Corn and Ethanol.

Soaring renewable fuel costs spark new fight over ethanol mandate

10:08 PM 07/16/2013

Renewable fuel credit pricesrose to record highs Monday, reigniting the debate over repealing the federal government’s ethanol mandate.
For months now, refiners and the petroleum industry have been pushing for the full repeal of the Renewable Fuel Standard (RFS), which requires that 13.8 billion gallons of ethanol be blended into gasoline this year and 14.4 billion in 2014.
However, refiners are hesitant to blend more than 10 percent ethanol into the fuel supply over safety concerns. Skyrocketing renewable fuel credit prices indicate that the industry is nearing the limits of what it can blend, or the “blend wall.”
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Read more: Soaring renewable fuel costs spark new ethanol mandate fight | The Daily Caller
 
[h=1]Senators introduces bill to repeal EPA’s ethanol mandate[/h]12:42 AM 06/21/2013


Read more: Senators introduces bill to repeal EPA's ethanol mandate | The Daily Caller

A bipartisan group of senators introduced legislation Thursday to fully repeal the federal ethanol mandate, which has been blamed for increasing fuel and food prices.
The federal Renewable Fuel Standard, which is run by the Environmental Protection Agency, has come under increased congressional scrutiny after the agency denied states waivers from the program last year. Skyrocketing ethanol credit prices earlier stoked fears that the refining industry was reaching the ethanol blending limit.
“The Renewable Fuel Standard is fundamentally broken and beyond repair,” said Wyoming Republican Sen. John Barrasso. “Instead of delivering meaningful environmental benefits, it’s driven up food and fuel costs for American families. This flawed program will also inevitably lead to widespread lawsuits against American manufacturers. When Congress enacts bad policy, the right response is to scrap it and start over.”
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Read more: Senators introduces bill to repeal EPA's ethanol mandate | The Daily Caller
 
Just increase the Government subsidies to Switchgrass and it will be growing everywhere, that's how it works.:sick:
 
nnuut said:
Why not use that Switchgrass stuff, nobody eats that?
Clemson University - Switchgrass as a Biofuel
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Because they are still working on the technology to make it economically feasable and large volumes to do Switchgrass. The technology still isn't quite competitive with corn or sugar.

Five years ago making ethanol from Sugar was twice the cost of corn. Now it's cheaper than corn. Swtichgrass is still a bit more expensive than both. The technology has to catch up to make it worthwhile.

Give it time, we'll get there.
 
How about a little sugar, Sugar?

Food manufacturers push for end to sugar-to-ethanol program

By Chris Prentice | Reuters – Mon, Jun 3, 2013


WASHINGTON (Reuters) - Food manufacturers and big sugar buyers said on Monday they believe a proposed U.S. sugar-to-ethanol program will cost twice as much as a government estimate and urged congress to repeal it as part of broader changes in sugar policy.






The program, which would allow the government to buy excess sugar and sell it to biofuel manufacturers, stands to cost the U.S. government $100 million in the fiscal year through October 1, said Agralytica food policy consultant Tom Earley on behalf of the Coalition for Sugar Reform. That would be roughly double the Congressional Budget Office's baseline estimate of $51 million.

The sugar-to-ethanol program is allowed under the 2008 farm bill, but it has not been carried out due to mediocre crop yields. This year, however, the government is considering it as a way to deal with a huge sugar surplus.

The coalition said it backs a new sugar policy that would repeal the sugar-for-ethanol program and also roll back price support levels to those that prevailed before 2008. Sugar users also want Congress to remove restrictions that prevent the Secretary of Agriculture from allowing more sugar imports.

The coalition's proposal is expected to come up in the House in about two weeks, following a failed bid in the Senate, as policymakers seek to establish a new farm law that would cover crops for 2014 to 2018.

"We have always been more optimistic about the House," said William Reitsch, president of National Foreign Trade Council, an open market trade advocate and member of the Coalition for Sugar Reform.

Attempts to introduce the sugar reform act did not pass through the Senate, even though many policy makers criticized the cost of existing sugar policy at a time of tight budgets.

The sugar-for-ethanol program allows the U.S. Department of Agriculture (USDA) to buy excess sweetener that sugar processors have used as collateral for government-backed loans. The loans begin to come due in July, and mass defaults are expected because U.S. sugar prices are hovering near record lows- price support loan rates.

U.S. sugar processors and producers in favor of the existing support program have said that the excess sugar is the result of increased Mexican sugar production and unrestricted North American trade, rather than U.S. farm policy.

They have also said that the sugar program generally operates at no cost to the taxpayer.

But Earley said that because the USDA has underestimated the size of a surplus overhanging the North American sugar market, his group calculates that the program will cost about $250 million over the next two fiscal years.

The USDA has projected a stocks-to-use ratio for the current crop year of 18.5 percent, which indicates a lot of excess sugar.

"This year and next year, the USDA will have to divert a million tons of sugar to ethanol to balance the market," Earley said. He said that would total about 400,000 tons in the crop year through September and another 600,000 tons in the next crop year.

He said the cost of that program could even be higher than the group's estimate if falling corn prices make sugar less attractive as a feedstock.

The last time U.S. prices fell to support levels was during the 2000/01 crop year, when the USDA had to purchase over one million tons of sugar.
(Editing by David Gregorio)
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More:
http://www.reuters.com/article/2013/06/03/us-sugar-surplus-reform-idUSBRE95217G20130603

Can we turn the excess sugar into fuel?
 
Alleged memo from petroleum industry, leaked....

Insightful excerpt from a leaked industry memo. "PO" in the last paragraph presumably refers to "public opinion".

--

[...] Currently, the average driver's unwillingness to experiment with his gas tank works to our advantage. However, as higher [biofuel] blends are offered to the public, the price discount will become irresistible. Previously conservative consumers will perform escalating trial runs in their own vehicles.

A private study commissioned in 2012 reported that the average vehicle owner could establish full confidence in an "alternative fuel" in as few as 5 tanks, provided that the price was lower and no mechanical incidents had resulted from the switch. This number is even lower for leased vehicles.

Clearly, wide availability of higher blends will represent an irreversible shift against our efforts. Present goals aim to prevent this by maintaining a semi-regulated ceiling of 10% [now 15%] ethanol in all markets.

We look to [company name removed] to establish future plans for the possibility that this ceiling may not hold. Given that a mass trial run of E15 or E30 will not support our position, we must ramp up efforts to hold PO behind the "red line" by appealing to "mechanic phobia", by circulating authoritative messaging, and by continuing to marginalize fuel experimentalism.
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Things that make you go Hmmmmmmm......
 
ETHANOL was screwing up all of my small gas engine tools, lawn mowers, chainsaws, weed eaters, pressure cleaner, edger until I started adding Fuel Stabilizer. Add that to the cost. It voids my warranties to use anything higher than E10, wonder why?:nuts:
mowinggrasss.gif​
 
In my town- we had three stations that sold E85 until last week. Two of the three are owned by the same company. (Brighton Michigan, Corrigon Sunoco and the BP downtown, are the two).

This week, they discontinued E85 at one of the two stations, (Sunoco), and replaced it with E0- "ETHANOL FREE RECREATIONAL GAS", according to the sign.

I walked in and asked inside why they discontinued E85- and was told "Oh- you can still get E85 just down the street at our other station- We are selling a lot of it there!" (At $3.09 a gallon, the E85 is a good deal right now).

Meanwhile the "ETHANOL FREE RECREATIONAL GAS", now being sold at the Sunoco for people to use in boats, or other equipment, is being sold for $4.24 a gallon.

(E10 is $3.99 right now).

So yes- ETHANOL IS SAVING A LOT OF MONEY for those who use E10 ($0.26 cents a gallon for E10 over E0,).... and $1.15 a gallon for E85 over E0.

Renewable-clean- better priced ETHANOL.

I love it.

Now "E ZERO" is the "botique fuel" that costs extra $4.24 a gallon, while my E85 is just $2.95.

Note: I burn E85 in my car.

Now a much better financial deal for me- I just spotted local E85 fuel at just $2.95 a gallon today. E85 Prices


It is nice to own a flex-fuel car- so that I have a CHOICE.
 
Trading RIN's. What next?

The price of carbon spot has been a complete failure due to government intervention.

20130420_FNC469.png

Imagine the money to be made by Wisdom Tree and Vanguard when they invent an ETF to track the index. HFT's already licking their chops for arb strategies and dark pool front running.
 
Next big thing? Trading RINs.


CME Group Announces New Futures Contracts for Renewable Identification Numbers (RINs)

NEW YORK, April 25, 2013 /PRNewswire/ -- CME Group, the world's leading and most diverse derivatives marketplace, today announced the launch of nine new futures contracts for Renewable Identification Numbers (RINs). These contracts will be listed with, and subject to, the rules and regulations of NYMEX.

"With the recent increase in volatility in RINs prices, we've seen strong interest from our customers and other market participants for cost-effective ways to manage their risk in this market," said Gary Morsches, Managing Director Global Energy, at CME Group. "As the most actively traded marketplace for the benchmark RBOB Gasoline and ULSD Diesel contracts, our new RINs futures contracts will be a strong complement to our existing suite of products and will allow our customers to take advantage of reduced capital requirements and margin efficiencies."

The new RINs contracts will be available for trading starting May 13, 2013, and will allow customers to hedge risk in three types of renewable fuels:

D4 Biodiesel
D5 Advanced Biofuel
D6 Ethanol

These contracts will be financially-settled based on Argus Media's prices for RINs, which are the most widely-used indexes for this market. They will provide a useful hedge for the price risk associated with the U.S. Environmental Protection Agency's (EPA) renewable fuel standard (RFS2). The EPA has created a credit trading system for compliance with RFS2 for various types of renewable fuels based on units called RINs.

These contracts will be available on the CME Globex electronic trading platform, for over-the-counter (OTC) clearing through CME ClearPort and open outcry on the trading floor in New York, beginning with the May 2013 contract month.


About CME Group

As the world's leading and most diverse derivatives marketplace, CME Group (www.cmegroup.com) is where the world comes to manage risk. CME Group exchanges offer the widest range of global benchmark products across all major asset classes, including futures and options based on interest rates, equity indexes, foreign exchange, energy, agricultural commodities, metals, weather and real estate. CME Group brings buyers and sellers together through its CME Globex® electronic trading platform and its trading facilities in New York and Chicago. CME Group also operates CME Clearing, one of the world's leading central counterparty clearing providers, which offers clearing and settlement services across asset classes for exchange-traded contracts and over-the-counter derivatives transactions. These products and services ensure that businesses everywhere can substantially mitigate counterparty credit risk.

CME Group is a trademark of CME Group Inc. The Globe Logo, CME, Globex and Chicago Mercantile Exchange are trademarks of Chicago Mercantile Exchange Inc. CBOT and the Chicago Board of Trade are trademarks of the Board of Trade of the City of Chicago, Inc. NYMEX, New York Mercantile Exchange and ClearPort are registered trademarks of New York Mercantile Exchange, Inc. COMEX is a trademark of Commodity Exchange, Inc. KCBOT, KCBT and Kansas City Board of Trade are trademarks of The Board of Trade of Kansas City, Missouri, Inc. All other trademarks are the property of their respective owners. Further information about CME Group (NASDAQ: CME) and its products can be found at www.cmegroup.com.
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