Corn Commentary

EPA Official Talks about RFS Proposal

The man directly responsible for the EPA proposal to lower the 2014 volume obligations under the Renewable Fuel Standard (RFS) last week addressed members of the ethanol industry directly impacted by that plan.

nec14-grundler“I really wanted to provide you with some context and what our thinking was behind our 2014 RVO proposal,” said Chris Grundler, EPA Director of the Office of Transportation and Air Quality for the U.S. Environmental Protection Agency speaking at the National Ethanol Conference. “And it is a proposal,” he stressed several times.

First off, Grundler wanted to make it clear that EPA does support biofuels. “The most disappointing thing I heard in the reporting is that EPA no longer supports the development of biofuels, and I’m hear to tell you that’s wrong,” he said. “We know that if we’re going to achieve what science is telling us we must achieve in terms of greenhouse gas reduction … biofuels has got to be part of that solution set.”

Gundler says they came up with the proposal to address marketplace realities for biofuels. “Our overriding goal with this 2014 RVO proposal is to put the RFS in what we call a manageable trajectory while continuing to support the growth of renewable fuels in our transportation supply,” he said. “We have to address some of the practical realities that we see today in the marketplace.” Comments by Chris Grundler, EPA at National Ethanol Conference

During a brief press availability after his remarks, Grundler defined manageable trajectory as “steady growth in overall biofuels space … where the market is able to move those fuels and people use them.”

Grundler also said specifically that the EPA can definitely change the proposal Grundler stressed that the proposal is just that and it could be changed. He also noted that EPA received over 100,000 written comments during the comment period with 6,000 “unique” comments, and that the hearing held in early December was a record. He added that they do intend to try and meet the goal of finalizing the rule by the end of spring. Press Avail Chris Grundler, EPA

Protect the RFS — Times Three

nec14-insidersNow that the farm bill is a done deal, National Corn Growers Association Public Policy Vice President Jon Doggett says his organization has three main priorities for this year in Washington – protect the RFS, and protect the RFS, and protect the RFS.

That may seem redundant, but that’s just how important the Renewable Fuel Standard is for corn growers.

Doggett sat on a panel with one of his best lobbyist friends at the National Ethanol Conference this week – Bob Greco of the American Petroleum Institute.

nec14-doggettWell, maybe not BEST friends, but Jon says they are friends, although they do disagree on important issues, like the Renewable Fuel Standard (RFS). “I like Bob Greco, I have friends at API, but if any person in this room doesn’t think that they will leap at the chance to get rid of the RFS between now and the election or during the lame duck session – you’re crazy!” said Jon during the panel session, warning the ethanol industry sternly, “Don’t be complacent.”

Besides Greco, Jon shared the annual Washington Insiders panel at NEC with Aaron Whitesel of DuPont, Kris Kiser with the Outdoor Power Equipment Institute, and Shane Karr from the Alliance of Automobile Manufacturers.

Listen to the whole conversation between them, moderated by Renewable Fuels Association president Bob Dinneen: NEC Washington Insiders Panel

Listen to my interview with Jon from the NEC where he talks about the importance of the RFS, next week’s Commodity Classic, and what NCGA likes best about the new farm bill: Interview with Jon Doggett, NCGA

2014 National Ethanol Conference Photo Album

Record Distillers Grains Exports in 2013

Patriot Renewable Fuels DDGsU.S. exports of the ethanol co-product distillers grains set a new record last year with China continuing to lead the demand.

According to the latest government statistics, exports of distillers dried grains with solubles (DDGS) totaled a record 9.7 million metric tons (mmt) last year, up 31% from 2012 and well above the previous record of 9.0 mmt set in 2010. China was responsible for nearly half of the total – 46%, with Mexico and Canada a distant second and third.

Credit for driving the demand for DDGS exports can be given to the U.S. Grains Council and the Renewable Fuels Association, which sponsor the Export Exchange every two years to bring buyers and sellers of coarse grains and ethanol co-products together. The event this year will be held October 20-22 in Seattle.

Meanwhile, U.S. exports of ethanol were down a bit from the previous year, but at 621.5 million that’s still the third-highest annual total on record. Canada was by far the leading export market for the year, receiving 52% of the total. The Philippines ranked second, followed by Brazil, the United Arab Emirates, and Mexico. Meanwhile, U.S. ethanol imports were down 27% from 2012, making the United States a net exporter of 226.3 mg in 2013, roughly a 24% increase over 2012 net exports.

Exports of both DDGS and ethanol from the United States are expected to continue to increase to meet demand, which could make up the difference if the EPA follows through on its proposal to lower the RFS.

Would Someone Please Tax Me Like Big Oil?

oily bird picIt’s tax time again. You know that short window during the year when it’s ok to complain about being taxed. Given the number of people who remain unemployed it really is kind of bad form to complain the rest of the year.

So as you belly up to do your part to keep the skids of government greased here is a whopper of a tax tale to help you really get the bile out and make your complaining count. I am guessing that it will come as no shock to you that each year the average American pays more than 20 percent of their income in federal taxes. This does not include state and local taxes.

So this begs the question; shouldn’t an industry that makes $175,000 per minute pay at least that much? This is a real number reflecting the profits of the five largest oil companies. Together they earn more in one minute than 95 percent of Americans earn in a year.

However, Reuters news service estimates that Chevron, ConocoPhillips, and ExxonMobil pays effective federal tax rates of 19 percent, 18 percent, and 13 percent, respectively. Reuters noted that this is “a far cry from the 35 percent top corporate tax rate.” Likewise the tax bracket for the most successful Americans is 35%.

The petrol industry has prospered over the past decade, thanks to high oil and gasoline prices. The five largest companies — BP, Chevron, ConocoPhillips, ExxonMobil, and Shell — earned more than $1 trillion during this time. In the first nine months of 2013, these five companies realized a combined $71 billion in profits. Certainly, these companies can prosper without $2.4 billion in annual special tax breaks.

The Congressional Joint Committee on Taxation estimated that three tax preferences provide $24 billion per decade in annual benefits to these five companies. The “limitation on Section 199 deduction,” designed to encourage domestic manufacturing to remain on shore, costs the Treasury $14.4 billion per decade for these five companies. The foreign tax credit deduction saves the big three domestic oil companies $7.5 billion per decade. The “intangible drilling costs” deduction saved the five companies another $2 billion, according to the Wall Street Journal.

It also seems the oil and gas industry has been the largest beneficiary of federal financial support in the entire energy sector benefitting from nearly 60 percent of all federal energy support since 1950.   Shouldn’t the lion’s share of these dollars be spent on new, alternative, renewable sources to make us less dependent on something as finite and as devastating to the environment as oil?

Big Oil will argue that these breaks are critical to job creation, but recent data from the Bureau of Labor Statistics shows oil industry employment is off 10 percent. This is not nearly as bleak as it sounds given that nearly half of the direct jobs touted by big oil are service station positions.

Simply put, it’s time to end special tax breaks for BP, Chevron, ConocoPhillips, ExxonMobil, and Shell.

RFS Hearing in the Heartland

Hearing-in-the-Heartland-Crowd-ShotThe turnout was huge in Des Moines Thursday for a “Hearing in the Heartland” to support the Renewable Fuel Standard (RFS).

The event was hosted by Iowa Governor Terry Branstad and included comments from dozens of lawmakers, government officials, farmers, biofuel producers, and other interested parties from seven states – as well as a crowd of hundreds.

“I urge President Obama, Administrator McCarthy and the EPA to listen to the people of Iowa and the Midwest, and continue to support a robust and strong Renewable Fuel Standard — as they have in the past,” said Branstad. Governor Brandstad comments

Among the speakers at the event were Congressmen Tom Latham and Steve King, both Republicans from Iowa who signed a letter this week from U.S. House representatives asking the EPA to revise its proposal for 2014 biofuel volume obligations under the RFS. “It’s good for the environment, it’s good for the economy, it’s 45,000 jobs,” said King. “The RFS is market access, market access, market access – that’s all it is.” Rep. King comments

Rep. Latham urged those present at the hearing to comment on the proposal if they have not done so already. “It’s up to those of you who are most dramatically and directly impacted by this fundamental shift in policy against biofuel to tell your stories and make your views heard,” said Latham. Rep. Latham comments

The comment period on the EPA proposal to lower volume requirements for biofuels under the renewable fuel standard is just days away now and it appears evident that they are being deluged with comments opposing the plan. Nebraska Corn Board executive director Don Hutchens reports that they received over 5,000 letters expressing opposition to the proposal. “This is the greatest grassroots response in the history of the corn checkoff program since its implementation in 1978,” said Hutchens. Earlier this month, the state group had sent farmers letters to the EPA that they could sign and return. These letters will be forwarded to EPA before the comment period deadline of January 28.

Imagine that! Over 5,000 letters from farmers in just ONE STATE! If you have not done so yet, please send in your comments today.

RFS: Hearing in the Heartland photo album

Farm Bureau Reaffirms Support for RFS

During the American Farm Bureau Federation (AFBF) annual meeting this week in San Antonio, delegates voted to reaffirm support for the renewable fuels standard and approved a policy “supporting renewable fuels tax incentives for the production of biodiesel and cellulosic ethanol and installation of blender pumps.”

ilfb-guebertNew Illinois Farm Bureau President Richard Guebert says maintaining a strong RFS for ethanol and biodiesel production remains the top priority for farmers in his state and the region.

“Midwest farmers have worked so hard and so long to get those standards where they are today,” he said. “It’s just difficult for us to understand why we’re being forced to rollback those standards.” He says he can’t understand how the EPA could propose a policy that most experts agree will hurt biofuel producers and markets, especially in the rural economy, considering how the president has repeated his dedication to green energy, including biofuels, time and time again.

Listen to an interview with Richard here: Interview with Illinois Farm Bureau President Richard Guebert

Just a reminder, if you have not yet submitted comments to the EPA regarding the proposal to scale back volume requirements under the RFS, you have until January 28 to do so. Shout it out and make your voices heard!!!

Big Oil Labels Family Farmers Extremists

A true David and Goliath battle is under way between the nation’s family farmers and Big Oil in the form of the American Petroleum Institute (API). And farmers in recent weeks bounced a big rock off the head of the petroleum behemoth. At issue is American ethanol.

For months the oil industry has been involved in a well-funded campaign of both public and covert efforts to undermine the growing role of sustainable biofuel like ethanol. They capped this massive misinformation campaign by leaning on the White House and EPA to propose a change to the Renewable Fuels Standard (RFS) that would reduce ethanol use by 1.4 billion gallons this year.

The bad news is the most recent slap in the face, if successful, has the potential to hammer farmers and slappythe rural economy to the tune of more than 10 billion dollars.

Before this recommendation can be accepted EPA’s proposal must go through a formal public comment period. Thousands of corn farmers across the country have responded with a vengeance submitting comments urging the U.S. Environmental Protection Agency to retract its proposed 10 percent cut in the amount of corn ethanol in the 2014 Renewable Fuel Standard.

The volume of supportive comments coming from farmers as well as equipment dealers, bankers, school administrators and consumers who favor a fuel choice has been incredible so thanks to everyone who has taken the time to register your opinion.

The response has been so terrific that it tweaked API and in response they have launched yet another effort to remove any competition from the fuel marketplace. It takes the form of an annoying and deceptive “robo-call.”

On the pre-recorded action request API refers to those supporting ethanol as both a “special interest group” and as “extremists.” Since most those making the calls are farmers, I guess that means you. They also use the same old hackneyed and debunked arguments saying ethanol leads to higher food prices and damages car engines.

If being called an extremist makes you a little angry fight back. If having one of the world’s most prosperous industries try to increase their profits at your expense….fight back.

Corn growers: Click here to send a public comment to the EPA.

Non-farmers: Click here to customize and send a public comment to the EPA.

I wish it was a real person calling rather than some digital dweeb called Tom, because I would tell him to quit bugging hard working Americans and get back to cleaning up the their latest oil spill.

Ethanol Gives an Extra Boost Even as Temperatures Drop

With temperatures well below normal across much of the country, stories focused on how to best handle the problems that accompany an arctic blast dominate newspapers, radio and television alike. One from South Dakota, where they contend with this type of winter wonderland on a regular basis, points out how ethanol blends in automotive fuel actually helps keep drivers up and going.

While Keloland Television notes that it is still important to start cars regularly, it points out that ethanol actually keeps non-diesel vehicles in commission during cold snaps.

“Most everything has an ethanol blend to it, which acts as a heat, if you will, to keep the moisture dispersed. So, not a super-huge issue.”

Whether you must brave the windy roads or can stay hunkered down by a warm fire, know that ethanol in your tank makes it more likely your car will start when the snow finally stops. Proper maintenance makes all the difference, but ethanol gives motorists an added bonus beyond its benefit to their environment and their pocketbooks.

New Years Resolution: Protect the RFS

mocornAs you are making your list of 2014 New Year’s Resolutions, one of them should be to do your part to help protect the Renewable Fuel Standard (RFS).

Unless your voice is heard, the Environmental Protection Agency will approve its proposal made on November 15 to cap corn-based ethanol in the nation’s fuel supply this year at 13 billion gallons, cutting 1.4 billion gallons from what it was supposed to be under the law.

The comment period on the proposal is open until January 28. If you believe the RFS is working as intended, if it has helped you personally and/or your rural community, if you think it is good for America that we have more renewable fuels, not less – let the EPA know.

The National Corn Growers Association has information on how to submit comments and drafts of possible comments that you can personalize – your story is what matters. You can also write your own letter, if you prefer, and send it to:

Environmental Protection Agency, Mailcode: 2822T
Air and Radiation Docket ID No. EPA-HQ-OAR-2013-0479
1200 Pennsylvania Avenue, NW
Washington, DC 20460

Watch this great video by the Missouri Corn Growers that tells “the greatest story never told” – Quiet Revolution: The Ethanol Story.

Six Years of RFS2

bushsignsenergySix years ago today, President George W. Bush signed into law the Energy Independence and Security Act of 2007 (EISA), which greatly expanded Renewable Fuel Standard (RFS) to become the RFS2. The goals of the new standard were to reduce our dependence on oil, confront global climate change, and expand production of renewable fuels for the security of future generations.

To celebrate that anniversary, the Renewable Fuels Association (RFA) has released a detailed analysis of where we are today compared to six years ago in the areas of renewable fuels production, economic activity, agricultural impacts, environmental issues, fuel prices, import dependence, and food prices.

mess-rfs“The RFS has indeed lived up to its promise in building out a renewable fuels industry, in reducing dependence on imported petroleum, in stimulating the agricultural economy,” says RFA Vice President of Research and Analysis Geoff Cooper, who compiled the analysis from a variety of resources. “At the same time the RFS has simply not had the impacts on the environment and food markets that detractors of the program have claimed.”

For example, Cooper says the size of the Gulf hypoxia zone is 27% smaller than it was in 2007. “In fact, last year the hypoxic zone was the smallest it has been in 12 years,” he said. Amazon deforestation is down 60% since 2007 and transportation sector CO2 emissions are down more than 10 percent.

When it comes to food prices, Cooper says they have increased about in line with general inflation while some items like milk and eggs are actually cheaper than they were in 2007 – and corn prices are almost the same. “The day President Bush signed this bill into law, corn prices were $4.34 a bushel,” said Cooper. The season average price this year is $4.40 per bushel.

Meanwhile, the price for a barrel of oil is up nearly 50% – up to over $108 compared to $72 in 2007.

So, tell us again why we should mess with the RFS?

Read the analysis and listen to the details here: RFA Celebrates Six Years of RFS

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