Biodiesel celebrates 25 by looking to the future01/24/2018 | Biodiesel, Soybean News
By Joseph Murphy, ISA senior communications manager
The National Biodiesel Board (NBB) celebrated 25 years of service in providing research and representation this week during the National Biodiesel Conference in Fort Worth, Texas.
An irony that didn't escape some of the attendees of the conference. With Texas leading the way in petroleum production and Iowa Secretary of Agriculture Bill Northey's confirmation being delayed at the hands of Texas Sen. Ted Cruz, the state hasn't been on Iowa's best friend list as of late.
"Before we landed the man next me asked why I was visiting Fort Worth," Brent Renner, an at-large director with the Iowa Soybean Association (ISA), said. "I told him to attend the National Biodiesel Conference. The man said, 'Isn't that a dirty word in Texas?'"
The opening session of the conference spotlighted the need for collaboration with the petroleum industry by featuring a panel comprised of petroleum marketers, distributors and refiners. Casey Schlichting, an ISA director from Clear Lake, found the conversation interesting.
"They were very blunt, and they were very honest. I thought it was good dialogue for us to hear and I valued their opinions," he said. "To keep that dialogue open between the different industries is a good thing."
While they didn't all agree on the Renewable Fuels Standard (RFS), they did all agree that electric vehicles were a common threat to the liquid fuels industry. NBB CEO Donnel Rehagen told the nearly 800 registered attendees it was essential to find common ground for the industry to flourish in the future.
"If you look at the big picture today, liquid fuels are under some form of attack," Rehagen said. "One of our goals for the next year is to broaden our base. To do more with organizations that have some, although even small, common ground."
Rehagen was the first to point out that the panel members were often on the opposite side of issues relevant to the NBB, but said there is common ground. Saying the petroleum industry recognizes the importance of the biodiesel industry and they depend on it for profitability.
"We aren't married to petroleum," Rob Underwood, president of the Petroleum Marketers Association of America, said. "We will sell anything as long as we can sell it safely and legally. The growth is there for biodiesel to make a move. "
Ryan McNutt, the CEO of SIGMA, told the group that the RFS provides them flexibility.
"My membership can't create demand we can only supply it. We sell what customers want," he said.
Chet Thompson, president and CEO of the American Fuel & Petrochemical Manufacturers, didn't hold any punches when talking about his view of the RFS.
"Let me start off by saying I come in peace," he told the group. "The refining industry has no beef with biodiesel standing alone. The RFS is certainly not a popular policy within my membership. You will never hear us talk badly about the product, but we are against mandates."
Grant Kimberley, director of market development for the ISA and executive director of the Iowa Biodiesel Board, wants a level playing field for the biodiesel industry.
"The petroleum industry will tell you they want a free market and not a mandated RFS. There is no pure free market when it comes to food and energy," Kimberley said. "Governments around the world manipulate it in different ways because of national security issues."
Passage of a tax credit by the federal government was on the minds of many that attended the conference. The NBB is asking for an extension to a tax credit that expired on Jan. 1, 2017. The industry wants the tax credit to focus on U.S. production by changing it from a blender's credit to a domestic producer's credit. Industry representatives believe that passage of the credit is getting closer but there hasn't been definitive news.
"Our impact was felt on day one. We started seeing that uncertainty Jan. 1, 2017 and so we really need to have some clear direction provided. Our real objective is some long-term consistency in that tax credit," Rehagen said.
The lack of a tax credit for the past 12 months has created a challenging business climate for the industry.
"Let's be frank. We've introduced a brand new fuel into the marketplace. That hasn't been done for 50 years," Rehagen said. "It's critical for us to have a stable policy moving forward. If you look back just a handful of years, we have not had a stable policy from Washington in that time frame."
Rehagen pointed to the uncertainty of the tax credit being off as much as on and the uncertainty of biodiesel volumes growing under the RFS as troubling for the industry. He hopes clarity will come to the industry through a tax credit and expects it will be soon.
"Biodiesel has a huge impact on the agriculture industry (adding 63 cents per bushel to the price of soybeans while reducing soybean meal by over $21 per metric ton). It's a significant portion of the success the farmer sees whenever they plant crops," Rehagen said. "The investment they (government) are making in renewable fuels is an investment in agriculture and that's not always evident to everybody. We need to sit down with the folks at the EPA and White House, and make sure that connection is made so they can better understand the impact on the decisions that are made."
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