Bergeson & Campbell, P.C. (B&C®) is a Washington, D.C., law firm providing biobased and renewable chemical product stakeholders unparalleled experience, judgment, and excellence in bringing innovative products to market.
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The group of four House Energy and Commerce Committee Members tasked with examining ways to reform the federal RFS met this week for the first time since the August recess. The group was named by Committee Chair Fred Upton (R-MI) and includes Representatives John Shimkus (R-IL), Cory Gardner (R-CO), Lee Terry (R-NE), and Steve Scalise (R-LA).


Reportedly, the group is looking at potential proposals that could be released this fall. In general, the biofuels industry is working hard to advocate that the RFS is working as it was intended and the best course of action would be to leave the law in place as is to allow it to continue to drive investment in the industry. The next few weeks will be telling in terms of what, if any, proposals may be introduced or considered by the House of Representatives. There is no similar organized activity in the Senate. Senate Committee on the Environment and Public Works Chair Barbara Boxer (D-CA) has stated publicly, however, that she may hold a hearing on the RFS early this fall.
 

Tags: RFS, biofuels,

 
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Congress returned from its August recess this week, and, as expected, the Republican leadership of the U.S. House of Representatives is looking toward passing legislation on the remaining nutrition portion of the Farm Bill, including $40 billion in cuts to food stamp programs over the next ten years. The bill could come up for a vote next week.


House Republican leaders, including House Committee on Agriculture Chair Frank Lucas (R-OK), have stated they do not wish to go ahead with a conference committee with the Senate to complete the next five-year Farm Bill until they pass the nutrition portion. In June, the House passed a "farm-only" Farm Bill, H.R. 2642, which left out funding for food stamps and other nutrition programs. A more comprehensive version of the Farm Bill containing $20 billion in cuts to nutrition programs was defeated in a previous vote mainly because several Democrats felt the cuts were too large, while several Republicans thought they did not go far enough.


Passage of a nutrition portion of the Farm Bill containing $40 billion in cuts may attract enough House Republicans to lead to a conference committee with the Senate to hammer out a final version of the next five-year Farm Bill, but it will not make those negotiations any faster or easier. In May, the Senate passed its version of the next Farm Bill, S. 954, the Agriculture Reform, Food and Jobs Act of 2013, which funds both farm programs and food stamps. S. 954 contains a strong energy title with nearly $900 million in mandatory funding and expanded eligibility for renewable chemicals. Senate Committee on Agriculture Chair Debbie Stabenow (D-MI), who is leading the Farm Bill effort in the Senate, has said that $40 billion in cuts is a "non-starter." In fact, she and other Democratic leaders in the Senate opposed the original $20 billion in cuts the House attempted to pass earlier this year. This disagreement will likely extend the Farm Bill conference committee negotiations beyond September 30, when the current version of the Farm Bill expires.
 


 
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On Wednesday, September 11, 2013, the European Parliament voted 356-327 to cap conventional biofuels at six percent of the European Union's (EU) transportation fuel by 2020 due to food-versus-fuel concerns. It also voted to require that 2.5 percent of EU transportation fuel consist of advanced biofuels by 2020, and to target that fuel to contain a 7.5 percent ethanol blend. The legislation does not require that indirect land use change be taken into account until 2020. The proposal must now be approved by EU Member States. 

Tags: EU, biofuels

 
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This week, the National Advanced Biofuels Conference and Expo was held in Omaha, Nebraska. During the three-day conference, industry leaders presented on and discussed major issues facing the industry, from legal considerations to advancing the aviation biofuels industry, supply, and feedstock successes and challenges. During the conference, Michael McAdams, President of the Advanced Biofuels Association, and Joe Jobe, CEO of the National Biodiesel Board, discussed some of their current federal policy priorities and work. Both spoke about the importance of the federal RFS to the industry and stressed the need for industry to unite at this time when it is increasingly under attack.


McAdams addressed the work this year of the House Energy and Commerce Committee to examine and reform the RFS. He mentioned that Committee's two-day hearing this summer on the subject during which he testified on the importance of the policy. He stated his expectation that legislation to reform the RFS could be drafted and considered by the House of Representatives by mid-October. He urged everyone to contact their Members of Congress on behalf of the RFS, if their trade associations asked them to do so.


Jobe made similarly supportive statements of the RFS and the need for the industry to unite. In addition, he stated the importance to the biodiesel industry of not only the RFS, but of maintaining the biodiesel tax credit. He attributed both policies to the industry's recent substantial growth, and cited them as important to achieving the industry's new goal of making up 10 billion gallons of the fuel supply by 2022.


Also during the conference, on behalf of Agriculture Secretary Tom Vilsack, Rural Development Acting Under Secretary Doug O'Brien announced that the U.S. Department of Agriculture (USDA) is making payments to support the production of advanced biofuel. USDA is making nearly $15.5 million in payments to 188 producers through the Advanced Biofuel Payment Program. USDA remains focused on carrying out its mission, despite a time of significant budget uncertainty. This announcement is one part of the Department's efforts to strengthen the rural economy. The funding is being provided through USDA's Advanced Biofuel Payment Program, which was established in the 2008 Farm Bill. Under this program, payments are made to eligible producers based on the amount of advanced biofuels produced from renewable biomass, other than corn kernel starch. Examples of eligible feedstocks include but are not limited to: crop residue; animal, food, and yard waste; vegetable oil; and animal fat. Through the Advanced Biofuel Payment Program and other USDA programs, USDA is working to support the research, investment, and infrastructure necessary to build a strong biofuels industry that creates jobs and broadens the range of feedstocks used to produce renewable fuel. More than 290 producers in 47 states and territories have received $211 million in payments since the program's inception. It has supported the production of more than three billion gallons of advanced biofuel and the equivalent of more than 36 billion kilowatt hours of electric energy.
 


 
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On August 28, 2013, the Solid Waste Association of North America (SWANA) and the National Solid Wastes Management Association (NSWMA) sent a letter to U.S. Environmental Protection Agency (EPA) Administrator Gina McCarthy urging EPA to (1) issue quickly a final rule clarifying how biogenic carbon emissions will be treated under Prevention of Significant Deterioration (PSD) and Title V permitting requirements and (2) determine that biogenic carbon emissions from municipal solid waste (MSW) should be categorically excluded from the new PSD and Title V greenhouse gas (GHG) reporting requirements. A copy of the letter is available online. In July, the U.S. Court of Appeals for the District of Columbia vacated EPA's rule temporarily exempting bioenergy and other biogenic sources of GHG emissions from the new GHG permitting requirements, which has created uncertainty for the industry going forward. BRAG's report on this decision is available online.


In their joint letter, SWANA and NSWMA argue that emissions from the biogenic portions of MSW should be permanently exempted from the new GHG reporting requirements in part based on EPA's recent calculation of the lifecycle GHG analysis of landfill gas as a renewable fuel feedstock. Under this analysis, EPA "assumed that the biogenic portions of MSW (which produce the biogas) pose no land use-related GHG emissions associated with its production and use as a fuel feedstock." In addition, the groups state subjecting the biogenic emissions to the new reporting requirements could deter renewable fuel production and progress on projects designed to promote the beneficial use of landfill gas and energy.
 

On August 1, 2013, over 100 groups sent a similar letter to EPA urging the Agency to find that bioenergy and other biogenic sources of GHG emissions are carbon neutral for purposes of new GHG permitting requirements under EPA's Tailoring Rule. More information on this letter is available online.
 


 
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The U.S. Department of Agriculture (USDA) announced that it had purchased 7,118 short tons of refined beet sugar for $3.6 million and sold it to renewable fuel producer Front Range Energy for $900,000 (a loss of $2.7 million) under the Food, Conservation and Energy Act of 2008 (the 2008 Farm Bill) Feedstock Flexibility Program (FFP). This was the first time USDA had utilized the FFP. The 2008 Farm Bill directs USDA to keep sugar prices at or above certain levels, and authorizes USDA to either acquire sugar through forfeiture of sugar loans made by the USDA's Commodity Credit Corporation or to buy sugar and sell it to bioenergy producers until prices raise to those levels. A copy of the USDA press release on this announcement is available online.


 
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Unilever announced this week its new partnership with the University of Liverpool for a three-year research project designed to develop renewable chemicals "from the surplus sugars, fats, oils and carbohydrates produced via commodity by-products and forestry wastes, creating a cent[er] of excellence in the identification of sustainably sourced ingredients that it is hoped will end up in the production of some of the world's most familiar brands." The company's press release on the partnership is available online.


 
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Renewable fuel and chemical company Aemetis, Inc. announced this week that EPA has approved its Renewable Fuel Standard (RFS) pathway to produce ethanol using grain sorghum and biogas with the Company's existing Combined Heat & Power system to generate D5 Advanced Biofuels Renewable Identification Numbers (RIN). This announcement means that additional fuel will qualify to fulfill the annual renewable volumetric targets under the federal RFS statute. It comes as EPA is preparing its proposed RFS volumes for 2014, which the Agency indicated it would likely reduce from those set in the statute to adjust for supply and the impending ethanol blendwall.


Aemetis' press release on the announcement is available online.
 


 
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On August 26, 2013, the U.S. Court of Appeals for the District of Columbia Circuit granted a petition by several industry groups, including the American Forest & Paper Association and the National Alliance of Forest Owners, for an extension to file an appeal to the court's recent decision to vacate the U.S. Environmental Protection Agency's (EPA) rule temporarily exempting biogenic sources of greenhouse gas (GHG) emissions from new GHG permitting requirements. For more information on the decision issued in July, please visit online. Groups will now have until 30 days after the U.S. Supreme Court decides whether it will consider several lawsuits challenging EPA's GHG regulations to appeal this biogenic carbon decision.


 
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Despite the August Congressional Recess, much regulatory and legislative action continues in Washington, D.C. on the federal Renewable Fuel Standard (RFS). Earlier this month, the leading trade groups representing the oil and gas industry, the American Petroleum Institute (API) and American Fuel & Petrochemical Manufacturers (AFPM), petitioned EPA to lower the 2014 RFS renewable volume obligations (RVO) to below 10 percent of total U.S. gasoline supply. Under the RFS, EPA is directed to set the following year's RVOs by November 30. API and AFPM argue that waiving the RVOs for 2014 to 9.7 percent of the U.S. gasoline supply is necessary so their members may fulfill their volume obligations under the RFS without exceeding the 10 percent ethanol "blend wall."


The Renewable Fuels Association (RFA), one of the leading biofuels trade associations, has already responded to the API/AFPM waiver petition by sending a letter to EPA urging the Agency to deny the waiver request for several reasons. A copy of the letter is available online. Among other things, RFA argues that API and AFPM lack standing to petition EPA to reduce the 2014 RVOs since the associations themselves are not obligated to comply with the RFS. In addition, RFA argues that there are several ways that obligated parties in the oil and gas industry may meet their 2014 RFS RVOs, including an increase in E15 and E85 sales, and carry over Renewable Identification Numbers (RIN) from 2013.


Earlier this month, Senators Chuck Grassley (R-IA) and Amy Klobuchar (D-MN) sent a letter to the Federal Trade Commission and U.S. Department of Justice requesting that they investigate allegations that certain petroleum companies are deliberately blocking the introduction of higher ethanol blends in violation of antitrust laws. A copy of the letter is available online.
 

As we have reported, a group of four Republican Members of the U.S. House Energy and Commerce Committee are working during the August recess on developing potential legislative reforms to the federal RFS. It has been reported this week that House Majority Leader Eric Cantor (R-VA) is considering potentially attaching an RFS legislative reform package to a "must-pass" bill similar to the one expected this fall to address the "debt ceiling."
 


 
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EPA was scheduled to post a video on its YouTube channel providing an overview of the Agency's plans to regulate GHG emissions from existing power plants. Under President Obama's Climate Action Plan (CAP) announced on June 25, 2013, EPA is directed to propose emissions guidelines for existing power plants by June 1, 2014. EPA's YouTube page is available online.


U.S. House Energy and Commerce Subcommittee on Energy and Power Chair Ed Whitfield (R-KY) has announced that he will hold a hearing on the President's CAP on September 18, 2013. Chair Whitfield, who does not support the CAP, has invited representatives from 13 federal agencies, including EPA, to testify at the hearing. The Subcommittee's press release (available online) states that "we seek to hear from relevant Federal agencies about U.S. climate change policies and the administration's second term climate agenda, and to obtain fuller information regarding the Federal government's past, current, and planned domestic and international activities, climate research programs, initiatives, and new regulatory requirements."
 


 
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Secretary of Energy Ernest Moniz has announced the selection of 19 individuals to serve on the Secretary of Energy Advisory Board (SEAB). The press release on the announcement is available online.


The SEAB will meet at least four times a year and will be broken into four subcommittees to focus on science, energy, nuclear security, and environmental stewardship. The group may also serve to provide advice to Secretary Moniz on an ad hoc basis to address specific issues. The 19 members of the SEAB are:

 

  • Frances Beinecke: President, Natural Resources Defense Council
  • Rafael Bras: Provost and Executive Vice President for Academic Affairs, Georgia Institute of Technology
  • Albert Carnesale: Chancellor Emeritus and Professor, University of California, Los Angeles
  • John Deutch (CO-CHAIR): MIT Chemist and Former Under Secretary of Energy
  • Persis Drell (CO-CHAIR): Professor of Physics, Stanford University and Former Director, SLAC National Accelerator Laboratory
  • Shirley Ann Jackson: President, Rensselaer Polytechnic Institute
  • Deborah Jin: Physicist, National Institute of Standards and Technology and Professor Adjoint for Physics at the University of Colorado, Boulder
  • Paul Joskow: President, Alfred P. Sloan Foundation and MIT Professor of Economics, Emeritus
  • Steve Koonin: Director, Center for Urban Science and Progress, New York University and Former Under Secretary for Science
  • Michael McQuade: Senior Vice President for Science and Technology, United Technologies Corporation
  • Richard Meserve: President, Carnegie Institution for Science and Former Chairman of the US Nuclear Regulatory Commission
  • Cherry Murray: Dean, Harvard University School of Engineering and Applied Sciences
  • John Podesta: Chair, Center for American Progress and Former White House Chief of Staff
  • Dan Reicher: Executive Director, Steyer-Taylor Center for Energy Policy and Finance, Professor, Stanford University and Former Assistant Secretary for Energy
  • Carmichael Roberts: General Partner, North Bridge Venture Partners
  • Martha Schlicher: Renewables and Sustainability Technology Lead, Monsanto Company
  • Brent Scowcroft: Retired U.S. Lieutenant General, Former National Security Advisor and President and Founder, Scowcroft Group
  • Ram Shenoy: Chief Technology Officer, ConocoPhillips
  • Daniel Yergin: Vice Chairman, IHS and Founder of IHS Cambridge Energy Research Associates
     

 
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On August 26, 2013, bio-isobutanol producer, Gevo, Inc., supported by Coca-Cola and Japanese chemical producer Toray Industries, Inc., held a ribbon cutting ceremony to open its new demonstration-scale paraxylene plant adjacent to Gevo's existing renewable jet fuel plant in Silsbee, Texas. Paraxylene is a key building block to renewable PET beverage bottles and packaging, among other things. Gevo's press release announcing this new facility is available online.


 
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Renewable chemicals are emerging at a fast pace, paving the way for new, innovative, and sustainable biobased products. The renewable chemicals’ market is estimated to reach $83.4 billion by 2018 in applications ranging from transportation and agriculture to textiles and cosmetics. In addition to all the elements great companies need to succeed -- a great product, a great brand, inspiring leadership, and vision -- biobased product companies need to understand how the U.S. Environmental Protection Agency (EPA) occupies a virtual seat at their management table, whether or not they know it.  

An article by BRAG in the August 2013 issue of Industrial Biotechnology, available online, lays out the regulatory challenges the Toxic Substances Control Act (TSCA) presents to biobased and renewable chemical products and the rationale behind the formation of BRAG.  Through strategic insight into regulatory and legislative issues, collective advocacy on Capitol Hill and before EPA, education and training opportunities, and hands-on guidance from a deep bench of TSCA legal and scientific policy experts, BRAG is removing obstacles to commercialization for its members.


 
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While in Brazil last week, U.S. Secretary of Energy Ernest Moniz stressed the importance of biofuels as part of President Obama's Climate Action Plan to reduce greenhouse gas emissions. To this end, Secretary Moniz called for greater partnership between the U.S. and Brazil on biofuels. Significantly, it was reported that Secretary Moniz stated that the U.S. Environmental Protection Agency (EPA) has the authority and ability, and will continue to consider imports when EPA sets the annual renewable volume obligations (RVO) under the federal Renewable Fuel Standard (RFS). This statement is important and signifies that EPA could continue to allow imported Brazilian sugarcane ethanol to meet annual RFS requirements.


As we recently reported, the U.S. Chamber of Commerce's Export Green Initiative continues plans for an upcoming trip to Brazil September 30-October 2, 2013, to encourage an increased relationship between that country and the U.S. on biofuels. Representatives from the Renewable Fuels Association (RFA), the trade association representing the Brazilian sugarcane industry (UNICA), and the Advanced Biofuels Association, along with 15 companies that produce biofuels in the U.S., are expected to attend the trip. More information is available online.
 


 
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