Energy Issues Top the Political Agenda for 2014

Posted by Ed Burke on Feb 25, 2014 12:52:00 PM

Main energy topics in the headlines for 2014 include the Crude Export Ban, the Keystone Pipeline, the Climate Change Action Task Force, RFS Volumes, and an expected final ruling on the Tier III mandate from the EPA. 

State of the Union 2014
(Photo Credit: Amanda Lucidon, WhiteHouse.gov Official Photo)

There is a lot of work to be done on energy infrastructure in the US - something that became especially clear with record breaking spikes in Natural Gas pricing to the New England and New York markets on the heels of the Polar Vortex. This topic is supposed to be the highlight of the Administrations Quadrennial Energy Review. However, the most obvious energy infrastructure and transport improvement - the Keystone XL pipeline is still bogged down in its 5+ years of paperwork, with no decision in sight, even following the most recent Environmental Study which found there would be no major negative impact environmentally from the project. The State Department review was expected after the President's State of the Union Speech, with a Presidential decision to follow but so far as of late February we haven't seen any movement on the issue. 

Renewables are also on the table - The EPA's expected final RFS volume reductions should be out this month (the first time the EPA will have used waiver power to decrease, not increase, volumes). The tax credits for Biodiesel and Cellulosic Biofuels also expired at the end of 2013, but if you recall, last time these were reinstated retroactively. The EPA is also expected to release its final ruling on Tier 3 Gasoline Standards, which would affect the sulfur content of gasoline vehicle emissions.

I wrote a more comprehensive article for the February issue of Oil & Energy Magazine on the topics on the Energy Agenda for 2014, you can read that article by clicking here 

What do you think the priority items on the Energy Agenda should be?    

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Topics: Energy Independence, Biodiesel Tax Credit, President Obama Address, RFS 2, EPA Mandate, US Crude Exports, Cellulosic Ethanol, Keystone XL

The Revival of the Biodiesel Blender'sTax Credit - Pro or Con?

Posted by Ed Burke on Mar 13, 2013 1:52:00 PM

In a move that was semi-surprising given the budget cut debates surrounding this years fiscal cliff talks, not only did law makers reinstitute the Biodiesel Blender Tax Incentive of $1 per gallon, but they did so retroactively to 2012.

The positives - or potential positives - of this decision are an estimated 30 thousand jobs sustained by the cut (112,000 versus a projected 82,000 jobs without the credit in place). Additionally in theory the credit serves to make domestic biodiesel competitive with Brazilian corn ethanol - currently ethanol blending into gasoline is the cheapest method of generating advanced biofuels to satisfy the EPA's RFS mandate. However, even with the credit in place, biodiesel still runs a significantly higher cost than ethanol. If biodiesel production does step up as a result of the credit and the RFS mandate, that could potentially prove a benefit for the United States economy, especially given that biodiesel is domestically produced, whereas we import most of the corn used for ethanol from Brazil because domestic corn does not satisfy the RFS "advanced" biofuel requirement.

On the negative side - given that ethanol is often cited as contributing to corn pricing spikes on  commodity and consumer product levels, it is reasonable to assume that increased biodiesel production and demand would have the same effect on soybean commodity prices as well as food items. Additionally, most of the projected benefits of reinstating the credit rest at least somewhat on the assumption that it will make biodiesel pricing competitive enough to compete with Ethanol - this is not really the case currently, and pricing structures on both products could prove unstable due to market volatility and competing uses for each items base commodity.

At the end of the day - my thought is a tax incentive on a mandated item is uneccesary, and appears more so given the uncertain nature of the benefits, and the solid $2 billion dollar price tag attached to this cut.

I wrote an article for Oil & Energy Magazine on this topic, if you want more info on the details of how the RFS mandate's ins and outs relate to this tax credit and why Brazilian ethanol's competitive advantage is tough to beat even with a dollar per gallon tax incentive. You can read the article online here: Oil & Energy Magazine - Feb 2013  or as a PDF by clicking here: Biodiesel Blender Tax Credit

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Topics: Commodities, Biodiesel Tax Credit, Fiscal Cliff, Ethanol, RFS 2, EPA Mandate

Déjà vu all over again

Posted by Ed Burke on Mar 11, 2011 6:43:00 AM

While still in the winter of 2011 we return to a season of discontent. Oil prices are soaring, food prices are soaring, as well as other commodities. The recent Biodiesel Conference was very much counter seasonal with many warm summer breezes:

  • the tax credit of 1.00/gallon came back
  • RIN values have risen dramatically making biodiesel competitive to petroleum diesel in price

Many argue that Massachusetts was very wise to insist on waste feedstock for biodiesel, which takes the food price argument off the table.

Massachusetts has demonstrated a very successful program, so successful that the Massachusetts state mandate may be postponed indefinitely to rely on voluntary efforts.

As energy independence and reducing spending (especially on foreign energy spending) dominates the news, it is great to have a great story in biodiesel.

I happen to be especially proud of Massachusetts – remember, Massachusetts is where America started!

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Topics: Biodiesel Massachusetts, massachusetts biodiesel mandate, Waste Feedstock Biodiesel, Energy Independence, Biodiesel Conference, Biodiesel Tax Credit

Let’s Get Blogging

Posted by Ed Burke on Jan 2, 2011 6:38:00 AM

As we start 2011, God Bless America!

Here are a few 2010 issues I’d like to discuss and get some industry input.

The Massachusetts Biodiesel Mandate, will we see any progress this year?

The Biodiesel Tax Credit is back and RINS values are soaring, does this play a role for Massachusetts?

Moving toward reducing America’s dependence on foreign oil, will solar power and electric cars become more accessible?

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Topics: Biodiesel Massachusetts, massachusetts biodiesel mandate, Biodiesel Tax Credit, Biodiesel, Solar Power, RIN values

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