Graham Noyes

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Graham Noyes is a Partner in the Energy Development practice group and joined the firm after seven years in the commercial sector of the biofuels industry. Graham's practice focuses on the development of large scale renewable energy and water projects, Renewable Fuel Standard representation, and the biogas and biofuel sectors in particular.


Articles By This Author

Army Corps of Engineers Will not consider GHG impacts

The Army Corps of Engineers will not consider GHG impacts in its environmental review of PNW coal export facilities. See  for the testimony of Acting Chief of the Corps' Regulatory Program, Jennifer Moyer.  Ms. Moyer testified before yesterday before the House Committee on Energy and Commerce on the subject at a hearing titled, "US Energy Abundance:  Regulatory, Market and Legal Barriers to Export."

CARB Proposes New Regulations for Alternative Diesel Fuels

In a public workshop held yesterday, the California Air Resource Board discussed its proposed new regulations for alternative diesel fuels as well as conventional diesel fuels.  There are a wide range of issues on the table which can best be reviewed on the CARB website for the proceeding.  Of particular interest to the advanced biofuels community, CARB is proposing a phased process for introducing alternative diesel fuels to the California market.  Prior to supplying any alternative diesel fuel to market, a producer would need to obtain a Memorandum of Exemption (MOE) granted by CARB.  I raised the issue that the language was sweeping and would perhaps be more restrictive than the federal standard established by the Fuels and Fuel Additive Registration system found in 40 CFR Part 79 (FFARs).  FFARs authorizes producers to provide some pre-commercial supply which can be highly valuable to companies testing and proving out new fuels for the marketplace.  CARB officials who attended were receptive to further input on this issue during the public comment period.  CARB encouraged public comments by June 24th if possible though the formal period is longer than that. 

Fourth White Paper Released by House Committee

The House Committee on Energy and Commerce released its fourth white paper on the Renewable Fuel Standard.  The white paper discusses the energy impacts of the RFS and the changes in US energy demand in the five years since the RFS passed.  The paper calls for comments regarding the impact of the RFS on demand, petroleum prices, and how the RFS could be improved to better meets its energy security goals.  The next House white paper will address fraud issues.  Comments on the RFS energy white paper are due by June 21st.

US Federal Social Price for Carbon Skyrockets

The Obama administration took another step forward with its greenhouse gas control program yesterday when it quietly posted its "Technical Update of the Social Cost of Carbon for Regulatory Impact Analysis under Executive Order 12866."  Executive Order 12866 was issued by President William Clinton on September 30, 1993, and established broad principles of regulatory process including risk assessment.  In the recent Obama Technical Update, the social cost of carbon for 2020 increased in value from a range of $7 to $81 per ton, to a revised range of $12 to $81.  The increased range will support more rigorous regulations with the first example being in the domain of microwave efficiency.  Businesses and industries in the energy sector will be well-served to evaluate the impact of the revised risk assessment on their activities.

Voting Underway for Biofuels Digest Hottest Partners List

Voting is underway for the 2013 Hottest Partners in Biofuels and BioBased Products, a poll conducted by our friend Jim Lane of Biofuels Digest. Poll categories include:

  • Distributors
  • Engineering, procurement & construction
  • Enzymes, yeasts & sugars
  • Feedstocks (energy crops)
  • Feedstocks (gases and residues)
  • Finance (early-stage)
  • Finance (commercialization)
  • Lab services
  • Pretreatment systems
  • Professional counselors & consultants (legal, finance, etc)
  • Separation, microharvest, informatics & catalysis systems and services
  • Processing systems and services
  • Vehicle & vehicular equipment systems
  • R&D Partners
  • Strategic customers (fuels)
  • Strategic customers (bio-based products)

We encourage all Digest subscribers to vote. Of course, we'd appreciate your vote. Stoel Rives is listed in the Professional Counselors category.

If you are not already subscribing to the Digest, we recommend it as an informative and sometimes entertaining daily report that is available for both the biofuel and the biochemical industries. You can subscribe here.

Hottest Partners polling info is here.

RIN Futures Become a Reality

In a development that will increase liquidity and transparency in the RIN market, two major providers are making RIN future contracts available to be traded.  Both CME Group and the IntercontinentalExchange (ICE) will have RIN products available to be traded by mid May.  CME Group and ICE will enable over the counter trading (OTC) of D4 RINs, D5 RINs, and D6 RINs.  D6 RINs are the most common RINs, typically fulfilled by corn ethanol production.  D5 RINs are the most flexible premium RINs, representing advanced biofuel that may consist of biogas, advanced drop in fuels, or other fuel types that meet the 50% GHG reduction standard.  D4 RINs are biomass-based diesel RINs, fulfilled primarily by biodiesel and renewable diesel fuels.  The development of a futures market could provide a substantial boost to the development of advanced biofuel facilities by enabling their financing.  Many financial market participants have in the past regarded RIN revenue as too speculative to include in a plant's pro forma but are likely to be reassured by the presence of RINs in the OTC market.  We speculated in our recent white paper that the EPA's rulemaking on Quality Assurance Programs (QAPs) could facilitate the establishment of a RIN futures market.  See http://www.stoel.com/showarticle.aspx?Show=10180

Requests to Waive US Renewable Fuels Standard Denied by EPA

The U.S  Environmental Protection Agency (EPA) today announced it has denied requests from the Governors of Arkansas and North Carolina to waive Renewable Fuel Standard (RFS) volume requirements, based on the effects of the drought on feedstocks used to produce renewable fuel in 2012-2013. The petitions, filed in August, triggered a review process to determine if the implementation of the RFS requirements would severely harm the economy of those states.

After considering the nearly 30,000 comments received during the public comment period and empirical evidence, such as the prices of RINs and market commodities, the agency’s economic analyses did not produce sufficient evidence of severe economic harm that would warrant the granting of the waiver request. The EPA analyzed 500 scenarios and found no impact from the RFS program on corn, food or fuel prices in 89% of those scenarios. In the 11% of scenarios where RFS impacts were shown, the impact was less than a 1% change in corn prices. EPA acknowledged that “this year’s drought has created significant hardships in many sectors of the economy, particularly for livestock producers. However, the agency’s extensive analysis makes clear that Congressional requirements for a waiver have not been met and that waiving the RFS would have little, if any, impact on ethanol demand or energy prices over the time period analyzed.”

In its 83-page Notice of Decision (PDF file), EPA interpreted the waiver provision in a manner consistent with its prior response to the first RFS waiver request from Texas in 2008, which was also denied. In both cases, Section 211(o)(7)(A) of the Clean Air Act was interpreted as providing narrow authority. In order to grant a waiver, EPA would have had to determine with a high degree of confidence that implementation of the mandate would not only contribute to economic harm, but would itself severely harm the economy of the State or region requesting the waiver.

While the issue is politically charged, EPA’s decision making process in waiver requests focuses on the legal standard established by the Clean Air Act. The waiver is essentially a pressure relief valve for the program but is only available when the very high standard of severe harm is met. EPA utilized an updated version of an Iowa State University model to analyze 500 scenarios. In 89% of the scenarios, the model indicated that the implementation of the RFS program would have no impact on ethanol production and corn prices. This is consistent with the market reality that ethanol blending is driven primarily by factors other than the RFS, in particular blending economics and the value of ethanol as an oxygenate. A significant additional factor considered in the EPA analysis is the availability of rollover RINs from prior years that can be utilized by obligated parties. To the extent that rollover RINs are used this year, this factor would change significantly should similar drought conditions return next year. 

While this waiver request has now been resolved, interested parties continue to follow EPA rulemaking activities relating to the RFS closely. It is anticipated that the agency will address the issue of RIN fraud in a pending rulemaking. Thanks to my colleague Sara Bergan for her assistance in reporting the EPA's RFS waiver decision today.

EPA Docket ID: EPA-HQ-OAR-2012-0632

New Advanced Biofuels Practice Page and Legal Guide for Advanced Biofuels

Stoel Rives has long been a trusted advisor to the biofuels industry. Since the industry’s inception, we have assisted biofuel companies in launching ventures, obtaining financing, ensuring regulatory compliance, licensing technology, negotiating agreements, and leveraging incentives and government programs. As the industry has evolved and expanded, our practice has remained on the cutting edge while maintaining focus on the needs of our clients.

Today, we are pleased to announce the launch of our Advanced Biofuels practice. We have assembled an experienced team of attorneys capable of meeting the diverse needs of the emerging Advanced Biofuels industry. Our attorneys possess a wealth of expertise in the full range of relevant legal areas including intellectual property, regulatory issues, financing, mergers and acquisitions, litigation, real estate, permitting, and contract negotiations. Our advanced biofuel attorneys already represent multiple advanced biofuel companies and have invested time in learning the industry and its unique legal requirements. The backgrounds and experience of the team, along with additional resources and publications can be found on our new Advanced Biofuels practice webpage: www.stoel.com/advancedbiofuels

In conjunction with the launch of our website and the announcement of our Advanced Biofuel team, we are also releasing the Law of Biorefineries and Advanced Biofuels. This publication is the first of its kind, providing the industry with a guide to the legal issues that developers of advanced biofuels projects face. We hope that you find our resources informative, and we look forward to working with you in this dynamic industry. The new guide can be downloaded free of charge at www.stoel.com/lawofseries

Stoel Rives Earns Top Professional Services Position in Biofuels Digest's Hot 40 Partners

Stoel Rives is honored to have been named the top partner in the Professional Counselors and Services category by the readers of Biofuels Digest, the most widely read daily news digest in the biofuels industry. Biofuels Digest Publisher Jim Lane and his team produce a great on-line magazine and some of the best conferences in the industry, and we are proud that the readership values the work of the firm.

Stoel Rives attorneys provide counsel on all aspects of biofuel and biochemical projects and are committed to providing valuable assistance to this exciting and dynamic industry. The firm continues to focus on bioenergy project development including real estate, permitting, financing, commercial agreements, RFS and regulatory work. Firm attorneys have extensive experience with both first and second generation projects and regularly provide useful resources for the sector which are available for download here.

Biofuels Digest’s Hot 40 Partners recognizes the industry’s top forty partners, as voted by the readers of Biofuels Digest and a panel of international selectors. According to Jim Lane, readers voted for companies that add credibility to their efforts, and accelerate their path to commercialization. The Biofuels Digest is an indispensible news source for the biofuels industry, covering producer news, research, policy, conferences, and financial news. The Digest reaches over 28,000 subscribers each weekday, and also publishes in-depth market research and data, including the Quarterly Biofuels Business Outlook, and the Advanced Biofuels Project Database.
 

EPA Releases Green Diesel Notice of Violation

Yesterday the EPA released the third major Notice of Violation ("NOV") against a biofuel producer in the past six months under the Renewable Fuel Standard ("RFS"). The NOV states that EPA has determined that Green Diesel, LLC of Houston, Texas, generated 60,034,033 invalid Renewable Identification Numbers (“RINs’) with a current market value of perhaps $85 million. Coming on the heels of 31 settlement agreements relating to the Clean Green Diesel and Absolute Fuels RINs, this NOV is likely to trigger immediate market reaction. The EPA has been enforcing invalid RIN cases first against the RIN generator then subsequently against the obligated party, i.e., the company that uses the RINs for compliance with RFS. Obligated parties under the RFS are petroleum refiners and importers in the U.S. About a month after the Clean Green Fuel filing, the EPA filed NOVs against the obligated parties. It remains to be seen whether EPA will do so again. The agency may instead rely upon its past actions and its recently released Interim Enforcement Response Policy to motivate corrections by obligated parties.

Some market participants have criticized the EPA for their managing of the RFS program and questioned the RFS program itself. In response, the biofuel industry and particularly the National Biodiesel Board have taken significant steps to address the validity issues. While there is significant time delay as many of the alleged activities date back to 2010, it appears that the EPA enforcement activities have motivated substantial due diligence activities that will serve the RFS program participants well in future years. The immediate challenge is in addressing the new Green Diesel NOV and the resulting contractual implications for market participants who transacted in these RINs. The rapid growth in the value of the RIN market has certainly presented substantial challenges. Nonetheless, private market responses to date suggest that the resourceful biofuel and petroleum industries can weather these storms and ultimately make the RFS program more effective toward its goals of reducing U.S. dependence on foreign oil imports and reducing GHG emissions.