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Feature: US EPA decision on RFS looms large for ethanol, gasoline markets

When Congress announced the US Renewable Fuel Standard a decade ago the aim was to combat the growing need for foreign oil as well as increase the production and promotion of clean, renewable biofuels. As 2016 approaches, and the Environmental Protection Agency is days away from the updated renewable volume obligations (RVO) for 2014, 2015, and 2016, the landscape that led to these implementations has changed considerably. Demand for foreign oil in the US has dropped tremendously as domestic oil production has increased to its highest level in 17 years, while the growing increase in fuel-efficient vehicles has led to total gasoline retail sales by refiners dropping to more than half of their 2005 levels. With the EPA proposing lowering the volume requirements by 20.5% (4.2 billion gallons), as well as growing support and creation of anti-RFS lobbying groups, US ethanol and gasoline traders and brokers hesitantly await the […]

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IEA says 3-fold or greater increase in biofuels possible by 2040

The International Energy Agency released its latest World Energy Outlook 2015, saying there are clear signs that an energy transition is under way. The report finds that the plunge in oil prices has set in motion the forces that lead the market to rebalance, and cautions that strong direction is needed from the upcoming United Nations conference on climate change in Paris, COP2. “It would be a grave mistake to index our attention to energy security to changes in the oil price,” said IEA Executive Director Fatih Birol. “Now is not the time to relax. Quite the opposite: a period of low oil prices is the moment to reinforce our capacity to deal with future energy security threats.” The World Energy Outlook 2015 examines all energy sectors, looking at global energy trends to 2014, the oil market, natural gas, unconventional gas, coal, power, renewables and energy efficiency, along with […]

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A US ethanol rally to be thankful for?

November is the month of Thanksgiving in the US, and if historical trends hold up, we’re about to see a price recovery that producers will appreciate. Before I dive into the evidence, I would first like to apologize for being wrong in September. I guess my crystal ball was a little fuzzy when I suggested that we were about to see a downturn in prices. US ethanol prices for four consecutive years had lowered in September, but thanks to crop concerns and rallying corn prices, that streak was broken. Similarly, we saw another minimal gain in October. So let’s try this again. Across the last four years, the Platts Chicago Argo benchmark ethanol assessment has averaged a 37.5-cent rise in November. Before you get too excited about that, understand that the bulk of those gains were made in the past two years. In 2014, the assessment rallied 98 cents […]

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Here’s One Thing Standing Between You and Even Cheaper Gasoline

Oil has lost a third of its value in two months, bringing U.S. drivers within pennies’ reach of $2.50 gasoline. But there’s at least one thing standing in the way of a steeper decline at the pumps: ethanol. While the crude rout dragged gasoline futures down about 60 cents a gallon, ethanol’s dropped a mere 15 cents — making it costlier than gasoline this week for the first time since January. Ethanol’s one thing that’ll keep gasoline prices from a total free fall. The biofuel’s value is being propped up by concern over yields for this year’s corn crop, its main feedstock. Meanwhile, refiners are required to blend the additive into gasoline to comply with the federal regulations. “Because they’re forced to blend, they’re blending a more expensive product,” Chris Knittel, professor of energy economics at the Massachusetts Institute of Technology in Cambridge, said by phone. “A large fraction […]

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Washington finds unlikely ally in OPEC as biofuels debate rages

NEW YORK The Obama administration has found an unlikely ally in its efforts to keep pushing more biofuel into the nation’s gasoline supply: OPEC. The lowest oil prices in over six years have fueled a resurgence in U.S. gasoline use in recent months as more Americans take to the road. Demand is expected to climb 1.5 percent this year to nearly 139 billion gallons (526 billion liters) according to the government’s most recent forecasts, enough to easily accommodate small increases in ethanol quotas without breaching the so-called "blend wall" that refiners say puts a cap on blending at around 10 percent of total gasoline and diesel supply. It may be even higher, based on data from the first quarter, when gasoline use surged by more than 3 percent, the fastest in over a decade. Those calculations help explain why biofuel backers are up in arms over the Environmental Protection […]

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EPA proposes renewable fuel quotas for 2014, 2015, and 2016

The US Environmental Protection Agency proposed renewable fuel quotas for 2014 that it said reflect the year’s actual biofuel use, and for 2015 and 2016 and, for biodiesel, quotas through 2017 that increase steadily over time. It proposed using authority granted by Congress to reduce quotas below federal Renewable Fuel Standard (RFS) levels established under the 2007 Energy Independence and Security Act (EISA). The proposal’s steadily increasing volumes indicate that biofuels remain an important part of the nation’s strategy to improve energy security and address climate change, it said. Under the notice of proposed rulemaking , which Administrator Gina McCarthy signed on May 29, EPA proposed adjustments to advanced biofuel and total renewable fuel targets for all 3 years. The proposed quotas for 2015 and 2016 “are expected to spur further progress in overcoming current constraints in renewable fuel distribution infrastructure, which in turn is expected to lead to […]

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At the gas pump, US biofuel lobby scores a point against big oil

NEW YORK In a long-running battle between oil refiners and the U.S. farm lobby over the future of ethanol fuel, biofuel producers may have just made a small, but important dent in big oil’s formidable defenses. Over the past few months, privately held retailers Kum & Go and Sheetz have become the first significant chains to announce plans to start selling E15, a gasoline with 15 percent of ethanol, 50 percent more than the typical U.S. blend. By the end of 2016, those two retailers plan to add E15 at pumps at 125 stations. That will more than double the number of U.S. outlets offering cheaper fuel with a higher ethanol content than the standard E10 blend that contains 10 percent of ethanol. If retailers continued to add stations at a similar pace over the next five years, there would be some 1,300 stations offering E15. That would still […]

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UPS to Use Renewable Natural Gas for Part of Delivery Fleet

Clean Energy Fuels produces a product called Redeem, which is the first renewable natural gas available in commercial quantities. The RNG will be used in stations across California beginning this month to fuel tractors and delivery vehicles. The stations in Sacramento, Los Angeles and Fresno will provide about 1.5 million gallon equivalents of RNG fuel to about 400 vehicles in the state. The company already uses natural gas on tractors in the U.K. RNG, or biomethane, can be created from sources such as decomposing organic waste in landfills. “Renewable natural gas is critical to our effort to minimize UPS’s environmental impact while meeting the growing demand for our services,” said Mitch Nichols, UPS senior vice president of transportation and engineering. The Atlanta-based delivery giant said in April that revenue for U.S. ground packages grew 5.3% to $6.36 billion in the first quarter. That helped buoy total U.S. domestic-package operating […]

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GOP Presidential Hopefuls Risk Iowans’ Ire on Ethanol

ENLARGE Corn is delivered to the Green Plains ethanol plant in Shenandoah, Iowa, earlier this year. Despite lower crude prices, ethanol plants across the nation continue to operate at a brisk pace. Photo: Associated Press For decades, presidential candidates have bowed to Iowa’s corn-based ethanol industry while campaigning in a state where corn is king. But several of the likely Republican candidates slated to address the state’s agricultural industry on Saturday backed the sunset of ethanol subsidies in 2011, and many oppose the industry’s new sacred cow: the renewable-fuel standard, which requires blending ethanol and other biofuels into the gasoline supply. How the likely White House contenders navigate the issue will signal how much Republican politics are now driven by the party’s conservative base, which balks at government interference in the marketplace. Two GOP contenders who want to phase out the renewable-fuel standard, Florida Sen. Marco Rubio and Louisiana […]

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A Biofuel Debate: Will Cutting Trees Cut Carbon?

Eduardo Porter Does combating climate change require burning the world’s forests and crops for fuel? It certainly looks that way, judging from the aggressive mandates governments across the globe have set to incorporate bioenergy into their transportation fuels in the hope of limiting the world’s overwhelming dependence on gasoline and diesel to move people and goods. While biofuels account for only about 2.5 percent today, the European Union expects renewable energy — mostly biofuels — to account for 10 percent of its transportation fuel by 2020. In the United States, the biofuel goal is about 12 percent by early in the next decade. The International Energy Agency envisions using biofuels to supply as much of 27 percent of the world’s transportation needs by midcentury. The reasons for such ambitions are clear: It is nearly impossible under current technology to run cars, trucks, ships and jet planes on energy generated […]

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NREL enzyme enables conversion of biomass to sugar up to 14x faster than current alternatives; changing the economics of conversion

« Lufthansa Group aircraft will fly from Oslo on biokerosene beginning in March; deal with Statoil | Main | Toyota introduces all-new Tacoma with new 3.5L non-hybrid Atkinson cycle engine » Scientists at the US Department of Energy’s (DOE) National Renewable Energy Laboratory (NREL) have developed an enzyme that can enable the conversion of biomass to sugars up to 14 times faster and more cheaply than competing catalysts in enzyme cocktails today. The enzyme called CelA, a cellulase from the bacterium Caldicellulosiruptor bescii , could thus could change the economics of biofuel conversion. In one scenario, the best commercially used enzyme converted sugars at a 30% extent in seven days. CelA converted to double that extent. And while it took the alternative enzyme seven days to achieve that conversion, CelA, with a small boost from an extra beta glucosidase, achieved double in just about two days. Among CelA’s many […]

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Falling Crude Prices Force Ethanol Makers to Take It on the Chin

ENLARGE Falling profit margins for the $40 billion U.S. ethanol industry may cause some companies to scale back production in 2015. Bloomberg News Tumbling oil prices are bringing unwelcome tidings to one of the U.S. Farm Belt’s hottest industries. Ethanol makers are bracing for a drop in earnings as cheap crude pushes down the prices they fetch from refiners to blend the corn-based fuel additive into gasoline. Ethanol producers also face a recent jump in the price of corn, their main raw material. Falling profit margins for the $40 billion U.S. ethanol industry may cause some companies to scale back production in 2015, analysts and industry executives say. Still, many observers think ethanol demand may remain steady or even rise if cheap gasoline spurs U.S. motorists to drive more, tempering the hit to ethanol earnings. Crude-oil prices slid 20% in December to about $53 a barrel and fell 46% […]

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