Advanced BioFuels USA

Oil Exec: It Would Be a Mistake for the US Government to Bail Us out

by Dan K. Eberhart (CNN Business Perspectives) … President Trump indicated that some sort of financial bailout for the US oil industry — and the millions of jobs it supports — could be in the works.

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“We will never let the great U.S. Oil & Gas Industry down. I have instructed the Secretary of Energy and Secretary of the Treasury to formulate a plan which will make funds available so that these very important companies and jobs will be secured long into the future!” Trump tweeted on April 21.

But the president must be careful. Any protective measures or a bailout for the US oil industry would not only be politically dicey, it could also undermine the free market forces needed to reshape and strengthen the sector in the longer term.

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The unfortunate truth is that the US oil industry must endure this brutal period, the worst crisis in its history, without much help from Washington if it wants to be able to compete with lower-cost rivals like Saudi Arabia and Russia in the future. Because that future likely involves operating in a lower price environment than before the pandemic arrived.

Recent negative prices for oil should accelerate the decision to shut-in wells for many companies rather than lose money on barrels that nobody wants. We’re also seeing an uptick in bankruptcies across the oil industry. Both are necessary to begin the process of rebalancing the oil market and building a stronger domestic energy sector for tomorrow.

Shut-ins, which have already been announced by a number of US oil companies, including Chevron, ConocoPhillips and Occidental, won’t be unique to America. They are also taking place in Canada and Brazil, and before all is said and done, market forces will likely drive most global producers to reduce production.

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Even the deal brokered by President Trump for the OPEC+ group to cut an unprecedented 9.7 million barrels a day of production doesn’t go far enough. Experts say the market needs to also see additional shut-ins across the globe to the tune of 6 to 7 million barrels per day for the second quarter if the demand loss from Covid-19 is around 20 million barrels per day this quarter.

That’s why implementing protectionist measures like tariffs or anti-dumping laws, or whipping up a massive industry bailout, doesn’t make sense. The US oil industry is not too big to fail. In fact, underperforming swaths of it should be allowed to fail.

Government intervention in the market risks delaying the rebalancing that needs to happen, particularly in the US sector where many companies are burdened by heavy debt loads.

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The truth is that the US shale sector was rife with underperformers that relied too heavily on debt to fund operations. Many companies faced a reckoning this year even before the double black swans of the coronavirus and the Saudi-Russian price war emerged.

Capital markets were already closing to many weaker US oil companies. Investors will separate the wheat from the chaff, whether through bankruptcies or merger and acquisition activity.

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In the long run the oil industry will be better off it it’s led by fewer, stronger, well-managed companies, because it will be imperative for the sector to drive down its break-even costs to sub-$30 WTI levels.

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Peak demand was already believed to be less than a decade away by many experts, including the IEA. It’s very possible that Covid-19 has brought about peak production in US shale as well.

At minimum, it will take at least a couple years to use up the massive oil inventories that have built up. And it sure looks like we’ve entered an “even lower for even longer” price environment, especially with the low-carbon energy transition and climate policy applying more pressure.

Government protection or bailouts won’t ready the industry for this tough new era. Yes, we should take steps to help the workers laid off by this crisis. But if the Trump administration really wants to help the industry, it will let free market forces drive the restructuring that is necessary. READ MORE

SPEED IT UP: (Politico’s Morning Energy)

Excerpt from Politico’s Morning Energy: SPEED IT UP: House Republicans want more royalty relief for struggling oil and gas producers, despite criticism from some watchdog groups and Democrats that Interior is doling out temporary royalty reductions without much oversight. Republican lawmakers, including House Minority Leader Kevin McCarthy and Minority Whip Steve Scalise (R-La.), called on Interior to “streamline and expedite” applications for royalty reductions, Anthony reports. “We are concerned that the current process is unnecessarily onerous and lacks the clarity needed to provide swift relief,” they write. READ MORE

QUOTE OF THE WEEK — Neste Corporation

“One in three Finns could stop using fossil fuels in the next few years. … Renewable fuels are an effective way to reduce road transportation emissions, and they are suitable for the current car fleet.” Neste Corporation READ MORE

What’s Next for Biofuels? 8 Scenarios for a Post COVID-19 World

by Steve Hartig (ReCon Associates/Biofuels Digest) … Looking ahead, the main drive for ethanol demand will be light vehicle miles driven however the EIA estimates annual improvements in fuel economy of between .5-1% over the next ten year. In the last few years, depending on the period analyzed, light vehicle mileage has slowly increased roughly matching the improvements in fuel economy leading to slow/no growth for gasoline volumes.

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Cars and air travel dominate with air travel growing rapidly, car and bus growing slowly and transit and rail stagnant.

It is difficult to find good data on the exact purposes of travel by mile ….

I think when discussing scenarios, it is reasonable to roughly look at two periods:

The rest of 2020 and 2021 while COVID 19 is still with us and a vaccine or cure is not widely available. In this time period, it seems likely mileage will increase from today’s low but at a slow pace.
2022 and beyond which will be our new normal.

Two relevant trends that started before this are:

Working from home which the DOT estimates has increased from around 2-3% in 1995 to 10-15% in 2017. This will directly reduce vehicle mileage and is more likely to take place with individuals with a longer commute.
Shopping from home and E Commerce. This will reduce light vehicle miles but have little impact or an increase in trucking mileage.

What are some scenarios that can be considered for the post 2022 period?

Working from home (WFH) has been proven over this period to function but is not always optimal. A realistic scenario is an increase in working from home, particularly in hybrid models where people work some days in the office and some at home. A 10% increase in WFH could equal about a 3% reduction in vehicle miles.
An increase in E commerce combined with people consolidating shopping trips. A 10% increase in this might be a 1-2% reduction in light vehicle miles. While trip consolidation is a one-time affect, E commerce is expected to continue to grow at a rate between 5-10% per year which will continue to reduce automobile miles.
People may be hesitant to travel by plane for shorter trips, for instance, less than 8-12 hours. If 10% of domestic air travel was replaced by car trips it would increase light vehicle miles by about 1.5%.
Gas mileage has been increasing between .5-1% per year with the EIA expecting it to increase. It is reasonable to estimate that a reduction in new vehicle sales due to the coronavirus financial fallout combined with the new proposed EPA gas mileage standards would keep this closer to .5% per year which will continue to pressure gasoline volume as this increases each year.
Longer term, electric vehicles will take share from liquid fuels. Last year about 325,000 electric vehicles were sold which is equivalent to about .1% of the vehicles on the road. There are very conflicting predictions of growth dependent on government incentives and expected improvements in cost and range but all predict that electric vehicles will start taking significant share of the market in the 2030-2040 range.
It seems somewhat unlikely that a replacement of mass transit by personal car travel would have a significant impact. The majority of travel is by buses which is commonly used for shorter trips in major cities where parking is expensive and not very available. Also, many people taking buses do not own cars.
Exports in 2019 were the second highest in the last ten years with main destinations being Brazil, Canada, India and South Korea. Given tough economic conditions in the coming years globally and low oil prices, it seems there is likely more downside risk than upside opportunity.
Finally, oil prices will likely be low over the coming years short term due to the huge amount in storage and longer term due to competition between OPEC, Russia and US fracking. Lower gasoline prices can tend to increase overall miles driven particularly around longer trips. Particular to ethanol, low oil prices would reduce the price attractiveness of higher-level ethanol blends.

As these are only scenarios it is impossible to come to clear conclusions and we will have to monitor them over the coming years. However, it is not unlikely that the peak year for gasoline volume in the US is in the past given the combination of trends.

Biofuels plants will need to look at opportunities for revenue and product diversification to drive maintain profitability. Projects around low carbon scores, corn fiber ethanol and animal feed fractionation will become increasingly important. It is likely some of the higher cost plants may stay closed long term. Further consolidation is probably less likely as it is not clear why any of the major ethanol producers would want to, and perhaps be financially able to, purchase more ethanol capacity.

On the optimistic side for biofuels, while jet fuel volume has dropped by about two thirds in volume over the last months and will have a long slow path back, diesel fuel both for vehicles and shipping has seen a relatively minor drop in volume which will likely come back as the world economies open back up. This make the various projects under way to grow renewable diesel and to find new paths to distillate fuels even more important. READ MORE

US fuel ethanol producers continue to face margin pressure, some consider the switch to industrial production (Independent Commodity Intelligence Services)

WHAT DOES THE FUTURE LOOK LIKE FOR THE ETHANOL INDUSTRY? (Brownfield Ag News)

US ethanol industry may be through worst (World-Grain.com)

Excerpt from Independent Commodity Intelligence Services: As industrial demand continues to soar and is expected to remain elevated even as the coronavirus subsides, fuel market participants continue to look into a permanent switch to industrial production.

Smaller fuel producers are more likely to consider the switch, as larger fuel ethanol producers are typically able to weather downturns for a longer period of time.

If demand for industrial remains elevated as part of a longer term trend, the switch to industrial production could be worth the investment, as producers are likely to return the costs.

Second quarter industrial ethanol contracts rose to record highs on booming demand, highlighting the dichotomy between the two products.

As the sanitization trend is likely here to stay, the cost incentive for some fuel producers to focus on industrial production is present, especially as the fuel industry is historically hampered by US federal regulations and a seemingly never-ending war with refiners on the biofuels mandate.

Ethanol is used as a gasoline blendstock, in pharmaceuticals, and in food and beverage applications, such as hand sanitizers and vodka. READ MORE

3 Things that Need to Happen for Sustainable Aviation Fuel to Take Off

by Lloyd Ritter (Green Capitol LLC/Biofuels Digest) A timely new report came out recently on sustainable aviation fuel (SAF), “Ready for

May 26, 2020 Read Full Article

WEBINAR: Forum Insights: Looking at Key Sectors of the Pacific Northwest’s Economy – Ag, Construction, Goods Movement and More — May 27, 2020

(Diesel Technology Forum) Exploring air quality, climate and energy profiles in key sectors of the region including transportation, ports, agriculture,

May 26, 2020 Read Full Article

Auto Industry to Fight Lawsuit Saying Auto Standards Too Stringent

by Kelsey Tamborrino (Politico’s Morning Energy) The Alliance for Automotive Innovation, which includes automakers and vehicle parts manufacturers, on Friday

May 26, 2020 Read Full Article

Oregon State University: Researchers Make Key Advance Toward Production of Important Biofuel

(The Register Guard) An international research collaboration has taken an important step toward the commercially viable manufacture of biobutanol, an alcohol

May 25, 2020 Read Full Article

Onboard Separation Technology Set to Improve Fuel Economy

by Lynne Roeder (Pacific Northwest National Laboratory) PNNL invention partitions ethanol from gasoline to enable octane on demand; could also

May 25, 2020 Read Full Article

Commission Re-opens Controversial Advanced Biofuel List in Transport

by Sarantis Michalopoulos (EURACTIV.com) The European Commission has launched a stakeholder consultation to expand the list of the so-called advanced or

May 25, 2020 Read Full Article

Higher COVID-19 Fatality Rates among Urban Minorities Come Down to Air Pollution

by David Vander Griend (Urban Air Initiative/Biofuels Digest) … Whether in New Delhi, Kansas City, New York, or Beijing, less driving

May 25, 2020 Read Full Article

Nest Egg + Renewables Help Protect Neste in 2020 – Even with COVID-19 Uncertainty, Neste Hits Renewables Production Record

by Jim Lane (Biofuels Digest) … In today’s Digest, Vanacker answers how the COVID-19 pandemic is affecting Neste’s operations at

May 25, 2020 Read Full Article

Rockefeller Heirs to Big Oil Find Dumping Fossil Fuels Improved Bottom Line

by Steven Mufson (Washington Post) Since severing investments in fossil fuels, Rockefeller Brothers Fund has outpaced its financial benchmarks. —

May 25, 2020 Read Full Article

WEBINAR: The Manure Challenge Grand Final — June 2, 2020

Manure Innovation Challenge — Watch the Grand Final Live via webinar June 2 The Manure Challenge will see eight

May 22, 2020 Read Full Article

ePURE: EU Ethanol Production Is Vital to Ag, Climate Goals

(ePURE/Ethanol Producer Magazine) Experts agree that achieving the EU Green Deal will require a massive increase in bioenergy, so it is

May 22, 2020 Read Full Article

2020-21 Planet Forward Correspondent Application Open DEADLINE: June 12, 2020

(Planet Forward) Are you interested in environmental journalism that can move the planet forward? Are you a great storyteller, or

May 22, 2020 Read Full Article

Oil Exec: It Would Be a Mistake for the US Government to Bail Us out

by Dan K. Eberhart (CNN Business Perspectives) … President Trump indicated that some sort of financial bailout for the US

May 22, 2020 Read Full Article

Oil Firms See Relief from Stimulus Tax Provision

by James Osborne (Houston Chronicle) Oil and gas companies that have struggled for years under low crude prices are reaping

May 22, 2020 Read Full Article

EPA: SRE Petitions Filed for Compliance Years 2019, 2020

by Erin Voegele (Ethanol Producer Magazine) The U.S. EPA on May 21 released updated small refinery exemption (SRE) data, reporting that

May 22, 2020 Read Full Article

Senate Committee Passes Gardner Bills to Strengthen Cybersecurity and Bioeconomy

(Office of Senator Cory Gardner (R-CO)) Today (May 20, 2020) the Senate Committee on Commerce, Science, and Transportation passed S. 3712

May 22, 2020 Read Full Article

The Covid-19 Crisis Is Hurting but Not Halting Global Growth in Renewable Power Capacity

(International Energy Agency) … Successful transitions to clean energy will require decarbonising the rest of the economy as well, including

May 22, 2020 Read Full Article

Neste’s Palm Oil and PFAD Traceability Dashboards Have Been Updated – Updates Twice a Year

(Neste) Neste has updated its traceability dashboard which provides detailed data on the company’s palm oil and palm fatty acid distillate (PFAD, a

May 22, 2020 Read Full Article

Maryland Energy Innovation Institute (MEI2) Energy Seed Grants Awarded

(Maryland Energy Innovation Institute) The Maryland Energy Innovation Institute (MEI2) awarded the third round of their Energy Innovation Seed Grants to six

May 21, 2020 Read Full Article

Palm Biofuel, Agro-Based Pharmaceuticals, Others Can Replace Petroleum, Says Ikuenobe

(The Guardian) … Oil palm can fetch Nigeria as much revenue as the crude oil can so said the Governor of

May 21, 2020 Read Full Article

Proposed Rulemaking: EPA Guidance; Administrative Procedures for Issuance and Public Petitions PUBLIC COMMENT DEADLINE: TBD

(U.S. Environmental Protection Agency) This action proposes the EPA’s procedures for developing and issuing guidance documents and to establish a petition

May 21, 2020 Read Full Article

Scrap to Wrap, a New App? NOVA, Enerkem Set Sights on Garbage-to-Ethylene, and How, and Why

by Jim Lane (Biofuels Digest) From Canada comes news that NOVA Chemicals and Enerkem entered into a joint development agreement to

May 21, 2020 Read Full Article

Rapid Screening Method Targets Fatty Acids in Yeast; Key to Sustainable Bioproducts

(Center for Advanced Bioenergy and Bioproducts Innovation) Scientists engineering valuable microbes for renewable fuels and bioproducts have developed a fast,

May 21, 2020 Read Full Article

EPA Chief Says No Decision Yet on Industry Requests to Reduce 2020 Biofuel Mandates

by Valerie Volcovici and Richard Valdmanis (Reuters) The U.S. Environmental Protection Agency has not yet decided whether to grant requests from

May 21, 2020 Read Full Article

Primoris Services Corporation Announces Industrial Awards Valued Over $62 million

(Primoris Services Corporation/Seeking Alpha) Primoris Services Corporation (PRIM) (“Primoris” or “Company”) today announced two new industrial awards with a combined value

May 21, 2020 Read Full Article

BD Zones and BDO Zones: Weaponizing Biomass to Support a Bio-Fueled Economic Recovery

by Jordan Solomon (Ecostrat Inc./Biofuels Digest) The US has over a billion tons of biomass which can be used as

May 21, 2020 Read Full Article

Longmont Waste Services Unveils RNG-Powered Fleet, New Facility

by Michael Bates (NGT News) As part of a project prioritized in Longmont’s 2018 greenhouse gas inventory, the Colorado city has

May 21, 2020 Read Full Article

Biogas #HANDS ON: 1st North American Online Biogas Training — June 22-26, 2020 — ONLINE

IBBK Biogas — The Convenience of Online Trainings meets the Interaction of Live Events ✓ Attend from wherever you are ✓

May 20, 2020 Read Full Article

Biogas-To-RNG Project Developer Is Ready To Move The Needle

by Nora Goldstein (BioCycle) BioCycle interviewed Bob Powell, founder and CEO of Brightmark, about his company’s growth trajectory in the

May 20, 2020 Read Full Article

EPA Panel Asked to Review Public Health Benefits of Ethanol

(Urban Air Initiative/Ethanol Producer Magazine) The Urban Air Initiative sent a letter to the COVID-19 Review Panel within the EPA’s Science Advisory Board

May 20, 2020 Read Full Article

Biofuel Quotas to Get Small Lift Under Draft of EPA Plan

by Jennifer A. Dlouhy (Bloomberg/Yahoo! Finance) The Environmental Protection Agency has drafted a plan to slightly lift biofuel-blending targets next year,

May 20, 2020 Read Full Article

RFA Thanks Sens. Grassley, Klobuchar for Renewable Fuel Feedstock Reimbursement Act of 2020

(Renewable Fuels Association) The Renewable Fuels Association today thanked Sens. Chuck Grassley and Amy Klobuchar for introducing bipartisan legislation to provide much

May 20, 2020 Read Full Article

Tom Carper (D-Del.), Laid out Concerns over EPA’s Final Auto Emissions Rule

by Kelsey Tamborrino (Politico’s Morning Energy) … EPA Administrator Andrew Wheeler will testify before a Senate Environment and Public Works

May 20, 2020 Read Full Article

Annual ACE Conference “Rising Up” (co-locating with FEW) — August 25, 2020 — Omaha, NE

The American Coalition for Ethanol’s Annual Conference will be held in conjunction with the 2020 International Fuel Ethanol Workshop (FEW)

May 20, 2020 Read Full Article

Flying with Sunlight

(Lufthansa Group) Lufthansa Group, ETH Zurich and its spin-offs Climeworks and Synhelion plan to cooperate in the field of Sustainable Aviation

May 20, 2020 Read Full Article

Ethanol Production: Sugar Mills Pitch for Tripartite Contracts with Banks, OMCs

by Ty Jayan (The Hindu Business Line) Govt recently approved an additional ethanol capacity of 600 crore litres — Sugar industry,

May 20, 2020 Read Full Article

Biofuel Backers’ Zoom Fly-In

by Ryan McCrimmon (Politico’s Morning Agriculture) Growth Energy, which represents ethanol producers and supporters, is hosting its first “virtual fly-in”

May 20, 2020 Read Full Article

Eni to Stop Using Palm Oil to Make Biodiesel by 2023

by Maitane Sardon (Market Screener) Italian energy giant Eni SpA said Friday that it is reviewing its supply chain with the

May 20, 2020 Read Full Article

QUOTE OF THE WEEK — Neste Corporation

“One in three Finns could stop using fossil fuels in the next few years. … Renewable fuels are an effective

May 20, 2020 Read Full Article

Neste Brings Neste MY Renewable Diesel to 51 New Stations in Finland – the Aim Is to Expand Its Availability to the Whole of Finland

(Neste) Neste brings Neste MY Renewable Diesel™ to a significant number of new stations during April and May 2020 in Finland. With

May 20, 2020 Read Full Article

‘Rona Cyclona’s Path, Macroeconomic Projects for Energy: The Digest’s 2020 Multi-Slide Guide to COVID-19 Impact for Energy Industry

by Jim Lane (Biofuels Digest) Alot has changed since February, but what exactly in terms of the energy sector and

May 20, 2020 Read Full Article

What’s Next for Biofuels? 8 Scenarios for a Post COVID-19 World

by Steve Hartig (ReCon Associates/Biofuels Digest) … Looking ahead, the main drive for ethanol demand will be light vehicle miles driven

May 20, 2020 Read Full Article

Fueling a Cleaner Future: Ethanol Is Just the Beginning

(Omaha World-Herald/Nebraska Corn Board) When you stop at the gas station to top off your tank, how much thought do you

May 20, 2020 Read Full Article

Biofuel Bolsters Economy and Environment – Humber LEP Responds to E10 Consultation

by David Laister (Business Live) Department for Transport gets response from home of UK’s largest bioethanol plant — … Biofuels

May 19, 2020 Read Full Article

Adkins Energy Announces Scholarship Recipients

(Journal Standard) Adkins Energy LLC recently announced Aaron Folk, Kayla Runkle and Hannah Pickard as the recipients of this year’s scholarship

May 19, 2020 Read Full Article

Amid Oil Price Crash, a New Hope for Biofuels

by Tina Casey (Triple Pundit) … (T)there are reasons to be optimistic about the future of biofuels, as the field

May 19, 2020 Read Full Article

EPA Biofuel Policy Fight Stalls Out At Supreme Court

(Law360) The U.S. Supreme Court on Monday declined to review a U.S. Environmental Protection Agency policy that fuel blenders aren’t responsible

May 19, 2020 Read Full Article

WEBINARS: Spotlight Retailer Infrastructure Grants — Higher Blends Infrastructure Incentive Program, or HBIIP — May 22 and 28, 2020

In cooperation with the U.S. Department of Agriculture, the Renewable Fuels Association will host two webinars this month to help

May 19, 2020 Read Full Article

Multi-Scale Structured Materials for Electrocatalysis and Photoelectrocatalysis

(Dresden University of Technology/Phys.Org) As a new class of porous materials, noble metal aerogels (NMAs) have drawn attention for their

May 19, 2020 Read Full Article

EPA’s Anti-Competitive Limits On Ethanol Blending Are Illegal

(Urban Air Initiative) Attorneys for a broad alliance of ethanol, agriculture and clean fuel organizations filed their opening brief arguing that EPA regulatory

May 19, 2020 Read Full Article

Ethiopian Sustainable Biofuel Future Scenario at a Glance

(Roundtable on Sustainable Biomaterials) As part of the Fuelling the Sustainable Bioeconomy powered by Boeing’s Global Engagement Portfolio, RSB gathered a

May 19, 2020 Read Full Article

Growth Energy Urges EPA COVID-19 Panel to Examine Air Toxics

(Growth Energy) In a letter to the Environmental Protection Agency’s (EPA) Science Advisory Board (SAB), Growth Energy urged members of a new COVID-19 Review

May 19, 2020 Read Full Article

Do We Need an Activist Army?: The Digest’s 2020 Multi-Slide Guide to Renewable Fuels in a Green Recovery

by Jim Lane (Biofuels Digest) On last week’s DigestConnect webinar about the Green Recovery, Joanne Ivancic from Advanced Biofuel USA shared

May 19, 2020 Read Full Article

New Lords of Circular Carbon: ArcelorMittal, EU Complete Financing of Steelanol Project

by Jim Lane (Biofuels Digest) In Brussels, the European Investment Bank, with the support of the European Commission, has granted

May 19, 2020 Read Full Article

U.S. Gain Supplies Oregon Companies with RNG

by Matthew Mercure (NGT News) U.S. Gain, a company that specializes in the development, procurement and distribution of renewable natural gas

May 19, 2020 Read Full Article

Vienna Energy Forum — TBD 2021 — Vienna, Austria

The Vienna Energy Forum (VEF) is a biennial global, multi-stakeholder forum with the objective of exploring developmental challenges within the

May 19, 2020 Read Full Article

CALL FOR PANELS: Co-Located: Smart Cities Connect Conference, US Ignite Application Summit, SBIR/STTR Fall Innovation Conference, Defence TechConnect Innovation Summit & Expo — November 16-19, 2020 — National Harbor, MD DEADLINE June 12, 2020

Submit your Panel Proposal for consideration. Selected panels will be provided registration waivers for all panelists. Special consideration will be