Biofuel leaders says EPA has treated industry unfairly

Source: By DAVID SHAFFER , Minneapolis Star Tribune  • Posted: Tuesday, October 14, 2014

In Minneapolis, industry officials say federal government erred in setting low targets for biofuels delivered at the pump.

Leaders of the biofuels industry, at a conference in Minneapolis Monday, spoke about the uncertainty in the industry caused by the EPA’s decision to set lower targets for use of biofuels. File photo of a plant in Scotland, S.D., that turns corn cob into cellulosic ethanol.

Photo: Dirk Lammers, Associated Press

Leaders of the nation’s biofuels industry on Monday accused the Obama administration of undermining the commercial success of advanced renewable fuels, like ethanol produced from corn cobs and stalks.

Michael McAdams, president of the Advanced Biofuels Association, said at an industry conference in Minneapolis that innovative, biofuel companies are looking to expand in countries like Brazil, China and India, rather than in the United States, because of this nation’s unstable renewable fuel policy.

“It has put us in suspended animation and has made it inherently difficult … to find financing to build these new, innovative plants in the United States of America,” McAdams said at the National Advanced Biofuels Conference & Expo at the Minneapolis Hyatt Regency.

McAdams’ association represents producers of low-carbon and other advanced biofuels, including Gevo Inc., which is trying to produce isobutanol, a higher-value alcohol, at an ethanol plant in Luverne, Minn. He and other industry officials sharply criticized the U.S. Environmental Protection Agency’s still-pending proposal to reduce the level of advanced biofuels that must be blended into the nation’s fuel supply.

“They pulled the rug out from under the industry,” McAdams said.

The EPA did not respond Monday to e-mail and telephone requests to comment.

“This administration is still dithering on whether or not to do the right thing,” added Joe Jobe, CEO of the National Biodiesel Board, a trade group for producers of biodiesel from soybeans, corn oil and waste oils.

Jobe said the biodiesel industry showed in 2013 that it could produce 1.8 billion gallons of biodiesel, which is considered an advanced biofuel because of its significantly lower carbon footprint compared to fossil fuels. Yet under the Renewable Fuel Standard, a 2007 federal law that aimed to expand the biofuels market, the EPA now proposes blending significantly less advanced biofuel than the biodiesel industry produced last year, he said.

Randall Doyal, CEO of Al-Corn Clean Fuel, a farmer-owned ethanol plant in Claremont, Minn., said he believed the EPA administrative action is “illegal” under the federal law.

“It’s unbelievable,” said Doyal, chairman of the Renewable Fuels Association, an industry trade group. “I can’t believe it happened.”

Industry officials said they are worried about financing large stand-alone commercial biofuel projects, such as the first three, large cellulosic ethanol plants recently or soon to be completed in the Midwest. Those plants — two in Iowa, and another in Kansas, all costing $200 million or more — could end up being the last ones in the United States, industry officials have warned.

Yet industry officials remain interested in lower-cost technology that can be added to the nation’s existing 214 ethanol plants to boost production or expand into new or greener products. This year, many ethanol plants have reported solid profits, leaving room on balance sheets for investment.

Doyal said Al-Corn is close to a deal to install two, pilot biodiesel production units at the Claremont plant, which is one of Minnesota’s oldest ethanol refineries. He said the portable technology developed by Revolution Fuels of St. Louis Park would produce biodiesel from corn oil extracted during ethanol making.

Brian Kletscher, CEO of Highwater Ethanol in Lamberton, Minn., said his company is looking at converting production to isobutanol, a higher-value ethanol that can be used not only as a motor fuel, but as a chemical feedstock for many other products.

“There’s a lot of different technologies out there,” added Mike Jerke, CEO of Guardian Energy Management, which operates three ethanol plants including one in Janesville, Minn. “If someone talks to me about technology that bolts on … that is going to get my attention a lot quicker than something that is stand-alone.”

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