2020 State of the Ethanol Industry Geoff Cooper President & - - PowerPoint PPT Presentation

2020 State of the Ethanol Industry

Geoff Cooper President & CEO Renewable Fuels Association 2020 National Ethanol Conference Houston, Texas

U.S. Ethanol Production

0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 Billion Gallons

1996 drought 2012 drought 2019 SREs & trade wars

Source: Energy Information Administration (2019 estimate based on Jan.-Nov.)

Small Refinery Exemptions

5 10 15 20 25 30 35 40 45 2013 2014 2015 2016 2017 2018 2019

Small Refiner Exemption Petition Decisions

Granted Denied Pending Ineligible Decided by Obama Administration Decided by Trump Administration

Source: U.S. Environmental Protection Agency

Ethanol Exports and Imports

200 400 600 800 1,000 1,200 1,400 1,600 1,800 2012 2013 2014 2015 2016 2017 2018 2019 Million Gallons

U.S. Ethanol Exports to Brazil, Canada, China, and Rest of World

Rest of World Canada Brazil China

• 200

400 600 800 1,000 1,200 1,400 1,600 1,800 2012 2013 2014 2015 2016 2017 2018 2019 Million Gallons

U.S. Ethanol Imports

Source: U.S. Census Bureau, U.S. Department of Commerce, U.S. Department of Agriculture

2019 Economic Impacts

• 68,684 direct jobs
• 280,327 indirect and induced jobs
• $43 billion contribution to gross domestic product (GDP)
• $23 billion in household income
• $8 billion in tax revenues
• Displaced 559 million barrels of imported crude oil,

keeping more than $30 billion in U.S. economy

Record E15 Sales

• 1,000,000

2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000

Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19

Gallons Sold

Minnesota Monthly E15 Sales

EPA Summer Volatility Control Season

Nationwide E15 sales were approximately 500 million gallons in 2019

trump

Seven Days in December

• “Phase One” trade deal reached with China
• EPA publishes final 2020 RVO with (some) SRE reallocation
• EPA withdraws problematic RFS “reset” proposal
• EPA announces it will revisit 500 MG remand volume
• USDA commits to biofuel infrastructure program and EPA

promises to streamline E15 regulatory burdens

• House passes USMCA
• President signs spending bill with biofuel tax extenders

“The only thing worse than being blind is having sight but no vision.”

—Helen Keller

The “Three Es”

• Energy Security
• Economic Development
• Environmental Benefits
• Clean Octane
• Carbon Reduction
• Choice & Competition

The “Three Cs”

Ethanol’s Octane Advantage

84 93 94 95 101 104 107 110 114 117

70 75 80 85 90 95 100 105 110 115 120 Gasoline Blendstock n-Butane Alkylate Reformate Benzene Toluene Xylene MTBE Ethanol Methanol Octane Number (AKI)

Blending Octane Number (AKI) of Various Gasoline Octane Sources

Regular grade pump gasoline (87 AKI)

Extremely high volatility Significant contributors to tailpipe pollution Banned in 26 U.S. states Not approved by automakers Known human carcinogen

Sources: RFA; DOE; Chevron; MathPro, Inc. BTX Aromatics

Ethanol Carbon Intensity in California

88.5 59.3 95.9 100.9

50 55 60 65 70 75 80 85 90 95 100 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2011 2012 2013 2014 2015 2016 2017 2018 2019 Carbon Intensity (g CO2e/MJ)

Carbon Intensity of Gasoline and Ethanol Under California LCFS

Ethanol Gasoline

• 41%
• 8%

“While the law of competition may be sometimes hard for the individual, it is best for the race…”

—Andrew Carnegie

Low Carbon Octane Standard

• Nationwide minimum octane requirement (preferably 98 RON)
• Source of octane boost must reduce GHG emissions
• RVP regulatory parity for all ethanol blends
• Streamlining EPA’s fuel certification process
• Substantially revising EPA emissions models (e.g., MOVES)
• Retail infrastructure compatibility with higher blends
• CAFE/GHG credits for FFVs and HOLC optimized vehicles