Ethanol Blended Fuels Program · • Execu7ve Summary • Program Issues/Concerns • 2017 Program...

E15AnnualMeetingJuly11,2016

Slide#1

EthanolBlendedFuelsProgram

2016E15AnnualMTG

•  Execu7veSummary•  ProgramIssues/Concerns•  2017Program•  ProgramResults2015-2016

E15EthanolBlendedFuelsPgm

2016E15AnnualMTG Slide#2

Anti-TrustGuidelines1.ThepurposeofRFGSAistoconductcompliancesurveys.DiscussionsatRFGSAmee7ngsshouldbelimitedtoissuesthataregermanetothispurpose.2.Thereshouldbenodiscussionofcompe77velysensi7vemaNersatRFGSAmee7ngs.Inpar7cular,thereshouldbenodiscussionofmembercompanies’(a)prices,(b)costs,or(c)confiden7albusinessinforma7on,includingmarke7ngplans.3.Companyrepresenta7vesshouldnotdiscusstheircompany’sstrategiesandplansforcomplyingwithregulatoryrequirements.4.Members/Par7cipantsgenerallymaydiscusswhetherRFGSAshouldsupportoropposeproposalsforgovernmentregula7onorlegisla7on.5.Ifanyonehasaconcernthatapar7culartopicofdiscussionmaypresentanan7trustissue,theyshouldraisetheirconcernwithRFGSA.Mr.LenskicanconsultwithRFGSA’san7trustcounselasneeded.Inaddi7on,membersarealwaysfreetoconsultwiththeirowncompanycounsel.


ExecutiveSummary•  Program–Mee7ngcomplianceobliga7ons•  NonCompliance–S7llHigh,Slightdecrease•  2017AnnualUpdate–Issues/Concerns•  Accelera7ngE15FieldGrowth•  NISTBlenderPumpProtocol/Update•  FieldImplementa7onIssues•  MidlevelEthanolBlends–EFF•  Ongoing-RFGSAAssistance/Support


RFGSurveyAssociationInc.

•  RegulatoryProgram/Associa3onObliga3on•  Independent,501(c6),Nolobbying–‘1994•  Design&Implement,highquality,unbiasedCompliancePgmsto

“assist”FuelsIndustry•  Proven“IndustryStandard”,FuelsCompliance•  Voluntary,DuesandFeeforServicePgms-TurnkeyPgms&Process•  ProgramAgreements/Terms&Condi7ons•  Lowcost/1employee/Outsourced•  Pgmbudgets-directcosts+shareofOHexp.•  AnnualAudit•  AllFederal&somestateFuelCompliancePgms


•  BlendPumpFilterContamina7onStudy•  BlenderPumpSamplingStudies

•  UpdatedProtocol–PM/RFA/GEendorsed-EPAApproved

•  RetailerSupport-Significant•  PNCAssistance/Proac7ve•  Retailers/States/EPA/PumpManufacturers

•  NIST–FormalBlenderPumpProtocol•  RFGSA–comments–lowestcost/bestvalue•  NISTapproved/published4/16•  RFGSA–NISTprotocolcomparison7/2016

RFGSAProgramSupport-Field


SurveyProgramStatus

•  Accelera7ngE15FieldGrowth– Opera7onalIssues/concern/Support

•  2017AnnualUpdatesdue6/3– 80%Companies/68%(vol)

•  RFAGuidancetoitsMembers– RFGSA/GE/RFAMee7ng–6/16/16

•  Concerns/NextSteps

•  PendingFlexFuelRule(EFF)


IndustryConcerns

•  RFGSABoardInfluence:–  RFGSA–Reg.Obliga7on-Independence–BODnoinfluence

–  ProgramAgreements-organiza7onalstructure–  RFGSAbylaws-BODApprovesoverallAssocia7onbudget

–  RFGSABODpar7cipa7on?•  SamplingprotocolEvalua3on:–  “One”originalASTMsamplingprotocol-EPAApproved.

–  RFGSAblenderpumpstudies–updateProtocol-PM/RFA/GE–Endorsed-EPAApproved-

–  PNCs3ll–high,20%improve,butotherissues


•  Fiduciaryresponsibility:– “Best”costop7on–tomeetRegulatory/EPAprogramrequirements•  Register/Fund/Measure/Support/Ac7on

– FullETOHIndustryPar7cipa7on/MeetObliga7on–  Etohnon-par7cipant-(1/3)

– RFGSAProvenTurn-KeyProcess–LowCost,ComplianceStandard,EPAApproved

–  IndustryCostSharing*•  =IndustryComplianceSuccess

IndustryConcerns

*ETOH/OILadop7onofE15/EFFcommerce


•  Ethanol/E15Commerce“requires”,EPAapprovedSD&MMP(retailsurvey)– AllEthanolProduc7on–E15Eligible/Obligated– NotOp7onal

•  RFGSA:– SurveyDesign&Budge7ng– 2017AnnualUpdate–duenow– ProgramObliga7on/Termina7on-8/01

•  Discussion

NextSteps


2017Program

•  ProgramStatus•  SurveyDesignPlan•  Es7matedBudget/Issues•  OtherIssues•  Summary


2017SurveyDesign

•  LocalGeographic– PrimaryfocusonE15areas– AdapttoRapidProgramgrowth(real7me)

•  5000Samples•  PNCExpansion– NonregisteredE15sites?– E10non-compliance?


2017Est.ProgramCosts

•  2017Budget$1.2M– ApplyProgramCredits-$300k-(S900Kbilled*)– Producer-50M-$5300*

•  SiteBlender-$100/loca7on•  Blender$500-1500-MinimumDues

•  IndustryComplianceSuccess•  MeetObliga7ons/Etohnon-par7cipant(1/3)--costs•  Annual–paymentissues-RFGSA–willpursue•  Allow“ProgramCredits”-Automa7c(Rev/billings)

*-Assumes–currentpar7cipa7onlevels&applyingpgmcredits.


RFGSURVEYASSOCIATION–E152016-2017PROJECTED


SamplingProtocolUpdate

•  RFGSABlenderPumpSamplingStudies– PM/RFA/GE–Endorsed–EPAapproved

•  Protocol:– Flush2gallon– Procure0.13gallonsample(HoseResidualonly)– SummerRVPaddi7onalsample– MeetsASTMD5842&D4057

•  RFGSAImplemented8/29/15•  RFGSAFieldReviewedbyIowaDOA


•  Improvedsampletestperformance(20%)•  SampleNon-compliance-s7llhigh– BlendingAccuracy(76%)– Highblends(>15.4%Etoh)–YTD82%PNCsHigh

•  BlenderPumpSamplingStudy–July/2016– Compare-NISTprotocols– PublishData

SamplingProtocolUpdate


•  SurveyData–Lessonslearned•  SuccessFactors

–  CorrectEPALabel(Sept16-May31)/Re-label(June1–Sept15){RVP}

–  Targetvalues-Passingavg.13.6-13.9%– Mul7pleVariables:Blendstockvaria7on,targetvalues,seasonalcalibra7ons,pumpvalvevaria7on,tankproductvalues

–  ControltheVariables–“INCREASEDTARGETVALUES”

•  RFGSAcommunicateslessonslearned

SiteBlendingSuccess


RFGSAProgramSupport•  EPA&RFGSAFuelComplianceleNers•  EmailPNCtoProgramPar7cipants– PNCdetails,HelpLinks

•  TrainingVigneNes–websitedownloads– ReportAccess,Sampleac7on,Managingusers

•  Non-memberPNCresponsesystem•  RFGSA–FieldComplianceAssistance/Training


•  RFGSAfieldsupportonprogramcomplianceissues•  Configura7on&labeling•  Blenderpumpstudies/Samplingprotocolupdate•  PNCmanagement/WebSiteresolu7on•  Illinois(2014),Iowa&Minnesota(2015)•  2016Scheduled–Minnesota,MajorRetailers,TBD

RFGSAFieldComplianceWorkshops


•  EthanolFlexFuel(EFF)•  FTCLabeling

OtherIssues


EFF–SurveyDesignElements

•  E16-E85scope•  LeverageE15SamplingProgram-êCosts•  Quarterly,RandomsamplingE85loca7ons-(3000),Siteblenders–certainty

•  FocusonParentfuels(E10/E85)andavailablemid-levelblends

•  Tes7ng-Etoh(vol%),RVP(summer),benzene,sulfur

•  PNC’s,surveyfailure2016E15AnnualMTG Slide#21

EFFSurveyParticipation

•  Uponrulepublica7on•  Requiredtopar7cipateinretailsurvey&RFGSAsurveyregistra7on– EthanolintendedforuseinE85–Producers,Blenders&Siteblenders-mid-levelfuels

•  E85retailloca7ons – Requiredtoallowretailsurvey–PNC– SurveyDataaccess–RFGSAregistra7onrequired


EFFProcess/Status

•  RevisedEPARuleScheduled(04/2016)–Summer(2017)implementa7on

•  RFGSAready-1/2017–AnnualUpdate– AnnualUpdateProcess–4/11/16– Required-ProgramAgreement/websiteUpdates

•  RuleDelayed(June1)-pending?•  TargetImplementa7on-1/2018?


EthanolBlendedFuelsAgreement

•  Released4/2016•  Effec7vewithEFFFinalRulePublica7on– Noprogramchangesun7lpublished

•  MinorAgreementChanges•  FacilitatesEFFobligatedpar7espar7cipa7on•  RFGSAEmailprimarycommunica7on


FTCEthanolLabeling

•  Effec7ve–July14,2016•  E15LabelExemp7on•  SizeandColor–similartoE15%label–  (3”X2.5”orange/black)

•  Mid-levelBlend-exactethanolconcentra7onsorroundtothenearestmul7pleof10– Example,retailerscanlabelfuelsat25and34percentconcentra7onsas30%Ethanol.

•  ForHigh-levelBlends-samerulesorlabelthefuelas‘‘51%to83%Ethanol.’’


LabelExamples

2016E15AnnualMTG 26

2015OperationalHighlights

•  RegisteredPar7cipa7on–65+%ethanolproduc7on–  SiteBlenders=60companies,208registeredloca7ons–  Producer/Blenders=89–  Refiner=2– Non_SBE15emergence

•  SurveyDesignModifica7ons– UpdatedSamplingProtocolforBlenderPumps–  FullSummerSampling

•  PNC’s–trendinghigher–  Lowresponse


•  TotalRequested–4722(4092)Analyzed•  Emp7es–13.3%,37%(PermClosed)– Refusals–1.3%

•  E15EthanolPNC’s–65%(BlendingAccuracy)– 90%ofPNCsblendedhigh

•  TotalSitePNC–5.5%•  OverallPNC–9.4%vs.8.12%(2014)•  PNCResponseRate–low-16%

2015E15EOYResults


•  TotalRequested–1792,(1656)Analyzed•  Emp7es–12.6%,(37%)PermClosed– Refusals–0.6%

•  E15EthanolPNC’s–71%(BlendingAccuracy)– 82%ofPNCsblendedhigh

•  TotalSitePNC–4.8%•  OverallPNC–8.0%vs.9.4%(2015)– PNCresponserate–beNer,low(25%)

2016E15YTDResults


Detail-2016YTDE15Results

*AsofMay25,2016

*


MAPYTD-2016Participants


PNCDiscussion•  76PNCs(excludingrefusals)for2016YTD

–  67Members/9nonMembers–  WebsiteResponses–16member/3non-member(25%)

AllPNCssinceProgramStart


•  2017AnnualUpdate–Nextsteps•  IndustryCommitment/Par7cipa7on/Support•  Surveyprogrammeetscomplianceobliga7on•  HighPNCratewithlowresponse•  Rapidfieldprogramgrowth/Issues•  PendingEFFRule•  RFGSAongoingprogram/fieldassistance•  NextMee3ng–July17,2017,9:00AMET

Closing


•  Availableonwebsitefordownload:•  Logintowebsite–www.rfgsa.org/Memberlogin

•  E15icon-Select•  Downloadstabtopofpage– 2016E15AnnualMee7ng–7/11/16

Slide#342016E15AnnualMTG

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