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G R O W I N G I N N O VAT I O N
A M E R I C A’ S E N E R G Y FUTURE STAR TS AT HOME
RFA board of Directors
Christopher Standlee, Chairman Scott Mundt Ryland Utlaut
Abengoa Bioenergy Corp. Dakota Ethanol, LLC Mid-Missouri Energy, Inc.
www.abengoabioenergy.com www.dakotaethanol.com www.midmissourienergy.com
For the U.S. ethanol industry, 2008 ushered in a year of historic production to meet
record demand as the industry continued to grow to meet America’s energy needs.
The industry can be proud of the milestones reached in 2008, including record production of
9 billion gallons, implementation of a new Renewable Fuels Standard (RFS), record exports of
distillers grains to feed the world’s livestock, building new infrastructure, moving to higher blends,
and last, but perhaps most importantly, technological innovations to improve both starch and
cellulose-based ethanol production.
It will take time to yield returns on these investments. This past year presented unique challenges
and economic difficulty, as producers faced record input costs, lower ethanol values and the
evaporation of credit in the market. But the industry will emerge stronger than ever.
2009 promises to be another exciting year. The RFS calls for blending 11.1 billion gallons of ethanol
and other biofuels in the U.S. motor fuels market. To ensure that America’s renewable fuels industry
continues to grow and evolve, the market for ethanol and other biofuels must expand. It is critical
that the arbitrary limit on ethanol blending – today capped at 10% of each gallon of gasoline – be
removed to allow gasoline blenders and refiners to take full advantage of the benefits of ethanol
blending. Increasing ethanol content reduces foreign oil consumption and our rising trade deficit,
and ensures a market will exist for the next generation of ethanol produced from cellulose.
We will continue to challenge ourselves to reduce our carbon footprint. More efficiently using our
natural resources is at the core of this nation’s efforts to secure a more sustainable energy future.
America’s ethanol producers are at the forefront of that effort, developing the technologies that
are constantly improving its green footprint.
The U.S. ethanol industry remains strong and steadfast in its resolve to provide domestically
produced renewable fuels because America’s energy future starts at home.
Sincerely,
There can be little doubt that 2008 will be a year In just the past year, America’s annual operating
capacity increased by 2.7 billion gallons, a 34%
America’s ethanol industry will not soon forget. increase over 2007. This growth in production capacity
In the face of manufactured baseless attacks, record was fueled by completion, start-up, and operation
of 31 new ethanol biorefineries and will ensure
corn prices, undervalued ethanol, and an economic America’s ethanol producers are capable of filling the
federal requirements for ethanol use outlined in the
crisis many say will rival the Great Depression, America’s
Renewable Fuels Standard (RFS).
ethanol producers continued to provide America with
In addition, ethanol production has continued to
a homegrown answer to its dependence on foreign oil. expand geographically, with ethanol biorefineries now
operating in 26 states, bringing economic opportunity
to tens of thousands of Americans, many of whom
U.S. Ethanol BIOrefinery locations live in rural areas. Dozens more biorefineries are
in the planning stages, including a number of
next generation facilities that will not only
expand the reach of traditional ethanol
production and use, but will broaden the array
of feedstocks from which ethanol is produced.
2
An Industry Evolving
9000*
The perfect storm of events in 2008, while 9000
temporarily disruptive, is going to lead to a new and
more robust American ethanol industry in 2009 and 8500
beyond. The challenges faced and currently being
addressed by this industry will make it stronger 8000
and more successful far into the future.
7500
Improved efficiencies at existing U.S. Ethanol Production CAPACITY BY STATE
In Millions of Gallons
biorefineries, new process technologies, 7000
commercialization of cellulosic conversion Under Con-
6500
Nameplate Operating struction/ Total
technologies, and yes, even some industry 6500 Expansion
consolidation, will provide a platform from Iowa 3,076.0 2,856.0 690 3,766.0
which this industry can launch and expand 6000 Nebraska 1,444.0 1,164.0 319 1,763.0
into a new, sustainable, and renewably- Illinois 1,190.0 1,190.0 293 1,483.0
fueled era in American history. 5500
Minnesota 1,081.6 837.6 50 1,131.6
South Dakota 1,016.0 799.0 33 1,049.0
4900
Millions of gallons
1300
1500
Arizona 55.0 55.0 55.0
1200
1100
1100
Washington 55 55.0
950
900
1000
870
845
to fill the requirements. In so doing, this industry production and use is equal to 10% of the nation’s
gasoline supply. Without a change in federal
has recognized new opportunities to expand the use standards, that level of ethanol use will undermine
the goals of the RFS and become an unwarranted
of ethanol and ensure the success of the RFS in the
cap on the growth of this industry and the
years to come. development of next generation technologies.
4
new renewable fuels standard schedule (Billion Gallons Per Year)
Year 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Renewable Biofuel 9.0 10.5 12.0 12.6 13.2 13.8 14.4 15.0 15.0 15.0 15.0 15.0 15.0 15.0 15.0
Advanced Biofuel 0.6 0.95 1.35 2.0 2.75 3.75 5.5 7.25 9.0 11.0 13.0 15.0 18.0 21.0
Cellulosic Biofuel 0.1 0.25 0.5 1.0 1.75 3.0 4.25 5.5 7.0 8.5 10.5 13.5 16.0
Biomass-based Diesel 0.5 0.65 0.8 1.0
Undifferentiated
0.1 0.2 0.3 0.5 1.75 2.0 2.5 3.0 3.5 4.0 4.5 4.5 4.5 5.0
Advanced Biofuel
Total RFS 9.0 11.1 12.95 13.95 15.2 16.55 18.15 20.5 22.25 24.0 26.0 28.0 30.0 33.0 36.0
ethanol use, investments in America’s fueling investments are made in higher level
infrastructure are essential. This industry, working ethanol blends, fuels like E20, E30,
with oil refiners, gasoline marketers, rail and and E85 will gain a bigger share of
America’s ethanol producers have long been at the plants under construction added more than $65 billion
to the nation’s Gross Domestic Product (GDP) in 2008.
cutting edge of the green economy, helping support Additionally, the production of ethanol provided an
additional $20 billion for American households in 2008.
more than 494,000 well paying jobs in 2008 alone.
Source: “Contribution of the Ethanol Industry to the
Economy of the United States,” LECG, LLC, February 2009.
Importantly, ethanol production provides a critical
Quick
F act
6
Assuming that all of the 9 billion gallons of ethanol Investment in Innovation:
produced in 2008 were marketed, the estimated The American ethanol industry is investing billions of
cost of the two major federal incentives for the year dollars in new technologies that will further enhance the
(VEETC and the Small Ethanol Producer Tax Credit), economic benefits of domestic renewable fuel production.
In 2008, this investment alone helped support more
totaled $4.7 billion. By comparison, the ethanol
than 29,000 jobs that put more than $1.5 billion in
industry generated $11.9 billion in new tax revenue the pockets of Americans.
for the Federal Treasury, yielding a direct return on Source: “Contribution of the Ethanol Industry to the Economy
investment to the federal government of 2.5 to 1. of the United States,” LECG, LLC, February 2009.
There is little question that the increased supply On average, the world consumes some 86 million
barrels of oil per day. According to the International
of biofuels, including ethanol, worldwide is not only Energy Agency (IEA), that number is slated to rise
lowering oil demand, but also helping to mitigate to 116 million barrels by 2030. In a 2008 report, IEA
notes that in order to meet the world’s thirst for oil,
the devastating impacts of volatile oil markets, nonconventional sources of fuel must be found. By
IEA estimates, world biofuels production is the only
which reached a record $140/barrel in 2008.
nonfossil fuel that is helping to reduce oil demand.
Were it not for the increasing production of world
biofuels producers, oil consumption would expand
by 1 million barrels per day.
Quick
F act
The production and use of 9 billion
gallons of ethanol in 2008 displaced
the need for 321.4 million barrels of oil.
It also saved American consumers/
taxpayers $32 billion, an average of
more than $87 million a day.
Source: Energy Information Administration,
LEGC, LLC.
8
“America’s dependence on oil is one of
the most serious threats that our nation
has faced. It bankrolls dictators, pays for
nuclear proliferation, and funds both sides
of our struggle against terrorism. It puts
the American people at the mercy of shift-
Biofuels Needed for ing gas prices, stifles innovation and sets
Long-term Security back our ability to compete.”
New oil supplies are getting harder and more expensive President Barack Obama, January 26, 2009.
Kevin Dietsch/UPI
to find. Existing supplies are dwindling in many of
the world’s producing nations. Nonconventional
reserves, like Canadian tar sands, pose even more
environmental and economic risks. To ensure long-
term economic health and energy security, biofuels To put in perspective the contribution of America’s
must be part of the nation’s energy policy. ethanol industry toward reducing our dependence
on foreign oil, consider that the 321 million barrels
According to the IEA’s June 2008 outlook, “Biofuels, of oil displaced by 9 billion gallons of ethanol pro-
including ethanol and biodiesel, will be an increas- duction and use in 2008 is the equivalent of elimi-
ingly important source of unconventional liquids nating oil imports from Venezuela for 10 months. Or,
supplies, largely because of the growth in U.S. to put it another way, it would mean that America
biofuels production. In the IEO2008 reference case, would not have to import any oil for 33 days, or the
U.S. biofuels production in 2030 is projected to be equivalent of more than one month’s imports of
1.2 million barrels per day, accounting for nearly crude oil. In 2009, the anticipated production and
one-half of the increase in world biofuels production use of more than 10.5 billion gallons of ethanol will
over the projection period.” further weaken America’s dependence on foreign oil.
Siouxland Energy & Livestock Coop* Sioux Center, IA corn 60.0 60.0
Siouxland Ethanol, LLC Jackson, NE corn 50.0 50.0
Southwest Georgia Ethanol, LLC Mitchell Co., GA corn 100.0 100.0
Southwest Iowa Renewable Energy, LLC * Council Bluffs, IA corn 110.0 110.0
Sterling Ethanol, LLC Sterling, CO corn 42.0 42.0
Tate & Lyle Ft. Dodge, IA corn 105.0
Tate & Lyle Loudon, TN corn 67.0 67.0 38.0
Tharaldson Ethanol Casselton, ND corn 110.0 110.0
The Andersons Albion Ethanol LLC Albion, MI corn 55.0 55.0
The Andersons Clymers Ethanol, LLC Clymers, IN corn 110.0 110.0
The Andersons Marathon Ethanol, LLC Greenville, OH corn 110.0 110.0
Trenton Agri Products, LLC Trenton, NE corn 40.0 40.0
United Ethanol Milton, WI corn 52.0 52.0
United WI Grain Producers, LLC* Friesland, WI corn 49.0 49.0
Utica Energy, LLC Oshkosh, WI corn 48.0 48.0
VeraSun Energy Corporation (Total) 1,635.0 450.0
Albert City, IA corn
Charles City, IA corn
Dyersville, IA corn
Ft. Dodge, IA corn
Hartley, IA corn
Linden, IN corn
Lake Odessa, MI corn
Janesville, MN corn
Welcome, MN corn
Hankinson, ND corn
Albion, NE corn
Central City, NE corn
Ord, NE corn
Bloomingburg, OH corn
Aurora, SD corn
Verenium Jennings, LA Sugar Cane bagasse 1.5 1.5
Western New York Energy, LLC Shelby, NY corn 50.0 50.0
Western Plains Energy, LLC* Campus, KS corn 45.0 45.0
Western Wisconsin Renewable Energy, LLC* Boyceville, WI corn 40.0 40.0
14
U.S. Cellulosic Ethanol Projects Under development and construction
Mascoma/Michigan Economic Chippewa County, “consolidated bioprocessing” refinery would use 40 mgy
Development Corporation/Michigan Michigan genetically modified bacteria to break down and
State University/ Michigan ferment local wood chips
Technological University
NewPage Corp. Wisconsin Rapids, WI 5.5 mgy woody biomass, mill residues
(formerly Stora Enso North America)
New Planet Energy Vero Beach, FL INEOS Bio Ethanol process (gasification, 1st stage 8 mgy; municipal solid waste (MSW); unrecyclable
(formerly Alico) fermentation and distillation) 2nd stage 21 mgy; paper; Construction & Demolition debris
3rd stage, 100 mgy (C&D); tree, yard and vegetative waste;
and energy crops
Pacific Ethanol Boardman, OR BioGasol 2.7 mgy Wheat straw, stover, and poplar residuals
POET Scotland, SD BFRAC™ separates the corn starch from the corn 20,000 gal/yr corn fiber, corn cobs, and corn stalks
Emmetsburg, IA germ and corn fiber, the cellulosic casing that 31.25 mgy
protects the corn kernel
Range Fuels Inc. Soperton, GA two-step thermo-chemical process (K2) 20 mgy woodchips (mixed hardwood)
Verenium Jennings, LA C5 and C6 fermentations 1.4 mgy sugarcane bagasse, specially-bred energy
Highlands County, FL 36 mgy cane, high-fiber sugar cane
ZeaChem Boardman, OR 1.5 mgy poplar trees, sugar, wood chips
Since its humble beginnings in the late 1970s, The rapid evolution of the starch-based ethanol indus-
try in this country is well documented. Technologies
innovation has defined the U.S. ethanol industry. such as fractionization and low heat fermentation
A steady stream of new technologies and cutting edge have lowered energy use, improved efficiencies, and
increased yields at ethanol biorefineries across the
production practices have improved the industry’s country. Likewise, improvements in farming techniques
and advances in corn hybrid technology are produc-
efficiency and economics over the past several
ing more corn with less inputs on the same acre of
decades. And when it comes to innovations for the land than ever before.
biofuels industry of tomorrow, the sky is the limit. While these improvements are impressive and extremely
important, greater innovation is already upon us.
16
U.S. Cellulosic Ethanol Projects Under development and construction
3
Butte, MT
10 23
20 16
Park Falls, WI Old Town, ME
19 | 26
17
Scotland, SD
12
Chippewa County, MI
13 15
Boardman, OR
Shelley, ID Wisconsin Rapids, WI
21
Upton, WY Rome, NY
1
York, NE
Emmetsburg, IA
7
Madison, PA
14 2
5
Lancaster, CA
Grand Junction, CO
Hugoton, KS
11 9
St. Joseph, MO
Washington
4
County, KY
Corona, CA 8
Vonore, TN
6
Brawley, CA
22
24
Jennings, LA
Soperton, GA
combustion. Thus, the technologies utilized and being The GHG benefits of ethanol will be even more
significant in the future, as the carbon footprint of
developed by America’s ethanol producers are ethanol production continues to shrink and new
technologies reduce the energy intensity of the
becoming increasingly environmentally sound,
process. According to the U.S. Department of Energy’s
sustainable, and absolutely essential. Argonne National Laboratory, “In terms of key
energy and environmental benefits, Argonne’s
GREET (model) shows that corn starch ethanol
clearly outpaces petroleum-based fuels, and that
tomorrow’s cellulose-based ethanol would do even
Tar Sands: A Case Study better.” Indeed, Argonne’s analysis shows ethanol pro-
18
Improving Resource Use Solar energy is
Through Innovation absorbed by corn and
other biomass crops
New technologies and outside-the-box thinking are
increasing ethanol yields, improving efficiencies, and
allowing ethanol biorefineries to make better use Solar energy from crops
Carbon dioxide converted into liquid ethanol
of the natural resources they need.
is recycled by
plants as they
grow
The U.S. Department of Energy’s Argonne National
Laboratory, based on survey data compiled by the Biomass containing
Carbon Cycle carbon is processed
Renewable Fuels Association, found tremendous
improvements in efficiency between 2001 and 2006.
CO2 & Solar Energy
Conversion
into fuel
n On the whole, total energy use decreased 21.8% Source: Renewable Fuels Association
over that 5 year period alone
With carbon emissions front and center in the policy various biofuels, including GHGs from so-called
indirect land use changes. Too often, sensationalism
debates in Washington, the role of ethanol and other supersedes science in this debate. Determining the
biofuels is a hot topic. In particular, the impact of impact, if any, of ethanol production on land use de-
cisions elsewhere in the world is imprecise and must
increasing ethanol production on land use decisions include a comprehensive analysis and accounting of
a host of factors.
by people in nations around the world has drawn
20
Global agriculture’s increasing productivity The Bottom Line on
is meeting rising demand.
Land Use Change
Production agriculture, particularly in the United
States, has dramatically increased its productivity “Based on available projections, we think crop yields
will continue to improve (especially in the U.S., but
through the use of technology. For example, using
also elsewhere), and that this should be properly
average global corn yields from 40 years ago (1967), incorporated into the land use change analysis.
more than 330 million hectares would be required Secondly, we believe new government analysis shows
to produce the world corn crop grown on 158 million that the land use credit for feed co-products coming
from corn-based ethanol production is much higher than
hectares in 2007. In other words, it would have taken
33%. When these factors are incorporated into land use
more than twice as much land in 1967 to grow a change analysis, as we have done in this study, no new
crop equivalent in size to the 2007 world corn crop. pasture or forest land will need to be converted in the
U.S. or outside the U.S. to meet the 15 bgy RFS require-
ment for corn ethanol in 2015. Thus, the GHG emissions
Arable farmland is available for sustainably
from land use change due to expansion of U.S. corn-based
increased production. ethanol to meet the RFS are likely zero.”
Though it seems unlikely that significant amounts of Source: “Land Use Effects of Corn-Based Ethanol in the United States,”
land will be needed to support future growth of the Tom Darlington, Air Improvement Resource, Inc., 2009.
11% of the world’s surface area. A new assessment U.S. Crop Area (445 acres)
by FAO and the International Institute for Applied 2008 U.S. Corn Area (86 acres)
Systems Analysis (IIASA) of soils, terrains and 2008 U.S. Corn Ethanol Area
(Net Distillers Grains) (14.5 acres)
climates compared with the needs of and for major
crops suggests that a further 2.8 billion [hectares]
are to some degree suitable for rainfed production.
This is almost twice as much as is currently farmed.”
ethanol producers are developing and adopting n According to the U.S. Geological Survey (USGS),
approximately 408 billion gallons of water are used
new technologies that are reducing water use. per day for all purposes in the United States. Indus-
trial water use (including water used in ethanol
production) is estimated at 18.5 billion gallons
An analysis by Argonne National Laboratory of industry per day. Based on expected ethanol production of
data found that water usage by ethanol plants in 2006 9 billion gallons in 2008, the industry’s total water
averaged 3.45 gallons per gallon of ethanol produced. use is estimated at 85 million gallons per day. It is
This is significantly less than in years past. Indeed, important to remember that ethanol is helping
a 2007 National Academy of Sciences report noted, displace those incremental gallons of crude oil
“consumptive use of water is declining as ethanol from sources like the Canadian tar sands. Accord-
producers increasingly incorporate water recycling and ing to the University of Alberta, it takes 7 barrels
develop new methods of converting feedstocks to fuels of water to produce just one barrel of crude from
that increase energy yields while reducing water use.” the tar stands.
More efficient use of water is a trend that will continue n The daily public water usage by the city of Chicago
within the ethanol industry. New technologies alone is five times greater than the entire U.S.
promise to more efficiently use and recycle the water ethanol industry’s water requirement.
required for cooling towers, boilers and other pro-
cessing components. Engineering and design firms n A typical 50 million gallon per year ethanol plant
estimate the average water use per gallon of ethanol uses about 400,000 gallons of water per day. This
produced is likely to continue to drop substantially is roughly equivalent to the daily water use of an
in the next several years. One such firm estimates 18-hole golf course. Water usage at the Sherman
water requirements will soon be reduced “…to less Hills Golf Course in Florida, for instance, averaged
than 1.5 gallons per gallon of ethanol produced.” 363,000 gallons per day over a 12-month period,
Some ethanol producers are now using waste water, according to the St. Petersburg Times.
or gray water to produce ethanol.
22
Important Water Facts
n According to the National Renewable Energy
Laboratory (NREL), “Water use ranges between n 3 gallons of water are required to produce a gallon of
ethanol.
65 and 90 gallons per barrel of crude oil processed
and wastewater discharge ranges between 20 and n 2-2.5 gallons of water are required to produce a gallon
40 gallons, leaving 45 to 50 gallons of water con- of gasoline, which is similar to that of ethanol
(3 gallons). Some estimates suggest as much as 8 gallons
sumed per barrel, or 2 to 2.5 gallons of water per
of water are needed to refine a gallon of gasoline.
gallon of gasoline.”1 Thus, using NREL’s conservative
n 4 gallons of water are needed to produce a pound of
estimate, the current per-gallon water requirement
hamburger.
for gasoline is similar to that of ethanol. But the
aggregate quantity of water required to produce n 11.6 gallons of water are needed to produce one
pound of chicken.
the gasoline consumed in the United States is
nearly 1 billion gallons per day. n A typical 40 MGY ethanol plant uses an amount of
water daily that is equivalent to the daily water use
of a standard 18-hole golf course.
n It is true that corn requires large amounts of water
to grow; a bushel of corn needs approximately 4,000 n 3/5 gallon of water is required per kilowatt hour at a
coal fired power plant (1 kWh is required for a 100 watt
gallons of water in a growing season. But what often
light bulb to burn for 10 hours).
goes unreported is that nearly nine out of every 10 corn
n 3/4 of a gallon of water is required per kilowatt hour
acres in the United States are rain-fed and require
at a nuclear power plant.
no irrigation other than natural rainfall. Further,
because most ethanol production occurs in the n 300 million gallons of water are needed to produce a
single day’s supply of U.S. newsprint.
central Corn Belt where corn is primarily rain-fed,
Source: U.S. Geological Survey, National Renewable Energy Laboratory.
NREL says “As much as 96% of the field corn used
for ethanol production is not irrigated at all.”2
1
Aden. “Water Usage for Current and Future Ethanol Production.”
http://epw.senate.gov/public/index.cfm?FuseAction=Files.
View&FileStore_id=3d2f1427-d51d-4a54-8739-166853ee1c44
2
Aden.
20000
Distillers Grains
5000
0
90-91
91-92
92-93
93-94
94-95
95-96
96-97
97-98
98-99
99-00
00-01
01-02
02-03
03-04
04-05
05-06
06-07
07-08
08-09*
24
The Ethanol Production Process (Dry Mill)
CO2 Scrubber Distillation Columns
Corn Delivered to Plant Grinder Cookers Fermenter Molecular Sieve Ethanol Storage
Centrifuge
In addition, ethanol producers are investing in new Animal scientists and nutritionists are also participating
technologies to improve the quality and quantity in the innovation process, continually studying the
of the livestock feed they produce. For instance, a feeding of ethanol feed co-products to animals.
number of dry mills are installing technology that Though beef, dairy, swine and poultry have been the
allows them to separate crude corn oil from the still- primary consumers of these co-products historically,
age on the back end of the process. This crude corn an increasing amount of research is being conducted
oil can be sold into the feed market (particularly for that examines the effects of feeding co-products to
poultry), further refined and sold into the human other species, such as goats, sheep, and fish. The use
food market, or used as a feedstock for biodiesel. of ethanol co-products in human food applications
is another area of increasing scientific interest.
Dry fractionation, a process to separate the corn germ
and other components from the starch on the front While new technologies and practices promise to
end of the ethanol process, is another technology change the complexion of the ethanol co-products
that is emerging in the dry mill ethanol industry. market in the years ahead, one certainty exists
This separation allows ethanol producers more about the future of feed co-products: the ethanol
flexibility in feed manufacturing and potentially industry will continue to take very seriously its role
provides customers with products that are more as a producer of safe, quality feed.
tailored to their specific nutritional needs.
Driven by the American public’s demand for alternatives The facts surrounding the misnamed and emotionally
charged “food versus fuel” debate reveal there is no
to high-priced foreign oil, the production of ethanol in need to choose between using grain for feed and
the United States has more than tripled since 2003. This food or using grain for fuel. American farmers and
ethanol producers can do both.
dramatic increase led some to erroneously manufacture
The fallacy of the “food versus fuel” debate was fully
hysteria and panic about the relationship between
exposed by the end of 2008, a full year after the public
ethanol production and food. This orchestrated public relations campaign against ethanol had been waged.
By late 2008, the prices of agricultural commodities
relations hysteria sought to “obliterate” the well- like corn had fallen by some 60% compared to highs
documented economic and environmental benefits of seen in June. At the same time, ethanol production
continued to increase. The fact that food prices con-
expanded biofuels production by sensationally pitting tinued to rise while agricultural commodity prices
plunged and ethanol production continued to increase
ethanol production against food prices in the grocery
in the second half of 2008 is proof that grain and other
store and feeding people around the world. farm products play a minor role in retail food prices.
130
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90
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70
60
50
1974
1976
1978
1980
1986
1988
1990
1994
1998
2000
2002
2004
2006
2008
26
A Bounty for food, What the experts say:
feed, and fuel n An April 2008 study by Texas A&M University concluded
Tremendous increases in the productivity of U.S. that “…corn prices have had little to do with rising
food costs.” The authors of the study found that the
farmers -- 71.9 bushels of corn per acre in 1974
“…underlying force driving changes in the agricultural
compared to 153.9 bushels per acre in 2008 -- have industry, along with the economy as a whole, is overall
ensured ample supplies of grain are available for do- higher energy costs, evidenced by $100 per barrel oil.”1
mestic and international use as food, feed and fuel.
n The White House Council of Economic Advisors in May
Further, one-third of every bushel of grain processed 2008 concluded that, “Ethanol accounts for somewhere
into ethanol is enhanced and returned to the animal between 2 and 3% of the overall increase in global
feed market in the form of distillers grains, corn food prices.” The council also found, “Had it not been
for ethanol, (U.S.) food prices would have gone up by
gluten feed or corn gluten meal.
4.25% as opposed to 4.5%.”2
Innovations in ethanol production technologies and This increase in global production will find a home
as many nations this year implemented renewable
markets have led to an increasing role for ethanol fuel use requirements. Even as ethanol’s opponents
in fuel supplies around the globe. Governments from were spending millions attempting to sully ethanol’s
reputation, Canada, the European Union and other
Europe to Canada to the Phillipines to India are nations forged on adopting requirements for
renewable fuel use of their own.
embracing domestic ethanol industries that promise
economic opportunities, environmental benefits and According to the International Energy Agency, the
growth of ethanol production worldwide has led
greater energy (and therefore national) security. to a 1 million barrel per day decrease in global oil
The investments made by these nations in their demand. As a result, as an analyst from Merrill
Lynch noted, the increasing reliance on ethanol
domestic renewable fuels industries can be seen in helped keep oil prices from spiking even more than
we experienced last year.
the record volume of ethanol production in 2008:
28
The growing production of ethanol across the globe 2008 World fuel ethanol
has also brought an increased sense of community production (In Millions of Gallons)
and cooperation among ethanol producers. On more U.S.A. 9,000.0
than one occasion, the ethanol industries in the Brazil 6,472.2
U.S., Canada, Brazil and Europe joined together to European Union 733.6
Understanding
the Credit Offset
The U.S. offers gasoline refiners a tax credit for every
gallon of ethanol they blend, regardless of where
the ethanol is produced. To avoid subsidizing foreign
producers of ethanol with American tax dollars, an
equivalent credit offset is placed on imported ethanol.
History has shown that foreign ethanol arriving in the
U.S. can pay the credit offset and still compete
effectively in the marketplace.
30
The Renewable Fuels Foundation (RFF) is dedicated RFA Staff
to meeting the educational, research, and strategic
Geoff Cooper
planning needs of the U.S. fuel ethanol industry. Vice President, Research and Analysis
32
RFA Associate Members
AGRA Industries www.agraind.com Gavilon, LLC www.gavilon.com Noble Americas Corp. www.thisisnoble.com
AgStar Financial Services www.agstar.com GCUBE Insurance Services www.gcube-insurance.com North American Bioproducts Corp. www.na-bio.com
Aker Kvaerner www.akerkvaerner.com Genencor, A Danisco Division www.genencor.com Novozymes North America, Inc. www.novozymes.com
Alfa Laval, Inc. www.alfalaval.com Grace Davison www.gracedavison.com NuStar Energy, L.P. www.nustarenergy.com
American Railcar Industries www.americanrailcar.com Greenberg Taurig, LLP www.gtlaw.com OPW Fluid Transfer Group www.opwftg.com
Antioch International Inc. www.antioch-intl.com Greene Holcomb & Fisher www.ghf.net Pavilion Technologies www.pavtech.com
Baker Petrolite Greenfield Ethanol Inc. www.greenfieldethanol.com Perdue Farms www.perdue.com
Barr Engineering Company www.barr.com Greenstock Resources, Inc. www.greenstock.net Phibrochem www.lactrol.com
BBI International www.bbibiofuels.com Growmark, Inc. www.growmark.com Pinnacle Engineering Inc. www.pineng.com
BetaTec Hop Products www.betatechhopproducts.com Harris Group Inc. www.harrisgroup.com Pioneer, A DuPont Company www.pioneer.com
BioFields S.A.P.I de C.V. www.biofields.com Hydro-Klean, Inc. www.hydro-klean.com Praj Industries Ltd www.praj.net
Bratney Companies www.bratney.com Innospec Fuel Specialties www.innospecinc.com PrimaFuel www.primafuel.com
Brown, Winick, Graves www.brownwinick.com Iowa Renewable Fuels Association www.iowarfa.org Pursuit Dynamics www.pursuitdynamics.com
Ceres Inc. www.ceres.net Jackson-Briner, LLC Qteros www.qteros.com
CF Industries www.cfindustries.com KATZEN International, Inc. www.katzen.com Renewable Products Marketing Group
CH2M Hill www.ch2m.com Kenan Advantage Group, Inc. www.thekag.com www.rpmgllc.com
Chapman & Cutler LLP www.chapman.com Kennedy and Coe, LLC www.kcoe.com Resonant Bio Sciences, LLC www.puremash.com
Christianson & Associates, PLLP Kincannon & Reed www.krsearch.com Ryan Companies US Inc. www.ryancompanies.com
www.christiansoncpa.com Kinder Morgan Inc. www.kindermorgan.com Safety Management, Inc.
CHS Inc. www.chsinc.com Knutson Construction Services www.safetymanagementinc.com
CME Group www.cmegroup.com www.knutsonconstruction.com SGS www.sgs.com/alternativefuels
CoBank www.cobank.com Kutak Rock LLP www.kutakrock.com Siemens Energy & Automation www.siemens.com
Codexis, Inc www.codexis.com Lansing Ethanol Services, LLC Stanley Consultants, Inc. www.stanleygroup.com
Commodity Specialists Company www.csc-world.com www.lansingtradegroup.com Stoel Rives LLP www.stoel.com
Consolidated Grain & Barge Co. www.cgb.com Leonard, Street and Deinard www.leonard.com Summit Software, Inc. www.summit-soft.com
CSX Transportation www.csx.com Lignol Energy Corp www.lignol.ca SunOpta BioProcess www.sunopta.com/bioprocess
CYC Construction, Inc. www.cycconstruction.com Lincoln Energy Solutions www.lincolnenergysolutions.com Syngenta www.syngenta.com
Delta-T Corporation www.deltatcorp.com Lindquist & Vennum PLLP www.lindquist.com The Scoular Company www.scoular.com
Dorsey & Whitney www.dorseylaw.com Lubrizol Corporation www.lubrizol.com Third Inning Solutions www.thirdinningsolutions.com
DSM www.dsm.com Lurgi Inc. www.lurgipsi.com TMO Renewables LTD www.tmo-group.com
DTN www.dtn.com Maize Processing Innovators, Inc. www.maizepi.com Tombstone Energy Solutions LP
Eco-Energy, Inc. www.eco-energyinc.com Mascoma Corporation www.mascoma.com TransMontaigne Product Services
Eide Bailly LLP www.eidebailly.com McGladrey & Pullen www.mcgladrey.com www.transmontaigne.com
Emerald Foam Control, LLC www.emeraldmaterials.com McGrath North Mullin & Kratz www.mcgrathnorth.com Transportation Fuels Consulting Inc.
Encore Business Solutions www.encorebusiness.com McKinsey & Co. www.mckinsey.com TranSystems www.transystems.com
ETH - BioEnergy Inc Mendel Biotechnology Inc. www.mendelbio.com Tranter PHE, Inc. www.tranter.com
Ethanol Capital Management Michael Best & Friedrich, LLP www.michaelbest.com Trinity Rail Group www.trinityrail.com
www.ethanolinvestments.com Midwest Laboratories, Inc. www.midwestlabs.com Union Pacific Railroad www.uprr.com
Ethanol Products, LLC www.ethanolproducts.com Monsanto www.monsanto.com Union Tank Car Company www.utlx.com
Ethanol Technology www.ethanoltech.com Motiva Enterprses LLC www.motivaenterprises.com U.S. Development Group www.us-dev.com
Fagen, Inc. www.fageninc.com Murex, N.A., Ltd. www.murexltd.com U.S. Energy Services www.usenergyservices.com
Farm Credit Bank of Texas www.farmcreditbank.com Musket Corporation U.S. Water Services www.uswaterservices.com
FCStone, LLC www.fcstone.com Nalco Company www.nalco.com Valero L.P. www.valerolp.com
Fermentis - S.I. Lesaffre www.fermentis.com National Corn Growers Association www.ncga.com Vertical North America www.vertical.bz
First National Bank www.fnbo.com National Grain Sorghum Producers Weaver & Tidwell www.weaverandtidwell.com
Ford Motor Company www.ford.com www.sorghumgrowers.com Weitz Industrial Services Group www.weitz.com
Fremont Industries, Inc. www.fremontind.com Natural Resource Group www.nrginc.com Wells Fargo Securities, LLC
Fulbright & Jaworski L.L.P. www.fulbright.com NewMech Companies, Inc. www.newmech.com Western Biofuels Company
Garratt-Callahan Co. www.g-c.com Nexen Marketing U.S.A. Inc. www.nexenmarketing.com Wilson Sonsini Goodrich & Rosati www.wsgr.com
GATX Rail www.gatxrail.com
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