Oil Industry Urges Trump Administration to Dismiss Biofuel Industry Wish List

NEW YORK (Reuters) – The American Petroleum Institute on Tuesday urged the Trump administration to reject proposals floated by U.S. farmers and ethanol producers to boost ethanol demand, the latest development in the clash over biofuel policy.

President Donald Trump last week said his administration was planning a “giant package” related to ethanol that would please U.S. farmers angry that many more oil refiners have been freed from obligations to use the corn-based fuel.

Trump is counting on support from both farmers and the oil industry in next year’s presidential election.

“We are deeply concerned by the RFS (Renewable Fuel Standard) policy changes the White House is currently considering,” said Frank Macchiarola, API’s vice president of downstream and industry operations, during a press call on Tuesday. “We hope the administration walks back from the brink of what would be a disastrous political decision that potentially hurts American drivers.”

The Renewable Fuel Standard requires refiners to blend biofuels like ethanol into their fuel, but allows the Environmental Protection Agency to grant waivers to financially troubled small facilities. The EPA announced in August a decision to grant 31 waivers to refineries under the Small Refinery Exemptions program, enraging farmers and ethanol producers who said the move undermines biofuel demand.

Since then, groups including the corn lobby and the Renewable Fuels Association have urged the administration to redistribute waived volumes from the exemptions into future biofuel volume mandates, a proposal API opposes.

“It is simply unfair for the burden of additional volume requirements to essentially be placed on the backs of those parties that have made decisions along the way to be able to comply with the law in the first place,” Macchiarola said.

The API late Friday submitted comments to the EPA on the proposed 2020 RFS volumes. API’s top concern is the ethanol blend wall, or the maximum amount of ethanol that can be blended into gasoline. Most U.S. gasoline contains 10% ethanol.

Separately, soybean associations from eight states including Nebraska, Missouri and Georgia sent a letter to Trump on Tuesday, saying the refinery exemptions were adding to farmers and biodiesel producers’ recent financial hardships. The group asked Trump to direct the EPA to make up for lost volumes caused by the exemptions.

REFS

Published on reuters.com

Oil industry urges Trump administration to dismiss biofuel industry wish list

Trump Orders Biofuel Boost in Bid to Temper Farm State Anger

President Trump, seeking to tamp down political fallout in U.S. farm states essential to his reelection, has ordered federal agencies to shift course on relieving some oil refineries of requirements to use biofuel such as corn-based ethanol.

Trump and top Cabinet leaders decided late Thursday they wouldn’t make changes to just-issued waivers that allow small refineries to ignore the mandates, but agreed to start boosting biofuel-blending quotas to make up for expected exemptions beginning in 2021. The outcome was described by four people familiar with the matter who asked not to be named before a formal announcement could be made.

The decision was reached after a flurry of White House meetings this week on the issue, which divides two of Trump’s top political constituencies: rural Americans and the oil industry. With the move, Trump is largely siding with farmers, ethanol producers and political leaders in Iowa that have accused the president of turning his back on the industry.

But the administration’s shift risks blowback in Pennsylvania and other battleground states, where blue-collar refinery workers have held rallies to push for relief from U.S. biofuel quotas they say are too expensive. The largest coalition of U.S. building trades unions on Thursday warned Trump that changing course on exemptions would betray the president’s “campaign promise to protect every manufacturing job.”

“President Trump is committed to ensuring our country not only continues to be the agricultural envy of the world, but also remains energy independent and secure,” White House spokesman Judd Deere said.

Administration officials agreed to the broad contours of a renewable fuel plan, including further moves to encourage the use of E15 gasoline containing 15% ethanol, beyond the 10% variety common across the U.S. E15 could be dispensed alongside conventional ethanol blends at filling stations, under the drafted changes.

Under the tentative plan, the Environmental Protection Agency also will give a 500-million-gallon boost to the amount of conventional renewable fuel, such as ethanol, that must be used in 2020. A separate quota for biodiesel, typically made from soybeans, would get a 250-million-gallon increase.

Additionally, the administration will enhance a program meant to expand U.S. fueling infrastructure and get more ethanol into the system. The EPA will adopt an Agriculture Department assessment of the greenhouse gas emissions associated with renewable fuel, and will expand environmental credits encouraging automakers to produce “flex-fuel” vehicles that can run on high-ethanol gasoline.

The EPA has drawn intense criticism for its Aug. 9 decision to exempt 31 refineries from 2018 biofuel-blending requirements. Although federal law authorizes the waivers for small refineries facing an economic hardship, the number of those exemptions has surged during the Trump administration, and biofuel producers say they are being handed out too freely.

The backlash has been most severe in Iowa, the nation’s top producer of ethanol and the corn used in its manufacture. It is also crucial for Trump’s reelection; the state twice voted for Barack Obama before voting to send Trump to the White House in 2016.

Trump’s Democratic challengers have seized on the issue, with front-runner Joe Biden accusing the president of lying to farmers and abandoning a campaign promise to “unleash ethanol.”

However, EPA officials and oil industry leaders say the waivers haven’t harmed domestic ethanol demand and blame a glut of the product for suppressing prices. Trump’s trade war with China has exacerbated the industry’s economic challenges. As with U.S.-grown agricultural products, including soybeans, ethanol faces retaliatory tariffs in China.

Against the backdrop of tariffs, the exemptions delivered another blow to the U.S. Midwest, where guaranteed domestic ethanol demand helps provide a floor of support for corn farmers and buttresses swings in commodity prices. Ethanol refining accounts for about 40% of U.S. corn consumption.

American “agriculture has a problem if ethanol doesn’t do well,” Green Plains Inc. chief executive officer Todd Becker said in a telephone interview on Thursday. The Omaha-based company created a political action committee last month, and Becker told analysts in May that Green Plains plans to “engage” 2020 U.S. presidential candidates on ethanol policies.

Becker said he “can’t fault” Trump for getting tough on China, but the combination of the trade war and small refinery exemptions was causing too much pain. “You don’t fight China and then give out SREs,” Becker said. “Farmers are furious now.”

Agriculture Secretary Sonny Perdue had urged the White House to rescind some of the recently issued waivers — at least those for refineries tied to “big” oil companies — according to an Aug. 20 memo obtained by Bloomberg. EPA officials successfully argued that would be illegal.

Instead, Trump directed the agency to increase biofuel quotas to make up for the exemptions, a so-called reallocation that will effectively boost the burden for larger refineries that are not eligible to win waivers. The EPA will start incorporating expected exemptions into annual biofuel quotas beginning with 2021.

Oil industry leaders blasted the tentative agreement on Friday, saying it would do little for U.S. farmers while hurting domestic refiners.

“Reallocation would be a major hit to fuel manufacturers in Pennsylvania and Ohio — and refinery workers across the country — with zero benefit to ethanol,” said Derrick Morgan, a senior vice president with the American Fuel and Petrochemical Manufacturers. “Those celebrating will ultimately be foreign biofuel producers whose biodiesel is being imported to help meet mandates.”

The EPA typically sets each year’s biofuel blending requirements by Nov. 30 of the preceding year, except for biodiesel quotas, which are set two years in advance. Under the U.S. Renewable Fuel Standard program, there’s a specific mandate for biodiesel, but the soybean-based product can also be used to satisfy an implied 15-billion-gallon quota for conventional renewable fuel.

Frank Macchiarola, a vice president at the American Petroleum Institute, called the drafted plan a “rushed, arbitrary policy.”

“We hope the administration walks back from the brink of a disastrous political decision that punishes American drivers,” Macchiarola said. “Bad policy is bad politics.”

Although the tentative plan was meant to assuage biofuel allies, it’s not clear it was having the intended effect Friday, amid industry skepticism the EPA would follow through on the agreement. Iowa officials are preparing to visit Washington for a formal rollout of the policy changes.

Biodiesel industry advocates say they can produce more fuel — and the Trump administration needs to take that into account.

“With a level playing field in biodiesel trade in 2018, domestic producers increased output by several hundred million gallons,” said National Biodiesel Board spokesman Paul Winters. “We can continue to do so — as long as EPA stops using RFS waivers to destroy demand and put biodiesel producers out of business.”

REFS

Published on latimes.com

Senators To Spend Billions on Electric Car Infrastructure

WASHINGTON – Republican and Democratic senators have agreed to pump billions of dollars in federal funding into building electric car charging stations and other infrastructure for low-emission vehicles.

Under an appropriations bill released by the Senate Environment and Public Works Committee Monday, the Transportation Department would distribute $3.5 billion over the next five years for projects that reduce carbon emissions from transportation.

It would also hand out $1 billion in grants for infrastructure supporting vehicles powered by electricity, hydrogen or natural gas along designated sections of highway.

“This bipartisan legislation includes the first-ever climate title in a highway bill and would invest $10 billion in policies and innovative projects aimed at reducing emissions and enhancing resilience,” Sen. Tom Carper, D-Del., said in a statement.

The bill also calls for $4.9 billion in funding to protect roads and highways from natural disasters including hurricanes and wildfires, which scientists believe could increase in quantity as the planet warms.

The climate change-related funding was a relatively small part of a $287 billion transportation bill, the majority of which will go to repairing the nation’s aged highways and bridges over the next five years. The committee said it was the largest highway funding bill in history.

“By modernizing our roads and bridges, we can make the roads safer for every family driving on them,” Sen. Tom Barrasso, R-Wyo., said in a statement. “The bill cuts Washington red tape, so road construction can get done faster, better, cheaper, and smarter.”

Republicans and Democrats have been at odds over electric vehicles, which represent a threat to gasoline and diesel demand in the decades ahead as drivers make the switch. Barrasso introduced legislation in October to end tax credits for electric vehicles, saying the program “largely benefits the wealthiest Americans.”

REFS

This article was published on chron.com

Japan Receives First Shipment of ETBE from US Corn-Based Ethanol

Following a recent policy change by the Japanese Government, the country has received its first shipment of ethyl tert-butyl ether (ETBE) made from US corn-based ethanol.

According to the US Grains Council (USGC), this first shipment to Japan marks the country’s new demand for US ethanol-based products, as well as a milestone in efforts to develop the US ethanol market internationally.

The policy change recognises the greenhouse gas (GHG) benefits of ETBE, which is a component of gasoline, and means that US corn-based ethanol is now able to be used in the production of ETBE to be imported into Japan.

The Asian nation will allow US ethanol to meet up to 44% of a total estimated annual demand of 217 million gallons of ethanol used in the production of ETBE, which equates to around 95.5 million gallons of ethanol.

Japan Biofuels Supply purchased the first shipment of ETBE from the US, which was unloaded at Chiba port near Tokyo, and then Wakayama port near Osaka.

The shipment of 13.5 million gallons is equal to 2 million bushels of corn demand, the USGC added.

CLOSING REMARKS

  • It is in their both advantages that US and Japan work more more closely together.

REFS

This article was published on biofuels-news.com

Japan receives first shipment of ETBE from US corn-based ethanol

TOP 10 Electric vehicles in the US

Tesla was the electric-vehicle sales leader in the US by a wide margin during the first half of 2019, according to estimates from the electric-vehicle website InsideEVs.

It sold around 83,875 vehicles in the US between January and June, InsideEVs estimated, over 10 times the number of vehicles sold by General Motors, which came in second in the rankings.

While Tesla sells three fully-electric models, more than most other automakers, Tesla’s best-selling vehicle, the Model 3 luxury sedan, outsold every other vehicle by at least 750%, according to InsideEVs.

But electric vehicles account for just 1% of the US automotive market and remain unprofitable for Tesla and many of its rivals, which means traditional automakers may not yet be motivated to sell them in large numbers.

These are the 10 best-selling electric vehicles in the US during the first half of this year, according to InsideEVs.

The website’s estimates are based on factors like vehicle identification numbers and automaker sales data, though some are based more heavily on the judgement of InsideEVs’ staff.

  • 10. Smart EQ fortwo – 2019 US sales through June: 496
  • 9. Jaguar I-Pace – 2019 US sales through June: 1,309
  • 8. Audi e-tron -2019 US sales through June: 1,835
  • 7. Volkswagen e-Golf – 2019 US sales through June: 1,893
  • 6. BMW i3 – 2019 US sales through June: 2,207
  • 5. Nissan Leaf – 2019 US sales through June: 6,008
  • 4. Tesla Model S – 2019 US sales through June: 7,225
  • 3. Chevrolet Bolt EV – 2019 US sales through June: 8,281
  • 2. Tesla Model X – 2019 US sales through June: 9,000
  • 1. Tesla Model 3 – 2019 US sales through June: 67,650

REFS

This article was published on businessinsider.com and written by Hollis Johnson

US Biodiesel Company Commits Environmental Fraud

Federal officials in California fined a San Joaquin biodiesel manufacturing company $401,000 for violating Clean Water Act violations after the firm admitted to tampering with monitoring equipment and dumping wastewater into a city sewer system in Stockton.

The U.S. Attorney’s Office for the Eastern District of California announced July 11 the fines against American Biodiesel Inc., saying employees tampered with flow meters and acidity recordings to underreport pollutants that would have violated city regulations.

CLOSING REMARKS

  • How is this possible anno 2019?
  • Does this reflect the values of the company?
  • Was the CEO or Senior Management involved in this fraud?

REFS

This article as published on news.bloombergenvironment.com

California Biodiesel Firm Fined Over Dumping Wastewater

Will EPA Kill The Small Biofuel Farmers?

President Donald Trump followed through on his promise to break down regulatory barriers at the Environmental Protection Agency and allow year-round E15 sales.

Iowa’s farmers and ethanol producers are grateful.

But the E15 rule will not make up for the damage that EPA is doing with its small refinery exemptions — particularly not for small biodiesel producers.

Over the past year, the biodiesel and renewable diesel industry has lost demand for hundreds of millions of gallons of product through the RFS loophole EPA created.

EPA has always granted RFS exemptions to a handful of small refineries every year since 2013. But in 2017, EPA began handing out these exemptions to some of the biggest, most profitable oil companies in the world.

It doesn’t seem possible that every oil company in the United States could be facing a hardship from blending biofuels, when fuel sales are climbing, and oil prices are strong.

For 2017, EPA granted RFS exemptions to 35 oil refineries. The total volume of gasoline and diesel produced by that group of oil refineries was more than 17 billion gallons.

That’s an enormous amount of fuel compared to biofuel producers. EPA set the 2017 RFS volume for all U.S. biofuel producers — ethanol, biodiesel and all other types — only at 19.1 billion gallons.

And that volume was eventually cut to 17.2 billion gallons through the exemptions.

EPA is protecting as much market space for oil refiners — excluding them from competition — as it is for biofuel producers. That’s turning the RFS program upside down.

According to University of Illinois economist Scott Irwin, if EPA continues to grant the exemptions to everyone who asks — the way it has been granting them — the demand destruction could reach 2.45 billion gallons over the next few years, with a $7.7 billion economic loss for the biodiesel and renewable diesel industry.

Biodiesel producers are tiny compared to so-called small oil refineries. Take CVR Energy, owned by wealthy investor Carl Icahn, as an example.

CVR reportedly received an exemption for its Wynnewood, Oklahoma, refinery, which refines 74,500 barrels of oil each and every day. A mid-sized biodiesel producer would refine less than an equivalent amount of vegetable oil in an entire month.

A single exemption for a small oil refinery can put a biodiesel producer out of business.

The math is simple enough. Since each barrel of oil yields a little more than 31 gallons of gasoline and diesel, a refinery the size of CVR’s produces more than 2.3 million gallons of fuel a day and over 860 million gallons each year.

The advanced biofuel RFS obligation for such a refinery this year would include close to 21 million gallons of biomass-based diesel. And there are dozens of small biodiesel producers across the country who produce less than that.

If a small biodiesel producer gets put out of business, it will impact more people than just the 20 or 30 plant workers.

Twenty million gallons of biodiesel production supports more than 600 jobs across the economy — from farmers to truck drivers.

Biodiesel producers are often the primary drivers of local economies.

According to recent news reports, the president is aware that his EPA is turning the RFS program on its head through small refinery exemptions.

He gave direction to EPA on the E15 rule and ensured it got done quickly. America’s biodiesel producers need him to take decisive action on the RFS exemptions.

Tom Brooks is general manager of Western Dubuque Biodiesel, a 30-million gallon per year facility in Farley whose investors include area soybean growers.

CLOSING REMARKS

  • Do you think EPA policies are against the little farmer?
  • Were the policies designed by big business?
  • Is this policy really supporting US households?

REFS

This article was published on thegazette.com and written by Tom Brooks.

Don’t put small biodiesel out of business

Trump Orders Review of Controversial Biofuel Waiver Program

U.S. President Donald Trump has directed members of his Cabinet to review the administration’s expanded use of waivers exempting small refineries from the nation’s biofuel policy, after hearing from farmers angry about the issue during his recent Midwest tour, according to three sources familiar with the matter.

Trump’s move underscores the rising political importance of the U.S. Renewable Fuel Standard, a more than decade-old law which requires refineries to blend corn-based ethanol into their gasoline to help farmers, but which also provides waivers to small refining facilities that can prove compliance would cause them financial harm.

Since Trump took office, the Environmental Protection Agency has more than quadrupled the number of waivers it has granted, saving the oil industry hundreds of millions of dollars, but enraging another key constituency – corn growers – who claim the move threatens demand for one of their staple products.

Trump heard from disgruntled farmers and their political backers on the issue earlier this month when he visited the Midwest to tout his administration’s decision to lift a ban on summer sales of higher ethanol blends of gasoline called E15. Farmers welcomed that move but warned Trump it was negated by the surge in small refinery exemptions.

The sources said Trump, upon returning from his trip, asked the heads of the EPA and the U.S. Department of Agriculture to find solutions to address the farmers’ concerns. They said the EPA is now considering limiting use of the waivers or forcing larger refiners to make up for the exempted gallons – or a combination of both.

“I think Trump realized he may have a political problem and told (EPA Administrator Andrew) Wheeler to fix it,” said one of the sources, a refining industry lobbyist who was briefed on the matter and asked not to be named.

The EPA, in a statement on Thursday, said the “EPA will continue to work with the White House, USDA, members of Congress and other stakeholders to ensure the Renewable Fuel Standard’s continued stability.”

The USDA and the White House did not respond to requests for comment.

Any move to alter the small refinery waiver program would face resistance from the oil industry, already stung by the administration’s expansion of E15 sales.

They view the government support for biofuels as a competitive threat to petroleum, and argue that the waiver program is now being run as Congress intended.

“The president has made promises to refiners, too. He promised to keep refineries competitive and he made promises to keep regulatory costs down, and we hope he keeps those promises,” said, Derrick Morgan, senior vice president of the refining trade group American Fuel and Petrochemical Manufacturers.

Trump’s expansion of the waiver program has become an unlikely talking point for several Democrats here vying to defeat him in the 2020 presidential election, including Senators Amy Klobuchar and Elizabeth Warren, who believe it can help turn farmers already stung by the trade wars against him.

The EPA granted 35 exemptions for 2017, up from seven in the last year of the Obama administration, according to agency data. That included waivers for refineries owned by profitable majors like Exxon Mobil Corp and Chevron Corp, as well as one owned by billionaire investor Carl Icahn.

The exemptions represent more than 2 billion gallons of potentially lost demand for ethanol, the biofuel industry says. However, the extent of the actual demand destruction, if any, is a matter of intense debate.

The EPA has delayed action on the 39 pending applications for the 2018 calendar year.

REFS

This article was published on reuters.com

Trump orders review of controversial biofuel waiver program: sources

US Ethanol Makers Buy Brazilian Corn

Some U.S. ethanol makers are considering buying corn from Brazil to guarantee supply as domestic crop prices are rising, the chief of the Renewable Fuels Association (RFA) said on Tuesday.

“I haven’t heard that it is happening, but I have heard some chatter that there are people looking at it, because of the growing spread between U.S. and Brazil corn prices,” Chief Executive Geoff Cooper said in an interview on the sidelines of the Ethanol Summit 2019 in Sao Paulo, organized by cane industry group Unica.

“Logistically, there may be some places where that could work, the West Coast for instance,” he said.

U.S. corn is fetching five-month high prices, including a more than 25% increase since May, as the crop outlook has deteriorated due to unfavorable weather.

Prices in Brazil have risen more slowly, and the country is harvesting its largest corn crop ever.

Brazilian grain analyst Agroconsult cited reports of U.S. ethanol makers, mostly on both coasts, buying corn from Brazil and Argentina.

Besides price, a major factor driving those deals is the difficulty in transporting corn from some U.S. areas to domestic ethanol facilities due to waterway disruption after rains, said Andre Pessoa, Agroconsult’s chief analyst.

RFA’s Cooper said ethanol prices are keeping up with rising corn prices, “but at some point you run out of room.”

“If ethanol doesn’t keep up, that will put further pressure on margins which are already low, and we already have some mills running in the red,” he said.

The worsening corn outlook will reduce output as some capacity is idled, Cooper said.

“Export demand is the most elastic for us, so that is where we would expect to see the first reductions in ethanol consumption and demand,” he added.

Brazil’s ethanol industry, largely based in sugarcane, believes the U.S. corn situation could expand demand for its fuel.

In his presentation at the conference, Cooper urged the Brazilian government to let the quota system expire in September and not renew it for a period, saying it would be only fair since the United States does not tax Brazilian ethanol.

Brazil taxes U.S. ethanol at 20% when import volumes go above 150 million liters per quarter.

REFS

This article was published on agriculture.com

Some U.s. Ethanol Makers Looking To Buy Brazilian Corn

Colorado Auto Dealers are Peddling Misinformation about Electric Vehicles

At Plug In America, we represent the more than 1 million Americans who have switched to electric vehicles (EVs). We also train and support many auto dealers who recognize that more and more consumers want EVs because they are fun to drive, offer greater convenience and are cheaper to fuel and maintain.

This is why we were surprised and baffled by the recent opinion piece by Tim Jackson, CEO and president of the Colorado Automobile Dealers Association. While we respect Jackson and his opinion, we question his arguments, many of which cite outdated, misleading and factually incorrect information about plug-in electric vehicles. Here we correct and update this information so that Colorado consumers can have the choice of vehicle they deserve and make more informed decisions about these vehicles that are widely recognized as the future of the automobile industry.

Jackson declares that the zero-emission vehicle (ZEV) guidelines now under consideration by the Colorado Air Quality Control Commission “would actually place a financial penalty of several thousand dollars or more on those who, for whatever reason, find that an electric vehicle doesn’t fit their needs.” This is false and misleading. Let’s be clear: under the proposed guidelines, there are no penalties for consumers who do not purchase electric vehicles.

Adoption of the ZEV guidelines increase consumer choice by giving Colorado residents greater access to the electric vehicles that they want. The guidelines do not take away access to vehicles without a plug and they have no impact on pricing of conventionally powered cars and trucks.

He also notes that the Tesla Model S runs in the $75,000–$96,000 range, seemingly to indicate that electric vehicles are too expensive for the average consumer. He fails to note that the Model S is outsold 10-to-1 by the Tesla Model 3, which starts at just $39,900 before incentives, of which there are many, that lower the price even more. Other popular plug-in models cost even less, including the Toyota Prius Prime, Chevrolet Bolt EV, Honda Clarity Plug-In Hybrid, and Nissan LEAF.

Jackson then cites very limited data from five years ago to support his claim that EV incentives go mainly to the wealthy. There are presently more incentives available to all income levels. Most EV drivers, as many as 80 percent and particularly those who are low- to middle-income, lease their vehicles. In these cases, the federal EV tax credit is awarded to the lienholder and often passed along to the driver through reduced lease payments, making EVs more affordable for consumers. However, because these consumers do not receive the tax credit directly, they are not included in the study Jackson cites. Nor does this study consider Colorado’s tax credit of up to $5,000, which also makes EVs more affordable for families.

He also argues that “electric vehicles come up short” in regards to SUVs and pickups. While it’s true that there are not yet any electric pickups available, you can walk into a Colorado auto dealer and purchase the Kia Niro, Mitsubishi Outlander, Audi e-tron and Subaru Crosstrek plug-in hybrid SUVs today at a competitive price point from a total cost of ownership standpoint. Details on these and other electric vehicles can be found at PlugStar.com. Many more models, including pickups, are coming soon.

We agree wholeheartedly that “Colorado’s new car dealers are in the business of selling cars, no matter what technology they use.” Considering EV sales in Colorado increased by 70 percent in 2018 over 2017, we couldn’t disagree more with Jackson’s assessment of EVs, or his willful misuse of outdated and highly suspect facts to support his arguments. While we respect Jackson’s viewpoint, as a nonprofit consumer advocacy organization representing the voice of EV customers and the dealers that serve them, we are compelled to set the record straight.

Jackson should be excited that consumers are visiting Colorado’s auto dealers to purchase these new vehicles.

REFS

This article was published on coloradosun.com

Colorado Auto Dealers are peddling misinformation about electric vehicles