Biofuel Policy News Update: July 23, 2013

Here’s an update on recent news items and other public policy developments relating to the U.S. Renewable Fuel Standard (RFS), and other U.S. and international biofuel policies.

Renewable Fuel Standard


EPA issues LCA data for possible RFS barley pathway. The Environmental Protection Agency has issued a Notice of Data Availability to release the results of its lifecycle analysis under the RFS of the use of barley to produce ethanol. According to EPA’s analysis, when barley is used as feedstock at ethanol facilities that use natural gas for all process energy, are powered by grid electricity, and dry 100% of their distillers grains, the resulting fuel meets the 20% greenhouse gas (GHG) reduction threshold required by the RFS to qualify as a conventional “renewable fuel” as defined in the RFS. Furthermore, under certain process conditions, barley ethanol is can achieve the 50% GHG reduction threshold so that it would qualify an “advanced biofuel” under the RFS. EPA is making the information available for public comment, as the first step in possible rulemaking to establish these processes as pathways under the RFS qualified to generate RINs. More information: Ethanol Producer Magazine, EPA website.

House Committee issues final RFS White Paper; Subcommittee schedules hearing. The U.S. House of Representatives Energy and Commerce Committee released its fifth and final white paper in a series of paper’s reviewing the renewable fuel standard (RFS).  The focus of the fifth white paper is on the Implementation Issues of the RFS. The white paper poses 7 questions for stakeholder comment, with responses requested by Friday, July 26. Also, the Committee’s Subcommittee on Energy and Power has scheduled a two-day hearing for Tuesday, July 23 and Wednesday, July 24, on a topic entitled “Overview of the Renewable Fuel Standard: Stakeholder Perspectives.” The preliminary witness list indicates that stakeholders on both sides of the RFS debate will be included, although there appears to be a slight bias towards those opposed to the RFS.

California Low Carbon Fuel Standard


California Appeals Court rules against Air Resources Board on Low Carbon Fuel Standard. In one of the two pending court cases relating to the California LCFS, a state appeals court has ruled that the California Air Resources Board (ARB) violated several provisions of state law when it adopted the LCFS in 2009. Specifically, these were procedural violations of the state’s Environmental Quality Act and Administrative Procedures Act. In its ruling on this case, which was brought by the ethanol producer POET against the state, the Appeals Court decided to allow the LCFS regulations to remain in place but required ARB to complete the administrative actions which it failed to carry out when originally adopting the rules. For more information: Biofuels Digest, California Environmental Law Blog.

European Union Renewable Energy Directive


EU Environment Committee approves package of amendments to RED, to be voted by full Parliament in September
. On July 11, the Environment Committee of the European Parliament voted to accept the proposal of its Rappateur Corinne Lepage regarding the proposed amendments to the Renewable Energy Directive (RED) and its companion legislation the Fuel Quality Directive (FQD). The Committee voted to impose a 5.5% ceiling on the amount of food-based biofuels that would count towards the overall goal under the RED of 10% renewable fuels across the EU (originally proposed at 5%). The Committee also adopted a 2% target for advanced biofuels, while apparently retaining the proposed multiple counting mechanism (e.g. quadruple-counting) for such fuels. The Committee recommended that consideration of indirect land use change be made mandatory beginning in 2020. Also adopted was a recommended amendment to the FQD that would require fuel producers to reduce the carbon intensity of their fuels by 9% by the end of 2025, up from the current requirement of 6% by 2020. The Committee’s proposal will be debated and voted on by the full Parliament in September. Reaction to the Committee action was predictable. Although there was fairly broad support for the advanced biofuel sub-target, trade groups representing corn ethanol or biodiesel producers were critical of the proposed cap on food-based biofuels, which they viewed as detrimental to the continued growth of that sector of the biofuel industry. For more information: Biofuels Digest, Ethanol Producer Magazine, DomesticFuel.com.

Other Biofuel Policy News


Federal Appeals Court throws out EPA’s “Deferral Rule” for biogenic carbon emissions
. A three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit issued an opinion which vacated a 2011 EPA regulation governing greenhouse gas (GHG) emissions arising from biofuel production or other  industrial uses of biomass. The vacated regulation arose from EPA’s 2010 action to begin regulating GHG emissions from existing facilities. These regulations, known as the “Tailoring Rule,” specified that facilities that emit more than 100,000 tons of CO2 per year were required to obtain permits from EPA under the Clean Air Act. This led the National Alliance of Forest Owners to file a petition asking EPA to review this requirement for biomass-burning facilities, on the basis that the CO2 emitted from such factories arose from “biogenic” sources (i.e. fixation of atmospheric carbon by plants) rather than from fossil carbon, and thus had a net zero carbon emissions. In response to the petition, EPA decided in 2011 to defer for three years any permitting requirements for facilities burning or utilizing biomass, to allow the agency the time to study the issues and determine the best approach to regulating emissions arising from such “biogenic carbon”. In throwing out the Deferral Rule, the Court noted that EPA misapplied applicable law and did not have the statutory authority to regulate biogenic carbon emissions any differently than fossil-derived carbon emissions, although the Court’s opinion noted that EPA may have had other avenues for imposing less onerous restrictions on biomass-burning plants, such as providing a route for biomass plants to obtain waivers from permit requirements. The impact of the Court’s decision is not clear, especially since EPA has been moving forward with its study of the issue in the years since 2011, and was scheduled to issue regulations for biogenic carbon by July 2014. Absent any further action by EPA or appeal of the Court decision, it appears that any biomass-burning plant emitting more than 100,000 tons of CO2 per year will need to obtain a permit, just as fossil-carbon burning plants exceeding this threshold must now do. More information: Biomass Magazine, Politico.com.

 

D. Glass Associates, Inc. is a consulting company specializing in government and regulatory support for renewable fuels and industrial biotechnology. David Glass, Ph.D. is a veteran of over thirty years in the biotechnology industry, with expertise in industrial biotechnology regulatory affairs, U.S. and international renewable fuels regulation, patents, technology licensing, and market and technology assessments. Dr. Glass also serves as director of regulatory affairs for Joule Unlimited Technologies, Inc. More information on D. Glass Associates’ government and regulatory consulting capabilities, and copies of some of Dr. Glass’s prior presentations on biofuels and biotechnology regulation, are available at www.slideshare.net/djglass99 and at www.dglassassociates.com. The views expressed in this blog are those of Dr. Glass and D. Glass Associates and do not represent the views of Joule Unlimited Technologies, Inc. or any other organization with which Dr. Glass is affiliated. Please visit our other blog, Advanced Biotechnology for Biofuels

 

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U.S. Biofuel Policy News: July 2, 2013

Here’s an update on recent news items and other public policy developments relating to the U.S. Renewable Fuel Standard (RFS), and other U.S. biofuel policies.

Renewable Fuel Standard


House subcommittee holds hearing on RFS. The House Energy and Commerce Committee Subcommittee on Energy and Power has held a hearing on June 26, entitled “Overview of the Renewable Fuel Standard: Government Perspectives.” The witnesses were from the EPA, the Energy Information Administration, and the U.S. Department of Agriculture. Subcommittee chair Ed Whitfield (R-Ky.) has said that the goal of the hearing was to compare original expectations for the RFS with actual experience to date. In notable highlights, Christopher Grundler of the EPA testified that the agency doesn’t expect the “blend wall” to be exceeded until 2014, and Joseph Glauber, USDA’s chief economist, stated the department’s view that biofuel production has had only a small effect on U.S. food prices. Further hearings on the RFS from the full Committee are expected later this year, to follow up the four white papers released by the Committee in recent months, on which public comment was solicited. 

Other Biofuel Policy News


Supreme Court rejects appeal on E15 waiver litigation
. On June 3, the American Petroleum Institute filed a brief with the U.S. Supreme Court, asking the Court to agree to hear the appeal of EPA’s decision to grant approvals for E15 ethanol-gasoline blends. As previously reported, three industry groups including API filed a petition asking the Court to overturn an Appeals Court decision that the groups did not have legal standing to challenge EPA’s actions allowing E15 to be sold in the U.S., and the API brief made similar arguments before the Court. The U.S. Solicitor General filed a brief in late May in support of the Appeals Court decision, and urging the Supreme Court not to take the case. On June 24, the Supreme Court announced that it would not take the case, thus allowing the Appeals Court ruling against API and its coplaintiffs to stand, and effectively ending this attempt to overturn the E15 waiver decisions.

Defense Department biorefinery contracts awarded. The Defense Department has announced that it has awarded three contracts for development of biorefineries to produce renewable fuels for military use. These contracts, which resulted from the RFA issued in the summer of 2012, were given to Emerald Biofuels LLC of Golf, Illinois; Natures BioReserve LLC of South Sioux City, Nebraska; and Fulcrum Brighton Biofuels LLC of Pleasanton, California. The three contracts together include $16 million in funding, which will be matched by contributions from the awardees.

New legislation introduced in House of Representatives.  Rep. Charles Rangel (D-NY) has filed a bill in the House, H.R. 2564, that would extend the current 2.5% tariff on imports of fuel ethanol. Also in the House of Representatives, Reps. Eliot Engel (D-NY) and Ileana Ros-Lethtinen (R-Fla.) introduced H.R. 2493, the Open Fuel Standard Act, that would require an increasing percentage of the nation’s automobile fleet to operate on non-petroleum fuels.

Prospects for new Farm Bill uncertain. Although the U.S. Senate passed a version of a new Farm Bill that contained mandatory funding for the energy titles, the U.S. House rejected a Republican-sponsored version of the bill. This vote betrayed a substantial rift within the Republican House delegation, leading to a great deal of uncertainty as to whether the House would be able to pass a Farm Bill at all this year.

Previous Biofuel Policy Watch posts on RFS policy:

D. Glass Associates, Inc. is a consulting company specializing in government and regulatory support for renewable fuels and industrial biotechnology. David Glass, Ph.D. is a veteran of over thirty years in the biotechnology industry, with expertise in industrial biotechnology regulatory affairs, U.S. and international renewable fuels regulation, patents, technology licensing, and market and technology assessments. Dr. Glass also serves as director of regulatory affairs for Joule Unlimited Technologies, Inc. More information on D. Glass Associates’ government and regulatory consulting capabilities, and copies of some of Dr. Glass’s prior presentations on biofuels and biotechnology regulation, are available at www.slideshare.net/djglass99 and at www.dglassassociates.com. The views expressed in this blog are those of Dr. Glass and D. Glass Associates and do not represent the views of Joule Unlimited Technologies, Inc. or any other organization with which Dr. Glass is affiliated. Please visit our other blog, Advanced Biotechnology for Biofuels

 

Renewable Fuel Standard News: June 25, 2013

Here’s an update on recent news items and other public policy developments relating to the U.S. Renewable Fuel Standard (RFS), and the efforts to produce commercial quantities of cellulosic biofuels which qualify to generate Renewable Identification Numbers (RINs) under the RFS.

Legislative Developments


New bill filed that would repeal RFS. Senator John Barrasso (R-Wyo.) along with one Democratic and six Republican cosponsors, has introduced S. 1195, “The Renewable Fuel Standard Repeal Act”. The bill would repeal the RFS in its entirety. In a statement, Sen. Barrasso said that the RFS “is fundamentally broken and beyond repair”. The language of this bill is identical to an amendment to the Farm Bill that Sen. Barrasso filed but which the Senate did not consider. Please see a previous post on my Advanced Biotechnology for Biofuels blog for information on other bills pending in Congress relating to the RFS and other biofuels policies.

House committee issues fourth white paper on RFS, subcommittee plans June 26 hearing. The House Energy and Commerce Committee has released the fourth of its series of white papers soliciting discussion on topics relating to the RFS. This paper addresses several energy policy considerations related to the RFS, including its role in enhancing energy security. Stakeholder responses were requested by June 21. More recently, the Committee’s Energy and Power Subcommittee has announced a hearing to be held tomorrow, June 26, entitled “Overview of the Renewable Fuel Standard: Government Perspectives.” Scheduled witnesses are from the EPA, the Energy Information Administration, and the U.S. Department of Agriculture. Look for a report on the outcome of this hearing in a future post on this blog.

House subcommittee hearing on RFS features one-sided testimony. The RFS was the subject of a hearing held on June 5 by a subcommittee of the U.S. House Committee on Oversight and Government Reform. According to the statement of the Subcommittee Chair, James Lankford (R-Okla.), the purpose of the hearing was to “see how we can alleviate the pressure on consumers” from consequences alleged to have arisen from the RFS. The line-up of witnesses betrayed the same focus, featuring three industry representatives from interests that oppose the RFS, and including only an EPA official and a representative of the Union of Concerned Scientists to defend the policy. A good summary of the testimony, and the reaction of biofuel industry spokespersons to the hearing, can be found here.

Senate committee jurisdiction over RFS.  It has been reported that two Senate committees have been jostling for control over the RFS. These are the Environment and Public Works (EPW) Committee, chaired by Sen. Barbara Boxer (D-Calif.) and the Energy and Natural Resources (ENR) Committee, chaired by Sen. Ron Wyden (D-Ore.). The EPW Committee historically has oversight over the EPA and the Clean Air Act (of which the RFS is a part), which administers the RFS, but the ENR Committee has jurisdiction over energy policy, including fuels. Sen. Wyden and the ENR Ranking Member, Sen. Lisa Murkowski (R-Alaska) have both expressed the view that the RFS may need to be revisited, while Sen. Boxer has been quoted as supportive of the RFS and skeptical that hearings would be needed to investigate possible changes to the law.

Previous Biofuel Policy Watch posts on RFS policy:

D. Glass Associates, Inc. is a consulting company specializing in government and regulatory support for renewable fuels and industrial biotechnology. David Glass, Ph.D. is a veteran of over thirty years in the biotechnology industry, with expertise in industrial biotechnology regulatory affairs, U.S. and international renewable fuels regulation, patents, technology licensing, and market and technology assessments. Dr. Glass also serves as director of regulatory affairs for Joule Unlimited Technologies, Inc. More information on D. Glass Associates’ government and regulatory consulting capabilities, and copies of some of Dr. Glass’s prior presentations on biofuels and biotechnology regulation, are available at www.slideshare.net/djglass99 and at www.dglassassociates.com. The views expressed in this blog are those of Dr. Glass and D. Glass Associates and do not represent the views of Joule Unlimited Technologies, Inc. or any other organization with which Dr. Glass is affiliated. Please visit our other blog, Advanced Biotechnology for Biofuels

 

Renewable Fuel Standard News: May 30, 2013

Here’s an update on recent news items and other public policy developments relating to the U.S. Renewable Fuel Standard (RFS), and the efforts to produce commercial quantities of cellulosic biofuels which qualify to generate Renewable Identification Numbers (RINs) under the RFS.

Regulatory Developments


EPA proposes adding new renewable fuel pathways under the RFS. EPA has announced that on May 20, Acting Administrator Bob Perciasepe approved a package of proposed regulatory amendments under the RFS. Key elements of the proposed rules include new approved pathways for renewable diesel, renewable naphtha, and renewable  electricity (used in electric vehicles) produced from landfill biogas; renewable compressed natural gas (CNG)/liquefied natural gas (LNG) produced from landfill biogas;  and butanol produced in a methods that meet the 50% GHG emission reduction standard. A number of other revisions to the rules are being proposed as well. The proposal will be open to public comment for 30 days, beginning with its formal publication in the Federal Register.

EPA releases RIN figures for March and April 2013. In its most recent monthly report, EPA has reported the Renewable Identification Numbers that have been generated under the RFS through April 2013. Most noteworthy was the news that there were 4,901 gallons of cellulosic diesel, corresponding to 8,332 RINs of the D7 category, generated during March, representing the year’s first cellulosic RINs. March also saw over 1 billion D6 renewable fuel RINs (most of which were attributed to cornstarch ethanol) and over 47 million advanced biofuel D5 RINs, most of which were sugarcane ethanol.  There were no cellulosic RINs generated in April, but D6 RINs up slightly from March, also at just above 1 billion. The number of D5 RINs generated was down from March to about 28 million in April.

Legislative Developments


More legislation proposed to revise Renewable Fuel Standard. Two new proposed bills to amend the RFS have been introduced to Congress in the weeks since I posted a summary of such bills in my Advanced Biotechnology for Biofuels blog. Representative Pete Olson (R-Texas), with several cosponsors including Jim Costa (D-Calif.), has introduced a bill, the “Domestic Alternative Fuels Act of 2013” (H.R. 1959) that would allow fuels produced from domestic natural gas to qualify as the equivalent of renewable fuels under the RFS. Proponents of the bill cited the alleged impact of corn ethanol on food prices, while opponents criticize the bill because it would defeat one of the intents of the RFS, which was to move the country away from fossil fuel derived energy sources.

In a separate action, Senators Bob Corker (R-Tenn.) and Joe Manchin (D-W. Va.) have introduced a bill called the Foreign Fuels Reduction Act,  S.977, that is meant to address  the current situation under the RFS which favors the importation of Brazilian cane-derived ethanol to meet the mandated levels for “advanced biofuels”. By making simple revisions to one key sentence in the RFS, this bill would require that any reduction made to the cellulosic biofuel mandates also results in a pro rata reduction of the mandates for total renewable fuel and advanced biofuels, which in the words of the sponsors, would “ensure that the RFS is met only by domestically sourced biofuels”.

Please see my previous post on my Advanced Biotechnology for Biofuels blog for information on other bills pending in Congress relating to the RFS and other biofuels policies.

House committee issues second and third white papers on the RFS. On April 18, the House Energy and Commerce Committee released the second of its series of white papers raising issues relating to the RFS. This paper, available here, discusses “agricultural sector issues” and poses nine questions on food-vs.-fuel topics on which stakeholder comment is requested by April 29. The Committee issued the third white paper on May 9, which examines greenhouse gas emissions and other environmental impacts associated with the RFS and poses a number of questions for discussion. Stakeholder responses were requested by May 24. The Committee now plans a total of five such white papers – the first paper, issued in March, discussed topics relating to E15 and the blend wall.

Previous Biofuel Policy Watch posts on RFS policy:

D. Glass Associates, Inc. is a consulting company specializing in government and regulatory support for renewable fuels and industrial biotechnology. David Glass, Ph.D. is a veteran of over thirty years in the biotechnology industry, with expertise in industrial biotechnology regulatory affairs, U.S. and international renewable fuels regulation, patents, technology licensing, and market and technology assessments. Dr. Glass also serves as director of regulatory affairs for Joule Unlimited Technologies, Inc. More information on D. Glass Associates’ government and regulatory consulting capabilities, and copies of some of Dr. Glass’s prior presentations on biofuels and biotechnology regulation, are available at www.slideshare.net/djglass99 and at www.dglassassociates.com. The views expressed in this blog are those of Dr. Glass and D. Glass Associates and do not represent the views of Joule Unlimited Technologies, Inc. or any other organization with which Dr. Glass is affiliated. Please visit our other blog, Advanced Biotechnology for Biofuels

 

Pending Biofuel-Related Bills in Congress May 2013

In the first few months of the U.S. 113th  Congress there have been a number of bills introduced into the House of Representatives and the Senate that, if enacted, might affect the development of ethanol or other renewable fuels. The ones of most potential concern are those, all introduced by Republicans, that are meant to repeal or curtail existing programs that currently benefit the renewable fuels industry. Although I’ve written about many of these bills in previous posts in this blog, I thought it would be useful to post a more complete summary, which I have done today in my Advanced Biotechnology for Biofuels blog.

In that entry, I’ve summarized 12 pending bills, all introduced by Republicans in either the House or the Senate, which would significantly affect or limit federal biofuel policies. Included are bills that would eliminate the Renewable Fuel Standard (RFS), or modify the RFS in several ways, e.g. to eliminate incentives for cornstarch-based ethanol or to change the way EPA calculates the annual volume mandate for cellulosic biofuels. There have also been several bills introduced that would prohibit the Environmental Protection Agency from approving ethanol/gasoline blends containing greater than 15% ethanol while also revoking EPA’s prior decisions to approve E15 fuel for certain motor vehicles. Other bills would eliminate some of the favorable tax treatment now available for biofuels and other sources of renewable energy.

That post, which has links to the text and up-to-date status of all these bills, can be accessed here. Please look to future posts on this blog for updates on the status of these bills and other U.S. Congressional or state legislative actions that may affect the renewable fuels industry.

D. Glass Associates, Inc. is a consulting company specializing in government and regulatory support for renewable fuels and industrial biotechnology. David Glass, Ph.D. is a veteran of over thirty years in the biotechnology industry, with expertise in industrial biotechnology regulatory affairs, U.S. and international renewable fuels regulation, patents, technology licensing, and market and technology assessments. Dr. Glass also serves as director of regulatory affairs for Joule Unlimited Technologies, Inc. More information on D. Glass Associates’ government and regulatory consulting capabilities, and copies of some of Dr. Glass’s prior presentations on biofuels and biotechnology regulation, are available at www.slideshare.net/djglass99 and at www.dglassassociates.com. The views expressed in this blog are those of Dr. Glass and D. Glass Associates and do not represent the views of Joule Unlimited Technologies, Inc. or any other organization with which Dr. Glass is affiliated. Please visit our other blog, Advanced Biotechnology for Biofuels

Renewable Fuel Standard News: April 18, 2013

Here’s an update on recent news items and other public policy developments relating to the U.S. Renewable Fuel Standard (RFS), and the efforts to produce commercial quantities of cellulosic biofuels which qualify to generate Renewable Identification Numbers (RINs) under the RFS.

Regulatory Developments


EPA proposes to voluntarily reconsider 2011 cellulosic fuel mandate
. On April 3, the EPA filed a motion in the U.S. Court of Appeals asking the Court to allow the agency to voluntarily reconsider the mandated 2011 volumes for cellulosic biofuels under the RFS. As previously reported, the 2011 mandate has been challenged by a coalition of groups led by oil company trade associations, and in a separate case, the Appeals Court vacated EPA’s 2012 cellulosic fuel mandate. All parties to the pending lawsuit over the 2011 mandate are reportedly in favor of EPA’s motion, which is expected to lead to a decision by the agency to retroactively set the 2011 mandate to zero.

Trade associations, companies comment on EPA 2013 mandates, RFA breaks ranks. The public comment period on EPA’s proposed 2013 RFS volume mandates closed earlier this month, with almost 50 public comments received, including comments from several companies and trade associations within the biofuel industry. Although most of the industry commenters supported EPA’s proposed target of 14 million gallons of cellulosic biofuel, the Renewable Fuels Association called for EPA to reduce this mandate to better correspond to the actual volumes of cellulosic fuel that are expected to be produced by companies later this year. RFA, along with the American Coalition for Ethanol, also highlighted the “advanced biofuels” mandate as favoring importation of Brazilian sugarcane ethanol at the expense of domestic production. RFA called for EPA to partially reduce the advanced biofuels volume mandate.

January 2013 RINsEPA has reported that over 44 million advanced biofuel (D5) RINs and 1.03 billion renewable fuel (D6) RINs were generated in January, most of which were attributed to ethanol. All of the renewable fuel RINs were generated domestically (most likely predominantly corn ethanol) while all but 3 million of the advanced biofuel RINs were generated overseas (with the imported fuel most likely dominated by Brazilian sugarcane ethanol). Similar (but slightly lower) figures have been released for RIN generation in February, including about 32 million D5 RINs and 937 million D6 RINs. No RINs for cellulosic fuels have yet been generated this year in the months reported to date.

Studies say RIN prices have not caused rise in gasoline prices; but may trigger other market shiftsSeveral studies or other online reports have appeared in recent weeks to refute the allegation that the recent spike in the price of corn ethanol RINs was a factor in rising gasoline prices. These include an analysis conducted by Informa Economics commissioned by the Renewable Fuels Association, an analysis of two University of Illinois economists, and an opinion piece written by Marshall Kaplan, an adviser to the Fuel Freedom Foundation. In a separate development, the U.S. Energy Information Administration, in its April Fuels Outlook issue, predicted that the high prices of ethanol RINs and the expected drawdown of banked RINs would stimulate E85 sales by lowering its price relative to E10, and also create increased incentive for biodiesel blending. Meanwhile, it has been reported that D6 ethanol RIN prices rose in early April to the highest levels since the price spike in March: prices on April 8 were reportedly $0.80/gallon for 2012 RINs and $0.86/gallon for 2013 RINs.

Legislative Developments


New Congressional bills opposing RFS. On April 10, Representative Bob Goodlatte (R-Va.) and several cosponsors introduced two bills that would substantially alter the U.S. Renewable Fuel Standard. One bill, H.R.1462, would amend the RFS to eliminate the requirements for corn ethanol under the renewable fuel program, and also prohibit the EPA from approving the sale of gasoline that contains greater than 10% ethanol. The other bill, H.R.1461, would simply repeal the RFS in its entirety. The introduction of these bills triggered the predictable responses from both sides of the renewable fuels debate, including strong statements of opposition from groups representing the renewable fuels industry.

Wyden to examine RFS and impact on gas prices. Senator Ron Wyden (D-Ore.), the chair of the Senate Energy and Natural Resources Committee, has voiced his skepticism about whether the volume mandates of the RFS can be met. At a public meeting held April 12, Sen. Wyden indicated that he intended to hold hearings later this spring on the RFS and its impact on gasoline prices. Wyden, who is characterized as a supporter of the RFS, had also recently asked EPA for market data relating to volatility in ethanol RIN prices.

Commercialization of Cellulosic Fuels


International Energy Agency reports on cellulosic biofuel capacityThe International Energy Agency has issued a 207-page report entitled “Status of Advanced Biofuels Demonstration Facilities in 2012,” which reports that global capacity for cellulosic biofuel production has tripled since 2010. According to a published summary, the IEA report describes 71 actively pursued projects for commercial production of advanced biofuels, with current capacity for cellulosic fuels at approximately 140,000 metric tons per year. The report can be downloaded here.

New market report on cellulosic ethanol. A newly-published market report by the consulting firm GlobalData estimated that global cellulosic ethanol production would rise from 14.25 million gallons in 2012 to 412.25 million in 2020, and that the U.S., currently the market leader with over 5 million gallons produced in 2012, would retain its lead through 2020. This report is available for purchase from GlobalData

Previous Biofuel Policy Watch posts on RFS policy:

D. Glass Associates, Inc. is a consulting company specializing in government and regulatory support for renewable fuels and industrial biotechnology. David Glass, Ph.D. is a veteran of over thirty years in the biotechnology industry, with expertise in industrial biotechnology regulatory affairs, U.S. and international renewable fuels regulation, patents, technology licensing, and market and technology assessments. Dr. Glass also serves as director of regulatory affairs for Joule Unlimited Technologies, Inc. More information on D. Glass Associates’ government and regulatory consulting capabilities, and copies of some of Dr. Glass’s prior presentations on biofuels and biotechnology regulation, are available at www.slideshare.net/djglass99 and at www.dglassassociates.com. The views expressed in this blog are those of Dr. Glass and D. Glass Associates and do not represent the views of Joule Unlimited Technologies, Inc. or any other organization with which Dr. Glass is affiliated. Please visit our other blog, Advanced Biotechnology for Biofuels

 

Renewable Fuel Standard News: March 25, 2013

Here’s an update on recent news items and other public policy developments relating to the U.S. Renewable Fuel Standard (RFS), and the efforts to produce commercial quantities of cellulosic biofuels which qualify to generate Renewable Identification Numbers (RINs) under the RFS. The week of March 18 saw an unusual amount of activity on the policy front in Washington, DC, as the petroleum industry and renewable fuels interests continue to trade accusations of blame over the rising RIN prices for cornstarch ethanol. This update will highlight those recent developments, as well as others not so recent.

Recent Developments in the “War Over the RFS”


Corn ethanol RIN prices apparently stabilize but are still at historic highs
. The price for Renewable Identification Numbers (RINs) for cornstarch ethanol have reached record levels, sharply escalating in a matter of weeks. The price reportedly closed above $1.00 per gallon on March 8, up from  of $0.53 per gallon on February 26 and $0.79 per gallon on March 5. There were even reports that the price exceeded $1.10 per gallon in early March (see links below), but the price appears to have stabilized at around $0.70 per gallon as of the week of March 18, according to fuelsnews.com and other reports. Nevertheless, the psychological impact of a dollar-a-gallon RIN was, in no small measure, responsible for much of last week’s flurry of activity.

There is general consensus that the sharp rise in RIN prices is due to factors like the anticipation of lower than usual ethanol production in 2013 due to last year’s drought, and the impending ethanol blend wall, which together may cause an increased need for obligated parties to use RINs, rather than actual gallons of ethanol, to satisfy their volume obligations. Even before last week, this price escalation triggered a “blame game” between the oil industry and the ethanol industry, with each blaming the other. For example, a recent online editorial from the head of the Renewable Fuels Association blames the oil industry for this price run-up and for creating the circumstances leading to the blend wall, as “little more than a convenient excuse for their refusal to move to higher-level ethanol blends.” An academic assessment from the University of Illinois of this price escalation can be found here.

New API attack on RFS draws swift industry response. On March 20, the American Petroleum Institute issued the results of a study conducted by NERA Economic Consulting, which asserts that the RFS will have significant economic consequences by 2015 due to its conflict with the ethanol “blend wall”. Among its dire predictions were decreased U.S. GDP, decreased worker take-home pay, and increased gasoline costs. Trade associations representing the renewable fuels and ethanol industries swiftly countered the report by conducting a “prebuttal” phone call with reporters refuting the study’s conclusions.

Congressional interest in rising ethanol RIN prices. U.S. Senators David Ritter (R-La.) and Lisa Murkowski (R-Alaska) have written to EPA Administrator-designate Gina Murphy to ask that EPA “utilize any and all existing regulatory authority and flexibility to address the issue of rising RIN costs and alleviate the threat of increased consumer fuel costs”. The letter also called for a detailed plan for addressing these issues within 14 days. The letter refers to reports that ethanol RIN prices had exceeded $1.10/gallon in March, but the linked article above from Reuters refers to prices of “more than a dollar” during the month.

House committee issues first of three white papers on the RFS. On March 20, the House Energy and Commerce Committee released a white paper discussing the ethanol blend wall. This is reported to be the first of a series of papers to be published at the initiative of Committee Chairman Fred Upton (R-Mich.) and ranking minority member Henry Waxman (D-Calif.). After setting forth the issues relating to the RFS mandates, the alleged problems with E15 fuel and other matters, the document posed a series of questions for stakeholder comment, with responses requested by April 5.

Other Regulatory Developments


EPA vacates 2012 cellulosic mandate
. On February 27, EPA announced that it was vacating the 2012 RFS cellulosic standard, following the decision of the District of Columbia Circuit Court of Appeals earlier this year. Obligated parties will therefore not need to address the 2012 cellulosic biofuel standard in their compliance demonstrations that were due on February 28, and for any parties who filed early and had already submitted payment for 2012 cellulosic biofuel waiver credits, EPA will issue a refund.

Other Legislative Developments


Governors voice support for RFS, oppose legislative modifications. The Governors’ Biofuels Coalition has sent a letter to Congress supporting the RFS and urging legislators to “reject any modifications to the RFS”. The Coalition is a group of 30 governors, led by Iowa Gov. Terry Brandstad, and the letter arose from a March 13 meeting at the headquarters of POET. The letter stressed the benefits that the RFS has brought to their states since its enactment in 2005, and rebutted some of the recent arguments against the law, which the letter called “unrelenting and false”.

Commercialization of Cellulosic Fuels


New CRS reports issued on RFS
. The Congressional Research Service has issued two new reports on the RFS: “Renewable Fuel Standard – Overview and Issues”, which updates previous CRS reports on the RFS, and “Meeting the Renewable Fuel Standard Mandate for Cellulosic Biofuel”. (Please contact David Glass if you have trouble obtaining these reports from the CRS website).

New report on cellulosic biofuel commercialization. At the request of Biofuels Digest, Tristan R. Brown and Robert C. Brown at the Bioeconomy Institute at Iowa State University have written a 5-page summary of commercial-scale cellulosic biofuels projects expected in the U.S. by 2014. This report covers some of the same ground as my February 21, 2013 post on the Advanced Biotechnology for Biofuels blog, in which I summarized cellulosic ethanol plants in operation, nearing operation, and under construction in the U.S. and Canada.

Bloomberg report on ethanol blend wall. Bloomberg New Energy Finance has issued a report analyzing the ethanol blend wall. The report notes that in 2013, the minimum amount of ethanol required under the RFS is essentially equal to the maximum amount of ethanol allowed in U.S. gasoline supplies under E10 policies. The report analyzes different scenarios in which the RFS mandate may be met.

EIA reports on cellulosic biofuel capacity. On February 26, the Energy Information Administration posted a report on its website estimating U.S. capacity for producing cellulosic fuels this year. The report notes that several companies combined to produce about 20,000 gallons of cellulosic fuels in late 2012, and that output could grow to more than 5 million gallons this year. EIA further estimated that aggregate nameplate capacity in the U.S. could reach 250 million gallons by 2015, although the report noted that its past projections of cellulosic output have proven to be overly optimistic.

Previous Biofuel Policy Watch posts on RFS policy:

D. Glass Associates, Inc. is a consulting company specializing in government and regulatory support for renewable fuels and industrial biotechnology. David Glass, Ph.D. is a veteran of over thirty years in the biotechnology industry, with expertise in industrial biotechnology regulatory affairs, U.S. and international renewable fuels regulation, patents, technology licensing, and market and technology assessments. Dr. Glass also serves as director of regulatory affairs for Joule Unlimited Technologies, Inc. More information on D. Glass Associates’ government and regulatory consulting capabilities, and copies of some of Dr. Glass’s prior presentations on biofuels and biotechnology regulation, are available at www.slideshare.net/djglass99 and at www.dglassassociates.com. The views expressed in this blog are those of Dr. Glass and D. Glass Associates and do not represent the views of Joule Unlimited Technologies, Inc. or any other organization with which Dr. Glass is affiliated. Please visit our other blog, Advanced Biotechnology for Biofuels