Energy Conference focuses on profitable energy independence

By Huggins Consulting Group LLC | October 05, 2017

Competitive landscape, innovative technologies and emerging energy policy were hot topics as a diverse group of nearly 150 thought leaders, industry representatives, researchers and suppliers convened in the heart of renewable energy production for the third annual Energy Conference in Des Moines, Iowa, September 11-13.

“We brought together public and private entities to discuss energy policy, emerging trends, and profit-driven solutions for American energy independence,” explains Conference Host Dawn Carlson, PMCI president and CEO. ”Our line-up includes presenters from the various liquid fuel industries and perspectives from each stage of the production and marketing process.”

The diverse and powerful line up did not disappoint. The program sessions featured spirited and productive exchanges with different perspectives challenged but also with common ground identified.

 

Fuels Policy Filled with Questions

Fuel policy was addressed significantly during the two days of educational sessions. When looking at the political landscape, need for a long-term energy policy was a common thread among presenters.

“We don’t all agree on everything, but one thing we do agree on is the uncertainty,” said Donnell Rehagen, CEO of the National Biodiesel Board. ”That is the biggest challenge we have to growth.”

The Renewable Fuels Standard, in place since 2007, has been a significant driver for industry growth. Yet, there is an overall consensus that the market has evolved and change is needed.

“Clearly, based on the numbers, [the RFS] worked great for the first generation,” said Michael McAdams, president of the Advanced Biofuels Association. “We now produce over 2 billion gallons of biodiesel and ethanol producers exported over a billion gallons on top of what we sold in the U.S. last year. That’s a great accomplishment for America.

“Yet, we have less than 300 million gallons of cellulosic ethanol,” he continued. “There is something wrong systemically with the program. It doesn’t give the banks the confidence to invest.”

In addition to long-term structure, industry leaders in general also look to adopt a reasonable renewable fuel volume obligation (RVO). Production levels remain essentially flat, while the industry leaders say they have the capability to generate more product.

“We are very capable of producing larger volumes,” said Rehagen. “The volumes that our industry produced in 2015 are higher than what the EPA set for the required volume in 2018. It makes no sense what so ever that capacity and ability is not a component of the equation, much less whether they should be trying to pull those numbers high to feed more investment.”

Several other policy-related c\topics were discussed. The temporary waiver recently imposed on Clean Air Act RVP regulations to offset the hurricane-related distribution challenges inspired significant discussion regarding the long-term validity of those rules. Also, most industry insiders agree there will not be a change in the point of obligation. Yet, perspectives on the biodiesel tax credit are much less aligned with differing opinions on who should get the credit—producers or blenders—and if it will happen at all.

 

Broadening Our Competitive Scope

The competitive landscape was another heavily discussed topic, with perspectives about opposition varying depending on the particular industry sector.

Competition at the micro level remains between ethanol and biodiesel, with a battle to see which renewable fuel takes the lead in market share and growth. Additionally, there also is the ongoing rivalry between petroleum and biofuels, with mandates for renewable fuels at the forefront of contention. Yet, an emerging idea is the need for the industry to take a more high-level, macro approach to competition.

According to Dr. Brian Conroy, with BConroy Consulting and the Texas A&M Energy Institute, the competition equation is shifting to liquid fuels versus electrification.

“The power sector is making more progress on carbon emissions than the transportation sector,” explains Conroy. “If the pressure for managing carbon continues to grow, I don’t think the next generation of biofuel development offers the solution and the electrification of transportation becomes much more viable.”

Alternatively, Conroy suggests, there is potential for the ‘virtual electrification’ of transportation, where policy shifts to a broad carbon credit encompassing the entire energy economy and transportation buys carbon credits from the electrical industry in order to meet its obligation in emissions reduction.

“In this scenario,” he adds, “the petroleum side and the biofuels side are in the exact same position, both rooting for liquid fuels.”

 

Technology Takes Time

The final presentation of the Conference focused on emerging technologies—examining several industry projections—from the end of car ownership and emergence of autonomous vehicles, to predictions of a mass shift from liquid fuel cars to electric vehicles. Fuels Institute Executive Director John Eichberger offered an intriguing sneak preview of the future, adamantly insisting that change will not occur overnight.

“The market changes slowly,” Eichberger explains. “Disruptive change is possible, but this is not the smartphone market. Vehicles are typically our second most expensive asset and consumer resistance to change shares a direct correlation to the cost of goods."  

Siting the slow emergence of hybrid and electric cars, Eichberger offered a few observations regarding transformation in the marketplace: consumers need to be educated; retailers need demand to drive investment; and the auto industry needs fuel availability to deliver vehicles—fuel resources must precede production. In addition, building on the theme of the conference, he concluded cross-industry collaboration is critical to new product success.

The 2017 Energy Conference was different from other similar events because of its diverse attendees from energy sectors throughout the country, according to Carlson.

“This unusual event brings together a wide range of energy experts, on a national scale—from producers to retailers—to collaborate under one roof with hands-on education, compliance updates and networking aimed at driving profits,” stated Carlson.

She went on to share, “A gathering of this type rarely happens in our industry.  It just confirms the importance of securing an energy independent future for America.”

To learn more about the 2017 Energy Conference and to view the complete speaker line-up and available presentations, please visit www.energyconf.net.