Advanced BioFuels USA

by Jim Lane (Biofuels Digest)  In Missouri, the National Biodiesel Board has named Donnell Rehagen as the trade group’s chief executive. Rehagen was named interim CEO in June after serving 12 years as NBB’s chief operating officer.

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It’s dead obvious, as NBB chairman Ron Marr aptly put it, that Rehagen has the “detailed knowledge of our organization and deep understanding of our industry certainly leads to a smooth transition. But the main reason we have asked him to take on this position is his proven ability to think strategically about our issues and apply creative solutions that lead to success.”

But also great to see that the NBB went through an exhaustive search — and we mean exhaustive — and confirmed, in the end, that the right leader for America’s favorite advanced biofuel was already at the wheel.

Good news, because biodiesel has some big opportunities and tough challenges coming up in leading the advanced biofuels charge. First, extend the biomass-based diesel tax credit. Second, expand the capacity. Third, expand the feedstock set so that the costs don’t soar for America’s drivers. Finally. to continue the effort to connect consumers with the awesome story of biodiesel — despite the efforts of naysayers and evildoers, — and all the while outnumbered something like 100-to-1 by the First Order. Er, we meant the forces of petroleum diesel.

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People always say nice things at the start of a chief executive’s term, unless the CEO’s address happens to be 1600 Pennsylvania Avenue — but the happy reactions of a wide selection of industry worthies are worth noting. If you do a document search on “leader”, “vision”, “focus” or “expert”, you’ll get the basic idea in a flash.    READ MORE / MORE

Excerpt from Biofuels Digest 11/10/2016:  Digest: We’ve always been very poor predictors of Renewable Volume Obligations for the coming year — do you have more success with picking numbers in your crystal ball, and what do you foresee?

Rehagen: If I was great at picking numbers, I probably would be buying lottery tickets at the moment, but we already know a lot, even if we can’t yet pick a precise number,. The EPA has proposed a 2.1B gallon RVO for 2018, and that’s a 100M gallon increase over 2017. Our message is “hey guys, we are already producing more today and we produced more than that in 2015 as well. Setting a goal for 2018 that is less than 2015 production doesn’t stretch industry and encourage investment.

Digest: Your preferred number?

Rehagen: We would like a target of 2.5B gallons for 2018, and even that would not be a major stretch.

Digest: Some have expressed concern that big targets will result in higher prices at the pump? Do you agree?

Rehagen: Prices will not have to rise, we are confident about that. And one of the unique things about the RFS and how the volumes are set up is that we have to sit down with EPA and justify facts and data. So we have good grounds to ask for higher volumes.

Digest: Before the new Administration is inaugurated, we have the lame-duck legislative session which picks up shortly. We’ve heard everything from “not a chance!” to “Why not?” on tax extenders. What have you heard?

Rehagen: We’ve heard the same range. But we have heard recently, and seen that the House leadership has interest in addressing the tax extenders, and Majority Leader McConnell has expressed interest, and the current Administration as well. So we still expect that something might come up. The results were a little bit unexpected last night, and I think we are all cautious at the moment while we see how the elections re-shape the landscape for tax extenders.

Digest: The NBB has proposed shifting from a blender’s tax credit to a producer’s tax credit, which would favor domestic US production. At first glance, that would seem in line with the Trump pro-American manufacturing vision, is the election helpful in that respect?

Rehagen: It’s definitely helpful. Our industry and organization exists to ensure the success of US biodiesel production, and we believe a producers credit furthers that cause and is more consistent with US energy policy since 2005. Look, we’ve seen the dynamics of the world markets change and evolve — as they always do. Even 5 years ago, the import of biodiesel wasn’t a big deal. But now it is very, very significant. This year, we expect to see imports of more than 600 million gallons. The producers credit gives the domestic producers the incentive to increase their invest.

Digest: Why?

Rehagen: Right now, the blenders credit is applied at whatever point that biodiesel enters the fuel supply. The credit is agnostic to where it comes from, With a producer’s credit, domestic production receives the incentive. That’s a big difference. Do we, the US, want to offer a tax incentive for product that doesn’t employ, necessarily, any Americans. When you give a tax incentive, you are trying to have an economic impact, and we think a producer’s credit accomplishes that.

Digest: If domestic production is incentivized and volumes are given a stretch target, will we see more diversification of feedstock to ensure prices don’t surge for domestic biodiesel?

Rehagen: There might be a misconception about feedstocks used today. Right now, about half of the feedstock is soybean oil. The other half is out of waste oils, recycled fats, corn oil. Things that are already out there, and things that no one else wants and end up in the waste stream. So, we’ve seen a  lot of diversification. Now, for our industry to continue to grow and get to 4-5-6 or even 10 billion gallons, we’ll need to see growth in new feedstocks, and we are eagerly looking to see how scientists are working to deliver those choices.  READ MORE