The end of 2014 delivered two powerful shocks to the transportation fuels sector. First, the Organization of the Petroleum Exporting Countries refused to decrease production to offset reduced demand, leading to the lowest oil prices in years. Then, the U.S. Environmental Protection Agency announced it would finish the year without setting annual federal renewable fuels volume requirements for gasoline and diesel distributors. Those burning energy issues, among others, were the hot topics at the annual National Biodiesel Conference and Expo January 19–22 at the Fort Worth Convention Center. Attendance surpassed 900 biodiesel industry leaders.
“President Obama has declared an all-of-the-above energy policy and made addressing climate change a priority,” said Joe Jobe, CEO of the National Biodiesel Board, as he kicked off the opening session. “The RFS has demonstrated success in contributing to both those top priority goals. It is our goal for 2015 to get the RFS back on track.”
While acknowledging the biodiesel industry has many friends and good working relationships among oil producers, he stated that RFS opponents have distorted the record of renewable fuels, as well as made alarming predictions for the program–predictions that have proven wildly inaccurate. As a result, he said, the implementation of effective policy has been consistently damaged by their misleading rhetoric.
In one example, Jobe pointed to a 2012 study by the American Petroleum Institute that predicted that biodiesel requirements under the RFS would result in a “Diesel Death Spiral” that would increase diesel fuel costs to about $15 per gallon in 2014 and $70 in 2015. Their predictions proved to be wildly incorrect, he stated, yet they continue to site the flawed study.
“Sensationalist tabloid headlines have no place in serious public policy debate – it makes for bad public policy,” Jobe said.
Now, Jobe said, some in the petroleum industry claim that America has achieved energy independence thanks to fracking of shale oil in Texas and North Dakota and from strip mining of Canadian Tar Sands. However, the fallout from the decision not to decrease production by OPEC has demonstrated once again the fallacy of that argument.
Since OPEC’s Thanksgiving decision, an already glutted fuel market became flooded in oil from Saudi Arabia and other members of their international cartel, driving prices so low they threaten to bankrupt the domestic fracking industry.
With a trillion dollars in reserves and production costs less than $6 per barrel, “The Saudis can outlast all their competitors,” Jobe said. “This is what monopolies and cartels do. They use anti-competitive tactics to raise, or in this case lower prices to squeeze competitors and alternatives out of the market. Then they increase prices to maximize their profits.”
That’s why the RFS is such a critical policy, Jobe said. Only by diversifying the transportation fuels market and providing competition to crude oil can the United States truly achieve energy security, he explained.
In a session on Jan. 21, Anne Steckel, National Biodiesel Board vice president of federal affairs, encouraged the biodiesel conference attendees to explain the importance of the advanced biofuel industry to the Obama Administration and Congress.
“We’re already writing our own script for 2015,” she said. “We do that by building our strengths, and redoubling our efforts across grassroots advocacy, coalition building and public outreach–to make our case, loud, clear and consistently.
“We do that by strengthening our collective voice–getting more members involved, and empowering you to advocate for yourselves – because we can’t do it without you,” she continued.
Steckel said a year of dysfunction and pessimism in Washington, DC, often felt like the industry was “stuck in a bad movie.”
“There was this manufactured suspense from the repeated delays in the RFS volumes, and every time we felt like the ending was coming, the directors threw in another unnecessary twist to string out the plot,” Steckel said. “And we still haven’t seen the credits roll.”
After the record year of nearly 1.8 billion gallons in 2013, the EPA initially proposed in November 2013 to hold the 2014 RFS biodiesel volume at 1.28 billion gallons. The agency subsequently withheld a final rule and has still not established 2014 volumes, even as it has signaled that it will improve the original proposal. The continued uncertainty throughout the year has left the industry in a state of limbo, although many biodiesel companies continued producing based on assurances from the Administration that RFS volumes would increase.
“It makes no sense, and unlike a weak Hollywood script, Washington’s failure to act is creating serious damage in the real world,” Steckel said.
Biodiesel industry awards
The National Biodiesel Board honored a variety of industry champions at the meeting.
Of particular interest to FON readers, and certainly a familiar name to most, was the Innovation Award presented to Tom Butcher, Brookhaven National Laboratory. Brookhaven National Laboratory is one of the premier U.S. Department of Energy national laboratories and the leading technical institution for heating oil research in the world. Dr. Butcher is the head of the Energy Conversion Group and has been at Brookhaven for 30 years. He has played an instrumental role in the technical research that has been done over the last six years that formed the basis for the balloting of performance specifications for 6% to 20% biodiesel blended into traditional heating oil as a new fuel grade in the ASTM D396 fuel oil standard. His groundbreaking work documenting the positive field experience with biodiesel blends and providing the research background were major factors in addressing questions brought up by the NORA/NBB-lead Bioheat Technical Steering Committee.
The Impact Award went to Senator Al Franken of Minnesota. He has long been a champion for biodiesel in Washington and particularly took a leadership role last year in challenging the EPA’s initial proposal that would have weakened Renewable Fuel Standard volumes.
The Influence Award went to Jerry Schoenfeld, of Minneapolis- based Greater States Advisors. Schoenfeld has been instrumental in development, passage, and defense of landmark biodiesel legislation in Minnesota since 2000. Without the lobbying expertise and efforts on behalf of the Minnesota Soybean Growers Association, the state would not have the favorable biodiesel policies that it does today.
The Inspiration Award went to Greg Anderson of the Nebraska Soybean Board. A Nebraska soybean farmer, and long-time biodiesel advocate, Anderson is considered by many an inspiration for his full time devotion to his fellow soybean farmers. He has served in more volunteer roles than can be named, but a few include; past chairman of the United Soybean Board, board member on the Nebraska Soybean Board, a long-time representative of NSB to the National Biodiesel Board, former NBB technical committee chair, current NBB marketing committee chair, and he was recently re-elected as NBB secretary.
And, the Pioneer Award went to Dallas Hanks. The biodiesel industry lost a true pioneer with the passing of Utah State University’s Dr. Dallas Hanks last June when he succumbed to cancer. For those that knew him, Dallas was a brilliant scientist, educator, humanitarian, entrepreneur, and all around good person. He spearheaded the visionary feedstock program Freeways to Fuels, was a huge supporter and contributor to NBB’s Next Generation Scientists for Biodiesel program, and had a hand in numerous oilseed test plots, biodiesel laboratories, and technology start-up business at the university and around the region. The respect he had from his peers was second to none, and he has left a truly lasting legacy in the biodiesel world.