kingdom (14.0 mg), United Arab Emirates (13.6 mg), and Netherlands (12.3 mg) rounded out the top five. Together, the top five destinations accounted for 86% of July denatured ethanol exports. Undenatured ethanol exports totaled 22.7 million gallons in July, more than triple the amount exported in June. Brazil was the top export market for undenatured product, receiving 12.9 million gallons. Other top destinations were the Philippines (3.9 mg), Netherlands (3.2 mg), and Mexico (2.6 mg). Unprecedented U.S. ethanol exports continue to be driven by the fact that corn ethanol is currently the lowest-cost motor fuel source in the world. High sugar prices and lower-than-expected sugarcane ethanol output in South America have allowed the United States to overtake Brazil as the world’s leading ethanol exporter. In fact, Brazil and Canada are neck and neck as the leading importers of U.S. ethanol so far in 2011. Canada has imported 155.5 million gallons of ethanol through July, while Brazil has imported 155 million gallons. Together, these two countries have accounted for half of U.S. exports this year. Exports of distillers dried grains with solubles (DDGS), the animal feed co-product resulting from grain ethanol production, totaled 644,525 metric tons in July, up nearly 8% from June. Mexico continued as the top DDGS export, receiving 156,400 metric tons in July. China (106,606 mt), Canada (63,707 mt), the United Kingdom (47,513 mt), and Vietnam (40,265 mt) rounded out the top five. Notably, exports to China have increased in three consecutive months after sliding significantly from late 2010 through April 2011. Year-to-date DDGS exports total 4.43 million metric tons, meaning the U.S. is on pace to export roughly 7.6 million metric tons in 2011.   Ethanol, Exports 2011-09-08T13:53:45+00:00 http://www.ethanolrfa.org/exchange/entry/improvements-in-ethanol-process-result-in-lower-ghg-emissions/ http://www.ethanolrfa.org/exchange/entry/improvements-in-ethanol-process-result-in-lower-ghg-emissions/ America is home to the most innovative, productive and efficient ethanol and grain producers in the world. As I noted in two previous blog posts on improvements in farming practices and ethanol efficiency, the trend line for both industries is toward greater productivity utilizing fewer resources. When viewed as a total system, the improvements at the farm level and the biorefinery have a multiplying effect. The eagerness of farmers and ethanol producers to embrace and implement cutting edge technologies has made American ethanol production the most efficient and cost effective in the world.  In 2008-2010, the ethanol industry was producing some 440 gallons of ethanol per acre, a 50% improvement over the average from just 15 years earlier.  Future projections, which include the use of cellulosic ethanol production from corn cobs and stalks left on the field and the fiber found in the kernel, could approach 800 gallons of renewable fuel per acre.  This increasing productivity and efficiency contributes directly to ethanol’s ability to lower greenhouse gas emissions from gasoline on a lifecycle basis (“well-to-wheels” or “cradle-to-grave”).  Six recent analyses show that corn ethanol reduces GHGs by 28-53% using current technologies.  As the data has demonstrated, these GHG reductions will only increase as new technologies are made available. Meanwhile, the energy intensity and GHG profile of crude oil extraction and refining continues to worsen.   Whether it’s fertilizer use on the farm or water consumption at an ethanol biorefinery, American farmers and ethanol producers are consciously investing in technology that dramatically lowers their carbon footprint while producing more fuel, feed, and food than ever before. The same cannot be said for petroleum production.  As the “easy” sources of oil are depleted, new sources are proving harder to extract and more costly to refine – both from a financial standpoint and in terms of environmental impacts. As we will look at next week, exploiting tar sands in Canada or endangering marine life in the Gulf are not sustainable approaches to meeting our energy needs in the decades to come.  Ethanol, Energy, Environment 2011-08-25T14:38:18+00:00 http://www.ethanolrfa.org/exchange/entry/from-farm-to-biorefinery-ethanol-production-efficiency-improves/ http://www.ethanolrfa.org/exchange/entry/from-farm-to-biorefinery-ethanol-production-efficiency-improves/ In the second part of RFA’s series on the improving efficiencies of corn ethanol production, the focus will be specifically on input use—both on the farm and at the biorefinery. Last week we noted the dramatic increase in grain productivity. Significant growth in corn yield per acre has allowed farmers to double annual production since 1980 on roughly the same amount of land. It is often assumed that this incredible growth in corn yields is the result of increased use of fertilizer. But data from USDA clearly show this is not the case. In fact, the data show that 2010 application rates of the three common macronutrient fertilizers (nitrogen, potassium, and phosphate) were the same--or below—the application rates seen in the early 1980s. Thus, nitrogen application per bushel of corn produced is down more than 30% since the early 1980s, while potassium and phosphate usage per bushel are down some 40%. Similar improvements have been seen in the use of other important resources needed for corn production. According to a landmark study by the Keystone Alliance (a group including both farm groups and environmental organizations, such as Environmental Defense Fund and The Nature Conservancy) the amount of water, energy, and land required to produce a bushel of corn were substantially reduced between 1987 and 2007.   The same kind of dramatic gains are being made at the ethanol biorefinery.  Before getting into the nitty-gritty details, here are a few facts to keep in mind.  Roughly 90% of the nation’s ethanol is produced using the dry mill process, with the remainder using what is known as a wet mill process.  Also, slightly more than 90% of the energy needed to run the nation’s 200+ ethanol biorefineries comes from natural gas—a plentiful domestic resource.  Finally, some 22% of these facilities are using Combined Heat and Power (CHP) technologies. The average dry mill ethanol plant in 2008 used 28% less thermal energy per gallon than it did just seven years earlier in 2001. According to a recent study published in Biotechnology Letters by a researcher at the University of Illinois-Chicago, the average dry mill today uses less than 26,000 BTUs of thermal energy to produce a gallon of ethanol. That compares to the 77,000 BTUs of energy contained in the gallon.  The same is true for both electricity demand and water consumption.  Electricity demand fell 32% from 2001 to 2008 and water use fell by 47%.     All the while, ethanol producers are increasing the amount of ethanol they can produce from the same bushel of corn.  Ethanol yields per bushel are up 5% since 2001.  Additionally, ethanol producers are providing ever-increasing amounts of distillers grains, the livestock feed co-product of ethanol production.  In 2011, the industry is expected to produce nearly 40 million metric tons of distillers grains for use in dairy, beef, swine and poultry diets in the U.S. and around the world.  As the data clearly demonstrate, America’s ethanol producers are mirroring the efficiency gains of the American farmers upon whom they rely for feedstock.  As existing processes evolve and new production technologies emerge, ethanol production in the U.S. will not only increase in volume, but also in efficiency. Without a doubt, today’s ethanol industry is high-tech and increasingly energy efficient. While new sources of crude oil require more energy for extraction and refining and are increasingly carbon intensive, ethanol’s energy and environmental track record continues to shine. In the next installment, we will look at the performance of ethanol production system as a whole and how it compares to petroleum production and use. Ethanol, Energy, Environment, Production, Water 2011-08-18T14:43:34+00:00 http://www.ethanolrfa.org/exchange/entry/dear-president-obama/ http://www.ethanolrfa.org/exchange/entry/dear-president-obama/   Dear President Obama:   Your scheduled tour of rural communities through the Upper Midwest this week will no doubt provide you with firsthand knowledge of the challenges and opportunities present in rural communities all across the nation.  Your scheduled travel will also bring you in close proximity to many of the most successful drivers of economic opportunity today:  ethanol biorefineries.   Today, more than 200 ethanol biorefineries in all corners of the nation are providing more than 13 billion gallons of renewable fuel to displace our reliance on imported oil.  These companies are helping to employ more than 400,000 Americans, with the majority of these Americans living in and around thousands of rural communities.  Ethanol production is offering jobs that provide a good wage, good benefits, and the opportunity for rural Americans to stay in rural America or move back home.   Domestic ethanol production is also helping to reduce America’s addiction to imported oil.  The estimated 13.5 billion gallons of ethanol production anticipated for 2011 will reduce our demand for foreign oil by more than 450 million barrels.  It will also greatly reduce the amount of money America sends overseas to support our oil habit, often to nation’s hostile to U.S. interests.  In 2010 alone, ethanol helped reduce our tab for imported oil by $34 billion dollars.    American ethanol production is also an important environmental tool to help mitigate the environmental damage done by our reliance on oil and other fossil fuels.  As the most efficient source of ethanol available today, domestic ethanol is reducing greenhouse gas emissions from vehicles by up to 59 percent.  At ethanol plants themselves, increasing efficiencies are providing more ethanol per bushel while technologies continue to reduce water and energy requirements.  Mirroring these gains, farmers are producing twice as much corn as they were a generation ago on the virtually the same acres while using fewer inputs like fertilizer and irrigation water.    These facilities are not only about renewable fuel production.  Each of the ethanol biorefineries you will pass by is producing a high value livestock feed, known colloquially as distillers grains.  This livestock feed is increasingly replacing corn, soy, and other grains in cattle, dairy cattle, swine, and poultry population feed both in the U.S. and across the globe.    Mr. President, contrary to the editorial pages of the Wall Street Journal and the rhetoric of some of those on Capitol Hill and the campaign trail, ethanol and the policies that have helped support it are providing benefits to Americans all across the country.  American ethanol production is the most successful, efficient, and cost-effective renewable fuel source the world has ever known.  And, this industry is just getting started.   With the continued support of your Administration, America can expand its production and reliance on ethanol and other renewable fuels from a variety of feedstocks, including grasses, wood wastes, agricultural residues, and even municipal solid wastes from the city dump.  All that is needed is the political will to stand up to the entrenched special interests who want to maintain oil’s monopoly over America’s fuel market.   On behalf of the nation’s ethanol industry, I thank you for your commitment to this important domestic industry.  Additionally, I encourage you to embrace your record of support for ethanol and other domestic renewable fuels.  We simply would not be talking about many of the exciting renewable fuel technology breakthroughs that are on the horizon were it not for the success and market build out resulting from the existing ethanol industry.    Sincerely, Bob Dinneen   Dear President Obama: Your scheduled tour of rural communities through the Upper Midwest this week will no doubt provide you with firsthand knowledge of the challenges and opportunities present in rural communities all across the nation.  Your scheduled travel will also bring you in close proximity to many of the most successful drivers of economic opportunity today: ethanol biorefineries.  Today, more than 200 ethanol biorefineries in all corners of the nation are providing more than 13 billion gallons of renewable fuel to displace our reliance on imported oil.  These companies are helping to employ more than 400,000 Americans, with the majority of these Americans living in and around thousands of rural communities.  Ethanol production is offering jobs that provide a good wage, good benefits, and the opportunity for rural Americans to stay in rural America or move back home. Domestic ethanol production is also helping to reduce America’s addiction to imported oil.  The estimated 13.5 billion gallons of ethanol production anticipated for 2011 will reduce our demand for foreign oil by more than 450 million barrels.  It will also greatly reduce the amount of money America sends overseas to support our oil habit, often to nation’s hostile to U.S. interests.  In 2010 alone, ethanol helped reduce our tab for imported oil by $34 billion dollars.  American ethanol production is also an important environmental tool to help mitigate the environmental damage done by our reliance on oil and other fossil fuels.  As the most efficient source of ethanol available today, domestic ethanol is reducing greenhouse gas emissions from vehicles by up to 59 percent.  At ethanol plants themselves, increasing efficiencies are providing more ethanol per bushel while technologies continue to reduce water and energy requirements.  Mirroring these gains, farmers are producing twice as much corn as they were a generation ago on the virtually the same acres while using fewer inputs like fertilizer and irrigation water.  These facilities are not only about renewable fuel production.  Each of the ethanol biorefineries you will pass by is producing a high value livestock feed, known colloquially as distillers grains.  This livestock feed is increasingly replacing corn, soy, and other grains in cattle, dairy cattle, swine, and poultry population feed both in the U.S. and across the globe.  Mr. President, contrary to the editorial pages of the Wall Street Journal and the rhetoric of some of those on Capitol Hill and the campaign trail, ethanol and the policies that have helped support it are providing benefits to Americans all across the country.  American ethanol production is the most successful, efficient, and cost-effective renewable fuel source the world has ever known.  And, this industry is just getting started. With the continued support of your Administration, America can expand its production and reliance on ethanol and other renewable fuels from a variety of feedstocks, including grasses, wood wastes, agricultural residues, and even municipal solid wastes from the city dump.  All that is needed is the political will to stand up to the entrenched special interests who want to maintain oil’s monopoly over America’s fuel market.  On behalf of the nation’s ethanol industry, I thank you for your commitment to this important domestic industry.  Additionally, I encourage you to embrace your record of support for ethanol and other domestic renewable fuels.  We simply would not be talking about many of the exciting renewable fuel technology breakthroughs that are on the horizon were it not for the success and market build out resulting from the existing ethanol industry.  Sincerely,Bob Dinneen     Ethanol, Jobs 2011-08-15T17:32:30+00:00 http://www.ethanolrfa.org/exchange/entry/more-ethanol-fewer-inputs-increasing-benefits-more-corn-on-fewer-acres-less/ http://www.ethanolrfa.org/exchange/entry/more-ethanol-fewer-inputs-increasing-benefits-more-corn-on-fewer-acres-less/ Over the past 30 years, and in particular in the past decade, ethanol production has quietly become increasingly efficient.  From improvements in corn production to greater efficiencies at ethanol biorefineries, America’s leading renewable fuel is providing more with less.  Throughout August, the RFA will be pointing out these improvements in a series of graphics and blog posts.  This effort will examine the increasing productivity of American farmers while using fewer inputs as well as the yield improvements and efficiency gains at the more than 200 American ethanol biorefineries. The first installment focuses on the increased productivity of American corn growers.  As the following chart notes, American farmers are producing twice as much corn today as they were in 1980 on virtually the same amount of land. In 1980, farmers averaged a yield of 91 bushels of corn per acre and produced a crop of 6.6 billion bushels.  In 2009, just a generation later, farmers produced an average yield of 164.7 bushels per acre and harvested 13.1 billion bushels.  This doubling of the American corn crop was achieved by planting just 3% more corn acres in 2009 than was planted in 1980.    Equally impressive, farmers are producing these bin busting crops using fewer inputs.  Specifically, farmers are using less water than ever before. Just 13% of the nation’s corn crop is irrigated.  Many critics of ethanol and farmers like to cite wild claims about the amount of water needed to produce corn.  But the vast majority of that water comes in the form of rain.  For those acres that require additional water resources, farmers are using 23% less water today than they were in 1988.  The same type of water use efficiencies are being mirrored at ethanol biorefineries, as we will discuss later this month.  As will become evident throughout the month of August, America’s farmers and ethanol producers continue to embrace new technologies and practices that reduce energy and resource demands while simultaneously increasing production of both grain and renewable fuel. Agriculture, Ethanol, Food, Land Use, Production, Water 2011-08-09T18:46:19+00:00 http://www.ethanolrfa.org/exchange/entry/ethanol-limbo-in-congress-continues/ http://www.ethanolrfa.org/exchange/entry/ethanol-limbo-in-congress-continues/ The partisan fight over raising the limit on the amount of money the federal government can borrow is ugly – even by Washington standards.  While the leaders of both parties are very close on many of the main sticking points, one area of contention still remains – raising revenue. Many Republicans, including virtually all of the House Republican Caucus, are adamantly opposed to any provisions that would raise revenue, such as eliminating tax breaks.  One such provision, the Klobuchar-Thune-Feinstein compromise on the future of the ethanol tax credit known as VEETC, could be a victim of the process. Now just seven days from default, both House Speaker John Boehner and Senate Majority Leader Harry Reid have introduced plans to move America passed the August 2nd deadline for default.  Each of their plans would cut trillions of dollars in government spending without raising revenue.  If all revenue raisers are off the table, then the prospects for including the ethanol compromise in this piece of legislation look grim. Sadly, the partisan bickering and dysfunction in Washington is preventing the passage of thoughtful legislation that would generate additional revenue for the federal government while simultaneously encouraging the evolution of American ethanol production and expanding the market for this domestically-produced renewable fuel. However, we have been in the 11th hour before and seen cooler heads prevail.  While the road to getting the ethanol compromise into law as part of the debt ceiling deal is uphill at the moment, it is not yet a dead end.  And, should this deal fail to yield an opportunity to include the ethanol tax compromise, other vehicles may present themselves such as the stalled Federal Aviation Administration reauthorization bill.  Worst case scenario is VEETC expires at the end of the year as planned.  The RFA will continue to look for opportunities to advance thoughtful ethanol policy that benefits taxpayers, consumers, and all ethanol producers alike.  Adding insult to injury, House members from the Oil Patch are once again after farmers and ethanol producers.  Oklahoma Rep. John Sullivan is continuing his quest to end EPA’s implementation of its E15 211(f) fuel waiver for cars, pickups, and SUVs made since model year 2000.  This is not the first time Rep. Sullivan has sought to carry the oil industry’s water on this issue.  Back in February, Rep. Sullivan offered a very similar measure.  That measure passed and this current effort, should it come up for a vote, may as well.  But it is all a moot point.  Like the bill back in February, the underlying EPA and Department of Interior appropriations bill to which Rep. Sullivan is seeking to attach his amendment is virtually dead on arrival in the Senate and has already drawn a veto threat from the White House.  This is a fool’s errand for several reasons.  First, this is yet more political posturing when it comes to ethanol.  It has everything to do with reelection and nothing to with legislation.  Second, this is legislating through appropriating.  Having failed to stop ethanol in previous attempts, Rep. Sullivan is trying to make a mockery of the appropriations process by seeking to legislatively prohibit fuel choice for Americans at the pump.  Third, EPA’s approval of E15 was based on the most rigorous federal testing of fuel we have seen to date.  The test vehicles were driven the equivalent of making 12 round trips to the moon.  Texas Rep. Michael Burgess is offering similar amendments that would prohibit EPA from spending money to register any new fuel over 10 percent ethanol by volume. The ethanol industry, through its continued support of the RFA, will continue to offer new ideas and sound policy recommendations that are fiscally responsible yet forward-looking to ensure Americans have a choice at the pump other than foreign oil. Congress, E15, Ethanol, Energy, EPA, Fuel, Jobs, Oil, Renewable Fuels Standard 2011-07-26T17:33:12+00:00 http://www.ethanolrfa.org/exchange/entry/rfa-to-president-obama-take-pride-in-u.s.-ethanol-industry/ http://www.ethanolrfa.org/exchange/entry/rfa-to-president-obama-take-pride-in-u.s.-ethanol-industry/ July 8, 2011 The PresidentThe White House1600 Pennsylvania Ave.Washington, D.C. 20500 Dear Mr. President: On behalf of America’s ethanol producers, I want to thank you for the leadership that your administration has shown in seeking to expand the market for ethanol and allow the industry to continue its evolution. Indeed, American ethanol production is rapidly transforming to include new feedstocks and new technologies that will allow domestic biorefineries to provide an ever greater range of renewable alternatives to petroleum-based products. While much of our industry’s research and development focus is on the next generation of feedstocks and biofuels, the existing grain-based industry has quietly made tremendous strides in its economic and environmental efficiency in recent years. Given its rapid rate of innovation and evolution, it was concerning to hear you suggest during your Twitter town hall that American ethanol was behind the innovation curve. More troubling was your assessment that Brazilian ethanol is a superior, more efficient product than the one produced here at home. I would like to take this opportunity to provide you with an up-to-date accounting of domestic ethanol production today. To start, America’s ethanol industry is the largest in the world. We are producing well over 13 billion gallons of ethanol each and every year, and displacing more than 445 million barrels of oil annually – a sum greater than annual oil imports from Saudi Arabia. It is also important to note that American-made ethanol is the most cost-effective motor fuel on the market today, costing less than Brazilian ethanol and gasoline. Importantly, American ethanol production is helping provide 400,000 Americans with a good paying job, a stark contrast to some of the working conditions and pay received by Brazilians employed on sugar plantations and ethanol mills. In addition, ethanol production is adding more than $50 billion to the national GDP each year. On the environmental side of the ledger, American ethanol production continues to improve. A recently published study in the Yale Journal of Industrial Ecology concludes that ethanol production reduces greenhouse gas emissions compared to gasoline between 48 and 59 percent. Similarly, ethanol production today is showing tremendous energy benefits with current ethanol production producing up to 2.3 units of energy for every unit of energy used. Together with improved efficiencies and new technologies, ethanol producers are getting more ethanol per bushel of corn and using fewer BTUs and gallons of water in the process. These efficiency gains means that, according to USDA, American ethanol producers get approximately 100 gallons of ethanol per ton of corn versus just 20 gallons of ethanol per ton of Brazilian sugarcane. This is significant because American farmers are continuously producing more corn from the same acre of land using fewer inputs. This year’s average corn yield is expected to be approximately 160 bushels per acre, up from less than 100 bushels per acre a generation ago. This growth in productivity has been made possible by the tremendous technological advances occurring on the farm that mirror those happening in ethanol production. Meanwhile, the amount of sugar available for ethanol conversion from a ton of Brazilian sugar cane has stagnated over the past decade. America’s ethanol industry is not limited to fuel alone. In addition to 13-plus billion gallons of ethanol, the industry is on pace to produce nearly 40 million metric tons of livestock feed popular with cattle, dairy, swine, and poultry producers. Increasingly, this feed product, known colloquially as distillers grains or DDGS, is gaining wide acceptance with our trading partners. In 2010 alone, the U.S. exported 9 million metric tons of DDGS to more than 50 countries, helping to create additional markets for U.S. corn products and increase our agriculture trade surplus. Ethanol’s product stream does not end at feed. More and more, ethanol producers are supplying products, like corn oil, that are the feedstocks for the production of other biofuels and bio-based chemicals. The benefits of American ethanol production are not limited to grain-based technologies. While our industry has been built by ever-improving corn-to-ethanol technologies, new technologies and additional feedstocks are rapidly being developed and identified that will greatly diversify the production of ethanol and broaden the geographic benefit base of this domestically-produced renewable fuel. Thanks in no small measure to your Department of Agriculture, advanced and cellulosic ethanol companies have received the conditional loan guarantees needed to begin construction on the nation’s first cellulosic ethanol biorefineries. Those companies, Coskata and Enerkem, along with Abengoa, Fulcrum, Poet, and a host of others will be bringing next generation ethanol technologies to the commercial market sooner rather than later. By investing in existing ethanol production and nearly-commercial next generation technologies, America is paving the way for even more futuristic fuel sources to become mainstream. Ethanol production from algae, for example, is now a very real possibility but would have seemed merely science fiction just a few years ago. America’s ethanol industry is not behind the curve in technology innovation; we are setting the curve. Investments made in ethanol production capacity, technology, and fueling infrastructure are just now beginning to pay dividends. As such, now is not the time to question our progress or efficiency, but to reassert the importance of a robust, domestic ethanol industry to the nation’s energy, environmental, economic, and national security goals. Americans cannot continue to bear the dangers presented by an outdated energy policy that locks us into a crippling addiction to imported oil. The contributions of homegrown first- and second-generation ethanol production to our energy future should not be marred by outdated and unbalanced comparisons to biofuels production in other nations. At the more than 200 ethanol biorefineries across the America, farmers, ethanol producers, and rural communities are partnering to provide a domestic, renewable alternative to oil, renewable feedstocks to displace petroleum-derived chemicals, and livestock feed to meet the demands of flocks and herds around the world. Mr. President, America’s ethanol industry should be a source of pride. It is a sparkling example of what made America great: the imagination to dream and the ability to make that dream a reality. As is always the case, the members of the RFA stand ready to work with you to realize the full potential of a robust American ethanol industry. We thank you for your leadership and remind you that our doors are always open to you. Respectfully yours, Bob Dinneen, President and CEORenewable Fuels Association Ethanol, Food, Jobs, Production, USDA 2011-07-08T17:01:33+00:00 http://www.ethanolrfa.org/exchange/entry/ethanol-tax-compromise-what-is-it-wheres-it-going/ http://www.ethanolrfa.org/exchange/entry/ethanol-tax-compromise-what-is-it-wheres-it-going/ As many of you know by now, Senators Klobuchar, Thune and Feinstein have reached a compromise on legislation to end the current ethanol tax incentive, known as VEETC, and use the funds for debt reduction, infrastructure investment, and cellulosic ethanol investment.  Under the compromise, $1.33 billion would be put directly to debt reduction.  To be clear, the ethanol industry is the only industry that is sacrificing some of its tax incentives to help address budget concerns.  Where, for example, are the fossil fuel industries on this issue? The compromise would also reform and extend what's known as the Alternative Fuel Vehicle Refueling Property Credit through December 31, 2014.  The current AFVR PC allows fuel retailers to take a 30% credit for the installation of alternative fuel infrastructure, up to $30,000, including E85 infrastructure.  The compromise reforms and improves the credit for ethanol by allowing the entire cost of dual-use blender pump to qualify for the credit rather than the incremental cost, and allowing a broader range of ethanol blends between E15 and E85, many blender pumps will now qualify.  This is an important change and will help expand the market for ethanol. The compromise, however, reduces the credit to 20%, up to $30,000. Additionally, the compromise would extend the existing $1.01 per gallon tax credit for cellulosic biofuels through 2015.  However, the announced deal would cap how much money could be spent on this incentive at $50 million, $100 million, and $155 million in 2013, 2014, and 2015, respectively.  The RFA and the Advanced Ethanol Council have concerns that such a cap sends the wrong signal to the market and will work to improve this provision before it might become law. The compromise also includes a 1-year extension of the Small Ethanol Producer Tax Credit through 2012, but reduces the value from 10 cents to 7 cents.  It would also extend the depreciation allowance of 50% for cellulosic biofuel plant property through 2015. And, the compromise would end the tariff on imported ethanol as the tax incentive would no longer be available.  A quick reminder here:  American-made ethanol is the cheapest on the market today.  Brazilian ethanol, erroneously believed to be more cost-effective, is more expensive and concerns over the industry have prompted a new round of government intervention in the Brazilian ethanol market.  The $64,000 question is, How does this compromise become law?  Unfortunately, the answer is unclear.  Speculation focuses on various House-passed tax bills the Senate could take up and replace with the language of this compromise.  Remember, any provision that raises revenue, as this one would because it is raising taxes on ethanol-blended fuel, must originate in the House.  There are three such bills currently before the Senate.  It is more likely, however, that proponents will attempt to insert this language into the deficit reform package currently being negotiated by the White House as part of the debt limit extension. We will continue to try to encourage constructive improvements to this package, such as the cellulosic concerns raised above, as it moves forward.   Please let us know if you have any questions.  Congress, Ethanol, VEETC 2011-07-08T14:38:49+00:00 http://www.ethanolrfa.org/exchange/entry/e15-moving-forward/ http://www.ethanolrfa.org/exchange/entry/e15-moving-forward/ Make no mistake; EPA’s final E15 label released yesterday is not the end of the E15 story.  Anti-ethanol and renewable fuel interests are continuing their legal challenges and will no doubt step up efforts to scare and misinform consumers about the efficacy of ethanol-blended fuels.  However, having a final label now in place means the ethanol industry can move forward with efforts to fight back these scare tactics and inform retailers and consumers alike about the safe and legal use of E15 blends. The label released by EPA yesterday is an improvement from the original label the agency proposed.  This final label will not unintentionally impede or discourage consumers from using E15 and the RFA certainly appreciates the EPA listening and including comments we submitted on the proposed label.  This label is not perfect, but it is an improvement from where this process began and shows an effort by EPA to be responsive to the common sense and fact-based comments made by some, but not all, stakeholders.  Case in point:  we already know that environmental lobbyists are going to attack this label and continue legal challenges despite clear evidence of E15’s efficacy for the engines included in the waiver.  But the real challenge will be getting E15 widely available in the commercial market.  After the final EPA decision was issued last year, RFA President and CEO Bob Dinneen outlined the next steps for E15.  Many of those issues have been the focus of RFA Market Development efforts.  Through programs like the Blend Your Own Ethanol (BYO) campaign and others, the RFA is actively working with retailers to bring more higher level ethanol blends to the market.  Simultaneously, the technical staff of the RFA is working with state regulators to make sure E15 sales can occur.  Some states, like Iowa, are ready to go.  Others will require more fine tuning.  The same was true with E10 blends and today they are the standard.  So, too, will E15. Lastly, the RFA is also working with our friends in the fuel marketing and retail industries to address misfueling concerns.  The RFA is still looking for opportunities to work with lawmakers to reintroduce the Renewable Fuels Marketing Act designed to calm and alleviate misfueling concerns. Gaining meaningful market access for E15 will not happen overnight.  It won’t happen with press releases or blog posts, but with elbow grease, patience, and some forward-looking retailers and engine makers helping to lead the way. Safety, E15, Engines, Ethanol, EPA, Fuel 2011-06-29T14:09:28+00:00 http://www.ethanolrfa.org/exchange/entry/ethanol-policy-and-meat-prices-unspinning-the-truth/ http://www.ethanolrfa.org/exchange/entry/ethanol-policy-and-meat-prices-unspinning-the-truth/ Opponents of biofuels are doing their best to spin the results of a new study released by the Geneva-based International Center for Trade and Sustainable Development (ICTSD). Anti-biofuel groups like ActonAid, Oxfam, and the Environmental Working Group selectively promoted certain findings from the study in a last-ditch effort to influence G20 talks in Paris focused on food price volatility. But anyone who took the time to actually read the ICTSD study in its entirety knows that the report’s main conclusions are at odds with the picture that is being painted by anti-biofuels crusaders. In fact, the study strongly supports the argument that biofuels policy has had almost nothing to do with food price increases in recent years. The study found that “…US ethanol subsidies during this period (2005-2009) had little impact on consumer prices and quite modest impacts on crop prices.” It concluded that the most significant impact of U.S. ethanol policy on retail food prices was a two-cent-per-dozen (1 percent) increase in egg prices in just one of the last five years. Meanwhile, retail prices for beef, pork, and poultry meat were impacted by “much less than 1 percent.” (For graphic representation of these results, click here) The ICTSD study was authored by Iowa State University professor Bruce Babcock and it builds upon a recent CARD paper that we wrote about here. Professor Babcock ran a complex economic model to examine how U.S. ethanol policies influenced prices for agricultural commodities and food products from 2005-2009. For commodities, Babcock found that the impact of ethanol policy on corn prices was “modest.” The largest impact on corn prices occurred in the 2007 marketing year when prices would have been $0.30 per bushel (7.1 percent) lower than they actually were, according to the modeling results. The impact on wheat, rice, and soybean prices “was even smaller,” Babcock wrote. As for consumer food prices, the impacts of ethanol policy were negligible. The chart below comes from the study and shows actual prices for eggs, broilers, pork, and beef compared to what prices would have been had there been no ethanol policy in place.   For broilers, the modeling results show that prices wouldn’t have changed by even one penny/pound if we hadn’t had ethanol policies in place. For pork, prices would have been one penny/pound lower (three-tenths of 1 percent) in one year, but identical in the other four years. It’s the same for beef, with prices identical in four years and only one penny (two-tenths of 1 percent) lower in one year. The largest impact was for eggs, where prices would have been two pennies (1 percent) per dozen lower in one year if we hadn’t had ethanol policies in place. Clearly, based on the study’s results, one can conclude that U.S. ethanol policies have not been a factor in retail food prices in the last five years and have been only a modest driver of commodity prices. In addition, any microscopic impact on food prices that might be attributable to ethanol policy would be overwhelmingly offset by the savings on gasoline prices that results from increased ethanol use. Not surprisingly, the strategy of flaunting the ICTSD study’s results as evidence that biofuels policy is somehow contributing to food price increases has back-fired miserably for the anti-biofuels crowd. The G20 agriculture ministers wisely didn’t take their bait; they saw right through the bombastic press releases and pithy sound-bites. It has been widely reported that the G20 group has agreed on an “action plan” that rightly focuses on boosting agricultural productivity, reining in excessive speculation in commodity markets, improving market transparency and information flow, and other activities that can make a real difference. Much to the chagrin of the extremists at Oxfam and ActionAid, the G20 leaders wisely opted to avoid brash actions on biofuels policies. Instead, they plan to continue to study and monitor the impacts of biofuels on agricultural markets. Agriculture, Corn prices, Ethanol, Food, Research 2011-06-23T17:38:13+00:00 http://www.ethanolrfa.org/exchange/entry/blaming-biofuels-wont-feed-the-hungry/ http://www.ethanolrfa.org/exchange/entry/blaming-biofuels-wont-feed-the-hungry/ Agricultural ministers from G20 nations are set to meet this week in Paris to discuss responses to rising food prices and food insecurity.  In advance of this meeting, a coalition of various non-governmental organizations (NGO) and quasi-governmental organization offered the G20 some jaundiced thoughts on how to deal with rising food prices. Predictably, the recommendations from this group disproportionately fixated on biofuel production and largely ignored any impact on the global food market from volatile oil prices or commodity speculation from non-commercial interests, i.e. those investors that will never take delivery of a bushel of grain or barrel of oil.  After some careful analysis of the report, the RFA found several holes in the logic and construction of the conclusions in the report.  A pdf copy of the RFA analysis is available here.  The entire response is also included in the text that follows.   On June 2, the U.N. Food & Agriculture Organization (FAO), Organization for Economic Cooperation and Development (OECD), and several other organizations released a report entitled Price Volatility in Food and Agricultural Markets: Policy Responses.[1] The report was prepared in response to a 2010 request from G20 leaders to “develop options for G20 consideration on how to better mitigate and manage the risks associated with the price volatility of food and other agriculture commodities, without distorting market behaviour, ultimately to protect the most vulnerable.” While the report offers some constructive recommendations for G20 leaders to consider when assessing possible responses to food price volatility, its suggestion that G20 governments “remove policy provisions” that support expanded biofuels production and use is terribly misguided and shortsighted. In reality, eliminating biofuels support policies would lead to higher fuel costs, which would actually aggravate food price volatility.  While the report acknowledges that there are a number of complex factors driving food price volatility, the policy recommendations unduly focus on biofuels and entirely fail to suggest actions to rein in high oil prices and excessive speculation in commodity futures markets.   *   *   *   *   * Most glaringly, this report fails to recommend concrete steps that could be taken by G20 countries to combat the impact of higher energy costs on food price volatility. Remarkably, the report fails to properly address the impact of prices for oil and other energy sources on food price volatility. While the authors recognize that high oil prices are a driver of current higher agricultural commodity and food prices, the report fails to offer any concrete recommendations that would help G20 governments mitigate or curb the impacts of rising energy costs and non-commercial speculation in energy markets. Recent research suggests high oil prices play a significant role in food price inflation and volatility.  A study by Texas A&M found that “The underlying force driving changes in the agricultural industry, along with the economy as a whole, is overall higher energy costs, evidenced by $100 per barrel oil.”[2]   The report neglects the role of non-commercial speculation in food price volatility. The report surprisingly fails to recommend any concrete actions that would assist G20 governments in mitigating the effects of excessive speculation in commodities futures markets. Despite a wealth of evidence to the contrary, the authors suggest that there is no consensus on the impact of non-commercial speculative investment on food price volatility. The report recommends only that, “More research is needed to clarify these questions [about the impacts of non-commercial speculation]...” and suggests that little is known “…about whether regulatory responses are needed and the nature and scale of those responses.” These conclusions are at odds with the results of a 2010 World Bank study examining the causes of the 2007/08 food price spike. World Bank found “…the effect of biofuels on food prices has not been as large as originally thought, but that the use of commodities by financial investors (the so-called “financialization of commodities”) may have been partly responsible for the 2007/08 spike.”[3]  Further, Texas A&M University researchers recently found that, “Speculative fund activities in futures markets have led to more money in the markets and more volatility. Increased price volatility has encouraged wider trading limits. The end result has been the loss of the ability to use futures markets for price risk management due to the inability to finance margin requirements.”[4]   The report’s recommendations to remove policies that support biofuels production and use are misguided and shortsighted. The report broadly suggests food price volatility would be helped by eliminating all policy provisions that “subsidize (or mandate) biofuels production or consumption.” This recommendation is at odds with the findings of recent studies, including some conducted by the organizations responsible for the June 2 report. Further, it is inconsistent that the authors would suggest eliminating only biofuels support programs, while neglecting to address subsidies for fossil fuel production and use. ·         Recent studies suggest that robust bioenergy industries can enhance food security in developing nations. Information released by the U.N. FAO in May 2011 stated that, “…investment in bioenergy could spark much-needed investment in agricultural and transport infrastructure in rural areas and, by creating jobs and boosting household incomes, could alleviate poverty and food security.”[5]   ·         Also in May, officials involved in the Global Bioenergy Partnership (which includes many of the organizations responsible for the June 2 report) stated that “Modern bioenergy encompasses many technologies that have the potential to not only promote sustainable development, but also help meet two important needs in the developing world by enhancing food and energy security.”[6]  Biofuels indirectly exert downward pressure on food prices by reducing energy prices. A May 2011 study by the Center for Agricultural and Rural Development found that the growth in ethanol production reduced U.S. gasoline prices by an average of $0.25, or 16%, over the entire decade of 2000-2010.[7]  Similarly, an analysis by Merrill Lynch found that, “Biofuels are making up a huge portion of oil supply growth…” and, “On a global scale, biofuels are now the single largest contributor to world oil supply growth. We estimate that retail gasoline prices would be $21/bbl higher, on average, without the incremental biofuel supply.”[8] Recent research suggests that biofuels have only a minor impact on agriculture commodity prices, and thus exert negligible influence on food prices. According to a 2010 report by United Kingdom government researchers, “Available evidence suggests that biofuels had a relatively small contribution to the 2008 spike in agricultural commodity prices.”[9] The report fails to discuss the contribution of biofuel co-products to the global feed and food supply. For example, every metric ton of grain processed for ethanol results in the production of both fuel and roughly 750 pounds of animal feed in the form of “distillers grains.” More than 45 million metric tons of this high-protein animal feed was produced and consumed in 2010. The report recommends that G20 countries should develop “contingency plans” to adjust biofuels policies when “global markets are under pressure and food supplies are endangered.” In an annex to the report, the authors acknowledge that some major biofuel producing countries, including the U.S., already have such contingency plans. The report states that the U.S. and some other countries “…have built flexibility into their legislative or regulatory framework.” Indeed, the Energy Independence and Security Act of 2007 that expanded the RFS contains a provision allowing the EPA Administrator to waive or reduce biofuels requirements if they are determined to be causing economic harm.   The report is right to highlight the contributions to food price volatility of underinvestment in agricultural productivity, export restrictions, commodity and food wastage, lack of market information and preparedness, high oil prices, monetary policy and currency fluctuations, weather-related crop losses, climate change, and other factors. The report correctly recognizes that food price volatility has many complex and inter-related causes. However, the authors unfortunately focus disproportionately on biofuels and fall short in providing actionable recommendations to address many of these more serious factors.   Because the report is incomplete and unbalanced, we encourage G20 leaders to reject its findings and request a revision that takes into account the available literature on the impact of biofuels on world food prices, as well as comments from stakeholders.   [1] Available at http://www.worldbank.org/foodcrisis/ [2] Available at http://www.afpc.tamu.edu/pubs/2/515/RR-08-01.pdf. [3] Baffes and Haniotis (World Bank Development Prospects Group). July 2010. Placing the 2006/08 Commodity Price Boom into Perspective. Polic Research Working Paper 5371. [4] Available at http://www.afpc.tamu.edu/pubs/2/515/RR-08-01.pdf [5] Press release available at FAO web site here. [6] Press release available at GBEP web site here. [7] Available at http://www.card.iastate.edu/publications/synopsis.aspx?id=1160 [8] Blanch, F. (2008). Biofuels driving global oil supply growth. Merrill Lynch. http://www.europabio.org/Biofuels%20reports/MerrilLynchJune2008.pdf [9] Available at http://archive.defra.gov.uk/foodfarm/food/pdf/ag-price-annex%205.pdf   Agriculture, Ethanol, Food 2011-06-20T16:03:45+00:00 http://www.ethanolrfa.org/exchange/entry/senate-ethanol-debate-peeling-away-the-debate/ http://www.ethanolrfa.org/exchange/entry/senate-ethanol-debate-peeling-away-the-debate/ If there is one thing for certain in Washington, it is that nothing is ever as it seems.  That has certainly been the case this week with three votes on ethanol that would leave the uninitiated fairly confused about where the US Senate actually stands with regard to ethanol.  On Tuesday, the Senate voted 59-40 against an amendment to eliminate the ethanol tax incentive program.  On Thursday, the Senate reversed itself, voting 73-27 in support of the very same amendment.  Then, just a half hour later, the Senate defeated another anti-ethanol amendment that would have restricted federal funding for blender pumps.  Huh?  Make up your minds! The fact is there are distinct messages in each vote, and support or opposition to ethanol isn’t necessarily at the heart of any of them. The Tuesday vote was about process.  Senators were justifiably frustrated by the parliamentary gymnastics Senator Coburn used to bring his amendment to the floor.  The amendment was not germane to the underlying bill.  It was going to be subject to a constitutional challenge because it was a revenue title not originating in the House of Representatives.  And, the Senator took the unusual step of filing for cloture on an amendment, rather than the underlying bill, and he did so himself, despite tradition dictating that is a privilege reserved for  the Leadership.   Many senators resented the aggressive tactics used to hijack the Senate floor in pursuit of Senator Coburn’s transparently Big Oil agenda. In any case, the vote on the Coburn amendment Tuesday was certainly not about fiscal responsibility.  That fact was made clear when it was revealed every one of the 16 Senators signing the cloture petition had voted just a month earlier to preserve tax breaks for oil companies.  (Also interesting, those senators supporting the Coburn amendment received more than $24 million in campaign contributions from lobbies opposed to renewable fuels.) Thursday’s vote on the Feinstein amendment was even more confounding.  The amendment similarly sought to eliminate a tax incentive that even the industry agrees needs to be reformed.  It was a free vote to demonstrate one’s fiscal resolve.  Some were even characterizing their vote in support of the amendment as a vote in favor of reform.  Indeed, even the amendment’s sponsor, Senator Feinstein, acknowledged during debate she is working with ethanol advocates on a compromise for transitioning the ethanol tax incentive, thus signaling a vote on her amendment would accelerate reform. Peel the onion back a bit further, however, and it becomes clear that the undercurrent for the Feinstein amendment was the growing battle over the debt ceiling and budget cuts.  For many Democrats, the vote on the Feinstein amendment was an opportunity to get Republicans on record as supporting the repeal of tax incentives (i.e., oil company subsidies) and raising taxes as a means of deficit reduction.  In fact, following the vote Senate Leader Harry Reid stated, “With Republicans endorsing our position that we can cut the deficit by cutting spending that occurs through the tax code, I hope they will join Democrats in eliminating taxpayer giveaways to big oil companies that are raking in record profits.” Look for Senate floor action on oil company tax breaks again real soon.  Indeed, why shouldn’t those be on the table?  Why is it that the only tax incentive some in the Senate are prepared to repeal are those that support farmers and ethanol?  As Senator Grassley noted during debate, “what’s good for the goose is good for the gander.” And once started, it will be difficult to slow the “cut tax cut” train.  Already, Senator Alexander has suggested looking at wind tax preferences if we’re going to look at oil tax breaks.  Choo, choo! The final vote on Senator McCain’s amendment to prevent any federal funds to be used for blender pumps underscores the reality that political support for ethanol is not eroding, even while support for energy tax incentives is clearly under scrutiny.  By a vote of 59-41, the Senate made clear that efforts of USDA Secretary Tom Vilsack to promote the distribution of blender pumps can and should continue.  That makes sense, because if this nation is ever to break its dependence on imported petroleum, consumers must have a choice at the pump. At the end of a crazy week, it is more clear than ever that the Senate needs and the public will demand a more thoughtful and comprehensive discussion about ethanol and energy policy.  How are we going to stimulate investments in next generation technologies?  How can we assure that small businesses that sell gasoline have the resources to invest in the infrastructure necessary to grow the biofuels market?  And how can we assure that OPEC can’t manipulate the market to the detriment of American ethanol and protect the investment the taxpayer has made in this important industry?  These are the questions that must be answered.  And this week’s political theatre did very little to provide answers.  With a dose of common sense and the dogged commitment of Senators Klobachar, Thune, Grassley, Durbin and others, perhaps we’ll have clarity soon. Agriculture, E15, Ethanol, Energy, Jobs, OPEC, Oil, Tariff , USDA, VEETC 2011-06-17T14:36:54+00:00 http://www.ethanolrfa.org/exchange/entry/the-politic-of-sen.-coburns-anti-ethanol-efforts/ http://www.ethanolrfa.org/exchange/entry/the-politic-of-sen.-coburns-anti-ethanol-efforts/ For those that thought the influence of Big Oil on Capitol Hill might have waned in the aftermath of the BP oil spill…think again.  For proof, one need not look any further than the efforts of Senator Tom Coburn (R-OK) and 15 of his Senate colleagues to end investment in America’s ethanol industry.  From 2005-2010, this Gang of 16 received more than $4 million in political contributions from the oil and gas industry.  For his part, Sen. Coburn took in nearly $250,000. The detailed list of contributions (to both candidate campaigns and leadership PACS) is below, courtesy of www.OpenSecrets.org:  Sen. Jim DeMint (R-SC)                    $223,000 Sen. John McCain (R-AZ)                  $98,000 (Sen. McCain has his own anti-ethanol amendment as well.  Running for president he took in $2.4 million) Sen. Richard Burr (R-NC)                  $233,000 Sen. David Vitter (R-LA)                   $539,000 Sen. Kelly Ayotte (R-NH)                  $128,000 Sen. Scott Brown (R-MA)                 $88,000 Sen. James Risch (R-ID)                   $83,000 Sen. James Inhofe (R-OK)                 $460,000 Sen. Bob Corker (R-TN)                    $285,000 Sen. Mike Enzi R-WY)                       $125,000 Sen. Johnny Isakson (R-GA)              $120,000 Sen. John Barrasso (R-WY)               $179,000 Sen. John Cornyn (R-TX)                  $1,100,000 Sen. Lamar Alexander (R-TN)            $156,000 Sen. Jeff Sessions (R-AL)                 $105,000 Sen. Tom Coburn (R-OK)                  $245,000 These contributions are not in and of themselves a surprise.  Money and politics go hand in hand.  But they do help illustrate the point that this effort has more to do with oil-patch politics than it does national energy security and responsible fiscal policy.  If this were a true effort to reign in federal energy subsidies, than the tens of billions of dollars given to mature energy industries like petroleum would be included in this amendment.  Those taxpayer handouts are conspicuously absent. This kind of political gamesmanship comes with consequences.  As RFA President Bob Dinneen noted in his statement on the amendment, “"This is the same kind of political gamesmanship that nations like Iran and Venezuela are exercising to keep consumer energy prices artificially high and Americans addicted to oil.  As few observers give this bill any chance of getting to the president's desk, Sen. Coburn's efforts are yet another example of oil-patch politics trumping sound national energy policy.  We encourage Sen. Coburn to lay down his arms and work with the ethanol industry to craft thoughtful and fiscally responsible legislation that allows for continued innovation and growth of domestic biofuel production and use without pushing the industry off a cliff.” Some background on the amendment:  Sen. Coburn pulled a bait and switch to get a vote on his anti-ethanol agenda.  Late Thursday night, Sen. Coburn swapped this amendment which would end the ethanol tax credit known as VEETC immediately with one he had previously filed on greenhouse gases.  He then immediately filed for cloture.  Filing for cloture is usually a process reserved for party leadership after agreements on what bill and amendments will be considered.  It is an effort of political grandstanding not seen on the floor of the Senate in sometime.  The cloture vote is scheduled for Tuesday.  No doubt this story has more twists and turns in store.  Stay tuned.  Congress, Ethanol, OPEC, Oil, VEETC 2011-06-10T16:02:45+00:00 http://www.ethanolrfa.org/exchange/entry/ethanol-export-boom-continues-usda-trims-corn-acre-estimate/ http://www.ethanolrfa.org/exchange/entry/ethanol-export-boom-continues-usda-trims-corn-acre-estimate/ Today was a busy day for ethanol and grain market data junkies. First, USDA released its June supply-demand estimates, which showed a downward revision to 2011 planted and harvested corn acres. Second, government data on April exports of ethanol and distillers grains was released, showing another record month of ethanol exports and huge shipments to Brazil. USDA’s June WASDE report lowered 2011 corn planted area by 1.5 million acres from March intentions to 90.7 million acres. According to USDA, "Planting delays through early June in the eastern Corn Belt and northern Plains are expected to reduce planted area, more than offsetting likely gains in the western Corn Belt and central Plains where planting was ahead of normal by mid-May." Harvested area was lowered 1.9 million acres, to 83.2 million with the additional 400,000-acre reduction "reflecting early information about May flooding in the lower Ohio and Mississippi River valleys and June flooding along the Missouri River valley." USDA's yield estimate, which is based on a long-term trend and adjusted for late planting dates was unchanged at 158.7 bu/acre. Total corn production is projected at 13.2 billion bushels, down 305 million from last month, but still a record, and up 753 million from 2010/11. On the demand side, USDA reduced corn feed use by 100 million bushels to an even 5 billion bushels. Ethanol demand and export demand were unchanged at 5.05 bbu. and 1.8 bbu., respectively. Here are some key points to keep in mind: The U.S. corn crop is now fully planted, for all intents and purposes. Warm, dry weather over the past few days has allowed Indiana, Ohio, and Michigan to finish up, joining other top corn states that finished planting last week. The early heat has helped emergence, which is not far behind normal. It likely is too early to accurately estimate how many acres may have been lost to flooding or abandoned due to prevented planting. The June 30 Acreage Report will provide a much better picture of actual corn acreage. It is extremely early in the season and much will change between now and harvest. Historical data has shown that the weather in July and August is a much more important factor in determining final yields than the planting date. The 2009 season is a good example. The 2009 planting pace was much slower than normal and similar to this year. Yet, the season ended with a record average yield of 164.7 bushels/acre. Conversely, 2010 saw one of the fastest planting paces on record, yet final average yields were much lower than expected because of extreme heat and dryness in August. One-third of the corn going to "ethanol and by-products" returns to the livestock market in the form of distiller grains, corn gluten feed and meal. That means total livestock feed use is closer to the equivalent of 6.6 billion bushels of corn on a net basis, and ethanol use is closer to 3.4 billion bushels—or 26% of total use. USDA is underestimating ethanol yield per bushel, which leads to overestimation of gross bushels used for ethanol. USDA reportedly assumes one bushel yields 2.7 gallons of ethanol, while actual average ethanol yields have been 2.8 gallons per bushel or higher. Using USDA's ethanol yield assumption, 5.05 billion bushels would generate 13.64 billion gallons of ethanol. But using the more realistic industry average of 2.8 gal. bu., production of 13.64 billion gallons would require 4.87 billion bushels. As for exports, another record was set in April, as unprecedented amounts of ethanol were shipped to Brazil. More than 120 million gallons of U.S. ethanol (denatured and undenatured, non-beverage) were exported in April, with Brazil accounting for more than half of total shipments received. Denatured ethanol exports tallied a record 95 million gallons, while shipments of undenatured product totaled 24.9 million gallons. Year-to-date U.S. ethanol exports (Jan.-April) stand at 321 million gallons, compared to exports of 397 million gallons for the entire calendar year of 2010. Notably, the U.S. exported more ethanol in the month of April than it did in the entire calendar year of 2009. Brazil imported 47.7 million gallons of denatured ethanol in April, followed by Canada (22.9 mg), the Netherlands (5.9 mg), United Arab Emirates (5.1 mg) and the United Kingdom (5.0 mg). Brazil has imported 69 million gallons denatured ethanol from the U.S. so far in 2011. Brazil was also the top destination for U.S. undenatured (non-beverage) ethanol exports, receiving 18.2 million gallons in April. The Philippines was a distant second with 3.1 mg, followed by the Netherlands (2.2 mg) and South Korea (1.1 mg). Exports of distillers grains fell sharply in April. Shipments totaled 585,117 metric tons, down 15% from March and 21% lower than April 2010. Mexico was the top recipient of U.S. distillers grains in April, receiving 138,206 metric tons. China, Canada, Vietnam, and Morocco, respectively, were other top destinations. Year-to-date (Jan.-April) exports of distillers grains stand at 2.60 million metric tons, virtually identical to the 2.61 million metric tons shipped during the first four months of 2010.   Agriculture, Ethanol, Exports, Land Use, Production, USDA 2011-06-09T19:02:45+00:00