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January 9, 2015
On January 6, the Clean Fuels Development Coalition released a white paper, ‘Re-thinking the Carbon Reduction Value of Corn Ethanol Fuel.’ Author Ron Alverson, former president of the South Dakota Corn Growers Association, writes that despite new science and several updates to the model that regulators use to determine the emissions profile of various fuels, the EPA and the California Air Resources Board continue to use a model that is seven years old. Scientists at the Argonne National Lab are tasked with modelling the carbon intensity of transportation fuels, including biofuels. Since 2008, they have found decreasing energy use and increased outputs and efficiency at ethanol plants. While these improvements have been incorporated into the model built by Argonne, the updated model has not been adapted by EPA or state regulators. The result has been a distortion of the effects of ethanol production on land use and the environment, with ethanol production and use subsequently being labelled as bad as or worse than gasoline from a greenhouse gas perspective.
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USDA, UN Declare 2015 the International Year of Soils
On January 6, the U.S. Department of Agriculture (USDA) and the United Nations Food and Agriculture Organization (FAO) kicked off the International Year of Soil, a campaign aimed at bringing attention to the integral role soils play in food production, water quality, climate change and ecosystems as well as farm and ranch resiliency. More precious than oil – soil has no substitute and takes hundreds of years to form just a few centimeters. The International Year of Soils, according to FAO, will aim to bring awareness to policy makers and the public about the importance of soil in food security, climate adaptation and mitigation, sustainable development and poverty alleviation. While scientific understanding of soil has progressed significantly, soil and fertile land is now being lost at an alarming rate due to erosion, urbanization, and modern farming practices.
RFS Roundup: As Gasoline Prices Plummet, Refiners Nix Ethanol Blending
Nationwide, gas prices are at a five-year low. According to AAA, the average price at the pump is $2.19 a gallon for standard E10 (10 percent ethanol, 90 percent gasoline). While drivers are rejoicing, falling gasoline prices have put a damper on surging domestic oil production. They also provide a reminder that domestic oil production does not shield the United States from the vagaries of the global oil market. OPEC has been quite clear that its decision to flood the global oil market is in hopes of severely diminishing (if not killing) U.S. shale oil production to preserve its market share. The falling market for oil has also put ethanol producers in a tight spot. Corn prices are rising from their September low, and currently ethanol futures are trading 13 cents a gallon higher than gasoline, a situation not seen since mid-2013. Given the uncertainty for the 2014 and 2015 blending requirements for renewable fuels under the Renewable Fuel Standard (RFS), combined with the climbing price of ethanol, refiners have instead turned to the ethanol credits market for compliance.
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