U.S. Department of Agriculture : Going for Gold
The American Coalition for Ethanol’s 2024 conference, themed “The Gold Standard,” highlighted topics like climate-smart agriculture, ethanol’s inclusion in sustainable aviation fuel (SAF) markets, and carbon capture pipelines. ACE’s chairman emphasized maintaining close relationships with policymakers, while CEO Brian Jennings discussed efforts to expand E15 availability and support decarbonization through low-carbon fuels
October 9, 2024
The American Coalition for Ethanol’s 2024 conference, themed “The Gold Standard,” featured important figures with industry impact, including representatives from Summit Carbon Solutions and the U.S. Department of Agriculture. Held in Omaha, Nebraska, this year’s general session speakers spoke on key topics weighing on the minds of U.S. ethanol producers, such as climate-smart agriculture, carbon capture and sequestration pipelines and ethanol’s inclusion in the developing SAF market.
Dave Sovereign, chairman of the board for ACE, introduced the general session, encouraging ethanol producers to stay engaged with policymakers. “When we, as industry representatives, meet with our elected officials, they quickly pick up on the integrity, character and passion in [our] conversation, and [they] realize how our industry has benefitted their constituents,” he said. “And thereby, we earn their support, but we can’t take this support for granted. And as an industry, we must keep these lines of communication open.”
Following Sovereign’s remarks, Brian Jennings, CEO of ACE, updated the assembly on the success attained “at long last” for the eight states that opted out of the federal government’s Reid vapor pressure (RVP) regulations, bypassing a rule that prevented E15 from being sold during the summer throughout much of the country. “The optouts from key Corn Belt governors combined with summertime … emergency waivers for E15 in conventional gasoline areas—the third consecutive year EPA has invoked its emergency authority I would add—should help set the stage for coast-to-coast availability,” he said. While encouraging more states to follow the path of those that opted out of the RVP rule, he advocated for Congress to step in and make E15 available year round, nationwide without the need for an emergency waiver, sharing that ACE is optimistic about “the opportunity to get E15 legislation across the finish line before the end of the year.”
The RFS has also been on an encouraging trajectory under this administration, Jennings said, citing fewer conflicts with refiners over annual blending obligations due to the relatively timely release of annual volume obligations and the current administration’s reluctance to approve unwarranted small refinery waivers (SREs). However, he also emphasized the need for vigilance in defending the RFS due to recent court battles with refiners and a D.C. court requiring EPA to reassess each SRE denial. He also highlighted the focus put on decarbonization and the role that low-carbon fuels could play in this national objective.
In his remarks, Jennings also shared updates on the Regional Conservation Partnership Program, which incentivizes farmers to implement climate-smart practices. The program launched in 2021 when ACE was awarded funding by USDA, allowing the program to get its start in South Dakota, incentivizing the adoption of low-carbon and regenerative farming practices on 18,000 acres, according to Jennings. This year, more funding was granted, expanding the program’s reach to 10 states and 13 to 14 ethanol companies with the funding to incentivize climate-smart ag practices on an additional 100,000 acres.
“The sites for this larger project were deliberately chosen to provide the Department of Energy with robust data regarding the greenhouse gas benefits of conservation practices in different soil types and climates,” Jennings said. “Already, more than 500 farmers have attended meetings we have hosted in seven of the 13 ethanol grain sheds, and those farmers have expressed interest in enrolling nearly 250,000 acres in our project, meaning initial farmer interest is approaching five times available funding.”
The goal of the project is to help address the real and perceived information gaps surrounding the GHG reduction benefits of climate-smart agriculture; helping farmers get credit for standalone practices—no-till farming, for example—rather than only getting a maximum 10-point reduction credit through the bundling of three requisite practices (cover crops, no-til and enhanced efficiency fertilizer use), as this year’s 40B guidance from Treasury required. “Ultimately, we are focused on helping ethanol companies sell new and valuable products to diversify their profit potential and earn premium prices in the regulated fuel markets that are being stood up all over the globe,” he said.
Following Jennings’ remarks, Ron Lamberty, chief marketing officer with ACE, gave an update on the Higher Blends Infrastructure Initiative Program, or HBIIP. He explained that the program was undersubscribed in its first three rounds, oversubscribed in its last round and on track to be oversubscribed for the current round as well.
Lamberty discussed the importance of educating marketers—who, in turn, educate consumers—about ethanol and its margin benefits. “That’s been our focus when we go out to trade shows, when we go out to meet with people; it’s to talk about the fact that you can make more money selling ethanol,” he said. “And the most successful retailers you’ll find are the ones that have figured that out and are making more money.” State incentives for selling higher blends “do a world of good,” he explained, pointing out that sales are surging in Iowa, Nebraska and California. The slowdown in electric car sales is driving automaker interest in developing hybrid and flex-fuel hybrid vehicles, Lamberty explained.
The keynote address of the general session was given by Summit Carbon Solutions CEO Lee Blank. In his remarks, he updated the assembly on the progress of the company’s carbon capture and sequestration (CCS) pipeline project. Blank did not avoid acknowledging the challenges the project has faced in the past year, starting with the initial siting permit for the injection site in North Dakota being denied by the state’s Public Service Commission in August 2023.
“September of 2023 was a very interesting time [for] Summit Carbon Solutions,” Blank said. “It was a time when we really had to reflect on [whether we] were going to get this thing accomplished or not? And so, we doubled down on efforts, we did very hard things around our company, and what I mean by that is we reduced our company down to 40% of what we were when we got started.” The company adapted to the challenge by switching from construction mode to permitting mode. He explained that the Iowa Utilities Commission permit process has finished, and Summit has been issued an order for the permit, which will be granted to them once certain conditions are met. Things aren’t over in North Dakota; the state has taken “time to rehear our permit,” Blank said, explaining that with those hearings finished, the company is waiting on a ruling.
An encouraging development for the project happened in Minnesota, when Minnesota’s Department of Natural Resources completed an environmental impact study (EIS) on a three-mile line of the project that crosses the Ottertail River, determining the project benign. “That is going to be used across our entire footprint as we move forward, as we work, state by state by state … that will resonate,” Blank said. “Because if you can get a benign EIS in Minnesota, that’s saying something about the project itself, so I’m really pleased for that.”
The permitting process in Iowa will need to restart with the addition of several POET and Valero facilities joining on, he explained. The “order for permit” was awarded to the “base route,” so landowner meetings will restart in Iowa for those additional laterals.
Blank reiterated the “why” of the pipeline project as well as the importance of communicating this information to ethanol producing communities. “South America is taking our exports,” Blank said. “And it’s not going to change; they are doing a bang-up job on growing crops. We have got to internalize the usage of our corn crop, and we have a way to do that, and it starts with a pipeline, it makes all the difference in the world.”
The final speaker of the general session was Tom Vilsack, Secretary of USDA. Vilsack affirmed the importance of the RCPP project, calling it “an opportunity to show the power of collaboration” through bringing land grant universities, ethanol facilities, NRCS officials and DOE officials together to enable implementation of climate-smart practices. “Understanding and appreciating that in asking farmers to take a chance and a risk in adopting climate-smart or sustainable practices that there’s a cost associated with that, and it would be difficult for farmers to take that leap without partnership,” Vilsack said.
This project helps continue building a database that allows farmers to further take advantage of market opportunities by gathering statistically significant and localized data on the impact of climate-smart and regenerative ag practices.
Vilsack also expressed that the project’s data helps USDA make a “more powerful case” for the importance of ethanol’s inclusion in SAF. Ethanol plays a valuable role in promoting domestic energy security and preserving small to medium-sized American farmers, thereby benefitting rural communities, according to Vilsack. “I owe, personally and in my capacity as Secretary of Agriculture, a debt of gratitude to all of you for your willingness to be part of this extraordinary industry,” he said.
The shrinking population of rural America and reduction in small family farms are among Vilsack’s concerns. A disproportionally large number of U.S. military personnel come from small towns across America, and if those populations continue shrinking, it becomes a national security threat, he explained. Making the “right choices” to support the ethanol industry is important to the administration.
“Now we come to one of the big choices, while this is a 15-billion gallon industry—important, significant—we now recognize that we’re not going to have battery-powered planes and ships, we’re not going to have hydrogen-powered planes and ships for quite some time,” Vilsack said. “And so, the world needs this industry to help it create low-carbon intensity marine and jet fuel.”
40B was part of an effort to make choices that support SAF. However, Vilsack recognized that bundling climate-smart ag practices in 40B guidance was not well-liked, but called an “effort to introduce the world to the fact that agriculture can make a difference, that ethanol can make a difference[.]” Establishing that was important, according to Vilsack, and it was also important that the false science around indirect-land-use change be corrected.
Ethanol’s inclusion in the “36-billion-gallon opportunity” that is SAF production matters for the energy transition, but it also matters because of its role in preserving the family farm, explained Vilsack. In closing, Vilsack emphasized that choices need to be made to ensure the ethanol industry’s continued access to the IRA and the continuance of small-to-mid-size family farms. “Seems to me there’s a better choice, recognizing the importance of production in agriculture and [continuing] to support that as we should, and we are. But also recognizing that there needs to be ways in which that farm family can generate more than one check, if you will, from what’s done on the farm[.]”
From working with farmers to drive down corn’s GHG emissions to championing nationwide, permanent availability of E15, ACE’s focus on expanding ethanol’s reach is evident. Jennings laid it out plainly: “Our goal: to make ethanol the undisputed gold standard clean fuel of the future.”
Source Link : https://ethanolproducer.com/articles/going-for-gold
