Biodiesel production down; ethanol still at record surplus

Des Moines Register
4:40 PM, Mar 21, 2012 by Dan Piller

Biodiesel production has dropped from its record levels of late-2011 after the renewable fuel’s $1 per gallon tax credit expired on Jan. 1. But ethanol production continues at record levels.

The U.S. biodiesel industry produced 135 million gallons of fuel in the first two months of 2012, according to new numbers released by the EPA Wednesday.

The recent volume is ahead of the 80 million gallons produced in the same two months of 2011, but down from the record production late last year when the industry exceeded 100 million gallons per month for five consecutive months and reached a peak of 160 million gallons in December.

In 2011 biodiesel enjoyed a resurgence after congress not only reinstated the tax credit but also began a mandate of 800 million gallons to be used last year, expanded to 1 billion gallons in 2012.

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Is E85 on the Rocks?

CSPnet.com (Convenience Stores)
By Samantha Oller
CSP Daily News February 10, 2012

Number of pumps may be halved by end of 2012

GREENVILLE, S.C. -- On January 1, the petroleum-retailing industry awoke to a nation without a Volumetric Ethanol Excise Tax Credit (VEETC). The tax credit, which provided 45 cents to blenders and fuel marketers for each gallon of pure ethanol blended into gasoline, was arguably the greatest driving force behind the spread of E85 in recent years.

Without it, the future of E85 as a motor fuel is in question, and at least one supporter of the fuel says the number of E85 pumps will be halved by end of this year.

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Ethanol production holds steady

Des Moines Register
8:36 AM, Jan 26, 2012 by Dan Piller

Three weeks after the expiration of the 45-cents per gallon blenders tax credit, ethanol production is running slightly ahead of last year’s pace.

The U.S. Energy Information Agency reported this week that ethanol production totaled 934,000 barrels per day for the week ending Jan. 20. That compared to production of 922,000 barrels per day for the same week last year.

The latest production had dipped slightly from the 944,000 barrels per day and 941,000 barrels per day in the first two weeks of 2012, which had been widely predicted after oil companies had blended furiously at the end of 2011 to capture the last of the tax credit.

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End of ethanol subsidy will raise the price of gas

USA TODAY
By Chris Woodyard
Updated 1/3/12

Gasoline could cost 4.5 cents a gallon more starting as early as this week, and it's not because of rising oil prices.

It's because Congress declined to renew the 30-year-old federal subsidy for ethanol, letting it expire Sunday.

Ethanol, denatured grain alcohol used as a proven smog-cutting ingredient, currently makes up 10% of most gasoline-based motor fuel for general use, so-called E-10. In a few areas, E-85 fuel, 85% ethanol, also is available. E-85 can be burned only by vehicles equipped for "flex fuel."

How much the end of the subsidy could add to gas prices, and how soon, is yet to be seen. Ethanol blenders got a 45-cents-a-gallon tax credit, which amounts to 4.5 cents for the amount blended into each gallon of E-10 fuel.

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After Three Decades, Tax Credit for Ethanol Expires

The New York Times
By ROBERT PEAR
Published: January 1, 2012

WASHINGTON — A federal tax credit for ethanol expired on Saturday, ending an era in which the federal government provided more than $20 billion in subsidies for use of the product.

The tax break, created more than 30 years ago, had long seemed untouchable. But in the last year, during which Congress was preoccupied with deficits and debt, it became a symbol of corporate welfare. Fiscal conservatives joined liberal environmentalists to kill it, with help from a diverse coalition of outside groups.

In the United States, most ethanol is produced from corn. The demise of the subsidy is all the more remarkable because it comes at the peak of the political season in Iowa, where corn is king.
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2011 a Productive Year for Ethanol

Hoosier Ag Today

Posted on 27 December 2011

by Andy Eubank

The year has been a memorable one for the ethanol industry with the start of one thing and the end of another topping the list of landmarks. The industry has allowed the expiration of the Volumetric Ethanol Excise Tax Credit (VEETC) at the end of the year to come and go without a fight, essentially agreeing it was time for it to end.

But Renewable Fuels Association president and CEO Bob Dinneen says the year started on a high note when EPA gave final approval for 15 percent ethanol to be used in model year 2001 and newer vehicles.

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End is nigh for ethanol blenders' credit Jeff Caldwell

Agriculture.com
12/29/2011 @ 11:26am
Jeff Caldwell
Multimedia Editor for Agriculture.com and Successful Farming magazine.

In June, the U.S. Senate voted toe nd the ethanol blenders' tax credit, a move decried by some ag groups and shrugged off by others.

Now, that tax credit, formally known as the Volumetric Ethanol Excise Tax Credit (VEETC) is slated to end with the end of calendar year 2011. With it will go the 54-cent-per-gallon tariff on imported ethanol. Ethanol industry groups were understandably upset with the decision, while cattle industry groups, namely the National Cattlemens Beef Association (NCBA) called it a "giant step toward leveling the playing field for a bushel of corn."

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US Congress adjourns without ethanol tax credit renewal

Biofuels Digest
Jim Lane December 26, 2011

In Washington, the 112th Congress adjourned without renewing the $0.45 VEETC tax credit for blenders of corn ethanol and the $0.54 per gallon tariff on imported ethanol. “With Congress in recess, there are no opportunities for further attempts to prolong the tax credit or the tariff, so we can confidently say these support mechanisms will be gone at the end of 2011,” said the Washington Representative for the Brazilian Sugarcane Industry Association (UNICA), Leticia Phillips.

“For the first time ever, the two top ethanol producers, which together account for more than 80% of world production, are not imposing an import tariff. Brazil zeroed its tariff in early 2010 and now the US is moving in the same direction. It’s time for these two countries to show leadership and work together to develop a truly global free market for ethanol, without trade barriers, as is already the case for oil,” said UNICA CEO Marcos Jank. He described the moment as “a great opportunity” for Brazil and the US to foment increased ethanol production and use throughout the globe.

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GOP field split over more ag subsidies

ArgusLeader.com
11:28 PM, Dec. 17, 2011
Written by Philip Brasher Argus Leader Washington Bureau

In Iowa, Republicans hear refrain: Leave a good thing alone

WASHINGTON — Seldom have things been this good in agriculture, and farmers don't want the next president to mess it up.

Don't touch the biofuels mandates. Don’t impose new regulations on farms. Seek to increase exports of grain and meat. Continue subsidies to protect farmers from price declines or losses in yield.

“Change could bring something that's much less acceptable,” said Dennis Friest, who said the ag economy is the best he’s seen in four decades of farming near Radcliffe, Iowa.

The Republican presidential candidates divide along fairly sharp ideological lines in agricultural policy.

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Ethanol Stocks Volatile as Key Subsidies Are Set to Expire

The Wall Street Journal's MarketWatch

The Bedford Report Provides Equity Research on Pacific Ethanol & BioFuel Energy Corporation

NEW YORK, NY, Dec 13, 2011 (MARKETWIRE via COMTEX) -- U.S. ethanol stocks have been volatile in recent weeks as investors brace for the expiration of the Volumetric Ethanol Excise Tax Credit at year's end. The subsidy is worth 45 cents per gallon of ethanol or 4.5 cents on a gallon of fuel pumped at the local gas station. The Bedford Report examines the outlook for companies in the Ethanol Industry and provides investment research on Pacific Ethanol Corporation /quotes/zigman/5369787/quotes/nls/peix PEIX +1.74% & BioFuel Energy Corporation /quotes/zigman/104236/quotes/nls/biof BIOF -5.34% . Access to the full company reports can be found at:

http://http://www.bedfordreport.com/PEIX

As Philip Walzer of the Virginian-Pilot reports, "For more than 30 years, the federal government has offered tax credits and imposed a tariff to stimulate U.S. production of ethanol, nearly all from corn."

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End of ethanol tax credit seen boosting gas price

Des Moines Register
6:42 PM, Dec. 6, 2011
Written by DAN PILLER

The ethanol tax break expires at the end of the year; drivers will pay 4 cents more, an industry leader says.

The price of a gallon of gasoline will rise by about 4 cents per gallon after the tax credit for ethanol blending ends Jan. 1, chief executive officer Jeff Broin of Poet said Tuesday.

Broin noted that the presence of cheaper ethanol blended with gasoline lowers the pump cost to the consumer by 17 cents per gallon. This week Iowa’s average price for gasoline has been $3.18 per gallon, but most convenience stores in the Des Moines area have sold for $2.99 per gallon.

E85, or 85 percent ethanol, will rise by about 40 cents per gallon, Broin said. E85 has enjoyed a record year for sales in Iowa, and the fuel has tended to sell as much as 75 cents per gallon under the price of the 10 percent ethanol blend.

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Congressman proposes ethanol import tariff extension

Ethanol Producer Magazine
By Kris Bevill December 06, 2011

Rep. Charles Rangel, D-N.Y., introduced legislation on Dec. 2 that would extend the 54-cent per gallon ethanol import tariff, currently scheduled to expire at the end of this year, through 2014.

According to Rangel, the tariff extension is necessary in order to preserve the ethanol refining industry in Caribbean nations and protect it from reduced U.S. market share as a result of Brazilian ethanol entering the market. As part of the Caribbean Basin Economic Recovery Act and the U.S.-Caribbean Basin Trade Partnership Act, trade programs collectively known as the Caribbean Basin Initiative, certain Caribbean nations are allowed to export a percentage of dehydrated ethanol to the U.S. duty-free each year. “It is critical for U.S. businesses and consumers to help our partners in the Caribbean Basin Initiative retain a vibrant ethanol refining industry,” Rangel said in a statement.

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LETTER TO THE EDITOR: Scuttling only ethanol tax credits is unjust

The Washington Times
Thursday, December 1, 2011

Yet again The Washington Times has chosen to snub the facts for the sake of disparaging America’s most commercially viable alternative fuel: ethanol (“Burning food,” Comment & Analysis, Nov. 25).

The Times claims that ethanol is an “unnecessary and sometimes harmful additive to gasoline.” First, the editorial ignores the fact that blending clean, biodegradable ethanol in our gasoline reduces life-cycle carbon dioxide and other ozone-forming pollutants entering our air, ultimately saving lives.

Second, the current 45-cent blenders tax credit does not go to the producer, it goes to the refiner - most often, Big Oil.

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Ethanol industry 'to do their part' with economy, budget

Hoosier Ag Today Midwest Producer
Posted: Wednesday, November 30, 2011 8:31 am

The end of another year is near and again the expiration of the Volumetric Ethanol Excise Tax Credit, or VEETC, is near. But this time there is no movement to extend the credit. In the age of deficit reduction work, it's obvious that credit is on its way out.

Bob Dinneen of the Renewable Fuels Association gives credit to the ethanol industry for not trying to extend it.

"They recognize the economic situation that the country is facing, that the government is facing, and they know everybody has to do their part. We look at the situation and recognize that the marketplace has changed pretty fundamentally. You're now looking at sustained $85-100 barrel oil, and quite frankly at that level it's a little hard to ask the taxpayer to provide a gasoline marketer with an incentive to blend ethanol when the marketplace is already providing that incentive."

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U.S. Biofuel Industry Prepares for Life Without Subsidies

RenewableEnergyWorld.com
By Tildy Bayar, Associate Editor, Renewable Energy World
September 9, 2011

Government backing fades for corn ethanol but next-generation biofuels gets a $510 million boost.
LONDON -- A recent feature story in UK newspaper The Guardian reported that the financial crisis in the U.S. and the country's pressing need to cut its federal budget by $1.3 trillion had combined to spur lawmakers to reevaluate three decades of corn ethanol subsidies.

A significant factor in this equation was the global food crisis, which has illuminated the consequences of biofuel production – rising food prices as farmland is converted to produce biofuels – and created a public backlash against it.

The Senate had already voted overwhelmingly in June to end the tax credits and trade protection that benefit the ethanol industry. In its story, The Guardian reported that Congress was also expected to end $6 billion in subsidies to the ethanol industry as part of its recent debt ceiling negotiations.

Federal pro-ethanol policies, including subsidies, helped to grow U.S. ethanol production to 13.3 billion U.S. gallons in 2010, up from 1.6 billion gallons 10 years before. These subsidies had flowed to oil companies whose products are partly constituted from ethanol. The industry had planned to redirect parts of the funds toward petrol station refits, enabling the stations to use more ethanol under a Senate deal made last July. But the drastic budget cuts required by the debt deal resulted in a Senate vote blocking federal money from paying for special ethanol-blending pumps.

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Fight over ethanol brewing in D.C.

McPhersonSentinel.com
By Sean Wardwell, staff writer
The McPherson Sentinel
Posted Jun 24, 2011 @ 11:11 AM

McPherson, Kan. — The future of $6 billion in federal ethanol subsidies are up in the air after the U.S. Senate voted to eliminate them.

Sen. Tom Coburn (R-Okla.) and Sen. Dianne Feinstein (D-Calif.) worked together to pass an amendment through the Senate on June 16 to the Economic Development Revitalization Act of 2011 that eliminated the Volumetric Ethanol Excise Tax Credit (VEETC), which is also known as the “blender’s credit.”

Created in 2004 as part of the American Jobs Creation Act, the credit provides a .45 cents per-gallon credit on pure ethanol and a .54 cents per-gallon tariff on imported ethanol. Its intent was to encourage the marketing of ethanol/gasoline blends.

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Setting the Net

Ethanol Producer Magazine
By Kris Bevill June 10, 2011

The concept of replacing VEETC with a variable tax credit is gaining popularity. Will it work?

Recently it’s been difficult to navigate a 24-hour news cycle without hearing at least some mention of the U.S. deficit. Discussions of the nation’s debt have dominated the political scene at the national and state levels as governments struggle with the task of regaining positive growth after a difficult economic recession. The situation has made the ethanol industry an easy target for those seeking ways to reduce government spending. The Volumetric Ethanol Excise Tax Credit and ethanol import tariff have been on some legislators’ chopping blocks for several years, and their repeated attempts to entirely eliminate the programs have been consistently defeated, but after December’s last-minute, one-year extension of both provisions, it was made clear that even pro-ethanol legislators would no longer support the continuation of VEETC or the import tariff at their current levels beyond 2011. Ethanol industry groups consented and agreed to combine their efforts and work with lawmakers to form a long-term reform plan for VEETC. By late May, the ethanol industry’s official long-term road map had yet to be unveiled, but recently introduced legislation offers a feel for what the industry’s preferred modifications look like.

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Millons Spent on Lobbying for VEETC Reform

DomesticFuel.com
Posted by Joanna Schroeder – June 21st, 2011

Last week was a crazy week in DC as several amendments to alter or kill the Volumetric Ethanol Excise Tax Credit (VEETC) were voted on by the Senate. While the first vote was in favor of ethanol (it defeated the Coburn amendment), the industry took a hit when Sen. Dianne Feinstein’s (D-CA) bill was passed, essentially killing VEETC and the tariff without a phase-out plan (but the ethanol industry doesn’t think it will pass into law). So who spent the most money to get their way on VEETC? Lobbyists against VEETC outnumbered and outspent pro-ethanol groups, according to data from First Street-CQ Press’ new policy intelligence platform.

First street followed the money dedicated to lobbying for both Senate Bill S. 520 Volumetric Ethanol Excise Tax Credit Repeal Act and House Bill H.R. 1075 Volumetric Ethanol Excise Tax Credit Repeal Act. During first quarter of this year, there were 32 lobbying firms representing 36 clients to the tune of $8,895,893.00. There were 22 lobbying firms active on the House side representing 18 clients and spent $3,645,862.08. So first quarter alone, more than $12 million was spent on lobbying for VEETC reform.

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