Recent Op-Eds, News Coverage on Biodiesel/RFS

Biodiesel campaign hits paydirt in RFS proposal
Amanda Peterka, E&E reporter
Published: Monday, June 1, 2015
Stakeholders from all around the biofuels debate groaned last week when U.S. EPA proposed renewable
fuel targets.
But one industry group cheered.
The National Biodiesel Board called the proposed targets -- which call for year-by-year increases in the
use of its favorite fuel through 2017 -- a much-needed "step in the right direction" by providing certainty
to producers.
"I was really pleased to see that EPA took the time and really listened to the advocacy and outreach that
our industry did conveying to them how it was essential they continue to grow the biomass-based diesel
program and the overall advanced [biofuel] program," Anne Steckel, the trade group's vice president of
federal affairs, said in an interview.
EPA's proposal covers targets for conventional ethanol and advanced biofuel -- including biodiesel -- for
the years 2014, 2015 and 2016. It also would set the 2017 mandate for biodiesel.
While the proposal generally calls for an increase in biofuel production compared to a prior scrapped
proposal for 2014, overall renewable fuel levels would remain below the levels that Congress wrote into
the renewable fuel standard in 2007. Several biofuel producers came out in opposition to the proposal
Friday, saying it handed the RFS program over to oil refiners that don't want to use more biofuels
(Greenwire, May 29).
For biomass-based diesel, a fuel made from soybean oil, animal fats and used cooking grease, the
proposal would set the 2014 mandate at 1.63 billion gallons, the level of fuel that was actually produced
last year.
EPA's proposal would require refiners to use 1.7 billion gallons of biodiesel in 2015 and 1.8 billion gallons
in 2016. In 2017, the proposal would set the biodiesel mandate at 1.9 billion gallons.
The targets represent a substantial increase from the agency's original proposal for 2014, which EPA
withdrew last year after receiving pushback from stakeholders. That proposal would have kept the
biodiesel target level at 1.28 billion gallons for both 2014 and 2015.
The proposed increases "will both contribute to market stability for the renewable fuels program and
continue to promote a growing and competitive advanced biofuels marketplace," EPA said in its
proposal Friday.
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When it passed the renewable fuel standard into law, Congress decided to treat biodiesel differently
than other fuels. Rather than setting year-by-year targets through 2022, as it did for other types of
renewable fuels, lawmakers said only that EPA must mandate at least 1 billion gallons a year of biodiesel
by 2012. After that, they left the decision up to the agency whether and by how much to increase the
annual target.
For more than a year, the biodiesel trade group has led an aggressive campaign in favor of higher
mandates for the industry while at the same time staying out of debates over other aspects of the RFS,
including the ethanol portion of the requirements. The campaign has included advertising, trips to the
agency and lobbying on Capitol Hill. Congressional supporters of biodiesel have held several events to
push EPA for higher targets.
Steckel credited the group's campaign with the increased mandates.
"We have a compelling story," she said. "We're really different than everybody else in the entire
program, so we focused on our story and telling it, and we were glad to see that the administration has
recognized that."
'Hardly done fighting'
The nation's largest biodiesel company, Renewable Energy Group, called the EPA targets an
improvement over the prior proposal and showed "federal policy is heading in the right direction."
According to the biodiesel board, more than 50 biodiesel facilities have either idled or gone bankrupt
since 2012 as a result of a lack of robust RFS targets and Congress allowing the industry's $1-a-gallon tax
credit to expire.
"Not having certainty of a target to shoot toward has been very detrimental for our industry," Steckel
said.
Oil refiners say that EPA doesn't have the authority to increase the biodiesel target until 2017, however.
When Congress passed the RFS into law, it stipulated that EPA set the biodiesel level at least 14 months
before the beginning of the compliance year.
According to the American Petroleum Institute, that means that EPA must give producers at least 14
months' notice before raising the biodiesel target.
"The language is very unambiguous in the statute, and it would be hard to interpret it any other way,"
API senior fuels policy adviser Patrick Kelly told reporters last week.
The biodiesel group disagrees. In its proposal, EPA noted that Congress did not provide any guidance to
the extent to which the biodiesel mandates should grow after the year 2012. The agency said it
considered relevant factors, including the impact of biodiesel tax credit, on the industry when choosing
the targets.
EPA also said it believed that it was possible for the biodiesel industry to exceed the proposed levels,
depending on market conditions. As of 2013, the total domestic biodiesel capacity registered under the
RFS program was 2.7 billion gallons.
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Under the RFS program, the biodiesel mandate is contained in the larger mandate for advanced biofuel
use. After enough of the fuel is produced to satisfy the biodiesel mandate, it can compete in the broader
advanced biofuel mandate. There, biodiesel's toughest competition has come from imported sugarcane
ethanol from Brazil, which EPA also considers an advanced biofuel.
Steckel said that, despite being pleased with the proposal, her group would continue to push for higher
targets for both biodiesel and advanced biofuels.
The American Soybean Association on Friday expressed similar sentiments, saying in a statement that
more robust biodiesel volumes would lead to further growth in the industry.
"We're hardly done fighting for biodiesel," ASA President Wade Cowan said.
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Does President Obama Support Renewable Fuels?
By Joe Jobe
May 26, 2015
After more than two years of delays, the EPA announced recently that it will soon set revised standards
determining how much renewable fuel is blended into our gasoline and diesel supplies in the coming
years.
The decisions the EPA makes — under a policy called the Renewable Fuel Standard (RFS) — will set a
critical precedent for the nation's energy policy, with the potential to shape the way we power our cars
and trucks for the foreseeable future. In short, the EPA's proposal will show whether the Obama
administration is truly committed to diversifying the fuels we use, or if "reducing our dependence on oil"
is more of a political slogan.
The RFS is the most successful policy we have for shifting away from petroleum in the transportation
sector, which accounts for more than one-fourth of U.S. greenhouse-gas emissions. Since it was created
in 2005 by a bipartisan Congress and President George W. Bush, it has delivered remarkable results. We
now get about 10 percent of our gasoline supplies from conventional corn ethanol, and the next phase
of the program is written to ensure we make similar progress with advanced biofuels like biodiesel and
cellulosic ethanol.
In both of his campaigns for the White House, President Obama vowed to strongly support renewable
fuels, particularly advanced biofuels, which by the EPA's definition reduce greenhouse-gas emissions by
at least 50 percent compared with petroleum fuels. In 2008, he visited biorefineries across the country
and told workers he was committed to making the U.S. No. 1 in the world in renewables. More recently,
EPA officials have apologized for damaging delays in implementing the RFS over the past two years, and
EPA administrator Gina McCarthy has said repeatedly that the administration is committed to getting
the program back on track and growing America's renewable-fuels production.
These assurances are positive, and the EPA's announcement that it will propose several years of
standards by June 1 is a step in the right direction. However, the only true measure of the Obama
administration's commitment to renewable fuels will be in the volumes that are proposed. As the old
proverb goes, the proof of the pudding will be in the eating.
Will the EPA pave the way for growth that gives producers and investors the confidence they need to
expand operations and that encourages the development of new technologies, as candidate Obama
said? Or will the administration retreat to a weakened policy that perpetuates the status quo, with
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continued dependence on petroleum — much of it coming from dangerous parts of the world or from
increasingly carbon-intensive and environmentally questionable sources?
The answer is critical. We have the demonstrated technology and the energy policy that finally has
shown great progress toward moving our nation away from the dangerous addiction to a singular
transportation fuel.
Biodiesel is a prime example of the success of the RFS. Over the last five years, biodiesel has grown from
a niche fuel with a small but enthusiastic following to a commercial-scale industry that has plants in
almost every state in the country. Before the administration effectively put the RFS on hold two years
ago, the industry produced a record of more than 1.8 billion gallons in 2013 — or nearly 5 percent of the
on-road diesel pool.
The industry did this using an increasingly diverse and abundant mix of raw materials, including recycled
cooking oil, plant oils such as soybean oil, and animal fats. According to the EPA, biodiesel emits 57
percent to 86 percent less greenhouse gas than petroleum diesel. And the industry supports more than
62,000 jobs.
This is a success story, and after two years of deliberation over what to do next, the answer should be
obvious. The RFS requires that advanced biofuels be sustainably grown each year, and it clearly intended
growth in all categories of advanced biofuel. To do otherwise would further undermine the investors,
entrepreneurs, and employees who responded to the law by building this new American energy
industry. On June 1, we hope to see President Obama's commitment to renewable fuels realized with
clear, sensible policy that delivers a more diverse and sustainable energy future.
Joe Jobe is CEO of the National Biodiesel Board, the U.S. trade association for the biodiesel industry.
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My Turn: EPA must honor promise to diversify
transportation fuels
By WAYNE PRESBY For the Monitor
Thursday, May 28, 2015
(Published in print: Thursday, May 28, 2015)
In 2008, my partners and I embarked on a new venture to build the largest biodiesel production facility in
the Northeast. Like many of you, we were concerned about sending billions of U.S. dollars to the Middle
East to buy oil and spending even more protecting our access to that foreign oil. In many cases, our own
dollars were financing terrorism against us. Valuable jobs that could be created in the United States were
being sent overseas. Sons and daughters were being maimed and killed to protect our access to oil.
We launched White Mountain Biodiesel after a bipartisan Congress under President George W. Bush
added biodiesel to the Renewable Fuel Standard. This program’s passage signaled that the federal
government was serious about attacking America’s addiction to oil. Beyond conventional biofuels such as
corn ethanol, the RFS encouraged the development of advanced biofuels, like biodiesel. While the effort
to build our plant was daunting in the face of a collapsing economy, we were convinced that with a federal
government pledged to diversifying fuel sources, we would be successful in reducing America’s
dependence on foreign oil, enhancing our nation’s security and improving the environment.
Biodiesel was the perfect candidate. Biodiesel is different from ethanol. Biodiesel cuts carbon emissions
by as much as 86 percent compared to petroleum diesel, and it’s produced in almost every state from
locally available fats and oils such as recycled cooking oil and soybean oil. At White Mountain, we collect
waste restaurant grease and process it into biodiesel. We also help farmers and landowners return fallow
and unused open land to productivity through the planting and harvesting of oil seed crops. And most
importantly we have no need for the massive expenditures in military dollars to ensure our access to
foreign crude oil.
Now, seven short years and millions of dollars in investments later, the biodiesel industry is at a turning
point, with strong potential for growth, but also at risk of being held back by the federal government that
once embraced it. Each year the Environmental Protection Agency sets production targets for biofuels.
Over the years, they have set volumes that encouraged biodiesel producers to grow from largely momand-pop businesses to a national industry. The industry has already proven it can deliver nearly 2 billion
gallons of biodiesel each year.
But in 2013, the EPA suggested that we roll back annual targets for gradually increasing the amount of
biodiesel required under the Renewable Fuel Standard. The EPA’s announcement naturally created
uncertainty in the industry and biodiesel producers across the country have been forced to either lay off
workers or shutter their plants.
Now, after two years of delays, the EPA has promised to announce new, stronger volume requirements
for the coming years by the end of the month.
But how will their latest pronouncement affect the first of EPA’s “Advanced Biofuels” to reach full market
penetration on the national stage? The benefits of biodiesel production are in danger unless the EPA
demonstrates that it’s committed to helping grow the industry under the RFS.
Critics in the oil industry predictably argue that there’s no reason to continue growing the RFS because of
expanded domestic oil supplies as a result of “fracking.” Yet America still imports nearly half its crude oil –
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millions of barrels every day – and much of it comes from countries that are openly hostile to U.S.
interests.
Further, Americans’ interest in switching from gasoline to diesel has never been greater. Last year, clean
diesel vehicle sales increased a whopping 25 percent as more drivers embrace the better mileage and
enhanced power provided by diesel engines. And here in New Hampshire, we converted the entire
locomotive fleet of Mount Washington Railway, the first mountain climbing train in the world, from coal to
biodiesel as we continue to find more uses for our cleaner burning fuel.
Luckily, we have Sen. Jeanne Shaheen and a bipartisan group of supporters in Congress. It is our hope
that President Obama – who took his first trip after being nominated for president to a Pennsylvania
biodiesel plant – will hear our voices and instruct the EPA to follow through on diversifying U.S.
transportation fuels.
(Wayne Presby is principal owner and president of White Mountain Biodiesel in North Haverhill.)
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Obama administration must uphold commitment
to biodiesel
By Anne Steckel
May 13, 2015
Just last week, six senators held a press conference in the U.S. Capitol urging the EPA and the White
House to ensure that America produces increasing quantities of biodiesel in the coming years.
The senators – who represent states across the nation – came together because we are at a crossroads
in our energy policy, particularly when it comes to transportation fuels. For reasons that remain unknown,
the Obama administration has failed for the last two years to issue annual standards determining how
much biodiesel and other renewable fuels are blended into the American fuel supply.
EPA’s inability to enforce the law in a timely manner has wreaked havoc on the biodiesel industry –
causing dozens of production plants to close or idle. But the Obama administration has the opportunity to
get back on course with its pending proposal set to be released by June 1.
It’s important to remember where renewable fuels like biodiesel got their start. Over the last decade, the
domestic biodiesel industry was spurred to action in response to a variety of economic and national
security threats facing the United States as a result of our dependence on oil. Specifically, the Energy
Independence and Security Act was passed by an overwhelming bipartisan majority in Congress and
signed into law by President George W. Bush because they all understood that our addiction to oil was
not just bad for consumers and the economy, but it was helping to fund terrorist groups and hostile
nations that sought to do us harm. The law created the Renewable Fuel Standard, or RFS, because
Republicans and Democrats realized that the key to breaking our addiction to oil was to spur the growth
of renewables like biodiesel, that aren’t made from petroleum.
This legislation, like the domestic biodiesel industry, has been a huge success. It has helped biodiesel
grow from a niche fuel to a commercial-scale industry with biorefineries in almost every state in the U.S.
Before the current policy delays, the industry produced a record of more than 1.8 billion gallons in 2013 –
or nearly 5 percent of the diesel used in cars and trucks in the United States.
The industry did this using a diverse mix of raw materials, including recycled cooking oil, plant oils such
as soybean oil, and animal fats. According to the EPA, biodiesel emits 57 percent to 86 percent fewer
greenhouse gas emissions than petroleum diesel. And the industry is supporting more than 62,000 jobs
across the United States.
In other words, biodiesel is creating jobs at home, reducing the amount of pollution we put into the air we
breathe, and reducing our dependence on foreign sources of energy.
The setbacks resulting from the Obama administration’s severe policy delays are very real. The National
Biodiesel Board estimates that 54 biodiesel plants in 30 states have either closed or idled because of the
policy uncertainty.
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At the press conference on Capitol Hill last week, Sen. Heidi Heitkamp (D-N.D.) stated: “No job in this
country should hang in the balance simply because a federal agency is dragging its feet or failing to live
up to its legal responsibility to promote confidence and growth.”
The administration now faces a choice as it prepares to issue the long-awaited proposal in the coming
weeks. A strong, forward-looking policy will get U.S. production plants and their employees back online,
and we can continue to grow the renewable content of the fuels we burn in our cars and trucks. We will
create more energy jobs at home, reduce greenhouse gas emissions and ease our dependence on
foreign sources of oil.
A weak or status quo proposal will mean that more of our energy dollars are sent overseas. The result will
be that foreign nations with large supplies of oil will be better funded and have more influence over our
security and economic stability. We will see continued job losses and an unnecessary increase in
greenhouse gas emissions and other pollution.
As a representative for thousands of workers in the U.S. biodiesel industry, I strongly urge the White
House to listen to the senators who spoke out recently and stand by American producers of clean,
renewable biodiesel by issuing robust standards.
Steckel is the vice president of Federal Affairs for the National Biodiesel Board, an association that
represents the U.S. biodiesel industry.
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Obama administration must uphold commitment
to biodiesel
By Anne Steckel
May 13, 2015
Just last week, six senators held a press conference in the U.S. Capitol urging the EPA and the White
House to ensure that America produces increasing quantities of biodiesel in the coming years.
The senators – who represent states across the nation – came together because we are at a crossroads
in our energy policy, particularly when it comes to transportation fuels. For reasons that remain
unknown, the Obama administration has failed for the last two years to issue annual standards
determining how much biodiesel and other renewable fuels are blended into the American fuel supply.
EPA’s inability to enforce the law in a timely manner has wreaked havoc on the biodiesel industry –
causing dozens of production plants to close or idle. But the Obama administration has the opportunity
to get back on course with its pending proposal set to be released by June 1.
It’s important to remember where renewable fuels like biodiesel got their start. Over the last decade,
the domestic biodiesel industry was spurred to action in response to a variety of economic and national
security threats facing the United States as a result of our dependence on oil. Specifically, the Energy
Independence and Security Act was passed by an overwhelming bipartisan majority in Congress and
signed into law by President George W. Bush because they all understood that our addiction to oil was
not just bad for consumers and the economy, but it was helping to fund terrorist groups and hostile
nations that sought to do us harm. The law created the Renewable Fuel Standard, or RFS, because
Republicans and Democrats realized that the key to breaking our addiction to oil was to spur the growth
of renewables like biodiesel, that aren’t made from petroleum.
This legislation, like the domestic biodiesel industry, has been a huge success. It has helped biodiesel
grow from a niche fuel to a commercial-scale industry with biorefineries in almost every state in the U.S.
Before the current policy delays, the industry produced a record of more than 1.8 billion gallons in 2013
– or nearly 5 percent of the diesel used in cars and trucks in the United States.
The industry did this using a diverse mix of raw materials, including recycled cooking oil, plant oils such
as soybean oil, and animal fats. According to the EPA, biodiesel emits 57 percent to 86 percent fewer
greenhouse gas emissions than petroleum diesel. And the industry is supporting more than 62,000 jobs
across the United States.
In other words, biodiesel is creating jobs at home, reducing the amount of pollution we put into the air
we breathe, and reducing our dependence on foreign sources of energy.
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The setbacks resulting from the Obama administration’s severe policy delays are very real. The National
Biodiesel Board estimates that 54 biodiesel plants in 30 states have either closed or idled because of the
policy uncertainty.
At the press conference on Capitol Hill last week, Sen. Heidi Heitkamp (D-N.D.) stated: “No job in this
country should hang in the balance simply because a federal agency is dragging its feet or failing to live
up to its legal responsibility to promote confidence and growth.”
The administration now faces a choice as it prepares to issue the long-awaited proposal in the coming
weeks. A strong, forward-looking policy will get U.S. production plants and their employees back online,
and we can continue to grow the renewable content of the fuels we burn in our cars and trucks. We will
create more energy jobs at home, reduce greenhouse gas emissions and ease our dependence on
foreign sources of oil.
A weak or status quo proposal will mean that more of our energy dollars are sent overseas. The result
will be that foreign nations with large supplies of oil will be better funded and have more influence over
our security and economic stability. We will see continued job losses and an unnecessary increase in
greenhouse gas emissions and other pollution.
As a representative for thousands of workers in the U.S. biodiesel industry, I strongly urge the White
House to listen to the senators who spoke out recently and stand by American producers of clean,
renewable biodiesel by issuing robust standards.
11
Democratic senators slam Obama admin
over delayed RFS rules
Amanda Peterka, E&E reporter
May 8, 2015
A coalition of Democratic senators yesterday slammed the Obama administration over delays in setting
annual targets for biofuels through the renewable fuel standard program.
The group, led by Sen. Heidi Heitkamp (D-N.D.), said that the delays in setting the targets were causing
uncertainty that was particularly hurting the biodiesel industry. U.S. EPA has not yet set any renewable
fuel mandates for 2014 and beyond.
Biodiesel is an advanced biofuel made up of soybean oil, used cooking grease and animal fats. Under the
renewable fuel standard, EPA is supposed to set the year's requirement for how much biodiesel refiners
have to use 14 months before the year begins.
"I'm a big fan of this administration, as you can probably guess, being my former colleague from Illinois
who is now our president," Senate Minority Whip Dick Durbin (D-Ill.) said, "but there is no excuse for what
we've been going through for the last 2½, three years."
As part of a proposal for 2014, EPA said it would keep the biodiesel target level at 1.28 billion gallons.
Biodiesel producers, however, complained that it lowballed their expected production; producers ended
up generating about 1.8 billion gallons last year, about level with 2013. EPA ultimately never finalized the
proposal, nor did it finalize any other renewable fuel targets for 2014 and beyond.
At a news conference yesterday, the Democratic senators said that the Obama administration, by not
issuing the standards in a timely manner or at the levels contained in the RFS, had gone against the
intent of Congress, which passed the RFS into law in 2007.
"They have taken away that consistency, those long-term goals, a way you can predict on how to invest,
by not having any standard and not knowing what's going to happen," Sen. Amy Klobuchar (D-Minn.)
said.
Democratic Sens. Maria Cantwell of Washington, Jeanne Shaheen of New Hampshire and Al Franken of
Minnesota rounded out the group. The news conference came shortly after 37 bipartisan senators urged
EPA to set robust targets for biofuels (E&E Daily, April 24).
Biodiesel producers say that the signals EPA sent with its 2014 proposal and the subsequent delay in
issuing any targets, combined with uncertainty over the industry's $1-per-gallon tax credit, have halted
expansion plans and caused more than 50 plants to either close or idle since November 2012.
"2014 was poised to be a breakout year for biodiesel, until the 2014 [RFS] proposal intervened," said Kent
Engelbrecht, manager of the biodiesel division at Archer Daniels Midland. "With the subsequent
expiration of the biodiesel tax credit, we were forced to cease or slow production at all of our facilities."
In a recent proposed settlement with oil groups, EPA agreed to propose 2014 and 2015 targets for all
types of biofuels by June 1 and to finalize that proposal by Nov. 30. EPA has said that it would issue
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targets for 2016, as well as the 2017 biodiesel target, under the same timeline. The proposal is currently
at the White House Office of Management and Budget for interagency review.
"Biofuels are an important part of the president's energy strategy, helping to curb our dependence on
foreign oil, cut carbon pollution and drive innovation," EPA spokeswoman Liz Purchia said yesterday.
Heitkamp, however, said that the administration has not followed through on its words.
"At a time when the administration purports to want to speed up green technologies," she said, "their
policy, their lack of implementation of congressional policy, has basically had the opposite result."
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Senate Democrats Urge EPA to Get RFS Targets
Back on Track
May 8, 2015
By Rachel Gantz
In an afternoon press conference today, six Democratic senators urged EPA to stop "dragging its feet"
and get back on track in issuing strong Renewable Fuel Standard (RFS2) targets.
"We've been working on this a long time and we can only express the height of our disappointment with
delay after delay after delay" on the RFS, said Sen.
Heidi Heitkamp (D-N.D.), leading a Capitol Hill press conference focused on the biomass-based diesel
targets of the provision. "We are pleading with the president of the United States to participate in this
discussion. If you are really serious ... why do what we are doing to the biodiesel industry?" she added.
In its 2014 RFS proposal, issued in November 2013, EPA called for nearly across- the-board cuts.
Meanwhile, last month, EPA announced that as part of a proposed consent decree, it planned to issue
the 2015 RFS targets by June 1 and finalize the 2014 and
2015 targets by Nov. 30. While not part of the proposed agreement, EPA also agreed to propose and
finalize the RFS biomass-based diesel volume requirement for 2017 on the same schedule.
As part of RFS2, biomass-based diesel volumes are supposed to be set 14 months prior to the applicable
year, so the 2014 target was due by Nov. 1, 2012, the
2015 target was due by Nov. 1, 2013, and the 2016 target was due by Nov. 1, 2014.
"There's no excuse for what we have been going for the past two and a half or three years," said Sen.
Dick Durbin (D-Ill.). "It's time for a decision.... It's time for the administration to step up and make the right
decision," he said.
The senators who spoke at the press conference all urged the administration to provide the industry with
the certainty it needs by providing strong RFS targets.
According to the National Biodiesel Board, since November 2012, 54 biodiesel plants in 30 states have
closed or have been idled because of the lack of certainty from the EPA. In 2014, nearly 80% of U.S.
biodiesel producers scaled back production, and almost 6 in 10 idled production altogether.
As OPIS exclusively reported earlier this week, EPA has sent its proposed 2014,
2015 and 2016 targets to the Office of Management and Budget for review.
"We are waiting to see what's in the rule," Heitkamp said, joking it was "the only guarded secret in
Washington, D.C." She added that "anything short of statutory mandates is not going to be acceptable to
a great many deal of members of the U.S. Senate."
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"The White House has a decision to make" on the proposal, said Sen. Amy Klobuchar (D-Minn.). "They
need to get this done and we should be over at the White House and meeting with them as soon as
possible," she said.
15
Senators, biodiesel industry call for renewable fuel
standards
May 7, 2015
By Jessica Holdman
In February, Archer Daniels Midland's Velva plant shifted away from producing the biodiesel it was
designed to make.
The industry and lawmakers say biodiesel investments are going to waste because standards for
blending volumes for fuels have been delayed. The U.S. Environmental Protection Agency was
supposed to release renewable volume obligations (RVOs) for a year in advance but failed to do so.
Earlier this month, the agency announced it would finalize the delayed RVOs by Nov. 30.
“2014 was poised to be a breakout year for biodiesel,” Kent Engelbrecht, biodiesel trade manager at
ADM, said during a press conference hosted by Sen. Heidi Heitkamp, D-N.D., Thursday. However, the
EPA postponed finalization of standards until 2015.
“With the subsequent expiration of the biodiesel tax credit, we were forced to cease or slow production at
all of our facilities, including Velva," Engelbrecht said.
The RVO offered incentive to operate at capacity and invest in the Velva facility, which employs 80
people and buys canola from area farmers, according to Engelbrecht, who said delays have dissuaded
investment. He, Heitkamp and five other Democratic senators called for a "reliable and growing"
Renewable Fuel Standard.
Engelbrecht said margins for the industry are at an all-time low.
Tom Lilja, of the North Dakota Corn Growers Association, said the corn and ethanol industries also have
been disappointed by RFS delays. However, production of ethanol has not been curtailed by the rule
delay.
"It's a function of economics," he said.
High corn prices in 2012 caused a drop in ethanol production but lower prices have brought it back to
normal levels, he said.
"They're very different markets," said Ben Evans, director of federal communications for the National
Biodiesel Board.
Evans said biodiesel is a younger industry that still needs the support of policy. European Union tariffs
have also eliminated an export market for the product, he said.
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Biodiesel Board’s Steckel says industry poised
to handle increased RFS volume requirements
May 4, 2015
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Low ULSD prices, EPA delay slow US biodiesel
trading: sources
By Wesley Swift
March 17, 2014
Poor blending economics and the US Environmental Protection Agency's inaction on the Renewable Fuel
Standard have virtually shut down physical trading for US biodiesel, sources said Tuesday.
"RINs are down, heating oil is down, so there is basically no biodiesel moving at all," one source said.
"Completely frozen."
Heating oil prices, one of the key factors in biodiesel prices and assessments, have fallen 60.5 cents/gal
since February 27 as seasonal demand has eased. Lower heating oil prices cut into biodiesel margins,
making physical product less attractive to potential buyers. The April ULSD NYMEX contract settled down
47 points on Tuesday to $1.6939/gal.
Meanwhile, the EPA's decision to delay the release of the Renewable Fuel Standard's blending mandates
for 2014, 2015 and 2016 are leaving producers and buyers with little guidance as to how much biodiesel
will be needed to blend into US fuel stocks.
That uncertainty is keeping physical trading stagnant.
"This market is dead," another source said. "Unless something changes in soybean or heating oil, I don't
see a major RIN move until the EPA is out."
EPA officials said earlier this year that the agency plans on releasing the mandates this spring.
Domestic biodiesel industry leaders have said the EPA's inaction has already forced some producers to
shutter plants or reduce production. Earlier this month, Western Dubuque Biodiesel in Iowa confirmed it
had shut its 30 million gal/year facility. In February, ADM said it shifted production at its 140 million
gal/year facility in Velva, North Dakota, from biodiesel to other products.
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EPA delays on biodiesel endanger U.S. energy
security
By JOE JOBE
March 14, 2015
Giving consumers everywhere something for which to be truly thankful, the Organization of Petroleum
Exporting Countries announced on Thanksgiving Day that Saudi Arabia and its 11 cartel partners —
despite a glut of international oil — would continue production at their current levels. Facing decreasing
demand, oil prices that began to edge down over summer transitioned into a free-fall plummet.
Analysts can debate the motives of OPEC’s decision to continue operating at their current output levels,
but there’s no disputing that it’s been bad news for U.S. oil producers who pay a heavy premium for
hydraulic fracturing and horizontal drilling technologies to mine previously unreachable shale oil reserves.
Estimates of the break-even price for shale oil drilling in places like Texas and North Dakota vary widely,
but Bernstein Research suggested last fall that oil priced at $80 per barrel makes a third of all U.S. shale
oil drilling unprofitable.
Yet that’s at $80 per barrel. In recent weeks, U.S. crude has settled in at about $50 per barrel — well
below the breakeven point for almost all shale fields.
Since OPEC’s Thanksgiving declaration, more than 550 domestic rigs have been shut down. And, at the
end of February, oil-field services company Baker Hughes Inc. said the number of rigs operating in the
U.S. fell below 1,000 for the first time since June 2011.
Further, as oil exploration and production companies shut down rather than lose money, the U.S. begins
to cede further global market share to OPEC. That’s the same OPEC who has already demonstrated the
power and willingness to set oil prices high or low, depending on their current strategy.
Thus, the moral of this story: The price of oil will always be at the whims of OPEC, which by its own
admission controls more than 80 percent of the world’s known oil reserves, and other global market
forces. And there’s really very little the U.S. and its domestic drillers can do about it.
All of which makes recent decisions by the U.S. Environmental Protection Agency’s all the more curious.
After years of progress helping renewable fuels like biodiesel — the first advanced biofuel to reach more
than a billion gallons of production four straight years — grow to commercial-scale industries, the EPA
reversed course in late 2013 and proposed scaling back those requirements.
The requirements fall under the Renewable Fuel Standard, a sensible policy passed with bipartisan
support under the George W. Bush administration. At its simplest, the standard ensures refiners blend in
a minimum amount of renewable fuels into the national fuel supply. Ultimately, renewable fuels, like
biodiesel, diversify the transportation fuels market, protecting against volatile market swings like we’re
seeing now.
After going the entire year of 2014 without finalizing their earlier proposal, the EPA punted again and
suggested the volumes would be higher than what had been previously reported. EPA is required by law
to announce the biomass-based diesel volume 14 months before the compliance year begins. Yet here
we sit in March 2015 and the EPA has still not announced volumes for 2014, much less the 2015 and
2016. In 2013, during oral argument, a federal district court, seemingly frustrated by EPA’s delay,
questioned why EPA has missed its RFS deadlines on numerous occasions. Since that time, EPA has
gone from being one year behind to being three years behind. If you or I failed to file our taxes for three
years in a row, we would be sitting in jail right now.
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Meanwhile, biodiesel producers are struggling to secure financing and protect their business from
closures and layoffs. In fact, small businesses from California to Pennsylvania have publicly announced
they were shutting down in the face of federal policy uncertainty. One of the largest plants in the country,
the 100-million-gallon Green Earth Fuels plant outside Houston, filed for bankruptcy in January. Dozens
of others are barely holding on, waiting for action from the EPA.
The fallout will only continue to grow the longer the EPA delays and indecision drag on. It’s not just bad
for America’s biodiesel producers who invested millions of dollars in building the industry, but by putting
more control back into the hands of OPEC, it’s dangerous for our energy security and economic wellbeing. Americans may not have a vote on OPEC’s next move, but our own government should be doing
everything it can to aggressively support alternatives to the international cartel’s product.
Jobe is CEO of the National Biodiesel Board, the U.S. trade association of America’s most productive
advanced biofuel producers.
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Biodiesel powers down
Dubuque County plant left in limbo awaiting completion of EPA rule
BY THOMAS J. BARTON Telegraph Herald
March 15, 2015
FARLEY, Iowa -- Last year, Western Dubuque Biodiesel ran at 57 percent capacity -- producing 17 million
gallons against a 30-million-gallon capacity.
Now, just three months into 2015, the plant already has shut down production after running at half
capacity, because of uncertain demand created by federal inaction on the Renewable Fuel Standard and
the biodiesel tax credit.
For most of last year, Congress allowed the biodiesel blenders tax credit to expire, renewing it in midDecember. At the same time, the U.S. Environmental Protection Agency went the entire year without
establishing how much biodiesel and ethanol to blend with the country's motor fuel supply, leading to a
nationwide industry slow down.
Due to the delay in finishing the 2014 standards, the EPA also has pushed back proposing the 2015
volume requirements.
"All the tanks are full and no one is buying," General Manager Tom Brooks said. "How do you sell product
to a buyer who doesn't know what he has to blend against? That's the frustration."
Across the U.S., biodiesel production fell from a high of 1.8 billion gallons in 2013 to 1.75 billion last year.
In Iowa, production fell slightly, but it remains the nation's leading producer, accounting for 16 percent of
biodiesel output in 2014, according to the Iowa Renewable Fuels Association.
Uncertainty sent prices falling nearly 25 percent for all of 2014 and led to a 73 percent decline in industry
profitability, Brooks said. The result: Dozens of biodiesel plants have stopped production or laid off
workers in recent months.
The Farley plant, which began production in 2007, employs two dozen people, generating an annual
payroll of $1.5 million. Indirectly, its shutdown hits trucking companies hard, and brings economic
insecurity to other local businesses, Brooks said.
"It creates doubt and uncertainty for investors and lenders, because they don't know whether the industry
is stable. Is the business growing or stagnating?" he said. "And when you're running the plant at half
capacity, your costs increase."
Western Dubuque Biodiesel loses 25 cents per gallon running at half capacity. Not running costs the
company $55,000 to $60,000 per day, Brooks said.
"Then, it creates doubt and confusion in your employees about whether they've chosen the right career
field," he said.
Fortunately, state biodiesel tax credits helped soften the blow for Iowa producers, allowing the Farley
plant to avoid layoffs and closures seen across the country.
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"Due to favorable state policies, Iowa was able to weather the storm better than most states," association
Executive Director Monte Shaw said in a news release. "But the same federal uncertainty hangs over
2015. If the federal government would simply provide policy certainty in the form of a strong and growing
RFS and a multi-year biodiesel tax credit extension, I think you'd see the biodiesel industry take a strong
step forward."
The EPA has proposed reducing the biofuel content in gasoline, and a bipartisan group of federal
lawmakers have pushed to scale back the mandate. They argue the standard is "unworkable" for refiners
and will lead to engine damage and higher fuel and food costs.
Opponents have declared the standard antiquated, as oil imports have fallen with surging domestic
production that has eased concerns about foreign supply and national security threats.
They also claim increased natural gas supplies, thanks to fracking, have had more success on reducing
greenhouse gases than corn-based ethanol.
Gov. Terry Branstad has said a reduction would be devastating for Iowa's corn and soybean growers, and
repeatedly has called on the Obama administration to support "a robust" standard that provides Iowans
lower-cost choices at the pump, supports growth of Iowa's ethanol industry and reduces U.S. dependence
on overseas oil.
Advocates say the mandate is a matter of market access, with ethanol, biodiesel and gasoline competing
for a place in cars' gas tanks. Without it, the oil industry would lock the renewable fuels industry out of the
market, they claim.
That would reduce consumer choice, drive up gas prices, increase the country's reliance on foreign oil,
increase carbon emissions that can harm the environment and depress corn prices, said Brooks, vice
chairman of the Iowa Biodiesel Board and vice president of the Iowa Renewable Fuels Association board
of directors.
Iowa leads the nation in renewable fuels production, with 43 ethanol refineries and 12 biodiesel plants
with the combined capacity of producing more than 4 billion gallons per year, according to the renewable
fuels association.
The association released a report in January saying the industry supported about 47,000 jobs last year
and accounted for nearly $5 billion, or 3.5 percent of Iowa's gross economic output.
Without the demand for corn and soybeans provided by biofuels -- more than half of corn harvested in
Iowa in 2014 went to ethanol production -- farmers would likely plant fewer acres, lowering investment in
rural Iowa, according to the association.
"Lower corn and soybean prices will have a ripple effect on the rural economy," Brooks said. "Many
farmers and ag operators didn't make money last year. We are already seeing the effects as John Deere
has announced various layoffs.
22
Without Immediate RFS, Biodiesel Industry Faces Uncertain
Future | Commentary
By Anne Steckel
March 12, 2015
The large-scale production of domestic biodiesel should be something President Barack Obama strongly
supports, due to his commitment to slowing the pace of climate change and reducing our dependence on
fossil fuels. After all, the EPA has certified that biodiesel can cut greenhouse gas emissions by almost 90
percent when compared to diesel made from petroleum.
From his time in the Senate, and throughout his first-term in the White House, President Obama
supported the biodiesel industry and encouraged investment in this renewable fuel. In response,
American investors took up the president’s challenge and built biodiesel plants in nearly every state. They
created good paying jobs and produced billions of gallons of renewable fuel that greatly reduces pollution
from older diesel vehicles such as trucks and buses, which the EPA has cited as some of the nation’s
worst polluters.
However, the president’s support for biodiesel is now in question, and his administration in recent years
has failed to back up his stated support with action.
Since 2013, the EPA has failed to issue a Renewable Fuels Standard, a bipartisan federal law signed by
President George W. Bush that requires the use of biodiesel in the nation’s transportation fuel supply.
The RFS is the single best tool the president has to demonstrate his support for the biodiesel industry,
and because it has been nearly two years with no guidelines from the administration, the industry actually
shrunk in 2014, with millions of fewer gallons of biodiesel sold in the U.S.
Biodiesel plants across the country are either shutting down or sharply reducing output. Producers are
letting employees go, hurting families and communities.
Congress has tried to urge the White House to act fast on the RFS. Last month, 33 senators, including
Sen. Barbara Boxer of California — the leading Democrat on the Senate Environment and Public Works
Committee — wrote to the EPA calling for quick action to help the biodiesel industry expand. That
followed a news conference last year in which numerous senators — including Richard J. Durbin, D-Ill.,
then assistant majority leader — held a news conference urging the same from the EPA. But despite this
pressure from Capitol Hill, the EPA hasn’t budged.
Why the White House has failed to act on biodiesel is a mystery. But make no mistake about it — oil
companies are the big winners in this situation. Without an RFS, they have less competition, and refiners
purchase and blend less biodiesel into the diesel fuel sold at gas stations around the nation. In other
words, the lack of a RFS means our dependence on imported petroleum fuel only deepens, leading to
more air pollution and weakening our energy security, national security and economic security.
Throughout these delays, biodiesel producers have waited patiently and done everything they can to
keep the industry going. The latest signals sent by the EPA indicates that the 2014, 2015 and 2016 RFS
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will be released sometime in the spring or summer — more than two years late. This massive delay
thwarts the intent of the Congress, which passed the RFS as part of the Energy Independence and
Security Act and requires the EPA to release a RFS every year — not once every three.
But recently, the same office inside the EPA that has failed to produce a RFS did find time to release a
new rule that could lead to hundreds of millions of gallons of Argentinian biodiesel flooding the U.S.
market in 2015. The EPA made this change without any notice or allowing for public comment. While
American biodiesel producers are firing workers, closing plants and filing for bankruptcy, the EPA
compounded those woes by giving a gift to Argentinian biodiesel producers. This has created the
perception throughout the industry that the administration has prioritized creating jobs in Argentina over
jobs in the United States.
The Obama administration must understand that the lack of regulatory clarity on the RFS is having real
world consequences for American biodiesel producers. News stories across the country have
documented the fallout in plant closures, layoffs and bankruptcies.
Biodiesel producers can’t wait another four months or six months for a decision. They need action now.
The EPA should immediately release a RFS that grows the U.S. biodiesel market and puts us back on
course to achieve our goals for stimulating domestic energy production, cleaning the air and putting
people to work in good-paying jobs.
Anne Steckel is the vice president of federal affairs at the National Biodiesel Board.
24
The RFS and the EPA -- making a mess of success
By former Sen. Byron Dorgan (D-N.D.)
March 4, 2015
In an age of hyper-partisanship, it’s hard to imagine a comprehensive energy bill becoming law with
support from nearly two-thirds of the U.S. Congress. Yet that’s exactly what happened 10 years ago when
we enacted the Energy Policy Act of 2005, which President George W. Bush quickly signed it into law.
The legislation was big and bold. It created incentives for energy efficiency and renewable energy as well
as streamlining regulations to spur domestic production and energy markets.
But the provision of which I am most proud is the creation of the Renewable Fuel Standard (RFS), which
called for phasing clean alternative, renewable fuels into the nation’s energy mix. The RFS has been an
unbelievably successful transportation energy policy. Ten years after its enactment, the U.S. now gets
more than 10 percent of its fuel supply from renewable fuels. That’s more than 15 billion of gallons of fuel
made from clean, renewable resources that displaces imported gasoline and diesel and strengthens our
energy security and our national security by reducing foreign oil imports.
But this is just a start. We can do even more!
After the success during the first decade of a renewable fuels policy, you would think we would be
celebrating an impressive accomplishment and preparing to do more. Unfortunately, that isn’t the case.
Today, there are producers of renewable fuels around the country that are shutting down their plants and
laying off workers because the current administration has impossibly delayed decision making about
volume requirements for the RFS.
It started back in 2013, when there was a leak to the press that the EPA was preparing to reduce RFS
requirements. The leak proved true, and the EPA proposed scaling back the program. It was devastating
to the industry. It immediately began to dry up investment in renewable fuels and seemed to send a
message that this Administration was backing away from its previous strong support of the RFS.
Since then, there has been over a year of silence from the EPA and the White House.
As one of the authors of the RFS legislation, it is very disappointing to see this Administration now act so
uncertain about the future of the RFS. The president, while in Congress and as a presidential candidate,
was a strong supporter of the RFS and renewable fuels. While in the White House he has continued that
support until now.
But we are now in the second consecutive year without RFS volume requirements. It is no way to run a
business, or an energy policy, and the dysfunction is having real-world consequences.
The biodiesel industry, for example, is the first and only EPA-designated Advanced Biofuel under the RFS
to reach commercial-scale production nationwide. It’s made from all sorts of resources, including
recycled cooking oil, plant oils and animal fats. It has roughly the same energy content as petroleum
diesel, and using it doesn’t require modifications in vehicles. Most important, it greatly reduces carbon
emissions.
Until last year, the biodiesel industry had been growing steadily over the past decade, with production
jumping from just over 100 million gallons in 2005, when the RFS was passed, to nearly 1.8 billion gallons
25
in 2013 – or almost 5 percent of the U.S. diesel market. The industry supports some 60,000 jobs and
produces a fuel that according to the EPA’s own analysis reduces greenhouse gas emissions by as much
as 86 percent compared with petroleum fuel.
Last year - for the first time since the RFS diesel program was implemented – the U.S. biodiesel market
shrunk, killing the momentum the industry had built in recent years and forcing many biodiesel producers
to close their doors or lay off employees. And many of those building opportunities in cellulosic advanced
biofuels have also been stopped in their tracks.
The trouble isn’t about technology or production problems. This setback is caused by a paralysis of
analysis in an Administration that is working for a lower carbon future, but is now watching the shutdown
of plants that produce low-carbon fuels.
This is an unnecessary, self-inflicted wound. The RFS policy was working. It is something to celebrate,
not punish with leaks and dithering indecision. The EPA now says it plans to get the RFS back on track in
the spring. It’s long past the time for them to get this right.
Dorgan served in the Senate form 1992 to 2011 and in the House from 1981 to 1992. He is currently
senior policy adviser at Arent Fox, whose clients include the National Biodiesel Board.
26
RFS Needs Commitment, Not Reform
ANNE STECKEL | MARCH 2, 2015
As seems to happen with every new Congress, lawmakers opposed to alternative energy are floating
proposals to re-legislate the Renewable Fuel Standard (RFS) – the federal policy that requires a minimum
volume of renewable fuels are blended into the national fuel supply. (See Feb. 18 Morning Consult.)
Just like in years past, the efforts at “reform” are often just thinly veiled attempts to eliminate the RFS. The
only new twist this year is that as a result of inaction by the Obama administration, the program itself is in
a state of disarray that looks like blood in the water to our opponents. The overriding truth, however, is
that the policy works incredibly well, and we simply need the EPA to effectively administer it so that we
can continue diversifying our fuel supplies and reducing our dangerous dependence on oil.
The renewable fuels critics – typically doing the oil industry’s bidding – throw out all sorts of unfounded
attacks, one of which lately is that Advanced Biofuels aren’t happening and will never reach commercial
scale. Unfortunately, Morning Consult repeated this myth in its coverage. [Ed: the Morning Consult
stands by its assessment of advanced biofuel production. See below.]
As a representative of the U.S. biodiesel industry, I am proud to say it is patently false. As defined by law
and by the EPA, Advanced Biofuels are those that reduce greenhouse gas emissions by at least 50
percent when compared to their petroleum counterpart. A number of fuels qualify for this designation,
including biodiesel, cellulosic ethanol, renewable diesel and others, and they are poised to grow
significantly in the coming years.
But we’re already seeing significant volumes. The U.S. biodiesel industry – which has plants across the
country producing fuel from a wide variety of resources such as recycled cooking oil and plant oils – has
delivered more than 1 billion gallons of Advanced Biofuel in each of the past four years. In 2013, the U.S.
biodiesel market reached a peak of nearly 1.8 billion gallons – displacing an equivalent volume of
petroleum diesel and reducing greenhouse gas emissions by more than 17 million metric tons, or enough
to remove 3.6 million cars from America’s roads.
Of course the fact that we’re replacing petroleum diesel has its own benefits, specifically bringing badly
needed diversity to the nation’s fuel supply. Our electric power grid is fueled by oil, gas, hydro, solar,
nuclear and more, delivering competition and stability to the marketplace. We need the same in our
transportation sector instead of the petroleum monopoly we have now.
Yet the EPA, which has responsibility for setting annual biodiesel requirements for the RFS, has been
paralyzed with indecision. Inexplicably, the rule for 2014 still has not been finalized – two months after
that year has passed – not to mention the volume requirements for 2015 and 2016 that are now also
overdue.
How can biodiesel producers be expected to operate in such an environment? How do they make
decisions on investing in their businesses and employees without some level of stability in the market?
And how do they attract capital to grow their companies?
The simple answer to those questions is “they can’t.” And, sadly, as a result, we’re seeing plants close
and employees laid off.
Amid this uncertainty, the EPA added salt to the wound when it somehow found time to approve a new
streamlined pathway for Argentinian biodiesel to qualify for the RFS. They came to this conclusion, which
could lead to the displacement of hundreds of millions of gallons of U.S. biodiesel, by allowing the
27
Argentinians an easier means to meet sustainability requirements without the benefit of a single hearing
or a shred of public comment.
The endless delays need to end. The RFS doesn’t need reform. It needs commitment and accountability
from the EPA and the Obama Administration, which has often proclaimed their support for biodiesel and
other advanced biofuels. And they can start by finalizing the 2014 through 2016 biodiesel volume
requirements immediately.
Anne Steckel is Vice President of Federal Affairs at the National Biodiesel Board, the U.S. trade
association of America’s most productive advanced biofuel producers
28
Lawmakers Slam EPA Handling of Ethanol Mandate
By Geof Koss
February 25, 2015
The renewable fuels standard continues to spark strong reactions on Capitol Hill, but lawmakers on both
sides of the debate agree on one thing: they’re unhappy with the EPA’s management of the program.
Current and former members voiced their complaints at CQ Roll Call’s forum Tuesday on the future of
advanced biofuels and the RFS.
Lankford, R-Okla., decried the EPA’s inability to produce the annual volumes for the Renewable Fuels
Standard, which he called unworkable. “They’re just stuck,” he said during Tuesday’s CQ Roll Call’s event
on the future of advanced biofuels. (Photo: Geof Koss CQ Roll Call)
The two-year old leak of a proposal that showed the EPA was considering a six percent reduction in the
mandate for 2014 still bothers RFS supporters. The proposed cut was “a slap in the face” that, if
finalized, would have had devastating impacts on biofuel producers, said Rep. Dave Loebsack, D-Iowa.
The EPA has yet to finalize volumes for 2014, falling short of statutory requirements as has become all
too common for the RFS in recent years. The pause is seen as buying the agency time to consider the
impacts of the blend wall — the point where the fuel supply can’t absorb additional ethanol without
exceeding levels that the oil industry and manufacturers say threatens a variety of engines.
Former Sen. Byron Dorgan, D-N.D., who helped write the RFS in 2005 and the expansion that was
enacted two years later, took the EPA and President Barack Obama to task for the delays.
“The EPA and the president, and I include the president by the way, has had a pretty disappointing run
here for awhile,” he said. “I would expect, and I think most members of Congress would and most
Americans would expect, that they do what’s in the national interest.”
Sen. James Lankford, R-Okla., a critic of the RFS, said the EPA is “locked up” as it struggles to reconcile
the statutory volumes for advanced biofuels such as cellulosic ethanol, which has failed to take off at the
pace envisioned by Congress when they created the RFS, with actual production.
“EPA cannot decide what to do with these mandates,” he said, citing a recent meeting with the agency.
“They’re just stuck.”
Lankford said Congress should end the mandate for conventional biofuel, which is largely met from
29
corn-based ethanol, and can compete in the marketplace. “It’s a good product,” he said.
He also called for changing the volume requirements in the statute for advanced biofuels, including
biodiesel and cellulosic ethanol, to levels that match production in the United States in any given year.
A top EPA official recently told Reuters that that approach will be contained in the agency’s final 2014
volumes that will be released this spring, along with volumes for 2015 and 2016.
Dorgan acknowledged there’s room for improvement in the law, but said he doesn’t expect Congress to
find consensus on a legislative fix soon. He also branded the RFS a success in meeting the goals
envisioned when it was enacted.
“It’s in the country’s best interest to have diversified fuels, and to have fuels that produce lower
carbon,” he said.
30
ADM cuts biodiesel output as industry hit by weak
margins
By ROD NICKEL AND CHRIS PRENTICE
February 25, 2015
Archer Daniels Midland , one of the world's top biofuels producers, has slowed North American
biodiesel output, the latest sign the industry is battling uncertainty over U.S. renewable fuel policy while
the oil rout curbs demand.
The Chicago-based agri business has "temporarily" shifted production at its Velva, North Dakota,
oilseeds processing facility from biodiesel to other products and cut production at its other North
American facilities, ADM spokeswoman Jackie Anderson said in an emailed statement.
"We will continue to evaluate the market, and look forward to resuming production when conditions
improve," she said.
With 140 million gallons of annual capacity at its wholly-owned Velva site and two joint ventures in
Missouri, ADM is a sizeable player in the 2-billion gallon U.S. industry.
It also runs a plant with 70 million gallons of capacity in Lloydminster, Canada.
The ADM spokeswoman declined to give the timing and size of the cutbacks. The Northern Canola
Growers Association said the switch in North Dakota took place a few months ago.
The move is a sign of the "strain" being felt across the industry after a year-long drop in biodiesel prices
and oil's second-worst rout in history, said Steve Nicholson, an analyst with Rabobank AgriFinance in St.
Louis, Mo.
"There's no question we'll see idling of plants and we may see consolidation or people getting out
altogether," he said.
Late last year, diesel's discount to B99/B100 biodiesel was at its widest since 2011, according to the
latest data from the U.S. Department of Energy.
Other major U.S. producers include Renewable Energy Group Inc. and Cargill Inc., but the industry also
has many small, independent players.
Uncertainty over decade-old federal policy aimed at energy independence and cutting carbon emissions
has added to the industry's woes.
The U.S. Environmental Protection Agency, which implements the Renewable Fuels Standard program
has not yet set biofuel blending requirements for last year, 2015, and 2016.
31
A $1-per-gallon tax credit expired in December.
Biodiesel producers represent a sliver of the 17 billion-gallon U.S. renewable fuels market, but they are
not alone: ethanol makers, which produce a corn-based fuel, are also feeling the crunch. A Reuters
analysis showed average ethanol margins are at their lowest levels since 2005. (Additional reporting
by Tom Polansek in Chicago; Editing by Grant McCool)
32
ADM 'Temporarily' Halts Biodiesel Production
at North Dakota Plant
By Rachel Gantz
February 26, 2015
Archer Daniels Midland (ADM) has "temporarily" shifted production at its Velva, N.D., biodiesel plant
due to current market conditions, an ADM spokeswoman confirmed to OPIS today.
Specifically, ADM has "temporarily transitioned production at our Velva, N.D., oilseeds processing facility
from biodiesel to other products. We have also slowed biodiesel production at our other North
American facilities. We will continue to evaluate the market, and look forward to resuming production
when conditions improve," ADM spokeswoman Jackie Anderson explained.
ADM has 140 million gal of biodiesel capacity at its three U.S. biodiesel plants
-- in Velva, and its two joint venture facilities in Missouri.
ADM also operates a handful of biodiesel plants in Germany, a plant in Rondonopolis, Mato Grasso, in
Brazil and a facility in Lloydminster, Alberta.
No further information was provided in terms of whether production has been reduced at any of ADM's
other biodiesel plants.
The U.S. biodiesel industry is struggling with the one-two punch of the lapsed $1/gal biodiesel credit
that expired at the end of 2014 and the lack of finalized annual Renewable Fuel Standard targets by EPA.
NBB is a member of the National Biodiesel Board (NBB), and when reached for comment, NBB referred
questions on ADM's operations to the company.
However, NBB Vice President of Federal Affairs Anne Steckel noted that her trade group has "been
shouting it from the hilltops for more than a year: This is an incredibly difficult time for U.S. biodiesel
producers. We are seeing plants go idle or shut down, and it is a direct result of the administration's
failure to establish a functioning renewable fuels policy. The EPA is more than two years late in
establishing volumes under the RFS. It has left the U.S. biodiesel industry in disarray. We are calling on
the administration to establish strong biodiesel volumes immediately to put a stop to this. We can't wait
another four months or six months. There is no reason the EPA can't establish a strong biodiesel volume
tomorrow to get this industry back on track," she added.
33
How the Obama administration's clean-fuel policy
is hurting one local business
4:01 AM, Feb 20, 2015
By Stu Lamb
The U.S. biodiesel industry has been operating in a state of confusion for two years as the Obama
administration has waffled on a critical policy aimed at stimulating the production of homegrown
renewable fuels.
So imagine my surprise when I learned recently that — even as it is more than two years late in
answering the U.S. industry's plea for stable policy — the administration instead had signed off on a
request from Argentinian companies to streamline that country's biodiesel imports into the United
States.
I was — and still am — stunned, frustrated and confused.
This is the same Obama administration that has for years pledged to support American-made renewable
fuels. It is the same President Barack Obama who visited several biodiesel plants as a candidate and told
workers in the industry they would have an ally under his leadership. It is the same Obama
administration that designated biodiesel as an "advanced biofuel," meaning it reduces greenhouse gas
emissions by at least 50 percent compared with petroleum diesel.
So where is the action backing up the rhetoric? This is an important question for me, because I have
spent five years and invested millions of dollars building a biodiesel refinery on the Treasure Coast and
developing an enzymatic biodiesel manufacturing process that is cleaner and more efficient than
traditional processing.
I am one of many who took cues from President Obama to go out and invest, who believed stable policy
would be in place to reward those who took risks to lessen our dependence on foreign petroleum and
clean the air.
Many of us feel ignored and abandoned.
The first problem came in 2013 when word leaked that the Obama administration was planning to cut
back volumes under the Renewable Fuel Standard, or RFS — a bipartisan policy passed under President
George W. Bush that requires refiners to blend renewable fuels into the nation's fuel supply. It is a smart
policy that was working until the administration's proposed cuts threw on the brakes.
The EPA ultimately backed away from those cuts, saying that the administration fully supports the RFS
and that the final volumes would be stronger. But months passed and nothing happened. No decisions
have been made, to the point where we now are in 2015, and the administration still has not said what
the volume for 2014 would be, much less 2015 or 2016.
34
It was in this context that the decision on Argentinian biodiesel imports arrived. The EPA quietly
announced — without a hearing or public comment — that it was approving the Argentinian application
that would allow Argentinian biodiesel to more easily meet the sustainability requirements of the RFS.
This decision was baffling. Here we are in our second consecutive year without a functioning RFS policy,
yet the administration prioritizes Argentinian biodiesel imports over the domestic industry. We are left
guessing what the market will be while also preparing for a flood of Argentinian imports that could total
600 million gallons or more in the coming years.
This is bad policy that is hurting U.S. companies and employees — not to mention our national,
bipartisan goal for developing clean, domestic transportation fuels that cut our dangerous dependence
on oil.
Companies like mine, which employs 45 people, face excruciating decisions about whether to lay off
employees or shut down. My plant is idled because it is simply a gamble to continue producing in the
current market environment.
It doesn't have to be this way. The administration can make it right by establishing strong biodiesel
volumes under the RFS, with a forward-looking policy that demonstrates — with action, not words — a
commitment to advanced biofuels like biodiesel.
Lamb is president and CEO of Viesel Fuel, based in Stuart.
35
Federal Foot-Dragging on Clean Fuels
February 17, 2015
Steven J. Levy
In a room full of energy investors on Wall Street, Vice President Joe Biden recently said: "I'm no
investment banker, but I wouldn't go long on investments that lead to more carbon pollution. I'd bet on
clean energy."
Based on this statement and others like it by the Obama administration -- including comments that
Obama made as a presidential candidate at a Pennsylvania biodiesel plant -- investors across the country
have taken serious and long-term financial risks to enter the biodiesel industry. There are good reasons
to support biodiesel: It is a true advanced biofuel, with the Environmental Protection Agency (EPA)
having certified that it reduces greenhouse-gas emissions by up to 86 percent relative to traditional
diesel. This is a win for both industry and the environment, and it creates U.S. jobs while lessening our
dangerous dependence on petroleum.
But the administration's recent decisions on renewable fuels -- or, in some cases, the lack thereof -- are
confounding. Up until 2013, with support from the Obama administration, the biodiesel industry was on
a path toward strong, sustainable growth. That was thanks in part to a robust Renewable Fuels Standard
(RFS), the federal policy passed under President George W. Bush and supported by Obama (then a
senator) that requires blending biodiesel and other clean fuels into the U.S. fuel supply. But today, that
growth has ground to a halt, and hundreds of businesses around the country supported by this industry
are hurting.
The most recent surprise to the biodiesel industry was a unilateral decision by the EPA to streamline
Argentinian biodiesel imports into the United States. Under the RFS, sellers must prove that their fuels
were grown on land that was cleared or cultivated before late 2007, but the new decision relaxes the
verification and reporting requirements for Argentinian exporters. There was no public hearing or
comment.
What was so bizarre about this change was that it came at a time when the U.S. biodiesel industry is in
turmoil as a result of the EPA's disastrous ongoing delays in administering the RFS. For the second
consecutive year, the administration has failed to finalize the standards, meaning the market has no way
of knowing how much biodiesel and other renewable fuels will be required on an annual basis going
forward.
This one-two punch has wreaked havoc on the markets. The result has been less biodiesel blending,
causing some biodiesel producers to close and many others to slow or suspend operations. In addition
to putting financial strains on the industry, it has also meant that America's diesel fuel is emitting
considerably more greenhouse gases into the atmosphere.
36
Like all biodiesel supporters, I am hopeful that the Obama administration will reassert its leadership in
this area. For starters, the EPA needs to immediately finalize a robust RFS that allows the biodiesel
industry to keep expanding and maximize its capabilities. The fact is, thousands of investors all across
this nation decided to take up the White House's challenge to produce, distribute, supply, and consume
fuel that reduces our dependence on oil and helps to slow the pace of global climate change. But like
every young energy industry that has come before, biodiesel needs stable policy to grow and mature.
Steven J. Levy is chairman of the National Biodiesel Board.
37
EPA Inaction Frustrates Maine's Biodiesel
Producers
By Tom Porter
February 12, 2015
PORTLAND, Maine - Maine's two senators this week signed onto a bi-partisan effort aimed at providing
more certainty to the biodiesel industry.
Maine Standard Biofuels outreach director Alex Pine at the company's facility in Portland.
Independent Angus King and Republican Susan Collins joined 30 other senators in urging the
Environmental Protection Agency to act on long-delayed production standards. And at least one
company in Maine will be keenly awaiting the agency's response.
It's "business as usual" on the production floor of Maine Standard Biofuels in Portland - the state's only
commercial bio-diesel manufacturer. 'So, here at the front end, this is where we off-load the oil from
our trucks," says Alex Pine. "So they come in, they're giant vacuum trucks so it's like a vacuum cleaner
on wheels, and they put the oil in these tanks."
Pine, the company's outreach director, explains how used cooking oil, grease and other food waste is
shipped here from restaurants across the region. Fats and oils are then extracted from the waste,
treated and turned into fuel. Some of that becomes motor fuel, some is used as home heating oil, some
is turned into soap.
Last the year the company produced just over half-a-million barrels of bio-diesel. But this represented a
massive slowdown in growth and only a slight increase over the year before. And he attributes that to
the U.S Environmental Protection Agency's failure to set production levels, as required under the
Renewable Fuel Standard, or RFS.
"And we didn't really know: Should we be producing as much as we can? Or shall we hold back on
production because the levels are going to be lower this year?" Pine says.
The RFS program was established by Congress 10 years ago as a way of increasing the amount of
renewable energy blended into the mainstream U.S. fuel supply. In the case of biodiesel, this would
ensure a certain volume of it would be mixed in with regular, petroleum-based diesel.
But Pine says the EPA set no volume levels for last year, or this year, and 2016 levels should also have
been established by now. "After summertime, they said they'd release the renewable standards for that
year," he says. "Didn't happen. Then they said after elections. Didn't happen again. Then they said later
in the year. Didn't happen. They said January of 2015, and it still hasn't happened. They're now saying
sometime in spring."
38
"It has really created a lot of turmoil in the industry," says Ben Evans, who is with the National Biodiesel
Board. Evans says the national trend mirrors what Maine Standard Biofuels experienced: strong growth
up until 2013, when 1.8 billion gallons were made by the country's approximately 200 registered
producers.
Since then, however, Evans says life has gotten increasingly hard for the sector - with many facilities
downsizing, and some going out of business. "We haven't really had a functioning RFS policy for going on
two years now. It leaves the producers to effectively guess at what the market will be."
Evans says the recent decline in crude oil prices has not helped the biodiesel industry, but it also
highlights the market volatility that justifies the RFS program.
So what's holding up the federal government on establishing biodiesel production standards?
"EPA is caught in a conundrum," says Jamie Py, of the Maine Energy Marketers Association. Py says the
conundrun, in this case, has to do with declining gasoline consumption.
The RFS program calls for a physical amount of renewable fuel, rather than a percentage, to be blended
into the national supply. This number is meant to get bigger every year, to keep pace with rising gasoline
consumption. "But what's happened is that, across the United States, the amount of gasoline sold has
decreased," Py says.
That's something Py says nobody expected a few years ago. And it means that the percentage of
renewables in the fuel supply will increase every year as new production standards are introduced.
Py says that has been met with strong resistance from auto-manufacturers, many of whom have not
approved their engines to run on gasoline that has more than a 10 percent blend. And it's this impasse,
says Py, that's held up the whole RFS program. He predicts it's going to take a change in the law to get it
going again.
An EPA spokesperson declined to be interviewed for this story. But the agency did issue a brief
statement saying it fully intends to get the program back on track this year.
39
Top Dem urges EPA to set biodiesel targets
Amanda Peterka, E&E reporter
Published: Wednesday, February 11, 2015
The top Democrat on the Senate Environment and Public Works Committee yesterday called on U.S. EPA to
get back on track in issuing annual requirements for biodiesel production.
In a letter to EPA Administrator Gina McCarthy, Sen. Barbara Boxer (Calif.) said the agency's delay in issuing
the standards is hurting the domestic biodiesel industry. EPA last year failed to set any annual biofuel targets
under the renewable fuel standard.
"The delays in promulgating final rules have harmed the investment expected to flow into both biodiesel and
other advanced biofuels industries," Boxer wrote.
Congress established the current renewable fuel standard in 2007 to require refiners to blend increasing
amounts of conventional ethanol and advanced biofuels into petroleum fuel through 2022. Biodiesel, a
renewable fuel made from soybean oil, used cooking grease and animal fats, is considered an advanced
biofuel under the program.
Although the law spelled out yearly aspirational targets for biofuels production, EPA is given leeway to decide
where the mandates should be set.
By law, biodiesel is treated differently from other biofuels in the RFS. EPA is required to set the annual
mandate at least 14 months before it goes into effect. The agency has yet to set the 2014, 2015 and 2016
standard for the industry.
In November 2013, EPA proposed to set the standard at 1.28 billion gallons for 2014 and 2015 -- a target that
the biodiesel industry said greatly underestimated production. EPA ultimately never finalized the proposal,
which also called for cuts to the mandates for conventional ethanol and other advanced biofuels.
"Like many industries, the biodiesel industry requires certainty in order to plan for future production,
continue to innovate, and to expand advanced production technologies," Boxer wrote in her letter. "Ensuring
the continued implementation of the RFS is also a critical part of the country's efforts to realize the industry's
contribution to reducing carbon pollution and addressing climate change."
On Monday, 32 bipartisan senators pressed EPA with a similar message (Greenwire, Feb. 9).
40
Boxer Blasts EPA Delays in Setting New Biodiesel
Volumes Under RFS
By Michael Schneider
February 11, 2015
U.S. Sen. Barbara Boxer (D-Calif.), ranking member of the Environment and Public Works Committee,
today sent a letter to EPA Administrator Gina McCarthy registering dismay over delays in establishing
new biodiesel volumes under the Renewable Fuel Standard (RFS).
"Despite the biodiesel industry's continued growth, the agency has not yet set the 2014 RFS volumes and
it has indicated it will not do so until later this year," she wrote. "In addition, the 2015 standard for
biodiesel has been delayed for over one year, and the 2016 standard should have been set at the end of
2014."
Boxer said the agency's original 2014 proposal would have set levels "far below that of the biodiesel
industry's production capability, and the delays in promulgating final rules have harmed the investment
expected to flow into both biodiesel and other advanced biofuels industries."
She said biodiesel producers in California have seen "significant impacts caused by the original proposal
and current delays."
"Like many industries, the biodiesel industry requires certainty in order to plan for future production,
continue to innovate and to expand advanced production technologies," she wrote. "Ensuring the
continued implementation of the RFS is also a critical part of the country's efforts to realize the industry's
contribution to reducing carbon pollution and addressing climate change."
Boxer noted that biodiesel volumes under the RFS can be promulgated independently of the other fuel
categories.
"I urge the agency to issue the 2014 biodiesel volume levels in a manner consistent with actual industry
production levels," she wrote, "and to ensure that the agency move toward meeting the statutorily
prescribed schedule for setting Renewable Volume Obligations."
In a letter sent to McCarthy on Monday, 32 senators urged EPA to finalize its biomass-based diesel
targets for the 2014, 2015 and 2016 RFS.
EPA has still not released its final 2014 RFS2 targets, despite statutorily being required by Nov. 30, 2013.
EPA has said it plans to address the RFS this spring, and plans to issue the 2014, 2015 and 2016 rules
this year. For the biomass-based diesel provision, EPA should have finalized the 2016 standard by
December 2014.
41
Bipartisan group of 32 senators calls for strong biodiesel RFS
By The National Biodiesel Board
February 09, 2015
A bipartisan group of 32 U.S. senators wrote to the EPA Feb. 9 calling for the agency to quickly approve
strong biodiesel volumes under the RFS for 2014, 2015 and 2016.
Highlighting biodiesel’s track record as the only EPA-designated advanced biofuel under the RFS to
reach commercial-scale production nationwide, the senators expressed concern about ongoing delays in
implementing the program and called on the Obama administration to get the RFS back on track. The
letter can be found here.
The EPA delays have created “tremendous uncertainty and hardship for the U.S. biodiesel industry and
its thousands of employees,” the senators wrote. “Plants have reduced production and some have been
forced to shut down, resulting in layoffs and lost economic productivity. We urge you to get biodiesel back
on schedule under the statutorily prescribed renewable volume obligations (RVO) process and quickly
issue volumes for 2014 at the actual 2014 production numbers. We also hope you move forward on the
2015 and 2016 biodiesel volumes in a timely manner.”
The senators also pointed to a recent decision by the EPA to effectively streamline biodiesel imports from
Argentina under the RFS. They said the EPA should take into account the anticipated increase in
Argentinian imports in setting biodiesel volumes to prevent the displacement of domestic production.
Sens. Heidi Heitkamp (D-N.D.), Roy Blunt (R-Mo.), Chuck Grassley (R-Iowa) and Patty Murray (D-Wash.)
led the letter.
“On behalf of biodiesel producers across the country I want to thank Sens. Heitkamp, Blunt, Grassley and
Murray, as well as all of the other senators who signed the letter, for their leadership on this issue,” said
Anne Steckel, vice president of federal affairs at the National Biodiesel Board, the industry trade
association. “These senators understand that we need clear, stable policy to break our dangerous
dependence on petroleum and diversify our fuel supplies with cleaner alternatives that create jobs and
economic activity in the U.S.”
“There is absolutely no reason for continued delays in the biodiesel volumes in the RFS. This could be
done tomorrow,” Steckel added.
Biodiesel, made from a variety of resources including soybean oil, recycled cooking oil and animal fats,
has plants in nearly every state in the country and supports some 60,000 jobs. According to the EPA,
biodiesel reduces greenhouse gas emissions by 57 percent to 86 percent compared with petroleum
diesel.
The EPA is more than two years late in establishing biodiesel volumes under the RFS after failing to
establish a requirement for 2014 and 2015. The continued uncertainty under the policy has destabilized
the industry, causing many U.S. production plants to stop production and lay off employees.
42
32 bipartisan senators urge RFS action to boost biodiesel
industry
Amanda Peterka, E&E reporter
Feb. 9, 2015
A bipartisan group of 32 senators today pressed U.S. EPA to take action on long-delayed renewable fuel
mandates to boost biodiesel producers.
In a letter to EPA Administrator Gina McCarthy, the senators said the agency's failure to finalize
mandates for 2014 and beyond through the renewable fuel standard has caused the biodiesel industry to
slow production and lay off workers.
The senators urged EPA to quickly issue a rule setting a retroactive RFS requirement for 2014 at last
year's production levels and to increase the RFS mandate for biodiesel in 2015 and 2016.
"Like many industries, the biodiesel industry requires certainty in order to plan for production in the next
year," the senators wrote. "As such, the administration risks causing further disinvestment and lost jobs if
these decisions are not made in a timely manner."
Sens. Heidi Heitkamp (D-N.D.), Roy Blunt (R-Mo.), Patty Murray (D-Wash.) and Chuck Grassley (R-Iowa)
led the group.
Congress established the current renewable fuel standard in 2007 to require refiners to blend increasing
amounts of conventional ethanol and advanced biofuels into petroleum fuel. Biodiesel, a renewable fuel
made from soybean oil, used cooking grease and animal fats, is considered an advanced biofuel under
the program.
In November 2013, EPA proposed to set the 2014 and 2015 standards for biodiesel at 1.28 billion gallons
-- a level the biodiesel industry said underestimated its expected production. EPA ultimately never
finalized the proposal, which also called for cuts to the mandates for conventional ethanol and other
advanced biofuels.
The National Biodiesel Board has also called on EPA to get the program back on track by swiftly
releasing a rule that sets the 2014 requirements at last year's production levels.
In their letter, the senators said EPA should increase the volumes for following years to take into account
the agency's recent decision to change the requirements for Argentinean biodiesel to qualify for the
program. The National Biodiesel Board has slammed EPA's decision, charging that it would lead to
increased amounts of biodiesel entering the United States (Greenwire, Jan. 30).
43
Afternoon Energy
Senators press EPA to issue biodiesel
mandates
By JENNIFER SHUTT
2/9/15 4:30 PM EST
With help from Alex Guillen, Darren Goode, Philip Ewing and Marianne LeVine
SENATORS PRESS EPA TO ISSUE BIODIESEL MANDATES: A
bipartisan coalition of senators are calling on EPA to move forward soon on
issuing biodiesel mandates under the long-debated Renewable Fuel Standard.
Like other RFS mandates, EPA has not finalized 2014's standards, is a year
behind on 2015 standards and is starting to run behind on setting 2016
standards, the letter notes. The senators write that biodiesel is different from
corn ethanol or other mandates under the RFS because the industry "has met the
criteria for growth, and under the law, its volumes are to be promulgated
independents of the other fuel categories." The letter adds that the delays
"continue to create tremendous uncertainty and hardship for the U.S. biodiesel
industry and its thousands of employees." Read:http://bit.ly/1DU7G9o
Welcome to Afternoon Energy. I'm your host, Jennifer Shutt. Send your
energy news and tips to jshutt@politico.com and mdaily@politico.com, and keep
up with us on Twitter at @JenniferShutt, @dailym1, @Morning_Energy and
@POLITICOPro.
44
RFS delay slowing biodiesel industry, senators say
By Philip Brasher
WASHINGTON, Feb. 9, 2015 - Nearly one-third of the Senate is urging the Obama administration to hurry
up and finalize the annual usage mandates for renewable fuels, saying the delay has slowed production
of biodiesel.
A letter to EPA Administrator Gina McCarthy on Monday signed by 32 senators, the majority of them
Democrats, says that recent layoffs and plant closures in the biodiesel industry underscores the need for
her agency to release the Renewable Fuel Standard levels for 2014, 2015 and 2016.
The delay in finalizing the mandates “has only compounded the effects from the November 2013 RFS
proposed rule which did not adequately reflect biodiesel production levels,” the senators wrote.
“These actions continue to create tremendous uncertainty and hardship for the U.S. biodiesel industry
and its thousands of employees. Plants have reduced production and some have been forced to shut
down, resulting in layoffs and lost economic productivity.”
The letter says Congress required the EPA to set the biodiesel levels at least 14 months before the start
of the applicable year.
The senators who signed the letter included a number of senior Democrats, including Minority Whip Dick
Durbin of Illinois and the ranking members of the Finance Committee (Ron Wyden of Oregon), Agriculture
(Debbie Stabenow of Michigan) and Energy and Natural Resources (Maria Cantwell).
Eight Republicans signed the letter.
The letter did not mention that Congress has repeatedly allowed the $1-a-gallon tax subsidy for biodiesel
to repeatedly expire. It was revived in December for 2014 but lapsed again on Jan. 1.
45
U.S. Biodiesel Makers Cry Foul as Obama Clears Argentine
Imports
By Mark Drajem
Jan. 30, 2015
(Bloomberg) -- Biodiesel makers are complaining that the U.S. Environmental Protection Agency is
allowing imports from Argentina while failing to comply with a law encouraging domestic production.
The EPA in a decision Tuesday cleared more imports of Argentine biodiesel made from soybeans. U.S.
biodiesel makers fear competition from low-cost Argentine producers and complain that the EPA
cleared that application while failing to set the required minimum production targets for 2014. It also
missed a legal deadline for the 2015 quota.
“Our plants are laying off people here, and EPA makes a decision helping producers in Argentina. Go
figure,” Anne Steckel, director of federal affairs at the National Biodiesel Board, said Friday on a
conference call.
The EPA’s troubled management of the so-called Renewable Fuel Standard has angered lawmakers of
both political parties as well as producers of alternatives to gasoline. The EPA has a legal deadline of
setting quotas for ethanol and other biofuels each December. It was so late in setting the 2014 quotas,
that it gave up and said it would do so retroactively, leaving refiners and producers to guess at what it
would demand. The agency hasn’t set a deadline the delayed 2015 quotas.
‘Legal Options’
The biodiesel board sent a letter to EPA Administrator Gina McCarthy Friday, asking her to reconsider
the decision, chief executive Joe Jobe said. If it doesn’t, the group “has a number of legal options that
we’ll consider,” he said.
Without quotas, producers say they are having a hard time finding a market for their products. Cornbased ethanol makes up the largest share of the biofuel market. Biodiesel, which is often made from
soybeans but also from waste cooking oil, is also a significant market, expanding to about 1.8 billion
gallons in both 2013 and 2014.
The 2005 law was designed to encourage the use of renewable fuel and lessen U.S. dependence on
imported oil. Refiners such as Exxon Mobil Corp. and Valero Energy Corp. are required to add a certain
amount of renewable fuels to gasoline and other products each year to meet guidelines in the law and
interpreted by the EPA.
46
The law sets up a way for foreign producers to certify that production doesn’t lead to clearing of
forested land. Individual Argentine biodiesel makers had already been cleared for import before
Tuesday’s decision.
An EPA official said that its import approval is done by a separate set of officials from those setting
annual quotas.
“It’s two parallel pieces,” said Byron Bunker, director of the compliance division of the EPA Office of
Transportation and Air Quality. The Argentine plan “would give it rigorous oversight.”
47
Biodiesel industry irked at delays in EPA mandate
By Timothy Cama - 01/30/15
The federal government’s delay in implementing biodiesel mandates is causing business to lay off
workers and declare bankruptcy, the industry said.
The National Biodiesel Board detailed some of the consequences of the Environmental Protection
Agency’s (EPA) more than one-year delay in the 2014 mandate in a letter Friday to the agency.
The EPA was obligated to make a final decision on the amount of biodiesel refiners must blend into
standard diesel by November 2013, but it has not made a decision, even after the year ended.
The biodiesel group’s frustrations reflect those of ethanol producers, whose mandate is on a similar
time frame and also had not been set.
“Based on years of statements by you and President Obama, we all believed we had an ally in this
administration,” Ben Wootton, a member of the biodiesel group, wrote in the letter to EPA head Gina
McCarthy.
48
BIOFUELS: EPA defends program for Argentinian biodiesel
amid industry backlash
Amanda Peterka, E&E reporter
Published: Friday, January 30, 2015
U.S. EPA is defending its approval earlier this week of a program for Argentinian imports of biodiesel
against withering criticism by the U.S. biodiesel industry.
In a sit-down interview with Greenwire, EPA senior adviser Paul Argyropoulos called the program "more
rigorous" than systems in place in other countries for biodiesel producers.
Under the program, a third party would certify that biodiesel produced in Argentina for export to the
United States meets renewable fuel standard requirements. Other countries' qualification systems are
based on a review of records meant to ensure that agricultural land does not expand as a result of the
RFS (Greenwire, Jan. 28).
"This particular alternative biomass tracking program is even more stringent than that. It's more robust
because it has a commitment from a third party to actually audit the entire biofuels supply chain,"
Argyropoulos said yesterday at EPA headquarters in Washington, D.C. "Absolutely it's more rigorous
because it's not just providing a document. It's having everybody verify the documents, verify by
physical visits and audits of the biofuel supply chain, and they are overseeing it."
When EPA announced the decision Tuesday, the National Biodiesel Board characterized it as "easing"
requirements on Argentinian biodiesel producers to qualify for the federal renewable fuel standard. The
group says that the program would result in a glut of Argentinian biodiesel coming into the United
States.
In the wake of EPA's defense of the program, NBB has doubled down on its criticism. It sent a letter to
EPA Administrator Gina McCarthy today asking the agency to reconsider its decision. NBB also today
hosted a call with reporters in which it slammed EPA’s handling of the RFS as a "failed" policy and
blamed EPA for biodiesel plant shutdowns and diminishing profits over the past year.
"The point of the RFS is to help with the domestic industry and to help with energy independence, if you
look back when it was signed into law -- not to be the Argentine jobs act," Anne Steckel, NBB's vice
president of federal affairs, said in an interview yesterday.
The 2007 renewable fuel standard mandates that refiners blend certain amounts of conventional
ethanol and advanced biofuels, including biodiesel, into petroleum gasoline and diesel each year. At
issue are the RFS's requirements that foreign imports of fuels for use in the program are made from only
renewable biomass.
49
Other countries typically use a "map-and-track" system that's largely a record-keeping exercise in which
foreign biofuel producers must produce documents such as land-use records showing that plant inputs
came from land that was already being used to grow crops when the RFS was enacted in 2007.
EPA's implementing regulations for the renewable fuel standard, however, laid out an alternative option
for foreign producers to certify their fuel. Argentina is the only country so far to have applied to use the
alternative option, according to Argyropoulos. EPA determined that it met all the requirements of the
RFS regulations.
Under the approved program, the Argentine Chamber of Biofuels, or CARBIO, will classify "go areas" in
Argentina where land was cleared or cultivated prior to 2007. A third party, the Peterson Control Group,
would certify that feedstocks used in biodiesel exports to the United States for use in the RFS program
come from those areas.
"We believe that having that third party oversee all of that process is certainly more robust than just
having records made available to do so," Argyropoulos said.
Biofuel producers arrayed under CARBIO would fund the third-party reviews under contract. EPA did not
participate in setting up the contract but reviewed it as part of its approval process for the program,
Argyropoulos said.
Argentinian biofuel producers wanting to qualify under the RFS would only be allowed to use soybeans
and other feedstocks that have been grown in Argentina, he added. Feedstocks imported from other
countries, even where they've been certified under the map-and-track system, would not be allowed for
inclusion.
The National Biodiesel Board, though, has countered that the new survey system would be "far less
strenuous and stringent" than the map-and-track approach because it leaves reviews of feedstocks to a
party that's being paid by the producers it audits. Whether feedstocks qualify under the renewable fuel
standard program would be difficult to verify, according to NBB.
"It makes absolutely no sense that a group of biofuel producers would get together and ask for more
stringent regulations on them," National Biodiesel Board CEO Joe Jobe said on today's press call.
The board estimates that the new survey system would lead to exports of up to 600 million gallons of
Argentinian biodiesel to the United States. NBB spokesman Ben Evans said that the number was based
on Argentina's historical exports to Europe before the European Union slapped an anti-dumping duty on
Argentinian imports. Argentina also operates under a tax export program that incentivizes exports of
biodiesel.
"This is going to displace U.S. production because the product coming in from Argentina has a strong tax
advantage," Steckel said today.
At the heart of complaints by the National Biodiesel Board is frustration over EPA's failure last year to
complete a rulemaking establishing refiners' mandates for renewable fuels. In late 2013, the agency
proposed to roll back the mandates for the first time in the RFS's history but did not finalize the proposal
after receiving criticism from both the biofuels and oil industries.
50
The RFS has been essential for creating a market for biodiesel producers. Without the annual
requirement, the trade group says that biodiesel production has slipped and producers have been
forced to close their doors. Congress also allowed the industry's $1-a-gallon tax credit to expire through
most of last year.
The group today highlighted Green Earth Fuels, a large biodiesel plant outside Houston that filed for
bankruptcy earlier this month. NBB says that EPA should be focusing first on completing the annual
volume requirements over the approval of the Argentina program.
"This is absolutely outrageous, and it is not without consequence. This failure on the part of EPA is
costing people their livelihoods," Jobe said. "It is just without understanding why they would decide this
week that they should prioritize a decision to lower sustainability requirements for foreign Argentinian
subsidized product."
Argyropoulos said that the agency has heard NBB's concerns. But he labeled "speculative" any attempts
to project how many gallons of Argentinian biodiesel would enter the United States under the new
program.
"We don't know," he said. "There's a lot of things that happen in the market which provide the people in
those businesses to make a determination if they're going to produce a product, No. 1, either for food or
for fuel production, and No. 2, whether they're going to keep the product domestic or export it to some
other country for other reasons."
EPA, Argyropoulos said, is still planning to go through with a rulemaking this year that combines the
refiners' volume requirements for 2014, 2015 and 2016 in a bid to get the program back on track.
He said that the Argentina decision had no relation to the agency's work in establishing the yearly
volume obligations.
"They are two separate things," he said. The Argentina decision was "an administrative action that is
allowed for under the regulation, and the annual volumes rules are something we have to do every year,
and certainly we know we are late and we have messages out there that we intend to get on track this
year, but they really are two separate actions."
In an interview earlier this year with Greenwire, EPA acting air chief Janet McCabe said that the agency
was "committed" to "getting the program back on track" and in supporting the development and use of
advanced biofuels. The major issue has been EPA's legal authority to consider the practical limits to the
amount of biofuel that can be used in the market, she said.
"That's what we have been focused on, how to best accomplish Congress' goal in determining what
those volumes should be, how the categories should be divided up and what's the right legal authority
to use," McCabe said.
Though tensions boiled over this week, the National Biodiesel Board and EPA have been going back and
forth on Argentina's application for the survey system since at least 2013. In November of that year,
NBB wrote a letter expressing concerns and asking EPA to initiate a formal public comment period on
CARBIO's request. NBB followed up with a letter reiterating its concerns Feb. 6.
51
Jobe said that NBB was not ruling out the possibility of taking legal action to challenge the Argentina
decision.
52
NBB 'Stunned and Frustrated' by EPA Inaction on RFS, Argentina
Decision
By Rachel Gantz
Jan 30, 2015
The one-two punch of EPA still not having issued its 2014 or 2015 biomass-based diesel targets in the
Renewable Fuel Standard (RFS2), plus the agency's approval this week of an Argentinian plan that would
enable as much as 600 million gal of biodiesel into the U.S. has made the National Biodiesel Board (NBB)
"stunned and frustrated by the administration's inaction and perceived disregard for biodiesel," the
group wrote in a letter today to EPA Administrator Gina McCarthy.
"...[W]hile our industry was already in distress, the actions of your agency this week to lower the RFS
sustainability standards for subsidized Argentinian biodiesel was in the view of our members an
incredibly disappointing development. Given the fact that your agency was required by law to have [the
biomass-based diesel] 2015 volumes finalized over a year ago, but have been unable to complete even
2014 volumes even though those volumes are now known, it is shocking that the EPA would make the
lowering of sustainability standards of highly subsidized foreign fuel a priority. We urge you to strongly
reconsider this decision," NBB Governing Board Member Ben Wootton wrote to EPA.
As OPIS previously reported this week, EPA approved a plan submitted by CARBIO, a consortium of
Argentinian renewable fuel producers, that would enable biodiesel producers in Argentina to earn
Renewable Identification Numbers (RINs) on biodiesel exports to the U.S.
Under the RFS, imports of biofuels to the U.S. can qualify to earn RINs if importers can develop an
"alternative tracking plan" for the biofuels feedstocks. With the approval to CARBIO, biodiesel producers
who join the program and follow the protocol can earn RINs for their soybean-based biodiesel.
EPA's decision on the Argentina biodiesel tracking plan was "discretionary" and made "without notice or
public comment," NBB CEO Joe Jobe explained to reporters on a conference call today, responding to a
question posed by OPIS. EPA said they could reverse the decision at any time. "We're determined to give
them much more information and appeal to them" to reverse course, he continued. If EPA maintains
status quo, "then we have a number of legal options that we'll consider," he added.
NBB has maintained that as much as 600 million gallons of biodiesel could be sent from Argentina to the
U.S. as a result of the approved EPA plan. As NBB Vice President of Federal Affairs Anne Steckel
explained on today's conference call, Argentina has in the past shipped at least 450 million gals of
biodiesel to the EU before tariffs were imposed on the country. That fuel now "has nowhere to go ... and
is looking right at us," she explained. Argentinian biodiesel producers have the capacity to produce 1.4
billion gallons and produced only 300 million gallons last year, she noted. "They have so much room to
grow ... and they don't have access to the EU market. The U.S. is the logical place to go," she added.
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It should be noted that EPA has called NBB's 600 million gal calculation "very speculative." That figure
would be about six times the highest amount exported from Argentina to the U.S., according to USDA
data, and would be disruptive to a U.S. market that has produced about 1.8 billion gal each of the last
two years.
On today's conference call, NBB representatives also urged EPA to finalize and issue its renewable fuel
standard targets. "Individuals and companies have been fined for not complying with aspects of this
[RFS] law, including deadlines. Yet the agency responsible for implementing and enforcing the law has
not complied with the law," NBB explained in its letter to the agency.
Not issuing the 2014 and 2015 biomass-based diesel targets "has not been without consequence," Jobe
told reporters. "The volumes that we produced in 2014 were produced in part by people who are now
out of business," he said.
"Ethanol groups have said they are ok with the [RFS] delays," Steckel added, noting that the U.S. ethanol
industry is larger and more mature than for biodiesel. However, "we are actually going backwards.... We
have dozens of producers that are hanging by a thread," she said, noting that "dozens of plants have
shut down production."
EPA "could get the biomass-based diesel number ... out this afternoon," Jobe noted. "The volumes are
already known. They need to push out the final rule, pegged at actual volumes.... That is their legal
obligation," he added.
In its letter, NBB has asked EPA for a meeting "to discuss these dire concerns."
EPA did not respond by press time to NBB's letter or its concerns.
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Biodiesel Shutdown: RFS, Argentine Imports Big
Concerns for US Biodiesel Industry
By Todd Neely
Jan 30, 2015
OMAHA (DTN) -- The U.S. Environmental Protection Agency's decision to relax sustainability standards
for biodiesel is opening the import market for Argentine producers. That couldn't have come at a worse
time for a U.S. biodiesel industry already on the ropes from EPA delays on the Renewable Fuel Standard.
Industry representatives told reporters Friday the U.S. biodiesel industry is in full shutdown mode, at a
time when the U.S. soon could begin to see an influx of Argentine biodiesel. Anti-dumping duties imposed
on Argentina by the European Union in recent years effectively closed off Argentine biodiesel to the EU.
That means about 450 million gallons could find its way to the U.S. market initially. One representative
said the industry is not ruling out legal action.
"We're in our second year in functioning without RFS policy," said Anne Steckel, vice president for federal
affairs at the National Biodiesel Board. "As the delay has dragged on, the EPAseems like it is ho-hum
business as usual. We are actually going backwards and companies are filing bankruptcy. It is seriously
damaging the biodiesel industry. We literally have dozens of producers hanging on by a thread."
Steckel said the Argentine industry has a 1.4-billion-gallon production capacity -- meaning there is
potentially a lot more biodiesel that could make its way to the U.S. Even if the RFS was fully functioning
for the biodiesel industry, Steckel said Argentine producers already have a price advantage. It is unclear
how many U.S. biodiesel plants have shut down or how many filed bankruptcy at this point, she said.
Joe Jobe, chief executive officer of the National Biodiesel Board, said U.S. industry production of about
1.75 billion gallons in 2014 had little to do with the RFS.
"The only reason our industry kept going is EPA indicated it was going to fix this RFS," Jobe said. ".They
could get the 2014 rule out this afternoon. The volumes are already known. They are now three years
behind. They should have all three finalized. Why they would decide this week to lower sustainability
requirements for a foreign Argentinian product when they are behind on a basic thing of finalizing the rule.
They decided to make the decision without notice or public comment."
Jobe said NBB sent a letter to EPA Administrator Gina McCarthy Friday asking the agency to reconsider
the decision. "This is a discretionary decision they made," he said. "They could reverse the decision at
any time. If they choose not to do that, we have a number of legal options. This is of great consequence.
The volumes we produced in 2014 were produced in part by people now out of business. It is mindboggling why it is they believe they don't need to comply with the law. The volumes are already out. That
is their legal obligation."
Prior to EPA's decision on Argentina biodiesel, producers from that nation were required to meet what
Jobe said were "significant" sustainability requirements such as not allowing new land to be cleared to
produce biodiesel.
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EPA said publicly it actually made the sustainability requirements more stringent with the decision. "How
does that make sense?" Jobe said. ".It makes no sense that producers got together and asked for more
stringent regulations."
EPA RESPONSE
Byron Bunker, director of the compliance division in EPA's Office of Transportation and Air Quality, said
Argentine producers came to EPA for clarification.
"It's like someone asking a professional tax preparer to do your taxes," he said in a statement. "They
know the codes, the regulation and how to manage the documentation. People want certainty and
protection that they are complying with the extensive laws, which most common people don't know or
understand, and so they want the protection of the professional tax preparer. This is no different for the
parties in Argentina."
Bunker said the agency intends to take action on the 2014, 2015 and 2016 RFS volumes this spring.
"We understand industry's desire for certainty," he said. "EPA is committed to getting the RFS program
back on track."
Bunker said claims by the U.S. biodiesel industry that sustainability standards were relaxed for Argentine
producers "is flatly wrong."
".The sustainability standards are exactly the same for all parties. This alternate biomass tracking plan is
simply one mechanism by which Argentinian producers can meet the record-keeping requirements of the
program."
The standards were defined in the 2007 Energy Independence and Security Act. In order to qualify for the
RFS program, planted crops and crop residue used as biofuel feedstock must be harvested from
agricultural land cleared or cultivated prior to December 2007.
"The RFS regulations Congress established in 2007 apply to both foreign and domestic producers,"
Bunker said. "Any foreign or domestic renewable fuel producer or renewable identification numbergenerating importer may meet the recordkeeping requirements for tracking feedstock from qualified lands
with an alternative biomass tracking program that has been approved by the EPA."
Several countries already import biofuel via the existing regulations, he said, and the EPA decision would
not necessarily lead to opened floodgates for Argentine biodiesel.
"Producers decide where to sell their feedstock based on multiple market factors, including where they
can get the highest price," Bunker said.
Argentina's biodiesel program will be implemented based on this year's soybean harvest, he said, which
will start sometime in March and run through June or July.
"The earliest that fuel might be exported under this program is later this fall (September or later), after
soybeans currently in the field have been harvested, crushed, and refined to produce biodiesel," Bunker
said.
BANKRUPTCY FILED
Ben Wootton, former owner of now-bankrupt Keystone BioFuels, a biodiesel producer based in
Pennsylvania, said his company filed Chapter 11 in 2013 because of RFS uncertainty. While the cornbased ethanol industry continues to thrive despite uncertainty, the same cannot be said for biodiesel.
"The lack of guidance by EPA on the RFS is hurting real people," Wootton said. "The industry always
lives up to what it says it will do. Having an influx of (Argentine) biodiesel into our market now -- I'm
56
concerned about the remaining producers. When a company like Green Earth files bankruptcy, it is a
major statement we need to get this RFS policy on track." The much-respected Galen Park, Texasbased biodiesel producer Green Earth Fuels, LLC, filed for Chapter 7 on Jan. 7, 2015.
Wootton wrote a letter to McCarthy in which he slammed the administrator for a statement she made last
year indicating the RFS delay had not appeared to slow the industry.
"I would invite administrator McCarthy to come to my shuttered plant and talk to some of the laid-off
workers or to visit practically any biodiesel plant across the country to see the damage that is taking
place," Wootton said.
"It is obvious that this administration doesn't understand the severe damage that the uncertainty
surrounding this rule has caused our industry and the thousands of employees it represents. It is beyond
frustrating that an administration I have strongly supported has inflicted so much harm on an industry it
says it supports."
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Biodiesel Sector Urges EPA To Finalize Higher RFS Target
January 30, 2015
Biodiesel producers are urging EPA to immediately issue its final renewable fuel standard (RFS) target for
biomass-based diesel at a level millions of gallons higher than the agency has proposed,
saying EPA's delay in issuing the target is creating major uncertainty for biodiesel producers that is
creating legal liability risks and economic harm.
In a Jan. 30 letter to EPA Administrator Gina McCarthy, National Biodiesel Board (NBB) Governing Board
Member Ben Wootton says that biodiesel plants around the United States are facing closure because of
the uncertainty caused by the absence of RFS rules. His own facility in Pennsylvania was one such victim,
he writes.
"[R]ecent actions from the EPA and comments from you and other Administration officials regarding the
RFS have generated great concern in the U.S. biodiesel community that you may not fully recognize the
significant damage that the uncertainty surrounding this rule has caused for our industry and the
thousands of employees it represents," Wootton writes, expressing major concern over EPA's lengthy
delay in finalizing the 2014 RFS.
EPA in November 2013 proposed an RFS for the following year that would have set a biodiesel target of
1.28 billion gallons, which is the same as the 2013 RFS. However, the agency in a Dec. 9 Federal Register
notice said it is delaying issuance of a final 2014 RFS until sometime this year, alongside a proposed 2015
and 2016 RFS.
A biofuels manufacturer recently filed a lawsuit over the Register notice, arguing that the decision to
delay the 2014 RFS indefinitely effectively implements the November 2013 proposal.
NBB's Wootton in his letter to McCarthy warns that the delay over finalizing 2014 RFS targets creates
compliance liability concerns for companies, as well as major economic uncertainty for the industry. He
urges EPA to swiftly issue a final 2014 RFS biodiesel target at an increased level of 1.75 billion gallons.
Wootton also says EPA should finalize an advanced biofuel production target for 2014 of 3.75 billion
gallons, much higher than EPA's 2.20 billion gallon proposal, which was lower than the 2013 goal of 2.75
billion.
The American Fuel and Petrochemical Manufacturers, meanwhile, has issued notices of intent to
sue EPA over its failure to finalize the 2014 or 2015 RFS rules, and will likely file suits seeking deadlines
for issuance of the rules in the U.S. District Court for the District of Columbia in the near future, sources
say.
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Wootton also says the biodiesel sector does not agree with EPA's approval this week of a streamlined
approach for allowing imports of Argentinian biodiesel into the country, which the group says relaxes
"sustainability" criteria.
NBB says that in light of the RFS delays, "it is shocking that the EPA would make the lowering of
sustainability standards of highly subsidized foreign fuel a priority. We urge you to strongly reconsider
this decision."
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Biodiesel Industry Seeks EPA Help
By DANIEL LOOKER
Jan. 30, 2015
Friday the National Biodiesel Board asked EPA administrator Gina McCarthy to reconsider the agency’s
decision to ease imports of biodiesel from Argentina and to issue blending obligations for the fuel
industry for last year, this year and next under the Renewable Fuel Standard.
“The National Biodiesel Board and I are requesting a meeting with you to discuss these dire concerns,”
NBB governing board member Ben Wootton wrote in a letter sent to McCarthy Friday. “We are
requesting that you reconsider your decision about Argentinian product, and we are urgently requesting
a finalized 2014 rule which sets biomass‐based diesel at actual production of 1.75 billion gallons and
total advanced biofuel at the statutory 3.75 billion-gallon level.”
Wooten told McCarthy the biodiesel industry has been hurt by the lack of certainty over how much
biodiesel will be blended and that Wootton lost his own Pennsylvania biodiesel plant, Keystone Biofuels,
in bankruptcy last year as a result, he said.
In a press conference Friday, he said that other plants have closed, either permanently or temporarily,
and many are running are at only 10% to 20% of capacity.
“I’m very concerned about the remaining producers,” he said. When asked if biodiesel from Argentina
costs less than the fuel made in the U.S., Anne Steckel, NBB’s vice president of federal affairs, told
Agriculture.com that “Argentina does have quite a price advantage to the U.S.”
NBB has already estimated that 600 million gallons of fuel will come from Argentina this year if EPA’s
decision to allow the fuel to qualify for RINs (Renewable Identification Numbers) isn’t changed. RINS are
traded by blenders to meet the requirements of the Renewable Fuel Standard under the 2007 Energy
Independence and Security Act (EISA).
Scott Irwin, an agricultural economist at the University of Illinois who tracks the RIN markets for both
ethanol and biodiesel, said Friday that “2015 excess capacity of industry [in Argentina] is about 600
million gallons. I think that is where the 600 million gallons of exports coming into the U.S. comes
from.”
Irwin said that the EPA’s decision to allow biodiesel to qualify for blending under the RFS may not be bad
news for the industry if it signals that the agency is going to return to allowing the full amount of
blending mandated by EISA for 2015.
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Irwin said that critics of EPA’s decision on Argentina seem to be assuming that the agency will keep the
blending volumes at the level of the 1.8 billion gallons of biodiesel produced in 2013 or the smaller 1.75
billion-gallon level for last year.
“What if the EPA made this sudden move because their proposal for 2014 and 2015 goes back to the
statutory level?” he asked. In November 2013, EPA proposed lowering the so-called renewable volume
obligations (RVOs) below the levels require by law, justifying its decision with the 10% saturation of corn
ethanol into the U.S. gasoline market known as the blend wall.
Irwin said fuel blenders have accumulated enough RINS to cover blending obligations for 2014, but “at
some point in 2015, we will have burned through those stocks of RINs.” With the U.S. biodiesel industry
at about 2 billion gallons of capacity, imports may be needed to increase the level of biodiesel blending
to about 2.5 to 3 billion gallons.
“That’s at least one plausible alternative explanation of this event,” he told Agriculture.com.
Biodiesel is a very different market in many ways. Much higher blends, up to 20%, are warrantied for
diesel engines by many manufacturers. And, unlike cellulosic ethanol, the biodiesel industry production
has gone well past the blending mandates of previous years.
It also uses a smaller share of the soybean crop than ethanol does for corn — about 10% of the U.S.
soybean acres for the 2014 crop, according to Iowa State University retired economist Bob Wisner,
compared to about 40% of the corn crop that is used for ethanol and distillers' grains.
The blending economics differ markedly, too. Ethanol prices are about on par with gasoline, but they’re
still cheaper than other petroleum derivatives like benzine that can be used to boost octane, according
to a study that Irwin and fellow University of Illinois economist Darrel Good released Friday. In contrast,
biodiesel has depended on both RINs and a now-expired $1-a-gallon tax credit to compete with regular
diesel fuel.
According to Harold Hommes, who tracks fuel prices for the Iowa Department of Agriculture and Land
Stewardship, prices for biodiesel in central Iowa last week were just under $3 a gallon, compared to
about $1.63 a gallon for ultra-low-sulfur winter diesel fuel.
Prices for biodiesel fuel in Argentina are regulated by that country’s government, with higher prices for
smaller producers. According to a report from the U.S. Foreign Agricultural Service last summer, prices
ranged from about $2.53 per gallon to $3.21 (after converting the price per metric ton to gallons (285
gallons per ton). Prices posted by Argentina’s energy secretary for the month of January appear to be
about $2.28 per gallon to $2.90 per gallon. (That’s using an exchange rate of 0.11585 U.S. dollars to
Argentine pesos.)
While the U.S. dollar is strengthening, Argentina’s currency is weakening in a country where some
economists estimate inflation at 40%.
Argentina has already exported biodiesel to the U.S. for heating oil. According to the Argentine new
organization, Infonews, that nation sold $360 million worth of biodiesel to the U.S. in 2013.
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Biodiesel Plants Closing Due to RFS Uncertainty
Posted on January 30, 2015 by Cindy Zimmerman
The National Biodiesel Board (NBB) is asking the Environmental Protection Agency to immediately
establish biodiesel volumes under the Renewable Fuel Standard to avoid further damage to the industry.
In a telephone press conference Friday morning, NBB officials highlighted fallout from the ongoing
failure of EPA to establish functioning renewable fuels policy for the second consecutive year and
said the recent decision to allow streamlined imports of biodiesel from Argentina under the RFS has only
added new urgency to the need for stable policy.
In a letter to EPA Administrator Gina McCarthy, a former biodiesel producer and NBB Governing Board
Member Ben Wootton challenged recent comments suggesting that the RFS delays haven’t hurt
renewable fuels industries. Wootton lost his Pennsylvania biodiesel plant, Keystone Biofuels, in
bankruptcy last year as a result of RFS uncertainty. In his letter, he explained to McCarthy how the loss
of his plant also forced him to lay off 30 employees and caused him to lose his daughters’ college funds
and his retirement savings.
“I would invite Administrator McCarthy to come to my shuttered plant and talk to some of the laid off
workers, or to visit practically any biodiesel plant across the country to see the damage that is taking
place,” Wootton said. “It is obvious that this administration doesn’t understand the severe damage that
the uncertainty surrounding this rule has caused our industry and the thousands of employees it
represents. It is beyond frustrating that an Administration I have strongly supported has inflicted so
much harm on an industry it says it supports.”
NBB CEO Joe Jobe says the EPA decision regarding imports of Argentinian biodiesel has just exacerbated
the difficulties facing the industry. “It is shocking that at a time when our renewable fuels policy is in a
shambles, the EPA has essentially greenlighted biodiesel imports from Argentina to qualify for the RFS,
with very little oversight or verification that the resources used to make the fuel will be grown under the
normal RFS sustainability requirements,” said Jobe. “We have done everything we can for two years to
help this Administration develop reasonable policy that matches President Obama’s stated support for
renewable fuels, but we are at wit’s end. We are desperately searching for any indication that this
support actually exists.”
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NBB blasts EPA decision on Argentina
Posted January 30, 2015 by Julie Harker
The National Biodiesel Board (NBB) is blasting the EPA for its decision to allow streamlined biodiesel
imports from Argentina to the U.S. NBB CEO Joe Jobe has written to EPA administrator Gina McCarthy
and has asked for a meeting. Jobe told reporters this morning, “This is a discretionary decision that they
made and their statement says they could reverse this decision at any time if they get more information.
We’re determined to give them much more information and to appeal to them to reverse this decision.”
The NBB says the decision is damaging to the US biodiesel industry and jobs – especially in light of
continued delays in establishing RFS volumes.
Anne Steckel, Vice President of Federal Affairs for National Biodiesel, says there seems to be a “ho-hum”
attitude in Washington about the EPA’s RFS delay, “Some of the ethanol groups, for example, have said
they are okay with the delays. I guess that makes some sense given the fact that they’re a much larger
and more mature industry. And, they actually had their best year ever last year. But, we’re actually
going backwards and companies are filing bankruptcy.”
NBB estimates as much as 600-million gallons of Argentinian biodesel could enter the U.S. – as biodiesel
plants go out of business. Just this week, Jobe say, Green Earth Fuels of Houston, Texas filed for
bankruptcy.
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Soyatech News: Heitkamp Calls Out EPA for Prioritizing
Foreign Biodiesel Imports Over Domestic Producers
January 29, 2015
U.S. Senator Heidi Heitkamp today criticized the U.S. Environmental Protection Agency (EPA) for opening
the door to prioritizing the import of biodiesel from abroad over producing biodiesel from American
farmers and producers - including many in North Dakota.
The EPA is planning to allow Argentina to ship as much as one billion gallons of biodiesel into the United
States without first fulfilling its legal duty to provide certainty to American farmers and producers by
setting clear production levels.
Questioning the EPA's priorities, Heitkamp slammed the agency for neglecting its legal obligation to
provide certainty to biofuels and agriculture and the workers they employ by setting biodiesel volumes
under the Renewable Fuel Standard (RFS). Lacking proper federal guidance, biodiesel producers across
the country have been forced to slow production, negatively impacting farmers whose crops supply the
industry, hurting jobs, and harming rural communities.
Last year, nearly 80 percent of U.S. biodiesel producers scaled back production and almost 6 in 10 idled
production altogether. Additionally, two-thirds of producers said they have already reduced or
anticipate reducing their workforce as a result of the downturn. Heitkamp has consistently fought for
North Dakota farmers and producers by pressing the EPA to institute standards that promote certainty
for the renewable fuels industry and the farmers who depend upon it.
"North Dakotans deserve better than to wait in line behind foreign competitors shipping goods into the
U.S.," said Heitkamp. "The EPA has neglected its legal obligation to set clear, practical production levels
and provide certainty to our agricultural and renewable fuels workers - and our farmers and producers
have suffered. It's time the government showed our farmers - who aren't just propping up local
economies, but also promoting North American energy independence - some real respect. Last year, I
brought EPA Administrator McCarthy to talk with North Dakotans face-to-face about how her agency's
newly proposed standards would cut down their businesses, and this fall her agency delayed these
harmful rules. It's time our federal agencies worked hand-in-hand with our producers to boost our
economy, support energy that is made in America, and renew our commitment to an all-of-the-above
energy strategy."
Go to: http://www.heitkamp.senate.gov/public/cache/files/d64f5e81-b277-43de-8bb1a4971904b393/letter-to-epa-carbio-rfs-1-28-15.pdf to read Heitkamp's letter to EPA Administrator Gina
McCarthy.
Heitkamp has long fought for policies that promote domestic biofuel production, as well as practices
that protect a path forward for North Dakota farmers and workers in the renewable fuels industry. She
has been pushing back on the EPA's proposed RFS rule since it was released. In May 2014, Heitkamp,
joined by other Senators and a farmer from Mantador, called for the Administration and Congress to
support policies that stand up for biodiesel jobs and production
http://www.heitkamp.senate.gov/public/index.cfm/2014/5/heitkamp-calls-for-federal-policies-thatsupport-nd-biodiesel-jobs-production, and reinforced the potential detrimental impacts for farmers and
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producers because of the EPA's proposed rule. In February 2014, Heitkamp brought EPA Administrator
Gina McCarthy to North Dakota to hear firsthand from farmers and producers about how her agency's
proposed RFS rules reducing the required amount of U.S.-produced biofuels would have a direct and
detrimental impact on their work. In November, the agency heeded their call, delaying the
implementation of the new standards. Heitkamp has continued to press the EPA to announce these
long-delayed standards.
The EPA's proposed Renewable Fuel Standard rule would establish a biodiesel standard of 1.28 billion
gallons this year, forcing many farmers and producers to shut their doors. But in 2013, biodiesel
producers - using products grown on farms in North Dakota and throughout the country, like canola and
soybeans - generated a record of nearly 1.8 billion gallons, with plants in almost every state in the U.S.
supporting about 62,200 jobs. And biodiesel reduces greenhouse gas emissions by 57 percent to 86
percent compared to petroleum diesel.
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E&E News: BIOFUELS: Bipartisan lawmakers seek support for RFS reform bill
Amanda Peterka, E&E reporter
January 29, 2015
A bipartisan coalition of four House members this week attempted to drum up support for legislation
that would reform the renewable fuel standard.
On Monday, the group circulated a "Dear Colleague" letter to House offices seeking co-sponsors for the
legislation, which would eliminate the annual requirements for corn ethanol, among other changes to
the RFS. The bill could be introduced as soon as next week, according to sources tracking the RFS.
"The RFS is causing unintended and negative consequences for American consumers, energy producers,
livestock farmers, and food manufacturers and retailers," Reps. Bob Goodlatte (R-Va.), Jim Costa (DCalif.), Steve Womack (R-Ark.) and Peter Welch (D-Vt.) wrote. "The RFS needs fundamental reform and
we urge you to join us by cosponsoring legislation to accomplish this task."
Congress passed the renewable fuel standard in 2007 to require refiners to blend increasing amounts of
ethanol and advanced biofuels into petroleum fuels. Proponents of the policy in the biofuels industry
say that the standard has been vital in reducing greenhouse gases and increasing energy security.
But critics say that ethanol has had a negative impact on food prices, car engines, the environment and
the livestock industry. They also charge that the RFS overestimated the amount of cellulosic biofuels, or
fuels made from non-food plants, that would be in the market.
Along with striking corn ethanol from the RFS, the legislation led by Goodlatte would also cap the
amount of ethanol that can be blended into petroleum gasoline and would compel U.S. EPA to base its
annual targets for cellulosic biofuel on actual production numbers.
"The federal government's creation of an artificial market for the ethanol industry has quite frankly
created a domino effect that is hurting consumers," Goodlatte, Costa, Womack and Welch wrote in their
letter.
The lawmakers introduced a version of the legislation in the 113th Congress, but the bill died in
committee. It had 82 co-sponsors, nearly a quarter of them Democrats. A strange-bedfellows coalition
of oil, environmental, livestock and food groups supported the bill; biofuels groups, on the other hand,
strongly opposed it.
Goodlatte also sponsored legislation last Congress to completely eliminate the RFS.
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Biodiesel Producer Green Earth Fuels Files for Bankruptcy
Jan. 21, 2015
Green Earth Fuels, which operates a 90-million gal/yr biodiesel plant in Houston, filed for bankruptcy
earlier this month.
In the Jan. 7 filing with the U.S. Bankruptcy Court for the Southern District of Texas, the company lists
$0-$50,000 in estimated assets and $10 million-$50 million in estimated liabilities.
Subsidiary Green Earth Fuels Houston first began production in July 2007 at 45 million gal/yr, and then
doubled production in October 2007 to its current 90- million gal/yr capacity, with multiple feedstock
capability. Green Earth Fuels is majority owned by Riverstone Holdings LLC, The Carlyle Group and
Goldman Sachs.
Among creditors holding unsecured non-priority claims are Carlyle Renewable Energy for $77,692.83 in
a convertible promissory note, Kinder Morgan for $4.1 million for a guarantee on terminal services
agreement and Riverstone Renewable Energy for $296,611.94 for a convertible promissory note.
It was not clear what led to the bankruptcy filing, although a number of biodiesel companies have been
hit hard by the one-two punch of EPA not finalizing the 2014 Renewable Fuel Standard targets and the
$1/gal biodiesel tax credit expiring at the end of 2014 after a retroactive extension for only that year.
--Rachel Gantz, rgantz@opisnet.com
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Biofuels industry in regulatory gridlock as it awaits EPA ruling
By JAMES OSBORNE josborne@dallasnews.com
Staff Writer
Jan. 20, 2015
FORT WORTH — Seven years ago President George W. Bush signed a law requiring that refineries blend
fuels derived from corn, animal fat and plant waste into the nation’s fuel supply. But the industry it
spawned says it’s on the verge of plant closures and layoffs if the federal government doesn’t clear up
uncertainty about future fuel standards.
At the National Biodiesel Conference in Fort Worth on Tuesday, National Biodiesel Board CEO Joe Jobe
said opposition from the oil industry had bogged down efforts to update the fuel standard and urged
the Environmental Protection Agency to move forward.
“If the EPA doesn’t get this back on track, we might as well not even have a program,” he said.
The renewable fuel standard, which sets year-by-year mandates for ethanol, biodiesel and other
biofuels, has come under debate in Washington over concern there is already too much ethanol in the
nation’s gasoline supply. In late 2013, a top EPA official told Congress that as domestic fuel demand
weakened because of more efficient cars, the proportion of ethanol in the fuel supply had risen to the
point it could harm engines — what engineers refer to as the “blend wall.”
At the same time, U.S. oil production has increased 80 percent since 2010 to more than 9 million barrels
a day. One of the chief arguments for biofuels — besides cutting carbon emissions — was reducing the
nation’s dependence on foreign oil. And, at least for now, U.S. oil imports are on the decline.
That has left the biofuel industry in regulatory gridlock. The EPA has not updated the renewable fuel
standard since November 2013. That year biodiesel production hit 1.8 billion gallons. But with no new
standard, that number fell to 1.75 billion gallons in 2014, according to the biodiesel board.
Earlier this month Green Earth Fuels, a Houston biodiesel producer, filed for bankruptcy, and there is
fear more losses are coming.
At the conference Tuesday, companies showed off biodiesel-fueled trucks and jars of crystal clear fuel
made from used cooking oil. Hanging over the downtown exhibition hall was a sense of unease over the
government’s commitment to biofuels.
Jarren Nagy, whose Northern California company collects used cooking oil from restaurants for use in
biodiesel production, said two of his competitors had closed over the last year.
“I have all my eggs in this. It would be nice to have some certainty from the government,” he said.
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The EPA was scheduled to release renewable fuel standards for 2015 two months ago. And with no
decision date set, rhetoric between the biofuel and oil industries has been ramping up.
During a presentation laden with clips from movies including Star Wars and Back to the Future, Jobe
cataloged what he described as “misinformation” about the biofuel industry spread by groups including
the American Petroleum Institute, the oil industry’s chief lobbying arm.
He pointed to a 2013 study commissioned by API predicting that by 2015 the renewable fuel standard
would cause gasoline prices to rise 30 percent and diesel 300 percent. Oil prices are down more than 50
percent since the end of 2013.
Asked to comment, an API spokesman said the fuel standard was “costly, based on outdated policy
aimed at reducing [oil] imports, and most importantly puts consumers at a safety risk since no auto
manufacturer will warranty more [ethanol] in gasoline than 10 percent.”
Still, Jobe said he remained optimistic. He said he believed there were potential partners within the oil
industry, to whom he appealed for greater cooperation.
“In 2014, the renewable fuel standard got off track. It’s our goal to get it back on track in 2015,” he said.
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Biofuels Company files for Chapter 11
By Matthew Daneman
December 4, 2014
One Seneca County biodiesel company pointed to as a linchpin for economic development in the Finger
Lakes region has fiied for bankruptcy.
Seneca BioEnergy LLC, born in 2008 out of grape seed oil processing work in Ontario County, filed for
Chapter 11 bankruptcy protection earlier this month.
According to company filings with the U.S. Bankruptcy Court for the Western District of New York, its
debts total more than $1 million and include $9,400 to the town of Romulus and $4,700 to the local
school district and $47,000 owed to the IRS for payroll taxes. And the company has been awarded —
though not actually received — substantial pots of public money in recent years, including $7 million
from the state. However, the company said that receiving those public dollars revolve around finding
outside investors as well — which Seneca BioEnergy still is trying to do.
According to the company, it plans on operating during the bankruptcy while restructuring to pay its
debts.
Seneca BioEnergy was among a slew of projects that the Finger Lakes region put forward to the state
earlier this year in its application for state economic development cash under the Regional Economic
Development Council process. The 2014 awards are expected to be handed out to the Finger Lakes and
nine other state regions later this month.
The company operates out of the 10,000-acres old Seneca Army Depot in Seneca County. There it also
makes Finger Lakes Grape Seed Oil, which is available at numerous wineries and some Wegmans stores.
The company's Chapter 11 bankruptcy filing came just days before its production facility along Route 96
in the Seneca AgBio Green Energy Park was to be sold at public auction as it had fallen behind on its
bank loans.
In a statement, Seneca BioEnergy CEO Michael Coia said the company plans "to repay everyone in full.
Over the past year, we have not been able to raise sufficient working capital alone and now we realize
the requirements to have a strategic investment partner."
The company also is looking for tenants to real estate it occupies in the Green Energy Park.
"Our vision is still right, but we have taken the business as far as we could, and now we need a white
knight as an investment partner," Coia said in a statement.
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Erie's Hero BX blames tough year on EPA inaction
JIM MARTIN, Erie Times-News
Dec. 6, 2014
Erie-based Hero BX, one of the nation's largest biodiesel plants, is in the final weeks of a difficult and
uncertain year.
Falling oil prices, the absence of what's called a blender's credit and uncertainty about a government
production mandate combined this year to slash profit margins and, ultimately, production.
"It's been an extremely tough year compared to the last three," said Chris Peterson, the company's vice
president.
Evidence of that decline can be found in the company's production figures. The East Lake Road plant,
which produced a record 50 million gallons of biodiesel in 2013, is on track to produce just 40 million
gallons this year.
There is not one simple fact that explains what made 2014 difficult, but part of the problem can be found
in declining oil prices that have held down diesel prices. And while the prices for feedstock -- oils used to
produce biodiesel -- have declined, they haven't kept pace with a decline in oil prices, said Mike Noble,
Hero BX president.
In recent years, biodiesel buyers have benefited from a $1 per gallon blender's credit that helped offset
the higher cost of diesel made not from petroleum, but from vegetable and animal fats.
Peterson said it was just last week that the U.S. House of Representatives passed a bill that would pay
that $1 credit retroactively. He said the bill has moved to the Senate and is expected to be signed into law
by President Barack Obama.
Restoring the credit will be a big benefit to buyers of biodiesel, but the absence of that credit wasn't the
industry's biggest challenge this year.
In recent years, the Environmental Protection Agency has established a mandate that determined how
much ethanol and biodiesel had to blended into fuel in any given year.
Eleven months into the year, no mandate has been established. And on Nov. 21, the EPA announced it
would not set one this year.
That lack of action has prompted the American Fuel and Petrochemical Manufactures to file notice it
plans to sue the EPA.
The lack of a mandate left producers uncertain about how much they should produce and buyers equally
uncertain about how much biodiesel they should blend, Nobel said.
"The whole industry is confused," Peterson said. "Everybody was just throwing darts at the board, not
knowing if it was enough."
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The absence of clear direction resulted in a disappointing year," Noble said.
"Prices are down 20 percent and margins are down significantly more than that," he said. "They have
gone from something to nothing."
Hero, owned by Erie Management Group, hasn't cut any of its 44 employees.
"We are keeping people employed in hopes of something better," Peterson said.
JIM MARTIN can be reached at 870-1668 or by e-mail. Follow him on Twitter at twitter.com/ETNmartin.
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EPA whiffs on ethanol
By Erica Martinson
11/21/14 12:32 PM EST
EPA is giving up on making a decision this year on a politically charged ethanol rule that was due last
November, the agency said Friday — an announcement that gives Big Corn at least a small, temporary
win in its perpetual battle against Big Oil.
The news was a turnaround from a year ago, when EPA proposed its first-ever cut in the amount of
ethanol that gasoline and diesel refiners must blend into the nation’s fuel supply. But it brought an
immediate lawsuit threat Friday from the oil industry group American Fuel & Petrochemical
Manufacturers, which has long complained about the burden on refiners and said EPA’s “repeated
inexplicable delays are a violation of the Clean Air Act.”
Rather than set its 2014 ethanol mandate by the end of this year, EPA said Friday that it intends “to take
action on the 2014 standards rule in 2015 prior to or in conjunction with action on the 2015 standards
rule.” The deadline for 2013 compliance with the rule will take place in 2015, EPA’s notice says.
Some ethanol producers were happy to at least have a respite from the cuts that EPA had proposed a
year ago. “While it’s not good on the uncertainty side, it’s a recognition that the proposal in 2014 is not the
best place for the country to go on renewable fuel policy,” Brooke Coleman, executive director of the
Advanced Ethanol Council, said before the official announcement.
“Today’s announcement by EPA shows the administration recognizes the proposed rule was inherently
flawed and based on an unworkable methodology,” said Chip Bowling, a Maryland farmer and president
of the National Corn Growers Association.
But the another biofuel group, the National Biodiesel Board, said EPA’s inability to meet its deadlines is
costing people jobs.
“This administration says over and over that it supports biodiesel, yet its actions with these repeated
delays are undermining the industry,” the board’s vice president of federal affairs, Anne Steckel, said in a
statement Friday.
“Biodiesel producers have laid off workers and idled production. Some have shut down altogether. We
know that fuels policy is complex, but there is absolutely no reason that the biodiesel volume hasn’t been
announced.”
“Deciding not to decide is not a decision,” said Bob Dinneen, president of the Renewable Fuels
Association. “Unfortunately, the announcement today perpetuates the uncertainty that has plagued the
continued evolution of biofuels production and marketing for a year.”
But Dinneen added that “the administration has taken a major step by walking away from a proposed rule
that was wrong on the law, wrong on the market impacts, wrong for innovation and wrong for consumers.”
On the other side of the debate, American Petroleum Institute President Jack Gerard called the
announcement “an example of government at its worst.” He said that “the only real solution is for
Congress to scrap the program and let consumers, not the federal government, choose the best fuel to
put in their tanks.”
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The mandate is part of a “renewable fuels” program that Congress created seven years ago in hopes of
fostering a home-grown, climate-friendly biofuel industry that would help wean the U.S. off foreign oil.
Since then, the requirements have fallen under increasing political fire — attacked by the oil industry,
restaurant owners, livestock and poultry producers, tea party Republicans and, increasingly, a
disenchanted environmental movement. But the program is still popular among many Midwestern
lawmakers, especially in the corn-heavy presidential caucus state of Iowa.
But ethanol producers in that state have been uncertain how much help they’ll get from Republican Sen.elect Joni Ernst, who said during her campaign that she has a “philosophical” objection to
such government meddling in the markets. People on both sides of the issue had speculated last summer
that the administration would issue a pro-ethanol decision in time to help Ernst’s staunchly pro-ethanol
Democratic opponent, Bruce Braley — but that never happened.
EPA said Friday that it heard many concerns in response to last year’s proposal, most notably “regarding
the proposal’s ability to ensure continued progress towards achieving the volumes of renewable fuel
targeted by the statute.” The agency added: “EPA has been evaluating these issues in light of the
purposes of the statute, and the Administration’s commitment to the goals of the statute to increase the
use of renewable fuels, particularly cellulosic biofuels, which will reduce the greenhouse gases emitted
from the consumption of transportation fuels and diversify the nation’s fuel supply.”
An EPA official said the agency aims “to get back on the annual statutory timeline by addressing 2014,
2015 and 2016 standards in the next calendar year.”
And in an email to some parties interested in the rule, EPA senior policy adviser Paul Argyropoulos noted
that the agency’s announcement includes action to address technical problems with “permit trading and
retiring 2012 [biofuel credits] beyond December 31st of this year, as well as our intent to take action on
the 2014 standards rule in 2015 prior to or in conjunction with action on the 2015 standards rule.”
It wasn’t immediately clear how Friday’s news would affect the sometimes-volatile market for the biofuel
credits that refiners must buy if they don’t use the required amount of ethanol. But Coleman doubted the
prices would feel much impact this late in the year. “There’s nobody who’s sitting around with a massive
compliance deficit at Thanksgiving,” he said.
By law, the final 2014 rule had been due on Nov. 30, 2013, and the 2015 version is due nine days from
now. But EPA didn’t even submit a final 2014 rule to the White House Office of Management and Budget
until August — and now, OMB’s 90-day deadline to review it has expired.
As late as this week, speculation had been rife that EPA would announce a 2014 mandate either just
before or after Thanksgiving, and some expressed astonishment as rumors began swirling Thursday that
the decision might be a non-decision. Some sources said the White House appeared to want to make
some kind of move as the OMB clock ran out.
Several sources closely involved in the debate have previously told POLITICO that the holdup was the
work of the White House, with President Barack Obama’s special adviser John Podesta deeply involved
in the process and at odds with EPA officials and policy writers. Both the oil and ethanol industries have
complained about the delays, saying the decision has become intensely politicized.
More recently, sources say players in the White House have been uncertain about which way to go with
the program.
Under the mandate, the agency specifies how many gallons of ethanol and other forms of biofuel the
refiners must blend into the U.S. gasoline and diesel fuel supply each year. Congress envisioned in 2007
that the gallons would increase steeply each year, giving ethanol an ever-greater role in powering
Americans’ cars.
Much of the administration’s indecision has centered on a fundamental question: Should EPA keep
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forcing growing amounts of ethanol into the fuel supply, despite the oil industry’s arguments that the
market cannot bear any more without risking a rise in gasoline prices — a limit refiners like to call the
“blend wall”? The cuts that EPA proposed last year for 2014 essentially acquiesced to the oil industry’s
case, and signaled that it would no longer be ratcheting up the mandate every year.
The biofuels industry argues that the blend wall was meant to be breached, and that the market can
easily absorb more of its product if the oil industry stops dragging its feet on allowing consumers to buy
gasoline blends with higher percentages of ethanol. The most commonly available blends contain 10
percent ethanol, but producers want to see greater availability of 15- and 85-percent blends.
Refiners must buy those credits, also known as renewable identification numbers, when they fail to blend
the required volumes of ethanol. That part of the program has provoked controversy over sometimes wild
price spikes on the credit markets, as well as a plague of sales of fraudulent credits.
A year ago last Saturday, EPA proposed its first-ever cuts to the mandate. It proposed a 2014 mandate of
15 billion to 15.52 billion gallons, which would have been less than the previous year’s 16.55-billion-gallon
requirement.
Within the overall ethanol mandate, the agency also proposed a cut in the amount of so-called advanced
ethanol the refiners would have to blend. The proposal was 2 billion to 2.51 billion gallons, a drop from
the previous year’s mandate of 2.75 billion gallons.
The proposal threw a huge chill into the industry and angered long-time supporters like Sen. Chuck
Grassley (R-Iowa). Dinneen exclaimed at the time: “Boy, my goodness, are the oil companies going to
benefit from this.”
But since then, EPA showed signs that it was preparing to reverse course, at least somewhat. Both
supporters and opponents of the mandate said last spring that they expected the agency to increase the
volume requirements, though perhaps not as much as the industry’s supporters wanted. EPA
Administrator Gina McCarthy told House members in April that she was “hoping for a June timeline,”
adding: “We have certainly heard from many folks on the Hill here that they didn’t appreciate the proposal
that came out.”
“One of the things we tried to do with this proposal is to try to provide more certainty moving forward,”
McCarthy said at the time.
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EPA won’t finalize 2014 volumetric standards this year
Nov 21, 2014
The Environmental Protection Agency announced today it would not finalize the long-awaited 2014
volumetric standards before the end of the year.
EPA distributed the following notice:
“Today, EPA issued a notice announcing that it will not be finalizing 2014 volume standards under the
Renewable Fuel Standard program before the end of 2014.
“The proposed rule, issued in November 2013, generated a significant number of comments, particularly
on the proposal’s ability to ensure continued progress toward achieving the law’s renewable fuel targets.
“Due to the delay in finalizing the standards for 2014, and given ongoing consideration of the issues
presented by the commenters, the agency intends to take action on the 2014 standards rule in 2015.
Looking forward, one of EPA’s objectives is to get back on the annual statutory timeline by addressing
2014, 2015, and 2016 standards in the next calendar year.”
The American Coalition for Ethanol, Growth Energy and the Advanced Ethanol Council praised the
announcement, while the National Biodiesel Board and the Renewable Fuels Association expressed
disappointment about the uncertainty that no decision presents.
The American Coalition for Ethanol said the decision was victory for ethanol producers.
Brian Jennings, executive vice president for the group, said the decision means EPA will set the final
2014 volume standard in 2015, and try to get back on schedule in proposing the 2015 and 2016 blending
volumes.
“Big Oil came close to bullying the administration to completely rewrite the RFS this year so oil companies
could escape their legal responsibility to blend more ethanol in gasoline,” Jennings said.
“But thanks to thousands of comments from ACE members and other biofuel supporters, EPA wisely
chose to reconsider their ill-advised proposal which would have legitimized the so-called ‘blend wall,” he
said.
“While we will reserve full judgment until they finalize the 2014 targets next year, it certainly appears the
administration recognizes their proposed RFS changes were inconsistent with legislative history and the
Clean Air Act,” Jennings said.
“We will continue to work with the administration to ensure they use their authority to hold oil companies
legally responsible for making cleaner and less expensive renewable fuel choices, such as E15 and E85,
available to consumers.”
Growth Energy, which represents ethanol plant builders and operators, praised EPA, saying that the extra
will to draft the final rule “will ensure that EPA gets the final rule right.”
“The EPA made the appropriate decision today to not finalize the 2014 RVO numbers,” Growth Energy
CEO Tom Buis said in a statement. “We commend them for listening to all stakeholders.”
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“Today’s announcement is a clear acknowledgement that the EPA’s proposed rule was flawed from the
beginning,” Buis said.
The statement continued:
“There was no way the methodology in the proposed rule would ever work, as it went against the very
purpose and policy goals of the RFS. The EPA wisely decided not to finalize the rule so they could fix the
flawed methodology. Their initial proposal over a year ago was unacceptable and simply acquiesced to
the demands of Big Oil and their refusal to blend more renewable fuels into the marketplace.
“The decision to withdraw the rule is a win for the renewable fuels industry. While a further delay is
unwelcome news, at the end of the day, the most important aspect is that the EPA gets the final rule right.
“The EPA must implement the RFS as it was originally envisioned and supported by a bipartisan majority
in Congress. This policy was established to help improve our environment, create jobs that cannot be
outsourced and reduce our dangerous dependence on fossil fuels and foreign oil, all while providing
consumers with a choice and savings at the pump by increasing market access to cleaner burning
renewable fuels.
“Growth Energy stands ready to work with the administration to ensure that America stays on a path to
energy security and innovation by ending the decades old, shortsighted practice of ‘putting our eggs in
one basket’ by relying only on foreign oil and fossil fuels.
“I encourage the EPA to act swiftly to produce a final rule that ensures the methodology allows our
industry to move forward and invest in additional production of biofuels, which will help grow an American
industry that creates jobs, reduces our dependence on foreign oil and fossil fuels, reduces carbon
pollution and creates new economic opportunities all over the country.”
“This administration says over and over that it supports biodiesel, yet its actions with these repeated
delays are undermining the industry,” said Anne Steckel, National Biodiesel Board vice president of
federal affairs.
“Biodiesel producers have laid off workers and idled production. Some have shut down altogether,”
Steckel said in a statement.
“We know that fuels policy is complex, but there is absolutely no reason that the biodiesel volume hasn't
been announced. We are urging the administration to finalize a 2014 rule as quickly as possible that puts
this industry back on track for growth and puts our country back on track for ending our dangerous
dependence on oil. "We also urge them to move quickly on 2015 so that we don’t repeat this flawed
process again next year.”
“Pulling back on the 2014 RFS rule is the right thing to do at this stage in the game when it comes to
preserving the integrity of the program,” said Advanced Ethanol Council Executive Director Brooke
Coleman in a statement.
“While the cellulosic biofuel industry will not get the policy certainty it needs from this decision, it does
suggest that the administration is listening when it comes to our concerns about giving oil companies too
much power to avoid its obligations under the RFS going forward,” Coleman said.
“This battle was never about the 2014 volumes for the oil industry, and we appreciate the administration’s
willingness to pivot in the right direction this late in the game. The key now for advanced biofuel
investment is to move quickly to fix what needs to be fixed administratively so we can reestablish the RFS
as the global gold standard for advanced biofuel policy.”
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The Renewable Fuels Association was less pleased.
“Deciding not to decide is not a decision,” said RFA President and CEO Bob Dinneen.
“Unfortunately, the announcement today perpetuates the uncertainty that has plagued the continued
evolution of biofuels production and marketing for a year,” he said.
“Nevertheless, the administration has taken a major step by walking away from a proposed rule that was
wrong on the law, wrong on the market impacts, wrong for innovation, and wrong for consumers,”
Dinneen said.
“Moreover, it is clear that one of the reasons we find ourselves in this position is that the oil industry has
steadfastly refused to make the investments in infrastructure or allow their marketers to offer higher
ethanol blends like E85 or E15. In the absence of their dogged efforts to undermine the RFS, this would
be far simpler for EPA.
“The monopoly-protecting talking points of the oil industry notwithstanding, the RFS has been enormously
successful. It has compelled competition in motor fuel markets, lowered consumer gasoline costs, and
reduced the carbon footprint of transportation fuels. We look forward to working with the administration to
assure this critically important program is implemented consistent with congressional intent, to the benefit
of consumers and with the goal of advancing the evolution of biofuels production and marketing.
“Refiners will continue to resist the competition from biofuels. The RFS must be allowed to be the market
forcing mechanism it was designed to be. In the end, the verdict on today’s announcement can only be
made after a decision on a path forward for biofuels is identified.”
▪ Environmental Protection Agency — Notice of Delay in Issuing 2014 Standards for the Renewable Fuel
Standard Program
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EPA decision to not finalize RFS volumes 'sorely'
disappoints
By Ron Kotrba | November 21, 2014
The U.S. EPA announced Nov. 21 that the agency will not be finalizing the 2014 renewable fuel standard
(RFS) volumes before the end of the year, disappointing and baffling both renewable and petroleum fuel
producers. “Finalization of the 2014 standards rule has been significantly delayed,” the agency stated.
“Due to this delay, and given ongoing consideration of the issues presented by the commenters, EPA is
not in a position to finalize the 2014 RFS standards rule before the end of the year. Accordingly, we
intend to take action on the 2014 standards rule in 2015 prior to or in conjunction with action on the 2015
standards rule.”
EPA’s proposal last November to lower ethanol blend requirements and stall the biomass-based diesel
standard “has generated significant comment and controversy, particularly about how volumes should be
set in light of lower gasoline consumption than had been forecast at the time that the Energy
Independence and Security Act was enacted, and whether and on what basis the statutory volumes
should be waived,” the agency stated. “Most notably, commenters expressed concerns regarding the
proposal’s ability to ensure continued progress towards achieving the volumes of renewable fuel targeted
by the statute.”
The agency stated it is evaluating these issues in light of the purposes of the statute and the
administration’s commitment to the goals of the statute to increase the use of renewable fuels.
“This administration says over and over that it supports biodiesel, yet its actions with these repeated
delays are undermining the industry,” said Anne Steckel, vice president of federal affairs for the National
Biodiesel Board. “We know that fuels policy is complex, but there is absolutely no reason that the
biodiesel volume hasn't been announced. We are urging the administration to finalize a 2014 rule as
quickly as possible that puts this industry back on track for growth and puts our country back on track for
ending our dangerous dependence on oil. We also urge them to move quickly on 2015 so that we don’t
repeat this flawed process again next year.”
Despite record biodiesel production volumes in 2013 far surpassing that year’s RFS mandate of 1.28
billion gallons, the EPA proposed last year to hold the RFS biodiesel volume at the same volume for the
2014 -’15 program years.
Lisa Mortenson, CEO of Community Fuels, a commercial biodiesel plant in Stockton, Calif., told Biodiesel
Magazine, “EPA’s delay in announcing the 2014 RVO has caused significant damage to the biodiesel
industry—margins are deteriorating and demand has softened. Any sustained periods of regulatory
uncertainly hurt small and independent producers the most. Companies like Community Fuels are
focused solely on producing high-quality advanced biofuels that help clean the air, diversify our energy
sources, create family-supporting jobs and stimulate the local economy. In our case, our advanced
biorefinery is located in Stockton, Calif.—an area that needs the good jobs and economic stimulus
associated with our facility. We believe the good work that we do has strong bipartisan support. We are
sorely disappointed that the EPA has not issued RVOs to support the growth of the advanced biofuels
industry and that Congress has not reinstated the biodiesel blenders credit. We look forward to both of
these issues being resolved so that we can grow our business and increase our production and supply of
advanced biofuels.”
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Jack Gerard, CEO and President of oil lobby group the American Petroleum Institute said, “It is
unacceptable to expect refiners to provide the fuels Americans need with so much regulatory uncertainty.
This is an example of government at its worst.”
“The continued delays create great uncertainty for the biodiesel industry and soybean farmers and limits
the industry’s ability to invest and expand,” said Ray Gaesser, president of the American Soybean
Association. “The proposed rule was unacceptable and would have taken biodiesel backward from the
amounts produced and utilized in 2013.
However, ASA believes that EPA can and should finalize a 2014 rule that sets the biomass-based diesel
volumes at or above the nearly 1.8 billion gallons that were produced and consumed in the U.S. in 2013.”
EPA also stated the compliance demonstration deadline for the 2013 RFS standards will take place in
2015, and the agency will be making modifications to the EPA-Moderated Transaction System to ensure
that renewable identification numbers (RINs) generated in 2012 are valid for demonstrating compliance
with the 2013 applicable standards. It intends to modify EMTS to permit the trading and retiring of 2012
vintage RINs beyond Dec. 31, 2014. EPA will incorporate the modifications into EMTS version 4.1, which
is scheduled to be deployed by April 1, 2015. From Jan. 1, 2015, until the release of version 4.1, EMTS
will not be able to support 2012 RIN transactions. It added that 2012 RIN holding data stored in EMTS “is
safe and will be preserved even though it will not be accessible during the period from Jan. 1, 2015, until
the release of version 4.1.”
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Green fuels under EPA threat;
The White House, facing pressure from oil companies, may roll back renewable energy mandate.
By Evan Halper
As biotech masterminds and venture capitalists scramble to hatch a new generation of environmentally
friendly fuels that can help power the average gasoline-burning car, they are confronting an unexpected
obstacle: the White House.
Yielding to pressure from oil companies, car manufacturers and even driving enthusiasts, the Obama
administration is threatening to put the brakes on one of the federal government's most ambitious efforts
to ease the nation's addiction to fossil fuels.
The proposed rollback of the 7-year-old green energy mandate known as the renewable fuel standard is
alarming investors in the innovation economy and putting the administration at odds with longtime allies
on the left.
California Gov. Jerry Brown is among several prominent politicians in the West who have personally
appealed to the administration to drop the rollback plan championed by the Environmental Protection
Agency.
Sen. Barbara Boxer (D-Calif.) asked the president to stop the EPA from proceeding, warning in a letter
last month that the plan destabilizes state efforts to combat climate change and creates "loopholes for oil
companies" to avoid reducing pollution.
But the administration is balancing a robust agenda to fight climate change with an alternative fuels
program hobbled by setbacks and the messy politics of ethanol.
"This policy is flawed and broken," said Bob Greco, an executive at the American Petroleum Institute, an
industry lobbying group. "The advanced fuels that Congress intended to be made under it just don't exist
yet."
The alternative fuels mandate, which requires that escalating amounts of ethanol and other biofuels be
blended into the nation's gasoline supply, was meant to spur the creation of environmentally friendly
forms of the additives.
These advanced biofuels were supposed to eventually supplant -- or at least compete with -- corn
ethanol, which is spurned by environmentalists because of the amount of energy it takes to grow and
process corn, as well as its potential to drive up food prices.
Investors are bankrolling plans to manufacture biofuels from energy-efficient crops and agricultural waste
such as corn husks, algae and even forest brush. But manufacturing facilities have been slow to get up
and running. There is little of the advanced product on the marketplace.
Corn ethanol is filling the void. And more and more of it is getting blended into the gasoline supply under
biofuel quotas that increase each year.
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Auto enthusiasts, led by the American Automobile Assn., are protesting in Washington that ethanol
causes engine problems. The point is very much in dispute, but some auto manufacturers are threatening
to void warranties if the proportion of ethanol in standard gas continues to rise.
Such concerns are at the root of the EPA's decision to slow the program. EPA Administrator Gina
McCarthy says the nation's gas supply is saturated with as much ethanol as it can handle.
Environmentalists say the outlook is misguided. The fuel standard, they say, is among the
administration's most powerful tools to combat climate change. They want the EPA to use it to prod
innovation in the auto and gasoline industries that would allow for more biofuel at filling stations.
"It is disheartening to see how much potential to slow climate change we are missing out on by not doing
this," said Ryan Fitzpatrick, a clean energy advisor at Third Way, a Washington group that seeks
bipartisan policy solutions.
Back in the biotech labs of California and the agribusiness offices of the Midwest, innovators say the
EPA's course change is undermining their efforts at a crucial time. The nation's first two plants producing
ethanol made from corn cobs, husks and stalks began churning the fuel in Kansas and Iowa only weeks
ago.
Corn ethanol factories, including at least a couple in California, are rolling out modifications to their
facilities that enable them to manufacture fuel from such crops as sorghum, a fast-growing, droughttolerant grain.
Brown and Washington Gov. Jay Inslee, in a letter to the administration this month, cautioned that the
work of scientists focused on creating low carbon fuels out of algae and other fast-growing plant matter is
jeopardized by the EPA's approach.
Brown is particularly concerned because California has its own alternative fuel mandates hooked to the
state's landmark global warming law. They were meant to work in tandem with the federal rules.
The viability of at least 25 advanced biofuels projects receiving a total of more than $100 million in state
funding is threatened by the administration's plan, according to California regulators.
"We have the ability to produce this great product, but now we can't sell it," said Eric McAfee, a venture
capitalist and chief executive of Aemetis, a California ethanol firm that retrofitted a factory to make fuel
from sorghum.
"Our ability to increase production of this cleaner, domestic, renewable fuel is eliminated," he said. "It
disappears when we can no longer sell the product."
McAfee's firm, a diverse, $220-million operation selling ethanol around the world, will probably survive the
shift in federal strategy. Smaller players in California may not.
In San Diego, Jennifer Case, chief executive of New Leaf Biofuel, says her once-thriving company is
struggling. It manufactures biodiesel out of cooking oil from hundreds of industrial kitchens in Southern
California.
The federal guidelines require that such products be blended into some of the diesel sold in gas stations,
as well as sold in its pure form for vehicles equipped to run on it.
But the EPA proposal ratchets down the mandated amount. Gasoline manufacturers slowed their
purchases in anticipation that the rule would pass. Case said there was now an oversupply of the product
nationwide.
In May, she started laying off employees. Her staff is down to 15, less than half her workforce last year.
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"We are just kind of hanging on," Case said. "We could produce the fuel, but there wasn't demand for it.
... I couldn't afford to pay my employees."
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By Sending Mixed Signals to Industry, White House
Imperils Growth of Clean Energy
By Anne Steckel
Oct. 20, 2014
Vice President Joseph R. Biden Jr. recently told an energy conference on Wall Street, “I’m no investment
banker, but I wouldn’t go long on investments that lead to more carbon pollution. I’d bet on clean
energy.”
The vice president’s comments are part of an ongoing effort by the President Barack Obama
administration to aggressively tackle climate change by sending American industry a clear message:
Investments in carbon-intensive fossil fuels will carry increasing risks while clean energy will show a
good return on investment.
But when it comes to renewable fuels, the administration is sending mixed signals that could have
negative ramifications for years to come.
I’m referring to the administration’s curveball proposal to cut the volumes under the Renewable Fuel
Standard, a market-based policy that requires petroleum companies to blend a growing portion of clean,
renewable fuels into their carbon-heavy petroleum fuels. The proposal took a hatchet to a wide variety
of biofuels, but particularly surprising was the effective cut to biodiesel — the diesel replacement fuel
made from a variety of plant oils, recycled cooking oil and animal fats.
Based on the White House’s efforts to spur American industry to invest in clean energy, one would
assume the Obama administration is eager to continue growing the biodiesel sector. After all, it is the
first Environmental Protection Agency-designated Advanced Biofuel to reach commercial-scale
production nationwide. According to the EPA’s own analysis, it reduces greenhouse gas emissions by 57
percent to 86 percent compared to petroleum diesel. That’s more than double the 30 percent reduction
goal laid out in the administration’s recent proposal for power plants.
Further, Obama has vocally supported biodiesel throughout his political career. While campaigning for
re-election in 2012, he assured the biodiesel industry it was in good hands under an Obama White
House. Entrepreneurs and investors took the president at his word and responded by investing millions
of dollars in plant expansions, new technologies and larger workforces.
And the efforts were clearly working. When Congress created the RFS with bipartisan support in 2005,
biodiesel was a niche fuel with around 100 million gallons in production. Nearly a decade later, biodiesel
producers in 2013 built a record U.S. market of nearly 1.8 billion gallons. Anyone filling up a diesel
vehicle in America is likely getting a biodiesel blend.
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So when the EPA proposed cutting biodiesel production back to 1.28 billion gallons for 2014, the
industry was stunned. Biodiesel producers understood such a sharp contraction would force many
companies to close their doors, lay off employees and watch their investments go up in smoke.
The proposal also sent a signal to energy investors and the market that the administration’s support for
the RFS could be on shaky ground. Biodiesel producers nationwide have scaled back production, delayed
expansions, sent workers home and gone into wait-and-see mode. Some have shut down altogether as
markets weakened and capital dried up. This damage will only grow if the proposed RFS is finalized into
law.
It’s almost the end of the year, yet no final decision has been made on the 2014 RFS. The delays have
been disastrous, but the industry maintains hope that the White House will correct its course and issue a
final rule on biodiesel that reflects Obama’s previous support and gets production back on track.
If not, many investors and entrepreneurs will lose the investments the White House urged them to
make, and we’ll burn hundreds of millions of gallons of additional petroleum diesel in the years to come.
That would not just hurt the biodiesel industry, it would undermine the White House’s entire clean
energy push as would-be investors sit on the sidelines fearing that a “here today, gone tomorrow” policy
could strike them too.
Anne Steckel is the vice president of federal affairs at the National Biodiesel Board.
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September 9, 2014
Why the Wait on Renewable Fuels?
By Byron Dorgan
Our government's policy on renewable fuels has been clear for a decade, since the Renewable Fuel
Standard (RFS) became law in 2005 with overwhelming bipartisan support in Congress and the signature
of President George W. Bush. These standards required fuel makers to blend renewables into the
products they sold. "Believe in it, invest in it, and count on it!" That's what the American people heard
from both political parties.
I, along with Senators Jim Talent and Tim Johnson, offered the legislation creating the RFS. President
Obama, while serving in the Senate, was also a leader in the cause: He helped strengthen standards for
biodiesel in legislation he wrote in 2007 with former Republican senator Dick Lugar.
But late last year, while the EPA was working to establish the 2014 guidelines for the RFS, a tentative
proposal leaked that would reduce previously established targets for renewable fuels. To this day -months after a final decision should have been made -- the administration has not signaled what it intends
to do other than to vaguely suggest that the initial proposal will be strengthened.
The proposal was met with aggressive criticism, not just from the renewable-fuels industry but also from
lawmakers in both parties who knew that the proposal threatened thousands of jobs in their states. Just
before the August congressional recess, ten senators pushed back, asking the White House why it would
propose cutting volumes of biodiesel, the most successful EPA-designated advanced biofuel. This is a
renewable fuel that the EPA says reduces carbon emissions by more than 50 percent relative to
conventional diesel.
In the meantime, the administration's delays have spooked investment and raised questions about the
government's commitment to renewable energy, particularly advanced biofuels. A survey by the National
Biodiesel Board released in May showed that 78 percent of the nation's biodiesel producers have cut
back production and more than half have been forced to idle production or shut down plants altogether.
And, contrary to a popular belief, backing a strong renewable-fuels industry is in no way at odds with
supporting continued growth in domestic oil production. The new oil-and-gas discoveries and increased
production here at home are good news for our country. But so is the work we've done to build a
renewable-fuels industry, which provides fuel diversity and environmental benefits while strengthening our
energy security and national security.
I am hopeful that the administration will tell the world that America's goals have not changed and will
make the adjustments necessary to further America’s leadership in the renewable fuels industry.
Byron Dorgan represented North Dakota in the U.S. Senate from 1992 to 2011 and in the U.S. House
from 1981 to 1992. He now is senior policy adviser at Arent Fox, whose clients include the National
Biodiesel Board.
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U.S. biodiesel industry suffers as biofuel rule
delays drag on
BY AYESHA RASCOE
Aug 20, 2014 12:12pm EDT
WASHINGTON - The long wait for final 2014 federal biofuel use targets has compounded troubles for
U.S. biodiesel producers already hit by the Obama administration's preliminary plan to slash renewable
fuel requirements.
Nearly nine months behind schedule, 2014 targets from the Environmental Protection Agency could
arrive in September at the earliest.
In the meantime, biodiesel producers have been squeezed by falling prices, as refiners and blenders
delay purchases until they see a final mandate.
Debate about the future of the Renewable Fuel Standard has mostly focused on ethanol. But the smaller
biodiesel industry has arguably been hurt more by proposed production cuts, said Anne Steckel, vice
president of federal affairs at the National Biodiesel Board.
"The longer we wait, the worse the biodiesel industry is impacted," Steckel said.
The RFS requires increasing amounts of renewable fuels - including ethanol, produced mostly from corn,
and biodiesel, often made from soybeans - to be blended into U.S. gasoline and diesel supplies each year
through 2022.
The preliminary 2014 rule, announced in November, held the biodiesel target at the 2013 level of 1.28
billion gallons.
Producers had asked for a target of 1.7 billion gallons after producing nearly 1.8 billion gallons in 2013,
and warned in a letter to President Barack Obama that a lower target would imperil billions of dollars in
investments and thousands of jobs.
Renewable Energy Group, one of the few publicly traded biodiesel producers, reported a 13 percent
drop in second-quarter revenues as lower prices offset an 11 percent increase in volume. Its shares have
languished.
The company said the average price per gallon of biodiesel sold in the second quarter was $3.67, 21.4
percent lower than the same period in 2013.
A recent NBB survey found that nearly 80 percent of producers had cut back output this year and more
than half had idled production or shut down a plant for a time. Many have cut their workforces as well.
"It's more difficult for smaller producers who don't have as much capital to take the risk of producing,
not knowing what the consequences are," said Pete Moss, president of Frazier, Barnes and Associates, a
biofuel consulting firm in Memphis.
Although the industry is confident it could meet a higher target, the EPA's delay means producers would
have to quickly ramp up production late in 2014.
Cramming production into the final weeks of the year disrupts the market, Moss said.
The market is in "disarray," Moss said. "We are fully capable of producing higher numbers, but we really
can't without some guidance."
Without the export market enjoyed by corn ethanol producers, or built-in demand from refiners that
use ethanol as a cheap source of octane, some biodiesel makers have already been forced out of
business.
More could shut if persisting delays leave the industry guessing at the future direction of U.S. policy, said
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Jeff Haas, chief executive of Seattle operations for General Biodiesel, which produces fuel from recycled
cooking oil.
"We've been sailing across an ocean without a compass," Haas said.
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Biodiesel dreams on hold in California
EPA’s reconsideration of renewable-fuel quota impeding future of California’s
small biodiesel operations
By Morgan Lee
June 13, 2014
SAN DIEGO – Just six months ago, the future burned bright for a Barrio Logan refinery that collects used
cooking oil from hundreds of San Diego-area restaurants and turns it into motor fuel for standard diesel
engines.
New Leaf Biofuel was on pace to produce 5 million gallons a year — the outcome of years of planning, a
hiring spree, state grants and more than $1 million in private investment. The company provides fuel to
military bases, San Diego city and county governments, and hundreds of school buses at the San Diego
Unified School District.
Those vaunted ambitions have been put on hold, however, as the Environmental Protection Agency
reconsiders how much renewable fuel can be mixed into the supply chain that ends in gas tanks across
the nation.
The agency has proposed keeping last year’s quota for biodiesel — 1.28 billion gallons — through 2015,
and sharply reducing additional allowances for biodiesel under “advanced” biofuels that are proven to
reduce greenhouse gas emissions by 50 percent.
Last year, the biodiesel industry produced nearly 1.8 billion gallons, and had been poised to expand.
The new biodiesel quotas are part of a larger debate over whether to reduce the total set-aside for
renewable fuel — a market dominated by corn-based ethanol.
The EPA intends to ward off a collision with the “blendwall” — the disputed point at which an increased
concentration of non-fossil biofuel threatens to become incompatible with older car engines and fueling
stations. A gallon of U.S. “gasoline” typically contains 10 percent ethanol — the limit for cars
manufactured before 2001.
The blendwall, whether concrete or conjured, is a symptom of the shrinking market for gasoline and
diesel, a consequence of more-efficient vehicles and long-term economic and cultural trends.
A surge in domestic oil production, meanwhile, has blunted concerns about dependence on foreign oil
that prompted the introduction of escalating renewable fuel quotas under President George W. Bush.
The EPA proposal would reduce the overall renewable fuel mandate at 15.21 billion gallons in 2014,
down from 16.55 billion gallons in 2013. A final decision could come this month.
That panorama has pitted crude-oil refiners against corn-belt distilleries in a high-stakes lobbying battle.
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CAUGHT IN CROSSFIRE
California’s small biodiesel operations, which take a bite out of local pollution and carbon emissions,
may become an unintended casualty of that bare-knuckles fight between Big Oil and Big Corn, according
to Jennifer Case, CEO of New Leaf Biofuel.
In physical terms, biodiesel production has ample room to grow in the U.S. without hitting the diesel
vehicle blendwall — a 5 percent biodiesel concentration.
But Case says the EPA proposal already has undermined the market price for renewable fuel credits —
known as RINs, or renewable identification numbers — that define the bottom line for biodiesel
producers.
Layoffs, pay cuts and idle production hours have ensued at New Leaf.
Nearly 80 percent of U.S. biodiesel producers have scaled back production this year and workforce
reductions are widespread, according to a survey by the National Biodiesel Board in Washington, D.C.
The trade group attributes the downturn to both the EPA proposal and uncertainty about renewal of the
federal biodiesel income-tax credit, worth up to $1 a gallon, which expired at the end of 2013.
“There is simply no financial benefit to turning cooking oil into biodiesel right now, and if we don’t stop
making fuel, we will run out of cash by Sept. 1,” Case wrote to a congressional official in Washington in
advance of a face-to-face meeting. “Not only is this devastating emotionally for us and our employees,
from a financial standpoint, it’s such a waste.”
OIL LOBBY BACKS EPA
In the name of oil importers and refiners, the American Petroleum Institute and American Fuel &
Petrochemical Manufacturers contend that the health of the U.S. economy is in jeopardy without a
waiver to reduce renewable fuel volumes.
The oil lobby has applauded the EPA proposal and asked it to reduce renewable set-asides further.
Refunds, it says, are due to businesses that bought credits for cellulosic ethanol (made from corn stalks
but not corn itself) that never materialized.
Cost-effective production of cellulosic ethanol would defuse competition between renewable energy
and food production, but the U.S. is only slated to produce 17 million gallons this year, equal to about
0.01 percent of the nation’s fuel supply.
In the predawn hours, van-sized tanker trucks fan out across San Diego to suction off used cooking oil
from drums positioned outside restaurants and taverns.
The oil is refined into both biodiesel and glycerin by New Leaf at an industrial lot on Newton Avenue,
previously home to a propeller maker for nearby shipyards on San Diego Bay.
Here and across the state, California energy regulators have funneled more than $100 million in public
funding into the fledgling renewable fuel sector — with more than $30 million dedicated to biodiesel.
The grants from the California Energy Commission continue at a pace of $20 million a year.
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By law, the commission does not fund biofuel refineries for traditional corn-based ethanol — a response
to unacceptable emission levels when consideration is given to energy expended on farming and lower
fuel economy for vehicles running on ethanol.
The local biofuel sector also is underwritten by the state’s low carbon-fuel standard and an emerging
cap-and-trade market for pollution permits. Those programs are part of the state’s push toward
reducing greenhouse gas emissions to 1990 levels by 2020.
The California Energy Commission and the Air Resources Board have urged the EPA to maintain or
expand quotas for biodiesel and advanced biofuel, to protect the state’s own investments in more than
25 related projects.
GROWING PAINS
State grants include a $2.6 million award in 2013 to Buster Biofuels in Escondido, which broke ground in
October on a biodiesel refinery.
Founder and CEO Buster Halterman, an accomplished professional skateboarder from Leucadia, is lining
up high-profile customers, including a deal to fuel lawn mowers for the San Diego Padres with a 20
percent biodiesel mix. More than 1,000 restaurants are expected to provide used cooking oil.
Halterman was optimistic about the future of small-scale biodiesel providers, based on margins between
used cooking oil and biodiesel, along with California’s incentives. “Every industry has its challenges and
growing pains,” he said. “I think boutique biofuel companies like us will have some staying power.”
Seasoned staff at New Leaf, founded in 2006, describe a more-tenuous business proposition.
Securing used cooking oil can be a juggling act, and New Leaf buys three-quarters of its feedstock
through intermediaries at market prices.
The proposed EPA changes, New Leaf CEO Case said, would likely pit recycled biodiesel against biodiesel
made directly from soybean oil, along with imported Brazilian sugarcane-based ethanol, whose
emissions qualify it for advanced-biofuel status.
Mike Lewis, co-founder of Pearson Fuels, a major distributor of renewable and alternative fuels in
California, said the biodiesel industry in particular has been blindsided by the EPA proposal. He knows
that public opinion frowns on fuel subsidies of all kinds, but people also want predictable regulations.
“A lot of biodiesel businesses built plants and invested based on these regulations,” he said. “It wasn’t
unexpected that the EPA would be questioning the ethanol mandate, but it was unexpected that they
would step back on advanced biofuels.”
morgan.lee@utsandiego.com
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Rhode Island sets example for feds on
biodiesel
Published: July 28, 2014 01:00 AM
BY STEVEN J. LEVY
Beginning this month, Rhode Island officially launched a new policy for heating oil in the state to contain
at least 2 percent biodiesel. As stated by Sen. Susan Sosnowski (D-South Kingstown), the state’s
requirement is a recognition of the national security, environmental and economic benefits that come
from expanding the use of a domestically produced, cleaner-burning, renewable energy source.
“The General Assembly’s top priority has been job creation this year, and this legislation definitely has
that in mind,” Senator Sosnowski said last year. “The creation of green jobs causes a positive ripple
effect throughout various aspects of our lives, from the economy to the overall quality of life. I think the
General Assembly’s mere recognition of that is going to put Rhode Island on the map regarding the
future of renewable energy.”
Meanwhile, on the national level, it is notable that, back in 2006, it was then-Illinois Sen. Barack Obama
who introduced legislation to add a biodiesel component to the Renewable Fuel Standard (RFS), which
requires a minimum amount of biofuels to be blended into the country’s transportation fuels.
Addressing America’s addiction to oil, he implored his colleagues not to settle for “piecemeal, bite-sized
solutions to our energy crisis.”
“We need a national commitment to energy security,” he continued. “Now is the time for serious
leadership to get us started down the path of energy independence.”
As a result of Obama’s prodding, his proposal became a major component of the revised RFS when it
was enthusiastically passed in 2007 with bipartisan support in Congress, and the biodiesel industry has
steadily been building momentum ever since.
So it is with a mix of frustration and irony that the biodiesel industry — now the makers of America’s
first advanced biofuel to reach full market penetration — is facing a curious RFS proposal released last
fall by President Obama’s own administration.
After a record of nearly 1.8 billion gallons in 2013, the Environmental Protection Agency proposed an
RFS volume for biodiesel of just 1.28 billion gallons for 2014 — representing a cut of at least 30 percent
from last year’s actual production. The proposal has languished since being released in November and
still hasn’t been finalized, but the fallout is already occurring.
A recent industry survey found that nearly 80 percent of U.S. biodiesel producers have scaled back
production this year and more than half have idled production at a plant altogether, according to a
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recent industry survey. Additionally, two-thirds of producers said they have already reduced or
anticipate reducing their workforce as a result of the downturn.
The collateral damage is extensive. Produced from a variety of co-products and waste products,
biodiesel producers are predominately located in small towns and rural districts just now climbing out
from under the recession. As result, the slowdowns and job cuts from biodiesel plants often have an
outsized effect on their communities.
For all of us, the EPA’s proposed reduction for replacing fossil fuels with cleaner burning biodiesel
dramatically affects air quality. Biodiesel is less toxic than table salt and, according to the EPA’s own
figures, reduces carbon emissions by as much as 86 percent compared with petroleum diesel. Since
2005, biodiesel has reduced lifecycle greenhouse gas emissions by 85.6 billion pounds — the same
impact as removing 6.2 million passenger vehicles from America’s roadways.
Perhaps most important is the need for America to diversify its transportation fuels portfolio. Because
the United States, according to the White House, has only a small a fraction of the world’s known oil
supplies, the price of oil — and ultimately the price at the pump — is priced globally as an
internationally traded commodity. Supporting American renewable fuels helps inject competition into
the marketplace to drive down fuel prices.
The administration appears to be nearing a final decision on the RFS, with EPA officials suggesting they
have recognized that the proposal was flawed and that the final rule will more accurately reflect the
president’s support for clean renewable fuels. We hope they look to Rhode Island’s leadership on the
issue as a guide.
After all, that legislation introduced by President Obama before he was elected to the White House
envisioned that biodiesel would annually replace 2 billion gallons of petroleum diesel by 2015. With
continued support for a strong and growing RFS, America’s biodiesel producers stand ready to make his
ambitious goal a reality — perhaps even a little ahead of schedule.
Steven J. Levy is chairman of the National Biodiesel Board, based in Jefferson City, Mo., a trade
association representing the biodiesel industry.
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Ukiah biofuel company to close
By Glenda Anderson
July 16, 2014
The North Coast’s only commercial biodiesel manufacturer has stopped producing vehicle fuel and is
preparing to close its retail outlet, a reflection of the perils of running a small business in an industry
subject to unsteady federal subsidies.
For more than 13 years, Yokayo Biofuels has collected used cooking oil from restaurants, transformed it
into biodiesel, then sold it at its south Ukiah pumps and to other fuel outlets.
It’s weathered tough times in the past but a series of financial hits this time have dealt the alternative fuel
maker what appears to be a lethal blow.
“We’re in the process of closing down. We’re selling off our remaining fuel,” said Kumar Plocher, Yokayo
Biofuels’ chief executive officer and co-owner.
The primary culprit for Yokayo was a promised bank loan that failed to materialize, voiding a $1.86 million
matching state expansion grant after the company already had spent its financial cushion on preparatory
engineering work, Plocher said.
That cushion, about $400,000, could have protected the company from subsequent financial hits —
including suspension of a federal tax credit and stagnation of the Renewable Fuel Standard, which sets
minimum biodiesel production levels. By leaving the production standard static, the government
effectively slashed the amount of money Yokayo Biofuels could earn selling carbon credits to other
companies, Plocher said.
At $1 a gallon, the tax incentive alone was worth about $30,000 a month to the company, Plocher said.
The incentives are aimed at bringing down the price of biodiesel in order to make it attractive to more
consumers and move it from a niche market to mainstream. Without them, biodiesel can be significantly
more costly than regular diesel, warding off customers.
Yokayo is not alone in suffering from the cutbacks.
The “policy setbacks in Washington are taking a major toll” on the biofuel industry, according to the
Missouri-based National Biodiesel Board. The board represents an industry that produced nearly 1.8
billion gallons of fuel last year and employed more than 62,000 people whose salaries are valued at $2.6
billion, said board spokesman Kaleb Little. Yokayo Biofuels had employed up to 20 people.
A recent survey by the trade group indicated that 80 percent of biodiesel producers have scaled back
production and more than half have idled a production plant since subsidies were cut. Small producers
have been hit the hardest, Little said.
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In late May, 117 biodiesel companies and affiliated businesses in 41 states signed the organization’s
letter calling on President Barack Obama to boost the biodiesel standard.
About a third of the organization’s 250 members utilize used cooking oil, like Plocher. Others may use
animal fats or a mix of fats and oils. Adding to the manufacturing costs is the demand for biodiesel
components. As biodiesel became more popular, restaurants began selling their used oil, whereas they
were once happy to simply avoid paying to have it collected.
Plocher said he has made arrangements that will keep his restaurant oil suppliers with pickup service
should he close his business for good.
There has been discussion in Congress about reviving the tax credit but it’s not yet been reinstated, noted
Jeff Buss, an official with the U.S. Environmental Protection Agency.
“The debate is always about whether the biofuel market is mature enough to stand on its own,” he said.
While subsidies have detractors, the National Biodiesel Board said the fledgling industry needs help
getting established and that it’s only fair.
“While the petroleum industry has received nearly 100 years of incentives and tax breaks from the
government, there has only been a federal biodiesel tax credit since 2005,” Little said.
Plocher said he’d expected his planned expansion and modernization of Yokayo Biofuels would make it
more efficient and profitable so it could survive without the seesaw subsidies. While he is angry with the
Obama administration and for a general failure to place more emphasis on researching and developing
alternative fuels, Plocher also blames himself for the company’s financial problems.
“I’m not the greatest business operator,” he said.
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TheEagle: Don't let the EPA destroy America's biodiesel efforts
Posted: Tuesday, June 10, 2014 12:00 am
By DAN BROWNE Special to The Eagle
Liquid fuel is the economic lifeblood of our civilization and while we scour the globe for increasingly
impenetrable petroleum reserves, it is critical that we develop the next generation of advanced biofuels
technologies.
The advent of advanced biofuels will change forever the global energy landscape and it is imperative for
the United States to support the implementation of these technologies to capitalize on the opportunity
at hand and maintain American leadership.
With the Environmental Protection Agency possibly to make damaging changes to a keystone policy
supporting domestic biofuels, now is an especially important time to pay attention.
The Renewable Fuels Standard is a piece of legislation that has proven highly effective in encouraging
the adoption of advanced biofuels. For those unfamiliar with the standard, this legislation ensures
diversity in our fuel supply by requiring fuel suppliers to offer renewable fuel in addition to their
petroleum offerings. If oil companies choose to offer only non-renewable fuels to their customers, they
can instead purchase credits from biofuel producers in compliance with the program.
The Renewable Fuels Standard not only supports the development of renewable fuels and creates more
choice at the pump for consumers; it also sends a signal to international oil cartels that the U.S. is
committed to producing our own domestic fuels.
Cartels such as the Organization of Petroleum Exporting Countries cannot directly increase the price of
renewable fuels the way they control the global price of crude oil. Nor can OPEC manipulate prices to
drive domestic producers out of business if America has a policy such as the Renewable Fuels Standard
to ensure fuel diversity.
There is no better example of the success of this strategic legislation than the biodiesel industry. In the
beginning, there were clever farmers with excess soybean oil and thirsty tractors. Soon came the
chemists and engineers who took biodiesel beyond tinkering. It was not long before commercial
enterprises were established to profitably produce biodiesel.
Today, the industry is firing on all cylinders, beating production targets, building diverse partnerships,
and developing cutting edge technologies to ensure the highest quality fuel.
Tens of thousands of Americans are benefiting from the jobs created by this burgeoning industry; and
every American benefits from the prosperity and energy security that results from investing in
renewable, American-made fuels. This has been possible in part because of the strong legislative
support of the Renewable Fuels Standard.
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It is to be expected that certain economic interests view the Renewable Fuels Standard as unwelcome
government interference. Torrents of expensive lobbying campaigns have been unleashed to tear apart
the standard.
The people with deep pockets in the well-established oil and gas industry cry that carbon and energy
policy should not interfere with the right to profit, which they do very well, often at the expense of the
public interest. They cherish the "free market" above anything that makes sense for energy security and
sustainability. They spew misinformation and downright deception, threatening the American public's
greatest opportunity for energy independence and freedom from reliance on foreign energy.
Without the fuel diversity created by the Renewable Fuels Standard, the free market is weakened and
we're vulnerable to international, price-fixing cartels such as OPEC.
While policy is not without its challenges, the answer is not to undercut the biofuels industry and stomp
it out of existence. As we have seen in the biodiesel industry, problems can be solved through candid
collaborative efforts among invested parties. This great American tradition of open dialogue and factbased policy results in solutions that strengthen us as a whole, as opposed to lining the pockets of a few
monopolistic kingpins.
Thus the Renewable Fuels Standard must remain a strong piece of legislation. Gallon for gallon, biodiesel
supports more domestic jobs than petroleum diesel. Biodiesel is sustainable and fortifies our energy
security in an increasingly volatile world.
It makes sense to use as much biodiesel as we can produce.
Last year, the biodiesel industry produced 1.8 billion gallons of American-made fuel. If the
Environmental Protection Agency slashes the Renewable Fuels Standard and cuts the biodiesel market,
many jobs and significant revenue will be lost, as well as hard-earned momentum. We should not let
greed supersede the common good.
Send a message to the agency: Support the Renewable Fuels Standard and you support American jobs,
innovation and leadership in the global energy market.
• Dan Browne is a co-chair of the Next Generation Scientists for Biodiesel and graduate research
assistant in the department of biochemistry & biophysics at Texas A&M University.
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Local, national biofuel production
threatened by EPA
June 2, 2014
By Jesse Farthing
The Environmental Protection Agency’s proposed Renewable Fuels Standard, which the administration
expects to finalize in June, could severely impact biodiesel production locally and nationally, says Blue
Ridge Biofuels founder Woody Eaton. The Asheville-based business creates about 1 million gallons of
biodiesel each year and works with about 1,000 local restaurants and companies.
According to a press release from Biodiesel.org, the RFS proposal would maintain a biodiesel standard of
1.28 billion gallons — the same as 2013 — for 2014-15. This number falls significantly below the actual
2013 production of 1.8 billion gallons. Biodiesel companies expected to reach 2 billion gallons in 2015, an
ambitious goal introduced by legislation from then-senator Barack Obama in 2006.
Historically, the EPA has raised the standard each year to keep up with production. Biofuel companies
have always exceeded the standard and the excess product is rolled over into the following year’s
standard.
The EPA also dictates how much biofuel needs to be blended into fossil fuels each year and they track it
using a “Renewable Identification Number” system. In this system, each batch of biofuel produced is
assigned a RIN, which biofuel companies sell to the petroleum industry for the purpose of blending.
Since the RFS proposal in November 2013, sale prices to petroleum companies have tanked.
“If they don’t bring up the volumes, prices will continue to fall and it will be harder to be profitable,”
Woodrow Eaton, founder of Blue Ridge Biofuels in Asheville, said.
Eaton has produced a letter to send to President Obama, signed by more than 50 businesses and
individuals, in a grassroots effort to bring attention to the plight of the industry and those it will affect. The
letter encourages the administration to raise the standard and extend tax credits to biofuel companies.
Blue Ridge Biofuels produces nearly 1 million gallons of biodiesel — a cleaner-burning, sustainable diesel
substitute created with soybean oils, recycled cooking oils and animal fats — each year and services
approximately 1000 used cooking oil collection clients according to Eaton’s letter.
“Our restaurants receive payments from BRB for used cooking oil, our stations carry BRB’s biodiesel
products and our vehicles and equipment run on their fuel,” the letter reads. “We stand behind locallymade biodiesel that reduces the harmful effects of greenhouse gasses and creates economic
opportunities in our region.”
Over 100 biodiesel companies and other businesses that utilize biodiesel products nationwide also sent a
letter to to the president echoing the same concerns. The letter says that significant damages to the
industry will occur if the RFS passes in its current form.
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Both call on Obama to restate his previous support for the biodiesel industry. In addition to the 2006
legislation, Obama said 2008 that biodiesel was “an example of how we can create jobs, new industry,
save our environment [and] recycle products that might otherwise go to waste.”
According to a survey of biodiesel producers, around 80 percent have scaled back production and nearly
half have halted production completely. Many have already reduced or anticipate reducing the number of
employees because of the RFS proposal.
Blue Ridge Biofuels is still producing, but Eaton said he is very concerned with the current policy.
“We have already laid off some employees and we expect things to get worse,” Eaton said. “[It] could
potentially shut down a large part of the industry. I don’t want to say it will shut BRB down because we’ve
always been pretty scrappy and able to weather these storms but… you’re going to see a lot more
shutting down.”
The Cellulosic Biofuel Producer Tax Credit, allowing biodiesel producers to get a $1.01 per gallon tax
credit and meant to spur to production of more biofuels, has had a shaky, uncertain run over the past
several years. Initially scheduled to lapse in 2009, the credit was extended to the end of 2012 when it
was again scheduled to lapse, before being extended again until the end of 2013. The Senate Finance
Committee has put forward a bill to extend the credit through 2015, but it’s unlikely to go to vote before
November.
Eaton said it’s definitely been challenging not knowing whether the administration will continue to extend
the tax credits.
“You can imagine it’s hard to run a business when, from one year to the next, you can lose up to 25
percent of your revenue,” he said. “They don’t even have to do anything.”
Committee Chairman Ron Wyden has said that this will be the last tax extension bill the committee will
take up as long as he is chairman.
“Most people agree that we need to start moving away from fossil fuels and finding renewables better for
the environment and better for local economies,” Eaton said. “But we definitely need federal support.”
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KIOW: Representative Braley Tours Mason City Biodiesel Plant
Mason City – June 27, 2014 – Members of Iowa’s biodiesel industry hosted Congressman Bruce Braley
(IA-01) at the REG Mason City biodiesel plant on Friday.
The plant is one of 12 in the state hanging in the balance as they await the Obama Administration’s final
Renewable Fuel Standard volumes for 2014. The current RFS proposal would set biodiesel volumes at
1.28 billion gallons, a sharp cut from last year’s actual production of nearly 1.8 billion gallons. REG
bought the 30-million gallon per year nameplate capacity facility in 2013, and began a $20 million
upgrade of the plant shortly after restarting it.
“REG generated 25 jobs that didn’t exist in Mason City a year ago, and we’ve begun this significant
investment on the promise of continued strong federal policy,” said REG Vice President of
Manufacturing Brad Albin. “We decided to invest in this plant during a record-breaking year for biodiesel
production and want to continue growing our industry that produces cleaner-burning, American fuel.”
The Environmental Protection Agency is reportedly in the final stretch before submitting final RFS
volumes to the White House. The biodiesel industry has urged the Administration to strengthen the
biodiesel volumes to continue growing this domestic energy industry.
“We’re grateful to Rep. Braley for his support on renewable fuels, and we’re asking for his help
specifically in increasing the proposed biodiesel volume to at least 1.7 billion gallons,” said Grant
Kimberley, executive director of the Iowa Biodiesel Board. “Iowa is the leading biodiesel state, which
generates jobs and economic advancement. The future of these promising businesses is threatened.”
A recent national survey of producers conducted by the National Biodiesel Board found that more than
half have idled a plant this year and 78 percent have reduced production from last year. Nearly twothirds – 66 percent – have already laid off employees or anticipate doing so.
Braley, a Democrat, is running for the U.S. Senate seat being vacated by Tom Harkin. Biodiesel – made
from a variety of resources including soybean oil, recycled cooking oil and animal fats – is the first EPAdesignated Advanced Biofuel to reach commercial-scale production nationwide. The Iowa Biodiesel
Board is a nonpartisan state trade association representing the biodiesel industry.
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E&E Daily: 50 bipartisan House members urge Obama to
boost RFS target
Amanda Peterka, E&E reporter
More than 50 bipartisan House members today called on President Obama to raise this year's target for
renewable fuel made from animal fats, used cooking grease and soybean oil.
The lawmakers said that the biodiesel industry has the capacity to produce more than 1.28 billion
gallons, the target included in a proposal by U.S. EPA last November. The agency is rumored to be
considering maintaining the target in a final rule that could be released sometime this summer.
"We believe it will have a terrible impact on the domestic biodiesel industry, and could lead to the
closure of numerous biodiesel plants, with smaller producers taking the largest impact," the 52 House
members wrote.
Reps. Collin Peterson (D-Minn.) and Adam Kinzinger (R-Ill.) led the effort.
EPA sets a yearly target for biodiesel and other renewable fuels through the renewable fuel standard.
Refiners are required to meet the targets by either blending in the renewable fuel or by purchasing
credits known as renewable identification numbers.
Last year, the biodiesel industry produced 1.8 billion gallons of fuel. According to an industry survey,
EPA's proposal to leave the target at 1.28 billion gallons for the 2014 compliance year has contributed to
widespread shutdowns and layoffs among biodiesel companies (Greenwire, May 14).
"We believe now is not the time for a critical shift in biodiesel policy," the lawmakers' letter said.
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BIODIESEL INDUSTRY PRESSES OBAMA ON RFS
By Erica Martinson
May 29, 2014
The biodiesel industry wrote to President Barack Obama Wednesday about its concerns that EPA won’t
increase its proposed volume mandate for biodiesel in its final 2014 Renewable Fuel Standard.
“It appears that the 2014 RFS Final Rule may be sent to [the White House Office of Management and
Budget] later this week, and we have received indications suggesting that the EPA and the Obama
Administration are considering leaving the Biomass based diesel program at 1.28 billion gallons while
perhaps adopting a small increase in the initial proposal for the overall Advanced Biofuels standard,”
said a letter from the National Biodiesel Board.
The biodiesel industry has already seen a slowdown in its output compared to 2013, when its production
overshot EPA expectations. The industry has also been hampered by the expiration of a $1 per gallon tax
credit at the end of 2013.
“You need to know that this decision would have lasting, damaging consequences for the jobs and
economic activity supported by the U.S. biodiesel industry, while undermining your efforts to boost U.S.
energy security through clean, domestic energy production,” the letter said.
EPA Administrator Gina McCarthy has said she hopes to have the final rule out in June, though it has not
yet gone to OMB for interagency review.
— Erica Martinson
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Future uncertain for Ukiah biodiesel
producer
By JUSTINE FREDERIKSEN
May 23, 2014
Two years ago, the future looked bright for Yokayo Biofuels, a biodiesel producer based in Ukiah, when
it received a large grant from the state to launch a project that would radically improve its operations.
"The grant was to install an enzymatic process that would increase our capacity by about 75 percent,
which would dramatically increase the yield we get, and dramatically change the cash flow for our
company -- by thousands more dollars a month," said Kumar Plocher, the company's CEO, explaining
that the new process would create a pure glycerin product that would be "worth more than biodiesel"
and require far less energy during production.
"It also virtually eliminates the amount of water we use at our plant, which is 600 gallons a day," Plocher
continued. "There are a whole lot of reasons why the bottom line looks incredible (if we can adopt this
process), and a whole lot of reasons why we have to adopt it, because if we don't, we're basically
existing at the whim of government programs."
When the company got the $1.86 million grant, Plocher said "we spent every spare dollar we had on the
engineering for the project, to the tune of hundreds of thousands of dollars." However, the company
ended up not being able to use the grant because its source for the required matching funds, $2.7
million, was not able to provide the money.
Since then, Plocher said, the company has fallen "deeply into debt, and if we don't fix our business
model, we're going to boom and bust at the whim of government incentives and subsidies. Obama has
been the worst president imaginable for biofuels."
As an example, Plocher pointed to the Renewable Fuel Standard, which requires certain companies to
buy carbon credits from companies like Yokayo Biofuels, which collects used deep fryer oil from more
than 800 facilities in Northern California and converts it into biodiesel.
"The whole strength of the program was in the requirement going up every year, but the Obama
Administration decided not to increase it this year," he said, explaining that because of that, biofuel
companies like his receive only 30 cents per gallon rather than $1.50. "It's ridiculous -- we're really
hamstrung."
Changes can still be made to the requirement by June 20, and if the requirements are increased, "those
carbon credits could really help us." But ultimately, Plocher said, it will be completing the enzymatic
process project, which he estimated will cost "far less than $3 million," that will keep the company alive.
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The best options for the company now, he said, are to be sold to someone who has the money to
complete the project, or "the situation I would love to see if there was some benevolent, wealthy
person that could guarantee a loan to us. With the project in place, we could definitely make the
payments on that loan."
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Biodiesel producers cut back due to US policies, report says
By Timothy Cama - 05/14/14 03:52 PM EDT
Almost eight in 10 biodiesel producers in the United States have cut back production this year due to
uncertainty over federal policies that encourage making the fuels, the National Biodiesel Board (NBB)
said.
The report released Wednesday was based on a survey the NBB conducted. In addition to the finding
that 78 percent of producers reduced output, 57 percent of companies have idle or shut down plants
and 66 percent have reduced their workforces or are considering it.
Almost all of the surveyed companies attribute the industry’s decline to two recent policy
developments: the expiration at the end of last year of the tax credit to produce biodiesel and a
proposal last year by the Environmental Protection Agency not to increase the biodiesel mandate in the
Renewable Fuel Standard.
“Inconsistency in Washington is wreaking havoc on the U.S. biodiesel industry,” Anne Steckel, NBB’s vice
president of federal affairs, said in a statement.
At a Wednesday press conference announcing the results on Capitol Hill, six Democratic senators called
for renewal of the tax credit and an increase in the biodiesel mandate.
“If you look at what this industry depends on from the United States Congress, it’s certainty. It’s some
measure of consistency in public policy,” said Sen. Heidi Heitkamp (D-N.D.). “And I have to tell you, on
that score, we’ve failed miserably.”
Sens. Dick Durbin (D-Ill.), Amy Klobuchar (D-Minn.), Al Franken (D-Minn.), Joe Donnelly (D-Ind.) and
Maria Cantwell (D-Wash.) also spoke at the event.
The biodiesel tax credit provides $1 per gallon of diesel produced from biomass, such as vegetable oil or
animal fat. It expired at the end of last year, but the tax break package the Senate will vote on this
week would renew it for two more years.
The EPA proposed in November to mandate that diesel refiners blend 1.28 billion gallons of biodiesel
into their products in 2014, the same level as 2013. The industry produced 1.8 billion gallons in 2013, so
that amounts to a reduction in volume, the NBB said.
The senators said those policies put thousands of jobs at risk, as well as the United States’ energy
security and the environmental benefits of biofuels.
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“We want to make sure that biofuels are included in the future when it comes to America’s energy,”
Durbin said. “When there’s uncertainty about the future of biofuels, there’s uncertainty about these
jobs.”
Klobuchar and Franken said Minnesota officials have estimated that the EPA’s biodiesel mandate would
cause the state to lose 1,500 jobs.
“We can’t back off our commitment to renewable biofuels,” Franken said.
The EPA has not yet finalized the biodiesel blending mandate.
The oil industry praised the November proposal from the EPA, saying it recognizes the reduced demand
for renewable fuels and the high costs to refiners. But they are still pushing for permanent changes to
the Renewable Fuel Standard, including eliminating it altogether.
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Durbin: Biodiesel jobs at risk under EPA biofuels proposal
By Edward Felker
The Obama administration's proposal for biodiesel fuel use in 2014 will be "disastrous" for the industry
if it goes into effect, the Senate's second-ranking Democrat said Wednesday, calling on regulators to
reverse course in the name of jobs.
Sen. Dick Durbin of Illinois, the chamber's majority whip, joined other senators to renew pressure on the
White House and the Environmental Protection Agency to raise biofuels mandates under the Renewable
Fuel Standard when it finalizes 2014 levels next month.
Durbin joins five other Democrats from the Midwest and Pacific Northwest at a news conference to
criticize EPA's proposal to set annual biodiesel use this year and in 2015 at 1.28 billion gallons, the same
as last year. The level would be about 600 million gallons below last year's production.
The additional biodiesel output last year was used to fulfill another target under the RFS, for the use of
so-called "advanced biofuels" made from non-food sources.
But this year's RFS proposal lowers both conventional ethanol and advanced biofuels use below the
2014 target set under a 2007 law.
If ratified, the proposal leaves little room for biodiesel producers to supply additional gallons under the
RFS beyond the specific biodiesel target set by EPA, effectively cutting mandated use.
That prospect has alarmed the industry and has most of the nation's producers already reducing output
and scaling back expansion plans, according to a survey issued Wednesday by the National Biodiesel
Board, which says up to 8,000 jobs are at risk out of the industry's 62,000 employee workforce.
Durbin stressed energy independence, carbon emissions reductions and job creation as reasons for EPA
to raise the target. "This industry creates real, good paying jobs," he said, adding that "when there's
uncertainty about the future of biofuels, there's uncertainty about these jobs."
He and the others, led by Sen. Heidi Heitkamp, D-N.D., also called on the Senate to pass the $85.3 billion
tax breaks extenders bill currently being debated by the chamber, which includes a two-year renewal of
the $1 per gallon biodiesel tax credit.
Durbin discounted the possibility that the extenders bill will stall over a partisan amendments fight
similar to one that sunk an energy efficiency bill on Monday.
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"I'm optimistic we'll get it done," Durbin said of the extenders bill. "There's too much at stake and I think
even Republicans who are anxious for amendments will understand that at the end."
A bipartisan group of 30 senators with biofuels production in their states late last year met with EPA
Administrator Gina McCarthy to pressure her to raise the RFS totals, and have kept up the lobbying in
meetings with her and administration officials, including President Barack Obama and Vice President Joe
Biden.
Durbin said he brought up the RFS with Biden on Monday, though he did not press him for any
commitment. Sen. Al Franken, D-Minn., said he mentioned it to Obama recently, but declined to
describe the conversation in detail.
EPA has been pressured from the other direction by the oil industry, small engine makers, and food
groups. They support lower levels and contend the RFS should be repealed in response to relatively flat
projected demand for motor fuels and the lack of pumps to sell higher blends of ethanol in gasoline.
They also cite concerns about using higher blends in engines not certified for them by automakers. The
biofuels industry has challenged all of those points, however.
The senators countered that the RFS need not be repealed or changed, and pointed to EPA as the
problem.
"I think quite honestly a mistake was made by the administration. We're going to give them a chance to
fix that mistake," Heitkamp told reporters. "The intensity of concern about this is very high, (among)
very many senators, it's not just those of us in the room talking about biodiesel."
Heitkamp said she expects EPA to raise its biofuels use targets in its final decision, but acknowledged she
was not sure.
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Focus on Biofuels Is Key to Renewable Energy Success | Commentary
By Byron Dorgan
May 12, 2014, 4:46 p.m.
I’ve always known where President Barack Obama stood on the issue of renewable fuels. He has
consistently voiced his strong support going back to his days in the Senate, and he has continued that
support in the White House. In a speech at an advanced biofuel refinery in Missouri on April 28, 2010,
he summed up his position like this:
“I’ve said before I don’t accept second place for the United States of America. I want us to be first in
wind power, first in solar power, and I want us to be first when it comes to biodiesel and the
technologies that are being developed [here].”
The president’s remarks that day showed the vision and competitive fire that I witnessed while working
alongside him in the Senate. And as an original writer of the Renewable Fuel Standard, I always
appreciated the president’s unwavering support for it.
But today, I’m concerned about the administration’s recent proposal that would put an end to the
growth of this emerging American energy industry. The EPA proposal, if left unchanged, would signal a
retreat on our bipartisan commitment to developing a strong renewable fuels industry to reduce our
dependence on foreign oil, create jobs and reduce harmful emissions.
This proposal simply doesn’t fit with the president’s goals. Take biodiesel as an example. It is a
significant RFS success story — the first EPA-designated advanced biofuel to reach nationwide,
commercial-scale production. The EPA says it reduces greenhouse gas emissions by 57 percent to 86
percent, and the White House’s recent report on climate change cited incentives for biodiesel as an
example of federal mitigation. Biodiesel is produced at refineries in almost every state in the country
and has steadily grown the past few years using an increasing variety of resources such as animal fats,
soybean oil and recycled cooking oil.
Yet under the EPA’s proposal, biodiesel production could be cut sharply from last year’s record
production of nearly 1.8 billion gallons, down to 1.28 billion gallons. This makes no sense, and it’s
threatening a clear success story in the advanced biofuels sector.
Why are we walking away from success? And how are we going to be “first when it comes to biodiesel”
if we cut RFS volumes below demonstrated capacity?
Sure, the critics have grown louder. But they are wrong.
I represented a major oil state in Congress and strongly support the new oil and gas production that is
transforming our energy future.
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But that success doesn’t mean we should give up on diversifying our fuel sources. Producing renewable
fuels makes us more energy secure while delivering significant environmental and economic benefits.
And let’s be clear about prices: Blaming the RFS for high gas prices is like blaming the rooster for the
sunrise. Fuel prices have been rising for decades, and Americans clearly understand that the real cause is
our lack of choice and competition. There is no free market in the fuels sector, and prices are heavily
manipulated by global cartels such as OPEC.
The RFS is designed to change that, and it’s working.
The EPA’s proposal has already been costly, drying up investment and forcing producers to scale back.
It’s time for the administration to make the adjustments necessary to restore confidence among
investors, entrepreneurs and thousands of employees in the renewable fuels industry that the United
States will do what it takes to be first. As Obama said a few years ago, let’s not settle for second place.
Byron Dorgan was a Democratic senator from North Dakota from 1992 to 2011. He now is a policy
adviser at Arent Fox, whose clients include the National Biodiesel Board, and is co-chairman of the
Bipartisan Policy Center’s Energy Project.
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EPA policy upsets Seattle-area biodiesel producers
The Environmental Protection Agency’s decision to keep the amount of biodiesel that must be blended
into the nation’s transportation fuel supply unchanged for two more years has upset biofuel producers in
Seattle and elsewhere who had been counting on increased production.
By Kyung M. Song
WASHINGTON — Jeff Haas runs a company with a singular niche: It collects used cooking oil from food
stands at CenturyLink Field and from two dozen Ivar’s seafood restaurants and turns the grease into
biodiesel.
Haas’ General Biodiesel produces 2 million gallons of the renewable fuel annually at its Georgetown
plant in South Seattle. When a six-month expansion is completed at the end of June, the plant should be
able to pump out 10 million gallons a year.
Haas, however, fears there might not be enough demand for all that extra biodiesel.
That’s because the federal government — which essentially dictates the size of the market for
renewable fuels — has proposed to keep the amount of biodiesel that must be blended into regular
gasoline and diesel unchanged for the next two years.
The announcement by the Environmental Protection Agency (EPA) upset biodiesel producers, who had
hoped for increased mandates by as much as 50 percent. It also forced Haas to trim hours for his 30
employees and cut production by 20 percent.
“It set the whole industry in disarray,” said Haas, chief executive of General Biodiesel. On Wednesday,
Haas joined three other biodiesel executives and six Democratic U.S. senators, including Maria Cantwell,
of Washington, to demand that the EPA boost the Renewable Fuel Standard requirement for biodiesel.
The agency, in a reversal of previous year-over-year increases, wants to keep the 2013 biodiesel
mandate of 1.28 billion gallons the same through 2015. A final ruling is expected this summer.
That proposal was part of a larger initial decision by the EPA in November to reduce the total amount of
renewable fuel — including biodiesel — that must be incorporated into the nation’s transportation-fuel
supply by 1.34 billion gallons, or 8 percent, for 2014. The EPA said the lower volumes more accurately
reflect actual production rates for renewable fuels, including ethanol.
Biodiesel producers, including three in this state, nationally produced 1.8 billion gallons last year. The
industry had hoped to see the 2014 mandate increased to 1.7 billion gallons.
Biodiesel emits less greenhouse gases than petroleum diesel but is more expensive. Biodiesel blenders
get a $1-a-gallon federal subsidy. But Congress let that expire at the end of 2013 along with a host of
other tax breaks. The Senate is expected to vote this week on a deal to renew the tax breaks for two
years.
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Cantwell, who helped develop the Renewable Fuel Standard in 2007, said the biodiesel industry is
depending on Congress and the federal government to create a reliable market that matches its output.
“We are holding them down because we’re not giving them predictability,” said Cantwell, who has
pushed for research and production of biofuels for aviation and other uses.
Cantwell joined five colleagues at the news conference: Heidi Heitkamp, of North Dakota; Al Franken
and Amy Klobuchar, both of Minnesota; Richard Durbin, of Illinois; and Joe Donnelly, of Indiana.
Haas said he can’t understand why the federal government would backpedal on a clean, domestic fuel
supply. His company collects free cooking grease from 3,000 restaurants from Vancouver, B.C., to
Portland, including those inside Seattle-Tacoma International Airport, that otherwise would be tossed
out as waste.
Of 54 biodiesel producers surveyed by the National Biodiesel Board, an industry group, 78 percent have
cut production this year. Haas’ company was among them.
“We’ve all been planning for an expanding market,” he said.
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EPA changes could hurt local biodiesel
By Dale Neal
Jan. 4, 2014
A proposal to scale back national alternative fuels could negatively impact Blue Ride Biofuels. /
JOHN COUTLAKIS / jcoutlakis@citizen-times.com
Asheville, NC – Blue Ridge Biofuels has built a thriving business turning the cooking oil that your local
restaurant uses to fry your food into biodiesel to fuel your car.
But that business could be threatened by a national reduction in alternative fuels proposed by the
Environmental Protection Agency. The policy change has pitted corn growers and ethanol producers
against oil companies and food producers in a fierce lobbying battle on Capitol Hill.
At stake is the Renewable Fuels Standard approved by Congress in 2007 to boost advanced biofuels,
requiring a minimum volume blended into the nation’s transportation fuels like gasoline and diesel. The
lion’s share of the Renewable Fuel Standard has gone to ethanol, but there’s been a smaller role for
biofuels made from other materials.
Now the EPA wants to scale back the annual production of ethanol from 18.5 billion to 15.21 billion
gallons. About 10 percent of each gallon of gas you pump into your car now is ethanol, typically made
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from Midwestern-grown corn. The EPA proposed the cut because gasoline use isn’t rising as quickly as
first projected in 2007. In fact, U.S. gasoline consumption peaked in 2006 and has been falling since
then.
Ethanol has also come under fire from some quarters as corn is diverted into fuel rather than food,
potentially making what we eat more expensive.
But as the EPA considers scaling back corn ethanol, the new standards could also affect Asheville
biodiesel made from used cooking oil.
For 2014, the standard for advanced biodiesel could be lowered from 1.7 billion to 1.28 billion.
That could put the brakes on Blue Ridge Biofuels’ growing business.
“We service over 560 restaurants and contract with over a dozen small oil collection companies in our
region. We collect approximately 500,000 gallons of used cooking oil a year,” explained Woodrow Eaton,
Blue Ridge Biofuels’ general manager.
Blue Ridge Biofuels has a staff of 10, earning a living wage as certified by Just Economics. Those jobs
could become shaky if the market is upended.
If the EPA proposal moves forward as it is currently written we are looking at potential layoffs, rising
prices to our customers, and if things get bad enough we may be forced to cease biodiesel production
selling our used cooking oil on the open market,” Eaton said.
While free-marketers will question why biodiesel or ethanol needs federal support, Ben Evans, a
spokesman for the National Biodiesel Board, points to the more than $4 billion in tax breaks that the
petroleum companies enjoy annually. It’s not a free, nor fair market when it comes to energy and U.S.
policy.
Evans admits that biodiesel is a small player overshadowed by ethanol, but biodiesel has been highly
successful — the first EPA-designated advanced fuel that can cut greenhouse gases by 50 percent over
petroleum and the first to break 1 billion gallons of gas per year.
Cutting that standard by almost a third would put small commercial plants like Blue Ridge at risk, cutting
the demand for their recycled product and potentially raising prices much higher than diesel made
strictly from petroleum, Evans said. “It would make it very difficult to get market share. That would have
a devastating impact on the biodiesel industry.”
Ethanol has its own problems, but Eaton points out biodiesel is a very different fuel from the corn-grown
ethanol.
“We still do have an energy problem in this country and we need to continue to invest in alternative
energy sector,” he said.
Both Eaton and Evans admit it’s unclear exactly what the EPA will do in 2014, or what the immediate
effect will be on the local biodiesel industry. “We had some expansion plans, but the uncertainty has
forced us to postpone those,” Eaton said.
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“With 2014 volumes now under consideration, we are urging the EPA to establish a volume requirement
at least consistent with this year’s projected production of 1.7 billion gallons,” he said.
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NBC-KING5 Seattle: Washington's biodiesel industry
in limbo
By ERIC WILKINSON / KING 5 News
Growing up during the gas shortages of the 1970's, Dan Freeman decided America's energy policies
were like a clogged fuel filter: they kept stalling the country's progress. Twenty-five years later he
became the first to introduce biodiesel to Seattle.
"I see it as the simplest, most perfect solution to our oil, energy and global warming problems," he said
from outside Dr. Dan's Alternative Fuelworks in Ballard, where he sells biodiesel to drivers.
Washington state has been a leader in the biofuel industry, producing millions of gallons of biodiesel
and supporting hundreds of family wage jobs. Now, though, the EPA is considering reducing the
mandatory mixture of ethanol and biodiesel in our gas pumps by hundreds of millions of gallons. It's a
move Freeman thinks could kill an important economic engine for Washington.
"That certainly is going to cut off any growth or plans of future development in the industry," he said.
The biofuel industry is coming off a record year, and could be falling victim to its own success.The EPA
says the country is approaching a point where the biofuel mandates would require the use of more
ethanol than can be blended into gasoline at the standard 10% mixture. Oil producers say the situation
would force them to export more fuel or produce less gasoline, which could lead to possible shortages
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and higher prices at the pump. Biodiesel doesn't fall under the same contraints as ethanol, but is
considered the same thing by regulators and would still be subject to the EPA cuts.
Analysts say cutting the EPA mandate could cost 45,000 jobs nationwide. Seattle's General Biodiesel is in
the middle of a 5 million dollar expansion, hoping to quintuple production and add about 10 more jobs.
But the opposite may happen if the EPA cuts are approved.
"We have no plans to cut jobs now, but it's something you have to look at. The constant back and forth
creates uncertainty for employees, managers and for investors," said CEO Jeff Haas. "It's a time of great
uncertainty right now."
As for Dan Freeman, he says he's losing faith that biofuels will ever succeed because the government
simply won't let them. "It still has huge potential, but until the people in government get behind it it's
not going to reach that potential."
The EPA is taking public comment on the issue until January 28th. Send comments to a-and-rdocket@
epa.gov and reference: Docket ID No. EPA-HQ-OAR-2012-0632
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Biodiesel plants idled by industry head
winds
A possible cut to the Renewable Fuel Standard leaves many Iowa companies sitting still
or reducing production while politicians fight over the mandate
Jan. 22, 2014
Shut down: Western Dubuque Biodiesel: Western Dubuque Biodiesel plant manager Troy Gibbs
talks
about the shutdown of their plant and the company's hopes for a re-start of production.
By Donnelle Eller
Both renewable fuel proponents and opponents are heavily lobbying the U.S. Environmental Protection
Agency on the amount of ethanol and biodiesel that must be blended in the nation’s fuel supply. The
EPA stops taking public comments Tuesday.
Gov. Terry Branstad and other state leaders are holding a public hearing today, beginning at 8:30 a.m.,
at the World Food Prize Hall of Laureates.
Biodiesel, depending on what products are used to make it, has 50 to 85 percent fewer greenhouse
emissions than petroleum diesel, said Tom Brooks, general manager at Western Dubuque Biodiesel.
Iowa leads the nation in biodiesel production, with 12 plants that produced a record 230 million gallons
in 2013. The industry contributed $400 million to Iowa’s gross domestic product in 2012, based on
industry estimates of the economic impact, and supports 5,000 jobs. That number includes direct and
indirect jobs. Nationally, there are 150 biodiesel plants.
The biodiesel industry also helps boost the value of Iowa soybeans, soybean oil and livestock such as
cattle and hogs, a source of animal fat used in some plants, said Monte Shaw, executive director of the
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Iowa Renewable Fuels Association. Iowa’s plants also use industrial corn oil, a byproduct that comes
from the state’s ethanol plant.
About the time the national recession was hitting, general manager Tom Brooks walked into Western
Dubuque Biodiesel for the first time and found 400 applications for the eastern Iowa plant’s 31 jobs.
Brooks interviewed all the candidates. He believed he owed that to Farley, a community of 1,537
residents. After all, organizers raised $19 million in one day from investors to build the plant — the
town’s first new company in 15 years.
“The impact of this plant running and not running is significant,” Brooks said. The plant, for example,
pays workers $1.5 million annually and spends $100 million on goods. That money ripples through town,
with taxes supporting schools and parks, and paychecks buying lunch at Greenwood’s Grocery and
bowling at Cobra Lanes.
Today, though, production at the plant has stopped while Brooks and others wait for the biodiesel
market to improve. Other plants also have idled production or cut output. Their fates depend in part on
a federal proposal to scale back the amount of renewable fuels that must be blended into the U.S. fuel
supply.
The Environmental Protection Agency proposes freezing the amount of biodiesel that must be blended
into the nation’s fuel supply this year to the 2013 level of 1.28 billion gallons. The problem is that the
industry produced a total of 1.7 billion gallons last year. And at the end of the year, it was producing at
an annualized rate of 2 billion gallons.
The oil industry has expressed concern that requiring higher biodiesel levels has significantly increased
the industry’s cost of making diesel fuel.
The biodiesel industry’s future is further clouded after losing a $1 blenders’ tax credit at the end of the
year. The tax credit makes biodiesel more competitive with petroleum diesel, industry leaders say.
While much of the focus on the EPA proposal has been on ethanol — with the corn-based renewable
fuel possibly rolled back about 10 percent, to 13 billion gallons — the younger biodiesel industry could
be hit hardest.
“We believe that plants will close. People have told us that privately. And some people around the
country are saying that publicly,” said Ben Evans, a spokesman for the National Biodiesel Board. “At the
very least, plants will have to reduce operations.”
“You can’t go from producing 1.7 billion gallons in 2013 to producing 1 billion gallons without a
tremendous shock to the market,” Evans said. “Clearly, many businesses will be hurt, and others will go
out of business.”
Just how big of a shock the biodiesel markets will experience is a guess.
Production could be cut 25 to 50 percent, said Evans and Monte Shaw, executive director of the Iowa
Renewable Fuels Association.
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One reason for the uncertainty is that the industry believes that biodiesel will be carried over from
record production last year, especially as blenders scrambled to take advantage of the expiring tax
credit.
“Everybody filled every storage container they had — and probably a few empty pop cans — by
midnight Dec. 31,” Shaw said.
He said the economics don’t favor biodiesel the way they favor ethanol, which is cheaper than gasoline.
Industry leaders hope Congress will reinstate the tax credit. Now, Western Dubuque would lose about
45 cents on every gallon of biodiesel, if they were producing, Brooks said.
Shaw said he believes that Iowa biodiesel plants are well-positioned to survive the challenge ahead.
“Iowa has good plants,” he said. “They’re well-sized, well-capitalized and they’re efficient,” with several
able to use different feedstocks that include lower-cost industrial corn oil and animal fat.
“And some plants are tied into large companies like Cargill or AGP,” private grain processing businesses.
“I don’t think Iowa will be immune from the storm, but I think plants here are well situated to ride it
out.”
Daniel Oh, CEO of the Renewable Energy Group, a publicly traded company based in Ames, said his
company can compete. REG hasn’t provided guidance to investors on the impact of the EPA’s proposal.
The company’s Iowa plants are in Newton, Mason City and Ralston.
“Of course, we want to see the strongest support possible from a policy perspective,” Oh said. But it’s
not a situation “where the market and government and customers want to move away from biodiesel.”
Despite short-term concerns, Oh said the EPA has “spoken favorably about biodiesel, the performance
of the industry, its ability to meet obligations and its ability to grow.
“I think the EPA is going to rely heavily on biodiesel over time,” Oh said.
Even though production has stopped, Western Dubuque continues to pay workers. They’re using the
time for maintenance, cleaning and training.
He expects the company could remain idle for a few months before it would need to begin laying off
workers. The plant laid off its workers in 2010 for a couple months, after losing federal supports and
part of the industry’s export market, Brooks said.
That was tough for employees, he said. The company managed to keep providing workers with health
insurance, but was only able to bring back 24 employees. “We’ve learned to be leaner,” he said.
An idle plant causes headaches for businesses that serve Western Dubuque as well. Simon’s Trucking,
across the street, typically has about 15 to 20 drivers hauling biodiesel out and canola oil, animal fat and
other supplies in daily.
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Justin Philipp, Simon’s general manager, said he is scrambling to keep his drivers and trucks moving
products for other clients.
“It puts a strain on our tanker business,” he said. “When production there comes to a screeching halt, it
means we have a lot of iron sitting, not being used.”
Western Dubuque has posted strong results over the past three years, with last year setting a record,
Brooks said. The company shares profits with employees, and gave each hourly worker $3,000 to $5,000
last year in bonuses. Brooks said that helped workers stash away a little, especially families living
paycheck to paycheck.
Employee Keith Neyen said the plant has helped young families like his remain in the community. The
company’s pay and benefits are among the best in the area.
Brooks said the company pays above the Dubuque County average.
Neyen, a production operator, wants to stay in Farley, where he has extended family, is a volunteer
firefighter and has deep ties to his church.
“We’ve gone through slow times before,” he said. “I’m hoping for the best.”
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New EPA Proposal Could Cost Missourian's
Jobs
Dec 12, 2013
COLUMBIA, Mo. – A recent recommendation by the Environmental Protection Agency could have
negative effects on Missouri jobs and the economy.
The biodiesel industry is young and rapidly growing. Biodiesel is an alternative fuel source for diesel
engines and is made from a variety of resources such as animal fats, recycled cooking oil and soybean
oil. The industry currently supports 62,000 jobs nationally and is set to produce 1.7 billion gallons by the
end of 2013. These healthy numbers may change, however, after the EPA recently recommended
cutting production numbers down to 1.28 billion gallons in 2014.
The EPA has the power to define biodiesel production numbers each year. Once a suggestion is made, it
is passed on to the Office of Management and Budget for final review. Once a decision is made, a
production standard is set for the following year.
Although the EPA's suggested production decrease for 2014 may not seem drastic, a recent study
conducted for the National Biodiesel Board shows the decrease in production would result in nearly
8,000 job cuts around the country.
"It [biodiesel] is working," said Jessica Robinson, director of communications for the National Biodiesel
Board. "It's working to support jobs, it's working to create domestic energy, it's working to diversify our
fuel supply. So it's a good question. Now is really not the time to retreat on that success."
Missouri is one of the leaders in the biodiesel industry. There are eight plants located throughout the
state that could possibly see jobs cuts and closures if the EPA's recommendation is passed by the
administration.
"Since Missouri has been a leader in biodiesel production it means that Missouri can be one of the
states that might feel the impact the most, and it really becomes a trickle down effect," said Robinson.
"If the market shrinks, the demand shrinks, so production would shrink and then potentially jobs would
have to go away and plants potentially close, and it will really depend plant by plant and company by
company, how much they will be affected by the change or how little."
One of the plants that could see an impact is Mid-America Biofuels LLC in Mexico. The plant was the first
to open in Missouri in 2006 and also includes a soybean processing facility. Local farmers sell soybeans
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to the plant, which allows it to produce around 50 million gallons of biodiesel each year. As a result,
production cuts would affect more than just the plant's employees.
"The other thing that you see is farming jobs," said Cliff Smith, general manager of Mid-America Biofuels
LLC. "Obviously the farmers are still going to be there, but it gives those farmers a better opportunity, a
better market for their beans. It gives them the opportunity to sell their beans at maybe a little bit
higher price than if we weren't here. That helps in, you know, an increase in trucking. Basically, we got
trucks coming in here every day, we've got that industry as well. So you see that there is a lot of auxiliary
jobs, not just the direct jobs of the people working at the plant that would be affected with a slow
down."
The cuts wouldn't be immediate.
"This is really an issue that has potential to be almost a slow death for some of the jobs and some of the
opportunities that now exist for the biodiesel industry," said Robinson. "We know that it will impact our
plants, we have heard from our members that they're not sure what their year will look like next year if
they have shrinking demand and clients and customers who are no longer knocking at their doors for
fuel. That's going to change how they do things and in some cases it will mean layoffs and in other cases
it could mean plant closures."
While the EPA has made its recommendation, the decision is still up for discussion. Robinson said the
National Biodiesel Board hopes to maintain current production rates, if not raise them.
"It's [biodiesel] proven to be a great economic benefit to our nation," said Robinson. "it's proven to
provide a working, reliable alternative fuel, and there's just no reason to back off. So, we're hopeful that
we can maintain that momentum and help convince the administration that this is something that needs
to be done, this is something that is important here in Missouri and all across the nation."
In the meantime, the National Biodiesel Board plans to push for higher production rates through calls
and letters sent to Senate and House members. The final decision on 2014 production volumes will be
made sometime this year.
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As U.S. gov't cuts back on biofuel, some rue 'collateral
damage'
By Cezary Podkul
NEW YORK, Dec 11 (Reuters) - Ben Wootton was just getting ready to bring his company out of
bankruptcy last month when word from Washington stopped him in his tracks.
Instead of an expected pick-up in sales for the biofuel-based diesel that he makes from recycled
cooking oil at a suburban Harrisburg, Pennsylvania, plant, demand is likely to drop due to a
proposed freeze on U.S. consumption mandates.
"I won't be alive, for sure," said Wootton, who runs the 1.5 million gallon per year Keystone
Biofuels plant.
Wootton and others like him are venting their frustrations at the U.S. Environmental Protection
Agency, which they say is penalizing makers of so-called advanced biofuels like biodiesel in rules
proposed last month that are primarily directed at curbing consumption quotas for ethanol in
2014.
The disappointment highlights the difficult task ahead of the EPA - and President Obama – as
they try to enforce a troubled 2007 law aimed at reducing U.S. dependence on foreign oil.
Predicting that gasoline demand would continue to rise, Congress mandated increasing
amounts of ethanol and other biofuels to be blended into U.S. fuel production. The goal was to
cut oil imports and reduce carbon emissions - all while building a home-grown biofuel industry
and creating jobs.
But with gasoline demand falling, the law's bespoke goals have made it impossible to please
everyone, leaving makers of advanced biofuels like biodiesel particularly vulnerable.
Advanced biofuels have not been around as long as traditional corn ethanol and require
investment in new plants, technologies and processes to bring them to market.
With the EPA proposing to cut 2014 advanced biofuel blending mandates to about 2.2 billion
gallons from 2.75 billion this year, those investments look a lot less certain. One type of
advanced biofuel - biodiesel made by producers like Wootton - would stay frozen at 1.28 billion
gallons through 2015.
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So while corn ethanol proponents have lashed out at President Obama and the EPA for backing
down on ambitious 2014 targets, frustrations may run deepest among those in the advanced
sector like Wootton, who took out loans and burned through savings to invest in the space.
"We're the collateral damage," said Michael McAdams, president of the Advanced Biofuels
Association, which represents 44 companies active in the sector.
Already, some larger companies are putting the brakes on investment in the space.
"For Abengoa, any additional investment in the U.S. biofuel space is on hold until we see where
the final EPA rule comes out," said Javier Garoz, chief executive of Abengoa Bioenergy. The
company had just spent $500 million to develop a new plant in Kansas that would make
advanced ethanol from non-food sources when it learned of the cut.
MARKETPLACE REALITIES
Advanced biofuel manufacturers feel frustrated as they say the mandate changes proposed for
their sector are harsher than changes put forward for corn ethanol.
They argue that because advanced biofuels are less carbon intensive than traditional corn
ethanol, they can do more to further the EPA's goal of reducing emissions from
petroleumbased fuels - and therefore should be mandated at higher levels.
Christopher Grundler, the top EPA official at a hearing on the proposal last week, told Reuters
that the agency has been dealt a difficult hand in administering the law.
"I think just about everyone will stipulate that what Congress imagined, and the pace Congress
imagined in 2007, is not feasible today," Grundler said.
"What we tried to do in the proposal is find the right balance between the goals of the law to
grow these renewable fuels while at the same time recognizing the realities that we see today
in the marketplace."
Those realities include a 10 percent "saturation point" beyond which it is hard for the U.S.
market to blend more ethanol into gasoline, Grundler said. Thanks to falling demand, the
market reached that point earlier than expected, he said.
To fix the problem, the EPA came up with a new process for setting the mandates, which
involves scaling them to fit supply and demand dynamics of the market, starting with ethanol.
That allowed the agency to reduce corn ethanol down to about 13 billion gallons for 2014, just
under 10 percent of gasoline supply, versus 14.4 billion envisioned under the 2007 law.
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CAN'T PAY THE BANK
Wootton, the Pennsylvania-based producer, had declared bankruptcy in March under a $12
million debt load, but recently found an investor willing to get his business running again.
Wootton had just signed the agreement in early October, when word leaked out that the EPA
was looking to keep biodiesel frozen at 1.28 billion gallons a year.
Now, even he admits he wouldn't invest in the business.
"If this thing holds out and they keep it at 1.28, I wouldn't invest," Wootton said. At the EPA
hearing last week, he waited 14 hours to get his chance to ask the agency to set the mandate
higher when it finalizes the rules next year.
The National Biodiesel Board (NBB), which represents the industry, forecasts that producers are
on pace to make 1.7 billion gallons of the fuel in 2013 - and that keeping the mandate frozen
could in effect cut demand in half.
The drop in demand could cost some 8,000 jobs, according to an estimate commissioned by the
group.
"We've built our industry on the promise of solid policy that we've had for five years and we
don't know why the Obama Administration is backtracking on it," Anne Steckel, NBB's vice
president of federal affairs, told Reuters last week.
Grundler, the top EPA official at the hearing, said the 1.28 billion gallon proposal is just a
minimum, and actual consumption could be higher. But that's little consolation for plant
owners like Stu Lamb of Viesel Fuel, a Florida-based producer that in July had just opened a
new plant that will produce about 5 million gallons of biodiesel a year.
Lamb took out a $5 million loan to finance the project and hire 45 workers. He said he may now
struggle to repay.
"I feel betrayed," he said.
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Raleigh (NC) News & Observer: EPA plan
imperils NC’s growing biodiesel industry
By Leif Forer
January 23, 2014
The growth of the renewable fuels industry in North Carolina is an American success story.
Notably, the state’s biodiesel producers have burst onto the scene in the past decade,
generating remarkable advances in creating new sources of sustainable energy. Yet today, the
latest political skirmish in Washington is threatening to stamp out the sector’s growth and cost
the state jobs in the process.
At the center of the dispute is the Renewable Fuel Standard, a sensible policy to introduce
renewable fuels into the country’s transportation fuels mix. The RFS was originally established
in 2005 by a bipartisan coalition in Congress that recognized it is critical to America’s national
security, economic and environmental interests to move away from our singular reliance on
petroleum. The program was hailed by President George W. Bush’s administration when signed
into law, and two years later, then-Sen. Barack Obama helped lead the effort to include
biodiesel as part of the program for the first time.
Predictably, once the program really began making progress in breaking the oil industry’s
stranglehold on the market, all heck broke loose. And as ethanol supporters and their
counterparts in fossil fuels have entered into a battle royal, biodiesel producers – makers of
America’s first commercially available advanced biofuel – are left fighting for their existence.
Domestically produced biodiesel cuts carbon emissions by as much as 86 percent, according to
the EPA’s calculations, and is less toxic than table salt. Produced from a variety of coproducts
and waste products – such as recycled cooking oil, livestock fats and soybean oil – biodiesel has
grown from a niche industry to a total production of nearly 1.7 billion gallons last year.
That growth is poised to make even greater strides in the coming years as North Carolina
producers explore new processes and feedstocks in creating the next generation of fuels. In
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2010, for example, Pittsboro’s Piedmont Biofuels commissioned the first enzymatic biodiesel
plant of its kind in the United States. Greensboro’s Patriot Biodiesel is operating a 600-gallon
tank to produce biodiesel from algae. N.C. State University has been part of a research project
exploring the growth of biofuel crops on our highway rights of way.
Now much of the progress made by North Carolina’s advanced biofuel pioneers is at risk by an
EPA proposal that appears to appease oil interests by slashing the amounts of renewable fuels
required by the Renewable Fuel Standard. For biodiesel producers, the industry’s effective
market could be cut in half this year.
Blue Ridge Biodiesel annually collects 500,000 gallons of used cooking oil from hundreds of
restaurants throughout Western North Carolina that it uses to produce biodiesel and distribute
across the Southeast. However, the company’s Woodrow Eaton is concerned that the EPA
proposal would have a devastating effect on his business.
“If the EPA proposal moves forward as it is currently written, we are looking at potential layoffs,
rising prices to our customers, and if things get bad enough we may be forced to cease
biodiesel production, selling our used cooking oil on the open market,” Eaton told the Asheville
Citizen-Times.
There’s still time for the Obama administration to reinstate the cuts proposed to the biodiesel
requirements in the RFS. The EPA is accepting comments on its proposal for the rest of the
month before making a final rule later this spring. Biodiesel supporters in North Carolina and
across the country are holding their breath hoping President Obama will reaffirm his
commitment to advanced biofuels before it’s too late.
The EPA is accepting comments on the proposed rule changes until Tuesday. . For more
information, go to nando.com/eparules
Leif Forer of Durham is president of the N.C. Biodiesel Association and a former manager with the N.C.
Biofuels Center.
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Greensboro (NC) News and Record: Fighting the power structure
By Taft Wireback – Dec. 8, 2013
GREENSBORO — A big part of North Carolina’s energy future just might be bubbling up
behind Gabe Neeriemer’s business on Chimney Rock Road.
His key ingredient bears little resemblance to the crude or shale oils from subterranean depths
that fuel much of America these days.
Neeriemer’s eureka substance? Algae — pond scum — marinating in waist-high tubs under
plastic tents in the yard behind Patriot Biodiesel, the company that Neeriemer and several
partners run at the edge of Greensboro’s monument to all things petroleum — the 600-acre
tank farm near Piedmont Triad International Airport.
“You have no pesticides in there, nothing that’s genetically modified. It consumes carbon
dioxide and its by-product is oxygen,” Neeriemer said last week of his algae crop. “How can you
go wrong?”
Neeriemer’s project to create a potentially expansive supply of non-fossil, renewable fuel
represents just one initiative in the Tar Heel State’s fledgling biofuels industry.
Proponents said this homegrown sector’s potential for both ethanol and biodiesel production
seems boundless. They believe the two fuels could dramatically cut transportation-related
pollution. And they think the industry could bring new life to agriculture statewide, while giving
communities greater control over their energy needs and the fate of their local economies.
But biofuels haven’t been feeling much love lately from either the state or federal government.
The U.S. Environmental Protection Agency wants to back away from renewable fuel standards
that encourage growth in the industry. And in Raleigh, state officials closed a facility recently
that played a role in attracting a $200 million ethanol project to eastern North Carolina.
The federal threat comes from an Obama administration proposal to soften the renewable fuel
standards that require that nation’s fuel supply to contain small percentages of ethanol in
gasoline and biodiesel in diesel products.
Neeriemer and other biofuel producers said they need these guaranteed markets to keep
growing, the same way “big oil” needs the tax breaks that it receives.
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But new EPA standards would keep biodiesel levels at current rates rather than increase them
about 24 percent, in line with growing production levels. The agency proposes taking similar
actions on ethanol.
Clean-energy advocates attribute the decisions to the hoopla surrounding fracking, the
industrial process that promises national, energy independence by extracting huge amounts of
natural gas from underground shale deposits, but with potentially damaging environmental
consequences.
“Otherwise, you wouldn’t have the EPA rolling back the (biofuels) standards,” said Anne
Tazewell, manager of the N.C. Solar Center’s clean transportation program at N.C. State. “This is
something that President (George) Bush put in place, the renewable-fuel standards, and now
you have the Obama administration wanting to reduce them.”
Meanwhile, at the state level, the General Assembly shuttered the Biofuels Center of North
Carolina five weeks ago, cutting off financial support for the nonprofit Oxford facility that was
formed six years ago with a goal of enabling North Carolina to produce 10 percent of its liquid
fuels from “biomass.”
The center used an annual budget of about $4 million to promote the biofuels industry in
general, recruit innovative projects and provide grants to scientific researchers in the Triad and
elsewhere.
Last week, one of the now-defunct Biofuels Center’s projects came to fruition when
ethanolmaker Biochemtex announced it would create 65 jobs at a new plant in Sampson
County producing the gasoline additive from switchgrass and similar plants.
The Biofuels Center “did all the recruiting for us” on Biochemtex, said Lyle Estill, founder and
vice president of Piedmont Biofuels, a co-op that produces biodiesel at its plant in Pittsboro.
“This is a terrific loss for our state,” said Estill, who served on the center’s board of directors.
“We went from a national leadership role to nothing. We decided, ‘We’ll let someone else do
it,’ and so now you’ll see something just like it in Tennessee or Georgia or somewhere else.”
Game changer
Despite the fate of the biofuels facility, the General Assembly’s new Republican majority seeks
“a comprehensive approach to increasing our state’s domestic energy production, ensuring our
energy independence and helping create energy-sector and agribusiness jobs,” said state Sen.
Andrew Brock, R-Davie, chairman of the Senate Appropriations Subcommittee on Natural and
Economic Resources.
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“In addition to passing legislation removing many of the needless regulatory hurdles faced by
the biofuels industry, we also included nearly $2.5 million in this year’s state budget for a new
Office of Biofuels within the N.C. Department of Agriculture — a model we expect will operate
more efficiently, with greater accountability and with an actual return on the investment of tax
dollars,” Brock said Friday in a written statement.
Indeed, the arrival of Biochemtex could be a “game changer” that helps attract other similar
plants to boost both the state’s industrial and agricultural economies, said Brad Ives, the state
Department of Environment and Natural Resources’ assistant secretary for natural resources.
“We’re optimistic that this plant is really the first of several to come to North Carolina,” said
Ives, who worked in the renewable fuels industry before joining the department earlier this
year.
Ives sees special significance in Biochemtex’s plan for “second-generation” processing, meaning
it will ferment its fuel from materials not linked to the human food chain.
“First-generation” ethanol facilities rely heavily on corn as their feedstock, which has drawn
criticism that they drive up the cost of groceries by competing for a source of food for people
and cattle.
Biochemtex diverges from that model by using grassy plants that grow on eastern North
Carolina farmland used mainly to dispose of hog waste, Ives said.
That provides an additional cash crop for farmers at the same time it benefits the environment
by consuming the waste as fertilizer, removing excess nitrogen and preventing contaminants
from running off into neighboring streams, ponds and lakes, Ives said.
He said the whole concept fits neatly into Gov. Pat McCrory’s “all-of-the-above” energy
strategy, meaning that state officials hope to pursue all forms of energy as opportunities
present themselves, from biofuels to off-shore drilling and fracking North Carolina’s relatively
modest underground shale formations.
‘Right thing to do’
Although they both fall in the biofuels category, ethanol and biodiesel differ in significant ways.
Ethanol works as a gasoline additive for conventional engines and is routinely dispensed from
commercial pumps in concentrations up to 10 percent.
Biodiesel runs diesel engines most popular in trucks and buses. Pure biodiesel is hard to get for
local motorists with cars that could use it — the National Biodiesel Board lists no local retail
outlets. But blends with 2 percent to 5 percent are common.
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And Neeriemer said he is doing increasing amounts of business with large companies that have
diesel fleets and leaders who said, “This is the right thing to do and we’re going to do it.”
On the ethanol-making front, Biochemtex would become North Carolina’s only ethanol plant
and the first of its kind in the U.S. An earlier, corn-based plant opened under different
ownership in Hoke County but folded in 2011 after less than a year.
By contrast, the state has a half-dozen, successful plants making biodiesel in relatively small
quantities.
Biofuels, particularly biodiesel, bring with them the potential to completely reshuffle the
economy, said Stokesdale resident Dean Price of Green Circle NC, a Garner-based company that
works with school districts to increase their use of biodiesel.
For feedstock, biodiesel makers often rely on used cooking oil from nearby restaurants or oil
extracted from such regionally grown crops as soybeans. That creates an opportunity for
communities to meet substantial amounts of their residents’ fuel needs and build a locally
based energy economy, Price said.
“The time is exactly right for this,” said Price, formerly of Red Birch Energy, which has a
biodiesel plant in Bassett, Va. “As a society, we don’t produce anything anymore. We have
massive unemployment and so many other things — farmland laying fallow, tobacco gone,
textiles gone, furniture gone.”
He said international corporations control America’s future by setting fossil-fuel prices that
trigger the export of good jobs and make survival ever more difficult for local business owners.
“We’re not going to come out of our conundrum until we start providing our own energy
locally,” added Price, who was profiled by author George Packer in “The Unwinding,” this year’s
National Book Award winner for nonfiction. Packer’s acclaimed book focused on the changing
political, social and economic landscape of “the New America,” where old solutions and old
attitudes no longer work so well.
Battling finite limits
As much as biofuels could offer a pathway to localizing a bigger chunk of energy spending, they
face finite limits not all that different from fossil fuels.
A community’s restaurants only produce so much cooking oil waste. There’s only so many acres
available to grow soybeans, which produce about 50 gallons of biodiesel an acre per season.
“Algae makes that much every day,” said Neeriemer, who sees his algae project as a promising
answer to such limitations. He plans to buy 100 acres of farmland in or near Guilford County to
augment 20 acres he already owns and outfit them all with algae-growing greenhouses.
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“We estimate that between my 20 acres and the 100-acre farm, we can make about 5 million
gallons of biodiesel a year,” Neeriemer said.
An oil similar to the standard vegetable variety makes up 30 percent of the algae, he said. And
Patriot Biodiesel plans to extract algae oil with a recently patented process it licensed from
outof-state researchers.
The beauty of the process is that after killing some of the algae and removing the oil, the
remains are pumped back into the tank as food for the surviving organisms.
It’s a continuous cycle with an end product that works just as well as oil from restaurants and
farm products, only it’s produced in much greater quantities, Neeriemer said.
“This has opened up doors for us that I never knew were there,” he said.
Now all he and his industry need, Neeriemer said, is continued support from Uncle Sam for
business efforts that are in the nation’s best long-term interests.
And, Estill adds, innovative programs in Raleigh that keep North Carolina in the vanguard of an
industry with so much untapped potential.
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Biodiesel Industry Puzzled By Loosening Of Alternative Fuel
Standard
Jan 20, 2014
As the biodiesel industry convenes for a national conference in San Diego today, one of the topics of
discussions will be the loosening of the renewable fuel standard.
Among the participants will be Seattle-based General Biodiesel, a company that turns used cooking oil
into vehicle-grade fuel. The company 's CEO is upset over backpedaling by the federal government on
incentives for more use of alternatives.
Until now, the company has enjoyed support through the standard, which was put in place under
George W. Bush and supported by the Obama administration. CEO Jeff Haas says the biodiesel industry
has expanded to meet those goals and even exceed them.
“This year, the mandate was supposed to be for 1.7 billion [gallons]. We actually produced as a nation
last year 1.7 billion gallons. So we were a year ahead of the goal.”
So Hass and other biodiesel advocates are puzzled to hear that the EPA is talking about keeping the goal
where it is this year “without a lot of explanation as to why they’re cutting the program,” Haas said.
Hass says it will be a big topic among delegates at the conference he’s attending this week in California.
Some of them will be invited to meetings with concerned people from the industry, both from the
renewables and the oil sectors. And the EPA is also holding talks.
The hope from business leaders like Haas is that governors of states with a lot of skin in the game will
convince the feds to at least stay steady.
Washington and Idaho both have big biofuels producers. But traditional oil companies are also feeling
the pinch as fuel efficiency standards increase and more companies look to reduce their carbon
footprints.
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Worthington (Minn.) Daily Globe: State ag commissioner
visits MnSP
By Erin Trester
Jan. 7, 2014
BREWSTER — Minnesota Department of Agriculture Commissioner Dave Frederickson made a stop
Tuesday morning at Minnesota Soybean Processors (MnSP). Frederickson is touring the state in support
of the biofuels industry and the Renewable Fuel Standard.
The U.S. Environmental Protection Agency’s proposed 2014 reduction in RFS required volumes would
result in an estimated $610 million in losses and more than 1,500 jobs cut from the Minnesota economy
and workforce, Frederickson said.
“This industry is very near and dear to my heart,” said Michael Zins, a member of the MnSP Board of
Directors. “This industry is really expanding. Just here in Brewster, we have started an $8 million rail
expansion project that began in the fall of 2013.”
The EPA is proposing to set the cellulosic biofuel standard at 17 million gallons, a figure lower than the
Clean Air Act target of 1.75 billion gallons. The EPA is also proposing to maintain the biomass-based
diesel standard for 2014 and 2015 at the 2013 level of 1.28 billion gallons, according to the EPA’s
proposed 2014 RFS.
MnSP employs about 84 full-time jobs for the area. It has $4 million in annual payroll, more than
$400,000 in employee benefits paid annually and $50,000 in local property taxes paid annually,
according to company figures.
MnSP has also spent more than $500 million in production costs paid to farmers, local elevators and
businesses.
“The money that we make goes back to the community — it goes back to Main Street,” Zins said.
Using the 34 million soybean bushels MnSP produced in 2013, it has manufactured 750,000 tons of
soybean meal, more than 350 million pounds of soybean oil and more than 32 million gallons of
biodiesel has been produced.
“I know people have developed a little cynicism about sending letters to our state senators and
representatives, but I remember when I was in office if I got 10 or 15 letters on an issue, I would pay
more attention to it,” Frederickson said. “I believe if we stand shoulder to shoulder on this issue, we will
win.”
Frederickson also made a stop in Lamberton on his tour Tuesday. He is expected to be at Minnesota
Soybean, Mankato, next week.
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Georgia biofuel company blasts EPA proposal
U.S. Biofuels Inc.'s CEO fears U.S. biodiesel production could be cut in half.
By David Allison
Editor- Atlanta Business Chronicle
Feb. 4, 2014
The CEO of a Georgia biofuel company is blasting a proposed move by the EPA to reduce the amount of
ethanol and biofuels that gets blended into gasoline.
In November, the Environmental Protection Agency proposed - for the first time - to allow U.S.
petroleum refiners in 2014 to lower the amount of renewable fuels blended into their products from the
18.15 billion gallons to 15.21 billion gallons.
In a Jan. 28 letter to the EPA, Gene Gebolys, president and CEO of Rome, Ga.-based U.S. Biofuels Inc.,
says the issue is the most important the company has faced in years, "and one which will determine our
ability to continue to contribute to the United States economy and perhaps more importantly to help
diversify the nation's fuel supply toward cleaner renewable sources."
"We implore the Administration to reconsider" its plans, Gebolys wrote.
"If finalized as proposed, EPA’s rule will trigger a dramatic drop in U.S. biodiesel production, causing
scores of plants to close dealing a devastating blow to one of the nation’s most important emerging
industries," Gebolys wrote.
U.S. Biofuels has been producing biodiesel at a 32,000 square foot, 32-acre biodiesel production facility
in Rome for more than a decade. Gebolys says the company has been a pioneer in biodiesel production
and employs 35 workers.
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Biodiesel teetering under EPA
proposal
By Guy Herrell
Feb. 27, 2014
There’s been a lot of talk about ethanol, and the policy – known as the Renewable Fuel Standard – that
introduced renewables into our nation’s fuels mix. What isn’t grabbing as many headlines is that
biodiesel and other advanced biofuels are also getting a kick-start from the RFS, and they’re being
manufactured on a commercial scale right here in Indiana.
In fact, it was Indiana’s own leadership in Congress that, in 2007, introduced legislation to amend the
RFS to include biodiesel, offering consumers promise for a domestically produced fuel that cuts carbon
emissions by as much as 86 percent and is less toxic than table salt.
The RFS has been predictably criticized by petroleum groups, when in reality it’s a reasonable policy that
requires oil companies to blend renewable fuels into their distribution streams. One of the categories
required is “advanced biofuels,” which includes biodiesel – the first U.S. advanced biofuel produced on a
commercial scale nationwide, including at the plant I manage in Morristown.
Made from a variety of co-products and waste products – such as recycled cooking oil, livestock fats and
soybean oil – biodiesel and the RFS have become American success stories. With the help of the RFS,
biodiesel has grown from a niche industry to a total production of nearly 1.8 billion gallons last year –
and growing.
Yet today, that promise of seven years ago could crumble under a proposal by the Environmental
Protection Agency to retreat on the gains made by biodiesel, while giving in to the demands of the oil
industry. Recently the EPA proposed slashing the RFS requirement for biodiesel and advanced biofuels
to the point that the industry’s effective market could be cut in half this year. If ultimately approved by
the Obama administration, EPA’s proposal has been predicted to cost thousands of jobs nationwide,
many of them in Indiana. That’s why Sen. Joe Donnelly recently joined nearly a third of the Senate
requesting the EPA rethink its proposal.
If he and his colleagues are unable to convince the EPA to provide a path to growth for biodiesel, it
would be a tragic result for legislation originally proposed in 2006 as the Alternative Diesel Standard that
eventually became law as part of the RFS.
“We believe that U.S. national security will be served by more robust coordination of all the elements
that contribute to energy security,” Indiana’s own Sen. Richard Lugar said in introducing the Alternative
Diesel Standard bill. “Obviously this is not a short-term proposition, but we can offset a significant
portion of demand for oil by giving American consumers a real choice of automotive fuel. We must end
oil’s near-monopoly on the transportation sector.”
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Lugar was right then and his words ring more true today. Ironically, his partner in introducing the
legislation was then-Sen. Barack Obama. Today, it is our hope that President Barack Obama will recall
Lugar’s and his own passionate advocacy for renewable fuels and put what is still a fledgling biodiesel
industry back on the path to growth.
Guy Herrell is the plant manager for Integrity Biofuels in Morristown. He wrote this for Indiana
newspapers.
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Coachella plant converting used cooking oil into biodiesel
By K Kaufmann
March 18, 2014
COACHELLA – The smell rising from the vats of recycled restaurant grease at Imperial Western Products
sticks to your nostrils — heavy, with undertones of days-old fried food — long after you've left the plant
where it is turned into renewable biodiesel.
"We're collecting used cooking oil from all over California, Arizona and southern Nevada," said Curtis
Wright, division manager at Imperial Western, which last year pumped out 8 million gallons of biodiesel.
Dozens of large blue plastic containers lined up at the plant go to restaurants and hotels, including many
in the Coachella Valley, that fill them up with their used grease. One gallon of used cooking oil produces
one gallon of biodiesel fuel, which Imperial Western sells under the brand name Biotane, Wright said.
While keeping a low profile locally, Imperial West is part of a highly visible boom in the use of biodiesel
nationwide, as well as current efforts to hold off proposed revisions to federal renewable fuel standards
that could put a brake on the industry's progress.
In the past two years, production of biodiesel jumped 63 percent, from 1.1 billion gallons in 2012 to 1.8
billion in 2013, and continues to accelerate, said Joe Jobe, CEO of the National Biodiesel Board, an
industry trade group. The organization's goal for 2015 — having biodiesel make up 5 percent of all diesel
fuels in the U.S. — was reached last year, he said.
But the U.S. Environmental Protection Agency last year proposed holding its requirements for biofuel use
at 1.28 billion gallons per year for both 2014 and 2015.
Imperial Western's own growth reflects the industry's expansion in the past decade. When the company
started producing biodiesel in 2001, sales were mostly to a niche green market, Wright said.
With the rise of state and federal renewable fuel targets and incentives, customers these days are often
mainstream oil companies that blend the biodiesel with their own fuels.
Imperial Western's Biotane is typically used in blends of 5 percent, called B5, and 20 percent, called B20,
Wright said.
The company still has some specialty customers such as Fred Hayes, 68, who designs and races highperformance diesel motorcycles. The holder of the land speed record for 750-cc diesel motorcycles,
about 121 mph, and six successive records on fuel economy, most recently scoring 162 miles per gallon,
he swears by Biotane's B20.
The former owner of Hayes Diversified Technologies, a Hesperia company that designed motorcycles for
the U.S. military, Hayes first tried Biotane in 2007, when he was looking for a cleaner-burning fuel for his
racing bikes.
"I'm not a big environmentalist or anything. I liked the idea of being able to use waste products," he
recalled. "We ran a whole series of bio tests and fuel mileage tests. I found out we got measurably better
performance on it."
Move to diversify
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In the valley more than 50 years, Imperial Western was founded and continues today as a family-owned
recycling business. Started by Lee Trawick and now run by his son, Bill Trawick, the company began by
processing cotton seed oil from cotton farms along the Colorado River, turning it into cattle feed.
Mountains of cotton seed are still processed at the plant, and what look like huge rotating vats, two
stories high, once used to process the seed now serve as storage units for biodiesel. Between cotton
seed processing and biodiesel the Coachella location has about 150 employees, Wright said.
The company also recycles bakery products and other foods and uses other kinds of vegetable oils to
make lubricants.
The company's diversification efforts eventually pulled in Wright, a chemical engineer, who back in 2000
was exploring options for starting a biodiesel plant. By 2001, the plant was online.
"We started building on Day 1 to run on used cooking oil," he said. "The whole operation here runs on
biodiesel. We use it in all of our cars and trucks."
In the process, Wright has become a cooking oil and fat aficionado, with a row of jars containing different
kinds of oils and lards, all colors and thicknesses, lined up on a book case behind his desk.
"Fats and oils are chemically very similar; they are all triglycerides," that is, long chains of hydrocarbons,
he said. "The only difference between, let's say, the fat on a cow versus sunflower oil is just the chemical
makeup of that triglyceride.
"So any of those fats or oils can be made into biodiesel, and any place you can get fat or an oil from can
be a feedstock to make biodiesel."
But producing biodiesel involves more than heating up recycled cooking oil, he said. At Imperial Western,
the recycled oil is first filtered to remove solids and water — a process that does involve heating the oil in
large vats and then running it through a couple different machines that shake and squeeze out the
impurities.
It is then mixed with methanol and a chemical base to create methyl ester — basically a long carbon
chain similar to diesel fuel but with an extra oxygen molecule attached.
"That's the reason biodiesel burns cleaner than diesel fuel. Because of the oxygen in there, it burns more
completely," he said. "Then because it's made from a fat or oil, there are no carcinogenic compounds or
toxic components."
Figures from the California Air Resources Board show biodiesel made from used cooking oil produces
about one-fifth or less of the greenhouse gas emissions of standard diesel produced by California
refineries.
It also doesn't have a "blend wall" — the point now reached by ethanol where the standard 10 percent
blend cannot be increased; higher blends require specially designed engines. Biodiesel can be used at
blends ranging from 2 percent to 100 percent without affecting vehicle performance, Wright said.
The main blot on the fuel's clean profile is its nitrogen oxide emissions — which can trigger other
pollutants including ozone and particulate matter, tiny particles that cause respiratory problems.
Depending on the kind of oils used, biodiesel can produce about the same or slightly more nitrogen
oxides than regular diesel, Wright said.
But that's not why the EPA wants to limit the production of biodiesel. The agency is proposing a rollback
on all biofuels as part of a general revision of the federal Renewable Fuel Standard (RFS) aimed at
accommodating the ethanol blend wall.
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The EPA maintains it is still committed to expanding the use of biofuels and working with all industry
stakeholders. At the same time, the agency defended its 2014 proposal as an effort "to put the RFS
program on a steady path forward — ensuring the continued growth of renewable fuels while recognizing
the practical limits on ethanol blending."
Both Wright and Jobe counter that with no blend wall, biodiesel could help offset the limits of ethanol. The
National Diesel Board is lobbying the EPA to raise its 2014 biodiesel targets to at least 1.7 billion gallons,
Jobe said.
Still, uncertainty over the EPA's final decision on biofuels is shaking up the market in ways that could
affect Imperial Western's business, Wright said.
"We're seeing lower sales prices, more competition from Midwestern biodiesel," he said.
Even if the EPA rolls back the federal biodiesel limits, the California market could remain strong due to
the state's own Low-Carbon Fuel Standard. Established in 2007, the standard requires a 10-percent
reduction in transportation-related greenhouse gas emissions statewide by 2020.
Biodiesel is considered a "fuel pathway" toward that goal and should benefit, said David Clegern, a
spokesman for the California Air Resources Board. Unlike the federal approach, California's law is not
aimed at setting limits on specific kinds of fuel — effectively picking winners and losers — but multiplying
options, he said.
When the standard went into effect, "there were not enough fuel blends, there were 26-27 approved.
There are now 200," Clegern said. "What that means now is Californians have a lot more choice. The
idea is to steer things into a more sustainable environmental and economic direction, and this regulation
is written with those things in mind."
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EPA: Right on ethanol, but wrong on other
biofuels
By Silvestre Reyes, former Rep. (D-Texas)
Jan. 7, 2014
Serving as chairman of the House Intelligence Committee for four years was one of the most
rewarding experiences I had in Congress. In my role as chairman, I had a front-row seat to the
most serious threats that faced this nation and what the intelligence and military branches of
government were doing to confront those challenges.
While much of what I learned remains classified, I am not revealing any state secrets by saying
that our addiction to foreign sources of oil is a serious concern for our national security.
Even with that in mind, the recent proposal by the Environmental Protection Agency to reduce
the amount of ethanol in our fuel supply is the right decision.
Ethanol is a mature industry that has grown so quickly there are concerns about damage to
engines when it is used in higher blends. Also, because U.S. ethanol continues to rely almost
entirely on corn for production, it has limited environmental benefits and creates impacts on
livestock producers that are of grave concern in Texas.
Where the EPA got it wrong, however, was in the decision to propose reducing the amount of
biodiesel and other advanced biofuels in our nation’s fuel supply next year. By most estimates,
the EPA is proposing to cut the amount of biodiesel production next year by at least 25 percent.
Unlike ethanol made from corn, biodiesel is an EPA-certified advanced biofuel that’s made from
a wide variety of renewable fats and oils. This means that it burns cleaner than diesel made
from petroleum, reducing greenhouse gas emissions by at least 50 percent.
Understandably, biodiesel producers across the United States are perplexed by the EPA’s recent
proposal, which could decimate their industry and force dozens of companies to close their
doors, particularly small businesses. This includes Texas, which is well known as an oil-patch
state but is less known for being home to at least a dozen biodiesel companies that are creating
jobs and economic activity from Austin to the ports in the Gulf.
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Biodiesel producers were particularly stunned by the EPA’s decision because the White House
has for years proclaimed advanced biofuels like biodiesel as critical components of helping this
nation end its addiction to foreign sources of oil. In fact, in 2011 the White House released a
report called the “Blueprint for a Secure Energy Future,” which included using biodiesel to
make our nation’s energy supply more secure.
The White House had it right then. It is impossible to account for the costs our nation has borne
in blood and treasure due to our dependence on foreign energy, particularly in the
transportation fuel market. Our economy is in constant danger of being disrupted or
undermined at the whim of foreign dictators who don’t have our interests at heart. And we
have for decades invested trillions of dollars in protecting our strategic energy interests
overseas. By producing fuels at home, we reduce those risks and those costs.
With the right policies in place, we can do so in a cost-competitive way. Just this year, Navy
Secretary Ray Mabus told the House Armed Services Committee that the Navy bought enough
biodiesel over the 2012-2013 heating season to save one Naval facility $30,000. If this program
was expanded, the armed forces could save millions of dollars a year on fuel costs — money
that could instead be used to better train and equip our fighting men and women.
Lastly, we cannot forget that the impacts of climate change caused by the production of
manmade greenhouse gasses are a serious threat to global stability and security. Floods,
droughts and hurricanes are all impacted by climate change and can dangerously destabilize
volatile regions. Any steps our nation can take — like blending biodiesel into our fuel supply —
to ensure the fuels we burn are both clean and sustainable are steps toward reducing tensions
around the world and even reducing our military footprint in the Middle East.
It is my sincere hope that the White House will intervene on behalf of the biodiesel industry and
ensure that the EPA’s proposal to cut biodiesel is dramatically modified. If anything, this
country should be using more advanced biofuels like biodiesel, not less. Our national security
depends on getting these types of decisions right. Let’s hope the EPA doesn’t get it wrong.
Reyes represented Texas’s 16th Congressional District from 1997 to 2013.
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EPA biodiesel retreat bad news for Minnesota economy,
environment
Feb. 27, 2014
By Taryl Enderson and Joe Jobe
Minnesotans rightfully are proud of the state’s commitment to renewable fuels. Long before others
followed, Minnesota leaders recognized the responsibility public officials have in nurturing the
alternatives industry and creating competition to fossil fuels, and they took action.
Minnesotans rightfully are proud of the state’s commitment to renewable fuels. Long before other
followed, Minnesota leaders recognized the responsibility public officials have in nurturing the
alternatives industry and creating competition to fossil fuels, and they took action.
Yet, while Minnesota this year is increasing the 5 percent biodiesel requirement for diesel fuel sold in
the state to 10 percent, federal officials have taken an opposite path. Instead of expanding the market
for advanced biofuels and other renewables, the U.S. Environmental Protection Agency reversed course
and recommended gutting by as much as 50 percent the national requirement for biodiesel’s
introduction into the nation’s diesel supply.
The only reasonable explanation for the EPA’s retreat in biofuels is capitulation to a monopolistic
petroleum industry that has grown increasingly hostile to America’s renewable-fuels policy. As we’ve
seen over history, when a competitor starts to make noticeable inroads on a monopoly’s market share,
the response to crush that competitor is predictably overwhelming.
In the beginning, the Renewable Fuels Standard (RFS) was supported by a bipartisan majority in
Congress and signed into law by President George W. Bush. The intent was straightforward: Gradually
introduce a growing amount of domestic renewable fuels into the national distribution of transportation
fuels. While the initial program focused primarily on ethanol, the renewable standard was amended in
2007 to include biodiesel, opening up new paths for the U.S. to grow the advanced biofuels sector.
Today, biodiesel fills much of the advanced biofuels requirement in the renewable standard. According
to the EPA, biodiesel cuts carbon emissions by as much as 86 percent. Made from a diverse mix of
regionally abundant and renewable co-products and waste products such as soybean oil, animal fats and
recycled cooking oils, it is less toxic than table salt and biodegrades as fast as sugar.
If the EPA’s proposed renewable standard volume requirements ultimately are approved — comments
have been taken from the public and interested parties, and a decision is expected this spring — the
consequences for American consumers would be dire. The rule would reverse the incremental progress
biodiesel and other renewables have been making to diversify the transportation fuels market. It would
be a step back in securing our domestic-energy security. And it would signal the EPA has lessened its
commitment to reducing greenhouse gasses and other pollutants. And, for Minnesota, the state that
passed the first biodiesel requirement in the country, it would be a devastating blow to the state’s
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renewable-fuels industry. According to the Minnesota Department of Agriculture, the EPA’s proposed
reductions would cause a $600 million hit to the state’s economy and result in more than 1,500 jobs
lost.
In our state, we pride ourselves on a can-do spirit. We haven’t given up hope the EPA will reinstate a
reasonable market for biodiesel growth. But we are anxious for President Barack Obama, who often has
stated his commitment to biodiesel and advanced biofuels, to step forward and remind his
administration the time is now to expand the markets for renewables, not retreat.
Taryl Enderson is general manager of the Brewster-based Minnesota Soybean Processors and
Joe Jobe of Jefferson City, Mo., is CEO of the National Biodiesel Board, the U.S. trade association
of America’s biodiesel industry.
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EPA's Biofuels Proposal Creates National
Security Risks
Commentary By Brett Hunt
Jan. 22, 2014
The Environmental Protection Agency has long led the way for the development, production
and expansion of advanced biofuels through the Renewable Fuel Standard (RFS). However it
appears that later this year, for the first time ever, the EPA may become a roadblock on the
path to America’s post-oil future if it issues a change to the RFS that will hobble the growth of
advanced biofuels by freezing their volume requirements below 2014 levels.
Advanced fuels are an essential tool for confronting our dependence on oil and ensuring our
economic and national security. As a veteran who served in Operation Iraqi Freedom, I know
that EPA’s proposed changes to the RFS would not only undermine our ability to pursue a
diverse energy sector, they would also hinder military readiness.
As the largest institutional consumer of fuel in the world, the Department of Defense is
extremely vulnerable to price shocks. Every time the price of oil rises by $10 a barrel, the
Defense Department is left with a $1.3 billion budget shortfall, taking money away from
essential training, readiness and acquisition programs. When fuel prices increase unexpectedly,
fighter pilots can’t fly, and mechanized infantry can’t train. Additionally, our military spends
enormous resources and puts our servicemen and women in greater risk just to keep
international supply lines open and operable.
That’s why the military is investing in advanced fuels to diversify energy sources and protect
against price spikes. For example, advanced biofuels are used to power the Navy’s ships and
aircraft on stations around the world.
And here at home, we are chained to the same volatile global oil market as our military. Our
transportation sector is dependent on oil to meet more than 93 percent of its energy needs.
And because the price of oil is determined globally, unrest or instability in far away places raises
prices on folks here at the pump.
We need and deserve better choices.
The urgency to address these threats inspired robust policy action in the form of a Renewable
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Fuel Standard. First passed in 2005, the RFS set out to achieve two goals: to reduce our
dependence on oil and to create a low-carbon alternative fuels sector. In 2007, the EPA
adopted even more robust policy — RFS-2 — that increased the required volume amounts and
most importantly, set carve-outs for advanced biofuels.
Today, the RFS-2 has been successful in achieving its intended mandate of reduced dependence
on oil and is helping to grow the advanced biofuels industry in America. Indeed, they boost our
energy security because they are created from a broad variety of feedstocks — everything from
algae to woodchips — creating the diverse and resilient energy economy we need.
One particular success story is biodiesel. Last year, the United States produced more than a
billion gallons of biodiesel, with every single gallon reducing our dependence on oil. The
industry is poised to produce even more this year, helping revitalize small businesses and
communities all over the country.
However, the EPA’s proposed cuts to volume requirements for biodiesel and other advanced
biofuels would severely curtail the growth of the industry, limiting our country — and the
military’s — ability to diversify fuel sources and hitting smaller producers and biorefiners
especially hard.
The RFS-2 fight is a fight for America’s energy future, and the stakes couldn’t be higher. We can
continue to embrace the status quo, committing to a future that would maintain our
singlesource dependence on oil without regard to the economic and national security
implications.
Or we can choose a different energy future, one where we embrace policy action to drive the
growth of advanced fuels — such as biodiesel — that diversify our energy options and make
sure we can maintain the strongest fighting force in the world.
As someone who served this country, I choose the latter.
I call upon the Environmental Protection Agency to reconsider the proposed reduction targets
and continue moving forward with robust policies that provide alternatives to our dangerous
dependence on oil and strengthen the renewable fuels industry in America. When it comes to
creating a more secure energy future — and at a time when these clean, homegrown fuels are
taking off — we shouldn’t be hobbling the industry.
Brett Hunt is a former captain in the U.S. Army. He is an active supporter and spokesman for the clean
energy campaign Operation Free.
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Springfield, Ill., State Journal-Register
EPA BIODIESEL PROPOSAL THREATENS ILLINOIS
JOBS, RENEWABLE FUELS INDUSTRY
By Bill Wykes
Feb. 13, 2014
While still a U.S. Senator from the state of Illinois, one of Barack Obama’s greatest achievements was
the 2006 introduction of legislation that would become the Alternative Diesel Standard. Recognizing the
need to diversify America’s fuel options, the proposal called for including incremental volumes of
biodiesel into the country’s diesel distribution streams.
“For all of our military might and economic dominance, the Achilles’ heel of the most powerful country
on Earth is still the oil we cannot live without,” Obama said at the time.
He was right then and his words ring every bit as true today.
How ironic is it then that it is now President Obama’s Environmental Protection Agency that has
proposed an inexplicable retreat on the gains biodiesel and other renewable fuels have made in
displacing billions of gallons of petroleum.
So how did we get here from there? In 2007, the Alternative Diesel Standard was essentially folded into
the Renewable Fuels Standard, a program launched in 2005 that had the similar goal of displacing
gasoline with domestic renewable fuels.
And a funny thing happened. It worked. Over the years, biodiesel and other renewable have been
gradually gaining market share on the monopoly the oil industry has held for more than 100 years. As
you would expect, this was not a welcomed development by the domestic petroleum industry or the
international cartel known as OPEC.
So after untold millions of dollars spent on lobbying against the RFS, the EPA last November reversed
course and proposed slashing the volume requirements for renewables. For the biodiesel producers,
their effective market would be cut in half.
If the Obama Administration signs off on the proposal, the reduction would result in the loss of
thousands of jobs nationally. It could be particularly devastating for the biodiesel industry in Illinois,
which supports more than 5,600 jobs and nearly $240 million in wages. All told, the industry provides a
$2.2 billion boost to the state economy.
Biodiesel is produced from a wide range of co-products and waste-products, including soybean oil,
livestock fats and recycled cooking oil. Since 2007, biodiesel production has grown to more than 1.7
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billion gallons last year. The fuel, the nation’s first commercially available advanced biofuel, represents
almost five percent of the country’s on-road diesel fuel market.
As a result of its 86 percent carbon reductions, biodiesel use in the U.S. since 2005 has cut lifecycle
greenhouse gas emissions by more than 56 billion pounds, the same effect of removing five million
passenger vehicles from our roadways.
Yet, as strong as the industry has performed – with the help of the RFS – the oil industry has never let up
in its pursuit of dealing a lethal blow to renewables. The oil industry’s self-interest is evident, but it
cannot be allowed to supersede the interests of Illinois and the nation overall.
In Illinois, we want our renewable fuels industry to thrive, because we know it is of particular help to
rural communities in a state whose employment rate significantly lags the rest of the country. Our
economy and diversifying America’s transportation fuels remain two of our top priorities. A policy that
would damage both should be more than ill-advised; it should be unthinkable.
Wykes is an avid biodiesel user in both his passenger vehicle and farm equipment in Yorkville. He
is also past Chairman of the Illinois Soybean Board.
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Senators Urge Administration to Support U.S.
Biodiesel
Nov. 15, 2013
By Clare Foran
A bipartisan group of 32 senators signed onto a letter Thursday asking the administration to protect the
American biodiesel industry from cutbacks under the renewable-fuel standard.
The letter was signed by senators such as Sens. Mark Pryor, D-Ark. Mark Kirk, R-Ill., Sheldon
Whitehouse, D-R.I., Jeanne Shaheen, D-N.H., and Deb Fischer, R-Neb. It was addressed to a trio of
administration officials, Environmental Protection Agency Administrator Gina McCarthy, Secretary of
Agriculture Tom Vilsack, and Office of Management and Budget Director Sylvia Mathews Burwell.
The letter asks the officials not to reduce target levels for biodiesel production under the 2014
renewable-fuel standard. It argues that biodiesel is the only advanced biofuel under the mandate to
achieve commercial-scale production across the country and states that any cutback or failure to
increase RFS target levels for biodiesel in next year's proposal would be harmful to the nascent industry.
"Biodiesel is improving our energy security by reducing our dependence on imported petroleum diesel,
diversifying fuel supplies, and creating competition in the fuels market," the senators state in the letter.
EPA is expected to release a proposal for the 2014 RFS as early as Friday.
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House members urge EPA to boost biodiesel
target
Amanda Peterka, E&E reporter
December 19, 2013
A coalition of 54 bipartisan House members yesterday urged U.S. EPA to increase its proposed target for
biodiesel, a renewable fuel made from soybean oil, animal fats and used cooking grease that must be
blended into petroleum-based diesel.
In a proposed rule last month, the agency said it was planning to keep the biodiesel industry's
production target at 1.28 billion gallons for the next two years, well below the projected level of
production in 2013.
Such a low-ball target for the biodiesel industry will result in lost jobs and investment in the industry, the
lawmakers led by Reps. Tom Latham (R-Iowa) and Mike McIntyre (D-N.C.) wrote to the Obama
administration.
"It is clear that biodiesel has been a great RFS success story. It has exceeded RFS targets in each year and
is clearly poised to do so again in 2013," the lawmakers wrote. "This type of reduction could have very
damaging repercussions."
For the last several years, EPA has consistently raised its biodiesel target under the most recent
renewable fuel standard, which was signed into law exactly six years ago today. Bolstered by the RFS
and a key production tax credit, the biodiesel industry is projected to hit a record 1.7 billion gallons of
production by the end of this year.
A recent study commissioned by the National Biodiesel Board found that the industry supported 62,000
jobs and $17 billion in economic activity.
This is the first time EPA has proposed to hold the biodiesel target level. The agency also proposed to
roll back the mandates for conventional ethanol and other advanced biofuels for the first time, citing
concerns over the limit to the amount of ethanol that can be blended into gasoline and delays in scaling
up advanced biofuel technologies.
At a hearing last week, EPA Director of Transportation and Air Quality Christopher Grundler said that the
agency was not compelled by law to increase the biodiesel standard each year and that it viewed the
target as more of a floor than a ceiling.
But the biodiesel industry says it will face a sharp drop in production compared with production levels
this year. It is faced with the prospect of not having significant backing from the Obama administration
coupled with the expiration of its $1-a-gallon production tax credit at the end of this year.
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"I think this letter reflects a growing consensus that the EPA got it wrong on biodiesel in this proposal
and should reconsider the draft and increase the volume to reflect actual market conditions," said Anne
Steckel, the National Biodiesel Board's vice president of federal affairs.
Of the 54 lawmakers signing the House letter, 41 were Democrats and 13 were Republicans. Last month,
32 senators wrote to the administration with a similar message (E&E Daily, Nov. 15).
A bipartisan group of senators met with EPA Administrator Gina McCarthy yesterday to call for a more
robust overall renewable fuel standard.
"I tried to impress upon her that while President Obama and his administration have claimed to be in
favor of domestic biofuels, this proposal is a step backward and will harm our efforts to further diversify
our fuel supply," said Sen. Chuck Grassley (R-Iowa), who participated in the meeting and is urging EPA to
hold a hearing in Iowa on the proposal.
EPA is accepting public comments and is aiming to finalize the proposal in early 2014.
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More For Big Oil? Really? Are You Kidding
Me?
By Cliff Schecter
Jan. 29, 2014
For the 1.3 million Americans unemployed and facing a life bereft of new benefits, Exxon feels your pain.
Big Oil's biggest and baddest had a rough year in 2011.
They only made $41 billion (that is with a "b"). Now I know what you're thinking: That's a lot of scratch!
But, you see, in 2012 they kicked it up a notch, scoring with $44.9 billion overall, coming only $300
million shy of a global record. So you can see where 2011 must have been devastating.
In fact, during the banner economic year of 2012, they earned $15.9 billion alone during the second
quarter, the highest ever for a U.S. corporation. At one point, in April of that year, Think Progress
estimated they were pulling in $104 million. Per day.
Oh and on that $41 billion from 2011, they only paid 17.6 percent in taxes. A highly taxed year in the
Romney household, to be sure, but for most of us not putting away quite as much bank, a hell of a lower
rate than we'll ever see.
Why do I bring this all up? Because a recent (as in November, 2013) and flawed proposal from the
Obama Administration is about to hand a huge payday to the oil industry. And I'm gonna go out on a
limb and say they don't need it.
To be specific, the Environmental Protection Agency proposed cutting back on the amount of biofuels
required in our fuel supply (the Renewable Fuel Standard) -- even advanced biofuels like biodiesel. This
proposal, if carried through into actual policy, promises to have myriad negative effects on a clean
energy future.
As if that isn't bad enough, there are the American entrepreneurs who, relying upon that decision in
2007, did what entrepreneurs do. They invested their savings, took out loans and did whatever else they
could to put their money, and not just their mouths, behind a clean-energy future devoid of debt-tyrants
abroad, in service of more oil importation. As an entrepreneur who has started one business and helped
start another, when someone suddenly changes the conditions on which your decision relied in
investing your hard-earned money, well, let's just say I can see where to euphemistically put it this might
irk them a bit.
I understand that biofuels are not perfect. Even advanced biofuels still need subsidies, and in some
cases further experimentation to make them more economically viable.
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But the truth is that only through government support and experimentation with current biofuels can
we get to even cleaner ones. In the meantime, it means less carbon production, less reliance upon oil
and fewer dollars going into the hands of repressive oil-rich governments abroad. That, at least to me,
seems like something we could call win-win-win.
Additionally, I have to say as someone who lives in the Great Midwest, where advanced biofuels
produce real jobs, this is particularly galling. These jobs help employ people in the very region decimated
by 20 years of corrupt, free-trade deals with foreign governments and false promises of employment
nirvana from our own, that have taken once thriving metropolises couch as Youngstown, Ohio and Flint,
Michigan and have destroyed an entire economic ecosystem. Drive though these towns sometime, if
you're not from the area, and see what we've sacrificed on the altar of shuffling paper for mass financial
gain by the few. Sure, the bankers have made out like bandits. But in many cities and towns that dot the
landscape around where I live, there has been no creative destruction. Just destruction. Of a way of life.
As if that is not enough, Congress is trying to add to this legacy of shame by giving the president fast
track on the terrible Trans-Pacific Partnership (slogan: NAFTA! But with more jobs shipped abroad if
that's possible!) which more aptly should be named a Trans-Pacific Panzer Movement against the very
jobs and environment we've already spent 30+ years assaulting. Read up on this terrible potential trade
deal that would negotiate our rights away in private and allow foreign governments to overrule any
protections for workers and the environment we try and enact. You want to be paranoid about
something Rand Paul? Be paranoid about this.
So, in addition to this potential disaster, if the EPA cuts its requirement for blending advanced biofuels in
2014 by 40 percent just like that, there are a whole lot of entrepreneurs, farmers and manufacturing
workers in the Midwest who are going to be hurt. But they don't watch write for The Washington Post
editorial page, so maybe that makes it ok.
The EPA's decision to cut biodiesel was especially shocking because it is the only domestic, commercially
viable advanced biofuel out there, made from Florida to Iowa to California. Freezing biodiesel at less
than 1.3 billion gallons -- when the industry likely produced 1.7 billion gallons last year! – threatens
thousands of jobs across the country and millions of dollars in wages during an employment crisis. Oh
and the fuel gap will be made up by more oil! Yippee!
That means we'll increase greenhouse gas emissions from vehicles by 8 billion pounds in 2014 (like Jesus
would have done!), because that's what would have been eliminated if we simply kept biodiesel at its
current production level of 1.7 billion gallons. (The EPA requires that advanced biofuels reduce
greenhouse gasses by at least 50 percent compared with their oily competitors.)
And for the crowd that wants to focus blindly on any potential drawbacks of biofuels instead of on the
petroleum elephant in the room, please my friends, let's not make the perfect the enemy of the good.
When a perfect fuel comes around, I'll be the first to jump on board. But until then, let's continue our
forward progress. Please?
Instead of continuing to subsidize a politically regressive industry which is destroying this planet bit by
bit, and every so often is kind enough to give us an Exxon Valdez or a BP Deepwater Horizon, don't we
want to provide jobs for those most hurt by recession and economic betrayal? Don't we want to tell
those who invested in cleaner energies it is safe to do this in the future, so please don't pull your funds
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and fundamental belief in change out of the market to create a cleaner planet? Don't we like this whole
breathing thing?
Lastly, there are those of us who have this slight problem with some of this country's so-called "allies." If
members of your family need to be quietly flown out of the country after large terror attacks, I am not
feeling very warm towards you. If we're strengthening governments that persecute women and
minorities while calling for the destruction of this country during casual badinage? Yeah, also not a big
fan.
This is what we get from our addiction to oil, and the only realistic alternative these days is biofuels. I
hope the EPA will reconsider. We've done it Big Oil's way and have seen the results. This time let's not.
Not all that much, just the planet, depends on it.
Follow Cliff Schecter on Twitter: www.twitter.com/cliffschecter
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EPA proposes slashed market for America’s cleanest fuel as observers ask
“why?”
Jim Lane | October 15, 2013
For industry observers, there is much that is mystifying in the EPA’s draft 2014 production
targets for the US 2014 Renewable Fuel Standard.
But nothing more mystifying than the biomass-based diesel numbers.
The Digest reports back from Mandate-Land with answers for your questions.
If there’s any fuel that reduces emissions — both of the CO2 type and the ordinary type that
chokes kiddies in the back of the school bus — it’s biodiesel. It’s sustainable, available,
affordable, reliable, green, clean, popular, growing, and has a lot of fans.
Consider the numbers. Ozone – 50 percent less than diesel fuel. Sulfur, sulfur oxides and sulfate
emissions – essentially eliminated. Carbon monoxide – 48 percent lower. Particulate Matter –
47 percent lower. Hydrocarbons – 67 percent lower for biodiesel than diesel fuel. Nitrogen
Oxide emissions are 10 percent higher. Polycyclic aromatic hydrocarbons – cancer-causing
compounds – down 75-85 percent, excepting a 50 percent cut in benzoanthracene, which was
reduced by roughly 50 percent. 2-nitrofluorene and 1-nitropyrene down 90 percent.
Result of all those positives? Biodiesel and renewable diesel are on target for 1.6 billion gallons
of production this year. And the EPA is proposing that the target next year is 1.28 billion – 20
percent down.
Now, petroleum-exporting nations — we can understand why they might want to protect their
market. The fuels may be (comparatively) dirty and (largely) imported, but they make a lot of
money for a lot of people.
But, the Environmental Protection Agency? It’s a shocker. Not the agency you’d expect to be
wielding the last sword, in the last ditch, as a crusader for higher particulate emissions, more
cancer-causing compounds at a pump near you, and a bigger market for Venezuelan crude.
Let’s review the background on biodiesel and renewable diesel. There’s no blend wall in sight,
production volumes have been growing fast, prices have been relatively stable, and because it
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provides a market for soybean oil, it reduces prices for ranchers and poultry farmers who use
the soybean meal as animal feed.
Here are answers to your questions regarding biomass-based diesel and the proposed 2014 and
2015 standards.
Q: What is EPA’s stated method and target?
A: In the draft EPA document that is floating around the industry — which the Digest has
reviewed — the EPA writes that it aims to “Base advanced volume on availability of advanced
biofuels but considering the blendwall” by [setting} the advanced volume at the sum of the
cellulosic standard, the BBD standard and all available volumes of non-ethanol advanced.” EPA
adds that it intends to “Maintain biomass-based diesel std at 1.28 Bgal; since BBD is nested
within the advanced biofuel standard, any excess volumes above 1.28 bill gal can compete with
other advanced biofuels. There is limited availability of other advanced biofuels, which
generates opportunities for biodiesel production above 1.28 bill gal to help meet the advanced
biofuel standard.”
Q. What is the proposed “higher volume” available within the advanced biofuel
standard?
A. EPA has proposed that this pool be reduced to 2.17 billion RINs for 2014 and 2015.
Q. How many biodiesel gallons would it take to fill up those gallons and RINs?
A. Remember, the biomass-based diesel target is the only one expressed in actual gallons, as
opposed to ethanol-equivalent gallons, or RINs. Accordingly, a biomass-based diesel standard of
1.28 billion gallons would be expected to generate somewhere between 1.92 billion and 2.1
billion RINs, depending on how much renewable diesel is produced within that target
(renewable diesel generates up to 1.7 RINs per gallon, compared to the 1.5 RINs per gallon of
biodiesel).
Q. So, how much practical room did the EPA leave for excess production in the
proposed 2014 and 2015 standards?
A. A range between of 70,000-250,000 RINs, which translates to between 41,000 and 166,000
gallons, per year.
Q: Does EPA think that excess biodiesel production is possible?
A: On page 8, EPA writes: “We intend to propose that the BBD volume for both 2014 and 2015
be maintained at 1.28 bill gal,” but notes “there is reason to think that some BBD volumes
above 1.28 bill gall are possible in 2014 (- biodiesel could each 1.7 bill gall in 2013).”
Q. What is a reasonable forecast for available production capacity for biodiesel
and renewable diesel in 2014 and 2015?
A. Through August, a total of 1.604 billions D4 RINs (representing a combination of biodiesel
and biobased diesel) have been generated, representing 1.053 billion gallons of actual
production. The industry is on a run-rate to produce a total of 1.57 billion gallons and 2.41
billion RINs for 2013.
Q: What about future capacity? Will even more come online?
A: New capacity is expected to be available in future years. For example, the Diamond Green
Diesel renewable diesel plant just came online earlier this year, and will be able to produce its
full capacity of 137 million gallons in 2014 and 2015. Not to mention biodiesel capacity that is
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relatively easy to add. REG estimates that there is currently 200-300 million gallons of unused
capacity in the biodiesel industry that could be brought online.
Q. Given that industry is on track to produce 2.41 billion RINs this year, is adding
production capacity and could add more — what was the advanced biofuel RIN
target for 2013?
A. 2.75 billion RINs. What was not produced with biomass-based diesel was supplemented with
Brazilian sugarcane ethanol.
Q. Sugarcane ethanol? Does it play a role in EPA’s thinking — because of the
ethanol blend wall?
A. Ah, grasshopper, you have hit upon it. As the EPA writes on page 25, “if BBD increases and
the advanced standard remains unchanged, there is less need for sugarcane ethanol.”
An industry observer writes: “one, they are trying to partially satisfy the oil industry on the
blend wall (which is a mistake since the RFS was designed to overcome the blend wall not
perpetuate it) and two, they are trying to keep Brazilian ethanol out ( probably at behest
of RFA) but they have screwed the whole program up in doing so.”
Q. Is that why the EPA is proposing statutory ranges for every fuel, excepting
biomass-based diesel? Even though biomass-based diesel has the widest range
in EPA’s production forecast?
A. Probably.
Q. Is that why EPA is slashing the most popular biofuel when there is no
controversy over it?
A. Probably. But toss in there the possibility that someone at EPA has simply goofed up the
numbers, forgetting that biomass-based diesel targets are expressed in gallons, and every other
target expressed in RINs (ethanol equivalent gallons). In setting a target of 1.28 billion gallons, it
might sound like there is a lot of room for excess production between 1.28 billion gallons and
2.17 billion in the proposed advanced biofuel target — but when you translate 1.28 billion
gallons into 1.92-2.10 billion RINs, you see there’s almost nothing there.
Q. What would be a reasonable biomass-based diesel standard for 2014 and
2015?
A. 1.7 billion gallons for 2014 and 1.8 billion gallons for 2015, minimally. The industry is already
close to that rate.
Q. How would that translate to the 2014 advanced biofuel pool?
A. Something like 2.60 billion RINs.
Q. What would that result in, compared to the 2.17 billion RINs EPA is proposing?
More jobs?
A. Yep.
Q. More energy independence?
A. Yep.
Q. Cleaner air?
A. Yep.
Q. Reduced CO2 emissions?
A. Yep.
Q. What does EPA stand for again?
A. Environmental Protection Agency.
Q. Is diesel demand growing in the US?
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A. Yep.
Q. Is there a blend wall issue?
A. Nope.
Q. Does anyone in a position to know think those numbers can’t be achieved?
A. Nope.
Q. So why doesn’t the EPA simply get on with it?
A. Good question. We hope they will.
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EPA fuel mandate imperils biofuel industry, producers
warn
Dec. 5, 2013
By Laura Barron-Lopez
Washington – Advanced biofuel companies say plants will close, risking thousands of lost jobs, if the
Environmental Protection Agency proceeds with its proposed renewable fuel mandate.
The agency's proposed draft scaled back the amount of biofuels that refineries must blend into the
nation's fuel supply in 2014.
Advanced biofuels industry officials say the proposed levels, if finalized, would devastate the booming
industry, which includes cellulosic ethanol, sugar cane ethanol and biodiesel.
Biodiesel makes up the largest percentage of advanced biofuels in the marketplace today and is on pace
to produce 1.7 billion gallons for 2013.
Production will only go up in 2014, Ben Evans of the National Biodiesel Board told The Hill — that is, if
the EPA's proposal does not go through.
The proposal could threaten up to 8,000 jobs, Evans said.
It could also shutter some of the nearly 200 biodiesel plants operating across the nation. Biodiesel is
used in mining operations, commercial trucking fleets, and is blended into the diesel fuel supply.
An example, Evans said, are drivers of vehicles like the VW Jetta. They could get biodiesel when fueling
up at the pump.
The EPA said it lowered the renewable fuel mandate for 2014 because of the blend wall, referring to the
highest amount of ethanol that the market could currently accommodate.
When more ethanol mixed fuels are pumped into the market, they have the potential to damage
engines and motors in vehicles, lawn mowers, snowmobiles, and more, oil and gas companies claim.
The irony, Evans said, is that the blend wall does not apply to biodiesel. It only applies to ethanol-based
fuels.
"Biodiesel is working," Evans said, "which is why this proposal is very damaging to our industry."
"It was very much a surprise," Evans added of the move by the Obama administration.
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Many biofuel firms called the proposal out of line with the president's stance on clean energy and
climate change.
Industry stakeholders will voice their concerns over the new levels at EPA's public hearing on Thursday.
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Biodiesel makers caught in crossfire of ethanol fight
By Darren Goode
10/23/13
Biodiesel producers are launching a new campaign to lodge their complaints that they have been caught
in the crossfire of the battle over the EPA’s ethanol mandates.
The National Biodiesel Board is criticizing leaked EPA draft proposals that show the agency may cut the
volume requirements for biodiesel for 2014 even though makers of the fuel say it will reach record
production levels next year.
“As a supporter of the U.S. biodiesel industry, I want to express my alarm at the draft proposal for 2014
Renewable Fuel Standard volumes that has been circulating recently,” states a letter the biodiesel board
is sending to its members to sign and send to EPA Administrator Gina McCarthy and Howard Shelanski,
head of the White House’s Office of Information and Regulatory Affairs.
“I want to make clear that, if approved, this proposal would reduce biodiesel production by some 25
percent and deliver a devastating blow to a young and growing industry, as well as to our bipartisan
goals for building America’s energy capacity,” the letter states.
The RFS, which was created by the 2005 and 2007 energy laws, has triggered a bitter fight, pitting
ethanol producers against oil refiners and splitting lawmakers across regional and industry lines. The
battle has centered on the so-called blendwall, where the ethanol volumes that the EPA has mandated
be mixed into the nation’s gasoline pool would exceed demand and levels that refiners have said can
safely be put into vehicles.
But biodiesel producers emphasize the fight over the ethanol blendwall has nothing to do with them.
“Many in our industry believe we’re being unfairly dragged into that issue with this proposal,” one
biodiesel industry official said.
The draft 2014 EPA mandate for biodiesel calls for 1.28 billion gallons — the same level as 2013 —
although biodiesel backers say the industry is on pace to produce a record of at least 1.7 billion gallons
this year.
“Biodiesel is currently the leading EPA-designated Advanced Biofuel in the country, and it has exceeded
RFS requirements in every year of the program,” the letter says. “Biodiesel and the RFS are working
successfully.”
But the proposed reduction “would without question stymie growth and investment throughout the
biodiesel industry and force plants to shut down,” resulting in the loss of nearly 8,000 jobs, especially at
smaller companies, it states.
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It also credits biodiesel for diversifying fuel supply and reducing air pollution, including greenhouse gas
emissions, and calls for the EPA to lift the 2014 volume mandate at least to this year’s projected
production level of 1.7 billion gallons.
A handful of biodiesel producers will also attend a meeting Friday with OMB, National Biodiesel Board
spokesman Ben Evans said. Several meetings already with the EPA and OMB have already been held
before the government shutdown and the leak of the EPA draft, Evans said.
McCarthy has already sought to quell concerns.
“At this point, EPA is only developing a draft proposal,” she said in an Oct. 11 statement after the draft
was leaked. “The agency has made no final decision on the proposed renewable fuel standards for
2014.”
McCarthy neither confirmed nor denied whether the draft accurately represented the agency’s position.
In a presentation to OMB officials on Sept. 25, biomass-based diesel industry advocates said setting the
volume standard for their product below 2 billion gallons in 2014 “will result in decreased domestic
production, worker layoffs and a pullback from new investment in capacity in this sector of the RFS.”
To view online:
https://www.politicopro.com/go/?id=27164
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