 Good afternoon folks. We're going to start this session where we're going to be talking about biofuels and There are so many issues so much information oftentimes misinformation that is out in the public domain with regard to to biofuels and biofuels are an extremely important part of our energy portfolio and and Thinking about what our energy mix really needs to be as we in terms of what it currently is and as we move forward and Again, there are a raft of technologies so many different aspects and again Every region of the country can be a player in terms of the production of biofuels It's another very very important piece in terms of thinking about our overall renewables portfolio and How it affects so many different sectors of the economy and obviously it's very very important as we look at transportation So to start us off today each of our speakers is going to take just eight or nine minutes and to start off today We will hear from Joanne Ivanic who is the executive director of advanced biofuels USA Thank You Carol I'm going to talk a little bit first about what advanced biofuels USA is a couple of points about some of the policy issues and legislative issues that are ongoing and Then I want to open up to a question. So I'm hoping that most of the time here. We can answer questions and Actually, I can then talk about things that are of interest to you Advanced biofuels USA is a nonprofit educational Organization we are not a trade group. So we don't represent a membership we have been formed to advocate for the understanding development and use of advanced biofuels as an energy security Economic development Military strategic flexibility Climate change mitigation and pollution control solution Biofuels come as as Carol was saying they can come and be made just about anywhere and they have many many values attached to them What we hope to have is an Coherent energy policy in the country that includes this and when it gets down to the agency levels to have a Harmonized regulatory structure one of the problems that we have now and I'm not going to go into the details unless you ask questions Is some of our regulations promote the development of renewable fuels? And then some of them take that away and and hinder the development of renewable fuels We'd like to have the DOE and USDA and EPA regulations in harmony The other important word here is sustainable I'm mostly talking about Transportation fuels land sea and air transportation because I think in in other sessions you've heard about power and heat So in that regard quickly Few policy issues that we're interested in renewable fuel standard Should be continued There should be tax policy certainty Agricultural Department of Agricultural Projects such as the BCAP program the biomass crop assistance program and REAP really need to be funded and The advanced biofuels memorandum of understanding among DOE USDA and The Department of Navy needs to be funded Doe contractings authority they need to be able to think beyond five years when they're doing contracts for fuels so that general statement of policies that relate to biofuels is About what I want to talk about so are there any questions that you all have about biofuels advanced biofuels that I might be able to answer Yeah funding money Financing investment How many more ways can I say that that that is? That is the main Issue and a related issue is market and that's where Government comes in like I said there's these regulations that on one hand given on the other hand take away We have the renewable fuel standard that has a it says that it is valuable to this country to be Putting more biofuels into our ground transportation structure, and on the other hand we have cafe standards the the Energy vehicle energy efficiency standards that don't give you credit for For doing that transition if it decreases your mileage So you might be able to we went to a conference yesterday about next generation engines If next generation's engines are going to get 50 or 60 miles per gallon if they can use higher octane fuels a Great and very cost-effective way to get that higher octane is to get it from ethanol from going to say 30% ethanol blend but You don't get any That mileage may be increased in that future, but right now if you have a flex fuel vehicle, and you use it the Recognition of that is dying is is is expiring so the automobile manufacturers are not incentivized to build vehicles that get that use biofuels if it's going to give you Not optimize the mileage that they can get so we can get optimized performance with higher octanes, but it might affect the Mileage that they might maybe be able to be able to get another way And so that's where their incentive is rather than to go the renewable route So so there's two things the funding and making sure there's a market because without a market you're not going to get funding Yeah, there are some cellulosic plants that should be coming online in the next year or so however The vast majority we are still working on a lot of different technologies a lot of people say There's not a silver bullet. There's silver shot. It depends on what kind of feedstock you can grow or what kinds of agricultural waste or Municipal waste that you can access most economically and then that should be the Technology that is going to be important for you to use and there's still a lot of research and development That needs to be financed to take that through pilot stages Demonstration to get to commercial. It doesn't just leap to commercial these are things that have never been done before and To be able to prove them you do them at a measured pace and that takes a lot of money It takes the this DOE memorandum that we're talking about was only a half a million dollars It can and it can cost a couple hundred million dollars just to build your your demonstration refinery not not even worried about all the way it commercial so so that is We're not quite there yet. We haven't proved it out. We can't do it tomorrow, but we can do a big piece of it tomorrow I think we can take more questions, you know, hopefully later and so anyway, thank you. I think you join Thank you, and and one of the things I wanted to mention because I think that we will hear more in terms of some of our Other speakers with regard to some of the the technologies that are underway because there is a lot that is happening and a lot of plants that are In feedstocks a lot of very interesting interesting things that are happening across the country in terms of soil loss Facilities and so I think We're going to be hearing And I'd be happy to talk to you more about some of that as well as as all of our speakers We're now going to turn to and Stuckel who is the vice president of governmental affairs And she is with the national biodiesel board Thanks for that introduction Carol appreciate it good afternoon everyone as Carol said I'm and Stuckel with the national biodiesel board and The national biodiesel board for those of you that don't know is the trade association that represents biodiesel producers and feedstock Makers all across the country a little bit of background on biodiesel Biodiesel is the renewable fuel alternative to diesel So it is a fully renewable it can be made from a variety of feedstocks We use recycled restaurant grease soybean oil canola oil Camelina oil animal fats algae Are just a few of our feedstocks that can be used to produce biodiesel and most of our plants are optimized to blend on Whatever feedstock is available in their area for example if we have a plant in New York City So that obviously uses a lot of recycled restaurant grease We have plants in the Midwest and that uses soybean oil So depending on where the plants are located usually depends on what feedstock we use We have a hundred and ninety five biodiesel plants in virtually every state across the country and We have been around For about 20 years or so Last year we reached our billion gallon mark in in terms of production Which sounds like a lot and it's a very proud thing for our industry However, when you think about it, we're blending that billion gallon into a 60 billion gallon diesel pool So we're still a relatively small part of the industry And biodiesel has really worked very well due to a lot of federal policies I know that there's been a lot of discussion today and obviously in Congress about energy policy And people kind of reviewing energy policy in the future of it and Carol alluded to that a bit Two policies that have been very beneficial to our industry has been the biodiesel tax credit Unfortunately the biodiesel tax credit did expire at the end of last year It's a dollar a gallon tax credit So we are working with folks on Capitol Hill to hopefully have that tax credit extended It's been really important for our industry in terms of providing stability and capital As well as kind of an outgrowth to provide more diversity for our plants across the country It's a difficult political situation as everybody is aware in terms of getting any policy through Congress let alone tax policies So it seems like the extenders provisions will probably be done in a lame duck session But we're certainly working with folks on Capitol Hill to let them know how important it is to our industry That we do have the biodiesel tax credit extended Our industry supports about 39,000 jobs across the country When we lost the tax credit in 2010 we saw about half of our industry go away So having that stability in that policy is very important In 2010 we were not a part of the renewable fuel standard now The renewable fuel standard is the other part of the federal policy That has been very beneficial to our industry in terms of getting us up and running We are part of the renewable fuel standard. We operate under the biomass based diesel portion of it Like I said, we we have volumes every year that we have to produce last year We are mandated to produce 800 billion gallons of biodiesel and we produced a billion So we're very proud of that this year. We will produce probably around the billion gallon mark as well So having that stability in terms of the renewable fuel standard and keeping that whole is something that that we're very Working very hard to do there's been a lot of talk about changing it or reevaluating it And we feel that from our industry's perspective We've gotten on to a solid footing And feel that it's kind of the next few years are going to be very important to the growth of our industry and Biodiesel is considered an advanced biofuel EPA has designated it an advanced biofuel. It means it reduces greenhouse gas emissions by at least 50% So depending on what feedstock you use to make biodiesel out of we reduce greenhouse gashes reduce greenhouse gases Between 56 and 86 percent. So we're very proud of that and are pleased to be considered an advanced biofuel That's a little bit of an overview of my industry I don't know if I have time for questions or you want to do that at the end The feedstocks that we use to make biodiesel soybean oil is the most popular. It's about 40 Or 40 or so percent 45 percent is made of soybean oil and then the rest is comprised of recycled restaurant grease That's very big animal fats and camalina and canola make up the rest of it and a bit of algae Sure We have a lot of capacity so we certainly are Positive that we're going to meet the billion gallon mark We are around 526 million gallons that we've produced so far. So we're well on our way to meeting the one billion gallon mark And the RIN fraud that you mentioned Unfortunately, there there were a few bad actors that created these things called false RINs Which is the accounting system for how you measure biodiesel production The EPA has done an excellent job in policing them and ending fraud in the system And so we feel very confident. We're working with the obligated parties with the oil with the oil community To find a collaborative effort to make sure that all of those RINs going forward are going to be Validated and people feel very confident in the marketplace And now we will turn to Tom bias who is the CEO of growth energy who can talk about About ethanol and some of the very important policy measures there Thanks, Carol and It's pretty tough act to follow with Joanne and then they talked about both the advanced fuels and biodiesel And I guess I'm here to talk about Ethanol I represent growth energy. We have 79 plant producing members across the country With about 25,000 what we call ethanol supporters anyone that wants to stand up and challenge all this misinformation that's been perpetuated by some of the vested interests that have Expended tens of millions of dollars to try to Stop the production of renewable energy and if you look around and you listen to what's happening in Congress today it's not They trained their sights on ethanol first because ethanol Is a viable alternative? We're 10% of the market in Anytime you start to succeed in producing alternatives those who have the market aren't going to give it up and That's why you've seen a lot of negativity over the past three or four years Because we actually are producing a sufficient amount that challenges market share and we know we can do more As we move forward through the requirements of the And the goals and targets of the renewable fuel standard to get to 36 billion gallons by 2022 It's entirely doable and still bulb and a variety of fronts the groups that previous two speakers Represent as well as Cellulosic ethanol the next generation of cellulose someone asked about that question there's actually been four plants that have Put steel in the ground this year for production next year one of those plants is a member of ours They're building a bold-on cellulosic plant in Emmitsburg, Iowa Next to a corn ethanol plant they're going to capture the efficiencies of both in distribution storage marketing etc and the Corn obviously they into the corn ethanol industry comes from the local farmers But the feedstock for the cellulose will to it comes from corn stover They're going to use about 20% of the corn stover on those fields, which doesn't affect fertility doesn't affect the soil Tilt but it'll be used as a feedstock It'll produce 25 million gallons of cellulosic ethanol the byproduct being Lignin which they're going to take the lignin turn to energy which will power both the corn ethanol plant and the cellulose Cellulosic ethanol plant so the fossil fuel use at those facilities will drop to zero It's exciting new technology, but I think one thing you have to keep in mind The renewable fuel standard which set targets for cellulosic ethanol wasn't even passed until 2007 and Immediately after it passed this nation and the world experienced the worst economic recession in our lifetimes If not ever worldwide with the collapse investors lenders Went to the sidelines and so the industry and investment into the industry Went on hold We're just now starting to see people Come back into the marketplace and start to invest the hundreds of millions of dollars that it cost to build a bio refinery of next generation biofuels But the big missing component to all this Leads me sort of into my my next issue and that's the marketplace We have a renewable fuel standard that says 36 billion gallons by 2022 But we have a requirement and a mandate that 90% of all the fuel That goes into your autos and light-duty trucks be fossil fuel based oil Only 10% ethanol can go in there and so we call that the blend wall We're up against the blend wall. We consume about a hundred and thirty five billion gallons of gasoline annually in this nation 10% of that which is the limit for Alternatives is a hot as 13.5 billion gallons last year. We produced a 14.6 Billion gallons. So there's no market signal Out there for people to invest in that next generation and trust me somebody's going to crack the code on it our member plants using Corn stover other plants that are under construction use things like a Dedicated cane crop not sugar cane, but a fast-growing cane. We got you got alls wood wood waste a number of Types of feedstock so we really have a 50-state solution to our energy crisis and we can do it But we have to crack crack that blend wall and to crack the blend wall Growth energy shortly after we were formed Filed a waiver with the EPA to ask to move that blend wall from 10% to 15% and I grew up on a farm and did a lot of hard jobs in my life Nothing has been as hard as this Every possible regulatory and legal hurdle that one could imagine has been erected We've cleared every one of them, but it's three and a half years And we just finally last week cleared the last federal hurdle to get 15% ethanol into the marketplace And what's what's that do for the industry that sends the signal for that next generation? First generation is capped out at 15 billion gallons So it's not all going to come from there, but the next generation Has to have that market signal now the e15 challenge is not over While we won the regulatory battle on the federal level We have to replicate that in a number of states many states have different rules and regulations on fuel We also have to educate the consumers Because keep in mind As I mentioned earlier hundreds of millions of dollars have been spent by the the people that don't want to see our industry succeed And to run up the negatives passing out all kinds of misinformation I've been in Washington for 25 years in that 25 years. I've heard some pretty big tall tales Whoppers lies, whatever you want to call them, but never one as big as the food versus fuel A campaign that was instituted by the vested interests And let me explain why in the distillation process of the first-gen ethanol plant They primarily uses corn some use sorghum, but the only thing removed from that kernel of corn is the starch That's one third of the kernel The Co-product after we convert that starch into ethanol all the fiber all the All the protein all the oil is returned for an animal feed Now, I don't know how many of you've had some number two corn here recently to eat Nobody it's not a food crop. It goes for pigs chickens and cattle So unless you get some real good grinding teeth, you don't eat number two yellow corn But the co-product in the ethanol distillation process is a very high value high protein Feed supplement called distillers grains it comes out at 27 28 percent protein And it's one third of the volume of the original kernel of corn and 45 percent of the value of feed It's not our product is not made out of Canned corn sweet corn candy corn or popcorn. It's made out of animal feed. There's different types of corn So anyway, we have to overcome the challenges and the perceptions We have to have the right public policy on the regulatory side on the legal side Or legal if need be and oftentimes that has to take place, too And on the legislative side especially What's happening in Congress today is there's a lot of scuttlebutt about eliminating the renewable fuel standard And if any of you want to do anything you can for the next generation of fuels whether it's biodiesel advanced drop-ins Cellulose whatever it is write a letter urge them not to mess with the renewable fuel standard because What it will do it'll stop the next generation We won't stop the first generation because corn ethanol or grain ethanol is the cheapest fuel in the world We're a dollar a gallon under the price of gasoline were two dollars under the alternative octane that they can refine into Oil to make gasoline so we're gonna be around the next generation is what's being stopped So write those letters. It's the only significant energy policy This nation has had since the first OPEC oil embargo in the early 70s. It's working. We're just five years into it. We've already met gen one Requirements as Ann talked about there. They're really ramping up production on the biodiesel Component and we can do this but we can't do it if we roll it back. It'll be set in America back Thanks girl As our speakers have said, you know, starting with the Joe and in terms of thinking about market and the investment that is required in terms of looking at at Cellulose can advance biofuels to you know, what we heard from Ann and Tom with regard to thinking about policy the need to Really think very seriously about the whole role of the renewable fuel standard if we're really concerned about Particularly in terms of transportation fuels and looking at the whole role of oil in the economy and if we're really looking at what we can do in terms of what this means on fuels on security and on economic development let alone a variety of other Environmental issues. So are there other questions in our few remaining minutes? Okay, go ahead You know in the European Union It's required to have the sustainability certification. The REG provides any We don't hear in the US, but do you think that could help potentially with the market perception especially if that's not I think You know, it really helped there the perception of it. This seems like a paradox In the last few years and it seems like that kind of like proof of Really being a A number of our plants are already qualified In the United States we have Like for California to meet our standards we have totally different requirements than we do for the federal government We get tagged with this phony Charge called indirect international land use change which nobody can prove there's no scientific Unity on it. They don't even have Modeling and even the regulatory regulatory agencies at EPA and in California have said well, we know it's not it's not right yet But we're going to go ahead which is kind of a bad way to do business regulate someone before you can prove it But you know, I don't think anyone really challenges as really challenged Our our nation's farmers on the sustainability on how they produce the crop, but I do know a number of plants have Signed up and been approved for for Europe Okay I think it would extend it longer only because if you do the math a fuel consumption the United States keeps coming down And this year it's projected to well the first few months of this year It was down even though we had favorable weather in the winter months high gas prices discourages consumption and The record high prices that we've been seeing this has really put a dampening effect on it right now if you take 15 percent of a hundred and thirty It's a billion gallons. That's about What 20 billion close to 20 billion gallons? And we're producing the capacity is about 14.9 under current production So it would depend upon how fast people build it out The infrastructure, I think you had it on the infrastructure about the retailers That's another one of those challenges that we've had to meet but In in I think everyone will tell you that's not a big challenge most of the tanks that are in the retail Establishments are capable of handling up to e 100 ethanol The pumps Depends upon the age the newer pumps are are are capable of handling 15 percent ethanol. Obviously flex pumps can handle 10 15 25 up to 85 And there's kits coming that soon Will be on the marketplace for less than a thousand dollars to be able to convince one convert one But if you compare the infrastructure challenges that we face in higher blends of ethanol And I think Joanne was talking about the cars that tomorrow They're minuscule to the infrastructure changes for any other type of fuel Compare that to what would it take for hydrogen cell Or electric vehicle infrastructure or for crying out loud natural gas, you know people talking about natural gas It's a huge infrastructure cost to change over And we're still a renewable fuel too. So We think it can be done gas stations rotate their pumps every ten years roughly Especially in the higher volume areas and it's really interesting to hear about the kits I hadn't heard about that and at that low a price to do the pump conversion pretty incredible Yeah, and the only reason they needed to do that Carol and you're probably aware of this is underwriters laboratory, which certifies equipment Said they're not going to certify any existing equipment or recertify existing equipment and Then they ran some tests And used not real-world fuel but used the most acidic fuel they could find out there to see in conjunction with I think the Department of Energy and The tests were designed for failure E10 would have failed on those probably E0 would fail on it We asked him to do that they kind of declined but Okay, great, okay last question You know Well, we don't quite have the resources of our competitor that industry it starts with O and ends with L Maybe has an I in between but we've done pretty well We started national campaign Advertising first time ever for the ethanol industry a couple of years ago On all the cable channels and then last year we partnered with NASCAR to move and you know Racing series needs fuel and we provide fuel and then we provide a high-performance fuel And we got them to switch all of their cars and trucks in their top three series to E15 They've now put two minute over two million miles in competition on it Haven't had any engine issues. They got increased horsepower and they got as good if not better fuel mileage So they became also a third-party validator and for NASCAR if you're not a fan You may be in the minority because I think one in four adults are fans of NASCAR. They have like 80 million followers and This offered us a way to get to the consumer to show them the good value of what a great product and have a third-party validator so Our big challenge is is educating people about the benefits. You know, we know we're cleaner We know we're produced here in America. We know we do reduce our dependence on foreign oil We create jobs jobs that can't be outsourced. It's cleaner for the air and it's cheaper for consumers But it doesn't do you any good if nobody knows it and that's why we've tried to step up and we just two weeks ago Set in place a multi-million dollar PR campaign around the E15 That's currently out there running including sweepstakes so You can win a variety of prizes and other stuff and so far it's going well Let me add a couple of things to that one is our Existence the existence of advanced biofuels USA. We're an educational organization We are everything on our website is available to everybody around the world. We have a worldwide audience. We get about averaging like five thousand Unique visitors a month. So there's there's people using us and and we just also provide, you know Personal resource of people who call us on the on the racing issue Indy if you don't like NASCAR you might like Indy car and they race on E85 great You start our last panel, but I hope you'll go ahead and ask your question of of our speakers So I want to thank you all very very much really really important issues and there's lots more that we need to do about them