Ethanol. Right. Now.

ACE partners with BBI International on ethanol conference

The American Coalition for Ethanol is excited to announce its 24th annual ACE Ethanol Conference, to be held August 22-24, 2011 at the Downtown Marriott Hotel in Des Moines, Iowa. Registration for the conference will open soon at Ethanol.org.

The ACE Ethanol Conference will continue to provide an outstanding venue for industry speakers, networking opportunities, information-sharing, and updates on what’s happening in the industry today. As in past ACE conferences, the program will include key leaders in public policy, market development, management and leadership, and other topics of interest to ethanol plant board members, management, investors, commodity producers, and goods and service providers to the industry.

In recent years, the American Coalition for Ethanol has paired its annual conference with an industry trade show. This year, to better serve its members, ACE is pleased to announce that it will partner with BBI International as a Supporting Organization for the Fuel Ethanol Workshop (FEW). This allows ethanol industry suppliers and plant operators to concentrate on one trade show, and gives ACE the opportunity to focus its efforts on providing a top-notch conference.

“ACE is thrilled to continue to provide our members with the best conference event possible, and supporting the Fuel Ethanol Workshop will enable ACE to continue to offer members a trade show option while focusing our efforts on presenting an informative and valuable conference event,” said Brian Jennings, Executive Vice President of ACE.

ACE’s status as a Supporting Organization of the Fuel Ethanol Workshop will allow ACE members to receive discounted registration to this summer’s event, to be held June 27-30 in Indianapolis. ACE members will continue to receive discounted registration to the ACE conference in Des Moines.

More information about the ACE Ethanol Conference will be available soon at Ethanol.org

Remembering the BP oil spill, one year later

One year ago, the world watched as an environmental catastrophe unfolded in the Gulf of Mexico. This article recalls the event:

"On the night of April 20, 2010, the Deepwater Horizon, a rig operated by Transocean Ltd.,  burst into flames as it was drilling a well for BP PLC., killing 11 workers on or near the drilling floor. The rest of the crew evacuated, but two days later the rig toppled into the Gulf and sank to the sea floor. The bodies were never recovered.

Over the next 85 days, 206 million gallons of oil -- 19 times more than the Exxon Valdez spilled -- spewed from the well. In response, the nation commandeered the largest offshore fleet of vessels since D-Day, and BP spent billions of dollars to clean up the mess, saving itself from collapse."

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The photo gallery seen here is well worth the time to page through the 33 pictures, as a remembrance of the 11 lives tragically lost, and a recognition of "the real cost of oil."

Posted by: Kristin Brekke, Communications Director, American Coalition for Ethanol

Guest Editorial: Ethanol must be part of energy independence

This guest editorial is from Mike Jerke, General Manager of Chippewa Valley Ethanol Co. in Benson, Minnesota. It appears in the April edition of "ET Field Notes," the membership publication for members of the American Coalition for Ethanol (ACE).

 

Saudi Arabia, Russia, Iran, Mexico, China, Norway, Canada, Venezuela, United Arab Emirates, and Kuwait. These are, in order, the top oil producing countries in the world, and the United States imports between 50 to 70 percent of its oil – around 11 million barrels per day – from nine of them (only Iran is cut off from U.S. import dollars).

This worries me. Venezuela’s president Hugo Chavez is openly hostile to the United States and has more than once threatened to halt oil exports to us. Saudi Arabia, Kuwait, and United Arab Emirates are known to funnel profits from oil into anti-Western Islamist education around the world. As New York Times columnist Tom Friedman has noted, when we buy oil from them, we’re basically funding hostility against ourselves.

The bottom line, though, is this: since we consume far more oil than we produce, the health of our transportation system – and thus our economy as a whole – is dependent on governments and events far beyond our control. A shift in the marketplace here, a drop in production there, or political instability anywhere could quickly make $3 seem like a bargain price for a gallon of gas.

If this seems like an exaggeration, consider the oil embargo of 1973, when OPEC nations were able to quadruple the price of gasoline – and cause widespread economic damage to the United States and other nations – simply by reducing output. Even now, the current Oil Minister of Iran shrugs off any concern over oil at $120 per barrel (which translates into gas at $4 per gallon or more).

Nothing short of energy independence will alleviate my worry. If U.S. producers filled all the fuel needs of U.S. consumers, we wouldn’t have to worry about political unrest or, to use Friedman’s phrase, “petro-dictators” disrupting our transportation and economic systems.

But how do we get to energy independence? R. James Woolsey, foreign policy analyst and former CIA director, thinks we should increase the use of ethanol, methanol, and other non-gasoline fuels, along with other measures like making natural gas the fuel for fleet vehicles like trucks and buses, improving mileage standards, electrifying as much automotive transportation as possible, and expanding domestic oil exploration. I agree with Woolsey, but would add that only the ethanol industry has:
•    a well-developed and expanding infrastructure for manufacturing and distribution,
•    plants that consistently produce a profit while also increasing production,
•    the ability to claim one large country (Brazil) and a growing number of areas around the world as places that use ethanol to meet over 25% of their liquid fuel needs.

Ethanol, in other words, is more than a promising piece of the energy independence puzzle. It is an established source of our current energy supply, and it has proven that it can move the country toward a more reliable and sustainable energy future.

If we are willing to subject ourselves to routine economic shocks from undemocratic and unpredictable world players, then ethanol is an unneeded commodity. If we want to move toward energy independence, however, greater ethanol use and production – along with a sound federal ethanol policy – is a must.
   

Gas prices and the ethanol tax credit, in perspective

As we prepare for our ACE fly-in to DC happening next week, I crunched a few numbers and found the results interesting:

During March 2009, the time of our first DC fly-in, gas prices were under $2 per gallon.  Today, gas prices are averaging above $3.50 per gallon -- which means we're spending a half-billion more dollars per day to fuel our cars.  Every day, the U.S. is spending almost $1.5 billion just on gasoline, not including diesel or jet fuel.

Just the increase over March 2009 will be triple what the U.S. spends on the ethanol tax credit (VEETC, the Volumetric Ethanol Excise Tax Credit) by the time we get to DC next week.

The ethanol tax credits each year costs about what U.S. motorists spend on gasoline in only 4 days.

Does this put a few things in perspective?

Posted by: Ron Lamberty, Vice President / Market Development, American Coalition for Ethanol

USDA asked to correct reporting which overstates corn used for ethanol

The Governors' Biofuels Coalition (GBC) wrote yesterday to Agriculture Secretary Tom Vilsack asking the agency to immediately correct its reporting procedures that overstate the amount of corn used for ethanol in the U.S.

"In recent months, global weather disruptions, rising oil prices, commodity speculation, and rising incomes that drive increased demand for grains and meat proteins have combined to once again put upward price pressure on corn and other commodities.  Predictably, first-generation ethanol opponents have begun to resurrect the food vs. fuel attacks... despite the fact that numerous studies by global food organizations, the Congressional Budget Office, and other reputable experts confirmed that ethanol was not a significant factor," the letter states.

"Unfortunately, USDA's monthly corn supply and demand reports provide support for this sensationalized reporting because they identify 'corn demand for ethanol' without immediately noting this is gross demand, and not the net use of the starch portion of the corn kernel," the letter continues.  "This overstates the use of corn for ethanol by as much as a factor of two or more, and fails to inform the public about what is truly happening in the food and fuel supply chain."

USDA reporting does not take into account the fact that to produce ethanol, only the starch portion of the corn kernel is used, and all the nutritional value of the corn -- the fat, fiber, and protein -- are returned to the food supply in the form of distillers grain, a high-quality livestock feed. 

The current USDA reporting system does not count the 33% of the corn that comes back to the nation's supply, giving the impression to the public that ethanol uses much more corn than it actually does.  A continuing error of one-third should not be acceptable.  I fully agree with the Governors' Biofuels Coalition that the USDA's reporting needs to be corrected as soon as possible so the public and the media can have a more accurate picture of the real amount of corn used for ethanol, as well as ethanol plants' contribution of a valuable food product for the nation's livestock -- food for those that feed us.  Food and fuel, not food versus fuel.

Read the GBC's full letter here, or view a special edition of Ethanol Today magazine dedicated to "food and fuel."

Posted by: Kristin Brekke, Communications Director for the American Coalition for Ethanol

Big Food's (very profitable) blame game

With oil prices currently around $95 a barrel, the cost of crude oil is about $2.25 a gallon. After it is refined, shipped, loaded, and delivered to a station, we pay $2.50 to $2.75 (plus around 50 cents in federal, state, and other taxes) for a gallon of their finished product.

Similarly, with corn at around six bucks a bushel, ethanol plants take about $2.25 in corn and, after it is refined, shipped, loaded, taxed and delivered to a station, it is also sold for around the same $2.50 a gallon.

Meanwhile, Big Food companies take the same $2.25 worth of corn and make it into 100 bucks worth of cornflakes, or several hundred dollars worth of candy or soft drinks. Then they have a little extra money so they can hire PR folks to blame ethanol and oil as the reason for high food prices.

In 2008 when the Grocery Manufacturers Association hired Glover Park to smear ethanol and blame the corn used (less than 3 percent of the world’s grain) in ethanol production, Big Food lamented the increased price of corn, said prices would go higher, and then raised their prices to prove they were right. The result? Record food company profits.

If I have ever said that Big Food is almost as bad as Big Oil, I take it back. They’re every bit as bad. Maybe worse.

It doesn’t take a lot of knowledge about markets and economics to understand that when government farm payments are at their highest, while those payments help farmers manage market volatility, they are also keeping Big Food companies’ costs artificially low. It is easy to see why Big Food would rather go back to the days when they paid two bucks for corn and you and I paid the rest of the bill with tax dollars.

What is hard to understand is how all of these ethanol detractors think that paying less for corn will encourage farmers to grow more of it. Ethanol production is causing more corn to be grown – more food is available because ethanol has created real markets for corn. As a bonus, ethanol adds to the fuel supply and helps moderate oil prices.

When oil prices go up, people carpool, take public transportation, ride a bike, walk, or stay home. When food prices go up, people don’t have options like that. If Big Food – with its shiny new mega-stores, elaborate packaging, and ultra-high prices on actual healthy food – is truly concerned about people being able to afford to eat, the solution is simple:

Quit charging so much.

Posted by: Ron Lamberty, Vice President / Market Development, American Coalition for Ethanol

Tim Searchinger "food vs. fuel" claims countered

Tim Searchinger, Princeton University visiting lecturer and contributor to “indirect land use change” charges against corn-based ethanol, is back in the news, this time writing a guest editorial in the February 11th Washington Post on biofuels’ role in food prices.  Marc Rauch, executive vice president at The Auto Channel, sent this response to Mr. Searchinger, which he also shared with us to publish here:


Hi Tim –

In reading your editorial in today's Washington Post (“How biofuels contribute to the food crisis”) I’m reminded of the famous movie line, “Just when I thought I caught up with the rat race the rats got faster.”
 
For a few years, whenever those opponents of ethanol launched a new attack on widespread acceptance or expansion of ethanol, we would hear about how the use of corn was affecting the overall price of food and causing worldwide starvation.
 
It took some time, but finally ethanol advocates started to prove that corn use for ethanol had no relationship to the rise in corn prices or general food prices, and that its use to make biofuels did not contribute to either a shortage or world hunger – primarily because the world outside of America doesn’t eat corn, they eat wheat. In this regard, the World Bank’s statement issued last summer reversed their earlier claim that ethanol was the reason for corn price rises and shortages.
 
Obviously, from your story, you know that the cost of the corn actually used in a box of corn flakes is a minuscule amount, roughly 1.5% of a $4 retail price.
 
So, to use the rat-rat race analogy, you came up with a new way to cast the same old worn-out story. Instead of corn flakes, which you agree that the world doesn’t eat like us Americans, you substitute corn meal for corn flakes. However, you really didn’t do your homework very well.
 
To begin with, corn meal is used for many other things than feeding starving people around the world. Corn meal is used as a plant fungicide, for weed prevention, insect repellant and to protect wooden floors. So why not blame the rise in corn meal prices on people who wish to use a non-chemical solution to their garden and pest problems? What, chemical fertilizers and insecticides are not good enough?
 
Why not be critical of people who like to dance on wooden floors? You mean it’s okay for a family in Somalia to starve just because some ballroom in New York doesn’t want to have to refinish their wood floor so often?
 
In addition, corn meal is used by seafood chefs as a simple, low-cost way to fatten clams and mussels before cooking them in any number of favorite recipes. Why not blame seafood lovers and restaurants for causing a run up of corn prices and shortages? I’ll bet that there are far more people who regularly eat clams and mussels than use ethanol.
 
Expanding on this chain of thought, let’s look at another significant use of corn: as a sweetener in soft drinks, candy and other snacks. Here we are, in the midst of what many people believe is a fast-food-obesity epidemic and you’re blaming ethanol for too much use of corn. Wouldn’t it be better for everyone concerned if you, a degreed fellow at a prestigious think tank, made the argument that we shouldn’t be eating so much junk food? It would be better for the health of non-starving humans, while leaving more “corn” for the starving humans.
 
Next, since even the worst scenarios merely depict a situation in which corn supplies will only be low until the next harvest, not exhausted, then there isn’t really any reason for corn prices to rise…except for one reason, and one reason only: commodity speculators. And, and as I know that even you must know, it was due to commodity speculators that there was the previous rise in corn prices that had been  errantly blamed on ethanol production.
 
However, most importantly, your blame on ethanol production for the real or imagined starvation of peoples around the world has absolutely nothing to do with corn ethanol production and use, but on the massive wheat failures in Russia and China. If either or both Russia and China had improved their farming methods, instead of screwing around with deviant forms of government for the past eight decades or so, they probably wouldn’t have had to face crop failures, again, creating a real (or imagined) food shortage. So why do we have to make up for their failures? Why are we responsible? Why should we have to sacrifice, once again, national aspirations for energy independence because of Russia and China’s farming failures? When and where have you written a paper that lays the blame for food price increases or shortages on them?
 
What truly amazes and concerns me is that there are people like you, who have wasted the educational resources of America to put forth the rubbish that you do. If your goal in life was simply to figure out how to suck up oil industry money couldn’t you have just opened a gasoline service station and been satisfied with providing clean restrooms for your customers? Why take up space in a classroom? Why tarnish the name of an institution like Princeton? Why write and publish a report that isn’t fit to wrap fish in?
 
If you got this far in the letter, thanks for your time. I hope that it has some impact on you.
 
Marc J. Rauch
Exec. Vice President/Co-Publisher
THE AUTO CHANNEL
www.theautochannel.com

Response to The WSJ: Ethanol is not reducing the amount of corn for food

While I was amused that The Wall Street Journal would invoke “morality” in one of its editorials, I was stunned by the sheer number of half-truths, miscalculations, and misleading statements that could be wedged into one 600 word anti-ethanol editorial, “Amber Waves of Ethanol.”

The article primarily seeks to blame ethanol for higher food prices, and even the failure of two food companies, yet it includes no discussion about the morality of other Big Food companies who managed to thrive during the time period the others failed, by invoking the mythical “food vs. fuel” bogeyman as an excuse to raise their prices and reap record profits.  While the “food vs. fuel” PR campaign was wildly successful, it was not the truth, and it still isn’t.

In fact, the opposite is true.  More corn for all other uses is now available in the United States because of growing ethanol production (see chart). 

Chart shows the U.S. corn crop in billions of bushels, the portion used to make ethanol, and the portion remaining for food, feed, and export.

Sources: Corn production data: U.S. Department of Agriculture / Ethanol production data: U.S. Department of Energy's Energy Information Service

The WSJ article talks of “reduced corn food supply,” which is at best ignorant of reality.  The supply of corn for food in America and around the world is increasing, and in the United States that is due in part to the fact that ethanol has restored market pricing to corn – as opposed to artificially low prices with government payments designed to keep farmers growing cheap corn.  Because real grain markets are more attractive, farmers are growing more corn – more food – than ever before.  I am continually puzzled by those who think farmers will grow more corn if they are paid less for it.  Which economics textbook did I miss that contained that theory?

The article contained many other factual errors, such as ignoring consistently higher corn yields and record-setting corn production, no recognition that ethanol only uses starch and returns all of corn’s protein, fat and fiber to the food supply in the form of the animal feed distillers grain (a 33 percent error), and no recognition of the fact that China – yes, China – is currently accusing U.S. ethanol producers of producing too much of this low-cost feed.  I am led to the conclusion that if this is the quality of analysis being used to make decisions on Wall Street, we had better be prepared to bail them out again.

Posted by: Ron Lamberty, Vice President / Market Development, American Coalition for Ethanol