RFA Optimistic about Ethanol in 2017 (and other opinions)

by Andy Eubank (Hoosier Ag Today) ... “One that comes readily to mind is the disparate treatment of E10 and E15 and other high level blends with respect to evaporative vapor control, RVP. Right now E10 and E15 are treated differently and it is a huge barrier to the year round use of E15. We really hope that in a regulatory reform effort, that the new administration will be able to provide parity with respect to volatility regulations, free up the market place such that consumers can make the choices that are right for their vehicle and their pocketbook.” (Renewable Fuels Association president and CEO Bob Dinneen)

With EPA setting 2017 biofuels standards in keeping with the RFS, there is cause for optimism about more progress in cellulosic and advanced biofuels.

Dinneen believes the full potential of the RFS can finally be realized. He also expects ethanol exports to increase this year but doesn’t expect challenges to the industry to go away altogether in 2017. READ MORE and MORE / MORE / MORE (Ethanol Producer Magazine)

Excerpts from Ethanol Producer Magazine: Mick Henderson
General manager, Commonwealth Agri-Energy.
Commonwealth Agri-Energy, a 35 MMgy plant in Hopkinsville, Kentucky, is owned by the 2,300 members of the Hopkinsville Elevator Co-op.

We as corn-starch ethanol plants can see a bolt-on technology that’s not a factor of $4 or $8 capital cost per gallon produced, but a fraction of that where you can increase capacity by 5 percent or 10 percent from the cellulosic fraction in the corn kernel fiber. We all recognize a good opportunity and we’re all looking at technology tweaking to get us there. However, it’s not going to be “Oh, my gosh, we’ve got to spend half a billion dollars to build a plant.” We’re not going to do that. But we can all see spending 20 percent of our capital on a bolt-on technology.

When the government promises you a cellulosic RIN [renewable identification number] that’s an extra dollar or whatever, that sounds good, but is it real? My conservative farmer ownership doesn’t want to invest in projects with government-controlled product prices. They want [investments] to be compatible, comparable to do what they do with nongovernment regulated products.

The price for cellulosic ethanol has to come down some, but it’s close. It’s really close. There are technologies and enzymes and yeast and processing equipment that are real, that people are actually installing and trying. The old storyline for me was “15 years ago cellulosic is five years away and 15 years later, it’s still five years away.” I don’t think it’s five years away now. I think the technology is being implemented right now.

On cellulosic ethanol and new technology:
We’re seeing very slow progress in terms of advanced ethanol. Let’s talk about cellulosic for a minute. Multiple plants have been on the horizon. Mass production of cellulosic ethanol has been five years away for about 25 years now and I expect that to continue. The problem with expecting a quicker uptake of cellulosic technology is that it will never be price competitive without subsidies and produce ethanol on an even scale with a feedstock that is as efficient as corn is.

Mark Borer
Senior Vice President and General Manager, Poet Plant Management.

There’s no question we’re closer (with cellulosic). Poet’s large project where we are commercializing cellulosic ethanol —Project Liberty in Emmetsburg, Iowa—presented challenges. Any development of new, revolutionary technology always does, but we’re continuing to work through those technical challenges. We’re at a point now where we’re getting an operational plant that’s going to be producing in 2017. We’re excited about the gallons we think we’ll be producing there and the fact that we’re proving out. It is a very real, very vital commercial operation that’s got a strong future.

Assuming that oil doesn’t fall out of bed, I look for exports to continue to grow over a billion gallons or higher, maybe 1.2 billion. It looks like every year we add new customers. China bought ethanol from us this year. India is ready to buy ethanol from us. The traditional market in Brazil, with world sugar prices high like they are, continues to be a destination for us. I am optimistic about exports as we continue to add new destinations.

On significant changes:
The No. 1 change has been growth in demand for our product, because it was easy to see that we were growing faster than there was demand for it.

There’s no doubt technology has gotten more efficient so we’re able to create more ethanol out of the same amount of feedstock. We’re able to do with less power, less energy all together, so we’re probably a little easier on the environment now than what we had been doing. READ MORE