Biofuels Credits Reinstated - DTN

Published in DTN - Jan. 3, 2013

STREATOR, Ill. (DTN) -- Congress reinstated the biodiesel blenders credit and extended the cellulosic biofuels producer tax credit as part of the package to avoid falling off the fiscal cliff.

The House of Representatives on Tuesday passed by a vote of 257-167 a bill to avert a set of automatic tax increases that would have gone into effect Jan. 1. The bill passed the Senate 89-8 Monday and is expected to be signed by President Barack Obama.

Under the legislation, the $1-per-gallon blenders credit for biodiesel and renewable diesel which expired Dec. 31, 2011, will go back into effect retroactively for 2012 and extend to the end of this year.

"It's been a long year with a lot of missed opportunity and lost jobs in the biodiesel industry," said Anne Steckel, vice president of federal affairs at the National Biodiesel Board in a statement released late Tuesday. "In the coming months, because of this decision, we'll begin to see real economic impacts with companies expanding production and hiring new employees."

The $1-per-gallon biodiesel tax incentive was first implemented in 2005. Congress has allowed it to lapse twice, in 2010 and again in 2012. Under the legislation approved by the House on Tuesday and first passed by the Senate on Monday, the incentive will be reinstated retroactively to Jan. 1, 2012, and through the end of 2013.

American Soybean Association President Danny Murphy applauded the decision to reinstate the biodiesel tax incentive, calling it a boon for soybean farmers.

"...The extension of the dollar-per-gallon credit retroactive to 2012 and through 2013 is also a significant win for the burgeoning biodiesel industry, an important market for soybean growers," Murphy said in a statement issued Wednesday. "More than half of all biodiesel produced in the U.S. uses the oil from American-grown soybeans as a feedstock, which helps to grow our domestic fuel supply and creates soy meal as a byproduct, providing protein-rich animal feed for livestock, poultry and aquaculture."

In addition to reinstating the biodiesel tax credit, the legislation also extended two cellulosic biofuels provisions.

Under current law, facilities producing cellulosic biofuel can claim a $1.01-per-gallon production tax credit on fuel produced before the end of 2012. This provision was created in the 2008 Farm Bill. The bill passed this week extends this production tax credit for one additional year, for cellulosic biofuel produced through 2013. In addition, the definition has been expanded to include cellulosic biofuel production from algae-based feedstocks.

The bill also included an extension of the 2008 Farm Bill's 50% capital costs expense bonus depreciation for cellulosic biofuels facilities. The provision extends the depreciation for one additional year for facilities that begin operations before the end of this year. This also expands the definition of qualified cellulosic biofuel production to include algae-based fuel.

"This one-year extension of the cellulosic producer tax credit and accelerated depreciation provides some measure of certainty to ensure that 2013 will be a year of growth and milestones for the advanced ethanol industry," Bob Dinneen, president and CEO of the Renewable Fuels Association, said in a statement Wednesday morning.

He added the cellulosic fuel producer's credit "will accelerate E15's entry into the marketplace this coming year."

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Wild Game Feed in Central City!

Recently, the employees at the Central City ethanol plant held their first ever “Wild Game Feed.”  Employees were encouraged to sign up and bring a dish made of wild game as well as side dishes for the event.  The event was enjoyed by everyone who attended and employees have already began talking about what they can bring to the next feed!

Some of the dishes included pheasant bites with mushrooms, deer roast, deer sausage, turtle gumbo, deer chili, apple jelly duck kabobs, fried crappie, deer snack sticks and deer heart. Yes, you read that correctly - Turtle Gumbo! Check out the recipe below, as well as the recipe for Perfect Pheasant.

Turtle Gumbo

  • 1 box Zatarains Gumbo Soup Mix (includes rice)
  • 1 bag shredded cabbage
  • 2 cups Andouille Sausage
  • 2 cups Deboned turtle
  • 2 tsp Filé
  • ½ chopped seeded Jalapeno
  • 1 c wine (optional)
  • Chicken broth (optional)

Following instructions on the Zatarains box, simmer soup until rice is tender.  Add cabbage until tender.  Add rest of meat, Filé, and jalapeno (could add Cajun seasonings as well).  Let simmer another 30 minutes or so.  You could add chicken broth or wine to adjust the thickness of the soup.

Recipe provided by Gary Bialas

Perfect Pheasant

  • 2 pheasants, meat cut from bones and in bite size pieces
  • ¼ c flour, seasoned with salt and pepper
  • 4 Tbsp oil
  • 4 Tbsp butter
  • 1 garlic clove
  • 1 cup chopped onion
  • 1 cup Sauterne or dry white wine
  • 1 Tbsp sugar
  • 1 small can chopped mushrooms
  • 1 small can sliced black olives
  • 1 ½ cups chicken broth

Dredge pheasant meat in seasoned flour, shake off excess flour.  Saute in shortening and butter.  Remove pheasant to slow cooker or roasting pan.  Marsh garlic clove in skillet juices, add onion, Sauterne, sugar, mushrooms, olives and broth.  Heat to bubbling and simmer five minutes.  Pour over pheasant.  Heat in slow cook/crock pot on low for 6-8 hours or in covered roasting pan at 325 degrees for at least 1 ½ hours.  Serve with wild rice or white rice.

Serves 6.

Recipe provided by Dwayne Braun

Markets, Not Mandates, Shape Ethanol Production

The Main Street Economist: Agricultural and Rural Analysis | Federal Reserve Bank of Kansas City, Issue 5, 2012

by Nathan Kauffman, Economist

The 2012 drought has reignited the food versus fuel debate. After cutting U.S. corn production below recent years’ consumption, the drought sparked a U.S. grain shortage and sent global food prices soaring. As the grain shortage intensified, pressure to relieve the shortage by easing ethanol mandates mounted. Escalating ethanol mandates under the Renewable Fuel Standard (RFS), which fueled the expansion of the U.S. ethanol industry, will soon exceed the amount of ethanol than can be used in current U.S. gasoline blends. Some industry participants believe that a waiver of the mandate has the potential to reduce ethanol production and relieve high corn prices.

However, ethanol production may not decline significantly, even if the mandates are waived temporarily, a request the EPA recently denied for the 2013 mandate. The RFS mandates stipulate ethanol blending for the next decade. A temporary waiver would not relieve the pressure on current production to build credits to satisfy future mandates

Read the full report here

Employee Spotlight: Nathan Lakers

Name: Nathan Lakers

Title: Senior Merchandiser

Location: Central City, Ord & Otter Tail

Education: BS of Science in Business Administration; Majored in Finance, Banking and Investment Science from University of Nebraska at Omaha

Hometown: Gretna, NE

How long have you been with Green Plains? I was originally hired on as the Feed Merchandiser for the Fergus Falls facility in March 2011.

Describe what you do with Green Plains? I am currently responsible for the sale and coordination of distillers out of the Central City, Ord and Otter Tail facilities. The main focus is inventory management, which is a balancing act between optimizing the value to the plant while keeping inventories at controllable levels. This includes price discovery, arbitrating logistics, etc.

What did you do prior to Green Plains? I worked for a middle market M&A firm that deals with companies in the ag, food and renewable fuels industries as an analyst.

What made you take a look at Green Plains? With my past experience, we had a lot of focus on companies in the ethanol industry. In the M&A world, the ethanol industry is seen as a place for a lot of consolidation potential. So it was really a timing thing. Green Plains has a great reputation in the industry for innovation and financial stability so it was a clear choice for me when searching for a career.

Is this what you excepted to do with your background/education? With a BS in Banking, Finance and Investments, I wasn’t expecting to be in the marketing field, but I am more than happy in this career. The trade world fits my personality well and is definitely a place I want to stay.

What’s your favorite thing about your job? My favorite thing about trading distillers is the fast-paced work environment. Every day poses multiple new opportunities to address!

Favorite thing about Green Plains? I love how well we have performed in comparison to the competition. Green Plains is a company I am proud to be a part of.

How important do you think the role of ethanol is in our future? It has proven that it can substantially reduce our dependence on foreign oil while keeping U.S. dollars and jobs at home. I think it will continue to have a big role in our future.

How important is ethanol to our small rural communities? Ethanol has done great things to rural communities all around the Corn Belt. From the people who work directly for the plant to the trucking companies that haul corn in and feed out, the job creation is HUGE!

What makes you excited to get up in the morning? Closing a deal! I am always searching for new venues and buyers to create relationships with.

What is one of your long-term goals? A long-term goal of mine would be to continue a career in trading as well as furthering my education. I would like to look into an EMBA program in Agribusiness that can fit around my work schedule.

When you’re not working, what do you like to do for fun? I am a big golfer and hunter. I, of course, don’t get to do either as much as I would like.

Advice or words of wisdom for people who may be interested in a future with Green Plains? Green Plains gives employees personal fulfillment. It’s good to be part of a team with good communication and collaboration to get the job done right.


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