August 2008 Ethanol Producer Magazine by BBI International

INSIDE: DEVELOPMENTS IN THE SEARCH FOR THE PERFECT CATALYSTS AUGUST 2008

2008 FEW Review Showcasing New Technologies to Meet Food and Fuel Needs

WWW.ETHANOLPRODUCER.COM

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inside

160 CATALYSTS Breaking the Catalytic Barrier to Biofuels

AUGUST 2008 . VOLUME 14 . ISSUE 8

Finding finely tuned catalysts is the key to the success of the biofuels industry. Fortunately, scientists today have tools that can speed the identification and

features

development of new catalysts for biomass conversion, and modify existing catalysts. By Jessica Ebert

74 EVENT The Truth About Food and Fuel The 24th annual International Fuel Ethanol Workshop & Expo brought

168 CORN Embracing the Carbohydrate Economy

industry representatives from around the world to Nashville, Tenn.

The 2008 Corn Utilization and Technology Conference featured research efforts

By Ron Kotrba, Kris Bevill, Jessica Sobolik, Dave Nilles, Hope Deutscher

to improve the corn-to-ethanol production process and new developments that

and Rona Johnson

take corn beyond fuel-grade ethanol. By Susanne Retka Schill

176 EQUIPMENT Connecting the Pipes

104 QUALITY Indy’s Super Fuel As Indy Racing League race car drivers test ethanol’s mettle on the track during the Milwaukee Mile, the fuel is further tested using PerkinElmer Inc.’s

Thousands of feet of pipes snake through a typical ethanol plant, making plant design a challenge. EPM examines the four main types of piping in ethanol plants, and details their benefits and drawbacks. By Jessica Sobolik

gas chromatography. By Craig A. Johnson

112 RESEARCH Microbial Tricks for the Cellulosic Ethanol Trade EPM details two projects where researchers tinker with microbes. One focuses on finding cellulose-producing microbes that can produce ethanol more efficiently, and the other involves the engineering of corn to be a better biofuels feedstock. By Jessica Ebert

Page 104

Page 176

120 MARKETING The Value of Branding

184 FEEDSTOCK In Pursuit of Fruit

Brand strategists from Sioux Falls, S.D.-based Elements help renewable

Researchers are looking at watermelon as a potential ethanol feedstock.

energy companies define who they are and what they do best, so they can

Although the conversion process should be relatively simple, there are issues

take that message to their customers and enjoy preferred status in the

such as economics and logistics that must be addressed before it’s a viable

marketplace. By Rona Johnson

option. By Bryan Sims

128 INDUSTRY Building the Next Generation Ethanol design/build companies are using their expertise in the corn-based ethanol industry to transition to cellulose. By Bryan Sims

192 PROCESS Beating Back Bad Bugs Resonant Biosciences LLC developed a system that reduces bacterial contamination in ethanol plants without leaving antibiotic residues in the distillers grains. By Jerry W. Kram

136 USE Where in the Northeast is E85? Drivers of flexible-fuel vehicles in the Midwest have the option to purchase cheaper ethanol blends, but finding filling stations that sell E85 in the Northeast can be a daunting task. By Kris Bevill

144 CONSTRUCTION The Mystery of Modularizing Roeslein & Associates Inc. and Integrated Manufacturing Technologies are offering their modularizing, unitizing and pre-assembly expertise to the biofuels industry. Find out why BlueFire Ethanol Inc. chose the companies to build its first commercial-scale waste-to-ethanol production plant. By Anna Austin

152 COPRODUCT The Role of DDGS in the Food-Versus-Fuel Debate Distillers grains are often overlooked when ethanol is being blamed for taking food from people’s mouths and causing prices to rise. The reality is that for every 100 tons of corn used to produce ethanol, 33 tons are turned into

200 PRODUCTION The Hand That Turns the Wrench At the Biofuels Automation University, ethanol plant technicians sharpen their skills in ways that can make a difference to their company’s bottom line. By Timothy Charles Holmseth

208 EUROPE GM Crops and Biofuels Genetically modified crops have helped U.S. producers increase yields by 30 percent over the past 10 years. In many European countries, however, GM crops are banned, leading some to wonder if that disadvantages farmers and biofuels producers there. By Jon Evans

216 SWEDEN FFVs Flourish in Sweden The number of flexible-fuel vehicles and E85 stations in Sweden has risen dramatically since the country decided to reduce its use of fossil fuels in passenger cars and lessen the effects of climate change. By Eric Kroh

animal feed for livestock producers. By Ron Kotrba

ETHANOL PRODUCER MAGAZINE AUGUST 2008

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inside

AUGUST 2008 . VOLUME 14 . ISSUE 8

departments 11 Advertiser Index 14 The Way I See It By Mike Bryan IFEW Sends Positive Message

contributors 224 CONTROL

Simple Advanced Controls in the Distributed Control System Easy to understand and quick to implement, a variety of advanced process controls provide plant operators with more plant control. Four ethanol-specific examples—three control and one optimization—allow their application in a plant to be visualized. By Greg Martin

228 SUSTAINABILITY

Beating the Environmental Enforcement Squeeze With government agencies predicting a significant increase in future energy demand and consumption, developing the next generation of ethanol production is imperative. Corn-based ethanol production is clearly the foundation from which to build upon. By Bill Eby

20 Business & People

232 OUTLOOK

26 Commodities

Energy Security Obtainable with Biofuels Made in the Americas

28 A View from the Hill By Bob Dinneen The Power of One

29 RFA Update

Investment and open borders are keys for allowing the Americas to realize the full potential of biofuels production. Improving sustainability and collaboration are the first steps to alleviating the hurdles. By George Philippidis

236 MANAGEMENT

Overcoming Challenges in the Boardroom

48 Plant Construction List

In today’s ever-changing market, a board of directors must be strong and united in order to lead a business. A board chairman faces many challenges that must be overcome to provide a proactive work environment. By Tracy Houston and Cindy Knutson

58 Our Plant

240 RISK

34 Industry News & BIObytes

By Kris Bevill New Life

60 In the Field By Susanne Retka Schill Twin Approach to Corn

Fuel for Thought: Protecting an Ethanol Production Business Market fluctuations, variable production costs and volatile fuel prices are just a few of the factors impacting ethanol producers. Insurance policies need to account for the unique risks that the industry’s producers face. By Scott Helmer

244 EMISSIONS 62 Up Front By Kris Bevill From Behind-the-Scenes to Center Stage

64 Flex Factor By Timothy Charles Holmseth Numbers Don’t Lie

66 Business By Bryan Sims Are Reverse Mergers Gaining Credibility in the Industry?

68 Finance By Jack Mount Make Accounting Software Investment Pay Off

70 Legal Perspectives By Leanna D. Whipple Natural Gas from the Ground to the Ethanol Plant

260 Events Calendar 262 EPM Marketplace

Treating Digester Off-Gas from Wet-Mill Ethanol Production A unique process for removing hydrogen sulfide gas from wet-mill production may conserve energy while boosting removal efficiency. The process is capable of treating aerobic and anaerobic gas streams while producing innocuous products and byproducts. By Kenneth D. Jones, Steve Black and Tony Barnette

248 EFFICIENCY

Plant Expansion Through Membrane Integration Molecular sieves and distillation have long been the industry’s primary means of removing excess water from fuel ethanol. However, an innovative advanced membrane separation technology is gaining interest and providing results for a Canadian producer. By Christian Roy

252 PUMPS

Pump Technologies Provide Greater Efficiencies As ethanol expands its reach throughout U.S. distribution infrastructure, compatible equipment is needed to move it. Aunique pump technology offers an efficient solution for the challenges of operating a petroleum bulk plant in today’s marketplace. By Tom Stone

256 POLICY

The Farm Bill: Planting Seeds of Renewable Energy The latest farm bill contains volumes of information related to ethanol and biorefinery development. A detailed look at the bill reveals that progress will be made one step at a time. By Matthew E. Ross

on the web EthanolProducer.com’s most-read Web exclusive news stories for June 2008

Ethanol Producer Magazine: (USPS No. 023-974) August 2008, Vol. 14, Issue 8. Ethanol Producer Magazine is published monthly. Principal Office: 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. Periodicals Postage Paid at Grand Forks, North Dakota and additional mailing offices. POSTMASTER: Send address changes to Ethanol Producer Magazine/Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, North Dakota 58203. BPA Worldwide Membership Applied for October 2006

ETHANOL PRODUCER MAGAZINE AUGUST 2008

1. Bill Gates sells more Pacific Ethanol stock 2. Brazil’s president slams U.S. corn-based ethanol at U.N. event 3. Louisiana Green Fuels ramps up construction 4. Alico discontinues cellulosic ethanol efforts 5. FEW: Takeovers concern producers 6. Beverage-waste-based ethanol to fuel DNC 7. CUTC: USDA official defends corn-based ethanol 8. FEW: Frontline teams with Fagen 9. CUTC: Researchers continue to study corn utilization 10.The Andersons, Marathon dedicate Greenville ethanol plant

Ad Index 72 2009 International 227 Fuel Ethanol Workshop & Expo 134 140 ABENCS 99 37 Adams Building Contractors 212 146 ADI Systems Inc. 242 108 Advanced Trailer Industries 22, 84, 142, 109 Aeroglide Corp. 206 & 272 92 Afton Chemical Corp. 138 162 Agra Industries Corp. 143 96 Agri-Systems 3 221 Air Resource Specialists Inc. 243 166 Alfa Laval Inc. 38 4 American Railcar Industries Inc. 86 154 American Stainless & Supply 133 6 Anhydro Inc. 150 183 Ansul - Fire Solutions 171 91 Antioch International Inc. 241 80 Apache Stainless Equipment Corp. 114 83 Aqua Power Inc. 167 258 Aquatech International Corp. 19 33 Barr-Rosin Inc. 158 30, 93 BBI International Community 172 Initiative to Improve Energy 56 & 57 Sustainability (CITIES) 189 102, 175, 190, 198 BBI Project Development 46 & 47 100 Best Energies Inc. 2 155 BetaTec Hop Products Inc. 18 182 Biodiesel & Ethanol 101 DVDs 119 & 151 274 Biofuels Australasia 73, 95 Biofuels Canada 159 50, 94 & 127 Biofuels Recruiting 179 82, 118 & 215 Biomass Magazine 188 123 Boulay, Heutmaker, Zibell & Co. 156 103 Brock Grain Systems 187 180 Brown, Winick, Graves, Gross, 10 Baskerville & Schoenebaum 197 110 Buckman Laboratories Inc. 202 71 Buhler Inc. 39 5 Burns & McDonnell 55 163 Calbrandt 41 131 Cashco Inc. 85 132 Central Power Products Inc. 12 254 Centrisys Corp. 40 165 Cereal Process Technologies LLC 54 77 Check-All Valve Co. 181 231 Chief Industries Inc.— 253 Agri-Industrial Division 51 178 Christianson & Associates PLLP 87 98 Clifton Gunderson LLP 65 164 Cloud/Sellers Cleaning Systems 199 126 Coverall Building Systems 203 194 Crown Iron Works 247 170 Crown Iron Works/ Harburg Freudenberger 76 111 Davenport Dryer LLC 173 69 dbc SMARTsoftware Inc. 45 195 Dedini Export 230 16 & 17 Delta-T Corp. 135, 196, Distillers Grains Quarterly 101 222 & 273 106 35 Dresser-Rand 116 61 DuPont Chemical Solutions Enterprise 88 226 Duratech Industries International Inc. 23

ETHANOL PRODUCER MAGAZINE AUGUST 2008

186 147 8 205 81 115 36 157 ETS Laboratories 124 Faegre & Benson LLP 234 Fagen Inc. 117 Farms Technology LLC 24 FBA Consulting 63 FCStone LLC 276 Federal Equipment Co. 79 & 107 Fermentis 78 Flottweg Separation Technology Inc. 44 FWS Technologies 191 Gamajet Cleaning Systems Inc. 235 GATX Corp. 42 Gavilon 52 Genencor International Inc. 89 Gordon Technologies 174 GreenShift Corp. 139 Hurst Boiler & Welding Co. Inc. 275 Hydro-Klean Inc. 122 ICM Inc. 246 Indeck Power Equipment Co. 257 International Distillers Grains 97 Conference and Trade Show 2008 229 International Process Plants 218 Interstates Cos. 237 Intersystems Inc. 43 ISCO Industries LLC 225 John Deere Agri Services 255 John Zink Co. LLC 233 Kahler Automation Corp. 141 Kaltron Absorbents 67 Kennedy & Coe LLC 148 &149 Koppers Inc. 259 Laidig Systems Inc. 213 Lallemand Ethanol Technology 204 MAC Equipment 31 Management Recruiters of Atlanta 238 Mapcon Technologies Inc. 214 Marcus Construction 90 Marley/SPX Cooling Technologies 239 McC Inc. 211 Mechanical Supply Co. 130 Metso Automation 210 Mettler Toledo 53 Midwest Towers Inc. 207 Ministry of Enterprise and Innovation, 32 Government of Saskatchewan 25 Moyno Inc. 250 Munters Corp.-Des Champs Products 219 Nalco Co. 249 National Corn-to-Ethanol 220 Research Center 125 Natural Resource Group Inc. 245 Natwick Associates Appraisal Services 251 Nebraska Public Power District 223 Nestec Inc. New York Blower Co. Durr Systems Inc. Eclipse Inc. Eisenmann Corp. Ekato Corp. Encore Business Solutions Inc. ethanol-jobs.com

Nexen Marketing USA Inc. North American Bioproducts Corp. Novozymes Ortman Ethanol Water Resources Outokumpu Stainless Inc. Papailias Inc. Paragon Enterprises LLC Paul Mueller Co. Perten Instruments Inc. Peters Machine Petroleum Equipment Institute PhibroChem Pioneer Hi-Bred International Inc. Poet LLC Praj Industries Ltd. Primafuel Inc. Pro-Enviornmental Inc. R&R Contracting Inc. R.J. O’Brien and Associates LLC RailWorks Track Systems Inc. Reimer Welding Inc./Granatus Consulting Resonant BioSciences LLC Renewable Fuels Association Rev Tech LC Robert-James Sales Inc. Roeslein & Associates Inc. Romer Labs Inc. Ronning Engineering Co. Inc. Roskamp Champion SafeRack LLC Salco Products Inc. Seneca Waste Solutions SGS North America Inc. Smar International Corp. SSOE Inc. Strongform Nationwide Industrial Builders Sturtevant Inc. Sukup Manufacturing Co. Sulzer Chemtech USA Inc. Summit Software Inc. Swanson Flo-Systems Co. Symaga Syngenta TDC Dryers Tranter Phe Trico TCWind Inc. Tri-Mer Corp. U.S. Energy Services Inc. U.S. Water Services UTEX Industries Inc. Val-Fab Inc. Vaperma Inc. Veolia Water Solutions & Technologies Verenium Corp. Victory Energy Operations LLC Vogelbusch USA Inc. Volkmann Railroad Builders Inc. W. Soule & Co. Watson-Marlow Bredel Pumps WIKA Instruments Corp. WINBCO Yellow Springs Instruments Inc.

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E D I TO R I A L

A RT

PUBLISHING & SALES

Jessica Sobolik Managing Editor jsobolik@bbibiofuels.com

Jaci Satterlund Art Director jsatterlund@bbibiofuels.com

Kathy Bryan Publisher & President kbryan@bbibiofuels.com

Dave Nilles Contributions Editor dnilles@bbibiofuels.com

Sam Melquist Graphic Artist smelquist@bbibiofuels.com

Mike Bryan Publisher & CEO mbryan@bbibiofuels.com

Rona Johnson Features Editor rjohnson@bbibiofuels.com

Elizabeth Slavens Graphic Artist bslavens@bbibiofuels.com

Joe Bryan Vice President of Media & Events jbryan@bbibiofuels.com

Ron Kotrba Senior Staff Writer rkotrba@bbibiofuels.com

Jack Sitter Graphic Artist jsitter@bbibiofuels.com

Tom Bryan Vice President of Communications tbryan@bbibiofuels.com

Jerry W. Kram Staff Writer jkram@bbibiofuels.com

Matthew Spoor Sales Director mspoor@bbibiofuels.com

Susanne Retka Schill Staff Writer sretkaschill@bbibiofuels.com

Howard Brockhouse Senior Account Manager hbrockhouse@bbibiofuels.com

Bryan Sims Staff Writer bsims@bbibiofuels.com

Clay Moore Account Manager cmoore@bbibiofuels.com

Kris Bevill Staff Writer kbevill@bbibiofuels.com

Jeremy Hanson Account Manager jhanson@bbibiofuels.com

Timothy Charles Holmseth Staff Writer tholmseth@bbibiofuels.com

Chip Shereck Account Manager cshereck@bbibiofuels.com

Erin Voegele Staff Writer evoegele@bbibiofuels.com

Tim Charles Account Manager tcharles@bbibiofuels.com

Anna Austin Staff Writer aaustin@bbibiofuels.com

Chad Ekanger Account Manager cekanger@bbibiofuels.com

Hope Deutscher Online Editor hdeutscher@bbibiofuels.com

Marty Steen Account Manager msteen@bbibiofuels.com

Jan Tellmann Copy Editor jtellmann@bbibiofuels.com

Marla DeFoe Advertising Coordinator mdefoe@bbibiofuels.com

Craig A. Johnson Plant List & Construction Editor cjohnson@bbibiofuels.com

Jessica Beaudry Subscriptions Manager jbeaudry@bbibiofuels.com

Amber Armstrong Administrative Assistant aarmstrong@bbibiofuels.com

Jason Smith Subscriber Aquisition Manager jsmith@bbibiofuels.com Erika Wishart Administrative Assistant ewishart@bbibiofuels.com Christie Anderson Administrative Assistant canderson@bbibiofuels.com Nicole Zambo Receptionist nzambo@bbibiofuels.com

HOW TO REACH US

LETTERS TO THE EDITOR We welcome letters to the editor. Send your letter to: Ethanol Producer Magazine Letters, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203 or e-mail to jsobolik@bbibiofuels.com. Letters should include the writer’s full name, address and telephone number, and may be edited for purposes of clarity and space.

SUBSCRIPTIONS Ethanol Producer Magazine is now free of charge to everyone with the exception of a shipping and handling charge of $49.95 for any country outside the United States, Canada and Mexico. To subscribe, visit www.EthanolProducer.com or you can send your mailing address and payment (checks made out to BBI International) to: Ethanol Producer Magazine Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. You can also fax a subscription form to (701) 746-5367.

CUSTOMER SERVICE AND CHANGE OF ADDRESS For service, please use our Web site at www.EthanolProducer.com. You can also call (866) 746-8385, or write to: Ethanol Producer Magazine, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203.

BACK ISSUES AND REPRINTS Select back issues are available for $3.95 each, plus shipping. To place an order, contact Subscriptions at (701) 746-8385 or subscriptions@bbibiofuels.com. Article reprints are also available for a fee. For more information, contact Christie Anderson at (701) 746-8385 or canderson@bbibiofuels.com.

ADVERTISING For advertising rates and our editorial calendar, visit www.EthanolProducer.com or call (866) 746-8385.

ETHANOL PRODUCER MAGAZINE AUGUST 2008

The Way I See It IFEW Sends Positive Message

he 2008 International Fuel Ethanol Workshop & Expo was perhaps one of the most inspiring in its 24-year history. This was because in a year of misguided media coverage, high feedstock costs, reduced profits and political uncertainty, the spirit and determination of those attending has never been greater. They came with a fighting spirit that says, “We’re damn mad, and we are not going to take it anymore. We’re tired of the negative press that ignores $140-a-barrel oil and instead focuses on biofuels. We’re tired of farmers—after generations of working the land—being vilified for actually being able to make a profit like any other business. We’re tired of the ethanol industry being treated as if it was the root cause of world hunger.” This industry has been built on fighting the odds, taking on giants and winning. Negative press has been a part of life for the ethanol industry since its inception. However, this time it’s different. It's different in the sense that the very success that we have been building toward for more than 25 years is now being portrayed by the media as a failure. Even in the face of this adverse attention, the spirit of this year's IFEW was clearly not one of acquiescence. Rather, it was one of standing our ground, drawing a line in the sand, and standing up for our industry and what we have worked so hard to achieve. Bob Dinneen of the Renewable Fuels Association said in his presentation, “Never before in our history has there been a greater need to develop a vibrant renewable energy industry. Rest assured, the ethanol industry will never waiver, nor will we falter in our commitment to help meet the world’s growing energy demand.” Dr. Robert Zubrin, author of Energy Victory, talked about the difference between industries that “take” energy and industries that “make” energy. Industries that take energy are dependent on the finite amount of resources available and the political stability of the region from where the energy is derived. The ethanol industry, on the other hand, makes energy and in doing so, Zubrin pointed out, has a far more stable and sustainable future. Ethanol is part of the next generation of fuels that will power the world. While not perfect, it is a cleaner, safer and more peaceful alternative to oil. So, as embattled as we may be from time to time, we can never waiver from our commitment to build an industry that repels those who are against change and those who would chose to let the perfect become the enemy of the good. That’s the way I see it!

Mike Bryan Publisher & CEO mbryan@bbibiofuels.com

ETHANOL PRODUCER MAGAZINE AUGUST 2008

WE KNOW CELLULOSE TO ETHANOL

With over 40 years of combined “hands-on” experience in conversion of lignocellulosic biomass to ethanol at the National Renewable Energy Laboratory, BBI is your best resource for cellulosic project evaluation and development. Our experts understand the critical technical and economic issues related to feedstock collection and storage, biological and thermochemical conversion technologies and downstream processing. Our direct experience includes the design and engineering of concentrated acid hydrolysis, dilute acid pretreatment, enzymatic hydrolysis, and fermentation processes for converting a broad range of feedstocks to ethanol. Whether it’s a feasibility study, feedstock assessment, due diligence, process design or complete project development, BBI is the definitive source of answers for your cellulose-toethanol questions.

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BUSINESS&PEOPLE

Business& People Ethanol Industry Briefs Business

Gates’ investment firm cuts stake in Pacific Ethanol This spring, Cascade Investment LLC, the investment firm of Microsoft Corp. Founder and Chairman Bill Gates, pared its investment in Sacramento, Calif.-based ethanol producer Pacific Ethanol Inc. In early May, it unloaded 9.5 million out of 41.8 million outstanding shares. Again, in June, it sold 1 million shares, according to a statement of changes in beneficial ownership filed through the U.S. Securities and Exchange Commission. In all, Cascade Investment has unloaded more than onefifth of its original investment in Pacific Ethanol, which equaled approximately 20 percent control of the company. It originally invested $84 million in Pacific Ethanol in 2005. EP

The Andersons, Aventine post first-quarter losses

New Web site indicates FFVs A new Web site has been developed for those in search of flexible-fuel vehicles (FFVs). At www.ffvfinder.com, visitors will find FFV dealerships, fuel stations and community forums. If consumers are trying to buy or sell a used vehicle, listings can be posted there, as well. “Buyers, you have found your one-stop shop for your next vehicle,” said Abbie Vanderwist, owner of www.ffvfinder.com. She said the purpose of the site is to educate consumers and dealers about alternative fuels. “This site is designed is to help those trying to find their next car, truck, SUV or van, and to help those sellers find the right buyer for their FFV,” she said. EP

VeraSun closes on credit line VeraSun Energy Corp. in Brookings, S.D., reached an agreement with USB Investment Bank for a new revolving credit facility. The facility will allow revolving borrowings up to a maximum of $125 million, including letters of credit up to a total of $40 million. The new credit facility is available until May 30, 2011, and replaces an existing $30 million secured revolving credit facility. “As previously announced, this credit facility will provide additional liquidity sources to support our accelerated growth,” said VeraSun President and Chief Executive Officer Danny Heron. EP 20

Share your Industry Briefs To be included in Business & People, send information (including photos or illustrations if available) to: Industry Briefs, Ethanol Producer Magazine, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. You may also fax information to (701) 746-5367, or e-mail it to jsobolik@bbibiofuels.com. Please include your name and telephone number in all correspondence.

The Andersons Inc. and Aventine Renewable Energy Holdings Inc. recently released separate first-quarter earnings statements, but neither was good news for the respective companies. The Andersons Grain & Ethanol Group reported an operating income of $2.2 million, an $8 million drop from last year. Meanwhile, Aventine posted a loss of $10.8 million versus a gain of $14.9 million during the same quarter last year. Despite a 34 percent revenue increase due to higher volumes of ethanol sold and higher ethanol prices, Aventine said its revenue continued to offset more than 40 percent of its corn costs. EP

Thermal oxidizer performs well in preliminary tests California-based Pro-Environmental Inc. said preliminary tests conducted by a third party showed excellent performance by a regenerative thermal oxidizer (RTO) that the company designed and built for Otter Tail Ag Enterprises LLC, a 55 MMgy ethanol plant in Fergus Falls, Minn. Pro-Environmental reported the three-canister RTO downstream of the rotary dryer showed nitrogen oxide emissions that amounted to 20 percent of permit levels, and volatile organic compound emissions at almost zero. The air-pollutioncontrol installation still has to undergo formal testing by the Minnesota Pollution Control Agency. Otter Tail Ag Enterprises began production in March. EP

ETHANOL PRODUCER MAGAZINE AUGUST 2008

BUSINESS&PEOPLE

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Business

People

Entrepreneur Magazine names Hot 100

Praj to supply technology in Central America

Range Fuels appoints board of directors member

Victory Energy, a manufacturer of heat recovery steam generators and water-tube package boilers was named No. 15 in Entrepreneur Magazine’s Hot 100 for 2008. The magazine’s Hot 100 ranks America’s fastest-growing businesses based on company sales, positive job growth and sales growth, among other criteria. In addition, ethanol producer Glacial Lakes Energy LLC was named No. 63. “In 2007, Glacial Lakes Energy was named a Hot 500 company by Entrepreneur Magazine, so to receive a similar award two years in a row is incredible,” said Glacial Lakes Energy Chief Executive Officer Tom Branhan. The Hot 100 list was printed in the magazine’s May issue and can be viewed at www .entrepreneur.com/hot100. EP

Guatemala-based Pantaleon has chosen Praj Industries Ltd. to supply technology and equipment for two ethanol plants in Guatemala and Nicaragua. Pantaleon, one of Central America’s oldest and largest sugar groups, is proposing a 27 MMgy facility in Nicaragua, and will manage a second 40 MMgy plant under development by Bio Etanol in Guatemala. Praj will supply the technology for fermentation, vacuum distillation using very low-pressure exhaust steam, molecular sieve dehydration and evaporation of vinasse (the residue left after distillation of fermented sugarcane). The Central American plants will be the first in the region to use Praj technology to concentrate vinasse for use as liquid fertilizer. EP

Range Fuels Inc. has appointed Dotty Hayes to its board of directors. She is vice president of internal audit at Intuit Inc., a top provider of business and personal finance software. She previously served as the company’s vice president and corporate controller, responsible for the design, implementation and operation of control systems, including financial consolidation, external reporting, Sarbanes-Oxley compliance and revenue recognition. EP

CVEC to collect greenhouse gas credits Chippewa Valley Ethanol Co. LLLP, a 47 MMgy ethanol plant in Benson, Minn., has entered into an agreement with Carbon Green LLC and Environmental Credit Corp., which will develop greenhouse gas credits stemming from CVEC’s renewable energy use and ethanol production. In addition to ethanol, CVEC recently installed a biomass gasifier, which provides thermal energy for its facility and will save natural gas usage by 90 percent. Ethanol producer Corn Plus LLLP in Winnebago, Minn., began a similar project in March when it joined the Chicago Climate Exchange with the help of Carbon Green and Environmental Credit. EP

GPRE to merge with VBV Omaha, Neb.-based ethanol producer Green Plains Renewable Energy Inc. and Delaware-based VBV LLC, along with its subsidiaries, have entered into a definitive merger agreement. The merger, anticipated to close by late summer or early fall, will place VBV under the GPRE name, and is subject to shareholder and equity holder approvals, as well as customary lender and regulatory consents. VBV was originally called Virgin Bioverda, a joint venture between Virgin Group, Wilon Holdings SA and Ireland-based NTR PLC. It owns two ethanol plants currently under construction: Indiana Bio-Energy LLC in Bluffton, Ind., and Ethanol Grain Processors LLC in Obion, Tenn. Upon closing, the combined company is expected to have a production capacity of 330 MMgy. Immediate goals of the new entity will include bringing GPRE’s Superior Ethanol LLC in Superior, Iowa, on line and completing construction of the two VBV plants. EP

ETHANOL PRODUCER MAGAZINE AUGUST 2008

Poet hires general managers Poet LLC announced the hiring of two general managers for its northern Ohio ethanol plants currently under construction. Jeff Henkle will lead Poet Biorefining-Fostoria Henkel in Fostoria, Ohio. He has a Bachelor of Science degree in mechanical engineering and a Master of Science degree in nuclear engineering from Ohio State University. Scott Case will join Poet Biorefining-Marion in Case Marion, Ohio. He has more than 20 years of operational and managerial experience in chemical manufacturing environments. He received a Bachelor of Science degree in chemical engineering from California State Polytechnic University at Pomona. EP

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People CPT names market development director Bridgeton, Mo.-based Cereal Process Technologies LLC recently named Reg Ankrom as its director of market development. He joins the company after managing EnNova LLC, an Illinois-based company where he assisted groups in developing ethanol projects. Prior to that, Ankrom held management positions at Ameren, an electric and natural gas utility. Cereal Process Technologies provides patented corn fractionation technology, and the company’s equipment is being used at Renew Energy’s 130 MMgy plant in Jefferson, Wis. EP

VeraSun announces personnel moves VeraSun Energy Corp. has announced several new personnel appointments. Timm Hoffman has been named the company’s vice president of information technology. He will be responsible for the strategic planning, development, and execution of information technology infrastructure and initiatives. Roderick Arnold has been named the company’s director of transportation. He will be responsible for VeraSun’s railcar fleet. Troy Shaner has been appointed director of process improvement. Previously, he was the plant manager at VeraSun’s ethanol plant in Fort Dodge, Iowa. In his new role, he will be responsible for leading and directing the process improvement group. Andy Roberts, Gabe Corey, Kent Holzer and Pat Hogan have each been promoted from their previous positions as VeraSun operations managers to plant managers. Roberts will be stationed at VeraSun’s ethanol plant in Albion, Neb.; Corey will be located in Woodbury, Mich.; Holzer will be in Janesville, Minn., and Hogan will be in Dyersville, Iowa. EP

SunEthanol hires CEO Amherst, Mass.-based cellulosic ethanol company SunEthanol Inc. has hired biofuels leader William Frey as its new chief executive officer. Previously, he spent 28 years with DuPont, leading the efforts to commercialize advanced biofuels and develop cellulosic process technologies. He replaced outgoing CEO Jef Sharp on June 23. EP ETHANOL PRODUCER MAGAZINE AUGUST 2008

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COMMODITIES REPORT Natural Gas Report

The bull rally continues June 19—Natural gas prices continue to steadily move up. Since the beginning of February, market prices have occasionally pulled back but then quickly rallied to new highs. Amazingly, from Feb. 1 through June 19 the market has made 18 new “highs” and 15 “higher lows.” Trends of this nature often indicate that a market is experiencing excessive and increasing demand or has mounting problems with supply. This isn’t necessarily the case with the natural gas mar-

By Casey Whelan, U.S. Energy Services Inc.

ket. Demand has been increasing but no more than usual or expected. The supply side has increasing domestic production and the capability to import more liquefied natural gas. Finally, while storage inventories are below those of 2007 (a historically high level), they are in line with five-year averages. Natural gas fundamentals can not and do not explain the recent strength in natural gas prices. Natural gas prices are caught up in the market euphoria surrounding most commodities. Buying and holding commodities has been a good investment over at least the past year. Attractive returns are likely drawing more money into commodity markets, fueling even higher prices. While this type of rally cannot go on forever, there still seems to be significant interest in being in “long” commodities. Our recommendation is to buy on dips for a relatively short forward period and be ready to purchase for a long period when the market significantly corrects. EP Casey Whelan, vice president of strategic initiatives, can be contacted at cwhelan@usenergyservices.com.

Corn Report

Yield trends the focus of summer June 20—The floods in early June contributed to volatility as corn soared more than $1.40 per bushel in one week. Too much rain, at least at this stage, does not make grain. The market was in a panic mode as traders and end-users scrambled for corn needs or unwound short positions. However, what happens to demand as rationing comes into play due to high-priced corn? At the current values demand rationing has occurred. The June USDA supply and demand report leaves much debate on the demand side as well as planted acreage and yield. First, the yield was slashed by five bushels to 148.9 bushels per acre, thus cutting production by 340 million bushels. Feed demand for the next marketing year was cut by 150 million bushels, estimated at 5.15 billion bushels versus 6.15 billion bushels one year ago. Corn demand into the ethanol sector is projected at 4 billion bushels versus 3 billion bushels one year ago. However, with current ethanol crush conditions these actual projections will ultimately be lower. Ethanol margin conditions will determine this corn usage as the market looks forward. The end-result as determined by the USDA is a 673 million bushel carry-out in the new marketing year, or a 5.4 percent carry-out-to-use ratio in the 2008-‘09 marketing year. From a world perspective, corn carry-out increased by 4.26 million metric tons versus the previous estimate. That compares to 121.09 million metric tons one year ago and 110.16 million metric tons in 2006‘07. The caveat in the global picture is China, which will produce 153 26

By Jason Sagebiel, FCStone

million metric tons of corn, use 157 million metric tons and export a mere 0.5 million metric tons. China is using more corn domestically and holding onto inventory despite higher prices. The graph illustrates China’s production versus usage. An out forward curve can lead to corn usage outpacing production. Ultimately the carry-out shrinks with today’s current production/usage ratio. Prices will stay supportive from a fundamental viewpoint. Any pressure will come from the “fund money” liquidation. EP ETHANOL PRODUCER MAGAZINE AUGUST 2008

COMMODITIES REPORT DDGS Report By Sean Broderick, CHS Inc.

Margins are the primary focus June 25—As the Fourth of July approached, margins were what every plant, buyer, seller and shipper was talking about. Plants were, and are, focused on them for the obvious reasons. Buyers, many of whom have been sitting on the fence waiting for new plants and their DDGS production to come on stream and “flood the market,” are rethinking their strategy. Sellers, scared that plants may or may not run (an event which literally can change multiple times in the course of a week), do not want to sell out past the following week. Shippers, trying to line up freight, have to battle fuel surcharges, road and bridge closings, river shutdowns and erratic car supplies. Those doing the actual feeding of the animals are looking at long-term negative margins. Relatively speaking, DDGS is one

(Monthly averages in cents per gallon)

BULK SPLASH/ TRUCK (rack) TOP OFF (rack)

REGION

SPOT

West Coast

265.534

259.53

276.161

Midwest

254.602

253.44

269.686

East Coast

256.614

----

302.838 Source: OPIS

of the better values available on a protein, energy or even phosphorous basis. DDGS is at less than 65 percent the value of corn, which has never been sustained before. It is not unusual to be there at some time during the summer, but it is when one is looking at July, August and September quotes. The export business has remained brisk. The worldwide price of wheat is going to play a part in determining the viability of all middle proteins in the rations, which looks to potentially temper some of the demand. Bulk vessels are being booked that include holds of DDGS, which had previously been done only via containers. Distillers grains is finding its way deep into many rations, particularly for hogs, in some cases comprising up to 50 percent of the entire diet. EP

Regional Gasoline Prices (Monthly averages in cents per gallon)

REGION

SPOT

RACK

RETAIL

West Coast

362.844

352.83

418.278

Midwest

330.082

335.869

393.107

East Coast

326.394

337.163

396.067 Source: OPIS

DDGS Prices ($/ton)

Ethanol prices jump in June

JULY 2008

175

106

California*

230

200

137

Chicago, Ill.

165

155

105

Buffalo, N.Y.

170

160

115

Central Florida

205

195

133

LOCATION

*Central Valley

Source: CHS Inc.

Corn Futures Prices (September corn, $/bushel) HIGH

LOW

June 20, 2008

7.52

7.31 3/4

7.35 1/2

May 20, 2008

6.15 1/2

5.99

6.02 1/4

June 20, 2007

4.10

3.99 1/2

4.04 1/4

By Spencer Kelly, OPIS

The big spike came in markets outside the Midwest that rely on the region’s ethanol production for supply. New York Harbor spot ethanol traded up to $3.15 per gallon for dead-prompt material with any-June barges topping $3.10 per gallon. That had harbor ethanol surging more than 70 cents on the month before prices cooled back to around $3 per gallon. Reports of delayed imports from Brazil that had been expected in latter June also boosted harbor ethanol. It also left July appearing much better supplied. Meanwhile, the slowdown in railcars out of Iowa and elsewhere also had West Coast prices hopping into the $3-$3.10 per gallon range for prompt shipments. EP For more information, contact OPIS Ethanol & Biodiesel Information Service at (888) 301-2645.

ETHANOL PRODUCER MAGAZINE AUGUST 2008

AUG. 2007

AUG. 2008

Minnesota

DATE

Ethanol Report

June 20—Ethanol spot prices headed into summer in a sharp upswing as markets that were already starting to tilt higher got a boost from disastrous flooding in the Midwest that snarled logistics and even shut down a couple key plants. Chicago spot ethanol traded up into the lower $2.90s per gallon by mid-June for material available in the second half of the month. That represented a 50 cent or so boost in prices since the end of May. Flooded highway bridges, embargoed rail lines, and washouts and closures on long stretches of the rain-swollen Mississippi River played havoc with ethanol logistics. While some plants with bottled-up rail transport did dump some cheap truck volume, most Midwest rack postings for ethanol also moved up. Iowa racks, averaging $2.75 per gallon for splash-blend sales late in the month were up 7.5 cents since the start of June.

Regional Ethanol Prices

Source: FCStone

Cash Sorghum Prices ($/bushel) JUNE 12, 2008 MAY 16, 2008 Superior, Neb. Beatrice, Neb. Sublette, Kan. Salina, Kan. Triangle, Texas Gulf, Texas

MAY 30, 2007 3.01 2.92 2.89 3.13 3.12 3.40

5.24 5.31 5.31 5.41 5.51 6.07

6.19 6.44 6.39 6.44 6.61 6.77

Source: Sorghum Synergies

Natural Gas Prices ($/MMBtu) JUNE 16, 2008

MAY 16, 2008

JUNE 19, 2007

NYMEX

12.87

11.07

7.69

N. Ventura

11.67

10.27

7.01

Calif. Border

12.36

10.80

7.24 Source: U.S. Energy Services Inc.

U.S. Ethanol Production Output (barrels/day) March 2008

561,000*

February 2008

513,000

March 2007

384,000

*all-time monthly high

Source: U.S. Energy Information Administration

VIEW FROM

THE HILL

The Power of One Whether it is a true love and appreciation for our political process, or indeed a sickness, we are entering the holiday season for those who enjoy the game of politics. This season promises to be one of the most exciting and historical in recent memory. From the top of the ticket down to the local city council elections, energy will be a central theme for all candidates. No doubt, they all will claim to have the greenest, most reliable, least expensive, readily available solutions to meet this nation’s energy goals. Some of them very well may, but that determination and responsibility falls directly on American voters. Given the recent deluge of misinformation and contrived attacks America’s biofuel producers are enduring, this election will be a pivotal moment in the future of this industry. Ethanol producers are being blamed for every ill befalling mankind today, and some politicians, often a fickle crowd, seem willing and, in the case of some candidates for higher office, eager to abandon America’s biofuels industry. They seek to start by weakening public policy by taking advantage of provisions Dinneen designed to prevent severe economic harm to Americans. Some seek to force American taxpayers to subsidize Brazilian ethanol production. Others would get rid of any public policy supporting a domestic renewable fuels industry in favor of greater reliance on ever-shrinking supplies of oil. Other candidates appreciate the future American biofuel producers are trying to achieve. They recognize that our dependence on oil comes with very real and costly consequences. They understand that everyone (or most everyone outside Houston) wants to move to that next generation of biofuel technology but recognize that only happens on the back of a strong industry being developed today. Many candidates fully comprehend that a plethora of solutions will have to be employed to ensure a secure energy future, but understand that ethanol and biofuels must play a critical role. They also recognize that action must be taken now. Lip service and pie-in-the-sky plans that ignore the realities of today’s energy markets are not what these candidates seek. These descriptions describe candidates from both parties and all parts of the country. They describe individuals rather than a party dogma and candidates for every elected office in the land. As America watches the national political conventions and truly begins to dissect every candidate and every position, it is imperative that we as the American biofuel industry do the same. The importance of this election to our industry and the energy and agricultural future of this country cannot be overstated. We must do our homework. Understand where the candidates stand and make an informed decision that will ensure American biofuels are allowed to reach their full potential. We have seen the impact just a single vote can have. Our nation has fought legal battles and seen elections swing by just one vote per precinct. Make sure that your voice is heard and the rest will take care of itself.

Bob Dinneen President and CEO Renewable Fuels Association

ETHANOL PRODUCER MAGAZINE AUGUST 2008

RFA UPDATE

Cooper, Hubbard join RFA The Renewable Fuels Association has hired Geoff Cooper, who will become its new director of research. For the past five years, Cooper served as director of ethanol and business development programs for the National Corn Growers Association. “Geoff’s qualifications and expertise in this field will be invaluable as ethanol plays an ever-increasing role in America’s future energy sustainability,” said RFA President Bob Dinneen. “It is with great pride that I welcome Geoff to the RFA family.” Cooper will work out of RFA’s newly acquired offices in St. Louis, Mo. The RFA has also hired Edward Hubbard Jr., Esq., to serve as its director of Tax and Trade. He joins the RFA from a position as legislative director with Maryland Rep. Albert Wynn. Hubbard is a member of the Los Angeles County Bar Association and worked for Culver City, Calif.-based law firm Willoughby & Associates before joining the RFA. Hubbard will work out of RFA's office in Washingon, D.C.

In late June the RFA submitted comments to the U.S. EPA regarding Texas’ request for a waiver of 50 percent of the Clean Air Act’s renewable fuels standard. The RFA said the waiver request is incomplete, legally insufficient and factually misdirected. The Texas request also doesn’t show severe harm to the economy of Texas. In fact, it is projected that a 50 percent reduction in the RFS would increase gasoline prices by more than 31 percent from the $3.997 per gallon price Texans paid at press time. The resulting $1.24 per gallon increase in gasoline prices, if the requested waiver is granted, could cause Texans to pay an additional $15.7 billion for gasoline, the RFA said. Also, even if the RFS were reduced by 50 percent, it would not reduce corn prices in any meaningful way, which the Texas request proposed it would.

Merrill Lynch report confirms ethanol benefits Merrill Lynch’s June 6 edition of “Global Energy Weekly” concluded that biofuels were helping to reduce gasoline prices for the average American. The authors of the report estimated that retail gasoline prices would be $21 per barrel higher without the incremental biofuel supply. Based on the fact that the average U.S. household uses 1,052 gallons of gasoline per year, biofuels are saving the typical American household $526 per year. “By keeping gasoline prices lower than they otherwise would be, ethanol is helping the average American family save about $500 per year, even after accounting for the slight increase in food prices due to higher prices for corn,” Dinneen said.

ETHANOL PRODUCER MAGAZINE AUGUST 2008

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RFA responds to Texas’ RFS waiver request

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BIObytes

INDUSTRYNEWS

Ethanol News Briefs Ethanol from beer waste to fuel DNC Molson Coors Brewing Co. and its U.S. subsidiary Coors Brewing Co. will be the official E85 ethanol producer for the 2008 Democratic National Convention in Denver. Molson Coors is donating all the clean-burning ethanol fuel for the fleet of General Motors flexible-fuel vehicles to be used for convention transportation needs. Coors' ethanol is made from waste beer generated at its brewery in Golden, Colo., at an adjacent 3 MMgy ethanol plant owned by Merrick & Co. and operated by Coors. Using waste beer to produce ethanol lowers the emissions of volatile organic compounds from the Coors brewery by approximately 70 tons per year.

Osage plans barley-to-ethanol plant Osage Bio Energy LLC hopes to break ground in September on a 55 MMgy ethanol plant in Hopewell, Va. The land is secured, along with local approval and a $300 million financing commitment from First Reserve Corp. for a total of four plants. The rest of the Hopewell financing package was under development and the permitting process was underway in late June, according to John Warren, Osage investor relations manager. Jacobs Engineering completed design work for the project, and Katzen International Inc. is providing the process technology. Osage plans to use winter barley for a feedstock, creating a new market for the crop that will provide environmental benefits as a winter cover and won’t compete with food crops.

Athena Biotechnologies receives SBIR grant Athena Biotechnologies Inc., a Newark, Del.-based biotechnology company focused on cultivating new bacteria, has won a $100,000 U.S. DOE Small Business Innovation Research grant. The award, issued in May, is being used to discover new microbes that can reduce the cost of ethanol production, targeting microbes that produce ethanol at high temperatures. If continued on page 36 34

GMA launches campaign A coalition of industrial food producers and other special interest groups has launched a campaign to discredit the ethanol industry. The effort, spearheaded by the Grocery Manufacturers Association, and a media campaign proposed by Glover Park Group was made public by U.S. Sen. Chuck Grassley, R-Iowa. The GMA represents more than 300 food, beverage and household goods companies in the United States. Other groups backing the effort include the American Bakers Association, the American Meat Institute, Environmental Working Group, the National Cattlemen's Beef Association, the National Chicken Council, the National Council of Chain Restaurants, the National Pork Producers Council, Pilgrim's Pride and the Snack Food Association, among others. This coalition was formed after the GMA requested a public relations campaign to combat the Energy Independence & Security Act of 2007. The request stated that rising food prices, food shortages overseas and environmental concerns had created a window of opportunity to change public perceptions about the benefits of biofuels, and overturn biofuels provisions in the 2007 energy bill. Glover Park Group responded to the GMA’s request by laying out a strategy to undermine the ethanol industry over the next six months. It establishes two fundamental goals: “First, we must obliterate whatever intellectual justification might still exist for corn-based ethanol among policy elites. … Second, we must demonstrate to policymakers at the state and federal level that there is a political price to allowing ethanol policy to drive up the cost of food.” The proposal continued to expand on its tactics to accomplish these goals: “It is worth noting at the outset that the recommendation to take this fight beyond the confines of the Beltway and policy elites is relatively rare. ... That does not hold true here. Average voters understand perfectly well what increased food prices mean and with the right messaging are fully capable of drawing the connection to corn-based ethanol.” The Glover Park Group charged the GMA a $50,000-per-month retainer fee for six months to run the campaign.

Commodity and Food Price Impacts

The Coalition for Balanced Food and Fuel uses charts such as this one to back its argument about ethanol’s impact on food prices. SOURCE: EMERGING BIOFUELS: OUTLOOK OF EFFECTS ON U.S. GRAIN, OILSEED AND LIVESTOCK MARKETS IOWA STATE UNIVERSITY, MAY 2007

To combat the disinformation campaign, six U.S. senators held a press conference in Washington D.C., on May 22: Sens. Grassley; Kit Bond, R-Mo.; Byron Dorgan, D-N.D.; John Thune, R-S.D.; Ben Nelson, D-Neb.; and Ken Salazar, D-Colo. “The Grocery Manufacturers Association has an obvious self-interest in launching this campaign,” Grassley said. “They need to blame someone for high grocery bills, but they’ve aimed their fire at a false target.” He later requested a meeting with 15 chief executive officers of GMA member-companies but subsequently canceled the meeting when only one CEO was willing to defend the group’s actions. Brian Jennings, executive vice president for the American Coalition for Ethanol, said the GMA campaign reinforces what ACE had suspected for some time. “It’s as close to a smoking gun as we’ve been able to discover,” he said. The campaign is operating anti-ethanol Web sites including www.foodbeforefuel.org and www.foodb4fuel.org. It’s also working with the Coalition for Balanced Food and Fuel, which has a Web site at www.balancedfoodandfuel.org. The Renewable Fuels Association has a response to the GMA posted at http://renewablefuelsassociation .cmail1.com/e/433465/l. ACE’s food-versus-fuel Web site can be found at www.ethanol.org /index.php?id=83. —Jerry W. Kram

ETHANOL PRODUCER MAGAZINE AUGUST 2008

INDUSTRYNEWS

UN reviews impact of biofuels on food sector tions, including FAO, within their The United Nations Food mandates and areas of expertand Agricultural Organization’s ise—with the involvement of High-Level Conference on national governments, partnerWorld Food Security: the ships, the private sector and civil Challenges of Climate Change society—to foster a coherent, and Bioenergy was held June 3-5 effective and results-oriented at the organization’s headquarters international dialogue on biofuels in Rome. The summit brought in the context of food security together heads of state and govSchafer and sustainable development ernment leaders from around the world to discuss the global food situation needs.” Emergency activities began during the and climate change with an emphasis on conference with $17 million being used to how it’s affecting agriculture. U.S. Agriculture Secretary Ed Schafer fight historically high food prices that led the U.S. delegation to the summit. He threaten to leave the globe’s 862 million was asked many questions regarding the people afflicted by hunger in an even worse nation’s biofuels programs and the effect situation. “The high prices are a burden for that biofuels polices are having on the glob- all of us,” said FAO Assistant Directoral food market. “We at the [USDA] have General Jose Maria Sumpsi. “No one will plotted the long-term trends of price, yield, be immune. Prices have been steadily rising availability and consumption, and as we've for some time, but the sudden sharp jump looked at those long-term trends, we are this year is just one small symptom of an anticipating this year an over 40 percent illness caused by years of neglect of world increase in food price inflation globally,” he agriculture.” During sessions, delegates to the said. “Of that, we can identify 2 [percent] to 3 percent of that price increase that is Rome Food Security Summit announced their increased commitment to the fight driven by biofuels.” Schafer stated that the major factor in against hunger and for agricultural develfood price increases is higher energy costs, opment. Although not a pledging conferwith rising demand contributing an almost ence, many donors announced firm financial contributions. Donors included (in U.S. equal percentage. A declaration calling on the interna- dollars): United States, $5 billion (2008tional community to increase assistance for ’09); African Development Bank, $1 bildeveloping countries was adopted. On the lion; France, $1.5 billion (over five years); issue of biofuels, the declaration said, “It is Japan, $150 million; the International Fund essential to address the challenges and for Agricultural Development, $200 milopportunities posed by biofuels in view of lion; Islamic Development Bank, $1.5 bilthe world’s food security, energy and sus- lion (over five years); Kuwait, $100 million; tainable development needs. We are con- Netherlands, $75 million; New Zealand, vinced that in-depth studies are necessary $7.5 million; Spain, $773 million (over four to ensure that production and use of biofu- years); United Nations Central Emergency els is sustainable in accordance with the Response Fund, $100 million; United three pillars of sustainable development, Kingdom, $590 million; Venezuela, $100 and take into account the need to achieve million; World Bank, $1.2 billion. and maintain global food security. We call upon relevant intergovernmental organiza—Timothy Charles Holmseth

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Industry assesses flooding impact

continued from page 34

The floodwaters have subsided in Iowa, the nation’s No. 1 corn- and ethanol-producing state, but the water continues to flow south. Many homes and businesses have been affected, including cornfields and ethanol plants. In many areas, the damage is being assessed, and for the ethanol industry, it is still too early to tell what impact Mother Nature has had. On June 27, Monte Shaw of the Iowa Renewable Fuels Association reported that no more than 10 million to 15 million gallons of production was lost in Iowa due to flooding.. Only three ethanol plants were directly affected, but one—Penford Products Co.—had just completed construction and was about to come on line. Therefore, current production capacity was lost. Archer Daniels Midland Co. had to shut down its plant for a short time due to a disruption in water service. At press time, it was running at partial capacity. A third unnamed plant reduced but didn’t halt production because there was no available rail service to ship the product from the plant. The plant instead shipped its product via truck. “I don’t want to diminish what’s going on right now,” Shaw told EPM. “The floods were devastating. It’ll be years, not months, before things are back to normal. I’ve heard some people say this is the ‘Hurricane Katrina of Iowa.’ However, when it comes to fuel production, not all ethanol plants are in

Phase One milestones are met for the SBIR grant, the company expects to apply for additional funding of up to $750,000 to continue fine-tuning microbes that will produce more ethanol, are tolerant to high levels of ethanol, degrade five-carbon sugars and digest cellulose.

ISU team receives award for fungal research A team of Iowa State University researchers won the 2008 grand prize for university research from the American Academy of Environmental Engineers. Anthony Pometto, Hans van Leeuwen, Mary Rasmussen and Samir Khanal were recognized for their research in developing a fungal process that improves the corn-toethanol production process. The researchers identified and applied a particular fungus, called Rhizopus microsporus, to the thin stillage that’s left after distillation. They said the use of this fungus reduces the energy costs required by current evaporation technologies. Besides facilitating the recycling of the enzymes and water in the stillage, the fungus can be harvested as a high-protein feed supplement. continued on page 38

Iowa, unlike the oil refineries in Houston. Not that much ethanol production will be affected.” Shaw said the real story in this time of tragedy is how ethanol was still able to be delivered to customers via rail, truck or barge. “Yes, there was an embargo in Chicago, and shippers had to go around the closed Union Pacific line,” he said. “It wasn’t easy to do it. I have to tip my hat to the logistics guys in this industry. They really worked hard and utilized the flexibility of the system. That’s something the oil industry can’t do.” The USDA’s National Agricultural Statistics Service released its annual acreage report as scheduled June 30, despite having to reinterview farmers after the floods hit. The report concluded that U.S. farmers intend to harvest 90.4 percent of their planted corn acres, down from 92.4 percent before the floods. NASS acknowledged that accurate data might not have been available by the June 30 deadline, so it plans to conduct a more extensive update of planted and harvested acreage in impacted areas in July. That information will be available in the USDA’s Crop Production report to be released Aug. 12. A review of the acreage report can be found under the Web exclusives section of www.ethanolproducer.com. —Jessica Sobolik

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Obligated parties submit RIN reports for human error. The EPA is The U.S. EPA is reviewRIN Code Format aware of this problem and, as a ing the first round of annual result, mandates an annual certireports summarizing recorded KYYYYCCCCFFFFFBBBBBRRDSSSSSSSSEEEEEEEE fied public accountant audit to renewable identification numK = RIN assignment code (1=assigned, 2=unassigned) rectify any errors that may have bers (RINs) under the renewYYYY = Year batch is produced/imported (when it leaves the facility) occurred throughout the comable fuels standard of the CCCC = Company registration ID pany’s yearly record-keeping. Energy Independence & FFFFF = Facility registration ID BBBBB = Producer assigned batch number Lack of knowledge on Security Act of 2007. An estiRR = Equivalence Value for the renewable fuel how to properly keep track of mated 1,000 companies filed D = Renewable type code (1=cellulosic; 2=noncellulosic) RINs has been another problem their first yearly summaries, SSSSSSSS = RIN Block Starting Number EEEEEEEE = RIN Block Ending Number for companies, according to called attest engagements, by Bennett. “The EPA tells what to the May 31 deadline. do, not how to do it,” he said, Not all companies filed, however. EPA spokeswoman Roxanne Smith were quite a few companies that experienced adding the agency is aware of the problem. In explained that the regulations contain a provi- problems when compiling data for filing. He an attempt to better inform companies that sion that allows certain parties to file their said the main problem was that not all compa- deal with RINs, the EPA has begun issuing 2007 attest reports along with their 2008 nies have efficient ways of tracking their data. question-and-answer documents on its Web “For a lot of small companies that don’t have site every few months. reports due May 31, 2009. Bennett suggests that obligated ethanol The EPA has yet to review the attest sophisticated, dedicated software … they’re engagement reports, she told EPM at press using [Microsoft] Excel [to track RIN move- companies appoint a person to become familtime. “We heard from a number of [certified ment],” he said. “For companies that have the iar with RIN regulations and how they apply public accountants] that the attest engage- resources and abilities, they can build and buy to the company. This should be the person’s ments identified and helped correct problems a system that has those templates built into it sole focus, he suggested, as it is intensive work. More information on the requirements with tracking and reporting RINs for many so that hopefully at the end of the quarter all companies,” she said. David Bennett, certified they have to do is push a button, and all the can be found at www.epa.gov/otaq/regs public accountant for RIN Attest and data is compiled and the appropriate reports /fuels/attestengage.htm. Advisory Services in Connecticut, has con- are output.” Bennett said companies that don’t use ducted approximately 30 attestations for vari—Susanne Retka Schill specific software have to rely on the manual ous RIN-holding companies in the United States since March. He told EPM that there input of numbers, resulting in a large margin

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Ethanol News Briefs continued from page 36

Georgia explores Brazilian ethanol industry According to a report released by Georgia Tech’s Strategic Energy Institute, Georgia has reached its goal of conveying to Brazilian business and academic leaders the advantages that the country and U.S. state could gain from cooperative projects in the ethanol industry, particularly cellulosic ethanol. In early May, Georgia Lt. Gov. Casey Cagle led a mission trip to Brazil to explore the country’s ethanol industry and meet with representatives from Brazil’s largest biofuels companies. Benefits, such as Georgia’s vast amounts of existing timber feedstock and Brazil’s experience in producing and transporting ethanol, were part of the discussion.

Swedish company to market sustainable ethanol By early August, Swedish ethanol producer and distributor SEKAB Group expects to be supplying the world’s first verified, sustainable ethanol to its Swedish customers. The company has developed requirements for sustainability with its Brazilian sugarcane ethanol suppliers that include environ continued on page 40

RFS waiver request debate continues demand plays only a small role in globThe 30-day public comment perial and food-supply pricing.” od for the Texas renewable fuels stanIn response to the EPA’s comdard (RFS) waiver ended June 23, durment request, the National Corn ing which time the U.S. EPA received Growers Association submitted a letnearly 15,000 comments. ter June 17, strongly urging a denial of The EPA requested public comthe waiver. “The strong renewable fuel ments on the issue after receiving a letpolicies in the United States have not ter from Texas Gov. Rick Perry’s office Perry only created local, rural and economic April 25 that requested a 50 percent waiver. Contradictory to a study recently released growth, but have increasingly prompted developby Perry’s alma mater Texas A&M University, ment and prosperity among third-world farmers,” Perry stated, “This request is based upon data the letter stated. The NCGA also said Perry’s demonstrating that implementation of the man- claims failed to consider the many benefits that date is unnecessarily having a negative impact on ethanol and other renewable fuels bring to Texas Texas’ otherwise strong economy, while driving and the nation.” On the other side of the argument, the up global food prices.” In the letter, Perry also said the Texas live- National Chicken Council filed comments with stock industry is facing great harm due to rocket- the EPA on June 13 in support of a national waiver, saying the use of ethanol as a supplement to ing corn prices because of the RFS. In response to an inquiry from U.S. gasoline may have been well-intended as a Committee on Energy & Natural Resources response to U.S. energy needs but has had negaChairman Jeff Bingaman, which posed multiple tive, unintended consequences. “The program has questions regarding the issues in debate, Secretary imposed, and continues to impose, heavy costs of Energy Samuel Bodman and Secretary of and severe harm on chicken producer/processors Agriculture Ed Shafer provided their take on the and their customers,” the council wrote. At press time, the EPA had until July 23 to situation in a letter sent June 11. “It is clear that biofuels are already moderating gasoline prices,” make a ruling. they said. “Our preliminary analysis further suggests that current biofuels-related feedstock —Anna Austin

ETHANOL PRODUCER MAGAZINE AUGUST 2008

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Verenium opens cellulosic ethanol demo plant PHOTO: KRIS BEVILL, BBI INTERNATIONAL INC.

energy cane, at Verenium’s request, and Cambridge, Mass.-based Verenium said he hopes it works well for the comCorp. hosted the grand opening of its pany because it’s easy and cheaper for the 1.4 MMgy demonstration-scale cellulosic farmer to grow. ethanol plant May 29 in Jennings, La. According to Verenium, experimenApproximately 100 people attended the tation is also being done on sorghum and event, including industry professionals, switchgrass to potentially diversify the local and state government officials, U.S. company’s feedstock choices. Verenium DOE representatives, and local farmers. would also like to use wood chips but will Attendees heard from several speakers perfect its bagasse technique before movand toured the facility, which had just ing on to other options. begun transferring sugarcane bagasse Verenium’s advantage so far in the into the plant for its commissioning cellulosic ethanol industry has been the phase. Members of Verenium’s corporate team wait for President and Verenium President and Chief Chief Executive Officer Carlos Riva to cut the ceremonial ribbon end-to-end capabilities the company posExecutive Officer Carlos Riva said the at the company’s demonstration-scale plant grand opening in sesses, including the ability to produce its Jennings, La. own enzymes. The demonstration facility event was a “truly momentous” occasion not just for the company but for the entire cel- mercial-scale facilities—all operating between includes a lab on the third floor of the plant that will allow scientists to work in real time lulosic ethanol industry. “We look forward to 30 MMgy and 60 MMgy. Sugarcane and energy cane bagasse are with enzymes being used at the plant. realizing the vision of making cellulosic the feedstocks currently being used at the However, Riva cautioned that much more ethanol a reality,” he said. Verenium’s plan, according to Riva, is to demonstration facility. At the grand opening, work still needs to be done to advance celluvalidate its technology during the commis- there were 9,000 pounds of bagasse ready to losic ethanol. “We (the industry) also need to sioning phase before moving immediately into be fed into the plant. Local sugar cooperative focus on the agronomics of crop production; the construction of its first commercial-scale Cajun Sugar Co-op is providing Verenium the economics of collecting, transporting and facility. Riva said commercial sites are being with all of its feedstock supply. Cooperative storing large quantities of biomass; and the developed in Texas, Louisiana and Florida. It’s member and lifelong farmer Joe Judice told transportation, storage, blending and marketpossible the first commercial plant could be EPM that he expects Verenium’s plant to help ing of the fuel itself,” he said. colocated with the demonstration facility, but the local sugar growers at a time when the other sites will also be considered because industry is struggling. He is one of several area —Kris Bevill Verenium plans to construct a “fleet” of com- farmers who have been experimenting with

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mental criteria, as well as labor conditions and wages. The criteria call for a reduction in carbon dioxide emissions of at least 85 percent compared with fossil fuels. Anders Fredriksson, vice president of SEKAB BioFuels and Chemicals, said the criteria will be synchronized with European Union regulations as they are developed. A long-time Swedish ethanol producer using black liquor from paper mills, SEKAB is moving its new cellulosic technology from the pilot to demonstration phase.

Group promotes bioenergy on world stage The World Bioenergy Association, an organization for the fast-growing bioenergy sector, was launched at the World Bioenergy 2008 conference in Jönköping, Sweden. The organization will promote the use of bioenergy in a sustainable and economically efficient way, and will help develop certification systems to document fuels produced in an environmentally sustainable way. The organization is open to national and regional bioenergy associations, and bioenergy companies. Swedish Bioenergy Association (Svebio) helped to create the organization to advocate for bioenergy businesses internationally. For more information about the World Bioenergy Association, visit continued on page 42

Canadian government passes renewable fuels standard On June 26, the Canadian Senate passed Bill C-33, which will require the use of 5 percent renewable content in gasoline by 2010 and 2 percent renewable content in diesel fuel by no later than 2012. Canada’s House of Commons passed the bill in late May. After the Senate passed the bill, Canada’s Government General Michaëlle Jean signed it, making it official. “This is huge in terms of giving the federal government the authority to regulate fuel blending on a national basis,” said Gord Quaiattini, president of the Canadian Renewable Fuels Association. “In the past, it’s been up to each province, particularly in regard to biofuels. This legislation builds on the leadership that those provinces had, giving the federal government the capacity to move forward on these current targets and go beyond that.” Ontario, Manitoba and Saskatchewan have currently enacted RFS mandates, and British Columbia and Quebec will continue to move forward with similar mandates. The CRFA said it expects the creation of 20 new biofuels facilities to meet this requirement. “We have some plants that are already built, some under construction and some that were at various levels of planning, financing and development,” Quaiattini said. “This [legislation] provides market certainty.”

Suncor Energy didn’t anticipate the passage of Bill C-33, but it certainly came at an opportune time. On June 12, it announced plans to proceed with a CAN$120 million expansion of its St. Clair Ethanol Plant in Sarnia, Ontario. The plant currently produces 200 MMly (53 MMgy) and will double its production to 400 MMly (106 MMgy). According to Suncor spokesman Jason Vaillant, the expansion was planned as soon as the facility began initial production in 2006. “We didn’t have the crystal ball to see this was going to happen, but we’re certainly glad it did,” he said. There is also the environmental benefit that will result from this legislation. According to Natural Resources Canada’s GHGenius life cycle model, the RFS outlined in Bill C-33 will result in a 4.2 megatonne (4 million tons) reduction in greenhouse gas emissions annually, which is the equivalent of removing more than 1 million cars from Canadian roads ever year. Not only would Canadian producers be able to meet domestic demand, but Quaiattini pointed out that they could also look south to help meet the RFS enacted in the United States. “It also provides opportunities for the United States to provide for Canada,” he said. “The bottom line is, it helps to grow the North American market.” —Jessica Sobolik

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Distillers grains energy value varies PHOTO: KRIS BEVILL, BBI INTERNATIONAL INC.

with the University of Nebraska, the Beef cattle fed a percentage of differences in base-feed treatment distillers grains in Nebraska perare marked and have much to do formed differently than cattle fed with how cattle respond to the same the same percentage of distillers distillers grains incorporated into grains in Kansas. the two differently treated base corn This finding has driven feeds. “What we know is that the researchers to investigate the phecattle perform differently to disnomenon further, and at least two tillers grains when they’re fed steammajor regional differences in feedflaked corn than when they’re fed ing practices have been pinpointed dry corn,” he said. “We don’t know as the bases for these variations in why, but that’s clear. The data from beef cattle performance. The nutriKansas State University, Oklahoma tional composition of distillers grains between different corn- Many researchers have found that beef cattle perform differently when State University, Texas Tech University and Texas A&M based ethanol plants can vary, too, fed with distillers grains originating from different feedstocks. University suggest the cattle so when recent research at Texas instances as a lone feedstock, makes up respond differently. When I say ‘performA&M University, Texas Tech University and elsewhere concluded that the energy only 6 percent of total U.S. ethanol produc- ance,’ I’m talking about rates of gain, effivalue of distillers grains is dependent on tion. The grain is grown in southern Plains ciencies of gain and [maybe] differences in the ethanol feedstock used, it confirmed states such as Kansas, Oklahoma and carcass quality.” Texas. Furthermore, there is the major difDry-rolled corn is gently rolled to what some already believed. Jim MacDonald, a beef nutritionist ference in how cattle feeders treat feed corn break up the kernel for easier digestion by with Texas AgriLife Research in Amarillo, as a base in which distillers grains may be the rumen, whereas steam-flaked corn is Texas, said two years of feeding trials on added prior to cattle consumption. steamed in a stainless steel chest for finishing beef cattle confirmed that dis- “Researchers in the northern Plains tend to approximately 20 minutes to moisten and tillers grains from sorghum has a 25 per- use dry-rolled corn, and in the southern heat the corn up, after which it enters a cent lower energy value than distillers Plains, they use steam-flaked, corn-based roller to make thin flakes. grains from corn because the energy value diets,” MacDonald said. According to Terry Klopfenstein, a —Ron Kotrba of the grains differs. Sorghum, used as an ethanol feedstock with corn or in rare research professor of ruminant nutrition

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Ethanol News Briefs www.worldbioenergy.org or contact Svebio’s Kjell Andersson at +46 (0)704417192.

Süd-Chemie, Linde plan cellulosic ethanol production Two major European companies, SüdChemie AG and Linde Group, have formed a partnership to develop and market plans for the production of second-generation biofuels. The partnership will involve using a biotechnological process to produce cellulosic ethanol from plant matter, including wheat and maize straw, grasses, and wood. Süd-Chemie will provide its knowledge in the biocatalysis and bioprocess engineering sectors, while Linde’s subsidiary company Linde-KCA-Dresden will provide the engineering expertise. The partnership is currently working on a pilot plant at SüdChemie’s research and development site in Munich, Germany, and is in talks with its first potential customers for commercial plants.

Castle Rock Renewable Fuels joins Wisconsin Ethanol Coalition Castle Rock Renewable Fuels LLC has joined the Wisconsin Ethanol Coalition, a diverse group of businesses, environmental continued on page 44

DOE, Harvard aid SunEthanol Another U.S. DOE grant and a collaborative agreement with Harvard University are helping to pave the way for a cellulosic ethanol company to develop a unique biomass-to-ethanol process. Amherst, Mass.-based SunEthanol Inc. received a $100,000 research grant from the DOE to help develop a process that converts biomass into ethanol in one step, compared with the current process that hydrolyzes and ferments pretreated cellulose. The grant was the DOE’s third to SunEthanol in the past year. The latest grant is a nine-month, phase one Small Business Innovation Research project consisting of a collaboration effort between SunEthanol, Texas A&M University and the University of Massachusetts. It’s expected to aid in SunEthanol’s quest to develop a one-step “consolidated bioprocessing” system to produce ethanol. On June 12, the company and Harvard’s Office of Technology Development announced a collaborative research agreement, in which Harvard University will research and produce new genetically modified strains of SunEthanol’s patented “Q Microbe,” a naturally occurring anaerobic microbe. John Gorham, SunEthanol’s cofounder and manager of business development, told EPM that the latest DOE grant and the Harvard research collaboration are aimed at manipulating the molecular genetics of the microbe. The projects are parallel to SunEthanol’s research in finding more

PHOTO: JON GORHAM, SUNETHANOL INC.

continued from page 40

Khursheed Karim works on the Q microbe in SunEthanol's laboratory in Amherst, Mass.

effective native strains of the microbe. The research will be conducted in the laboratory of George Church, Harvard professor of genetics and director of the school’s Center for Computational Genetics. His laboratory will apply its expertise in DNA synthesis and genome engineering to create modified strains that will be tested by scientists at SunEthanol to improve biomass conversion and ethanol production. SunEthanol will have an option to license any of the strains created under the partnership. “Teaming with a Massachusetts leader in alternative energy illustrates the broad impact that Harvard’s expertise in genetic engineering may have well beyond its traditional applications in medicine,” said Isaac Kohlber, Harvard chief technology development officer. —Dave Nilles

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Alico withdraws from cellulosic ethanol project LaBelle, Fla.-based Alico Inc., a land management company, announced in early June that it will no longer explore the construction of a cellulosic ethanol production facility in Florida. In light of Alicoâ&#x20AC;&#x2122;s move, New Planet Energy LLC has assumed full ownership of the project. Alico was slated to receive up to $33 million in grants and loan assistance from the U.S. DOE, and another $2.5 million from the state of Florida to partially offset the costs of a proposed cellulosic ethanol venture. Alico said it will no longer pursue those grants. In addition, Alico will have no further financial commitment or liability to NPE, the DOE or the state of Florida in regard to the project. During the past year, Alico had been working with NPE on the project, according to Craig Evans, project consultant for NPE Florida LLC. He served as an independent consultant to Alico and handled the day-to-day operations for the project, along with the grant and loan guarantees. â&#x20AC;&#x153;Thereâ&#x20AC;&#x2122;s been a relationship [between Alico and NPE] for a long time, and it has just grown over time to the point where now, as Alico made this decision, itâ&#x20AC;&#x2122;s actually just a transition,â&#x20AC;? he said. â&#x20AC;&#x153;NPE was already taking on a large role in the project.â&#x20AC;? Before the transition, Alico was planning to use gasification/fermentation process technology patented and provided by BRI Inc. The technology can produce cellulosic ethanol from virtually any hydrocarbon and/or organic waste material. NPE will continue working with that company. Seattle-based Harris Group Inc. will function as the lead designer and engineering firm for NPE, as well, Evans said.

According to Evans, NPE will initially install two separate modules, each consisting of a gasifier, a synthesis gas conditioner, a bioreactor and distillation equipment that can produce 4 MMgy of ethanol each for a total of 8 MMgy. NPE intends to operate at an 8 MMgy capacity for at least six months before expanding to 20 MMgy and eventually 100 MMgy, Evans said. The company has selected a 2,000-acre site in central Florida, Evens said, adding he couldnâ&#x20AC;&#x2122;t divulge any additional details. The plant will be capable of processing feedstocks such as animal manure, unrecyclable paper, untreated lumber from construction and demolition sites, various vegetative wastes, agricultural residues from the citrus industry, seaweed such as kelp, plastics, old tires, and cardboard. Untreated lumber, paper waste and various agricultural wastes will be the initial feedstocks, according to Evans. â&#x20AC;&#x153;We think [we have] the best technology to produce ethanol because of the multiple feedstocks it can take in and obviously the economics associated with it,â&#x20AC;? he said. According to Alico, the impetus behind its decision to withdraw the partnership with NPE simply boiled down to the risks. â&#x20AC;&#x153;In reaching this decision, [the company] will continue to focus on our core operations of real estate management, including agriculture and development opportunities, to provide returns for our shareholders,â&#x20AC;? said John Alexander, chairman and chief executive officer of Alico. â&#x20AC;&#x201D;Bryan Sims

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BIObytes Ethanol News Briefs continued from page 42

entities, statewide groups and local organizations that are building public and legislative awareness of ethanol issues in Wisconsin. Castle Rock Renewable Fuels employs 37 people at its 50 MMgy ethanol plant in Necedah, Wis. General Manager Bernie Hoffman said the plant is pleased to be a part of the coalition.

Raven Biofuels, Spectrum Energy to convert softwood into fuel New Jersey-based Raven Biofuels International Corp. announced a partnership with British Columbia-based Spectrum Energy Inc. to develop cellulosic ethanol plants in the province that will use infested wood and other biomass as feedstocks. The pine beetle has created a major problem in Canada, and according to the British Columbia government, if infestation trends continue, approximately 75 percent of the 1.35 billion cubic meters of merchantable pine will be killed. Currently, the affected area is sizeable to the state of Texas and has the potential to produce more than 1 billion gallons of ethanol. Spectrum Energy and Raven Biofuels International have submitted a proposal to British Columbia’s Innovative Clean Energy Fund to help with financing. EP

DuPont, Genencor to develop cellulosic ethanol company DuPont and Genencor, a division of Danisco AS, announced an agreement in midMay to form DuPont Danisco Cellulosic Ethanol LLC, a joint venture to develop and commercialize technology for the production of cellulosic ethanol. The effort is part of the two companies’ commitment to produce biofuel from nonfood sources. The initial investment calls for $140 million, which will target corn stover and sugarcane bagasse. Future objectives include multiple lignocellulosic feedstocks including wheat straw, energy crops and other biomass sources. “With food and gas prices surging at doubledigit rates, there is an imperative for sustainable biofuels technologies,” said DuPont Chairman and Chief Executive Officer Charles Holliday Jr. “This joint venture addresses this issue head on. By integrating our companies’ strengths and expertise in this new venture, we are significantly increasing the potential to make cellulosic ethanol from multiple nonfood sources an economic reality around the world.” Scientists from both companies will begin an accelerated effort to integrate unique cellulosic processing capabilities. “By combining the worldclass capabilities of DuPont and Danisco, our joint venture will offer the technology standard for cellulosic ethanol production,” said Danisco

CEO Tom Knutzen. “This joint venture will be a powerhouse of discovery, development and engineering. It represents a major step forward in Danisco’s new strategic intent to be a leading force in the field of industrial biotechnology.” Jennifer Hutchins, spokeswoman for Genencor, said a site has yet to be finalized for the pilot or commercial facilities. A start-up date for the plant is slated for 2009. A commercial-scale facility will follow within three years. Hutchins stressed that Genencor won’t discontinue its current enzyme work in light of the new collaboration. “This is huge for us, but it won’t stop us from continuing to offer our merchant enzyme services for both first- and secondgeneration ethanol,” she said. The parent companies will license their combined existing intellectual property and patents related to cellulosic ethanol. The goal is to maximize efficiency and lower the overall system cost to produce a gallon of ethanol from cellulosic materials by optimizing the process steps into a single integrated technology solution. The joint venture will be headquartered in the United States and will be formed after required regulatory approvals are received. —Craig Johnson

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New ethanol terminals opening along major rail lines are giving producers, wholesalers and retailers an affordable way to receive shipments, compared with the more common method of trucking, which may be especially welcome as the cost of diesel fuel continues to climb. “The decision to carry and offer ethanol-blended fuels has really been centered on the cost,” said Robert White, deputy director of the Ethanol Promotion and Information Council. “There is no doubt that there are markets where we would see more adoption if transportation costs dropped.” Safe Handling Inc., a bulk product transportation and toll processing company, has opened western Pennsylvania’s first rail-to-truck ethanol transloading terminal in Mount Pleasant, Pa. The new terminal is located on three Class I railroad systems, including CSX Transportation, Canadian National and Norfolk Southern railroads, giving wholesalers the opportunity to purchase ethanol from a wide range of producers and choose a rail line based on the lowest offered rates. The terminal can receive up to 30 tanker cars at a time, each holding approximately 29,000 gallons of ethanol. The facility has the capacity to transload 180,000 gallons per day and has private siding capable of accommodating 145 railcars. An industry leader in ethanol handling and distribution terminals, U.S. Development Group LLC has opened a new state-of-the-art facility in Arlington, Texas. Served by the Union Pacific Railroad, Dallas Fort Worth Rail Terminal LLC consists of a rail terminal, pipeline operation, truck load operation and mass storage facility. The terminal has an 84-railcar high-speed offloading facility, and outbound truck and pipeline capabilities. It

PHOTO: SAFE HANDLING INC.

Ethanol rail terminals offer alternative to trucking Environmental Sustainability, Process Efﬁciency. • Plant Water Balance

Ethanol is transferred from a railcar into a truck at Safe Handling’s rail terminal in Mt. Pleasant, Pa.

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also features 130,000 barrels of dedicated storage capacity. Provista Renewable Fuels Marketing LLC, with SHS Inc. as its single member, has signed a letter of intent to partner with Trans Load Ltd. Inc. and Blendstar LLC to construct and operate an ethanol distribution center in Birmingham, Ala. Provista will be the exclusive supplier of fuel to the terminal. Trans Load Ltd. and its Birmingham warehousing and transloading location, served by the Burlington Northern Santa Fe railroad, will be responsible for the placement and off-loading of railcars. Blendstar will handle engineering, construction and back-office accounting of the new storage facility. Other ethanol rail terminals around the country are in the planning and construction phases. This increase in the number of terminals should help create a more coherent system of ethanol distribution, bringing biofuel products to previously underserved markets.

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Ethanol Plant Construction Flooding Hits Midwest Cornfields, Ethanol Plants t the end of June, most of the ethanol industry was moving forward with an eye fixed on the skies. Flooding in the Midwest has affected a few plants. At press time, Archer Daniels Midland Co.’s facility in Cedar Rapids, Iowa, was running at a diminished rate due to a disruption in water service, for example. According to Jerry Gidel of North America Risk Management Services, as much as 8 percent of Iowa’s corn acreage may have to be replanted due to rain. This news is driving corn for December delivery to record highs. At the end of June, corn was trading at $7.55 per bushel at the Chicago Board of Trade. Soaring costs may be good for farmers, but for plants under construction, the price increase will certainly affect bottom lines. The Iowa Renewable Fuels Association reported June 27 that the floods have halted as much as 10 million to 15 million gallons of ethanol production in the state. However, production was expected to be back to normal by the end of June. For plants under construction, most of the challenges have been confined to getting materials to the sites. For the most part, no plants reported significant delays or disruptions in construction. “We knew floods in the Midwest could affect a plant since the last big flood in 1993,” said one project board member. “We chose [our] site with that in the backs of our minds and built above the 100-year flood plain.” For plants outside the affected areas, construction is still “business as usual.” A serious concern for all is the rising cost of energy and the way in which those costs are passed on to consumers. For example, since May 2007, the cost of steel products has increased 17 percent, asphalt has gone up 30 percent and domestic crude oil has increased 51 percent. Time will tell if these costs will slow new plant construction. In the past month, two plants under construction announced completion. Superior Ethanol LLC in Superior, Iowa, will use Delta-T Corp. technology to produce 50 MMgy of ethanol. Calgren Renewable Fuels LLC will produce 52 MMgy in Pixley, Calif.

PHOTO: SUPERIOR ETHANOL LLC

Superior Ethanol LLC

Since the beginning of 2008, 35 plants have finished construction and begun production, bringing a total annual capacity of nearly 2.5 billion gallons on line. The number of plants coming on line peaked in May when nearly 1 billion gallons of annual production capacity was added to the industry. —Craig A. Johnson EPM will remove seemingly inactive projects from this list if: 1. Our good faith attempts to contact project representatives go unanswered for three straight months. 2. Through exhaustive means, we are unable to verify the continued advancement of a project. 3. The Renewable Fuels Association, as well as project representatives, are notified and given a reasonable amount of time to verify the project’s current status. To provide updates to this list, contact Craig A. Johnson at (701) 7468385 or cjohnson@bbibiofuels.com.

ETHANOL PRODUCER MAGAZINE AUGUST 2008

Construction Represents 3.69 Billion Gallons Annually

Project Complete

Archer Daniels Midland Co. Location General contractor Process technology Capacity Feedstock

Cedar Rapids, Iowa undeclared

undeclared 275 MMgy corn

Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date

Archer Daniels Midland

undeclared undeclared June 2007 first quarter 2010

Synopsis of progress Because of local flooding, this siteâ&#x20AC;&#x2122;s existing ethanol plant was temporarily shut down and is now operating at partial capacity. ADM still considers the construction site active, but construction has been nearly halted. The target start-up date, which was originally the third quarter of 2009, has been delayed.

Location General contractor Process technology Capacity Feedstock

Columbus, Nebraska undeclared

undeclared 275 MMgy corn

Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date

Archer Daniels Midland

undeclared undeclared July 2007 third quarter 2009

Location Design/builder Process technology Capacity Feedstock

Calgren Renewable Fuels

J.D. Heiskell & Co. N/A March 2007 May 2008

Union City, Indiana Fagen Inc. ICM Inc. 100 MMgy corn

Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date

Murex CHS Inc. N/A February 2007 fall 2008

Synopsis of progress Siding is nearly complete on all of the buildings. Construction is underway on the pipe rack. The water treatment building is mostly complete. Yeast tanks are being installed.

Aventine Renewable Energy-Aurora West LLC Aurora, Nebraska Kiewit Energy Co. Delta-T Corp. 100 MMgy corn

Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Start-up date

Cardinal Ethanol LLC

Synopsis of progress The time line for this project has been delayed. Start-up was previously slated for the fourth quarter of 2008.

Location General Contractor Process technology Capacity Feedstock

Pixley, California W.M. Lyles Co. Lurgi Inc. 52 MMgy corn

Synopsis of progress Testing was being completed in late June. Congratulations Calgren Renewable Fuels LLC!

Archer Daniels Midland Co. Location General contractor Process technology Capacity Feedstock

Calgren Renewable Fuels LLC

Cilion Ethanol LLC

Ethanol marketer Aventine Renewable Energy Distillers grains marketer Aventine Renewable Energy Carbon dioxide marketer N/A Broke ground September 2007 Target start-up date first quarter 2009

Synopsis of progress The project is on schedule. No further information was available at press time.

Location General contractor Process technology Capacity Feedstock

Keyes, California Harris Construction Praj Industries Ltd. 55 MMgy corn

Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date

undeclared undeclared N/A July 2006 third quarter 2008

Synopsis of progress All major structural work is complete, and most construction work is focused on piping and electrical.

Aventine Renewable Energy-Mt. Vernon LLC Location General Contractor Process technology Capacity Feedstock

Mt. Vernon, Indiana Kiewit Energy Co. Delta-T Corp. 100 MMgy corn

Ethanol marketer Aventine Renewable Energy Distillers grains marketer Aventine/Consolidated Grain and Barge Carbon dioxide marketer N/A Broke ground September 2007 Target start-up date first quarter 2009

PHOTO: CILION ETHANOL LLC

Synopsis of progress The project is on schedule. No further information was available at press time.

Bridgeport Ethanol LLC Location Design/builder Process technology Capacity Feedstock

Bridgeport, Nebraska ICM Inc. ICM Inc. 50 MMgy corn

Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date

undeclared Colorado Ag Services undeclared September 2007 September 2008

Synopsis of progress Road construction is being completed. All buildings are erected, and most work is confined to electrical and piping.

ETHANOL PRODUCER MAGAZINE AUGUST 2008

Cilion Ethanol LLC

Clean Burn Fuels LLC Location General contractor Process technology Capacity Feedstock

Raeford, North Carolina Biofuels Design/Clean Burn Fuels Katzen International 60 MMgy corn

Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date

undeclared undeclared N/A January 2008 June 2009

PHOTO: FIRST UNITED ETHANOL LLC

Synopsis of progress All major dirt work for the site is complete, and foundation work has begun.

First United Ethanol LLC

Ethanol Grain Processors LLC Location Design/builder Process technology Capacity Feedstock

Obion, Tennessee Fagen Inc. ICM Inc. 100 MMgy corn

Ethanol marketer Aventine Renewable Energy Distillers grains marketer CHS Inc. Carbon dioxide marketer N/A Broke ground December 2006 Target start-up date October 2008

Synopsis of progress Construction continues. No further information was available at press time.

First United Ethanol LLC

PHOTO: FIRST UNITED ETHANOL LLC

Location Design/builder Process technology Capacity Feedstock

First United Ethanol LLC

Camilla, Georgia Fagen Inc. ICM Inc. 100 MMgy corn

Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date

Eco-Energy First United Ethanol undeclared January 2007 summer 2008

Synopsis of progress Dryers are being installed. The grain-handling area is 55 percent complete. The grain-receiving building is complete, and grain transport equipment is being installed. All major equipment in the fermentation area has been installed, and piping, electrical and instrumentation work is approximately 85 percent complete there. Piping, electrical and instrumentation for the process equipment is approximately 75 percent complete.

GreenField Ethanol Location General contractor Process technology Capacity Feedstock

Johnstown, Ontario SNC-Lavalin Group ICM Inc. 200 MMly (53 MMgy) corn

Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date

Commercial Alcohols Commercial Alcohols

undeclared October 2006 fourth quarter 2008

Synopsis of progress N/A

ETHANOL PRODUCER MAGAZINE AUGUST 2008

Hawkeye Renewables Location Designer/builder Process technology Capacity Feedstock

Menlo, Iowa Fagen Inc. ICM Inc. 110 MMgy corn

Homeland Energy Solutions Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date

Eco-Energy undeclared N/A July 2007 fourth quarter 2008

Synopsis of progress Construction continues. No further information was available at press time.

Location Design/builder Process technology Capacity Feedstock

Shell Rock, Iowa Fagen Inc. ICM Inc. 110 MMgy corn

Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date

undeclared undeclared N/A May 2007 January 2009

Synopsis of progress N/A

Hawkeye Renewables Location Designer/builder Process technology Capacity Feedstock

Lawler, Iowa ICM Inc. ICM Inc. 100 MMgy corn

Indiana Bio-Energy LLC Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date

Eco-Energy undeclared N/A July 2007 first quarter 2009

Synopsis of progress N/A

Location Design/builder Process technology Capacity Feedstock

Bluffton, Indiana Fagen Inc. ICM Inc. 101 MMgy corn

Ethanol marketer Aventine Renewable Energy Distillers grains marketer CHS Inc. Carbon dioxide marketer N/A Broke ground November 2006 Target start-up date August 2008

Synopsis of progress The rail loop has been completed, and only minor roadwork remains. Crews are painting the tanks and putting the finishing touches on the facility. Activity at the site is now largely focused on electrical and piping work.

Highwater Ethanol LLC Location Design/builder Process technology Capacity Feedstock

Lamberton, Minnesota Fagen Inc. ICM Inc. 50 MMgy corn

Kawartha Ethanol Inc. Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date

undeclared undeclared N/A November 2007 spring 2009

Synopsis of progress Work has begun on the beer well and fermentation tanks. Dirt work for the distillers grains building and grainreceiving area is underway.

O'Neill, Nebraska Adams Construction Vogelbusch 100 MMgy corn

Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target completion date

Synopsis of progress N/A

ETHANOL PRODUCER MAGAZINE AUGUST 2008

undeclared undeclared N/A July 2007 late 2008

Havelock, Ontario Profab International Delta-T 80 MMly (21 MMgy) corn

Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date

undeclared Thompson's Ltd undeclared October 2007 December 2008

Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date

undeclared N/A N/A April 2008 June 2009

Synopsis of progress N/A

New Project

Holt County Ethanol LLC Location General contractor Process technology Capacity Feedstock

Location Design/builder Process technology Capacity Feedstock

Louisiana Green Fuels LLC Lacassine, Louisiana Praj Industries Ltd. Louisiana Green Fuels 25 MMgy sweet sorghum

Synopsis of progress Dirt and foundation work is underway.

NEDAK Ethanol LLC Location General contractor Process technology Capacity Feedstock

Atkinson, Nebraska Delta-T Corp. Delta-T Corp. 44 MMgy corn

One Earth Energy LLC Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date

Eco-Energy Frahm and Deitloff N/A June 2006 second quarter 2008

Synopsis of progress N/A

Location Design/builder Process technology Capacity Feedstock

Gibson City, Illinois Fagen Inc. ICM Inc. 100 MMgy corn

Ulysses, Kansas ICM Inc. ICM Inc. 40 MMgy corn/milo

Pacific Ethanol Stockton LLC Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date

undeclared undeclared undeclared August 2007 late 2008

Synopsis of progress N/A

Location General contractor Process technology Capacity Feedstock

Stockton, California W.M. Lyles Co. Delta-T Corp. 50 MMgy corn

Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date

Kinergy Marketing Pacific Ag Products LLC

undeclared April 2007 third quarter 2008

Synopsis of progress Construction continues. No further information was available at press time.

Northeast Biofuels LLC Location General contractor Process technology Capacity Feedstock

Volney, New York Lurgi Inc. Lurgi Inc. 100 MMgy corn

Patriot Renewable Fuels LLC Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date

Noble Americas Corp. Perdue Farms BOC Gases July 2006 2008

Synopsis of progress N/A

Location Design/builder Process technology Capacity Feedstock

Location General contractor Process technology Capacity Feedstock Synopsis of progress N/A

Annawan, Illinois Fagen Inc. ICM Inc. 100 MMgy corn

Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date

Murex undeclared undeclared February 2007 2008

Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date

Provista UBE Ingredients N/A November 2006 August 2008

Synopsis of progress N/A

Northwest Renewable LLC

Eco-Energy Ag Motion Inc. N/A October 2007 second quarter 2009

Synopsis of progress Fermentation tanks and grain silos are complete. Slip form work on the distillers grains silos has begun, and storage tanks are 30 percent complete.

Nexsun Ethanol LLC Location Design/builder Process technology Capacity Feedstock

Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date

Longview, Washington Makad Construction Corp. Lurgi Inc. 55 MMgy corn

Platinum Ethanol LLC Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date

U.S. Ethanol LLC Lansing Trade Group undeclared November 2006 fourth quarter 2008

Location Design/builder Process technology Capacity Feedstock

Arthur, Iowa Fagen Inc. ICM Inc. 110 MMgy corn

Synopsis of progress N/A

ETHANOL PRODUCER MAGAZINE AUGUST 2008

Poet Biorefining-Fostoria Location Design/builder Process technology Capacity Feedstock

Fostoria, Ohio Poet Design & Construction Poet Design & Construction 65 MMgy corn

Southwest Iowa Renewable Energy LLC Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date

Poet Ethanol Products Poet Nutrition N/A August 2007 fourth quarter 2008

Synopsis of progress Construction continues. Hiring is underway, but no further information was available at press time.

Marion, Ohio Poet Design & Construction Poet Design & Construction 65 MMgy corn

Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date

Poet Ethanol Products Poet Nutrition N/A May 2007 December 2008

Synopsis of progress Construction continues. Hiring is underway, but no further information was available at press time.

Council Bluffs, Iowa ICM Inc. ICM Inc. 110 MMgy corn

Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date

Lansing Ethanol Group

Bunge undeclared November 2006 August 2008

Synopsis of progress Overall construction is 70 percent complete. All six steam dryers have been set. Construction of the steam line, which will connect the ethanol facility to a neighboring power plant, is underway. The ethanol plant will use some of the excess steam created by the power plant for energy.

Project Complete

Poet Biorefining-Marion Location Design/builder Process technology Capacity Feedstock

Location Design/builder Process technology Capacity Feedstock

Superior Ethanol LLC

Location General contractor Process technology Capacity Feedstock

Superior, Iowa Agra Industries Delta-T Corp. 50 MMgy corn

Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Start-up date

RPMG undeclared N/A July 2006 June 2008

Synopsis of progress Construction is complete, and the plant has begun grinding corn. Congratulations Superior Ethanol LLC!

Poet Biorefining-North Manchester Location Design/builder Process technology Capacity Feedstock

North Manchester, Indiana Poet Design & Construction Poet Design & Construction 65 MMgy corn

Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date

Poet Ethanol Products Poet Nutrition N/A third quarter 2007 first quarter 2009

PHOTO: SUPERIOR ETHANOL LLC

Synopsis of progress Construction continues. Hiring is underway, but no further information was available at press time.

Route 66 Ethanol LLC Location Tucumcari, New Mexico General contractor APS/United Stainless Process Technology Process technology United Stainless Process Technology Capacity 10 MMgy Feedstock corn/milo

Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date

undeclared undeclared N/A October 2007 2008

Synopsis of progress N/A

Superior Ethanol LLC

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Terra Grain Fuels Inc. Location General contractor Process technology Capacity Feedstock

VeraSun Hartley LLC

Belle Plaine, Saskatchewan Ethanol marketer EllisDon/VCM Contractors & Engineers Distillers grains marketer

Delta-T Corp. 150 MMly (40 MMgy) wheat

Carbon dioxide marketer Broke ground Target start-up date

undeclared undeclared undeclared September 2006 2008

Location Design/builder Process technology Capacity Feedstock

Synopsis of progress N/A

Casselton, North Dakota Wanzek/Valley Engineering Vogelbusch 100 MMgy corn

Location Design/builder Process technology Capacity Feedstock

undeclared undeclared N/A June 2007 December 2008

Janesville, Minnesota Fagen Inc. ICM Inc. 110 MMgy corn

Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date

Provista UBE Ingredients N/A January 2007 third quarter 2008

Synopsis of progress According to the company Web site, construction continues. No further information was available at press time.

VeraSun Dyersville

VeraSun Welcome LLC

Dyersville, Iowa Fagen Inc. ICM Inc. 110 MMgy corn

Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date

Provista UBE Ingredients N/A November 2006 2008

Location Design/builder Process technology Capacity Feedstock

Synopsis of progress According to the company Web site, construction continues. No further information was available at press time.

Welcome, Minnesota Fagen Inc. ICM Inc. 110 MMgy corn

Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date

VeraSun Energy VeraSun Energy N/A November 2006 June 2008

Synopsis of progress The company has decided to delay start-up of this facility until market conditions improve.

VeraSun Hankinson Location Design/builder Process technology Capacity Feedstock

VeraSun Energy VeraSun Energy N/A November 2006 June 2008

VeraSun Janesville Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date

Synopsis of progress N/A

Location Design/builder Process technology Capacity Feedstock

Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date

Synopsis of progress The company has decided to delay start-up of this facility until market conditions improve.

Tharaldson Ethanol LLC Location General contractor Process technology Capacity Feedstock

Hartley, Iowa Fagen Inc. ICM Inc. 110 MMgy corn

White Energy Plainview LLC

Hankinson, North Dakota Fagen Inc. ICM Inc. 110 MMgy corn

Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date

Location Design/builder Process technology Capacity Feedstock

Provista UBE Ingredients N/A August 2006 2008

Synopsis of progress The company has decided to delay start-up of this facility until market conditions improve.

Plainview, Texas Fagen Inc. ICM Inc. 100 MMgy corn/milo

Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date

Murex The Scoular Co. undeclared October 2006 2008

Synopsis of progress N/A

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ETHANOL PRODUCER MAGAZINE AUGUST 2008

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New Life

lexandria, Ind., is a typical Midwestern small town. Approximately 55 miles northeast of Indianapolis, this town of 6,000 wanted more to boast about than its high school and quality of life in order to keep its young people from relocating elsewhere. For Alexandrians, their last large employer to help that cause was a Ford Motor Co. plant, and it closed in the late 1970s. Then, Poet came to town. It was a happy day for the community of 6,000 when Poet began building its $115 million, 65 MMgy ethanol plant just outside of Alexandria in late 2006. One year later, community leaders’ hopes that a new industry would breathe life into their small town were realized. Poet Biorefining-Alexandria hosted more than

1,000 people at a grand opening celebration at the facility April 17. The state-of-the-art plant is the 23rd ethanol facility to be constructed and operated by Poet, the world’s largest ethanol production company that began doing business as Broin Cos. two decades ago. The facility sits on 235 acres in the midst of northern Indiana’s corn-growing region. In order to produce at full capacity, the plant will need to take in 21 million bushels of corn annually at a total selling price between $3 million and $6 million per year for area farmers. The plant is equipped with Poet’s Broin Project X technology. The patentpending process uses a raw starch hydrolysis to convert starch to sugar, which is then fermented to ethanol without the use of heat. The process is unique to Poet facilities and saves the company an

ETHANOL PRODUCER MAGAZINE AUGUST 2008

LOCATION DESIGN/BUILDER PROCESS TECHNOLOGY CAPACITY FEEDSTOCK ETHANOL MARKETER DISTILLERS GRAINS MARKETER CARBON DIOXIDE MARKETER BROKE GROUND START-UP DATE

untold amount of money in operating costs each year. Poet Chief Executive Officer Jeff Broin is focusing on keeping his company on the leading edge of ethanol production, saying the plant in Alexandria could easily be expanded to produce cellulosic ethanol once the process has been perfected. Poet is currently working to commercialize cellulosic ethanol at its research facility in Scotland, S.D. Each Poet facility is an independent limited liability company, so it isn’t dependent on local farmers for feedstocks, but it still reaps the benefits of buying and selling to any interested farmer in the area. A portion of each plant is made available for sale by shares, so farmers can still own a piece of the plant, but they can also shop around for the best price for their crop. Poet Biorefining-Alexandria General Manager Dave Hudak says farmers have been extremely supportive so far and actually held on to some of their corn in order to sell it to Poet’s facility in Alexandria. Another benefit to farmers and ranchers in the Alexandria area will be the availability of distillers dried grains. The plant will produce 178,000 tons (or

Alexandria, Ind. Poet Design & Construction Poet Design & Construction 65 MMgy corn Poet Ethanol Products Poet Nutrition N/A December 2006 April 2008

35 railcars) of Poet’s Dakota Gold Brand distillers grains annually. Plant officials say they will export some of the distillers grains and also sell it locally. Guests at the grand opening were told it would be as easy as calling the administration office and ordering a truckload for feed, then driving over and filling up their trucks. While some of the plant’s employees are company executives who transferred in from other areas of the country, at least 80 percent of Poet Biorefining-Alexandria’s 42 employees are local residents. The annual payroll and benefits from the plant will inject up to $2 million into the local economy. Local residents couldn’t be happier to provide a home for Poet’s ethanol production. Now they just need to improve the local ethanol market. A guest at the grand opening asked how

ETHANOL PRODUCER MAGAZINE AUGUST 2008

—Kris Bevill

:OU R P L A N T

POET BIOREFINING-ALEXANDRIA LLC

far behind Indiana is from the rest of the country when it comes to the use of ethanol—and it’s true that the state is a latecomer to ethanol. There are approximately 1,000 retail filling stations in Indiana, and only 100 offer E85. The closest E85 station to Alexandria is 20 miles east in Muncie, Ind. However, ethanol proponents are determined to get the Hoosier State caught up in the ethanol game. Poet is planning to open its third facility in Indiana later this year in North Manchester, and the sudden presence of ethanol production facilities in the state may bring new interest in retail ethanol sales. During her speech at the grand opening, Indiana Lt. Gov. Becky Skillman announced recent progresses made by her state. “Thanks to the investment of this company, our state now boasts seven operational plants with seven more to come,” she said. “In the past three years, this industry has contributed 750 new jobs (in the state), more than $2.1 billion in capital investment and more than $26 million in the pockets of Hoosier farmers. We owe a huge debt of gratitude to Poet and all of the corn growers in Indiana.”

:INTHEFIELD 60

Twin Approach to Corn

win brothers Gene and Dean Carstens of Minden, Neb., are the type of farmers who use academic research as the launching pad for their own. In the Carstens’ case, it was work done in the 1970s by a Rutgers University researcher who achieved 400-bushel-per-acre corn yields through attention to spatial availability—the precise spacing of corn plants. The Carstens used that research, plus what they learned from others and on-farm experience, to design their own corn planter. Besides the farm and a fertilizer business called FirstAg, the brothers have been building corn planters as part of another business of theirs, called Twin Diamond Industries LLC. The most recent version of their corn planter is being kept undercover while the patent process proceeds. The Twin Diamond twin-row, strip-till corn planter will space each corn plant in a precise diamond-shaped pattern. Strip tillage is a relatively new concept seeking to overcome some of the limitations of notill systems. Farmers, particularly in the West, have adopted no-till practices because the method reduces soil erosion, improves moisture retention and soil quality, and reduces energy use by eliminating several trips through the field. On the downside, leaving large quantities of residue in the field can depress early-season plant emergence and development. The new Twin Diamond planter solves the challenge of managing high crop residues by clearing an eight- to 10-inch path through the waste to plant twin rows of corn spaced eight inches apart with the paired rows spaced 30 or 36 inches apart. “We wanted to be able to use a conventional header to harvest,” Gene Carstens explains. The planter clears the seeding zone, allowing for better root development and water penetration while incorporating some organic matter deeper into the soil profile, and allowing better fertilizer placement. One of the weaknesses of the no-till system is that the surface application of nutrients keeps root development in the top two to three inches, he says. Placing the nutrients below the germinating plant encourages deeper root development, plus it requires 30 percent less nitrogen and 25 percent to 40 percent less phos-

phate. The system can be adapted to use liquid or dry formulations, as well as anhydrous ammonia. There’s much more to the Carstens’ vision than just a new planter design. The Carstens advocate a systems approach that combines precise plant and fertilizer placement in the strip-till system with optimal plant populations and proper variety selection. “The majority of people are going in the wrong direction on plant population in my opinion,” Gene Carstens says of the dominant trend toward higher plant populations. “It takes so much water and so much fertility to maintain that.” To maintain yields with a lower plant population, he recommends using a flex-hybrid. Under lower plant population and good growing conditions, the indeterminate flex-hybrids will set and fill a second ear, which will continue to grow larger as long as conditions are right. Using a common yield estimation system, multiplying a 23,000-plant population (with two cobs on each plant) with 1,200 kernels per cob and dividing that by 90,000 kernels per bushels suggests that a 300-bushel crop is possible. “That’s unheard of,” Gene Carstens admits, but he acknowledges that farmers working with this systems approach are seeing a 50- to 60-bushel-per-acre improvement in yields on both dryland and irrigated fields. “Plants have to be spaced correctly,” he says. “We’ve learned that it does make a difference.” Producing bigger yields with less water and fertilizer while improving environmental performance is increasingly important, not only for the bottom line but in the public eye. “We need a balance between food demand and ethanol demand,” Gene Carstens says. “We’ll be dead if we can’t do this.” —Susanne

Retka Schill

ETHANOL PRODUCER MAGAZINE AUGUST 2008

:UP FRONT

From Behind-the-Scenes to Center Stage

hen his name was announced as the recipient of the 2008 High Octane Award at the International Fuel Ethanol Workshop & Expo in Nashville, Tenn., on June 17, David Kolsrud humbly took the stage to accept. The award, referred to as the “People’s Choice Award,” is handed out every year to whomever receives the most nominations from his or her peers in the ethanol industry. Nominations for Kolsrud noted his commitment and dedication to the industry. When he presented Kolsrud with the award, BBI International Inc. Chief Executive Officer Mike Bryan said he couldn’t think of a more deserving person. Q: Dave, tell our readers how you first got into the ethanol business. A: In 1995, local farmers were contacted by Luverne, Minn., Mayor Bill Weber to build an ethanol plant. I was chosen to spearhead the local effort. We put together a steering committee and board of directors, and worked with Broin & Associates (now Poet) to raise the equity. Because of high corn prices ($5-plus), our fund drive struggled. In early 1997, farmers, Broin Cos., Fagen Inc., the city of Luverne and an investment group called Corn Energy Investors completed financing and built Agri-Energy LLC. I stayed on as co-op coordinator.

Q: How has the industry evolved in the time since you first became involved with it? A: It started out with a few farmer-owned plants in Minnesota and has expanded to hundreds of plants nationwide. The industry is now composed of several types of investor models instead of just farmer-owned. We’ve witnessed plants getting larger and technology improving considerably. One of the things I’m the proudest of is the fact that farmers who relied on the government for subsidies for three generations are now tax-paying citizens, thanks to the ethanol industry. Q: Where do you see the ethanol industry in five years? A: I see the emergence of the celluloseto-ethanol industry. Believe it or not, I see farmers expanding their roles in ethanol ownership because it’s a natural hedge against high fuel prices and low corn prices. With the technology to make both food and fuel products out of the same plant, farmers will be more secure with their investments.

Q: What did it mean to you to receive the High Octane Award at this year's FEW? A: I want to thank BBI for creating such an award and Kevin Tenpas of Heartland Business Bank for nominating me. It is truly humbling to be selected by my peers for this award. This award signifies the faith that I and thousands of other investors have had in the future of the ethanol industry. Q: What else do you want EPM readers to know about yourself and your business? A: It isn’t just about me. It’s about the love and support I’ve received from my family. In addition, this industry has allowed me to make thousands of friends and business partners, all of whom I value highly. DAK Renewable Energy believes strongly in the industry, and that there is a right way and wrong way to do business. We feel that we have the best interest in mind for all of our clients as we make business decisions together. —Kris Bevill

Q: Where do you see the ethanol industry in 20 years? A: In 20 years, I see synergies of various renewable energy industries comingled in the same location. An example would be having food and fuel-ethanol plants located alongside wind towers and biodiesel plants.

Name David Kolsrud Title President Company DAK Renewable Energy Education University of Minnesota, Agriculture Education Career United States Army, Berlin, Germany 1970-1972 Farmer, Beaver Creek, Minn. 1973-Present Agri-Energy LLC, Luverne, Minn., Coop Coordinator 1995-Present Mike Bryan, chief executive officer of BBI International, presents David Kolsrud with the High Octane Award at the 2008 International Fuel Ethanol Workshop & Expo in Nashville, Tenn.

DAK Renewable Energy, Founder and President 2006-Present

PHOTO: KRIS BEVILL, BBI INTERNATIONAL INC.

ETHANOL PRODUCER MAGAZINE AUGUST 2008

High performance starts in the field

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:FLEXFACTOR 64

Numbers Don’t Lie

n June 12, the average price of gasoline at the pump was $4 per gallon. Many Americans understand the age-old adage that “nothing is so bad that it couldn’t get worse.” So although $4 gas is bad news, the prices could be higher and the situation worse. According to the U.S. DOE, the price of gas could be as much as $4.35 per gallon under different circumstances. So what’s keeping the extra 35 cents off each gallon of gas at the pump? According to the DOE, it’s biofuels. The department says that without biofuels—ethanol in particular—gasoline prices would be 20 to 35 cents higher. In a letter sent to U.S. Sen. Jeff Bingaman, D-N.M., chairman of the Senate Committee on Energy and Natural Resources, by Secretary of Energy Samuel Bodman and Secretary of Agriculture Ed Schafer, the secretaries concurred that biofuels are moderating gasoline prices. Statistics from the DOE reveal that for a typical household, the average savings being realized annually is $150 to $300. The overall significance of biofuels to the United States is laid out in the letter’s statistics that say the country has seen a $28 billion to $49 billion savings based on an annual gasoline consumption of roughly 140 billion gallons. A study conducted by Xiaodong Du, research assistant at the Center for Agricultural and Rural Development at Iowa State University, and Dermot Hayes, professor at ISU’s Department of

Gasoline Consumption Reduction Attributed to Ethanol Use Gasoline Displacement

2007

2008 (estimated)

Thousand Barrels/Day

357

472

Billion Gallons/Year

5.5

7.2

SOURCE: U.S. DOE

Economics, shows similar numbers compared with those quoted by the DOE. “Estimation results show that over the period of 1995 to 2007, ethanol production had a significant negative effect of 29 to 40 cents per gallon on retail gasoline prices,” the study summary says. “The results suggest that this reduction in gasoline prices came at the expense of refiners’ profits. These results are statistically significant across a range of model specifications and across all regions.” The study also states, “The availability of ethanol essentially increased the capacity of the U.S. refinery industry and in doing so prevented some of the dramatic price increases often associated with an industry operating at close to capacity.” The ISU study concluded: “Had we not had ethanol, it seems likely that the crude-oil refining industry would be slightly larger today than it actually is, and in the absence of this additional crude oil refining capacity, the impact of eliminating ethanol would be extreme.” The ISU study can be viewed at www.card.iastate.edu/publications/DBS/PDFFiles/08wp467.pdf. The “E” stickers on gas nozzles at many gas stations nationwide indicate the percentage of ethanol mixed with the gasoline (i.e., E10, E85). Everyone in the ethanol industry knows that if you remove that percentage of ethanol from the gasoline, more gasoline is required. It could just as well stand for Easy-to-understand. —Timothy Charles Holmseth

ETHANOL PRODUCER MAGAZINE AUGUST 2008

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:BUSINESS 66

Are Reverse Mergers Gaining Credibility in the Industry?

rom a business standpoint, the idea sounds like a match made in heaven: A small, private ethanol company that’s hungry for capital and eager to become publicly traded targets a public company devoid of assets and operation but desperate to create some value for its shareholders. In today’s current volatile ethanol market, many privately owned ethanol firms may be exploring more creative and aggressive business strategies for capital formation. As a means to grow by acquisition, a reverse merger tactic could serve as a viable alternative to the typical initial public offering (IPO) process. Reverse mergers are less burdensome, less time-consuming and in some cases equally lucrative if done right. Essentially, a reverse merger— sometimes referred to as a shell merger—is a transaction in which a privately held company merges with a dormant publicly listed company (the shell company), which may have had a broken business model, obsolete business plan, or underperforming assets and liabilities. Although several publicly traded ethanol companies have found success after undertaking a reverse merger strategy, such as Pacific Ethanol Inc., a reverse merger tactic shouldn’t be considered “the preferred option if you’re looking for liquidity,” according to Gregory Lynch, partner with Michael Best & Friedrich LLP. “I think there are other transactions that may be more beneficial,” says Lynch, who is also cochairman of the firm’s business practice group and renewable energy industry group. “If you’re looking for pure liquidity of sale, I think that would be a viable option, but if you’re looking for some type of roll-up transaction or consolidation [and not] some short-term liquidity, I think a reverse merger would be a viable option.”

Precarious in nature, with an reverse merger, there is no involveunsavory past of being handled by ment with the regulatory authorities illegitimate players in similar emerg- prior to closing,” Feldman says. “It’s all about how fast you can ing markets in the 1980s, get the deal done.” reverse mergers could be However, IPOs genergaining more credibility ally raise more money. The across all industries, espeIPO process also makes it cially since the U.S. easier to create market Securities and Exchange support for the once priCommission’s ruling to vate company seeking to improve disclosure and increase its value on Wall legitimacy in such transacStreet. “I think one of the tions. Plus, the IPO market challenges is that there are is relatively inactive right a lot of biofuel companies, now. According to David Lynch especially ethanol compaFeldman, founder and managing partner of Feldman, nies, that are subject to the public Weinstein & Smith LLP, more legiti- reporting requirements [through the mate players have used reverse SEC],” Lynch says. “They don’t have merger tactics, including some in the the benefits of liquid public trading in ethanol industry. “The average market their stock, and those types of compavalue of a reverse merger last year nies are well-suited for either a was about $55 million, so these aren’t reverse merger or some type of other tiny little start-ups,” he says. “In the similar liquidity event.” He adds that alternative energy space, it’s been a having the backing of a good sponsor very popular method of going public. and a good investment bank for priWhatever is hot on Wall Street is hot vate investment in public equity is crucial for “selling worth” to Wall Street in reverse mergers.” Like all business strategies, from the bulletin board in an attempt there are advantages and disadvan- to get on higher exchanges such as tages to reverse mergers that must be NASDAQ. “That’s going to be the key closely examined during the due dili- to a lot of the success of the reverse gence period. Some of the overarch- merger for private ethanol companies ing benefits of a reverse merger ver- looking to go public,” he says. “How sus an IPO are that it’s less expensive quickly are you able to create the liqand less time-consuming. Plus, less uidity for that stock? That’s the dilution is involved, meaning earnings biggest question.” per share of common stock are reduced. Additionally, there is no pub- —Bryan Sims lic disclosure of financial statements in a reverse merger, whereas a prospectus is required for an IPO through the SEC. “The problem with an IPO is that you have to get your prospectus approved by the SEC, and that’s just unpredictable, whereas in a

ETHANOL PRODUCER MAGAZINE AUGUST 2008

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: FINANCE 68

Make Accounting Software Investment Pay Off By Jack Mount

ccounting software is one of the most critical components to a plant’s success, but it can also be one of the most frustrating. Every day, thousands of records impacting assets and liabilities are entered in the computer. Operators may pay little attention to where the information flows, and if the software is incorrectly set up, or users have had limited training and the work flow and output is not understood, financial analysis and decisions based on the information become a guess at best. Sometimes a new employee under-appreciates or misunderstands the function or power of the software, which can result in confusion, wasted time and money, and an affected bottom line. In other cases, a system may be in place and the set-up is sound, but help is needed in reviewing and understanding the document work flow. If that is an issue, consultants can help. A client may not realize their accounting firm can serve in a consulting role, but we have helped many of our biofuel clients attain additional value. For example, close tracking and monitoring of “closing” is important. That information leads to a discussion on the key perform-

Another key point is ance indicators and what not allowing the software key components are company to manage the needed that fit the current implementation. While it environment. A recommay do a nice job of mendation is then made to installing the software, manage the implementaspecific outside training is tion of the software proneeded by another gram. Some of the key resource provider to indicators include where direct the implementathe points are to gather tion. This allows the client information, how to corMount to have a person who rectly capture the critical information, and identification of understands the daily challenges areas where functionality can be and work flow to manage the implementation correctly and efficiently. improved. While each client is different, Clients need to understand that not all software may work for their the four key points of a successful environment or size of operation. accounting system are: 1) underSoftware is not the savior of the standing current information sysbusiness but a valuable tool to man- tems, 2) implementation of the existage the work flow properly and suc- ing systems in the new software, 3) cessfully. With programs in the mar- refining new system inefficiencies ketplace such as SAP, PeopleSoft, and 4) creating an optimal system QuickBooks, Microsoft Dynamics for the company. By managing the NAV, Microsoft Dynamics GP and project effectively and in a schedMAS 500, clients need to under- uled manner through careful trackstand they all have similar functions ing, the investment will be more than with different depths of information. worth it to address the company’s The size of the company, amount of needs. detail required and the amount one is willing to spend will help determine which system will best create Jack Mount is a manager in the agrithe information necessary to help culture group at Kennedy and Coe the company succeed. LLC. Reach him at jmount@kcoe Accounting systems will never .com or (970) 330-8860. create great information. Only the people and the process will create great information. If the system creates, a new accounting system will only add to the disaster. Items such as where the business get its information, the capture points, and what kind of integration is needed to combine the existing accounting system into the new platform with minimal brain damage to the organization are key to this process.

ETHANOL PRODUCER MAGAZINE AUGUST 2008

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:LEGALPERSPECTIVES 70

Natural Gas from the Ground to the Ethanol Plant By Leanna D. Whipple

hile new technologies ered natural monopolies, as one IPC for alternative energy will likely service an entire regional sources to natural gas area, without duplication of pipelines are being studied, a from other IPCs. Thus, the FERC majority of ethanol ensures that this monopolistic strucplants in the United States continue to ture is not abused and customers are protected from unreasonuse natural gas as their priable rates. mary energy source. This Historically, IPCs purarticle follows the journey of chased natural gas from the natural gas from the ground producer and then re-sold it to the plant and the various to local distribution compaplayers involved. nies (LDCs) or end-users. The first step is to find However, in 1992, the FERC and extract the natural gas. ordered IPCs to â&#x20AC;&#x153;unbundleâ&#x20AC;? This process alone requires their services and separate significant resources to their sales of transportation secure the permits and services from their sales of rights necessary from reguWhipple natural gas. As a result, latory bodies and private landowners for the exploration and marketers and even end-users now extraction of the natural gas. Once the have open access to purchase natural natural gas has been extracted, it is gas directly from the producers, and transported through low-pressure the IPCs are required to provide transgathering pipelines to a processing portation services equal in quality plant where any oil, carbon dioxide or whether the natural gas is purchased water, among other items, is removed. from the IPC or from a producer or Once processed, the natural gas marketer. Once the natural gas reaches the enters the interstate pipeline system. The Federal Energy Regulatory region of a plant via an interstate Commission (FERC) provides regula- pipeline, a connecting pipeline must tory oversight of interstate pipeline be constructed either to the interstate companies (IPCs). IPCs are consid- pipeline itself, or to a pipeline owned by a LDC or local utility. An ethanol plant can either connect directly to the interstate pipeline through a privatelyowned interconnection line, or a local

utility or LDC may construct, own and operate the connection line. The costs of both options must be weighed on an individual basis. Either way, it is beneficial for ethanol plants to locate their plants in close proximity to an interstate pipeline to minimize construction costs and reduce the number of landowners from whom easements must be secured. In addition, the construction of the interconnection pipeline generally requires regulatory approval from the state utilities regulatory commission. In todayâ&#x20AC;&#x2122;s open access model, an ethanol plant can negotiate directly with the producers of the natural gas. However, due to the current volatility in natural gas prices, marketers can play a key role in procurement. Marketers enjoy minimal regulation by the FERC or state utilities commissions and can provide a wide range of services, such as negotiating with IPCs for their transportation services and connection to their pipelines, natural gas procurement, risk management through hedging programs and pipeline construction. Once the connecting pipeline is constructed and tapped into an interstate or LDC pipeline, and a supply of natural gas has been procured and is flowing through pipelines, the ethanol plant can flip its switch and begin production.

Leanna D. Whipple practices primarily in the areas of securities and corporate transactions, as well as environmental and public utilities law at BrownWinick, a Des Moines, Iowa-based law firm serving the renewable fuels industry. Reach her at whipple@brownwinick.com or (515) 242-2433.

This article is only a general summary for information purposes and does not constitute legal advice. Consult a qualified and experienced legal advisor for your specific situation or particular questions.

ETHANOL PRODUCER MAGAZINE AUGUST 2008

Standards for tomorrow. We see food, feed, and fuel. What do you see? Fractionation makes it all possible.

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w w w. f u e l e t h a n o l wo r k s h o p. c o m

EVENT

At the 24th annual International Fuel Ethanol Workshop & Expo, Bryan, right, chief executive officer of BBI International, presented RFA President Dinneen with a plaque recognizing his 20 years of service to the renewable fuels industry. PHOTO: BBI INTERNATIONAL

ETHANOL PRODUCER MAGAZINE AUGUST 2008

EVENT

The Truth A bout

Food and Fuel The 24th International Fuel Ethanol Workshop & Expo was held June 16-19 in Nashville, Tenn., in the midst of record-busting energy prices and serious charges against the industry posed by Big Oil and “Big Food.” By Ron Kotrba, Dave Nilles, Kris Bevill, Jessica Sobolik, Hope Deutscher and Rona Johnson

ETHANOL PRODUCER MAGAZINE AUGUST 2008

EVENT

he celebration at the 24th annual International Fuel Ethanol Workshop & Expo general session was bittersweet as the ethanol industry pioneer who hand-crafted the world’s most renowned ethanol conference nearly a quarter-century ago— Kathy Bryan, president of BBI International—was absent for the first time since the show’s inception due to her battle with cancer. “The industry wouldn’t be what it is today were it not for Kathy,” said Bob Dinneen, president of the Renewable Fuels Association. A woman with “indomitable spirit,” in the words of Dinneen, Bryan received a heartfelt standing ovation from the audience and warm wishes for a speedy recovery. Opening remarks were given by Mike Bryan, chief executive officer of BBI International. “It’s been a year of success and tremendous abuse for the industry,” he said, referring to the relentless attack on corn-based ethanol from all sides. “What bothers me the most is the abuse that agriculture is taking,” he said, adding that the

PHOTO: BBI INTERNATIONAL

Valesco of the Brazilian Sugar Cane Industry Association, said only 1 percent of arable Brazilian land is used to grow sugarcane for ethanol, the same percentage of arable land used globally to grow feedstock for ethanol.

ethanol industry can’t allow the continued vilification of the American farmer for raising the price of food. Farmers in Tennessee know all about the utility of corn and adding value to its

state crops. Tennessee Commissioner of Agriculture Ken Givens told the audience in Nashville, “We have a long history in Tennessee of adding value to corn products,” referring to the state’s rich history of continued on page 80

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ETHANOL PRODUCER MAGAZINE AUGUST 2008

EVENT

Merger and Acquisition Activity Increases Not only do ethanol producers need to worry about corn prices at $8 a bushel, they also need to be concerned about hostile takeovers. And the two worry lines are closely linked. Kirk Martin, managing partner at Ascendant Partners Inc., said it’s natural for a rapid buildup of an industry followed by crashing of margins to lead to an increase in mergers and acquisitions, which is happening in the ethanol industry today. According to Martin, there were three reported mergers and acquisitions between 2004 and 2006 at a total cost of $220 million. There have been 12 mergers and acquisitions in the past year-and-a-half at a cost of more than $2 billion. He expects the trend to continue. Martin spoke about business considerations during a breakout session at the International Fuel Ethanol Workshop & Expo. Companies interested in merging with or acquiring other companies are driven by four main factors. The first is the desire to increase the company’s scale and diversity. For instance, an ethanol company looking to acquire a plant located closer to the feedstock than its

current facility, would fall into this category. The second reason to merge or acquire a company is that it’s a way for a business to enter the market. An increasing number of international companies are looking to get into the U.S. biofuels market, and acquiring a plant that is already in operation allows them a way to do so. The third reason is a strategic move—vertical integration. And finally, the desire to gain more technology is a driving force for a company to merge or seek to acquire another company. Martin expects this factor to increase substantially as the commercial development of cellulosic ethanol production technologies gets closer to reality. It’s a proven fact that most mergers fail to achieve their anticipated value. In fact, up to 80 percent of mergers fail. However, Martin said that as margins continue to drop in the ethanol industry the “bottom feeders” will move in and acquire the weaker companies, either in a friendly merger or in a hostile takeover. “The falling tide exposes the less efficient,” Martin said. And, he added, there are plenty of businesses out there waiting to swoop in and take advantage of the situation.

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Since 1958 West Des Moines, Iowa USA 77

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As a precursor to the official start of the 2008 International Fuel Ethanol Workshop & Expo, attendees had the option of taking in the Ethanol 101 seminar. Approximately 200 people attended and heard from a variety of speakers. The seminar began with an overview of the preconstruction aspects of ethanol plant development, delivered by Todd Mestepey, senior project manager of construction for ICM Inc. His most important tip to audience members was be sure to establish a well-defined scope that clearly identifies the duties of all parties involved in the preconstruction process. Casey Whelan, vice president of strategic initiatives at U.S. Energy Services Inc., commented during his presentation that he was pleasantly surprised to see so many people at the seminar despite all the recent bad press that ethanol has been receiving. A show of hands, however, confirmed that almost all of the people in attendance were associated with companies already servicing ethanol plants, as opposed to constructing new facilities. The most popular presentation of the day was delivered just after lunch by Mark Holtzapple, a Texas A&M

PHOTO: BBI INTERNATIONAL

Ethanol 101: Class is in Session

Approximately 200 people attended the daylong ethanol seminar that was offered as a precursor to the International Fuel Ethanol Workshop & Expo.

University professor. His presentation, titled â&#x20AC;&#x153;Carboxylate Platform: The MixAlco Process,â&#x20AC;? might have seemed a bit advanced for an audience presumed to be new to the industry, but the line for questions after he left the stage proved that people were interested in

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hearing more about the process. The MixAlco Process consists of building a large pile of biomass, pretreating it with a combination of lime and air to remove the lignins, and then utilizing a carboxylate method to produce fuel. The fuel produced in this case is gasoline, rather than ethanol. According to Holtzapple, research on the process began in 1991. Currently, a semi-works plant is under construction in Bryan, Texas, and should be operational in September. The plant will be capable of producing 300 to 400 gallons of gasoline per day. Holtzapple told the audience that “you can talk about it and talk about it, but until you build the plant to prove it works, no one will believe you.” The price of corn was not overlooked during the seminar. Several speakers addressed the growing concern of high-priced corn and recent bad weather in the Midwest as prime examples of the volatility of the ethanol market. Risk management was a popular topic because of those factors. Jason Sagebiel, risk management consultant at FCStone, announced that corn traded for $8 per bushel June 15, and he continued to stress that the biggest risk in ethanol production is margins. He said the huge swings in profits and losses are typical in the ethanol industry.

Kenneth Ayers, managing director at Aon Environmental Services Group, presented the environmental risks that need to be considered when planning a biofuels plant, as well as environmental insurance. Two types of new environmental insurance he mentioned were project efficacy insurance and carbon credits/offsets insurance. Project efficacy insurance is a policy that will pay for a company to tweak its process in the beginning phase to help insure an actual start-up. Carbon credits/offsets insurance protects a policyholder if carbon credits are either not produced or not delivered by the seller as promised. Other speakers at the seminar included Kent Herbst, ethanol team leader for U.S. Water Services; Angela Ronayne, project manager for Natural Resource Group; Kyle Althoff, project analyst for BBI International; James Broghammer, president of Pacesetter Management Group; James Heath, head of U.S. research and development at EcoSecurities LLC; Mark Yancey, vice president of project development for BBI International; and Neal Jakel, DST program manager of Delta-T Corp.

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Preparations Underway for 2009 FEW The 25th Annual International Fuel Ethanol Workshop & Expo will be held June 15-18, 2009 in Denver. The 2009 FEW will celebrate its silver anniversary at the Denver Convention Center. According to Lisa DeYoung and Dave Blazer with media and Events at BBI International, the ethanol industry has developed significantly in the past 25 years and the FEW has kept up with the pace—providing unmatched business development and networking opportunities, the largest and most widely attended expo, and an industry-leading educational forum.

As part of the 25th anniversary, BBI International has updated its FEW logo design. DeYoung said the design provides a progressive look for the exciting next stage of this conference and the industry. Booth sales and sponsorship opportunities are already available. For more information on sponsoring an event at the FEW in Denver e-mail fewsponsors@bbibiofuels.com. For more information on reserving a booth at the 2009 FEW, visit www.fuelethanolworkshop.com. The FEW workshops are developed through a steering committee. The call for abstracts will open this fall. continued from page 76

whiskey distilleries. Despite this history, fuel ethanol is something relatively new for Tennessee, but the state is moving forward quickly to develop an environment conducive to renewable fuels production and use. Givens mentioned the $72 million state investment in a switchgrass-to-ethanol pilot plant developed by Mascoma Corp. in partnership with the University of Tennessee. The commissioner also said the state is working on the creation of green corridors where motorists can find ethanol- and biodiesel-blended fuels. Motorists in Brazil don’t have problems finding ethanol since 90 percent of all new vehicles sold in the South American country are now flexible-fuel vehicles, according to Joel Valesco of the Brazilian Sugar Cane Industry Association, who presented an update on Brazilian ethanol to the general session audience. The basis of Brazilian cane producers’ new mode of production is a triple-product platform consisting of sugar, ethanol and power. The South American country will produce 6 billion gallons of ethanol this year and sell more than 3,000 megawatts of renewable electricity generated from cane byproducts back to its grid. Valesco said Brazil only uses 1 percent of its arable land to displace 50 percent of its gasoline; in a country where gasoline contains 25 percent ethanol. He said ethanol made in Brazil enjoys a 9.3 to 1

ETHANOL PRODUCER MAGAZINE AUGUST 2008

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Soybean Hulls Potential Ethanol Feedstock As corn prices continue to rise, spurred recently by flooding in the Midwest, producers and investors are eager to learn about alternative feedstocks. One of the breakout sessions at the International Fuel Ethanol Workshop & Expo addressed that very topic. More than 100 people attended the session in order to learn more about some of the intriguing options now becoming available for U.S. ethanol production in the United States. Jonathan Mielenz, biomass program manager for Oak Ridge National Laboratory, delivered an insightful look into the possibility of using soybean hulls as a feedstock. He has been experimenting with this feedstock in the laboratory and has come to the conclusion that soybean hulls can be used to produce ethanol and at the same time

still be used as a high-protein animal feed. Soybean hulls have historically been destined for animal feed. Mielenz used a simultaneous scarification and fermentation process in his experiments, and discovered that pretreatment doesn’t make a difference in production levels, thereby potentially saving the producer 18 percent in production costs. Mielenz assured session attendees that the fermentation portion of production is simple, and the end result is both ethanol and a high-protein, low-lignin animal feed. Mielenz has determined that by utilizing his method and if soybean hulls were put into production as a feedstock nationwide, the United States could produce an additional 300 million gallons of ethanol each year and 1.4 million tons of animal feed.

energy balance. While Brazil only uses 1 percent of its arable land for ethanol production, Valesco said only 1 percent of global arable land is used to grow crops for ethanol production, including U.S. land used to grow corn for the biofuel. The “villain” is that guy who wants to eat better in China, not biofuels, Valesco said tongue in cheek.

No Mincing of Words Here With his powerful presence, Dinneen told the audience that in January he thought his speech at this year’s FEW would be a “victory lap” after the Energy Independence & Security Act of 2007 was passed, but since then, the vicious assaults on cornbased ethanol ramped up exponentially. According to Dinneen, the oil companies are behind it all. He said with the passing of the 36 billion-gallon renewable fuels standard, the oil barons saw one-third of their market share slipping away and concocted an enormous campaign against renewables. “They sit on editorial boards of every major newspaper,” he said, adding that Big Oil “bought themselves some studies” and teamed up with major food companies to create a giant smokescreen. “They need to stop us now, but they won’t,” he said, adding that rising food prices are due in part to demand from developing countries like China and India, and changing diets of people around the

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world. “Now people want a pork chop with their rice,” he said. Of course, the price of oil is paramount to this entire debate, and Dinneen hit home this message by saying, “We can’t produce $2.50 corn with $4.50 diesel.” Speaking of oil, the morning’s keynote speaker Robert Zubrin, author of “Energy Victory: Winning the War on Terror by Breaking Free of Oil,” gave a compelling account of the Organization of the Petroleum Exporting Countries strategic will to power through the constriction of global oil supplies. In 1972, the United States spent $4 billion on oil imports, or 4.5 percent of the U.S. defense budget. In comparison, 35 years later, the United States is spending $650 billion on imported oil. As Zubrin put it, “$650 billion isn’t just money, it’s power.” What’s bad for wealthy countries like the United States is crushing for developing countries such as Kenya, he said. OPEC’s “slow choke” on oil supplies is smarter than a complete shutoff due to the military consequences the United States would exact on such a move. To hammer home Dinneen’s point about oil interests controlling the editorial content of major media outlets, Zubrin said the Saudis partially own the Wall Street Journal. The paper should be renamed the Wahhabi Street Journal, he quipped. “OPEC is taxing the industrial world into depression,” he continued. The United States could open up the Arctic National Wildlife Refuge, but it would do little good. “That’s a desperation card,” Zubrin said. “It’s not the way to go. Oil is trump right now, so how do we change the trump suit?” His answer is mandating all vehicles sold in the United States be flex-fueled, giving consumers a fuel choice. A flexible-fuel vehicle mandate would end the chicken and egg dilemma, and would make E85 pumps appear rapidly across the country. “This would crash the oil price to $50 a barrel,” he told the crowd. “This is how you smash OPEC,” he said. Once the U.S. farmers continued on page 91

ETHANOL PRODUCER MAGAZINE AUGUST 2008

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FEW student scholarship winners accept checks from American Stainless & Supply. Pictured are, left to right, Rick Rafferty, senior sales representative/ethanol industry team leader of American Stainless & Supply; Howe of Chariton, Iowa; Bawa of Saskatoon, Saskatchewan; Sorenson of Missoula, Mont.; Gary Bulloch, president and chief executive officer of American Stainless & Supply.

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PHOTO: BBI INTERNATIONAL

Businesses and individuals were honored for their achievements in the ethanol industry during the International Fuel Ethanol Workshop & Expo general session. DAK Renewable Energy Chief Executive Officer Dave Kolsrud of Brandon, S.D., received the 2008 BBI International High Octane Award, which acknowledges by people’s choice a person who has helped the ethanol industry mature and progress over the years. According to BBI Chief Executive Officer Mike Bryan, Kolsrud “was doing ethanol before ethanol was cool.” The 2008 Award of Excellence was given to Jay Shetty of Palo Alto, Calif., who is senior director of global applications and grain processing at Genencor, a division of Danisco. The Award of Excellence recognizes an individual who has published papers and/or made significant research, technical advisory and development contributions in the industry. Three students interested in ethanol industry careers each received $5,000 scholarships, sponsored by American Stainless & Supply. The 2008 scholarship program winners were: Nancy Bawa of Saskatoon, Saskatchewan, who is attending the University of Saskatchewan to acquire a master’s degree in applied science; Colin Sorenson of Missoula, Mont., who is attending the University of Montana where he is conducting research on the food-versus-fuel debate and is earning a master’s degree in economics; and Hugh Howe of Chariton, Iowa, who is attending Indian Hills Community College and will transfer to William Penn University to earn a

PHOTO: BBI INTERNATIONAL

FEW Award Winners

Add 25 Years To Your Experience.

Bryan, right, presents BBI International’s High Octane Award to Kolsrud at the International Fuel Ethanol Workshop & Expo.

master’s degree in biology. Also during the FEW awards ceremony, Poet LLC and East Kansas Agri-Energy LLC received the Energy Star Award, which was presented by the U.S. EPA. The award recognizes commercial projects that reduce emissions and use 5 percent less fuel through combined-heat-andpower (CHP) generation. Poet was the second plant in the United States to install a CHP system at its ethanol plant in Ashton, Iowa. The 56 MMgy ethanol facility generates up to 7.2 megawatts of electricity and uses 16 percent less fuel than a conventional process. As a result, Poet saves almost 19,000 tons of carbon dioxide emissions per year. Garnett, Kan.-based East Kansas Agri-Energy uses a CHP system designed by ICM Inc. that recovers heat from oxidizers.

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Biorefinery Future Looks Bright Despite some of the recent misguided accusations lobbed at the ethanol industry, corn remains the foundation for current and near-term production. According to several industry experts, it could help the industry move beyond ethanol and distillers grains as end products. The biorefinery concept continues to gain momentum in the ethanol industry. While consumption of at least 36 billion gallons of ethanol per year is required by 2022 under the Energy Independence & Security Act of 2007, the industry holds the potential to move well past that and also provide a bevy of specialty chemicals, according to speakers at the International Fuel Ethanol Workshop & Expo. “The biotech and ethanol industries will be the industry framework for the future development of chemicals,” said Mark Stowers, Poet LLC vice president of research and development. Poet is at the leading edge of rolling out the biorefinery concept, which essentially models itself after the petroleum and petrochemical industry. In this instance, corn and other renewable agricultural residues replace crude oil as a feedstock. The South Dakota-based company continues to develop its Project Liberty, which is being implemented at its ethanol plant in Emmetsburg, Iowa. The 50 MMgy facility is being expanded to 125 MMgy, with 25 MMgy from corn fiber and cobs. By adding cellulosic production to an existing corn-based ethanol plant, Poet will be able to produce 11 percent more ethanol from a bushel of corn, 27 percent more from an acre of corn and

almost completely eliminate fossil fuel consumption, while decreasing water usage by 24 percent, the company said. Stowers said biorefineries open the possibility of creating specialty chemicals such as benzene, organic acids/alcohols and protein-based biomaterials. Benzene can be produced from “green” glucose out of a biorefinery, Stowers said. “This is a real potential,” he added. “It’s there. The technology is clearly in place. Having a strong corn (base) to the ethanol industry is critical not only for the footprint of cellulosic ethanol, but also for the biorefinery of the future.” Aspen Technology consultant Mike Mendez echoed Stowers’ comments. Mendez said the ethanol industry is well-positioned in biochemical and computational knowledge to make an impact on the broad specialty chemical market in the next 20 years. He said the trillions of dollars spent on existing infrastructure to create products from crude oil will be capable of handling inputs from the ethanol industry. Mendez specifically mentioned the production of ethylene from ethanol. Ethylene is the most important building block in the petrochemical industry, he said. The production of ethylene from naphtha, which is any of various volatile liquid hydrocarbon mixtures used chiefly as solvents and dilutents, is three to five times more complicated than ethanol in terms of equipment and process steps, Mendez said. It was just one of many examples of products that can be derived from the corn-based ethanol industry. “The chemical industry will not collapse with the inevitable decline of petroleum reserves,” Mendez said.

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As the 24th annual International Fuel Ethanol Workshop & Expo kicked off at the expo grand opening, distinguished chemical engineer and longtime industry consultant Raphael Katzen and his wife Selma eagerly awaited entrance to the tradeshow floor. After the ceremonial ribbon-cutting, Katzen, now well into his 90s, made his way up and down the aisles of the expo floor, shaking hands with all the people he has met over the years. Katzen, a previous recipient of the FEW’s Award of Excellence, began working with cellulosic ethanol technologies in the 1940s. In the 1970s, when the U.S. DOE was interested in helping to develop a fuel ethanol industry in the United States based on corn, the department turned to Katzen and his company Raphael Katzen Associates International for his acumen and breadth of experience. In 1997, Katzen and his wife sold their interest in his company, now called Katzen International, and started a small but active consulting company in Bonita Springs, Fla., where he works today. Katzen is retained as a consultant by Abengoa Bioenergy, for which he provided the design for its cellulosic pilot plant in York, Neb. Katzen also consulted for Alico Inc., one of six companies to receive a DOE grant for commercial-scale cellulosic projects. Alico has since pulled out of the project. At the 30th Symposium on Biotechnology for Fuels and Chemicals, which was held this year in New Orleans, Katzen was honored by being given the inaugural Raphael Katzen Award, which recognizes outstanding individuals who have greatly

PHOTO: BBI INTERNATIONAL

FEW Faithful Return

Katzen awaits his chance to speak at the microphone during the question and answer portion of a technical breakout session.

contributed to the commercialization of biotechnology to produce fuels and chemicals. When asked how many of the FEW events he’s been to over the years, Katzen responded, “How many have there been?” Then he smiled and nodded, intimating that he’s been to them all.

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Efficiently Driving Plant Profits Fuel ethanol producers continue to tweak production processes to maximize efficiency and boost the bottom line. While the industry has always done so, it now has a choice of specialized optimization techniques, including software programs and technology. Several industry experts discussed the importance “data visibility” plays in the industry at the International Fuel Ethanol Workshop & Expo. Data drives financial performance, according to Brandon Henning, global industry manager of biodiesel for GE Fanuc. “It’s critical in today’s space,” he said. Henning was one of four speakers in a workshop panel aimed at improving production efficiencies. The panel’s goal was to discuss how the smart usage of data impacts the plant from management to operations to controls. Maina Macharia, manager of project engineering for Pavilion Technologies, provided a step-by-step glimpse into how a Colorado ethanol producer implemented a plant-wide optimization program based on advanced process control (for more information, see www.ethanolproducer.com/article.jsp?article_id=4277). Sterling Ethanol is a 42 MMgy plant that started in November 2005. Macharia said the facility was an early adopter of advanced process control, and the benefits are proving it was worth the move. The plant’s goals include improving yield, throughput and quality, while reducing operating costs. “It’s a balance game,” Macharia said. “You’re trying to run the plant hard while watching your constraints and making sure the fermentors don’t run too long.” Macharia said a properly executed control system allows plant managers to view near-real-time operating margins. This also allows managers to view and define specific impacts to operating margins. Then they can assign a dollar value to events in the

production process. Making operators aware of these events allows such things to be alleviated or eliminated. Macharia said it’s critical to make sure the plant’s instruments are taking repeatable readings prior to implementing a system. Instrument error ranges must also be defined for accuracy. Sterling’s control system reduced overall batch time by two hours and added 18 percent increase in throughput. Henning summed up the industry challenges as maximizing plant efficiency to meet increased demand while best utilizing a facility’s equipment and energy inputs. He said that a survey of more than 200 manufacturers across a wide swath of industries showed great value in installing production management software to provide real-time visibility into operations. Overall equipment effectiveness increased 10 percent. The average unscheduled downtime decreased 4 percent to 6 percent. The average scheduled downtime decreased 2 percent to 4 percent, and the average waste rate declined 4 percent to 8 percent, resulting in significant improvements for ethanol producers. Henning said a 1 percent increase in fermentation yield generates $1 million in incremental revenues at a 50 MMgy plant. Production management software and process control systems are the “Rolls-Royce” of data collection tools, according to Jesper Frickman, customer solutions and biofuels scientist with Novozymes North America. However, other data-tracking options are available that don’t require extensive research and costs. Regardless of how data is collected, Frickman said baseline information should be accumulated when the plant is running well. From there, the producer can set accurate control limits for process variables. It also helps to determine why a plant is running well or poorly. “If your ethanol [throughput] is going up and a month later it is going down, and you have no idea why it was going so well, it’s still something that should be investigated,” Frickman said.

ETHANOL PRODUCER MAGAZINE AUGUST 2008

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have produced all the ethanol they can, trade barriers should be abolished, beginning the importation of ethanol from friends in Latin America and elsewhere to help them reap the prosperity now enjoyed by OPEC countries, Zubrin said. “It would be a terrific financial engine for world development,” he said. “Instead of selling Citibank to Saudi princes, we can be selling tractors to Africa. … We cannot afford to leave this power in the hands of the enemies of freedom.”

The last leg of the general session was a panel on midlevel blends moderated by the general manager of Commonwealth Agri-Energy LLC, Mick Henderson. In Kentucky, where Commonwealth Agri-Energy is located, E10 is a new option for state motorists as of December, a time when ethanol marketers were busting into the virgin territory of the Southeast. Panelists included Robert White of the Ethanol Promotion and Information Council; Ralph Groshen, senior marketing specialist with the Minnesota Department of Agriculture; and Ron Graves, director of the fuels, engines and emissions research center at the Oak Ridge National Laboratory in Oak Ridge, Tenn. White promoted his organization’s new blender pump program campaign happening in South Dakota, where only 1,100 refueling stations exist in the entire state. EPIC launched the effort on May 1 with hopes to get 100 new blender pumps established in a year. There’s a $5,000 incentive for approved applicants to use toward installation, and White said 29 stations applied in the first 45 days since the beginning of the program. There has been some question recently as to the legality of selling midlevel ethanol blends, but White made it clear that blender pumps must be designated for flex-fuel vehicles only and cannot target legacy (gas only) vehicles. “The program can talk to the research but [station owners or signage] cannot advise cus-

PHOTO: BBI INTERNATIONAL

Midlevel Blends Panel

Author Zubrin said OPEC’s power would slowly wither if the. government mandated that all vehicles sold into U.S. markets be E85-capable.

tomers to use midlevel blends in legacy cars,” White said, adding that inside sources say EPA will begin strict enforcement of the FFV rule. Nevertheless it was mentioned that station owners can’t stop people from using midlevel ethanol blends in their gas-only cars. “It’s just like we can’t stop people from putting diesel in their gas tanks,” White said. White also said 60 percent of the gas pumps currently on the market are indeed blender pumps of a sort; they blend premium gasoline and regular gasoline to make a mid-grade product, and over the next decade as more and more stations upgrade, 75 percent of all dispensers in the United States will be replaced, which would be a good opportunity to develop an ethanol blenderpump infrastructure, White said. “At some point blender pumps have got to be certified,” Groschen said. He spoke of Minnesota’s E20 law and how it continued on page 101

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Life-Cycle Analysis and the Ethanol Industry

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Life-cycle analysis is a process that is constantly evolving as new issues come to the forefront such as indirect land-use change, the value of ethanol coproducts and the impact of higher corn yields. The life-cycle analysis session at the International Fuel Ethanol Workshop & Expo addressed some of those issues although the panelists admitted that a lot of work needs to be done to determine the impact of indirect land-use changes on life-cycle greenhouse gas (GHG) emissions and just what should go into those calculations. “Certainly life-cycle analysis is not a new concept or a new practice when it comes to biofuels. The [U.S.] Department of Energy and others have been looking at the greenhouse gas and energy lifecycle of biofuels essentially since the industries began,” said Jeff Cooper, director of research at the Renewable Fuels Association and moderator of the panel. “It seems like up until now it has been quietly under the radar that this has been happening, but certainly understanding life-cycle analysis for biofuels has probably never been more important than it is now.” That’s because policy regimes, such as the Energy Independence & Security Act of 2007, are being developed that feature life-cycle analysis as regulatory mechanisms requiring several GHG thresholds be met for various classes of fuels to qualify for the renewable fuels standard (RFS). Also, California is developing a low-carbon fuel standard to reduce GHG emissions 10 percent by 2020 which relies heavily on life-cycle analysis for regulation of the standard. Cooper pointed out that the

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life-cycle analysis of biofuels is an evolving field and many questions have recently emerged about the impact of indirect land-use changes, the impact of higher corn yields and how to allocate coproduct credits. “We at the RFA are advocating for sound science and not to rush to judgment on these issues,” he said. The researchers who developed the Biofuel Energy Systems Simulator Model have modified their product as questions are posed concerning lifecycle GHG emissions. “Last year, I spoke about the model at this meeting and it was during the release of the first version,” said Adam Liska, a postdoctoral research associate at the University of Nebraska, Lincoln. “Since then we’ve gone through three revisions based on external comments from interested users. There have been more than 400 downloads of the model, of which 50 percent are within the ethanol industry, about 25 percent in academia and some governments who are interested in using the model as well.” Liska started his presentation with the definition of life-cycle GHG emissions from the EISA, which is “the aggregate quantity of GHG emissions (including direct emissions and significant indirect emissions such as from land-use changes), related to the full fuel life cycle, including all stages of fuel and feedstock production and distribution.” Compared with gasoline, the EISA requires that corn ethanol must reduce GHG emissions by 20 percent, cellulosic ethanol must reduce GHG by 60 percent and other advanced biofuels must reduce it by 50 percent. Analysis produced using the BESS model indicates that ethanol plants reduce GHG emissions by 50 percent to 62 percent, compared with gasoline. Liska says that is quite startling, as other assessments show only a 20 percent reduction. “We’re getting ready to publish this data and we hope that it will stick, and that people will recognize that the industry is actually reducing

greenhouse gas emissions more than some other models would suggest,” he said. One important component of the model is the emissions inventory where all of a plant’s emissions from all the life-cycle inputs and emissions from those inputs can be clearly assessed. For example, Liska pointed to one ethanol plant scenario where a quarter of the plant’s life-cycle GHG emissions could be attributed to nitrous oxide from crop production. The assessments of emissions from nitrous oxide are made using nine parameters from the Intergovernmental Panel on Climate Change’s “2006 IPCC Guidelines for National Greenhouse Gas Inventories.” So how does the BESS model compare with other models? Liska believes that the BESS model better represents the industry than others currently available because it uses updated values based on the latest information available for the parameters. Liska went on to describe the BESS model for life-cycle analysis and pointed out that it’s an analysis of individual biorefineries and crop production zones, assuming an ethanol plant is supported by the crop zone surrounding it. The model has three main input/output components: crop production, the ethanol biorefinery and a cattle feedlot for feeding the distillers grains coproduct. “There are three types of analysis in this model,” he said. “There’s the energy analysis, which is the life-cycle net energy yield and efficiency. There’s a greenhouse gas emissions analysis, which is carbon dioxide and other trace emissions—methane and nitrous oxide—and the global warming potential of those three combined.” And then there are the metrics for resource requirements—such as crop production, grain, water and fossil fuels—that are needed to support the ethanol plant. The model doesn’t yet include land-use change. “We will assume that land-use change will be one parameter which will be applied to all ethanol plants,” he said. “This analysis is for

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looking at an individual plant not an aggregate for the whole industry.” To give producers an idea of the serious consequences of using the calculations that were presented to determine the land-use change impacts in a Science magazine article, which was recently published and harshly criticized by the ethanol industry, Liska plugged the land-use change number from Tim Searchinger of Princeton University into his calculations. As anticipated, it significantly raised the GHG emissions levels for ethanol plants. Including this parameter value nearly doubled the GHG emissions compared with gasoline, making ethanol more GHG intense than the 20 percent reduction required by EISA. However, Liska and others believe that the number is far too high, and he cautioned that a lot of work still needs to be done to determine the value of land-use change. He also urged the industry to be actively involved in the discussions regarding land-use change, and scrutinize the assumptions that underpin the calculations. The U.S. EPA and the California Air Resources Board are currently developing methods and models to determine life-cycle GHG emissions for biorefineries that should be done by next year. In fact, Zia Haq, a chemical engineer for the DOE’s Office of the Biomass Program and one of the session panelists, said a notice of proposed rule making will be published in September followed by a public comment period. He urged those in attendance who are interested in the rule making to make sure they comment. While researchers are looking for ways to determine the life-cycle emissions for biorefineries, Keith Kor, general manager of Corn Plus LLLP, has been actively reducing the GHG emissions and fossil fuel use at the Winnebago, Minn., plant. By installing a fluid bed boiler to burn the corn syrup from the ethanol process, Kor has been able to reduce the plants natural gas consumption by 52 percent. That generates 40,000 carbon credits, which are sold on the Chicago Climate Exchange. The plant has also added another revenue stream by pelletizing it’s ash into “prills” and selling it to farmers for fertilizer. The addition of two 2.1 megawatt wind turbines produces half the electrical power requirements for the plant. Kor pointed out, however, that with September corn at $7.63 per bushel and natural gas prices at $13.05 per million British thermal units as of June 18, the industry has to do more to become low-cost producers.

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The Beauty of Raw Starch Hydrolysis and Sorghum More than three years ago, Genencor Inc., which is now a Danisco company, released its new Stargen enzyme for raw starch hydrolysis applications in corn-based ethanol plants. Raw starch hydrolysis allows plants to skip the cooking step, saving them time and energy. Recently, the company conducted research on these same enzymes to be used in noncook applications in sorghum-based ethanol plants. Gang Duan, a company director, presented Genencor’s findings in a breakout session focusing on enzyme technology at the 2008 International Fuel Ethanol Workshop & Expo. Duan first acknowledged that sorghum isn’t a widely used ethanol feedstock. He said approximately 5 percent of U.S. ethanol is made from the grain at eight different ethanol plants, and it’s mostly used in tandem with corn in the south-central part of the United States. However, he pointed out that sorghum is more price competitive than corn in certain areas. It also requires less process water than corn in ethanol production. Furthermore, sorghum-based distillers grains are of equal value to corn-based distillers grains. When cooking corn in the ethanol production process, the slurry needs to be heated to approximately 100 degrees Celsius. Sorghum must be heated to approximately 130 degrees. For that reason, producers should consider a noncook system that would simply bypass the jet cooker, liquefaction and saccharification processes, Duan said. The noncook system could bring sorghum fermentation efficiency to 95 percent, versus less than 90 percent using a cooking method. Less cooking means less unit operation, and less energy consumed to heat and cool the slurry. Furthermore, components of sorghum that are difficult to break down after using a cooking method, such as tannins and protein, are easier to break down if not cooked. “When sorghum is heated up, it reacts with amino acids or protein, and forms chemicals that may be interesting … but not to ethanol producers,” Duan said. When it comes to the resulting distillers grains, protein digestibility is improved in a noncook process. The phytic acid and free phosphate contents are lower. Phosphate disposal, which is an environmental concern, is thus reduced. By installing a noncook system, new facilities don’t spend as much in capital investments, and construction is completed more quickly. Duan said the system could easily be adopted in existing facilities by simply installing equipment that bypasses the cook steps. “Hopefully after my talk, you feel a little more comfortable using sorghum,” Duan concluded.

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ETHANOL PRODUCER MAGAZINE AUGUST 2008

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EPA’s 250-Ton Rule Impact The impact of environmental regulations on the ethanol industry was the topic of a session at the International Fuel Ethanol Workshop & Expo. “Environmental regulations are just one segment of a long list of compliance issues that the industry must stay on top of,” said Stephanie Regagnon, director of commercialization for the National Corn-to-Ethanol Research Center and moderator of the environmental regulations session. “In today’s world where the industry is constantly under attack in the media—in terms of food versus fuel—it is critical that we stay informed of our environmental responsibilities.” Jessica Karras-Bailey, senior environmental scientist for RTP Environmental Associates Inc., said the scrutiny that ethanol is facing in the public and in the media, combined with the growing number of plants, could increase the chance of an agency inspection. She gave producers a few tips to make the air quality inspection process easier. “You need to know what to expect, be proactive, maintain your records, correct deficiencies and—I think something that’s very important and sometimes lacking—develop an employee understanding not just in management but all the way down to shift supervisors—anybody who’s working at the facility,” she said. Howard Gebhart, manager of environmental compliance at Air Resource Specialists Inc., addressed the impact of the U.S. EPA’s decision to raise the emissions limit for a newly constructed ethanol plant from 100 tons per year to 250 tons per year, before the plant needs to install federal emissions controls. “The 250-ton rule is basically what the major emissions source threshold is for a new source construction permit under the EPA rules,” Gebhart said. “So under the federal [Prevention of Significant Deterioration/New Source Review] rules, if you

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belong to one of 28 listed source categories in that rule, you have a 100-ton per year [emissions] threshold for determining whether or not your facility is or isn’t a major source. If you are not one of those listed source categories, the threshold for major source is 250 tons.” Gebhart explained that ethanol plants were originally covered in the chemical processing plant category, but the EPA changed the definition of what a chemical processing plant is and specifically excluded ethanol production by natural fermentation. “That moved ethanol production out of the listed source categories where the 100-ton rule applied and moved it into the 250-ton category,” he said. Also, fugitive emissions such as leaking pipes would no longer count toward the applicability of a major source. Although it’s important for ethanol producers to know about the rule change, it’s also critical that they understand what the new rule didn’t change. “If you were worried about being a major source based on emissions of hazardous air pollutants, the threshold has not changed for hazardous air pollutants,” he said. Also, for plants in or near nonattainment areas, the 100ton threshold may still apply. “So if you are in or near these nonattainment areas, the 250-ton rule has basically done nothing for you, Gebhart said. Brian Wanzenried, senior associate for Terracon, and Todd Potas, principal with the Natural Resources Group Inc., rounded out the environmental regulations panel. Wanzenried discussed new issues, common problems and misinterpretations of environmental and chemical regulatory compliance, and Potas talked about environmental issues concerning biomass gasification.

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A panel on midlevel blends included, left to right, moderator Henderson, general manager of Commonwealth Agri-Energy; White with EPIC; Groschen of the Minnesota Department of Agriculture; and Graves with Oak Ridge National Laboratory. continued from page 91

would be nullified if the state’s fuel consumption by de facto constitutes 20 percent ethanol. Groschen also talked about the results of the 80-vehicle test the state conducted—40 pairs of identical vehicles, half run on E20 and half on E10, the state’s “regular” gasoline, which to this point analyses has concluded no material compatibility or operability issues were encountered. Groschen also wondered if health effects testing, required for any new fuel, could consist of extrapolation from results on E10 done years ago. Graves told the audience that the U.S. DOE has issued $14 million to look at E15 and E20 blends in legacy vehicles and small engines. He says credible studies already on the books show nitrous oxide increases from emissions of legacy cars using E20, and the potential for premature catalyst degradation along with drivability

THE FASTEST WAY TO GALLON 1

problems for older vehicles. Graves said 11 or 12 vehicle tasks on this issue are to be performed, and some are already underway. Early results showed if in theory E20 were to lose 7 percent fuel efficiency, it only lost 5 percent, which is good news. He also said early indications are that no drivability concerns were detected in bumping up from E10 to E20 in vehicles tested so far. Some threeway catalytic converters got hotter than they should have, indicating that the engine did not run rich enough with E20. “We’re on the brink of initiating an 80-vehicle study,” he said, which will take two years to complete. Graves said EPA was concerned about small engines and midlevel ethanol blends, which is why the agency asked him and his team to look at them first. Increased temperatures and idling speeds were noted as side effects of running E20 in small engines, but he also noted that the variability in these types of engines was so wide, and problems with temperature and idle speed were problems most noted with lower cost engines. During the question and answer period, Groschen mentioned Brazil and its success in decreasing petroleum consumption. “[If automakers want to sell engines here, tell them] to get with it,” he said. “Sometimes the right thing to do is mandate it.” EP Ron Kotrba is the senior writer and Rona Johnson is the features editor for Ethanol Producer Magazine. Reach them at rkotrba@bbibiofuels.com and rjohnson@bbibiofuels.com or (701) 738-4962. Kris Bevill is a staff writer, Dave Nilles is the contributions editor, Hope Deutscher is the online editor and Jessica Sobolik is the managing editor for Ethanol Producer Magazine. Reach them at kbevill@bbibiofuels.com, dnilles@bbibiofuels.com, hdeutscher@bbibiofuels.com and jsobolik@bbibiofuels.com or (701) 373-0636.

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INDYâ&#x20AC;&#x2122;S SUPER FUEL Since 2006, Indy Racing League competitors have been using ethanol to fuel their hopes for a checkered flag. Making sure that quality is never sacrificed in the process is the job of PerkinElmer Inc. EPM goes to the Milwaukee Mile to experience the power of Indy racing and to see firsthand what goes into testing the fuel for this high-octane environment. Story and Photos By Craig A. Johnson

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creaming around the track at more than 160 miles per hour, an Indy racing car skims a razor’s edge between success and chaos. For the 50,000 fans in the grandstands, ear protection is not an option, but a necessity. At the Milwaukee Mile, a “small oval” by Indy standards, 27 race teams converged recently to risk their reputations for a chance at victory. The last Saturday in May is qualifying day and crowds swarm pit road eager to catch a glimpse of their favorite driver. Some of the biggest names in racing are here. Favorites such as Marco Andretti and A.J. Foyt converse with newer stars like Danica Patrick, Tony Kanaan and Helio Castroneves, who appeared on ABC television’s “Dancing with the Stars” and won. Fans are understandably excited by the approachability of these icons. And the cars are no less famous. They are as sleek and muscular as jungle cats. Nothing on these vehicles is overlooked as every ounce of material supports the dual emphases of safety and speed.

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Tolerances in Indy racing are incredibly thin, a function of the environment they inhabit. In the five closest Indy Racing League races, the combined margin of victory was .0275 seconds. That’s about onefifth of the time it takes to blink once. Each piston travels more than a mile up and down in its cylinder each minute. The wind force put on the car at top speed would allow the cars to race upside down. It is to this dance that ethanol was invited.

A Brief History of Racing Fuel In 2005, the IRL used 100 percent methanol in their tanks. The fuel worked well and was more efficient than straight gasoline, but IRL officials believed there was room for improvement. In 2006, they moved to a 10 percent blend of ethanol and methanol, which was then changed to 100 percent ethanol for the 2007 season. The desire to use only ethanol aside, 100 percent ethanol is nearly impossible to obtain, and is illegal to keep without paying hefty taxes that date back to prohibition. The actual fuel used by the IRL is a blend

An Indy Racing League official fills a tank with racing-grade ethanol.

of about 98 percent ethanol and 2 percent denaturant. The exact composition includes a small amount of high-octane racing fuel. The fuel for today’s Indy cars has an octane rating of 113, compared with methanol’s 107. This means a significant

ETHANOL PRODUCER MAGAZINE AUGUST 2008

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Ryan Hunter-Reay’s crew rolls the ethanol car in to be tested.

reduction in pre-ignition, or knocking and pinging. In addition, many of the people who handle the fuel, say it smells like tequila. This quality may seem insignificant, but smell is actually one of ethanol’s benefits when compared with methanol. Pit crews

noticed the switch to ethanol immediately, reporting fewer coughing fits and less eye irritation before any other modifications were made to accommodate it. According to Dennis Vervynckt, manager of hospitality services and an IRL official, in 2006, the first year the IRL began

using ethanol, teams saw a reduction in efficiency of about 10 percent. “That’s because we put straight ethanol into the tanks,” he says. “The teams initially didn’t make any—or very many—adjustments to their engines. After a few months, they kept tweaking and by the end of the season they were back up to 100 percent efficiency.” Vervynckt points out that there was a minor loss of power. “When they first started using ethanol, teams saw a slight drop in horsepower,” he says. “As the teams got used to the fuel, they were able to get more horsepower from ethanol once they again reached maximum efficiency.” The switch to ethanol also allowed the racers to carry less fuel and make fewer pit stops, thereby increasing efficiency even more. “When the cars ran on methanol tanks had to hold 30 gallons to accommodate the fuel requirements of the cars,” Vervynckt says. “After getting the engines to perform at their full potential, there was a significant gain in mileage. Indy cars now have 22-gallon tanks. When a driver pulls in to change out his tires, he can fill up. Teams

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Blanch, center, keeps the testing area running smoothly.

were able to match their tire and fuel stops exactly, instead of stopping for tires only, or fuel only.” That efficiency translates into much less fuel being used by the sport. Lifeline Foods LLC, which supplies fuel for the IRL, will produce 120,000 gallons of ethanol for the 2008 season. And though this may seem like a lot, it’s 20,000 gallons less than was used the previous seasons. The switch from methanol-based fuel to ethanol has amazed almost everyone in the league. Drivers, the direct users of the fuel, voice their approval in glowing terms. “[Ethanol] is an American fuel that is good for the country and the environment,” says Ryan Hunter-Reay, of Rahal Letterman Racing and driver of the ethanol car. Standing beside his crew as they make last-minute adjustments to the car, he is more than happy to discuss the benefits of the IRL’s switch to ethanol. “It’s been great for Indy racing—the fuel economy, emissions—there’s nothing we don’t like. We love it.”

PerkinElmer’s Testing Procedure During Saturday’s qualifying round cars must make a date with IRL race official Kevin “Rocket” Blanch. All day teams roll their cars from their setup areas in the infield to the testing center for inspection. The cars come in order—no exceptions. As teams push them toward the testing area, Blanch makes sure they know who’s in charge. “Go! Go! Go!” he yells to a team that’s taking a little too long to get their front wing set before rolling underneath the white awning that’s popping in the strong wind off Lake Michigan. Outside the tent, two men in red shirts dash from car to car taking small samples of fuel. Gerry Kennedy, a senior customer support engineer for PerkinElmer Inc., handles a syringe with a long tube. After taking a bit of fuel, he turns to PerkinElmer field service engineer Saleh Abdeljalil, who stands ready with a small

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sample jar. Abdeljalil makes a note of the sample number and then places it, in order, in a piece of wood that holds the sample jars. As Abdeljalil finishes, Kennedy is already headed for the next car. Fuel testing takes place before and after qualifying. “We test the fuel from the main tanker truck and then from all the cars,” Kennedy says. “After the qualifying round, the top five teams will have to come back and we’ll do a follow-up test.” Of course, stiff penalties await any team that might attempt to cheat, but the idea might be more apocryphal than realistic. “There’s not much they can put in the tank that would give them an advantage,” Abdeljalil says. Still, the fuel needs to be checked, and if a sample deviates too much from the mean, further testing will be done. PerkinElmer partnered with the IRL in 1996 to begin testing fuel for the league using gas chromatography. Before then IRL fuel was tested using ultraviolet-visible spectroscopy (UV-VIS). Analyzing the absorption of light passing through the sample, UV-VIS is a fairly easy test to perform. The test is accurate to a point, but gas chromatography is preferred for its ability to identify the actual composition of the elements and particles present in the sample. A UV-VIS test can tell if fuel has impurities in it, but it can’t necessarily tell what all of those impurities are. Conversely, a gas chromatograph can tell exactly what impurities are in the fuel based on their chemical signature. After the cars are through the checkpoint and given the green light to qualify, they are rolled to pit road for any lastminute preparations before the drivers arrive. The samples taken by Kennedy and Abdeljalil are brought inside the IRL station and tested using PerkinElmer’s gas chromatograph (GC). As the qualifying round commences, most Indy officials begin to turn their attention to the television screens. Everyone is a race fan whether they are directly involved with the IRL or the racers, or not. In the meantime, PerkinElmer’s scien-

tists still have a job to do making sure each of the 27 samples is accounted for and will be checked accurately. Abdeljalil and Kennedy are oblivious to the cars still audible zooming around the track. “Samples go into the GC unit and are heated,” Kennedy says. “They start at about 45 degrees Celsius (113 degrees Fahrenheit), increasing by 20 degrees each minute up to about 160 degrees C (320 degrees F). Each sample takes five to seven minutes, so once we start the samples will take a few hours to process.” The next day, when all the samples have been processed, and assuming all comes out well for the teams, Kennedy and Abdeljalil will only need to test the top five finishers. “The only problem is that sometimes they forget to bring their car by so we can test it,” Kennedy says. “That means we may have to track them down quick and get the sample.” Because the fuel is pumped out of the cars before they travel, the sense of urgency is real. “There have been a few times I’ve had to stick my arm way down in the tank just to feel for any moisture whatsoever,” Kennedy says. “Luckily we don’t need much for the GC.”

Capture The Power

Ethanol in Indy’s Future PerkinElmer is one of many players who make the IRL the powerhouse it is in American racing. From the technologically advanced tires that Firestone produces for the league, to the engines—all identical from the factory and leased by Honda— Indy racing brings a powerful image to anyone affiliated with the sport. The fact that the IRL switched to ethanol should signal to observers that league officials spent a lot of time and energy making sure they were getting the best fuel available. Their ringing endorsement is an indication that they plan to continue the relationship for a long time to come. EP Craig A. Johnson is the Ethanol Producer Magazine plant list and construction editor. Reach him at cjohnson@bbibiofuels.com or (701) 738-4962.

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Pictured are flasks of cyano bacteria growing in a liquid media. PHOTO: UNIVERSITY OF TEXAS, AUSTIN

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MICROBIAL TRICKS FOR THE CELLULOSIC ETHANOL TRADE In two recently reported research projects, scientists describe how they have taken cues from microbes that may ultimately lead to more efficient and cost-competitive production of biofuels. By Jessica Ebert

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alcolm Brown Jr. and David Nobles Jr., molecular geneticists and microbiologists at the University of Texas, Austin, liken their approach to scientific exploration to the way the “Car Talk” brothers on National Public Radio seem to approach mechanical maladies, with quick wit, good humor and an expansive knowledge of their respective subjects. Although the puzzles may be different—“Click and Clack” may try to solve a mysterious “clunk” that rings out each time someone tries to make a left turn in their ’99 Jeep Cherokee while Brown and Nobles tinker with the genetics of bacteria to make the organisms produce cellulose—the objective is the same: increased efficiency and security, and reduced costs. For Brown, the search for the solution to the cellulose biosynthesis puzzle has been ongoing for 40 years. “I’ve used many different living organisms as test organisms from cotton to trees to algae to even bacteria,” he explains. The most prolific cellulose producer that Brown’s team has ever worked with is the bacterium, Acetobacter xylinum, more commonly known as the vinegar bacterium because it’s used to make vinegar. “It has given us probably the most information on how cellulose is made by any living organism,” Brown says. The potential of the vinegar bacterium as a new source of cellulose was only made more attractive by the fact that the cellulose secreted by the organism is a pure form of the molecule minus hemicellulose and lignin, which makes the biomass of wood and other plants so difficult to initially break down. However, a challenge to the large-scale production of cellulose by A. xylinum is that the bacterium requires a sugar such as glucose as an energy source to grow and subsequently make the molecule. One way to overcome this challenge would be to colocate with a sugar mill, which could provide a rich supply of sugar to the microbes. This wasn’t an option for Brown’s team so they chose to search for other microbes that could grow and produce cellulose without being fed sugar. Photosynthesizers, or organisms that get their energy from the sun, were the obvious choice. “That’s when I turned to David Nobles, who was then my graduate student and I said, ‘could you check and see if there is cellulose in the cyanobacteria,’” Brown explains. Cyanobacteria can be found in diverse habitats ranging from deserts to the oceans. They can survive exposure to high levels of radiation and can fix nitrogen from the atmosphere. Cyanobacteria are often referred to as blue-green algae but unlike their eukaryotic namesakes, these microbes multiply much more quickly. In 2001, the Brown team published a paper in the journal Plant Physiology based on Nobles’ work that described the machinery for cellulose production that certain species of cyanobacteria carried in their genes. “Until that time no one had any really good evidence that cyanobacteria could produce cellulose,” Brown explains. “This study validated the fact that they make cellulose.” ETHANOL PRODUCER MAGAZINE AUGUST 2008

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PHOTO: UNIVERSITY OF TEXAS, AUSTIN

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Flasks of cyanobacteria are growing in liquid media and on plates of solid agar.

It turns out that the cellulose produced by cyanobacteria is incorporated into a gooey protective shell that encapsulates the cells. Unfortunately for Brown and Nobles, this naturally produced cellulose has some drawbacks including it’s crystalline structure, which is difficult to break apart, the other polysaccharides that incorporate with the cellulose, and the small amounts of the molecule that the bacteria are able to make. Instead of trying to improve the outcome of cellulose production in cyanobacteria by modifiying the genome, Nobles took a strain of cyanobacterium that doesn’t naturally produce cellulose and inserted the genes for cellulose production from A. xylinum. At first, Brown and Nobles were disappointed in the results because the gellike cellulose produced by the cyanobacterium didn’t look like the molecule made by the vinegar bacterium. That’s when the team had a “eureka” moment; the noncrystalline, low-molecular weight cellulose was easier to break down into glucose than the typical crystalline product made by A. xylinum. “That’s when we started thinking about this source of cellulose as a feedstock for biofuel,” Brown says. Under the right growth conditions, the transgenic cyanobacterium also makes glucose and sucrose, two sugars that can be used directly to make ethanol. These molecules, along with the cellulose,

are released directly into the liquid broth or medium used to grow the cells and can be easily separated from the microbial cells themselves. “What’s exciting about this is that it can be done nondestructively. We don’t have to kill the cells to get the products,” Nobles explains. “It eliminates the need for harvesting the cells, it eliminates the need for extracting a product, and in the case of the sugars, it eliminates the need for any digestion or treatment to get the sugars. The idea is that some of the most costly steps in the production of biofuels from conventional crops or even from algae can be circumvented.” Brown and Nobles are currently working on moving this research out of the lab and into small-scale outdoor experiments. The two have formed a company called Phykotek Inc. and aim to commercialize the process on many different scales, Brown says. Ultimately, the cyanobacteria will be raised in large, saltwater ponds. “If you can use salt water and nonarable land, then it’s a noncompetitive issue with food and water,” Nobles explains. In addition, since cyanobacteria can take nitrogen from the air and convert it into a form that the microbe can use to grow, there’s no need for fertilization. “Here we have a microbe that takes the terawatt energy from sunlight and converts it into all these useful products

ETHANOL PRODUCER MAGAZINE AUGUST 2008

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in a place where it’s never been done before. What better idea can one have?” Brown says. He and Nobles are initially planning on being a feedstock provider for the ethanol industry since the infrastructure is in place. “If we can get ethanol producers to start thinking about other sources and how to integrate those, I think that’ll be a win-win situation,” Brown says. “There will be many avenues to become completely energy independent, and we want to be part of the overall effort.”

Concentrating on Corn Spearheading a second avenue of discovery within that portfolio of approaches is a team of scientists from Michigan State University. While the Texas researchers pioneer the effort to find new sources of cellulose, the MSU researchers are engineering corn to be a better biofuels feedstock. Led by Mariam Sticklen, a crop scientist and molecular geneticist, the scientists recently reported the development of a line of corn that harbors microbial enzymes for converting plant cellulose into simple sugars for ethanol production. Only in the past few years has Sticklen focused her energy on this type of research. “Because the cost of gasoline was not as high as it is now, it was more basic research,” she explains. “Could one produce these materials from microbes in plants while maintaining the function of the enzyme? In 2000, we realized this is something we should take seriously, so we dropped

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some of our other projects to focus on this research.” Since that time, the team has developed two corn varieties, dubbed Spartan I and Spartan II. Each line carries a gene that directs the production of an enzyme for breaking down cellulose. The Spartan I variety, for instance, expresses an endoglucanase, which was isolated from a bacterium found living in a hot spring. The enzyme cuts long chains of cellulose into shorter fragments. In Spartan II, an exoglucanase isolated from a soil fungus was inserted into the corn genome. This molecule degrades the shorter fragments of cellulose into dimers, which contain two glucose units. The newest generation of Spartan corn, Spartan III, carries the genes that code for the enzymes in Spartan I and Spartan II and an enzyme that breaks dimers into simple sugars. “The third [line] I consider the most interesting,” Sticklen says. The third enzyme in this line came from a microbe that resides in the rumen of African cows. “We selected a cow from Africa because they only eat grass and must have a good system for the conversion of cellulose to energy,” she explains. The researchers made numerous modifications to the gene sequence of this microbial enzyme, which is called cellobiase, so it could be expressed in corn and perform its dimer-degrading function. “It’s similar to an electrician wiring a house for heating or cooling or for electricity,” Sticklen explains. “You have a lot of wiring. You have to synthesize switches. It even has zoning.

ETHANOL PRODUCER MAGAZINE AUGUST 2008

PHOTO: MICHIGAN STATE UNIVERSITY

RESEARCH

Sticklen stands among rows of Spartan III corn, which has been engineered to express three enzymes for the degradation of cellulose into simple sugars.

There are different elements that control this gene at a level that can be produced by plants.” In addition, the genes are engineered so that each enzyme

ETHANOL PRODUCER MAGAZINE AUGUST 2008

is stored in a different part of the plant cell. The cellobiase, for example, can be found in a specialized compartment of the cells in the leaves and stalks of the plant. “We didn’t want the enzyme produced in the pollen or roots so we developed this system, and specifically made the enzyme only inside the leaves and stalks,” Sticklen explains. The special compartment within the cells of these plant parts is called the vacuole and serves as the garbage can for the cell. “Whatever the cell doesn’t need it dumps into the vacuole,” she explains. The cellobiase collects in the vacuole as the corn grows and develops. It can be extracted along with the other two enzymes when the plant is harvested and ground. At that point, the enzymes can be separated from the fibrous parts of the plant and can be applied to pretreated biomass to break it down into simple sugars for ethanol production. Sticklen says that MSU is getting close to finalizing a deal with a seed company for the Spartan varieties. Meanwhile, her team continues to work on new Spartan lines engineered with better enzymes and reduced pretreatment requirements. “The work we’re doing in my laboratory is to bring down the cost of biofuels,” she says. “That’s the whole idea.” EP Jessica Ebert is an Ethanol Producer Magazine freelance writer. Reach her at jebertserp@yahoo.com.

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MARKETING

Elements created this booth for Davenport Dryer LLC based on its branding process and the messages that were developed during that process. SOURCE: ELEMENTS

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MARKETING

The Value of

Branding In a growing industry having preferred status with customers is essential. A Sioux Falls, S.D., company has developed a way to help renewable energy companies define their brands and distinguish themselves among their competitors. By Rona Johnson

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hat’s it worth to a com- ‘Oftentimes many of the companies we work for, sure they pany or a product to want to make money, but they really believe they are going have preferred status? to make a difference in how things are done with regards to For example, when most people think of jewelry, Tiffany’s energy production in America.’ comes to mind. And if those people had a choice they would purchase jewelry from Tiffany’s as opposed to aligned around a common purpose,” body is,” he says. “But today everybody is clamoring for attention. There are “Ralph’s” or some other name that Kubista says. You may not have heard of more ethanol producers, more trade they’ve never heard of. “What if you decide you want to Elements because the company has only shows and conferences. So how does a been in the renewable energy company stand out among all of the get into the jewelry business business for a few years, but noise, all of the clutter that’s going on?” and you have an opportunity you may have heard of some And, like many in the renewable energy to buy the Tiffany’s brand, of their clients such as business, Kubista wants to make the but all you get are rights to the Davenport Dryer LLC, world a better place to live. “When we name and their famous blue Reznick Group, a national asked ourselves what we could do that is box—no jewelry and no public accounting firm, US going to have some meaning in 20 or 30 stores?” asks Tim Kubista, BioEnergy Corp., which years that led to renewable energy,” he chief executive officer and merged with VeraSun Energy says. brand strategist for Elements, Kubista Corp. in March and Outland a Sioux Falls, S.D., company The Process that specializes in helping companies Energy, a wind services company. Kubista decided to focus on renewBranding is more than just coming develop brands. “The market values it at able energy because it’s an industry up with a catchy name and then splash$5 billion but that’s not the point.” The point is having preferred status that’s growing fast, and that’s where ing it all over the airwaves and in print. having preferred status really makes a It’s a process that starts with having a is priceless. “Companies with a well-defined difference. “If it was 20 years ago and I well-defined brand and ultimately leads brand will find that they have increased was an ethanol producer I would have to preferred status. To become wellmarket share, preferred status with cus- been one of only a handful and there defined, a company has to know who tomers, increased valuations, reduced would be no need to really pay attention they are, what they stand for and why employee turnover and often a very to your brand because everybody who is people want to do business with them. Branding works because most buywell-defined culture with employees anybody in ethanol knows who every-

ing decisions are based on emotions not facts. “When you talk about a brand you are talking about the emotional qualities,” Kubista says. “Think of the car that you drive. Did you buy that car because of the wheel base or the size of the engine or any of the features or benefits? You probably bought it for some nonrational reasons. You might have felt good in it. You might have imagined that, ‘Hey, I look good in this car.’” The first step that Elements takes in working with a company to define its brand is to visit with senior leadership. Then they do what Kubista defines as a “deep dive” into their business in what’s called brand essence discovery. This is where they find out the organization’s true purpose. “Oftentimes many of the companies we work for, sure they want to make money, but they really believe they are going to make a difference in how things are done with regards to energy production in America,” he says. The next step is talking with the company’s various audiences, which is different for every company and could involve customers, vendors, employees, the government, a community or other stakeholders. “We can interview people and learn how they tick and how they make decisions, and we can build a

SOURCE: ELEMENTS

MARKETING

This Web site was designed by Elements for Reznick Group, a national public accounting firm.

brand and messaging around that in ways that are very appealing to them,” he says. In doing this, Elements tries to ascertain if there are any gaps between what the company thinks it does best and what everyone else thinks it does best. “Let’s say we meet with company

senior executives and they insist that what is so great about their company is their technology,” Kubista says. “Then we go talk to their customers and we find out that the reason they buy from them is because they ship on time. You see there is a gap. What they are really good at is delivering on their promises

MARKETING

ple who work for the company don’t understand what the company’s core competencies are, there’s no way they can connect with the outside world and communicate those messages.” Throughout the process people within the company will begin to understand their own decision-making processes, determine what threats they face and identify opportunities. “Once that’s done it’s time to talk to the outside world,” Kubista says. “The company will have a guiding strategy that it can align its

You know how to get every drop of ethanol from your materials ...

SOURCE: ELEMENTS

and that’s what their potential customers expect, so that’s what our messages are going to revolve around.” When Kubista talks about messages he’s not just referring to advertising. These are messages that have to permeate within the whole company before they can be broadcast outside of the company. “I don’t care if it’s five employees or 500, everyone needs to understand what the company’s core competencies are,” he says. “What’s the essence of the business? What’s the core truth? If peo-

Elements designed these brochures for US BioEnergy, one of its first clients in the renewable energy industry.

business with, and it will be crystal clear how they can communicate their visual, verbal and what we call their auditory identity.”

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Kubista readily admits that Elements developed its branding process by accident. “I would love to tell you it was some stroke of brilliance but it wasn’t,” he says. “We just stumbled on it. We probably put ourselves through our own process and didn’t even know we had it. In other words we just asked ourselves, ‘What’s our purpose? Why are we even doing this?’” With its unique branding process and its ability to attract clientele, Elements seems to have found a home in the renewable fuels industry. A little persistence also pays off. “Their business development manager was pretty persistent that we give them a shot at doing some branding for us,” says Robert Nixon, president of Davenport Dryer LLC, which supplies steam tube dryers to ethanol producers. “We’d seen them at the shows several times. They knew we ETHANOL PRODUCER MAGAZINE AUGUST 2008

MARKETING

were real and they gave us a proposal that made a lot of sense to us. Much of our advertising and branding has been pretty consistent with everybody else in the industry and their credentials were good.” Nixon says his company was interested in distinguishing itself from other dryer manufacturers and their message is that they are leaders in what they do and that their dryers can make dramatic difference to an ethanol producer’s bottom line. “One of the first plants that we were in— and you will see that in advertisements—they are saving $10 million in energy over a direct-fired dryer system,” Nixon says. The ad, which appears in the July EPM, features a testimonial by Brad Davis, general manager of Corn LP a 55 MMgy ethanol plant in Goldfield, Iowa. “Now that the ethanol industry is maturing and the plants are getting much more sophisticated, and with natural gas prices rising, there was a fairly dramatic shift in interest and we want to be at the forefront of that,” Nixon says. “Branding can help put us there and Tim’s efforts have been pretty good to date.” Although their advertisements are already running, Davenport Dryer isn’t finished with the branding process. Nixon says they are in the middle of the process and he expects they could spend another 12 to 18 months making sure their message is consistent. Every client that Elements works with has different needs and thus the process they go through will differ. “Sometimes we get hired, we get them launched and they are on their own,” Kubista says. “We have other clients who we stay with and help them out.” So what is the value of branding? Simply put by Elements’ principal and brand strategist Carmen Swartz in a paper called “Brand: What It Is and How It Can Give You an Advantage:”

“A great brand not only drives sales, it adds material value to the business. Brand is as much an asset as employees, facilities or computer networks. According to estimates, the average market value of well-branded companies is about 70 percent greater than the value of their tangible assets.” If Elements is successful in communicating its message to the renewable energy industry it will have preferred status. “The whole topic of brand communications is something I’m very passion-

ate about, and it’s my desire that more people understand it,” Kubista says. “Hopefully over time the industry can see the potential.” EP Rona Johnson is the features editor for Ethanol Producer Magazine. Reach her at rjohnson@bbibiofuels.com or (701) 7384962.

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Building the Next Generation With the advent of cellulosic ethanol, design/build teams are gearing up for the commercialization of the next generation of biofuels, and at the same time are continuing to be involved in corn-based ethanol, where they built their reputations. EPM talked with some of the big names in the industry to get their view on this challenging transitional period. By Bryan Sims 128

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INDUSTRY

he ethanol industry seems to have reached a plateau after the heady days of breakneck growth in 2006 and 2007. According to data compiled by EPM, the last corn-based ethanol plant to break ground was Bridgeport Ethanol, a 50 MMgy plant located in Bridgeport, Neb. Since then, not one corn-based ethanol plant has broken ground for construction. That doesn’t mean the industry is at a standstill. Plants that were under construction are coming on line and others, mostly featuring cellulosic feedstocks, are in the planning and development stages. Some have broken ground on pilot facilities. However, until cellulosic ethanol can sucessfully be produced commercially, the United States will rely on corn to produce ethanol. According to the USDA, corn-based ethanol is expected to be the primary biofuel in the United States for the next several years, noting that corn use for ethanol was 2.1 billion bushels in 2006-’07, the equivalent of 5.7 billion gallons of ethanol. This marketing year, an estimated 3.2 billion bushels of corn will be used to produce approximately 8.6 billion gallons of ethanol. In 2008-’09, expected plant capacities suggest that 4.1 billion bushels of corn will be used for ethanol production. The USDA says U.S. farmers planted about 90 million acres of corn this spring, down less than 4 percent from 2007. Volatile market conditions continue to squeeze operating margins for corn-based ethanol plants. Two of the predominant issues that producers and would–be producers face are high corn prices and commercial banks are not as eager to lend to traditional corn-based plants as they were before. As a result, the nation’s process technology providers and builders are approaching the industry with a sundry of business strategies to expedite the leap to cellulosic ethanol production. Those strategies got a boost from the Energy Independence & Security Act of 2007, which was enacted into law in December. The new RFS requires that 36 billion gallons of ethanol be consumed by 2022, and that 21 billion gallons of the overall mandate be advanced biofuels. Of those 21 billion gallons of advanced biofuels, 16 billion gallons must be cellulosic biofuels. Additionally, 6 billion gallons of cellulosic biofuels must enter the market for consumption by next

ETHANOL PRODUCER MAGAZINE AUGUST 2008

year. To meet the mandate, 12 cellulosic ethanol facilities each producing 50 MMgy would have to be under construction now and be operational next year. One can only ponder whether this is feasible. With that in mind, the presumption that some of the industry’s prominent process technology providers and ethanol constructors could be wrapping up cornbased ethanol projects in preparation for the transition to cellulosic ethanol production is understandable. However, Granite Falls, Minn.-based Fagen Inc., one of the country’s leading ethanol plant engineering, design and construction firms, doesn’t see the corn-based ethanol market fading away. Instead, Fagen is shifting its focus by being more selective of the projects it engages in while still servicing its corn-based clients. “We’re not necessarily wrapping up the corn grainbased ethanol projects,” says Larry Murdoch, regional manager for Fagen’s southeast operations in Greenville, S.C. Murdoch is charged with finding new technologies that provide engineering and construction opportunities for the company. “We’re continuing design and construction at a greatly reduced pace, obviously, and we plan to continue at a certain level whether it’s new plants or improvements to existing plants. We plan to keep a strong base of knowledge and resources to serve the current industry, but at the same time have some people to develop the know-how and expertise in the cellulosic area,” he says. Process technology firms such as ICM Inc. are also not prepared to turn their backs on the corn-based ethanol market. The Colwich, Kan.-based company remains adamant that the corn-based ethanol industry will continue to serve as a viable base for achieving a successful transition into cellulosic ethanol. For example, ICM is engaged in the development of novel production methods such as fractionation technologies. Through combined enzymatic and fermentation processes, the company is refining and tailoring the technology to meet the needs of existing corn-toethanol producers looking to curb operating costs, enhance overall production and to produce valueadded commodities, according to Doug Rivers, director of research and development for ICM. “We believe there is more value in a kernel of corn from an ethanol perspective [as well as] the energy and cellulosic side of the equation,” Rivers tells EPM. Founded in 1995,

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ICM has designed and engineered more than 75 dry-mill ethanol plants in the United States and Canada. There are 25 plants currently under construction which are using Rivers ICM’s ethanol process technology. “We see ourselves as a technology and services provider,” Rivers says. “One of the things that is incumbent upon us is to be out there beating the bushes looking for new technologies that have the potential to convert natural resources, whatever they might be, into value-added products,” Rivers says, adding that ICM’s involvement in technologies like this in no way makes their current corn-based ethanol customers obsolete. Fagen takes a similar stance. Together, the two have assisted in the development and construction of more than 150 ethanol plants across the country. Like ICM, Fagen is mindful of grain-based ethanol’s importance in the transition to cellulosic ethanol. “We are positive in terms of not only the grain-to-ethanol industry continuing to be a viable and critical industry for our country, but also of the cellulosic industry that’s emerging,” Murdoch says. As grain-to-ethanol in engineering and construction projects decrease, Fagen is redeploying personnel and efforts into other industries it has served in the past as well as developing relationships with some of the cellulosic technology companies to be prepared to serve that industry in a major way when the commercial-scale plants come on line, he says.

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looking to explore add-on on-site technologies to convert what would otherwise be disposed of into a valued revenue stream. â&#x20AC;&#x153;There are great opportunities for these cellulosic plants to be colocated and integrated with existing corn plants, which we believe are going to provide some nice synergies and efficiencies of operations between the two,â&#x20AC;? Rivers says. In January, ICM was one of four companies to receive funding from the U.S. DOE to develop a small-scale cellulosic ethanol plant. Preliminary plans call for the pilot-scale cellulosic facility to be built adjacent to LifeLine Foods LLC, a 50 MMgy corn-based ethanol facility in St. Joseph, Mo. The $30 million project calls for the utilization of various feedstocks including corn fiber, switchgrass, corn stover and sorghum. The intent is to integrate biochemical processing pathways and to demonstrate viable energy recycling methods within a biorefinery. ICM is working with a team of companies and research institutions to develop cellulosic ethanol projects, including Ceres Inc., Edenspace Systems Corp., South Dakota State University, AGCO Corp., the National Renewable Energy Laboratory, the National Center for Agricultural Utilization Research, Novosymes, VeraSun Energy Corp. and SunEthanol Inc. In February, Junction City, Kan.-based Edenspace announced it had joined the team as a provider of feedstocks. Edenspaceâ&#x20AC;&#x2122;s primary role will be to provide corn, sorghum and switchgrass bioengineered to reduce the postharvest costs of producing cellulosic ethanol. In May, ICM tapped Thousand Oaks, Calif.-based Ceres to sow thousands of acres of switchgrass, high-biomass sorghum and other energy crops over the next three years in the St. Joseph area. In addition to building its own pilot-scale cellulosic facility, ICM has formed an alliance to design and build Coskata Inc.â&#x20AC;&#x2122;s first commercial-scale ethanol plant, which will use various biomass and waste produces as feedstocks. The Coskata plant, which has not been sited yet, will produce between 50 MMgy and 100 MMgy, using Coskataâ&#x20AC;&#x2122;s biological fermentation technology, which can convert most organic matter into fuel at a cost of about $1 per gallon (see â&#x20AC;&#x153;Anaerobic Organisms Key to Coskataâ&#x20AC;&#x2122;s Rapid Riseâ&#x20AC;? in the July 2008 EPM). â&#x20AC;&#x153;We believe itâ&#x20AC;&#x2122;s important to stay on top of all these areas so that weâ&#x20AC;&#x2122;re able to contribute to the success whichever way things go,â&#x20AC;? Rivers says. â&#x20AC;&#x153;There are a number of chemicals out there that the DOE has identified that are important in the scheme of being produced by renewable resources that are today produced from petroleum chemicals.â&#x20AC;? Rivers adds that ICM is collaborating with companies looking to develop unique microbial strains that are capable of enhancing the fermentation process. One strategy is to look at organisms that can ferment both C5 (hemicellulose) and C6 (glucose) sugars simultaneously in the fermentation

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process. Organisms used today can only break down glucose sugars, Rivers says. “We’re working to develop strains that will do both forms of sugar, thus we’ll be able to get more alcohol out of a given weight unit than we otherwise would be able to,” he says. Taking that a step further, ICM is partnering with companies to develop a consolidated bioprocessing organism where microbes would be able to degrade both hemicellulose and glucose sugars and simultaneously ferment alcohol. “It would be a complete processing package in and of itself,” Rivers says. “That’s sort of the Holy Grail in terms of being able to convert cellulosic materials to ethanol and/or other value-added fuels and chemicals.”

Scaling Up to Commercial Although design/build teams such as ICM and Fagen have their footprints forever stamped into the corn-based ethanol industry, others have contributed and are moving on to make a significant impact in the cellulosic space. One of those companies actively involved in cellulosic and other nonfood-based related ethanol production is Merrick & Co. The Aurora, Colo.-based engineering, design and construction company has been tapped to build Range Fuels’ 100 MMgy cellulosic ethanol facility near Soperton, Ga. Once operational, the facility would be the first commercial-scale cellulosic ethanol plant of its kind in the nation. The plant will use Georgia pine collected from various forest products recycling centers in the

region. Range Fuels and several other companies are in the process of constructing commercial cellulosic ethanol plants across the country. Merrick also owns and operates a waste beer collection, recycling and processing plant colocated with a Coors brewery in Golden, Colo. The 3 MMgy facility processes off-spec beer from the brewery and converts it into fuel-grade ethanol. These are just a smattering of projects the company is involved in, in the renewable energy and fuels space, according to Steve Wagner, vice president of energy process systems for Merrick. Wagner agrees that the corn-based ethanol industry has hit a construction plateau. He believes that minor optimization efforts to the operating equipment of corn ethanol plants are short-term solutions until the gap between corn and cellulosic ethanol is fully bridged. “There will continue to be some capacity expansions and that kind of thing,” Wagner says. “It all depends on the debt structure of a particular project. There are some synergies to processing the ethanol that come off the cellulosic process. You’ve got the back end of your plant for making fuel-grade ethanol from the beer well backwards through distillation and dehydration. That would mean that you’d really unload the evaporators and of course you wouldn’t have the dryers at all.” According to Murdoch, this is a feasible step toward cellulosic ethanol production since many of the corn-based ethanol processing methods in use today are compatible for cellulosic. “The cellulosic process has some distinct differences and it has

INDUSTRY

some unit operations that are similar to the grain-to-ethanol projects,” he says. “Certainly, a lot of the know-how, design and equipment used are adaptable from the corn-based to the cellulosic, although there are a lot of new equipment and changes too. As far as being able to utilize certain materials and equipment that will be possible.”

Considering Cost While cellulosic ethanol is in its demonstration state and scientists, universities and other research entities continue to assess its commercial viability; the cost at which these technologies can be deployed presents a challenge. The ability to attract funding to develop innovative cellulosic technologies and scale that up to commercial size won’t be easy. “It’s not that there aren’t projects out there; it’s not that there aren’t feedstocks available to go into these plants,” Rivers says. “It’s that the financial institutions got themselves in a bind to the point where they’re ultra conservative.” Financiers and others involved in the industry believe that there is also limited funding available because of the gold rush mentality that permeated the ethanol industry in the past few years. And, it’s always been difficult to obtain loans for technologies that are complex and unproven. Unless an ethanol project can differentiate itself from the traditional “greenfield” corn ethanol plants, lenders aren’t apt to consider looking at it. Even then, differentiation doesn’t come without a cost. “What we’ve found is that lenders are no longer looking for good deals,

ETHANOL PRODUCER MAGAZINE AUGUST 2008

they’re looking for great deals,” says Alan Goodnight, director of marketing for ICM. Lenders are more selective to whom they provide funding for in the cellulosic ethanol industry and in other applicable technologies intended to optimize existing corn-based technology, according to Mark Baratta, vice president and manager of First National Bank of Omaha’s renewable fuels group. “As ethanol plants get more complex in their design and technology more capital is required and it’s hard to come by today,” he says. “The build-out of the corn-ethanol business is nearing its maturity. The move toward cellulosic won’t necessarily make corn-based ethanol plants obsolete, and they will potentially have the opportunity to re-engineer themselves or retrofit to be cellulosic compatible.” Baratta The journey to transition from corn-based to cellulosic ethanol won’t come easy, or cheap. However, design/build teams assert that progress would not be possible without the establishment of the corn-based ethanol industry as a solid foundation to build from. “It’s hard to see past any of these additional products without corn-based ethanol as the starting point,” Goodnight says. EP Bryan Sims is an Ethanol Producer Magazine staff writer. Reach him at bsims@bbibiofuels.com or (701) 738-4962.

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Where in the Northeast is

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PHOTO: SAM MELQUIST, BBI INTERNATIONAL

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here are 345 gas stations in Minnesota that provide E85, according to the National Ethanol Vehicle Coalition. Minnesota leads the nation in the number of E85 stations per state. Many other Midwest states have invested the time and energy to install E85 pumps for their flexible-fuel vehicle (FFV) driving customers, including Iowa with 90 E85 stations, South Dakota with 70 locations and even oil-rich Texas with 38. But there are other states where E85 pumps are not as abundant. If one took a drive out to the Northeast and tried to fill their tank with E85, a GPS system would come in handy. Once one got to Pennsylvania, with only 15 E85 stations, a person would have to do a little searching to find a station. From there, one would want to reset their GPS system and head east or north until they reached the coast where they would have a choice of 31 stations to purchase E85 throughout 11 states. That means the odds of finding an E85 pump without GPS before the FFV’s gas gauge hits the empty mark are not good. That’s not a good situation for the FFV driving public because as gas prices continue to rise, the spread between the cost of regular unleaded and E85 is also increasing, making E85 a better bargain than regular gasoline. So what’s the holdup in the Northeast? “We can’t assume that because we’ve heard of ethanol and that because our political leadership has promoted ethanol for people here in the Midwest, where people have been using ethanol for the past 20 years, that the knowledge of others around the country is as accurate as ours,” says NEVC Executive Director Phil Lampert. A lack of education is one reason why the Northeast lags behind the Midwest in its use of E85. It’s a longterm process to change opinions, Lampert says. “It takes awhile to increase education and awareness on these products. It’s not going to happen overnight,” he says. The NEVC has been advocating ethanol use in all parts of the country for years and continues its efforts on a daily

basis. Lampert knows what it takes to establish a market for E85 anywhere, but sometimes it requires more than educating the public and station owners to get E85 stations Lampert installed. Often the biggest hurdle to overcome is the federal and state governments.

Blame California According to Lampert, problems for gas station owners interested in installing equipment for and selling E85 can be traced back to 2006 when the Underwriters Laboratory Inc. rescinded its certification for E85 pump equipment, which made little sense. “We had never had a leak, a failure of an E85 pump or any indication of exorbitant corrosion of an E85 pump, but nevertheless the UL rescinded the certification,” he says. That move by the UL eliminated the possibility of federal regulations for E85 equipment, leaving it up to individual states to decide. Lampert says interested parties have been able, for the most part, to effectively deal with local weights and measures divisions and fire departments in order to acquire waivers for the installation of E85 pumps and storage equipment. Work at the local level has led many states to allow the sale of E85 today. And then there’s California. Established by the state legislature in 1967, the California Air Resources Board governs all things related to emissions and vehicle standards in the state. According to its Web site, CARB was established to attain and maintain healthy air quality, conduct research into the causes of and solutions to air pollution, and systematically attack the serious problems caused by motor vehicles. It all sounds good, but well-meaning legislation can often have unintended consequences. “There are more flex-fuel vehicles on the road in California, than in any other state, and [California] has only 10 E85 fueling stations,” Lampert says. One reason is that California

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Maine (0)

New Hampshire (0) New York (20)

Pennsylvania (15)

Vermont (0) Massachusetts (1) Rhode Island (0) Connecticut (0) New Jersey (0)

CARB spokesman Dimitri Stanich told EPM that an executive order was in the works and could be finalized any day, after which participatory states would have the opportunity to accept it as is or interpret it for their own best interests.

New York: The E85 Beacon

Perhaps the one shining example for the Northeast is a state that Maryland (6) already sets the trends for District of Columbia (3) This map shows the number of E85 stations in the Northeast as of May the region. According to 2008. Lampert, New York has SOURCE: NEVC done wonders improving its biofuels programs and makrequires the use of stage 2 vapor recovery ing alternative fuels available for the conequipment. Stage 2 vapor recovery equip- sumer. “They have bought into this,” ment is a sleeve on the outside of the Lampert says. “They support it. They’re pump nozzle designed to catch vapors not letting the bureaucracy get in the way that escape from the vehicle’s gas tank. of it. They’ve got millions of dollars that For gas station owners required to install they’re making available for grants and the equipment, the expense can take quite they’ve eliminated taxes on E85 for a a chunk out of their bottom line. The number of years. New York is second to NEVC has been arguing that stage 2 none in the country, as far as what they vapor recovery systems are not really nec- have done to promote E85.” essary because all vehicles manufactured The New York State Energy in the United States since 2000 come Research and Development Authority equipped with onboard vapor recovery implements the states’ biofuels programs. systems. And nearly all FFVs were manu- So far, public response to the increased factured after 2000. This is important availability of biofuels has been “well because 12 other states have adopted beyond our expectations,” says Senior California’s emission standards, including Project Manager Patrick Bolton. In his almost every northern state on the opinion, California emission standards Eastern seaboard. Connecticut, Maine, have not significantly impacted Maryland, Massachusetts, New York, NYSERDA’s work to make biofuels New Jersey, Rhode Island, Vermont and incentives available. Pennsylvania follow CARB rules, as do Among the programs being impleNew Mexico, Oregon and Washington. mented by NYSERDA is the Biofuel In February, CARB declared that Station Initiative. The objective is to stage 2 vapor recovery equipment was no increase the number of E85 and biodiesel longer necessary for E85 fueling stations. stations throughout the state by reimbursHowever, an executive order needs to be ing 50 percent of station-owners’ costs, issued to rescind current regulations up to $50,000 for each station, for the before the 12 other states can make the installation of biofuels dispensing equipchange. It remains to be seen whether that ment, storage tanks and associated piping is all that’s needed to jump-start the E85 equipment. Bolton says the program has movement in the Northeast. In early June, been operating for about a year and has Delaware (1)

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PHOTO: KRIS BEVILL, BBI INTERNATIONAL

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It’s fairly common for drivers in the Midwest to have access to E85 pumps to fuel their flex-fuel vehicles, and the cost savings is becoming quite noticeable. A gas station in North Dakota was recently selling E85 for $2.99 per gallon, compared to the national average of almost $4 per gallon for regular unleaded. Interestingly, the cost of E85 was equal to the cost of bottled water that day.

collected 73 applicants. Application processes are in various stages of completion. “Our hope is to do approximately 300 stations in the state with the funding that we have available,” Bolton says. It is an open-enrollment program and has been renewed until May 2009.

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NYSERDA also provides an incentive for terminal operators by supplying up to 50 percent of the cost for equipment to distribute E85 or biodiesel to retail stations and fleets across the state. Each terminal that applies can secure up to $150,000 to cover those costs. For producers, the state offers a 15cent-per-gallon tax credit for every gallon over 40,000 gallons of ethanol and biodiesel produced in the state. Also, there is no state tax on ethanol. The only tax that is applied is the federal excise tax on the sale of the fuel. Bolton attributes the state’s recent push to make E85 available to ample funding and forward-looking legislators. He says the governor’s leadership has been important to not only set up the infrastructure for biofuels but also to set the stage for second-generation biofuels. The success of the NYSERDA’s work can easily be measured. According to Bolton, E85 stations in New York sell anywhere from 700 to 10,000 gallons of ethanol per day. “They are some of the top performing E85 stations in the country,” he says. And consumers are seeing the economic benefits of using biofuels. In early June, an E85 station near NYSERDA’s office was selling E85 for $2.99 per gallon, compared with $4.15 per gallon for regular unleaded, Bolton says.

“That saves the consumer $10 on a 20gallon fill up, so there’s been significant interest by consumers, who are saving real dollars by using it,” he says.

The Granite Island New Hampshire is the lone Northeast state to refrain from adopting California emissions standards. One would assume that would make it easier to sell E85, but Liberty Energy LLC cofounders Scott Maltzie and Thomas Mann have found that’s not the case. Maltzie and Mann founded Liberty Energy in 2004 with the hopes of becoming a renewable fuels marketing company, and to help alleviate the United States’ dependence on foreign oil, create domestic jobs and improve the environment. In 2006, the duo attempted to market ethanol in the southern half of New Hampshire and northern Massachusetts. To date, they’ve managed to increase their personal knowledge on the difficulties of passing E85 legislation. However, their desire to keep trying to make E85 available to consumers in their part of the country hasn’t waned. But there are still no E85 stations. “It’s been a kind of good news, bad news situation,” says Maltzie, who serves as the company’s chief operations officer and chief financial officer. Since they

ETHANOL PRODUCER MAGAZINE AUGUST 2008

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began focusing on acquiring and marketing E85, he and Mann have been pleasantly surprised at the supply of ethanol in the area. It contradicted their original thought that acquiring a reliable supply would be the hard part about marketing ethanol. So the good news is that ethanol is there and ready to be used. However, because there is a lack of E85 stations, Mann says most of the local producers end up shipping much of their product to the Southeast, where ethanol has experienced a recent surge in demand. The bad news for Maltzie and Mann has been state regulations—or a lack thereof. Ethanol hasn’t been addressed in New Hampshire regulations at all, forcing officials to treat it essentially the same as gasoline. It’s baffling to Mann who, as senior vice president of business development, spends much of his time talking to station owners and state representatives. “It’s like they apparently didn’t ever see this coming,” he says. Maltzie says the state has expressed interest in making regulatory changes, but the New Hampshire government is chronically short staffed and under budgeted so it takes a while for things to get done. New Hampshire is also historically conservative and leans more toward people helping themselves than heavily funding any one project. “People are not intentionally trying to stonewall us, but the end result is it makes this more difficult,” Maltzie adds. Maltzie and Mann say some owners have expressed a willingness to try E85, but they don’t want to have to invest their own money to install equipment. At least not until there is proof that people will buy it. The closest E85 station to Liberty Energy is approximately four hours away in Albany, N.Y. “It’s not like in the Midwest where a four-hour drive can be the norm,” Maltzie says. “For people here, a day spent driving to check something out is not really appealing.” Mann adds that station owners are currently making half the

amount on gas sales than they have in the past so independent owners just don’t have the money to invest in new equipment. Furthermore, corporate stations are afraid to install pumps at their locations because of lawsuits over the potential misuse of E85. Another hurdle for E85 in New Hampshire is that many FFV owners don’t even realize they can use E85 in their tanks. According to Mann there are 18,500 FFVs in New Hampshire. It is assumed that none are currently being fueled with E85. Mann says they get frustrated at times because it often feels they are alone on an island trying to make changes to New Hampshire’s fuel regulations. After several phone calls and e-mails they eventually found people willing to help and offer some advice, but ongoing education and a mentoring system would be useful in the future, Maltzie says. They also feel that ethanol promoters have simply forgotten about New Hampshire. “We’re a different place than the middle of Iowa,” Maltzie says.

Maltzie and Mann will continue to develop a market for E85 in New Hampshire as long as it is feasible. They hope to win a grant from the state’s clean cities program that will help provide financial assistance to station owners who would like to sell E85. If they get the grant, Maltzie says their goal is to help fund 10 to 15 gas station ethanol projects. “We’re also working to get a group of first adopters who are willing to boldly go where stations haven’t gone before in the state of New Hampshire,” he says. “Our primary focus has been to get those stations identified and to figure out what needs to happen to get those stations converted.” EP Kris Bevill is an Ethanol Producer Magazine staff writer. Reach her at kbevill@bbibiofuels.com or (701) 3730636.

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CONSTRUCTION

odularizing is not a new concept—but it is evolving. The process, which mainly entails the construction and pre-assembling of equipment, machine components and modules indoors to later be transported to a final destination, is a technique that many companies have embraced. Roeslein & Associates Inc., a full consulting, engineering and construction management firm, specializes in modularizing,

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unitizing and pre-assembly. The company, headquartered in St. Louis and with branches in Denver and Birmingham, U.K., has been recognized as one of the leading modularizing firms in the world. Integrated Manufacturing Technologies, located just outside of St. Louis in Red Bud, is a wholly-owned subsidiary of Roeslein. The facility, consisting of an impressive 236,000 square feet—swallowing up 17 acres of land—provides cus-

ETHANOL PRODUCER MAGAZINE AUGUST 2008

CONSTRUCTION

The Mystery of Modularizing A top modularizing firm, Roeslein & Associates Inc., has formed a partnership with BlueFire Ethanol Inc. to integrate its concepts into the construction of a new ethanol biorefinery. They have now opened a door into the world of renewable energyâ&#x20AC;&#x201D;serving as a short cut to the market. By Anna Austin

tomers with complete process systems constructed under IMTâ&#x20AC;&#x2122;s roof, according to their wants and needs. This includes paint, steel and pipe fabrication, equipment, electrical panels, cable/ladder tray, lighting, and power and control wiring. IMT is divided into four shops of different sizes, each designed for a specific purpose. Approximately 35,000 square feet are designated for fabrication processes; a smaller portion of that space is isolated for the sole purpose of stainless steel

ETHANOL PRODUCER MAGAZINE AUGUST 2008

production to prevent cross-contamination. Painting procedures account for 29,000 square feet, and up to 35,000 square feet is used for shipping, receiving and storage. A large amount of modern office space is also available to provide IMT sufficient space to handle company needs, and segregated areas for customers to use for on-site project management. Upon completion, the structure, system or unit is tested in the 115,000-square-foot pre-assembly shop to ensure

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CONSTRUCTION

able energy facilities, as well as ourselves,” says Terry Leebolt, director of engineering for Roeslein.

PHOTO: IMT

Befriending BlueFire

Integrated Manufacturing Technologies consists of 236,000 square feet and is located in Red Bud, Ill.

desired capabilities, safety and accuracy. Then, it is partially disassembled. Whether it be by rail, truck or barge, each unit is then carefully transported in large sections—all of the braced and packaged pieces, which may include piping, electrical components and ductwork—to arrive intact and ready to be easily re-assembled. To hasten the process, each piece is specially marked or bar coded. Having provided service to customers for more than 30 years, Roeslein has completed work in more than 16 countries on nearly every continent, with several projects currently underway. In the past, the company mainly specialized in modularizing units for can manufacturing and packaging plants, but now it’s working with clients in the corn ethanol and biomass industries. “We do agree that this has been a step forward for renew-

Recently, Roeslein has attracted a new customer. BlueFire Ethanol Inc., which intends to use its patented Arkenol process to convert Leebolt wood wastes, urban trash, rice and wheat straws, and other agricultural residue into ethanol. The company has strived to partner with landfill owners and municipalities among others to build its plants at waste disposal sites. In 2007, BlueFire was selected as a recipient of a $40 million grant from the U.S. DOE and is using the funding to build its first commercial-scale waste-to-ethanol production biorefinery. The facility will be in northern Los Angeles County near Lancaster, Calif. To test the efficacy of the new technology, the company has constructed and operated a pilot plant near its southern California offices for the past several years. In an April press release, BlueFire announced the company had selected Roeslein and IMT to help develop the plant using unitizing, modularizing and pre-assembling concepts. "Prefabrication and modular construction has proven itself time and again to be the best method for maintaining quality, controlling costs and creating the fastest to-market time for the deployment of complex facilities,” says Arnold Klann, presi-

CONSTRUCTION

dent and chief executive officer of BlueFire Ethanol. “Roeslein came highly recommended to us.” Having found modular concepts to be efficient in the construction of power and water treatment plants, Klann points out that this is the first time BlueFire will utilize the modularization for an ethanol plant. “This isn’t a new concept,” he adds. “But the way in Klann which it is being deployed is significant. It is greatly reducing cost and completion time for us. We are working with very good teams of people working diligently to get things accomplished.” According to Klann, BlueFire is “knee-deep” in engineering issues for the Lancaster facility. “We’ve just started drilling wells,” he says. “But by this time next year (June) we should be producing ethanol. Modularizing is really giving us a leg up.” The Lancaster plant will convert post-sorted green waste and other cellulosic materials, taken from landfills in southern California, into roughly 3.1 MMgy of fuel-grade ethanol. Process Automation Concepts Ltd., MECS and Brinderson are also members of the engineering team. Klann says that the size of the Lancaster facility will better suit and assist the capabilities of developing countries that are unable to produce mass amounts of useable feedstock. “[Modularizing] also allows us to potentially sell our facilities as a turn-key manufactured product, leveraging our capabilities and expanding our market reach

several fold,” he says. “The Lancaster facility will bring a new dimension of thinking to BlueFire, one which combines cost-effective modules for rapid deployment to meet the burgeoning demand for renewable fuels.” Klann believes that the design of the facility is “right-sized” to seize market opportunities for landfill sites of any size.

Comeau

The Upsides in Detail Cutting costs is the most obvious benefit to modularizing. However, as the economic scale has grown, some companies have mistakenly abandoned modular concepts. “A lot of facilities think they’ve gotten too big,” says Steve Comeau, IMT manager of business development. “Really, everything is still manageable and can be modularized to a certain point. We are trying to re-educate owners and engineers that even a large plant can still modularize. Granted, it limits us in how big the equipment is—but if we can break 50,000 components down to 100 pieces by modularizing, the savings are still tremendous.” “We encourage our clients to get us involved right away in the first part of the project to better identify which parts of the facility lend themselves to modular concepts,” says John DeMoulin, Roeslein manager of business development. Other cost savings include minimizing change orders and contract growth, controlled shop fabrication, which reduces

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PHOTO: BLUEFIRE ETHANOL

CONSTRUCTION

Pictured is a preview of BlueFire’s Lancaster plant.

field labor, a lower hourly rate and increased productivity. “The bottom line is there is a much faster recovery of committed capital and financing costs,” DeMoulin points out. Since modularizing brings the number of facility components to a minimum, there is a substantial reduction of on-site installation scheduling and man-

power. “We work parallel with, or even ahead of on-site infrastructure,” DeMoulin says. “There doesn’t have to be any waiting for ground breaking.” In simple terms, prefabricating facility components saves time since the process of installing these components is not affected by building construction. Typically, without modularizing installation is slow-

er as one part must be completed before work on another can begin. Another issue affecting project completion may be a shortage of available resources in a geographDeMoulin ical area—for example, professional welders or electricians— types of work that can be moved from the field and into the shop. Depending on the project and where it is located, Roeslein provides onsite assembly aids as well. Typically, an installation supervisor who was largely involved in the pre-assembly process, but more recently, installation crews, have been sent. “It all depends on the owner’s preference,” Comeau says. “It certainly is to the customers’ advantage, as we understand the complexity and design of the project.” Weather, such as extreme temperatures or storms, is another matter that

CONSTRUCTION

may affect on-site construction; bringing work indoors may prevent loss of progress. Enhanced overall project safety allowing for a more productive work environment, is yet another benefit to modular concepts. This includes reducing site congestion—equipment and lifts—and people. Stacking of trades is also minimized by shifting pipe and structural fabrication and erection labor hours from the field to a controlled shop environment. The need for structures that are potentially dangerous, such as temporary scaffolding, are lessened or may not be necessary, and jobs that entail workers hanging from the sides of tanks, doing electrical or mechanical work, can also be eliminated. Safety issues related to extreme temperatures that pose a danger to individuals working on the site are lessened.

The Four-Phase Approach Customers who select Roeslein for their project at the beginning will be

introduced to four different phases— preliminary engineering, detailed design/ engineering, procurement/prefabrication, and installation/start up. Comeau reiterates that getting Roeslein and IMT involved in the preliminary stages, which determine the feasibility of modularizing, associated costs, project schedule and other applicable information, is a decision that greatly reduces the final price tag. “This is the most important item when modularizing renewable energy facilities,” he says. “With more than 20 years of experience, we really have an eye for recognizing modular potential. It is much easier and more cost effective to plan a modular facility in the preplanning stages rather than later on in the design.” The second stage of this approach involves equipment specifications, mechanical/electrical design packages and bid documents, design reviews with the client’s suppliers and contractors, and building design coordination. In the last two stages, all of the modularizing, unit-

izing and preassembly is done. The final step is running tests to ensure a quality, customer-desired product. This includes start-up support and may involve training and ongoing technical/operations support to educate and familiarize customers and staff with systems and equipment. “Really, in the end, it is like an erector set,” Leebolt says. As Roeslein continues to provide services to returning customers, the company is optimistic about breaking into this new industry. “We have now successfully worked with every branch of the biofuels industry—ethanol, biomass, cellulosic—you name it,” Leebolt says. “We’ve got our fingers in every piece of the pie right now.” EP Anna Austin is an Ethanol Producer Magazine staff writer. Reach her at aaustin@bbibiofuels.com or (701) 7464962.

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COPRODUCT

The Role of DDGS in the Food-Versus-Fuel Debate As mainstream media continues its tirade against biofuels in the food-versus-fuel debate, many arenâ&#x20AC;&#x2122;t aware of or ignore distillers grains and how it fits into the picture. By Ron Kotrba

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tanding inside the distillers grains building of an ethanol plant as tons of coproduct pile up, it’s difficult to comprehend how the mainstream media could overlook such an important and large part of the food-versus-fuel debate. To many people, the notion of pitting food against fuel is only that—a debate. “Everyone is in agreement that there’s a food-versus-fuel debate,” says John Caupert, director of the National Corn-to-Ethanol Research Center. “However, I am firmly convinced there is not a food-versusfuel issue. A debate is one thing but whether there’s an issue— that’s something else.” Dan Keefe, manager of international operations for the U.S. Grains Council, tells EPM he can’t recall ever reading an article on the topic of food versus fuel in which it is stated that for every 100 tons of corn used for ethanol production there are 33 tons of quality, high-protein animal feed sold back to livestock producers. “It’s been grossly understated in the general media,” Keefe says. According to him, the world will never be satisfied with American agricultural policy. “The reality is, historically, the United Nations has blamed the U.S. for artificially keeping crop prices too low so [world]

ETHANOL PRODUCER MAGAZINE AUGUST 2008

farmers could not afford to grow [their own crops],” Keefe asserts. “Now that prices are high, they blame us for using up all the food for fuel. Apparently in some of these other countries with these high prices they still can’t figure out how to grow something—or their governments won’t let them. So what’s the answer? Being dependent entirely on foreign oil and having low crop prices so Argentina and countries in Africa can complain about the low prices again? I don’t know, but I don’t think there’s anything we can do to make the world perfectly happy.” There is no question that the rise of U.S. corn-ethanol production has brought about unprecedented changes in agriculture, domestically and internationally. But the fact is, despite the growing demand on corn from ethanol producers, American corn farmers are meeting the needs of their domestic and international customers. The USDA’s World Agricultural Supply and Demand Estimates says this year the United States is exporting 69 million metric tons (76 million

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76 million metric tons of corn for ethanol = DDGS

Ethanol

CO2 23,812,500 31%

27,889,200 37%

24,490,680 32%

It would behoove the mainstream media to learn that approximately only one-third of the corn coming into an ethanol plant, the starch, actually becomes ethanol, while another third becomes carbon dioxide and the remaining third is sold back to the livestock industry as protein rich distillers grains.

tons) of corn—the most recorded in history—up from about 58 million metric tons (64 million tons) last year. Information from the USDA states that the current breakdown of U.S. corn allocation goes like this: 47 percent is purchased by U.S. livestock producers for feed; 24 percent is bought by ethanol producers to make fuel; 19 percent is bound for export markets; and 10 percent for other uses such as corn oil, starch, plastics, etc. The 24 percent of the U.S. corn crop going to ethanol production will result in 24 million metric tons (26 million tons) of distillers grains, which the mainstream media seems to ignore. “Part of the problem is distillers grains is an untold story,” said Charlie Staff, executive director and chief executive officer of the Distillers Grains Technology Council, at the organization’s 2008 symposium in Kansas City, Mo. “Ethanol and distillers grains are hooked to the hip together, so if ethanol is taking a hit then we too are taking a hit. Critics say that the United States has started something that’s immoral—taking food and making ethanol. It’s emotional. We don’t like to see starving people, and governments are upset too. All of us have compassion about famine.” But as heavily populated countries like China and India continue to modernize, an increasing demand for meat, and grains like corn to feed finishing beef cattle, swine and poultry, will remain a constant in this ever-developing world. As the saying goes, more money, more problems.

Boosting Distillers Grains’ Feeding Efficiency Clearly as resources around the globe become scarcer, or as with U.S. corn’s case more abundant yet significantly higher priced than before, there is greater need to use those resources more efficiently. One of the biggest drawbacks of distillers grains, according to some, is the lack of uniform product standards and consistency, which inevitably leads to use of the product in a manner that is not as efficient as it could be. ETHANOL PRODUCER MAGAZINE AUGUST 2008

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“Because margins are so tight in the livestock industry, the nutritionists need to be very precise in their formulation,” says Troy Lorhman, vice president of Quality Technology International, a global grain and coproducts marketing company. QTI is also part of a joint-venture limited-liability company, Corn Value Products, which is promoting its fractionation technology called Hydromilling. “So if livestock producers have an ingredient they’re using a lot of in the ration, but are not sure of the nutrient composition of that ingredient, they have to put safety or discount factors on the nutrient composition.” What this means is the feeders underestimate the actual nutritional value. “They only do that to be safe, so when they discount the nutrient analysis, that means they have to pay less for it because they are consuming less nutrients,” Lorhman tells EPM. “So when they can be assured of a product’s nutrient analysis, they’ll give it a higher valuation in their formula and then in turn they can pay more compared with other ingredients.” Keefe says it’s important that livestock producers know what the protein, fat and fiber content of distillers grains is, so they can put a full value on it in their least-cost formulation. At the 2008 DGTC symposium, Larry Berger, a University of Illinois professor, was asked after his presentation how much distillers grains could be incorporated into cattle diets if sulfur levels and the resulting potential of polio weren’t concerns. Berger’s response was that while protein at levels that are too high might be a problem, 60 percent to 70 percent inclusion rates could be possible if it weren’t for sulfur. “Some feedlots are doing that now with additional management,” Berger said. At the same event a research scientist with JBS United Inc., Joel Spencer, said with the high grain prices today the swine industry is in “survival mode.” He made mention of various limitations swine producers find in distillers grains utility in hog rations, including high iodine and phosphorus

levels, which are of concern especially for grow/finish operations; mycotoxin sensitivity of young pigs; depressed litter size for sows, meaning that, while the savings of approximately $11 a ton per year in sow rations appears beneficial to large swine producers, a reduction of one pig per litter overshadows any rations savings gained over the course of a year; and amino acid variability from plant to plant—especially lysine. Spencer told the swine producers in attendance, if they desire to incorporate DDGS into pig rations, to make sure to purchase the coproduct from only one or two plants. “Know your plant because lysine content varies tremendously,” Spencer said, recommending ethanol producers step up quality assurance and real-time reporting of the amino acid profiles in their coproduct streams. If ethanol plants could offer real-time daily or even weekly amino acid reporting on its coproducts, the value of that service would be worth approximately $3 a ton to the ethanol plant. Moreover, it would optimize the feed efficiency of distillers grains to contribute even more to the global agricultural community, and help satisfy food and fuel requirements domestically and abroad. Keefe says it’s unfair to single out distillers grains and the lack of amino acids reporting from ethanol producers, because feeders don’t get that kind of information from other feed mills. “It’s just not that common,” he says. “To say DDGS is a bad product because of the variability and because you don’t give me the digestible lysine content just isn’t consistent with what’s going on in the industry, whether it’s with corn, soybean meal or whatever. You don’t get that kind of data from other sources, so why it has to be applied to distillers grains I just don’t get.”

DDGS’ Role in the Debate Aided by NCERC Research being conducted on distillers grains at NCERC is helping to

ETHANOL PRODUCER MAGAZINE AUGUST 2008

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PHOTO: NCERC

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Caupert, director of NCERC, tells EPM the second phase of the DDGS national library project will survey producers about parameters of their process with hopes to link their particular operational techniques with specific characteristics of their distillers grains.

relieve pressure on mounting feed costs for livestock producers. “We have two projects that are directly contributing to that,” Caupert tells EPM. One is NCERC’s national distillers grains library, and the other is a coproducts’ nutrient composition project. While the two projects sound similar, they are not.

The national distillers grains library project has been underway for about a year now, and it is a physical library of samples obtained on a quarterly basis from “every dry-grind ethanol plant we can get to participate in the project,” Caupert says. Roughly 30 percent of all U.S. dry-mill ethanol plants are involved. “It’s a good cross-section and

representation of what’s out there,” he says. The information is kept private and is used by NCERC as leverage for competitive grants. “To our knowledge that database is the single-most comprehensive one of its kind in the world,” Caupert says. NCERC’s other project, which is similar in nature, is completely public and is not exclusive to dry-grind ethanol plant coproducts, but rather the center solicits coproduct samples—including corn gluten feed, corn gluten meal, distillers grains, wet gluten, corn kernel fiber, corn bran, etc.—from every corn processor in Illinois, western Indiana, southern Wisconsin and eastern Iowa. The national library project collects samples quarterly while the other project collects samples on a monthly basis. “In this project we run moisture, protein, fiber and fat analyses, and to do that we use the methods recommended by the American Feed Industry Association,” Caupert says. The results are forwarded to the Illinois Rural Affairs Institute and the information is on a Web site (www.valueadded.org). “You

PHOTO: NCERC

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About 30 percent of U.S. ethanol plants submit DDGS samples to NCERC for the national library project.

might be a swine feeder in southern Illinois or a poultry feeder in Indonesia, but you’ll be able to log onto this Web site and find various products and their compositions, and over time you can see each individual

plant and corresponding analyses,” he says. The good news coming out of the national distillers grains library is the consistency seen in distillers grains samples. “While we see some variation across the industry—we see protein levels that maybe range from 25 percent to 32 percent— within a particular plant we don’t see the variation and inconsistency that some are claiming is there,” Caupert tells EPM. “From a plant located in Iowa to one in Arizona, you may see some differences in moisture and protein, but within a single plant it’s been pretty doggone consistent— at least the variation wouldn’t be statistically significant—and that’s really encouraging.” While the mainstream media neglects to report that one-third of the corn used in ethanol production is returned back to the livestock community as high-protein feed, it is fair to wonder if the ethanol industry places too much value on the role distillers grains plays in the mix. Caupert doesn’t think so. “If anything I think it’s the polar

opposite,” he says. “As an industry, I think distillers grains marketers and ethanol producers undervalue its role, and here’s why. We take corn, it comes into an ethanol plant at between 8 percent and 10 percent protein, and at the back of the plant it’s coming out at 26 percent to 30 percent protein. Whenever we put a pound of distillers grains in feeding rations for cattle, swine or poultry, we’re not only replacing a certain portion of the energy of the diet, which would probably come from corn, but we’re also replacing a high percentage of their protein in that ration—be it soybean meal or something else. So I actually think we’re undervaluing our products, but with the information we are gathering at NCERC I think the situation is getting much better.” EP Ron Kotrba is an Ethanol Producer Magazine senior writer. Reach him at rkotrba@bbibiofuels.com or (701) 7384962.

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CATALYSTS

Breaking the Catalytic Barrier to Biofuels Whether itâ&#x20AC;&#x2122;s enzymes for degrading cellulose, microbes for fermenting sugars into ethanol or solid particles for the reforming of syngas to ethanol, the development of highly active and selective catalysts for biofuels production will be key to the success of the industry. By Jessica Ebert

Scott Auerbach, white shirt, and students Rachel Shirron, blue shirt, and Vishal Agarwal, black shirt, work on a research project involving biofuels and zeolites. This summer, the basic question that Shirron is trying to answer is: What biomass-derived feedstock molecules can actually fit into the pores of zeolites? PHOTO: UNIVERSITY OF MASSACHUSETTS

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CATALYSTS

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iorefineries of the future will likely take many lessons from the efficient refineries of today, which pump crude oil in and separate it into the components that are ultimately used to make a portfolio of chemicals and fuels including natural gas, propane, gasoline, asphalt, diesel and jet fuel. The key to the plethora of processes that make the petrochemical industry such an efficient, integrated machine is several decades of research and development, much of which has been devoted to the design and modification of the finely-tuned catalysts that possess just the right kind of chemistry for turning “lead into gold.” “In the world of fuels, the lead is either crude oil or biomass of some sort,” explains Scott Auerbach, a professor of chemistry and chemical engineering at the University of Massachusetts, Amherst. “The gold is either high-octane gasoline, diesel, ethanol, butanol, biodiesel, [or some other biofuel].” Although the paradigm for the production of this symbolic gold is shifting from millennia-old oil pumped from the ground, to biomass harvested from the surface of the Earth, the catalysts for making the transition to biobased refineries are still being developed and optimized. “There’s a very rich history of catalyst research and understanding as it applies to petroleum and petrochemicals,” says John Holladay, a senior research scientist in the Chemical and Biological Processes Development Group at Pacific Northwest National Laboratory. “Those catalysts are very effective for the feedstocks they use, unfortunately, they’re not for biomass feedstocks. We don’t want to take another 80 years to get to the same point.” To the biofuel industry’s benefit, scientists are now armed with modern tools that speed the identification and development of new catalysts suited for biomass conversion as well as the modification of existing catalysts.

Gasoline from cellulose by catalytic fast pyrolysis with zeolite-based catalysts in a single reactor Cellulose

Pyrolysis to sugars and other products, adsorption into catalyst

Glucose in ZSM-5 Catalytic conversion

Gasoline, CO2, water

These two images show the structure of cellulose and a picture of a zeolite with a glucose molecule in its pore.

Catalyst Basics Catalysts by definition are facilitators of chemical reactions. Their chemical composition doesn’t change during the reaction so they’re not considered to be direct participants in the reaction. However, they do allow the reaction to proceed under milder conditions. Catalysts typically don’t impact the yield of a reaction or how much of the reactant is converted to product. Most commonly, catalysts change the mechanism of a given reaction and impact both reaction rates and selectivities. By speeding up the formation of certain products and slowing down the formation of others, catalysts effectively steer a reaction to a subset of possible products. In the refinement of biomass-to-fuel, catalysts can steer reactions to the most valuable

PHOTO: SCOTT AUERBACH, UNIVERSITY OF MASSACHUSETTS

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biofuels and bioproducts thereby minimizing costs associated with product separation and feedstock recycling. “This is the real magic and promise of catalysis,” Auerbach says. Catalysts come in two main forms: there are biocatalysts, also known as enzymes, which can come from a single cell such as a microbe or from an entire organism such as a plant. In addition, there are chemical catalysts, which are not associated with living organisms and often are produced synthetically. Chemical catalysts can be divided into two types: homogeneous catalysts, which are in the same phase—typically liquid— as the reactants in the reaction they catalyze, and heterogeneous catalysts, which are generally solids and out-of-phase with the reaction reactants. Christopher Jones, a chemical engineer at Georgia Institute of Technology, works from a number of different angles when it comes to biofuels research. The common thread to his team’s projects, however, is that they all focus on lignocellulosic feedstocks, mainly pine and switchgrass, as opposed to edible starches. One of their ongoing projects is gathering data on the behavior of mineral acids such as sulfuric acid in the pretreatment of biomass. “It’s not a particularly interesting or sexy catalytic process,” Jones says. “Mineral acids have been used for a number of years to break down biomass but there are only small, isolated studies in the literature.” Jones’ team is taking a single biomass and systematically studying the effect of certain types of acids and reaction temperatures to gain a greater understanding of how these catalysts act. In addition, this fall, Jones will embark on a new project with Range Fuels of Soperton, Ga., to develop and improve the heterogeneous catalysts used for transforming syngas into cellulosic ethanol. It’s this line of discovery that seems to captivate a significant number of biofuels researchers.

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Superior Solid Catalysts Heterogenous catalysts typically consist of tiny particles of precious metals such as platinum which are embedded in some kind of support such as silica or alumina. In addition to identifying the right metal and the right amount of that metal to catalyze a particular reaction, optimizing a solid catalyst also involves fine-tuning its support so that the latter is stable, and is porous to allow for the best possible flow of reactants and products, Auerbach explains. One of the most important classes of solid catalysts in oil refining are the zeolites. These solids are naturally occurring but can also be made in the laboratory. They are crystalline aluminosilicates that act as molecule-sized reactors, playing the role of supports and catalysts at the same time. “Since we know so much about zeolites, we should be able to take that knowledge and apply it to the biorefinery of the future to make a portfolio of biobased fuels and products,” Auerbach says. “The problem is that the zeolites used in the petroleum industry are by their very nature strong acids.” This is a stumbling block for the production of biofuels because the basic reaction for creating these fuels takes simple sugars or gases and converts them into longer-chain alcohols or higher hydrocarbons. Strong acids catalyze the cracking of molecules not their lengthening, but this is a challenge that Auerbach and colleagues, including George Huber and Curt Conner, are working to overcome by changing the composition of a zeolite to make it more strongly basic. To do this, the team is restructuring the zeolite by removing oxygen and adding nitrogen. “Nitrogen-substituted zeolites are generally about twice as basic,” Auerbach explains. Whereas Auerbach and colleagues work to adjust known catalysts to make them more efficient in reactions involving

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biomass feedstocks, other research groups are working to identify and develop new solid catalysts. Brent Shanks, a chemical engineer at Iowa State University, first gains an understanding of the characteristics of a reaction and then designs catalysts around that. He calls this “rational design.” His approach is one of bio-inspiration in that it aims to take certain characteristics of enzymes and build them into chemical catalysts. “Enyzmes are beautiful catalysts but they have some issues such as sometimes

PHOTO: IOWA STATE UNIVERSITY

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Miriam Garcia, an undergraduate student in Shanks’ lab, takes a sample from a reactor while performing experiments on monosaccharide degradation kinetics.

they’re too specific, too selective, and also you can’t go to high temperatures with them,” he explains. “With chemical catalysts you can go to higher temperatures but they’re not nearly as specific as enzymes.” Advancements in materials chemistry over the past decade or so provide new opportunities to structure materials at the nano-scale. “We can now design at the molecular level, chemical catalysts,” Shanks says. “The catalytic site of an enzyme is exquisitely defined at the molecular level. The reactant interacts with the catalyst in a very specific way. We don’t have that in chemical catalysts so the question is can we build that same level of molecular specificity into chemical catalysts?” To that end, Shanks’ team is trying to build acid/base functionality into a chemical catalyst. This is based on the knowledge that unlike chemical catalysts, whose function is carried out by metals and enzymes, such as those that break the bonds between molecules of glucose, use organic acids and bases to do the chemistry. “We’re interested in marrying the two,” Shanks explains. “We want to put organic acids and organic bases on metal oxide materials.” In a different approach, the team at PNNL, which Holladay is a part of, uses high-throughput screening to test multiple catalysts at a time and to increase the number of experiments

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Combinatorial Catalysis Lab Work Flow Robotics catalyst prep and activation

Reagent addition High pressure reactor Sample prep Seal

Informatics Sample analysis

He at &

sti r

Fill with gas

improve such things as the interactions between the metals and their supports. “It’s kind of a balance of both approaches,” Holladay explains. “We start with the discovery phase and then move into the fundamental stage with the overall goal being to develop this industry quickly.” EP Jessica Ebert is an Ethanol Producer Magazine freelance writer. Reach her at jebertserp@yahoo.com.

This schematic shows the basic steps used to create and test catalysts for high-throughput screening at PNNL’s Combinatorial Catalysis Lab. SOURCE: PNNL

they can do over a given period of time. This method for identifying new catalysts is carried out at PNNL’s Combinatorial Catalysis Lab. Initially, robotic equipment is used to form each catalyst to be tested. Solids handling robots weigh and add an appropriate amount of solid support to a small well on a microtiter plate. Each plate holds 96 wells, so up to 96 catalysts can be developed and tested together. Liquids handling robots then add a salt solution of metals, which fill the pore spaces of the support. The liquid is evaporated leaving the metals embedded in the support. Once the catalyst is treated to set the metals in the active state, the plate is moved to a reactor system where the biomass to be tested is applied to each well. The reaction is carried out in a second reactor and then another set of robotic systems draws samples from each well for analysis, Holladay explains. “We’ll take the ones that show activity and do further experimentation on them,” he says. It’s these experiments that provide a fundamental understanding of how the catalyst works. Using tools such as gas chromatography, high- pressure liquid chromatography and microscopy techniques that weren’t available 20 years ago, new catalysts can be discovered and the surface chemistry can be studied to understand and ultimately

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Embracing the Carbohydrate Economy Industry and academic research leaders share new research leads and emerging technologies for corn use at the 2008 Corn Utilization and Technology Conference. By Susanne Retka Schill

he carbohydrate economy is taking shape as the cheap oil economy is showing signs of decline. “There is an agricultural and economic revolution underway in the United States and the world,” USDA Undersecretary Thomas Dorr told the industry and academic researchers assembled at the Corn Utilization and Technology Conference in early June in Kansas City. In his keynote address, Dorr reiterated the USDA’s defense of corn ethanol, saying a re-examination of the numbers by the department’s economists conclude that ethanol is responsible for only 3 percent of the world’s increase in food prices. He commended the National Corn Growers Association for its leadership in addressing the issues that arise regarding corn and for supporting the basic science, genetic research and progressive product develop-

ment. “The carbohydrate economy is only limited by our imagination,” he said. The last couple of conferences sponsored by the NCGA have included more sessions on dry milling and ethanol technology and fewer on the wet milling technology that dominated the conferences in the past. Product development, new research leads and emerging new technologies comprised the core of the two-day conference, along with sessions covering research related to current issues.

Improving the Ethanol Process Vijay Singh, associate professor in the Department of Agricultural and Biological Engineering at the University of Illinois, described recent research on technologies to improve the ethanol process. Since the start of ethanol pro-

USDA Undersecretary Thomas Dorr, far left, visits the NCGA booth after delivering his keynote address at the Corn Utilization and Technology Conference. CREDIT: NCGA

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duction in the 1980s, dry-grind technologies have improved with the combination of saccharification and fermentation, Singh said, with the percentage of ethanol conversion improving as yeast nutrients are better balanced. New technologies are working toward simultaneous liquefaction, saccharification and fermentation in order to simplify the process and in turn, eliminate the manSingh agement required to maintain two different temperatures and pHs when the processes are separated. The new enzymes developed for the combined process are known by several names—no cook, cold hydrolysis, raw starch enzymes, low temperature hydrolysis enzymes or granular starch hydrolyzing enzymes. Two companies are leading the development Lewis of the new enzymes, which are commercially available. Genecor International has trademarked its product as Stargen and Novozymes’ technology has been licensed by Poet LLC under the BPX brand. Poet’s chief science officer Steve Lewis said they have applied the BPX technology in 22 of the company’s dry mills since the technology was introduced in 2002. The traditional jet cooking process kills much of the biology which can be capitalized upon in the BPX process, he said. “BPX ethanol conversions are approaching 3 gallons per bushel,” he added. Energy costs at Poet plants are now concentrated on drying distillers grains,

he said. The BPX process shows other benefits including improved flowability of distillers dried grains (DDG), minimization of feedstock variation and improved fermentation consistency. “Contamination is almost nonexistent,” he said. Novozymes scientist Randall Deinhammer said the company’s large culture collection of enzymes has benefited its enzyme developments. Deinhammer Besides the raw starch hydrolyzing enzyme used by Poet, the company has developed a more robust glucoamylase enzyme it calls Spirizyme Ultra. The enzyme used for saccharification improves the efficiency of the starch conversion, results in higher ethanol yields and faster fermentation and improves the solid separation at the back end of the process. Novozymes has a celluJohnston losic biomass kit available for lab testing on cellulosic ethanol conversions, which contains five enzyme complexes developed by the company, Deinhammer added. David Johnston, lead scientist at the USDA Agricultural Research Service’s Eastern Regional Research Center, described another promising new technology called E-Mill. The process uses protease enzymes in a short soak prior to fractionation and the addition of granular starch hydrolyzing enzymes. Johnston said the process yields a clean germ and bran, the product ferments more

A NEW DIMENSION OF MECHANICAL PRESSING.

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quickly resulting in a higher final ethanol yield, plus a greater number of coproducts and better nutrient content in the DDG comparable to soy meal and corn gluten meal. The process has been commercialized in a small modified wet mill in Malaysia, and he hopes to see it adopted in the United States soon. Genecor has licensed the technology. Singh described other research designed to optimize the drygrind saccharification and fermentation process through the dynamic control of process parameters. In the conventional drygrind process, he explained, only three process parameters are monitored: pH, temperature and glucoamylase dose. The settings for these process parameters are based on compromises between the optimum conditions for enzymatic hydrolysis and yeast metabolism, he explained. Using dynamic controls that adjusted the pH, temperature and enzymes during the process resulted in a 50 percent reduction in glucoamylase with the final ethanol concentrations being similar to conventional treatments. A pilot test of the dynamic controller in a Midwestern commercial dry-grind ethanol plant resulted in a 35 percent reduction in enzymes used. Johnston said other research is looking at new applications using enzymes during different stages to help in water removal to reduce energy costs in evaporation, enzymes to help with saccharification control to get higher ethanol yields and to push the yeast to complete fermentation. Also, using enzymes in dry fractionation can improve the process, he said. Yet another promising technology described by Singh is still being developed on a bench scale using

a vacuum combined with the new enzyme technologies that allow simultaneous liquefaction, saccharification, fermentation and distillation. In the process, fermentation is done under a vacuum where ethanol distills at 32 degrees Celsius (90 degrees Fahrenheit) and is continuously removed. In addition to permitting higher solid content (around 45 percent compared with 28 percent to 36 percent solids in traditional processes), the process eliminates the yeast inhibition caused by concentrated ethanol. The distillers grains come out of the process with the consistency of wet cake.

Beyond Ethanol Several speakers covered new developments in coproducts and new products, both from the wet-milling perspective and for ethanol plants. The University of Illinois has been cooperating with Archer Daniels Midland Co. in developing a corn replacement pellet. In a different twist on utilizing cellulose, Kyle Beery, ADMâ&#x20AC;&#x2122;s senior processing engineer, said they see a number of crop residues including corn fiber, corn stover, soy hulls and other fibrous materials being combined with distillers grains. â&#x20AC;&#x153;We see a logistical movement ahead to process cellulose components at feed mills or elevators,â&#x20AC;? he said. The next speaker went into details of the work involved in creating a highly digestible feed from crop residues and distillers grains that approach the value of corn. University of Illinois-Urbana Champaign researcher Larry Berger said a pelleted feed containing 25 percent DDG and 75 percent crop residues performed favor-

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ably in feedlot trials for digestibility and rates of gain. Cattle ate the feed readily, and fecal samples showed the corn replacement pellets (CRP) were 60 percent digested compared with 66 percent on the corn diet. “Feed efficiency was best for corn, but not bad for the CRP,” Berger said. When corn was $2.50 a bushel, there was little incentive to collect residues for such a process, but Berger suggested that at $5 and higher, the ratio of corn price to residue price makes it more favorable. By taking some of the corn residue, combining it with distillers grains, “we can get ethanol and feed from the same acre,” he said. Berger predicted cattle will be the first to be weaned from heavy corn feeding since the 5:1 corn-to-gain ratio for cattle is much less efficient than the rate of gain that pork and poultry feeders experience. DDG and corn stover show promise for the development of other new products, according to Rawle Hollingsworth, director of the Center for Renewable Resources at Michigan Sate University. “There are fibers in corn stover and DDGS that provide high-quality fibrils used in paper production,” he said. The researchers are taking a second look at other chemicals such as glycolic acids formed from the sugars in cellulose. “We’ve been throwing them away because they have such low value,” he said. Other chemicals derived from corn, such as the cholesterol lowering drug Crestor can result in extremely high-value chemicals netting $250,000 per ton, albeit using very small quantities. Researchers reported on other compounds derived from corn that show promise in replacing petroleum-based chemicals in the $3 billion plastics market. Many of the chemicals used in the petroleum industry come from eight platform chemicals, said Carl Lira, assistant professor of chemical engineering at Michigan State University. In 2004, researchers looked at 300 molecules found in corn sugars and

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ethanol and identified the top 12 candidates for evaluation. Organic acids recovered from the fermentation broth have applications in solvents, polymers, polymer plasticizers and cosmetics. Berger While it may require diverting a portion of the product stream away from ethanol to produce a compound like ethyl lactate, that alternative product may provide a new revenue stream for Hollingsworth an ethanol plant. Similarly, the New Jersey Institute of Technology has been partnering with the Iowa Corn Growers Association to study new uses for chemicals based on isosorbide Lira molecules found in corn sugars. “Isosorbide is a ubiquitous building block used in polymers and personal care,” said NJIT spokesman Mike Jaffe. “After three or four years we’re beginning to understand these molecules and how to make compounds to do what we want them to do.” One promising area is using the isosorbides as the building blocks for sunscreens that could go into cosmetics or be used in plastic manufacturing for ultraviolet stabilization. Other uses may be to make brittle plastics more flexible or to manufacture epoxy resins.

New Horizons Not all presentations dug into the conversion process or the chemistry of corn compounds. Several speakers addressed issues surrounding the emerging cellulosic ethanol technology and issues that are becoming more important to the public. Two of the speakers provided an overview of work being done on global

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warming issues. The University of IllinoisChicago and the Institute for Technology Development in Illinois have collaborated to conduct a study on land-use changes around the Illinois River Energy LLC ethanol plant, said John Fridgen, project manager at ITDI. The project correlated satellite imagery and farmer surveys in a study of land-use changes with the goal of determining carbon sequestration impacts. Nobilis of Falls Church, Va., is developing a model for life-cycle analysis for biofuels. Darryl Banks, a fellow at the nonprofit center, said the initial work focused on the production of greenhouse gases and water used throughout the ethanol supply chain from raising the crop through distribution of the end product. Intended for policy makers, the model will allow the inputting of variable corn acreages, corn yields and ethanol plant capacity, to allow analysis of different scenarios. As China is the second-largest producer of corn in the world, Scott Rozelle, senior fellow with the Institute of International Studies at Stanford University, described developments which are transforming that country from being an exporter of corn to very quickly becoming an importer. China’s disappearance from the export market was caused when the country banned corn exports. It has also banned further expansion of corn ethanol, turning to other feedstocks as it continues to hold the position of third-largest ethanol producer in the world behind the United Banks States and Brazil. As the population expands and agriculture develops to meet demand through improved productivity, mechanization and larger farm size, Rozelle predicted China will meet 90 percent of its corn needs in the future but will still need to import 1 billion bushels. Future ideas and issues for cellulosic ethanol were also discussed at the confer-

ence. Bill Rooney, plant scientist at Texas A&M, described his work in developing a high yielding biomass sorghum which he believes will fit well Rozelle into agriculture in the Southeast with its long growing season and adequate rains. Jacob Barney, weed scientist at the University of California-Davis, Hladik warned that the same characteristics that make a crop an ideal biomass producer may also indicate a potentially invasive weed. Strategies to prevent invasiveness and plan ahead with eradication methods need to be built into biomass development research, he said. Maurice Hladik, director of marketing for Iogen Corp., described the challenge of developing a biomass-based biofuels industry in his presentation. “To meet 16 billion gallons [of advanced biofuels] by 2022 will require 266 biorefineries in 14 years, averaging 80 MMgy each year,” he said. He estimates that will require 200,000 growers. “200,000 growers in the nation earning extra income could really benefit the ag economy,” he said. The logistics of handling huge volumes of biomass to feed those biorefineries will require high yielding biomass feedstocks. Hladik thanked the corn ethanol industry for blazing the trail for cellulosic ethanol. “We would be dead in the water,” he said, “without the work accomplished by the corn ethanol industry to educate consumers, automakers and the oil industry.” EP Susanne Retka Schill is an Ethanol Producer Magazine staff writer. Reach her at sretkaschill@bbibiofuels.com or (701) 738-4962.

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typical 100 MMgy ethanol plant could require as much as 95,000 linear feet of piping, depending on the plant design. Fitting all of these pipes together is no easy task. Certain areas of the plant call for different types of piping, mainly welded, threaded, flanged or coupled. Depending on the type of piping, labor could be intense and safety may be a factor. For all types, however, maintenance is necessary, and educating plant owners and operators is the key to keeping piping systems trouble free. EPM looks at the four main types of piping, along with their benefits and challenges.

Options There are many different ways to connect pipes, and several are used throughout an ethanol plant.

One method is welding. This could include simple butt welding (touching two pieces together without overlap and welding the seam), or it could involve welding the ends of flanged pipes together. It’s usually a strong bond and the most common within ethanol plants, but there are a couple drawbacks. For one, a welded pipe is hard to take apart. In instances where maintenance is necessary or a part was simply welded incorrectly, it would take additional labor and more time to fix. Furthermore, welders are in scarce supply these days. Still, it’s necessary in many applications and is preferred by process technology providers such as Colwich, Kan.-based ICM Inc. and Memphis, Tenn.-based Lurgi Inc. Threaded piping is cut at the ends so that it can be screwed onto another piece. Mike Kroeker, director of design services for ICM, says it’s used mostly

Miscellaneous process piping in the cook area, primarily welded/flanged alloy piping PHOTO: ICM INC.

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Connecting the Pipes Ethanol plants may vary in design, but they all need one thing: piping. There are different types of piping that connect the many processes within the facility, and each offers its own advantages. Although this equipment is essential it isnâ&#x20AC;&#x2122;t without its challenges when it comes to labor, maintenance, safety, education and cost. By Jessica Sobolik

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PHOTO: VICTAULIC CO.

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Victaulic Depend-O-Lok coupling for stainless steel systems

around a plant’s instrumentation and to transfer air throughout the plant. For regular maintenance, this type of piping is easier to disconnect than welded pieces. Flanged piping can be connected at the ends via welding, or with eight to 12 bolts and a gasket in the middle, according to Tom Sheeler, vice president and chief operating officer of Cheraw, S.C.based American Stainless & Supply, which produces this type of piping. ICM uses flanged piping around instruments and valves. If it’s bolted and not welded, it can be taken apart after removing the bolts. In areas of ethanol plants that require regular maintenance or cleaning, this type of piping is ideal. Kroeker says flanged pipes are more rugged and easier for maintenance crews to work with. However, he also acknowledges that they are more expensive, especially for the larger-diameter piping. Coupled piping connects the ends of pipes with only two bolts and is used almost exclusively in fire suppression systems, according to Kroeker. Mark Aldrich, industrial business development manager for Easton, Pa.-based Victaulic Co., which produces this type of pip-

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ing, says his company’s products have also been used for cooling water, air and reverse osmosis systems, distillation, drying, decanting, and distillers grains handling. He points out that coupled piping can be assembled and disassembled quicker than flanges, thus saving time and labor costs. He also points out that coupling doesn’t require welding, which improves plant safety. “We don’t require flame on a job site,” he says. “The possibility of fires is reduced.” This means improved maintainability for ethanol plant operators and owners. Another benefit of coupled piping is the compressive load capabilities on the gaskets in between connections, according to Aldrich. He says coupled piping has a c-shaped, cross-section seal that is durable and can handle significant compressive and cyclical loading. In other words, operators can pressure and depressurize a system repeatedly for many years without fatiguing the rubber. The rubber seal also accommodates vibrations felt throughout the plant, along with the expansion and contraction that naturally happens in all piping systems. In contrast, Aldrich says welded or flanged piping systems may have rubber bellows or braided flexible hose, which tend to wear out over time and require replacement. Still, Kroeker calls flanges “a slam dunk.” In addition to piping, there is a similar option for connecting processes: welded tubing, which has thinner gauge (wall thickness) compared with piping and is typically used in heat exchangers, according to John Robb, president of Beloit, Wis.-based United Industries Inc., which makes this kind of connection. Kroeker says ICM uses tubing to connect air lines to instruments and control lines because it’s flexible.

From Creation to Installation Companies such as American Stainless & Supply, United Industries and Victaulic produce various pieces of pipes in their shops, but how does the equipment get to ethanol plants across the United States? Piping can range in diameter from two inches to 12

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feet or more, making transport a challenge. Therefore, American Stainless & Supply ships its stainless steel and carbon steel piping— mostly welded and flanged—in pieces to fabricators such as Granite Falls, Minn.-based Fagen Inc. Fagen has a fabrication facility in Wisconsin, where workers assemble the various pieces of pipes before putting them on trucks and shipping them to ethanol plant sites. United Industries has shipped its stainless steel products to fabricators such as ICM, Poet LLC, Delta-T Corp., Archer Daniels Midland Co. and Wisconsin-based Apache Stainless Equipment Corp. Victaulic has sent its steel pipes to process technology providers Lurgi, Delta-T and ICM. It has also sent products directly to engineers such as SSOE Inc., C.J. Schneider Engineering Co., Ambitech Engineering Corp., Crown Iron Works Co., Burns & McDonnell and JH Kelly. Along with the equipment, it sends representatives to the plant site to train the workers who assemble its piping. Pipe suppliers meet with engineers and process technology providers often to discuss the benefits of their products. “Once they’ve used [the products], then [the engineers] usually continue to use them for the same services,” Aldrich says. “They put us in the specs, and once we’re in there, we work with contractors when they’re bidding a job or negotiating, so we’re sure they understand what’s been done by the engineer.” Typically, once the pipes are installed in an ethanol plant, it’s up to the plant owner or operator to service the equipment. However, process technology providers that design the piping structure, such as ICM, usually offer an in-depth training program, and parts and services. “We have a warranty program that would cover material failures during a certain period,” Kroeker says. “ICM also has an active customer-oriented aftermarket support and maintenance group that helps plants keep necessary spares and coaches them on what they need.” Victaulic also participates in training with the plant owner.

PHOTO: WILLIAM LEMKE, PHOTOGRAPHIC IMAGES

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Aclose-up view of a tube-forming station used to produce welded stainless steel tubing

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PHOTO: APACHE STAINLESS EQUIPMENT CORP.

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Evaporator shell sections with tubes installed

Combating Raw Material Costs Pipe fitters and suppliers face many challenges in this industry, and most recently the largest hurdle—no matter what type of piping—has been the fluctuating cost of raw materials. For example, Sheeler says that although stainless steel prices have been sta-

ble and nickel prices have dropped lately, the prices of molybdomen and chrome have increased. “So [the cost savings] is offset,” he says. In addition, carbon steel prices have gone up 60 percent since Jan. 1, and additional increases are expected. Sheeler says carbon steel price swings were mainly caused by China importing 50 percent of

the U.S. carbon steel pipe supply, followed by other foreign countries, creating a demand that domestic producers couldn’t meet. That, combined with the devaluation of the U.S. dollar, has caused some suppliers to export their materials. “The worldwide demand for steel is very strong,” he says. Meanwhile, demand for piping in the United States has seemingly stagnated. For example, because of a slowdown in conventional ethanol plant construction, Fagen has been left with a lot of extra equipment onhand, according to Sheeler. It is currently trying to sell back $20 million worth of equipment at reduced prices, and Sheeler acknowledges that this will hurt his company’s distributors. “Ethanol was gangbusters for awhile, and now it’s almost come to a halt,” he says. Victaulic, a huge buyer of scrap steel, has also been affected by the fluctuating cost of raw materials, according to Aldrich. However, he points out that because his company is reducing necessary labor and materials, it can still provide a 25 percent

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cost savings to its customers. “Using our systems, we reduce labor by 50 percent to 75 percent compared with traditional piping systems,” he says. With less manpower required, it also takes less time to install the piping systems. “If it was going to take 12 months to build a plant, you might shave a month off,” Aldrich says.

without sacrificing safety,” Kroeker says. “So we carefully examine any opportunity we have to minimize the number of pipe fittings, which translates into the price of fittings and reduces the number of welds.” Lange says Lurgi also optimizes its plant designs to reduce piping quantities.

When It Comes to Cellulose Optimizing Plant Design As previously mentioned, the amount of piping in an ethanol plant varies by plant design. Carlos Lange, executive vice president of Lurgi, says his company uses approximately 51,000 linear feet in a 55 MMgy ethanol plant and 95,000 linear feet in a 105 MMgy facility. ICM, on the other hand, uses approximately 50,000 linear feet in a 50 MMgy ethanol plant and 66,000 linear feet in a 100 MMgy facility, according to Kroeker. This number has varied from year to year as ICM engineers sit down annually to review its plant design. “We’re looking for maximum piping economy to make these plants as affordable to build as possible

These types of piping work well in conventional ethanol plants, but suppliers have noticed the recent slowdown in construction. However, more cellulosic ethanol plants are on drawing boards nationwide. Is there a market for the same pipes in that type of facility? Absolutely, Aldrich says. “We tie together all the pieces of process equipment,” he says. Kroeker says as long as the various cellulosic processes explored thus far don’t change, piping specifications should stay the same. “We don’t think there’s going to be a lot of radical changes,” he says. “We haven’t found anything yet that requires exotic materials.”

Lange agrees. “In general, I do not see much change in the piping requirements as we move to cellulosic ethanol,” he says. “When cellulose is converted to a starch stream and processed into ethanol, the general piping requirements stay the same as a typical corn facility.” In general, pipes require relatively low maintenance, Kroeker says. They are used in different ways in different areas of a plant— but they are fairly versatile. On another level, Aldrich points out that pipes do more than simply connect processes. “Honestly, I don’t view us as trying to move couplings,” he says. “We are really bringing to the industry a faster schedule, less cost and more safety. That’s really the end result.” EP Jessica Sobolik is the Ethanol Producer Magazine managing editor. Reach her at jsobolik@bbibiofuels.com or (701) 3730636.

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In Pursuit of Fruit As the food-versus-fuel debate rages, ethanol producers are searching for nonfood and food-based waste products to make renewable fuel. This has led researchers to take a closer look at watermelons that don’t ripen in time for harvest or fail to make the grade for grocery store produce aisles. By Bryan Sims

or growers and laborers, harvesting watermelons is no quick and easy task. Workers move through fields, cutting vines and filling trucks by hand, looking for the ripest, most pristine-looking melons. But not all watermelons ripen at the same time and laborers must return later to retrieve them. Even more watermelons might need to be cut later, and after a while, that is costly. Also, watermelons that aren’t visually perfect, which are referred to as culls, are rejected and left in the fields. That adds up to a lot of watermelons that never make it to the produce section at the grocery store or the Fourth of July picnic. “Historically, our industry abandons 20 [percent] to 25 percent of the crop that it produces every year because of labor issues, where you can’t afford to go back in the fields for a fourth or fifth time to harvest what’s left because it’s spread all over creation,”

according to Bob Morrissey, executive director of the National Watermelon Association. With nine chapters across the country, the NWA is a consortium of watermelon growers, researchers and advocates organized to support the industry. In 2006, Morrissey met with then U.S. Secretary of Agriculture Mike Johanns and five of his constituents to gather advice about new marketing possibilities for watermelon growers. For Morrissey, the answer was obvious. Why not create a new revenue stream for

the 800 million pounds of watermelons abandoned out of the 400 billion produced each year, and somehow convert them into ethanol or other biofuels? Morrissey’s question is laudable, considering that corn-based ethanol production is expected to plateau at 15 billion gallons a year. “I told them that we have all this fruit that’s loaded with natural sugar and there’s really not much opportunity to process it into juice,” Morrissey says. “There are a lot

USDA Agricultural Research Service technician Rick Houser works on a bench-scale demonstration of the separation of lycopene from watermelon juice. PHOTO: USDA, ARS

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PHOTO: NATIONAL WATERMELON ASSOCIATION

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National Watermelon Association Executive Director Morrissey scans a watermelon field in Mexico.

of people out there looking at it, especially with everything that’s been coming out of Washington. There’s an energy component that has now been put into the new Farm Bill, which should help us a little bit.” Looking at the fruit from an ethanol producer’s standpoint, watermelons contain all the organic components amenable for ethanol production. Typically, watermelons are comprised of about 10 percent sugar and 90 percent water. The three main natural sugars found in watermelons—fructose, sucrose and glu-

cose—are highly fermentable and have been used for centuries to make a variety of products in the wine and spirit industry, including the infamous “moonshine.” In addition, the rind and seeds serve as a feed ingredient. Producing ethanol out of these simple sugars isn’t difficult, but there are a few challenges associated with integrating discarded watermelons into an existing commercialscale corn-based ethanol plant, particularly in today’s market conditions, according to Morrissey. “It is a viable deal for us,” he says. “The concern we’ve got right now is just the pure economics of it all. Ethanol producers can’t afford to give us enough money to cover the farmers’ and packers’ labor costs.” Those costs have increased in tandem with the price of fuel. “We can’t afford to ship it and nobody else can afford to ship it anywhere either,” Morrissey says. “So, it’s become a challenge for us.” After a national convention hosted by the NWA in February, Morrissey met with biochemists and engineers from the University of Georgia to explore strategies that could benefit ethanol producers and watermelon growers.

Researching the Feasibility Utilizing a watermelon juice waste stream and the watermelon itself as a feedstock for ethanol production would provide simple sugars for direct fermentation to ethanol, and at the same time eliminate a majority of the sewage treatment costs for the waste stream. Like most ethanol feedstocks, these two waste products continued on page 188

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Other Fruitful Feedstocks Like watermelons grown in the Southeast, waste from the cranberry and peach crops are being targeted as potential feedstock sources for ethanol. According to Jeffrey LaFleur, executive director of the Cape Cod Cranberry Growers Association in East Wareham, Mass., cranberry growers leave behind a lot of waste from harvesting the bogs including leaves, rotting fruit and twigs. Typically, the waste is piled up and made into compost. However, cranberry growers and researchers are hopeful that the leftovers from cranberry production can be turned into cellulosic ethanol; another source of revenue for the industry. “There’s an interest in seeing if there really is potential for using those waste stream products from the industry and moving it from a compost into ethanol production,” LaFleur says. “If there is, it could be a nice alternative. We’ve met with a few firms that have been researching it.” Cranberries, the largest agricultural commodity in Massachusetts, have garnered interest mainly because the cranberry juicemaking process leaves behind a “press cake.” With the country’s largest cranberry handler and juice maker, Ocean Spray Cranberries

Inc., nearby, both the plant matter and the press cake could be available for cellulosic ethanol companies. However, geographic and logistical challenges might hamper shortterm consideration. “I think the No. one issue to be resolved is whether an individual farm would be able to produce the volume necessary to sustain the operations of an ethanol facility,” LaFleur says. “There may be a need to pool from a variety of different farms from the industry into an ethanol facility that would be easily accessible in the growing region.” At Clemson University in South Carolina research is being conducted to determine the feasibility of converting waste peaches into ethanol production. According to Terry Walker, associate professor of Biosystems Engineering at CU, about 20 million pounds of peaches are thrown away in South Carolina, the second leading peach producer behind California. The research is focused on optimization of ethanol production from dry peaches. “Right now, we’re doing kinetic type work and just looking at its feasibility, and how much of the material actually ferments if we can get near theoretical maximum yields,” Walker says. “At this point, it’s been pretty promising. It’s certainly fermenting well.” Since the pit acounts for much of the peaches’ composition, the second stage of

ETHANOL PRODUCER MAGAZINE AUGUST 2008

PHOTO: CAPE COD CRANBERRY GROWERS ASSOCIATION

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Workers sift through a cranberry bog in search of high-quality cranberries in Massachusetts. the research aims to break down every component and maximize ethanol yield. It’s these secondary waste materials organically found in fruits that will be a challenging task for anyone looking to exploit waste feedstocks for ethanol production, according to Walker. “It’s really a matter of just trying to take advantage of the optimal routes for whatever substrates are coming in and being able to do that in a fairly flexible type of system,” he says. “It’s an interesting challenge in engineering right now of trying to pull that together into something that’s organized and practical for the ethanol industry on a larger scale.”

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would have to be broken down into simple sugars, either chemically or enzymatically, before being fermented into ethanol. Last year, the NWA conducted various research projects in conjunction with the UG to determine the feasibility of using discarded watermelons as an ethanol feedstock. So far, the findings are encouraging. One option would be to build or acquire a separate facility on site with an ethanol plant that would extract two of the predominant antioxidants found in watermelons—lycopene and citrulline. These two

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antioxidants could then be shipped for pharmaceutical and/or nutriceutical purposes and the liquid absent the antioxidents would be made into ethanol, according to Elliot Altman, director at the Center for Molecular BioEngineering at UG’s Department of Biological and Agricultural Engineering in Athens, Ga. The department also conducts research on other fruits for biofuel production such as peaches and blueberries. “If you really wanted a process to do this right you would probably need to

extract the lycopene and citrulline first and then produce the ethanol,” he says. “What we have found is that watermelons don’t have any inhibitors that would affect the [ethanol production] process so that’s feasible.” The only problem is what to do with the rind. Altman says he has a way to circumvent this potential hurdle. “We have actually found chemical hydrolysis techniques that are pretty benign, where you can actually extract more sugar from the rind,” he says. “So, we would suggest including that as part of the process.” Another positive property of watermelon juice is that if a producer doesn’t extract the citrulline and other amino acids prior to production, the juice itself is rich in nitrogen, which is a critical component to the propagation of yeast in the fermentation process, according to Wayne Fish, lead research chemist with the USDA Agricultural Research Service in Lane, Okla. Since August 2007, Fish and his research team have been exploring the use of watermelon juice, rind and pulp waste streams as feedstocks for ethanol production. “We have found by fermenting watermelon juice, or by taking watermelon juice and adding molasses or sugar to it, those amino acids in the juice have a high affinity to the yeast,” Fish says. As for improvements in production efficiency of the rind, Fish says that part of the research is ongoing. He says that if the rind were to be coprocessed with the watermelon juice, it could add to the amount of ethanol produced per pound of watermelon by 50 percent to 75 percent. “We have a process to remove the lycopene that’s industrially scalable, and we are finishing up the last aspects to remove the amino acids, including citrulline, which will also be industrially scalable,” he says. “We almost have things in place so that watermelon juice could be implemented with another ethanol plant as a source of some sugars and water, which would be a nice fit.

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This looks like it does have definite potential.” Ethanol producers are cautiously optimistic about the economics of using fruit-based waste feedstocks for ethanol production on a commercial scale. “If there are ethanol plants in heavy watermelon growing regions then it does become feasible,” he says. “We’re looking at a process or a system whereby the watermelons could be processed in the field. So, instead of hauling individual watermelons, you’re hauling concentrated products, including the juice.” Another possibility is to have the watermelon processing plant next to the ethanol plant so the juice can be processed on site and pumped into the ethanol plant. One reason ethanol producers shy away from taking in waste fruit-based feedstocks, such as watermelons, is because it’s seasonal and would interrupt their operations, according to Altman. “The problem with watermelons is you’re probably going to have a three- to four-month window where that’s available,” he says. “It’s not going to be a 12month process and you definitely don’t want to let your watermelons lie around before you use them. They’re just not interested in something that’s going to interrupt their operation.” Boca Raton, Fla.-based Citrus Energy LLC is locating its ethanol operations adjacent to a fruit-based waste feedstock. In conjunction with FPL Energy, Citrus Energy is currently breaking ground on a 4 MMgy commercial-scale citrus-peel-to-ethanol plant in Florida where it will utilize its proprietary processes. FPL specializes in wind energy and operates the two largest solar fields in the world. According to David Stewart, president and vice president of engineering, he formed his technology company two years ago to focus on converting citrus waste to ethanol and received a $250,000 grant from Florida’s Farm to Fuel Initiative last year.

“Clearly, to turn anything that’s not coming from the food supply chain like waste watermelon into ethanol is a good idea,” he says. “But, the economics are tough because when people look at the amount of fruit waste available you’re talking about pretty small-scale plants. That’s the predominant challenge right now.” As for Morrissey, the prospect of using discarded watermelons for ethanol production is at a standstill as growers’ top priority today is food quality and safety. “I think just looking at watermelon alone it can have a

small impact,” Morrissey says. “If we could take the lost production from watermelon, citrus peels and from any other fruit or vegetable that can be converted into some type of biofuel, it’s going to help all of us in the long run. Is it going to be the total answer? No. But every little bit helps.” EP Bryan Sims is an Ethanol Producer Magazine staff writer. Reach him at bsims@bbibiofuels.com or (701) 738-4962.

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BEATING BACK BAD BUGS Bacterial contamination is one of the banes of ethanol production. Producers spend a considerable amount of money on sanitation and antibiotics trying to control bacteria in their fermentation tanks. A new system will not only reduce bacteria in the fermentation tanks, but also prevent re-infection. As a bonus, the new system leaves distillers grains free from antibiotic residues. By Jerry W. Kram

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o make ethanol, producers must create a pleasant environment for a living creature, yeast, which does the heavy lifting of converting sugars to alcohol. Unfortunately, other organisms also find the inside of a fermentation tank to be hospitable and compete with yeast and inhibit their growth. That lowers an ethanol producer’s efficiency and production. To combat the growth of bacterial invaders such as Lactobacillus and Acetobacter which produce organic acids that inhibit ethanol production, plants have resorted to dosing their tanks with antibiotics. Different plants have various levels of contamination problems depending on their age, design and maintenance practices. In some large plants more than a half-million dollars can be spent per year on antibiotics to control infection problems and the resulting organic acid levels. However, this is a short-term fix that allows tanks to become re-infected and leaves residues in the distillers grains that has made some feedlot operators uneasy.

A New Approach PureMash is a system developed by Resonant BioSciences LLC, which greatly reduces bacterial contamination in ethanol plants without leaving antibiotic residues in the distillers grain, says company President Allen Ziegler. The system is based on a water purification technology that uses chlorine dioxide (ClO2) and hydrogen peroxide to kill bacteria. Yeast turned out

to be resistant to the chemicals’ antiseptic properties. “We came across this technology a few years ago when I was working for a major brewer,” Ziegler says. “When they went to aseptic brewing they started having all kinds of infection problems. We found that yeast could stand up to the chemicals to a high degree where the other microbes could not. We also found [the chemicals] can stand up to a high organic matrix.” The PureMash system is designed to produce ClO2 without unwanted byproducts such as chlorine and chlorites. ClO2 also attacks biofilms which coat the insides of tanks, pipes and other equipment. “Where we found most of the infections coming from in these plants is actually the heat exchangers,” Ziegler says. “A lot of the antibiotics will not get [those infection sources].” Bacteria in the biofilms are more resistant to antibiotics and antiseptics and can be a source of re-infection in an ethanol fermentation tank. “Because of production reasons, ethanol plants don’t go through the levels of cleaning you find in a brewery, so they wind up leaving lots of biofilm in the heat exchangers,” he continues. “When we directed our technology to the heat exchanger and then the fermentor we were able to clean up that heat exchanger and a lot of the source of the infection. “What we try to do is not just clean the common areas you treat but our standard package also goes into the CIP (clean in place) loop. As we’ve proved in breweries, PureMash does a good job in removing biofilms. What they do now is a caustic

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PHOTO: RESONANT BIOSCIENCES

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The PureMash disinfection system is skid mounted for simple installation. The automated injection point tying the system into the plants’ water system is on the right of the photo.

wash that isn’t very effective against biofilms. But adding our system to the final rinse gets to the problem at the source and doesn’t treat just the symptoms.” The system is integrated into a plant’s distributed control system allowing full control and monitoring of the process. It also gives the plant a paper trail to go back and investigate in

case any problems crop up. “It helps you run the plant too,” Ziegler says. “From an engineering and operations standpoint, it really lets you look to see where you have any issues in real time. So it is really like looking at a whole other way of running and operating a plant while dealing with unwanted microbiology.” The PureMash system is mounted on a pallet-sized skid, which makes it easy to integrate into the water systems of existing plants. The input chemicals are relatively safe and the system generates the ClO2 on-site, unlike systems using chlorine gas. “You cannot ship or package chlorine dioxide,” Ziegler says. “The chemistry is much like (generating) ozone. Some people are concerned because it has chlorine in the name. Even though it has chlorine in the name it has nothing to do with chlorine chemistry and doesn’t react like chlorine.” It is also an improvement on ozone or chlorine as a disinfectant because it is much more selective. ClO2 doesn’t react with organics such as starch and sugar or compounds such as ammonia, like pure chlorine does, so it can be used directly in the fermentation process. “Chlorine dioxide is better because ozone wants to react with everything,” Ziegler says. “But they have similar chemical characteristics. They are both dissolved gases and are not chlorinating agents.” Ziegler says the company has also worked closely with engineering firms to confirm that the ClO2 doesn’t harm stainless steel pipes, tanks and other equipment.

PHOTO: RESONANT BIOSCIENCES

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Using chlorine dioxide and other chemicals, PureMash attacks biofilms not only in fermentation tanks but in hard to clean systems such as heat exchangers.

Because the system is integrated into the regular operation, plants don’t have to go off-line to be disinfected. “You don’t have to break everything down,” Ziegler says. “You don’t get it all right away, but within a week or two you see an effect.”

Successful Tests Resonant BioSciences tested the process in a fermentation laboratory in Montreal. In the summer of 2007, the company

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tested the system in plants that had bacterial contamination problems. Some of the plants had been having recurring problems for several years. The results were dramatic. “The plant we went into gave us their worst fermentor,” Ziegler says. “It had [organic acid levels] a good 30 [percent] to 40 percent higher than the other three fermentors. In a period of just three fermentations, we took that fermentor that was notorious over the past three or four years and got its [organic acids] down to 30 percent lower than the other three fermentors. They had spent years and a lot of money trying to address the problem. We were able to do it in one week.” The company is conducting tests in plants that have minimal problems with bacterial contamination to confirm the system’s ability to increase ethanol production in clean plants. “The first plant we went into had some mild infections and we were able to demonstrate significant ethanol gains,” Ziegler says. “Even in the lab in experiments with no organic acids present we’re seeing an ethanol gain. What we are trying to do is quantify those gains. We have four plants signed up for much more indepth studies. Two of the plants are very clean and the other two have some challenges. We know what we can get out of an infected plant, but we’re not sure what we can give you out of a very clean plant.” The speed of the PureMash system will also be one of its selling points, according to Ziegler. But the real gains come from the higher, more consistent levels of production that come from running a consistently clean system. The test plants using the PureMash system had more consistent levels of ethanol production even if they didn’t suffer from noticeable infection problems. “If you have an infection, this will take it out immediately as opposed to antibiotics,” Ziegler says. “It gives you a way to rid yourself of antibiotics, and it gives you a

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much better performing plant. You can address infections in all areas of the plant, not just where it is obvious. We try to go to the source of the infection and not just treat the symptoms all the time.” With the positive results from the testing, PureMash received U.S. EPA registration in February and is now commercially available to dry-grind ethanol producers through Ethanol Technology of Milwaukee, Wis. Ten plants signed up to have the system installed in the first few months that it was available. The system can be purchased through a leasing arrangement with monthly payments, Ziegler says. “It is one monthly fee and for that fee we take care of the equipment, we provide the chemicals and service, and also provide 24/7 emergency service,” he says. “There is no capital purchase. We do ask for a three-year commitment but we include a performance guarantee. If it doesn’t work for some reason, we will pull it out.” Factoring in the increased and more reliable production from the ethanol plants, the cost of the system is comparable with using antibiotics to control bacterial contamination. “The plants we are going into, we are matching their antibiotic pricing,” he says. “But [the plants] are showing higher ethanol pro-

duction and much less variation in ethanol production. They don’t see the wild swings in ethanol production anymore. With a little more history under our belt I think we will be able to put a better number on the real cost of our system. But we should be right in the middle of what an average plant spends on antibiotics.”

Clean Distillers Grains An added benefit of the PureMash system is the only traces of the chemical left in the distillers grain is in the form of chloride, which is a component of common table salt. The level of chloride left in the mash is well within the acceptable limits set by federal regulations. That allows companies that use the PureMash system to sell their distillers grains as antibiotic free. “That seems to be one of the primary drivers of interest in the system,” he says. “It doesn’t leave a residue in the distillers grains. We have forwarded all this to the [U.S. Food and Drug Administration] and [U.S.] EPA and they are very interested that we can take the bacteria out and still leave natural or organic grain behind.” PureMash has been approached by some ethanol producers not because they have production problems, but

ETHANOL PRODUCER MAGAZINE AUGUST 2008

because they would like to market their ditillers grains as being free of antibiotic residues. Ziegler says a number of the plants that have installed the PureMash system have been able to command a significant premium for their distillers grains by marketing them as natural or organic. “There is a lot more interest in the system than we expected from the market looking for an antibiotic alternative,” Ziegler says. “I think they are looking for something that is a little better. We are certainly seeing interest from the engineering firms.” While cutting the use of antibiotics is a definite selling point for PureMash, Ziegler takes a broader view of the system’s benefits. “Yes you can say you are replacing antibiotics, but I really don’t look at it like that,” he says. “It is really a better systems approach to maintaining and treating your plant like a lot of food facilities do now. What we are doing is updating that technology and bringing it into the ethanol plant.” EP Jerry W. Kram is an Ethanol Producer Magazine staff writer. Reach him at jkram@bbibiofuels.com or (701) 7384962.

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The Hand That Turns the Wrench Ethanol plant technicians who are able to avoid unexpected shutdowns are like money in the bank. Instructors at the Biofuels Automation University in Plymouth, Minn., believe that with highly trained technicians and the technology available today, there should be no unscheduled downtime in an ethanol facility. By Timothy Charles Holmseth Photos By Howard Pfefer

Ethanol plant technicians, who attend the Biofuels Automation University in Plymouth, Minn., receive classroom instruction and hands-on training.

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he expression it’s not in the tool that the magic lies, the magic is in the man who knows which screw to turn, is not included in the Performance Plus Ethanol Maintenance Training literature at the BioFuels Automation University in Plymouth, Minn. But it should be. The ethanol plant maintenance technicians who attend the university come away with knowledge that sharpens their skills in ways that can make a difference to their company’s bottom line. Hans Alwin, director of business development for Biofuels Automation, says that in an industry, where maintenance is a profit center, the closer a technician gets to being a crystal ball into plant problems, the more money that facility makes. “There should be no unscheduled downtime in an ethanol facility.” Alwin says, sizing up the ultimate goal of the training program that is now in its second year. With the technology available today there is no reason for downtime, says Sidney Sondag, Biofuels Automation general manager. “If that piece of equipment works when it’s installed, it’s going to keep working,” he says, noting that most

Students at Biofuels Automation University in Plymouth, Minn., receive industry-specific training in ethanol plant maintenance. Here they assemble at work stations in the rear of the classroom after receiving instructions from a power-point presentation.

parts are good for years. Too much time is spent trying to throw different devices at the problem to see if it fixes it, he adds. Students who go through the course receive a fuller understanding of how to assess automation issues that may be problematic, he explains. When

they leave they have a brand new foundation to build upon. The allure of this industry-specific training that keeps the registration constant at $1,000 per technician is money, Alwin says. The enrollment fee is inexpensive compared with what a company

ETHANOL PRODUCER MAGAZINE AUGUST 2008

gains (or stands to lose) as result of utilizing (or not utilizing) the course. If enrollment, turnout and repeat attendance are indicators, it would appear that Alwin is correct. â&#x20AC;&#x153;The session is full,â&#x20AC;? he says, looking into the training room where 19 men sit attentively following a power-point presentation. â&#x20AC;&#x153;We booked 20, one fellow couldnâ&#x20AC;&#x2122;t make it,â&#x20AC;? he says. For Jon Logterman, the maintenance manager for Western Wisconsin Energy LLC, the June 5-6 session is his second time around. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;ve been sending two [technicians] for every session,â&#x20AC;? he says during a quick break between sessions. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re starting to repeat because you pick up something new every time.â&#x20AC;? Technicians who attend the university sometimes find solutions to problems theyâ&#x20AC;&#x2122;re experiencing back at their ethanol plants. â&#x20AC;&#x153;Iâ&#x20AC;&#x2122;ve got a page of notes in my notebook as [our plant] has been having some issues,â&#x20AC;? Logterman explains. â&#x20AC;&#x153;Then all of a sudden itâ&#x20AC;&#x2122;s like the light bulb goes off when youâ&#x20AC;&#x2122;re in class here, and you think, â&#x20AC;&#x2DC;Hey that might be our problem.â&#x20AC;&#x2122; so you take that information back to the plant.â&#x20AC;? Using the training method of classroom power-point lectures followed by immediate hands-on training at the

PHOTO: HOWARD PFEFER

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Left to right, Selk, United Wisconsin Grain Producers, Logterman of Western Wisconsin Energy, Coots of Castle Rock Renewable Energy and Goodell of Corn LP, execute an assignment at a work station during the June 5-6 session at the BioFuels Automation University in Plymouth, Minn.

direction of Biofuels Automation University specialists, the technicians are systematically introduced to or updated on everything from temperature measurements to valves to communication protocols. Standing over a cylinder during a

break-out session, Logterman is joined by Todd Selk, a maintenance technician from United Wisconsin Grain Producers LLC in Friesland, Wis., Jeff Coots, a maintenance technician at Castle Rock Renewable Fuels LLC in Necedah, Wis., and Aaron Goodell,

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from production resources at Corn LP in Goldfield, Iowa. “We’re setting up transmitters to read levels in a cylinder,” Matt Derosier, a BioFuels Automation service technician, says as the student technicians observe. As the technicians begin to discuss and troubleshoot the task, their training takes hold. “Okay, we got our signal back,” Coots says, after a temporary loss of a reading on the monitor. “Calibrate,” Goodell, says. “Beautiful, she just zeroed out,” Coots says as the men nod their heads in agreement. Jeff Milani, BioFuels Automation’s lead service technician, shows the students what happens when a little bit of pressure changes because of gases that can exist above the liquid. “You can cancel it out if you happen to make a mistake,” he says after showing them the difference it makes. Alwin says communications among the technicians is a plus because they have the opportunity to exchange information with their peers. Logterman says he has compared notes with some technicians from United Wisconsin Grain Producers LLC. “They were [on line] before us, but we exchange information because they’ve seen problems come up [due to] the age of their plant. We were built a year later so we share information,” he explains. The significance of fresh information cannot be overstated, Logterman says. “Yesterday they brought out a new [transmitter isolation valve],” he says, adding that it can be applied to the process in certain applications at his plant where oper-

ational issues sometimes arise. “Up to this point that technology wasn’t in the industry, so you basically had to shut down to change out the Level Instruments,” he explains. “[With this] we can change those out on the fly.” While the program is designed to educate students through audio, visual and hands-on learning techniques, Sondag also throws in some real world analogies that the average person will remember. For example, he explains the Coriolis effect to the class in this fashion: “Have you ever driven past the highly sophisticated fake Holstein cow in the yard with its tail made of a hose doing this (whipping his hand around)?” he asks. “That’s the Coriolis effect actually causing that tail to whip.” Moving through the lesson plans, Sondag and Alwin use daily experiences to provide insight into complicated but important dynamic fluid properties that relate to ethanol process experiences. “If you take a cup of sour cream and tip it upside down it will never come out—it’ll just sit there,” Sondag says, explaining the essence of non-Newtonian liquids. “But if you stir it up, it will pour out easily.” The ability to deliver the latest insights and education didn’t happen overnight. Alwin credits the university’s success to the market penetration of its parent company Swanson Flo-Systems Co. Swanson Flo-Systems is an equipment provider handling a comprehensive package of instrumentation, automated and manual valves and specialty components to measure and con-

PHOTO: HOWARD PFEFER

PRODUCTION

The June 2008 class at Biofuels Automation University

trol temperature, pressure, flow, level, proof, density, pH, percent solids, percent causticity and other analytical variables found in ethanol production. Understanding the applications and providing this broad scope of products indelibly connects the Swanson Flo-Systems and BioFuels Automation companies to these technicians for the life of the plant. â&#x20AC;&#x153;Most of our brands are major market share leaders,â&#x20AC;? Alwin says pointing out that, â&#x20AC;&#x153;Foxboro Instrumentation, Masoneilan Control Valves and Flowseal butterfly valves each enjoy over 75 per-

cent market share in the dry-grind ethanol industry. So the training can be pertinent and valuable.â&#x20AC;? Doug Diny, whoâ&#x20AC;&#x2122;s involved with project sales activities for Biofuels Automation, says the full classrooms make sense when you look at the present state of the ethanol industry, which is being plagued by record-high corn prices. â&#x20AC;&#x153;Plant builders today must be more resourceful,â&#x20AC;? he says. â&#x20AC;&#x153;We can work the downturn to our advantage.â&#x20AC;? Future sessions are scheduled and Logterman says his company will most likely be sending technicians to that those training sessions. â&#x20AC;&#x153;Thereâ&#x20AC;&#x2122;s always something new,â&#x20AC;? he says. Alwin agrees, adding that BioFuels Automation University responds to the changing needs of its clients. â&#x20AC;&#x153;In addition to the quarterly Performance Plus Ethanol Maintenance Training Course, which runs next on Sept. 11-12 and again on Dec. 4-5, several new courses will be added to the curriculum offerings. The new courses will include maintenance sessions covering heat exchangers and pumps, an ethanol operations module, an emissions compliance and safety management course and a module covering advanced control loop tuning.â&#x20AC;? EP Timothy Charles Holmseth is an Ethanol Producer Magazine staff writer. Reach him at tholmseth@bbibiofuels.com or (701) 7384962.

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GM Crops and Biofuels Are European biofuels producers being disadvantaged because some countries wonâ&#x20AC;&#x2122;t allow the production or importation of genetically modified crops? By Jon Evans

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n many ways, genetically modified (GM) crops and biofuels are made for each other. The enhanced yields available from the current generation of GM crops such as corn and soybeans can help farmers meet the growing feedstock demand for biofuels while still producing sufficient quantities of food and animal feed. In the future, GM crops with even higher yields and entirely novel GM varieties of grasses and trees should make biofuels production even more efficient and inexpensive. This relationship between GM crops and biofuels has blossomed most fully in the United States, which isn’t entirely surprising as it is the largest single market for both GM crops and biofuels. In particular, it is GM corn that has encouraged the relationship to blossom, with GM varieties accounting for 73 percent of all the corn planted in the United States in 2007 and corn being the main feedstock for U.S. ethanol production. According to Brent Erickson, executive vice president, industrial and environmental section, at the U.S. Biotechnology Industry Organization, GM crops have helped U.S. farmers to increase yields by 30 percent over the past 10 years. This should provide sufficient feedstock for the United States to meet its biofuels commitments, as set out in the recent Energy Bill, which requires that biofuels account for 36 billion gallons of the U.S. fuel supply by 2022 (up from 9 billion gallons in 2008). “With agricultural biotechnology, farmers can continue to increase yields of crops to meet the demands for food, feed and fuel,” Erickson says.

GM Crops Not Welcome in Europe In Europe, however, the relationship is essentially forbidden, with biofuels prevented from fraternizing with GM crops. Part of the reason for this is simply because the European biofuels sector is different than the U.S. sector (see the “Vive la Difference” feature in the May EPM), with many of the crops used as biofuels feedstocks in Europe lacking commercially available GM varieties. This is especially the case for ethanol, which tends to be produced from wheat and sugar beets rather than corn. More important, however, is the continuing negative perception of GM crops in Europe. This arises from two main concerns: that the foreign genes added to GM crops might escape into wild plants; and that food derived from GM crops could pose a health risk to consumers. Despite the fact that GM crops have been grown and consumed around the world for more than 10 years now without causing any major environmental or health problems, some European environmental and consumer groups continue to assert that GM crops pose unacceptable risks. As a result, although the European Commission introduced a comprehensive regulatory regime for GM crops in 2003, the vast majority of GM crops still haven’t received regulatory approval in Europe. According to the International Service for the Acquisition of Agri-biotech Applications, eight EU member states—Spain, France, the Czech Republic, Portugal, Germany, Slovakia, Romania and continued on page 212

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How Genetic Modification Works Genetic modification involves inserting one or more foreign genes, which can be derived from numerous different species, into the genome of a host organism, thereby providing it with a new ability or trait. Any living organism can be genetically modified, including humans, but the technique has been most widely applied to crop plants. In plants, the foreign genes are first inserted into individual cells, often by transporting the genes within a virus or bacterium or blasting the cells with a gene gun. These plant cells are then encouraged to multiply and grow into proper plants. But none of these insertion techniques are perfect, which means that only a few of the cells will contain successfully inserted genes. To find out which these are, the genes of interest are usually linked to another gene that codes for some easily observable trait, such as resistance to a specific antibiotic. After insertion of the genes, the plant cells are exposed to the antibiotic and only those that survive are allowed to grow into full plants, which can then be cultivated as normal.

Although scientists have developed a wide variety of GM plants possessing numerous different traits, the most popular commercially-available traits for GM crops are herbicide tolerance and insect resistance. As the name suggests, herbicide-tolerant GM crops are able to withstand certain herbicides, usually the broad-spectrum herbicide glyphosate. This means that farmers can spray their fields with the herbicide while the GM crops are growing, affording better weed protection. Insecticide-resistant crops generate their own insecticide, having been genetically-modified to produce a protein that is fatal to many insect pests but harmless to mammals. The most popular GM crops are corn, soybeans and cotton, with GM varieties accounting for more than 90 percent of the U.S. soybean crop and 87 percent of the U.S. cotton crop in 2007. Increasingly, producers of GM crops such as Monsanto are combining two or more different genetic traits in the same plant, such as tolerance to a number of different herbicides and insect resistance, to create so-called â&#x20AC;&#x153;stacked traits.â&#x20AC;?

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Poland—grew just over 100,000 hectares (247,000 acres) of GM crops in 2007 (solely comprising of insect-resistant corn). In contrast, farmers in the United States, which has a similar area of arable land to the EU, grew almost 58 million hectares (143 million acres) of GM crops. The question is: Could biofuels offer a way to rehabilitate GM crops in Europe? European consumers are most concerned about the health effects of eating food products derived from GM crops, but there would be no such concerns with producing biofuels from GM crops. Anti-GM campaigners obviously think so, with a number recently warning about the danger that biofuels would let GM crops in through the back door. For example, in February 2008, the environmental group Friends of the Earth, which prefers the term agrofuels because they think biofuels sounds too environmentally friendly, published a briefing titled “Agrofuels: Fuelling or Fooling Europe?” As the title suggests, this report is generally critical of the proposed environmental benefits of biofuels and had the following to say on the relationship between GM crops and biofuels. “Proponents of genetic engineering promote agrofuels in an attempt to break worldwide opposition to GM foods, even though current GM crops provide no advantage when producing agrofuels. GM crops raise unacceptable health and environmental concerns as well as lead to the further intensification of agriculture and increase corporate control of agriculture. In addition, crops engineered with traits specifically intended for industrial agrofuel use will inevitably contaminate food supplies. The use of GM crops and trees should not be permitted in the production of agrofuels.”

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But their fears are currently unfounded. Even European proponents of GM crops admit that, at the moment, there is no specific need to grow GM crops for biofuels. According to Dirk Carrez, director of

public policy and industrial biotech at EuropaBio, the association of the European biotechnology industry, EU member states should be able to meet the target set by the Carrez European Commission for biofuels to make up 10 percent of transport fuel by 2020 without GM crops. However, GM crops would help to make the European biofuels sector more competitive. “The more that you can increase your yields, the more competitive it is and the more bioethanol and biodiesel you can produce,” Carrez says. “So is there an advantage with GM crops? Yes, of course, like there is for all other applications.” Despite what Friends of the Earth claims, GM crops and food are accepted and welcomed in many other parts of the world. According to the ISAAA, GM crops are now grown on almost 115 million hectares (284 million acres) in 23 countries, including major agricultural producers such as Argentina, Brazil, Canada, India and China. In Europe, however, not only are most GM crops not approved, but the produce from those crops, such as the grain from GM corn, are not allowed to be imported. This situation is beginning to create real problems, because it is becoming increasingly difficult and expensive to obtain nonGM grain from outside Europe. This is already impacting European livestock farming, because it’s becoming more cost-effective to import meat from outside Europe rather than try to purchase non-GM grain to feed cattle. It is having a similar impact on the European bioethanol industry. “We cannot import GM corn to produce biofuel,” Carrez explains. “So what some European companies are doing now is producing ethanol in Canada and the United States and importing it to Europe. This of course consumes more energy and means that European ethanol producers are

ETHANOL PRODUCER MAGAZINE AUGUST 2008 17.06.2008 14:26:33 Uhr

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building production capacity in other parts of the world and not in Europe. That’s a little bit crazy.” So although Europe doesn’t currently need GM crops to help it meet the European Commission’s 10 percent target for biofuels, having access to GM crop-derived biomass would enhance the competitiveness of the European biofuels industry, especially the bioethanol industry. In addition, recent European Commission figures show that Europe will only meet the 10 percent target if it imports 20 percent of its biomass, and if cellulosic ethanol makes up 25 percent of the biofuels supply. If that doesn’t happen, Europe will struggle to meet that target. Furthermore, future generations of GM crops should offer even more benefits to the European biofuels industry. The global GM crop market is currently dominated by the U.S. plant science company Monsanto, with its GM varieties accounting for 87 percent of all the GM crops grown in 2007. It sees the biofuels industry as an increasingly important market for its GM crops. As such, it is putting a great deal of effort into further increasing the yields of crops used for both food and biofuels. This includes developing varieties of corn that can “fix” atmospheric nitrogen rather than requiring fertilizers, and that can tolerate low water supplies. “Monsanto is very focused on helping farmers around the world deliver more yield from the same amount of acres,” says Monsanto spokesperson Darren Wallis. “This yield can be used for food, feed and increasingly energy needs.” The company has also developed a variety of corn known as Processor Preferred, which contains more starch for fermenting into ethanol, and is looking to develop varieties that can produce even greater quantities of starch. But Monsanto isn’t just concentrating on corn. At the end of April 2008, Monsanto announced that it had signed a collaborative agreement with a U.S. company, Mendel Biotechnology, to develop varieties of perennial grasses as feedstock for cellulosic ethanol. This next generation of GM crops will provide more benefits to biofuels producers and could put European producers at an even greater disadvantage if they are not able to utilize them. Eventually, this may provide the necessary impetus for the widespread acceptance of GM crops in Europe, especially GM nonfood crops like grasses, but Carrez doesn’t think it will happen in the short- to medium-term. “We can continue in Europe for a few years to make biofuels without GM crops, but in the longer term we have to think about using GM crops if we want to have a competitive biofuels industry,” he says. Until then, it may be problematic for GM crops and biofuels even to be seen together in Europe, lest the negative perception of GM crops begins to rub off on biofuels. EP

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SWEDEN

FFVs Flourish in Sweden

An ethanol-powered Scania truck is parked outside an IKEA store. PHOTO: SCANIA

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The Swedish people take the environment and their need to reduce oil use seriously. That attitude is reflected in their use of flexible-fuel vehicles, which has increased from 717 in 2001 to more than 100,000 today. By Eric Kroh

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PHOTO: SCANIA

hen Kjell Andersson, information director of the Swedish Bioenergy Association, is asked why Sweden has been so successful in adapting to ethanol, he tells the following story. In the 1990s, the capital city of Stockholm, working with the Swedish Flexi-Fuel Buyers’ Consortium, placed an order for 2,000 flexible-fuel vehicles (FFVs) for any car company that could produce them. The idea was to jump-start the FFV industry by offering guaranteed business to producers. The two big Swedish automobile companies, Volvo Car Corp. and Saab AB, declined the offer, as did other European automobile makers. ”It was a hen and egg situation,” Andersson says. “Someone has to start. The car companies say there aren’t any ethanol filling stations, we won’t build cars. The oil companies say, there aren’t cars, we won’t build filling stations.” Instead, Ford Motor Co. took them up on the offer, and was given the go-ahead to begin importing the FFV version of its Focus model. Ford was the first manufacturer to offer ethanol-powered vehicles on the European market. “They were alone on the market for many years,” Andersson says. “That was 2001.” From 2001 to 2005, Ford sold more than 15,000 FFV Focus models in Sweden, commanding 80 percent of the ecofriendly car market, according to Ford. Rather than being seen as a failure on the part of Swedish car companies, though, the success of the Focus was seen as a victory for the people of Sweden, who were willing to do what it takes to reduce their dependence on oil, even if it meant giving business to a foreign car company, Andersson says. “It’s better to do the right thing,” he says. Since then, FFVs have taken hold in Sweden in a big way. In 2001, 717 FFVs were on the road in Sweden, according to

A man fills up a flexible-fuel Volvo V50 with E85 at a filling station in Sweden.

Sweden’s BioAlcohol Fuel Foundation, an organization of biofuels producers and transportation companies. That number passed 100,000 earlier this year.

More FFVs, Means More E85 The number of gas stations offering E85 has also risen dramatically, from the first pump in 1995 to more than 1,200 today, according to BAFF. By comparison, there are about 1,500 E85 filling stations in the United States for the 6 million FFVs on the road, according to the National Ethanol Vehicle Coalition. The European Union has a renewable fuels mandate of replacing 5.75 percent of gas and diesel with biofuels by 2010, and has proposed a mandate of 10 percent by 2020.

But the Swedish approach to using biofuels to reduce dependence on oil relies on using incentives to change the direction of fuel consumption, rather than setting unattainable mandates or benchmarks, Andersson says. It is a natural outgrowth of Sweden’s familiarity with renewable fuels such as biomass, which Swedes have long used to heat their homes. “It’s a long-term strategy,” Anderson says. We have worked with bioenergy in other fields—for heating, electricity—for a very long period to reduce the use of fossil fuels in other sectors. To be able to go on, we need to do something about transportation It’s a matter of political will, to put in the right incentives for public procurement.” In 2005, the Swedish government assembled a commission of leaders in government, industry and conservation. It included such dignitaries as Göran Persson, the prime minister of Sweden at the time, and Leif Johansson, the president and chief executive officer of Volvo, the renowned Swedish transportation company based in Gothenburg. The commission set an ambitious goal for Sweden: Figure out how to dramatically reduce dependence on oil and eliminate oil imports by 2020. To do so, the Commission on Oil Independence thought it necessary to reduce the use of oil for transportation by 40 percent to 50 percent by that year. A group of aggressive incentives has Sweden well on its way to achieving that goal, says Per Carstedt, chief executive officer of Svensk Etanolkemi AB (Sekab), one of Europe’s largest producers and distributors of ethanol. Because of tax breaks, E85 fuel at the pump in Sweden typically costs about 30 percent less than gasoline. Since the energy content of ethanol is less than that of gasoline that means it costs about the same for consumers to drive a certain distance whether they’re powered by E85 or gas.

ETHANOL PRODUCER MAGAZINE AUGUST 2008

PHOTO: SCANIA

SWEDEN

Volvo S40 flexible-fuel vehicle

In addition, the government provides other incentives for FFV owners, including a $1,800 bonus to purchasers of FFVs; a 20 percent tax reduction for flexible-fuel company cars; lower vehicle insurance; exemption from congestion charges in Stockholm; and even free parking spaces in all but one of Sweden’s 35 largest cities. It is because of incentives like these that ethanol has been able to make such a large headway into Sweden’s fuel supply, Carstedt says. It should be no problem to significantly reduce the use of fossil fuels in passenger cars. “The first three months of this year, roughly 25 percent of cars purchased are flex-fuel,” Carstedt says If you stop that trend now, continue having 25 percent of new cars be flex-fuel, you reduce roughly 30 percent to 35 percent of (overall) gasoline consumption. The more difficult area is heavy traffic.”

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PHOTO: SCANIA

SWEDEN

Scania will use its 270 horsepower 9-liter ethanol Euro 5 and EEV bus engine with EGR in its ethanol-fueled trucks.

From Cars to Trucks To meet the goal of reducing overall fossil fuel consumption for transportation, it will be necessary to do for trucks and other heavy vehicles what Sweden has done for passenger cars, he says. Sweden already has about 600 buses that run on pure ethanol, Carstedt says. The engine they use is made by Stockholm-based Scania AB, the world’s leading producer of heavy trucks and buses. Sekab and Scania are working together to make trucks that have the newest generation of the ethanol engine that has been used in Sweden’s buses for 20 years. A lack of places to fuel up on pure ethanol has impeded the use of the engines in anything other than vehicles that are able to return to the same place every night, such as buses. It becomes more com-

plicated for trucks and other vehicles that travel long distances, and therefore need filling stations along the way. But there are plans to have a skeleton system of 10 pure ethanol filling stations along major routes in Sweden by 2010. These pumps will feed pure Sekab ethanol to a fleet of Scania trucks, which will be sold for the first time later this year. The ethanol engines operate on the same principle as diesel engines, says Hans-Ake Danielsson, a spokesman for Scania. The main differences are that the combustion pressure is not as high for the ethanol engine, and the ethanol fuel needs to be blended with an ignition enhancer. The ethanol engine has the same efficiency as an engine running on diesel—up to 44 percent, according to Scania. But the ethanol engine offers a reduction of up to 90 percent of carbon dioxide emissions compared with diesel when sugarcane ethanol is used for fuel. The 9-liter engine has an output of 270 horsepower and a torque of 1,200 newton meters (885 foot-pounds), according to Scania. The ethanol-fueled trucks will be available throughout Europe, Danielsson says. Scania does not operate in the North American market for logistical reasons. The ethanol that will power these trucks—and Sweden’s other flex-fuel automobiles—will for the most part be imported. Sweden only produced about 18.5 million gallons of ethanol in 2007, according to the European Bioethanol Fuel Association. This is roughly the same amount of ethanol the country produced in 2004, and half of what it made in 2006. But Sweden also consumed nearly 100 million gallons of ethanol in 2007, meaning the country imported about 80 million gallons of ethanol that year. Most of this ethanol came from Brazil. In fact, Sweden is the largest importer of Brazilian ethanol in Europe.

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A low import tariff makes Brazilian ethanol attractive to buyers. Swedish officials would like to abolish the import tax, but have been met with resistance from the European Union, which would like Sweden to increase tariffs, Andersson says.

On the Production End Sweden is working on developing other sources of ethanol as well. The country has a substantial paper pulp industry. Black liquor, a byproduct of pulp production, is a promising source of biofuels. In addition, Sweden is collaborating with the African countries of Ghana, Tanzani and Mozambique to develop ethanol industries there. Ghanain company Northern Sugar Resources Ltd. announced it will cooperate with Sweden to grow sugarcane to supply a 40 MMgy ethanol plant. The plant will be built by Brazilian company Constran S/A, and Skania has committed to buying the first 10 years of the plant’s ethanol production, though it will not operate at full capacity when it begins producing. Sweden’s reliance on foreign ethanol could presage what’s in store for the American ethanol industry, says Wally Tyner, agricultural economist at Purdue University. Renewable fuels mandates passed by Congress last year cap production of corn ethanol in the United States at 15 billion gallons per year by 2020, while requiring 36 billion gallons of renewable fuels to be produced that year. The most likely contender to fill out most of the gap is cellulosic ethanol, but the domestic industry will likely not be able to fulfill that demand, Tyner says. “Right now we’re doing fine meeting the renewable fuels standard,” he says. “Down the road we won’t be able to unless we start importing more ethanol.” One way to encourage ethanol imports is to reduce the

ETHANOL PRODUCER MAGAZINE AUGUST 2008

import tax, Tyner says. The Farm Bill passed by Congress in May extends the import duty through 2010, but Tyner thinks Congress will revisit the issue in 2009 and consider reducing the tax if they are serious about meeting ethanol mandates. Nobody can accuse Sweden of not being serious about addressing climate change, says Mattias Goldmann, spokesman for the Swedish Association of Green Motorists. Why are Swedes so environmentally conscious? Goldmann says it is because the effects of climate change are much more obvious in Sweden than other places. “Here in Stockholm, we technically didn’t have a winter at all this year,” he says. “Our ice skates are just rusting. My daughter was complaining that she couldn’t go sledding at all. That’s the number one reason.” Goldmann also says Sweden has something to prove. Swedish car manufacturers, such as Volvo and Saab, have historically produced larger cars that guzzle more fuel than other European models. Sweden has “by far the highest fuel consumption at fleet level of any European country,” Goldmann says. “We have a lot of homework to do.” This motivation, along with effective financial incentives and the Swedes’ love for nature, has propelled Sweden to a leadership role in the European Union with regard to renewable fuels, Goldmann says. “We’re a country of nature-going people who really care about the environment,” he says. “In Sweden we’re really starting to learn now.” EP Eric Kroh is a Chicago-based journalist who writes and creates multimedia content about biofuels and the environment.

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Producer Magazine not only contains top editorial content but also a useful

Yeast Ferm Solutions 859-402-8707

Inland Waters 313-841-5800 www.ferm-solutions.com

Fermentis-Division of SI Lesaffre 800-558-7279 www.fermentis.com

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Filter Media

262

SAFELY DISSOLVES THE TOUGHEST DEPOSIITS OF ...lime, magnesium, calcium, dirt, corrosion & rust. • NSF Registered & Biodegradable • Non-Hazardous • Non-Corrosive • Changes color when spent

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Hydro-Klean, Inc. 515-283-0500

added exposure, EPM Marketplace is the perfect solution. www.hydro-klean.com

Seneca Waste Solutions 800-369-5500 www.senecacompanies.com

ETHANOL PRODUCER MAGAZINE AUGUST 2008

EPM MARKETPLACE Tank Cleaning Services

Insulation

Hydro-Klean, Inc. 515-283-0500

Mavo Systems 763-788-7713

Inland Waters 313-841-5800

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Mayes Coatings, Inc. 866-93MAYES www.mayescoatings.com

Professional Environmental Cleaning Services 402-212-0949 www.professionalECS.com

Miller Insulation Co, Inc. 701-258-4323 www.millerinsulation.com

Seneca Waste Solutions 800-369-5500 www.senecacompanies.com

Management

Construction Buildings-Modular

Plate窶認rame Hydro-Klean, Inc. 515-283-0500

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Railcars Hydro-Klean, Inc. 515-283-0500 Inland Waters 313-841-5800

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Macomber Welding & Fabricating, Inc. 616-698-0819 macwelding@triton.net www.hydro-klean.com VAL-FAB Inc. 877-482-5322 W. Soule & Company 1-877-976-8531

www.valfab.com

Coverall Building Systems 800-268-3768

top editorial content but also a useful first-time advertiser wanting to raise awareness of your business or a

www.wsoule.com

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Grain Storage

Tank Cleaning Equipment

Producer Magazine not only contains directory in each publication. Whether a

www.inlandwaters.com

Seneca Waste Solutions 800-369-5500 www.senecacompanies.com

Spraying Systems Co. 630-665-5000

one convenient location, Ethanol

Fabrication

Smoke Stack Hydro-Klean, Inc. 515-283-0500

With all contact information placed in

the perfect solution. www.coverall.net

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ETHANOL PRODUCER MAGAZINE AUGUST 2008

263

EPM MARKETPLACE Mechanical

JIC

JOULÉ Industrial Contractors

9l`c[`e^ 8 GcXek Fe K_\ N\jk :fXjk6

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Wanzek Construction,Inc. 701-282-6171

wanzek.com

Railroad Tracks

OVER 40 YEARS OF PROVIDING QUALITY COST EFFECTIVE SOLUTIONS TO THE INDUSTRIAL INDUSTRY. We provide: • Experienced Supervision • Multi-craft Staff • Logistical Support For: • Plant Outages • Plant Construction and Expansion • Relocations • Capital Projects • On and off site pipe Fabrication To: • Ethanol and Alternative Fuel Plants • Pharmaceutical Manufacturers • Food Plants • Building Material Facilities Toll Free: (800) 445-6853 email-bbosher@jouleinc.com

Reimer Welding Inc. 218-773-0886

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/)( K_`i[ 8m\el\# Cfe^m`\n# N8 0/-*) *-'%+)*%,,(' nnn%a_b\ccp%Zfd

JIC Mid-States Mechanical Services, Inc. 800-950-0279 www.mid-statesmechanical.com W. Soule & Company 1-877-976-8531

www.wsoule.com R & R Contracting, Inc. 800-872-5975

Plant Construction Agra Industries, Inc. 715-536-9584 Agri-Systems 406-245-6231 CYC Construction 402-333-1652

Railworks 913-888-4091

www.agraind.com

www.agrisystems.net

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Volkmann Railroad Builders, Inc. 262-252-3377 www.volkmannrr.com

Tanks DCI, Inc. 320-252-8200 Eagle Tanks, Inc. 888-678-0698

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www.eagletanks.com

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EPM MARKETPLACE 264

WINBCO Tank Company 641-683-1855

www.winbco.com

Consulting Business Plans ICM, Inc. 316-796-0900

www.icminc.com

ETHANOL PRODUCER MAGAZINE AUGUST 2008

EPM MARKETPLACE SearchPath of Chicago 815-261-4403 www.searchpath.com/chicago

Environmental Air Resource Specialists,Inc. 970-484-7941 www.air-resource.com

Plant Optimization

Global Issues. Local Solutions. Engineering, Environmental, Health and Safety Services

www.golder.com 1.800.275.3281

ICM, Inc. 316-796-0900

www.icminc.com

Inland Waters 313-841-5800

www.inlandwaters.com

Granatus Consulting, Inc. 218-773-0005 www.granatusinc.com Harris Group Inc. 206-494-9422

Seneca Companies 800-369-5500 www.senecacompanies.com TKDA 651-292-4602

Terratec Biofuels of Solutia 800-742-1476 www.TerratecBiofuels.com

Project Development

www.tkda.com

Ethanol Productions 813-968-6867

Feasibility Studies Harris Group Inc. 206-494-9422

Harris Group Inc. 206-494-9422

www.harrisgroup.com

Groundwater Services

www.harrisgroup.com

Personnel Recruiting

Leggette, Brashears & Graham, Inc. 651-490-1405 www.lbgweb.com

jim.plautz@verizon.net

www.harrisgroup.com

Public Relations Lanser Public Affairs, LLC 262-797-7876 www.lanserpublicaffairs.com

Quality Assurance

EPM MARKETPLACE

Eurofins Scientific, Inc. 551-580-9140

www.eurofinsus.com

With all contact information placed in one convenient location, Ethanol Producer Magazine not only contains top editorial content but also a useful directory in each publication. Whether a first-time advertiser wanting to raise awareness of your business or a

Optimize the Value of Your Co-Products

frequent display advertiser looking for added exposure, EPM Marketplace is the perfect solution.

Grading, sampling, mycotoxins, proximates, residues, GMOs. QA / QC Consulting: HACCP, GMPs, SOPs, NIR calibration Co-products: Quality assurance testing; Lot certiﬁcation; Export assistance 504-297-4330 ethanol@euroﬁnsus.com

ETHANOL PRODUCER MAGAZINE AUGUST 2008

265

EPM MARKETPLACE Wanzek Construction, Inc. 701-282-6171

Regulatory Air Resource Specialists.Inc. 970-484-7941 www.air-resource.com

National Fuel Marketing 303-996-6781 www.NationalFuelMarketing.com

Education Iowa BioDevelopment 641-969-4167 www.iabiodevelopment.com Iowa Biofuels Training International 641-969-4167 www.biofuelstraining.org

Anton Paar +1-804-550-1051

Process Design Agri-Systems 406-245-6231

Risk Management

Analytical Instruments wanzek.com

ChemSim 781-248-5057

Blowers & Fans www.agrisystems.net FlaktWoods 716-845-0900

Recruiting Hobbs & Towne 610-783-4600x108

www.vogelbusch.com

Rentech Boiler Systems, Inc. 325-794-5701 www.rentechboilers.com

Custom Metalcraft Inc. 417-862-0707 www.custom-metalcraft.com

Catwalks

Air Pollution/Odor Control

Lean Technologies LLC 701-352-9620 www.leantechnologiesllc.com

Ceco Abatement Systems, Inc. 630-493-0624 www.cecoenviro.com/Abatement

Centrifuge Repair

The Richmond Group USA - BioEnergy Search Division

804-285-2071

www.trgbioenergy.com

Engineering-Civil

www.tkda.com

www.bachelorcontrols.com

Control System Integrators, Inc. 319-377-6538 x19 www.csystemi.com

www.nosnhojinc.com

Westfalia Separator,Inc. 201-784-4322

www.wsus.com

Combustion Equipment

John Zink Company LLC 800-421-9242

www.eclipsenet.com

www.johnzink.com

Computer Software dbc SMARTsoftware, Inc. 770-427-7633 www.dbcsmartsoftware.com

Design/Build Agra Industries, Inc. 715-536-9584

www.icminc.com

Nosnhoj Services Inc. 317-887-6436

Eclipse.Inc. 815-637-7213

Control Systems Bachelor Controls 785-284-3482

ICM, Inc. 316-796-0900

Centrifuges

Antioch International, Inc. 402-289-2217 www.antioch-intl.com TKDA 651-292-4602

Factory Sales and Engineering, Inc. 985-867-9150 www.fsela.com

Agitation Equipment

www.hobbstowne.com

SearchPath of Chicago 815-261-4403 www.searchpath.com/chicago

Robinson Industries, Inc. 724-452-6121 www.robinsonfans.com

Boiler Systems

Equipment & Services Employment

www.flaktwoods.com

www.chemsim.com

Process Engineering Associates, LLC 865-220-8722 www.processengr.com Vogelbusch USA, Inc. 713-461-7374

www.anton-paar.com

www.agraind.com

Encore Business Solutions 204-989-4330 www.encorebusiness.com

www.agrisystems.net

Integrated Business Solutions 888-697-3060 www.ibsolutions-llc.com

Delta-T Corporation 757-941-0188

www.deltatcorp.com

John Deere Agri Services 770-238-5100 www.johndeereagriservices.com

ECE Design 312-235-6960

www.ecedesign.com

Summit Software, Inc. 800-433-5724 x 181

Agri-Systems 406-245-6231

Ethanol Productions 813-968-6867

jim.plautz@verizon.net

Control Systems

GS CleanTech Corp. 678-566-3588

www.gs-cleantech.com

FeedForward, Inc. 770-426-4422

ICM, Inc. 316-796-0900 266

www.icminc.com

www.summit-soft.com

www.feedforward.com

Kahler Automation Corp. 507-235-6648 www.kahlerautomation.com

ETHANOL PRODUCER MAGAZINE AUGUST 2008

EPM MARKETPLACE SoftPLC Corporation 512-264-8390

Filters www.softplc.com Eaton Filtration 800-656-3344 ext 581 BruceCLaw@eaton.com

Control Systems-Distributed

Larox 301-543-1200

Control System Integrators, Inc. 319-377-6538 x19 www.csystemi.com

www.larox.com/cpi

Filtration Equipment BWF America 800-733-2043

www.bwf-america.com

W.S. Tyler 1-800-321-6188

www.wstyler.com

Fractionation—Corn Buhler Inc. 763-847-9900

Conveyors—Enclosed

Cereal Process Technologies 217-779-2595 www.cerealprocess.com

Grisley Components, Inc. 303-756-6474

www.grisley.com

Conveyors—Pneumatic Blower Engineering 800-388-1339 www.blowerengineering.com Gusmer Enterprises, Inc. 847-277-9785 www.gusmerenterprises.com

Distillation Equipment SRS Engineering Corporation 800-497-5841 www.srsengineering.com

FEECO International, Inc. 920-468-1000 ICM, Inc. 316-796-0900

www.feeco.com

www.icminc.com

Ronning Engineering Company, Inc. 913-239-8118 www.ronningengineering.com

Emission Monitoring Systems MonitorTech Corp. 866-682-6771

www.monitortechgrp.com

www.barr-rosin.com

Dryers—Fluid Bed Aeroglide Corporation 919-851-2000

www.aeroglide.com

Continuous Emissions Monitoring Systems Easiest installation, operation and maintenance Meet or exceeds EPA requirements NOx, O2, CO, SO2 and others Turnkey systems for under $100,000.00 P.O. Box 9271, Columbus, Oh 43209 866-682-6771 sales@monitortechcorp.us

Dryers—Other

Emissions Testing & Reduction

Davenport Dryer, LLC 309-786-1500 www.davenportdryer.com

Lantec Products, Inc. 617-265-2171

Dryers—Ring

Evaporators

Barr-Rosin,Inc 630-659-3980

www.barr-rosin.com

Barr-Rosin,Inc. 630-659-3980

Sturtevant Inc. 781-829-6501

www.fwsgroup.com

www.sturtevantinc.com

Gas Detectors UE Systems, Inc. 914-592-1220

www.uesystems.com

Gaskets

GEA NIRO Inc 410-997-8700

www.lantecp.com

Grain Handling & Storage Sukup Manufacturing Co. 641-892-4222

www.sukup.com

Heat Exchangers CMC Letco Industries 417-831-1528

www.cmc-letco.com

Custom Metalcraft Inc. 417-862-0707 www.custom-metalcraft.com

Your Ad HERE Your Solution. Advertise Today. www.niroinc.com

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HRS Process Technology, Inc. 623-915-4328 www.hrs-americas.com

Dryers—Rotary Drum Aeroglide Corporation 919-851-2000

FWS Technologies 204-487-2500

Allegheny Coupling Company 814-723-8150 www.alleghenycoupling.com

Dryers-Flash Barr-Rosin,Inc. 630-659-3980

www.buhlergroup.com/us

www.aeroglide.com

www.barr-rosin.com

Reach your customers

Fermentors WINBCO Tank Company 641-683-1855

www.winbco.com

Your Solution. Advertise Today.

EPM MARKETPLACE ETHANOL PRODUCER MAGAZINE AUGUST 2008

267

EPM MARKETPLACE Loading Equipment

Pressure Gauge Solutions for the Ethanol Industry

SafeRack 866-761-7225

www.saferack.com

Lubrication Systems

Summit Industrial Products has lubricants and greases for conveyors, dryers, cooling tower pumps, gearboxes, blowers, compressors, motor bearings and CO2 recovery.

Contact Hardy Orzikowski for more information and to schedule your free instrument review. 888.945.2872 ext. 5127 ethanol@wika.com

Call today for a distributor in your area.

800.749.5823 P.O. Box 131359 Tyler, TX 75713 www.klsummit.com

Made in the U.S.A.

Munters - Des Champs Products 540-291-1111 www.deschamps.com

Instrument Associates 708-597-9880 www.instrumentassociates.com Process Sensors Corp. 508-473-9901 www.processsensors.com Shimadzu Scientific Instruments 800-477-1227 www.ssi.shimadzu.com

www.wika.com

EPM MARKETPLACE With all contact information placed in one convenient location, Ethanol Producer Magazine not only contains top editorial content but also a useful directory in each publication. Whether a first-time advertiser wanting to raise awareness of your business or a frequent display advertiser looking for added exposure, EPM Marketplace is the perfect solution. 268

Jouleâ&#x20AC;&#x2122; Industrial Contractors bbosher@jouleinc.com www.jouleinc.com

Jet Cookers Maintenance Software

ProSonix Corporation 800-849-1130, x. 801

Instrumentation

WIKA Instrument Corporation 888-945-2872, x5127

Maintenance Services www.wika.com

www.pro-sonix.com

Mapcon Technologies, Inc. 800-922-4336 www.mapcon.com

Laboratory-Equipment Astoria-Pacific International 800-536-3111 www.astoria-pacific.com

Laboratory-Supplies Midland Scientific, Inc. 800-642-5263

www.midlandsci.com

Eurofins GeneScan, Inc. 504-297-4330 www.gmotesting.com

Romer Labs, Inc. 636-583-8600

CBT Wear Parts, Inc. 888-228-3625 Prater-Sterling 630-679-3254

Laboratoryâ&#x20AC;&#x201D;Testing Services

Midwest Laboratories 402-334-7770

Mills-Hammer www.cbtwearparts.com

www.prater-sterling.com

CPM/Roskamp Champion 800-366-2563 www.cpmroskamp.com

Millwright Agri-Systems 406-245-6231

www.agrisystems.net

www.midwestlabs.com

Mixers www.romerlabs.com

SGS North America, Inc. 281-478-8234www.sgs.com/alternativefuels Trilogy Analytical Laboratory 636-239-1521 www.trilogylab.com

KINEMATICA, INC. 631-750-6653

www.kinematica-inc.com

Moisture Analyzers Sartorius Mechatronies-Omnimark 800-835-3211 www.sartorius-omnimark.com

ETHANOL PRODUCER MAGAZINE AUGUST 2008

EPM MARKETPLACE Custom Metalcraft Inc. 417-862-0707 www.custom-metalcraft.com

Molecular Sieves Gordon Technologies 570-279-8086 Vaperma, Inc. 418-839-6989

www.gtsieve.com

www.vaperma.com

WINBCO Tank Company 641-683-1855

Trico TCWind, Incorporated 320-693-6200 www.tricotcwind.com

SimplexGrinnell 800-746-7539

www.simplexgrinnell.com

www.winbco.com

Seals

Process Control Harris Group Inc. 206-494-9422

Motors

Safety

Aesseal Inc. 865-531-0192

www.aesseal.com

www.harrisgroup.com Utex Industries, Inc. 432-333-4151/800-873-0946 www.utexind.com

Pumps

Pipe

Sensors

American Stainless & Supply 800-845-5511 www.americanstainless.com

Electro Sensors 800-328-6170

ISCO Industries 800-345-4726

Separation Equipment

www.isco-pipe.com

Robert-James Sales, Inc. 800-666-0088

Puritan Magnetics, Inc. 248-628-3808 www.puritanmagnetics.com

www.rjsales.com

Separators

Pipe-Fittings Robert-James Sales, Inc. 800-666-0088

Westfalia Separator,Inc. 201-784-4322

www.rjsales.com

Chapel Steel 800-320-6042

Pipe-Flanges

davidj@chapelsteel.com

Outokumpu Stainless 847-517-4050

www.rjsales.com

www.outokumpu.com

Sandmeyer Steel Company 215-464-7100 www.sandmeyersteel.com

Pressure & Temperature WIKA Instrument Corporation 888-945-2872, x5127

www.wsus.com

Steel Suppliers

St. Louis Pipe & Supply 800-737-7473 www.stlpipesupply.com

Robert-James Sales, Inc. 800-666-0088

www.electro-sensors.com

Storage-DDGS

www.wika.com

Laidig Systems, Inc. 574-256-0204

Pressure Vessels

www.laidig.com

Structural Fabrication ITT Industries Goulds Pumps 315-568-2811 www.gouldspumps.com

Cherokee Steel Fabricators, Inc. 903-759-3844 www.cherokeesteelfabricators.com

Yamada America, Inc. 800-990-7867 www.yamadapump.com

Tanks Agra Industries, Inc. 715-536-9584

QA Test Products Phenomenex 310-212-0555x3328

www.phenomenex.com

CMC Letco Industries 417-831-1528

RTO Media Lantec Products, Inc. 617-265-2171

www.lantecp.com

Resource Recovery Eco-Tec, Inc. 905-427-0077

ETHANOL PRODUCER MAGAZINE AUGUST 2008

Brown-Minneapolis Tank 281-252-9809

www.agraind.com

www.bmt-tank.com

www.cmc-letco.com

Custom Metalcraft Inc. 417-862-0707 www.custom-metalcraft.com Federal Equipment Company 800-652-2466 www.fedequip.com

www.eco-tec.com

Greenberry Industrial 541-757-8458 www.greenberryinc.com 269

EPM MARKETPLACE Paragon Trailer Sales 800-471-8769 www.paragontrailer.com WINBCO Tank Company 641-683-1855

Siemens Water Technologies 800-525-0658 www.siemens.com/water

Used Equipment

Ethanol Production

www.winbco.com

Existing Producers Thermal Energy

Louis Dreyfus Commodities 402-844-2680 LDCommodities.com

American Waste Removal 505-417-9933 www.americanwasteremoval.com

Future Producers Thermal Oxidizers

Syntec Biofuel, Inc. 604-648-2092

www.syntecbiofuel.com

Finance Accounting

PROVEN RELIABILITY

Christianson & Associates PLLP 320-235-5937 www.christiansoncpa.com

for VOC, CO & PM ABATEMENT

www.kcoe.com

Kennedy and Coe, LLC 800-303-3241

Appraisals Federal Appraisal & Consulting, LLC. 908-823-0607 www.federalappraisal.com

EISENMANN Corporation Crystal Lake, Illinois 815.455.4100 es.info@eisenmann.com

VOC Scrubbers Lantec Products, Inc. 617-265-2171 www.lantecp.com

Valve Actuators

Natwick Associates Appraisal Services 800-279-4757 www.natwick.com

Rotork Controls,Inc. 585-247-2304

ICM, Inc. 316-796-0900 Pro-Environmental, Inc. 909-989-3010

www.rotork.com

Valves www.icminc.com

www.pro-env.com

Turbinesâ&#x20AC;&#x201D;Gas Kawasaki Gas Turbines 281-970-3255x18 www.kawasakigasturbines.com

Central States Group 800-318-2747 www.centralstatesgroup.com Check-All Valve Mfg. Co. 515-224-2301 Metso Automation 508-852-0215

Your Ad HERE Your Solution. Advertise Today.

EPM MARKETPLACE

270

Harris Group Inc. 206-494-9422

www.harrisgroup.com

Equity Procurement

www.checkall.com

Greenman Funding 888-802-7678 greenman.funding@verizon.net

www.metsoethanol.com

Jordan, Knauff & Company 312-254-5900 www.jordanknauff.com

Wastewater Treatment Services Biothane Corporation 856-541-3500x501

Due Diligence

Insurance

www.biothane.com

Water Treatment Aquatech International Corporation 724-746-5300 www.aquatech.com

Armor Companies, Inc. 612-501-5654 acline@armorcompanies.com Chubb Insurance 312-454-4250 ERI Solutions, Inc. 316-927-4294

chubb.com

erisolutions.com

ETHANOL PRODUCER MAGAZINE AUGUST 2008

EPM MARKETPLACE Noble Americas Corporation 626-585-1705 www.thisisnoble.com

Lender Representatives Greenman Funding 888-802-7678 greenman.funding@verizon.net

Mergers & Acquisitions Thomas Group Capital 404-504-6050

Provista Renewable Fuels Marketing 651-355-8519 www.provistafuels.com

Miscellaneous

Railcar Moving Heyl & Patterson Inc. 412-788-9810

www.heylpatterson.com

RAILCAR MOVING

www.thomassec.com

Risk Management First Capitol Risk Management 800-884-8290 www.firstcapitolrm.com R.J. O’Brien 800-621-0757

The CUB™ is an electromechanical machine designed to move single railcars or groups of cars. Some advantages of the CUB™ are:

www.rjobrien.com

R.J. O’Brien 800-621-0757

•Safety of Personnel •One Person Operation •Little Maintenance Requirements •Low Investment/Operating Costs

www.rjobrien.com

Ask about our complete line of Railcar Moving Devices

Software-Accounting Encore Business Solutions 204-989-4330 www.encorebusiness.com

www.heylpatterson.com P

Summit Software, Inc. 800-433-5724 x 181

www.summit-soft.com

Legal Services

info@heylpatterson.com

www.shuttlewagon.com

www.salcoproducts.com

Utilities

Dorsey & Whitney LLP 612-343-8275

www.dorsey.com

Faegre & Benson, LLP 612-766-6930

www.faegre.com

Natural Gas

Transportation www.stoel.com/biofuels

Marketing

Heavy Highway Transport Landstar Carrier Group 920-487-3877

Distillers Grains

www.landstar.com

Rail

Contact Mark Rundle at marundle@integrysenergy.com or (608) 222-5170.

www.chsinc.com

ConAgra Trade Group 402-595-4125 www.conagratradegroup.com Hawkeye Gold, LLC 515-663-6429

412-788-9822

Salco Products, Inc. 630-783-2570

BrownWinick Law Firm 515-242-2400 www.biofuellawyers.com

CHS, Inc. 651-355-6271

Railcar Parts

Attorneys

Stoel Rives LLP 612-373-8800

412-788-9810

Shuttlewagon 816-767-0300

Ameritrack RailRoad Contractors, Inc. 765-659-2111 www.ameritrackrailroad.com Blacklands Railroad 903-439-0738 www.blacklandsrailroad.com

www.hawkgold.com

Rail Consulting Fuel Ethanol Atlas Renewable Energy, LLC 800-884-8290 www.atlasenergyllc.com C&N Ethanol Marketing Corp. 952-854-6675 www.candncompanies.com ConAgra Trade Group 402-595-4125 www.conagratradegroup.com

124 W. Broadway, Suite 300 Madison, Wisconsin 53716 www.integrysenergy.com

Antioch International, Inc. 402-289-2217 www.antioch-intl.com TKDA 651-292-4602

www.tkda.com

Rail Ties

Utility Integrys Energy Services 608-235-2547 www.integrysenergy.com

Thompson Industries, Inc. 317-859-8725 www.thompsonindustries.net

ETHANOL PRODUCER MAGAZINE AUGUST 2008

271

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CONTROL

Simple Advanced Controls in the Distributed Control System By Greg Martin

ver the past 30 years several simple advanced control methodologies have been invented out of necessity by process control consultants. In the early days these applications were implemented in a supervisory computer. Now they can be implemented in the distributed control system (DCS). Applications using these methodologies are easy to understand, quick to implement and commission, and are virtually maintenance-free. Moreover, they are readily accepted by management and operations. Four examples are provided with applications in a fuel ethanol plant.

Nonlinear Level Control Nonlinear level control is used when the flow that is adjusted to control level is the feed to a downstream process, and it is desired to maintain the flow as constant as possible to avoid upsetting the downstream process. This method uses a variation of the classic proportional, integral, derivative

DPC versus PID robustness.

Figure 1. DPC, indicated by the top pair of lines in each graph, versus PID robustness

(PID) algorithm. When the controller error falls outside a designated â&#x20AC;&#x153;gapâ&#x20AC;? then the reset tuning parameter is reduced. The effect is that level is allowed to wander

inside the gap, with small changes to the flow, and reset action is increased whenever the error wanders outside the gap. An example application of nonlinear

The claims and statements made in this article belong exclusively to the author(s) and do not necessarily reflect the views of Ethanol Producer Magazine or its advertisers. All questions pertaining to this article should be directed to the author(s).

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Constraint Projection Constraint projection is effective when pushing constraints. It improves profits by keeping the process at the most limiting of a number of possible constraints. Constraint projection applies to a situation where one manipulated variable influences more than one potential controlled variable (constraint variable). The method calculates the manipulated variable move to place the most limiting of the constraint variables at its constraint limit. An example would be molecular sieve gallons as the manipulated variable and inlet temperature and backpressure as potential constraint variables. The constraint projection application maximizes gallons to the most limiting of the minimum inlet temperature (e.g., 300 degrees Fahrenheit) and the maximum back pres-

ETHANOL PRODUCER MAGAZINE AUGUST 2008

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that the bottoms flow is adjusted at an increased rate. The objective of the nonlinear level control is achieved: the bottoms flow is adjusted less severely and the level is allowed to wander more.

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level control would be the distillation section second column bottoms level control, since the bottoms flow that is adjusted to control that level is the feed to the molecular sieve section. A more constant feed to the molecular sieve section makes that part of the plant easier to manage. For PID control, when the disturbance is introduced, the level increases somewhat and the controller adjusts the bottoms flow to compensate, and bring the level back to its setpoint. In the simulation the bottoms flow is a negative number so an increase in flow appears as a decrease in the plot trend. While the PID control action is notable, it may be desirable instead to let the level wander more away from the setpoint, and adjust the bottoms flow less. After all, the bottoms flow for this example is the feed to the molecular sieve section. Another example introduces the same disturbance and the level gradually rises, with the bottom flow not being adjusted much. Finally, when the level exceeds the high side of the gap, the reset is increased, which is clear in that the level starts to turn around, but moreover in

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CONTROL

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CONTROL sure (e.g., 30 inches of water). Each potential constraint variable is compared with its limit constraint value, and the corresponding manipulated variable move to put that constraint variable at its constraint value is calculated. The minimum of the calculated gallons moves is the output of the constraint projection calculation. The reason this method is called constraint projection is that each constraint variable move is “projected” back onto the manipulated variable using the corresponding steady-state gain.

Constraint projection moves are always based on the most limiting constraint.

Evolutionary Optimization Evolutionary optimization is applicable when an operating objective can be expressed as a function that includes the manipulated variable. This method minimizes (or maximizes, as desired) the objective by repeatedly making moves to the manipulated variable that improve the objective function value.

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Evolutionary optimization does not use a complicated optimization algorithm. It simply makes a move to the manipulated variable in one direction, waits for the process to line-out, and checks to see if the objective function value improved. If it did, the method makes another move to the manipulated variable in the same direction as the first move. If the objective function value did not improve, it reverses direction and makes a move to the manipulated variable in the direction opposite that of the first move. The method proceeds in this way until a valley (or peak) is confirmed by objective function values. Evolutionary optimization then uses a simple rule to make a final move to approximate optimization of the objective function. An example objective function would involve the calculation of slurry solids percent based on slurry density, dry milled corn, water, backset and alpha amylase enzymes. The function used for evolutionary optimization is the error-squared of the slurry solids percent setpoint minus the calculated slurry solids percent. The manipulated variable is dry milled corn. The evolutionary optimization application adjusts dry milled corn up or down until the calculated slurry solids percent approximates the setpoint, thus minimizing the objective function. The name “evolutionary” comes from the fact that the method simply evolves the manipulated variable value by repeated moves to find the optimum. The first move made by evolutionary optimization is just a guess—the manipulated variable is increased by a specified amount, x. The objective function is recalculated and the error is found to increase. Evolutionary optimization then reverses direction, and decreases the manipulated variable by 2x. The error is found to decrease, and another move is made to decrease the manipulated variable by x. This is followed by a series of moves to decrease the manipulated that results in a continuous decrease in the objective function. Finally, the minimum of the objective function is passed, and evolutionary opti-

ETHANOL PRODUCER MAGAZINE AUGUST 2008

CONTROL mization reverses again. This sequence of moves adjusted dry milled corn to drive a calculated slurry solids percent to a desired setpoint.

Distributed Predictive Control Distributed predictive control (DPC) is a single variable model predictive controller, which is effective for control loops with significant time delay, like analyzer loops or some temperature control loops. The performance of DPC in these cases is from two to four times better than a PID application. DPC can increase profit accordingly when the application is to maintain an economically important setpoint or push an economically important constraint. DPC is designed specifically for application in a microprocessor, such as is common in modern DCSs. It uses minimum storage for the predictions, since all response elements and predictions are calculated on-line. This gives DPC adaptive and nonlinear capability. An example of a suitable application for DPC would be the control of distillation section water in ethanol using analyzer feedback. DPC has another advantage over PID, which is called robustness. This means that the estimated model used in the DPC can be significantly different from the actual process model without the DPC performance being significantly depreciated. In other words, the engineer’s estimate of the process response need not be as accurate for DPC as for an equivalent PID application. This is demonstrated in Figure 1, where the model gain is underestimated by a factor of 2.5. On both sides of Figure 1, the upper plot is DPC, and the lower is PID. On the left the model gain is 1 and both DPC and PID have been tuned to respond similarly to a step change in the setpoint. The controlled variable is blue, and the manipulated variable is red. On the right side of Figure 1 the tuning for both DPC and PID are held constant and the process model gain is increased to 2.5. This gives the DPC application an oscillation that damps out after two cycles, an accept-

able result. The PID application, however, is oscillatory. In fact, it borders on instability, which is definitely an undesirable result. This demonstrates the robustness property of a DPC application relative to an equivalent PID application.

Summary Four examples have been provided of simple advanced control and optimization applications: three control and one optimization. These applications can be implemented in the DCS. They are easy to understand and quick to implement and

ETHANOL PRODUCER MAGAZINE AUGUST 2008

commission, and are virtually maintenance-free. Moreover, they are readily accepted by management and operations. EP Greg Martin is an independent consultant in the automation industry. Reach him at greg@gregmartinconsulting.com or (512) 864-3822. Derek Peine, vice president of Heartland Ethanol LLC, provided the author with ethanol industry specific examples.

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SUSTAINABILITY

Committed to the Next Generation of Biofuels By Bill Eby

cientists and researchers say renewable forms of energy can help give America a new energy future that is cleaner, improves national security, strengthens the economy and contributes positively to the quality of life for all. Contributing to the urgency of developing this new energy future is the prediction from the Energy Information Administration that U.S. energy consumption will grow nearly 20 percent by 2030. Global energy consumption, says the EIA, is expected to increase nearly 60 percent by 2030. Authorities in the field also say that meeting those pressing demands for energy will require a wide array of resources. “I don’t think we should assume there is a perfect technology,” says Chris Somerville, director of the Energy Biosciences Institute at the University of California at Berkeley. “What we need is a basket of every conceivable technology,” including wind energy, geothermal, solar power and biofuels. Liquid fuels derived from a wide vari-

ety of plant feedstocks make up a key component of a new energy future, say researchers. A University of Tennessee study commissioned by the 25x’25 Alliance concluded that the United States has adequate land resources to secure 25 percent of its energy needs from renewable sources by the year 2025 without compromising the ability of the agricultural and forestry sectors to reliably produce safe and abundant food, feed and fiber at reasonable prices.

Specifically, the Tennessee study says production and conversion into energy of land-based feedstocks from America’s fields, farms and forests, including cellulosic ethanol after it becomes commercially viable, have the potential to decrease gasoline consumption by nearly 60 billion gallons in 2025, while the production of energy from biomass and wind sources will offset the growing demand for natural gas and coal-generated electricity. Additionally, developing these land-based

‘The enormous progress in understanding basic biological processes achieved during the past several decades has not previously been brought to bear in the energy sector, so we believe that there may be fundamentally new opportunities to reduce the environmental impacts of energy production and use.’

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SUSTAINABILITY

energy resources will generate an additional $700 billion in economic activity annually, and create 5.1 million jobs in 2025, most in rural areas.

Biofuels in Transition The current use of sustainably produced biofuels is aiding a growing transition to cleaner and more dependable energy solutions to meet the ever-growing demand for electricity and transportation fuels. Bruce Dale, a professor of chemical engineering at Michigan State University, says that “by any measure, ethanol is better for the planet than gasoline—and it is getting better all the time. Today's ethanol made from corn is priming the market for the coming generation of alcohol fuels that will also be made from wood chips, urban waste and other feedstocks, not just agricultural crops.” Looking to the future, it will be nongrain crops and materials now considered waste that will become the primary feedstocks for biofuel production, Dale says. Ongoing and growing research is optimizing cellulosic feedstocks, including energy crops such as switchgrass, hybrid

poplars and other prairie grasses, and residues such as corn stalks, wheat straw, forest trimmings, sawdust, wood chips, yard waste, municipal solid waste and even animal wastes. Ethanol can be made from cellulose, much as it is today from corn, once the tightly bound sugars in the plant fiber are broken down by enzymes. Thanks to biotechnology, the cost of these enzymes is dropping rapidly, down 30-fold in the past five years to 10-18 cents per gallon of ethanol produced. However, that cost “has to be reduced even more to make it a viable technology,” says Joel Cherry, senior director of bioenergy technology at Novozymes, a company that develops enzymes for industrial solutions.

Our Generation’s ‘Moon Shot’ The effort to make the next generation of biofuels cost competitive “is our generation’s moon shot,” says UC Berkeley Chancellor Robert Birgeneau. Significant private investment is underway in developing cellulosic ethanol. For example, 25x’25 Alliance member General Motors is partnering with two

ETHANOL PRODUCER MAGAZINE AUGUST 2008

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SUSTAINABILITY

In considering the role biofuels will play in America’s energy future, researchers and advocates say that the current corn ethanol platform is the foundation for a second generation of viable and affordable biofuels that will provide significant economic and environmental returns.

technology firms with proprietary cellulosic conversion processes. The “Big 3” automaker believes the technologies will ultimately expand the market for GM flexible-fuel vehicles. “We are very excited about what this breakthrough will mean to the viability of biofuels and, more importantly, to our ability to reduce dependence on petroleum," GM Chairman and Chief Executive Officer Rick Wagoner said. On another front, petroleum giant British Petroleum has committed $500

230

million over 10 years to the consortium with UC Berkeley, the Lawrence Berkeley Laboratory and the University of Illinois that created the Energy Biosciences Institute to research the application of biological sciences to transportation. Researchers have “embarked on a commitment to develop new solutions to global energy needs through the deployment of new technologies based on advances in knowledge about biological processes,” says Chris Somerville, Earth

Biosciences Institute director and a plant biochemist at UC Berkeley. “The enormous progress in understanding basic biological processes achieved during the past several decades has not previously been brought to bear in the energy sector, so we believe that there may be fundamentally new opportunities to reduce the environmental impacts of energy production and use.” In the public sector, the U.S. DOE over the past year said it is investing $1 bil-

ETHANOL PRODUCER MAGAZINE AUGUST 2008

SUSTAINABILITY lion in biofuels research and development, including efforts to develop improved enzymes for breaking down cellulosic biomass material into sugars that can then be fermented into ethanol. The department also said it is investing $114 million in small-scale cellulosic refineries, $405 million in bioenergy centers and $385 million in commercial-scale cellulosic refineries. The DOE says cellulosic ethanol can be produced in every region of the country using locally grown materials, while producing a fuel that creates less greenhouse gases than corn-based ethanol.

tons of carbon, or the equivalent of approximately 33 percent of total U.S. emissions. In considering the role biofuels will play in America’s energy future, researchers and advocates say that the current corn ethanol platform is the foundation for a second generation of viable and affordable biofuels that will provide significant economic and environmental returns. “But we need to move very quickly,” says Dr. Richard Flavell, chief scientific officer with Ceres Inc., an energy crop

Time to Act is Now Predictions vary as to when the next generation of biofuels will become viable. However, one firm, KL Process Design, earlier this year brought on line what the company calls the first small-scale, wastewood commercial ethanol facility operating in the United States. Located in Wyoming, the plant is the result of six years of development efforts between the firm and the South Dakota School of Mines and Technology. It uses a proprietary enzymatic method to break down wood and waste materials, such as cardboard and paper. Meanwhile, Range Fuels is racing to build the first large-scale commercial cellulosic ethanol plant in the United States. Phase 1 of the 100 MMgy plant in Treutlen County, Ga., is expected to be completed in 2009 and have an initial capacity of 20 MMgy, using wood as a feedstock. Scientists say that produced the right way, biofuels provide a much-needed and environmentally sound alternative to petroleum fuels. University of Nebraska researchers say a five-year study shows switchgrass can produce 540 percent more energy than that required to grow, harvest and turn it into cellulosic ethanol. In addition, say Ohio State researchers, conservation tillage and other agriculture and forestry residue management techniques used to produce biofuel feedstocks can provide a constant buildup of soil organic carbon—practices on croplands, grazing lands and woodlands that can lead to the sequestration of nearly 600 million metric

company. “Given the commercialization pressures, improved feedstocks must be in the hands of the industrial sector rapidly.” Flavell adds, “We know what to do and how, in principle. We simply need to do it.” EP Bill Eby is with the 25x’25 Alliance. Reach him at beby@25x25.org or (512) 980-8990.

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OUTLOOK

Energy Security Achievable with Biofuels Made in the Americas By George Philippidis

he escalating price and declining availability of oil , combined with increasing concerns about energy security and climate change, have prompted the United States to seriously assess alternative sources of transportation fuels. Corn has ushered the United States into alternative fuels, and cellulosic biomass promises to boost domestic production in the future. Meanwhile, Latin America has tremendous potential to become a global biofuels leader and thus contribute to U.S. energy security and climate stabilization. The availability of land, a favorable climate, agricultural experience and ethanol know-how are key attributes of that potential. Closer cooperation between the United States and Latin America will enhance U.S. energy security by capitalizing on the continentâ&#x20AC;&#x2122;s biofuels capabilities. The high demand for oil has contributed to an unprecedented increase in oil prices and, by extension, in food prices, which threaten national security, the economy, family budgets and even social order. At the same time, the use of fossil fuels generates greenhouse gases, which trigger climate change. Fuel diversification based on biofuels

produced from agriculture constitutes a key component of greater energy security and environmental stewardship. Ethanol blended with gasoline is already available in several countries. However, only in Brazil does ethanol represent a significant portion of total fuel consumption (more than 40 percent) and is projected to become the dominant transportation fuel by 2010. In the United States and other countries ethanol accounts for less than 5 percent of fuel use. Biofuels possess numerous advantages over fossil fuels in consumer, environmental, agriculture, economic and national security aspects. They are renewable, non-toxic, biodegradable, cheaper than gasoline and diesel, and beneficial to the automobile engine, the environment and the domestic economy. Yet, these benefits still remain largely unknown because the government and the industry have failed to educate the public. Now that concerns about food versus fuel and biofuel sustainability are in the news on a daily basis, biofuels are facing an uphill battle.

Sustainability Concerns The issue of sustainable biofuels production is quickly becoming global as the world faces dramatic increases in food prices. Although the campaign against biofuels is based on misinformation, the biofuels industry can not afford to ignore this issue. Pushback from social groups is already forcing governments around the world to scale back their plans for mandatory ethanol blending. In the United States the corn ethanol industry needs to seriously invest in technology improvements to reduce land demand and minimize its carbon footprint. On a life cycle basis compared to gasoline, corn ethanol results in 18 percent greenhouse gas emissions reduction, compared to the 80 percent realized with sugarcane ethanol and projected with cellulosic ethanol. Similarly, the life cycle net energy balance (the ratio of renewable energy output over fossil energy input) of corn ethanol is 1.3 compared to 9 or higher for sugarcane and cellulosic ethanol. The main reasons are: Sugarcane ethanol and projected cellulosic ethanol yield per acre of land is

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OUTLOOK WWW.STRONGFORM.NET

increased significantly, while the food, fuel and energy needs of Brazil are satisfied.

The Future is Cellulosic Biofuels

twice that of corn ethanol Sugarcane and cellulosic biomass require less irrigation and fertilization Ethanol production from cane and cellulosic biomass is powered by renewable energy derived from bagasse or other biomass, whereas corn ethanol production relies mostly on natural gas. Moreover, from an economic standpoint, the significant agronomic and process improvements that Brazil has accomplished during the past 30 years have made Brazilian ethanol cost-competitive with gasoline at just $45 per barrel of oil without government subsidies. Yet, this does not mean we abandon corn as a feedstock. Corn ethanol has ushered the United States into fuel diversification and will continue to play a role in the U.S. economy, but there are lessons to be learned from Brazil: a 33 percent increase in crop yield per hectare, an 8 percent increase in sugar yield from sugarcane, a 14 percent increase in sugar conversion to ethanol, and a 130 percent increase in fermentation productivity. Today, sugar mills are biorefineries that co-produce food (sugar), fuel (ethanol) and electricity in a renewable fashion. This way Brazilian agricultural productivity has

Cellulosic biomass holds significant promise for the worldâ&#x20AC;&#x2122;s future fuel needs as it constitutes an agricultural residue that in many cases is already collected and inexpensive. It has no food or feed value and therefore no effect on food availability and prices. It is abundant, particularly in the form of sugarcane bagasse and wood waste throughout the Americas, enabling many countries to produce biofuels domestically. By nature it contains significant amounts of water (more than 50 percent) and has significant caloric value as a solid fuel, which could eventually render ethanol production water and energy self-sufficient. A number of technologies are being pursued for production of cellulosic ethanol and other fuels, such as butanol and diesel. The technologies can be classified as biochemical (enzymatic or chemical hydrolysis and fermentation), thermochemical (gasification and catalytic conversion or carbohydrate reforming), and hybrid (gasification and fermentation). Undoubtedly, great technical progress has been achieved in cellulosic technologies during the past 15 years. Still, they all face technical challenges before becoming cost-competitive. Most likely there will be no single technology winner, but rather technologies will be adapted to the particular characteristics of local feedstocks. Closer collaboration within the Americas will allow the countries of the Western Hemisphere to capitalize on their collective technical expertise and biomass resources to produce significant amounts of ethanol further enhancing their energy security, economic growth and environmental record.

Manage Expectations Properly The new federal renewable fuels standard calls for the United States to raise its annual biofuel production from 6.5 billion gallons per year in 2007 to 36 billion gallons per year by 2022. This is a tremendous undertaking in terms of investment required, construction activity and infrastructure development. Corn ethanol alone will not

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OUTLOOK

already been â&#x20AC;&#x153;false startsâ&#x20AC;? in the past. This time around, when policy, technology and investment have finally converged, we can not afford to miss the golden opportunity for a long-term prospective.

Figure 1. Projected U.S. ethanol demand and supply 2007-2030

40.0

Billion gallons/yr

35.0 30.0

Latin America Part of Solution

Ethanol Demand

25.0

Total Ethanol Supply

20.0

Corn Ethanol Supply

15.0 10.0 5.0

30 20

28 20

26 20

24 20

20 20

18 20

16 20

12 20

10 20

08 20

SOURCE: GEORGE PHILIPPIDIS

suffice to reach that goal, since U.S. corn ethanol production will max out at approximately 15 billion gallons per year. Hence, there will be a significant gap between U.S. ethanol supply and demand, as shown in Figure 1. In this model the supply projections are based on a realistic capacity growth of U.S. corn and cellulosic ethanol, whereas demand is based on a combination of historical trends in the number of total and flexible fuel vehicles on the road, per capita miles driven per year, and estimated E10 and E85 market penetration rates. The projected ethanol shortage will have

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to be filled by ethanol derived from sources other than corn. Cellulosic ethanol is viewed as the only feasible domestic solution for the United States, but expectations of commercial cellulosic plants within the next two to three years are not realistic. Resolution of scale-up issues in newly built demonstration plants will require several years, and lengthy construction (due to a shortage in stainless steel) will add more time. If expectations for cellulosic ethanol are not properly managed, the whole biofuels industry will suffer from a potentially fatal public and investor reaction. There have

The United States must look at its hemispheric neighbors to make up the demandsupply gap. Sugarcane ethanol from Brazil, Colombia and Central America needs to be an integral part of the U.S. energy strategy, especially when an increase in cane ethanol capacity in Latin America provides an expedient, cost-effective and low-risk strategy. This can be accomplished by adding (or expanding) ethanol production capability at existing sugar mills to enable them to produce a diverse portfolio of products: sugar, ethanol, renewable electricity and steam, animal feed (molasses) and fertilizers (vinasse). Undoubtedly, the United States needs Latin America for energy security through diversification. Conversely, Latin America needs the United States for capital and technology infusion to build or expand their cane ethanol (and, in the future, cellulosic ethanol) capabilities to satisfy their own energy needs and enter the U.S. market, the largest fuel market in the world (145 billion gallons per year of gasoline). This interdependence calls for closer

ETHANOL PRODUCER MAGAZINE AUGUST 2008

OUTLOOK

collaboration within the Americas in the energy sector and by extension in agriculture, project financing, trade, immigration and poverty reduction.

Biofuels Challenges in Latin America While conditions are favorable for biofuels production, Latin America faces a number of challenges that make foreign investors hesitant. Those issues need to be addressed on a hemispheric basis under the joint leadership of the two biofuels giants, the United States and Brazil. The challenges include political, economic, trade and social issues. Political instability and poor regulatory and legal frameworks need to be addressed. Latin American countries need to commit to protecting foreign investment, intellectual property and the sanctity of contractual agreements. For Latin America to realize its full biofuel production potential, significant investment will be needed. Joint ventures between U.S. and Latin American investors, helped with debt financing from regional development banks, is the best means to fund local biofuel projects. Although one has to recognize the complexity of agricultural subsidies world-wide, there is no excuse for setting up barriers to the open trade of biofuels. For biofuels to truly become world commodities and hence cost-

competitive, import quotas and tariffs need to be eliminated. Through economic growth and employment opportunities the biofuels industry can become a means to alleviate rural poverty in Latin America and reduce migration to the United States. For local people to take advantage of employment opportunities, the public and private sectors need to team up to provide workforce training and development with the active participation of local educational institutions.

Recommendations Ethanol and other biofuels are a key part of the solution to our countryâ&#x20AC;&#x2122;s need for energy diversification. The corn industry has introduced Americans to a new era of fuels, but we need additional abundant ethanol resources to break our addiction to oil. Domestic cellulosic biomass and biofuels from Latin America are two key sustainable resources. The U.S. needs to pursue a fourprong biofuels strategy. First, the corn industry needs to improve the sustainability of its ethanol by eliminating fossil energy use and concentrating on agronomic and process improvements rather than conversion of more U.S. land to ethanol production. Second, through public-private partnerships the United States should treat the commercialization of cellulosic technologies as a matter of national security (a new Manhattan

project) and invest all the necessary resources to accelerate deployment. Third, the United States should pursue closer energy integration with Latin America though regulatory convergence and open biofuels trade, thus encouraging private investment in sugarcane ethanol production to supplement domestic capacity. This is the fastest and lowest risk means to boost E85 availability within three to four years and displace gasoline use to an extent significant enough to cause oil demand and prices to drop. Fourth, consumers should be educated about the benefits of biofuels and incentivized to switch to flexible-fuel vehicles, creating proper market conditions for automotive manufacturers to switch their production lines to such vehicles, which will dramatically cut U.S. dependence on foreign oil. On the road toward fuel diversification there is no silver bullet. It is not an issue of corn versus sugarcane, food crops versus cellulosic biomass or even ethanol versus butanol. The sooner we realize that U.S. energy security needs all of the above, the sooner our country will be able to develop and commit to a coherent long-term energy policy. EP George Philippidis is associate director of the Applied Research Center and co-director of the Energy Business Forum at Florida International University. Reach him at george.philippidis@arc.fiu.edu or (305) 606-9998.

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MANAGEMENT

Overcoming Challenges in the Boardroom By Tracy Houston and Cindy Knutson

any ethanol projects, companies, service providers and other stakeholders along the supply chain are driven by individuals and small groups. A board of directors commonly oversees operations. With today’s market environment, boards must remain proactive and committed to the industry. The role of the board includes oversight, direction, implication, anticipation, synthesis of information, probing and robust conversation, just to name a few. The end result from the actions of this collective body is to ensure successful growth, viability and the legacy of the organization. When a chairperson walks into the boardroom and takes her or his seat at the head of the board table, the unique role of a leader among equals begins. First-rate chairmen/leaders stimulate an energy and atmosphere that invites the directors to step up and participate in robust discussions. With that come many challenges. The first challenge of the chairman/leader is to stir a readiness for participation from all directors and trigger internal reminders of their role and responsibilities to the board and organization. The way in which the chairperson creates the climate of the boardroom can shape the effectiveness of the meeting. We have seen chairmen do this well and seen that effect mirrored in the high quality of the discussions, decisions and questions asked during the meeting. We have also seen a chairperson do this poorly and it too receives the same poor reflection to the detriment of not only the quality of the meeting output, but the un-energized effect that it can have on the organization. The

chairperson sets the tone for the “tone at the top”—a phrase coined by the Institute of Internal Auditors. Being chairman of the board of a growing and successful organization is more demanding today than it was 10 or 15 years ago. Today’s boards have more diversity of people, viewpoints and experiences. Organizations today are challenged with more variables, market and economic conditions that can change overnight, compressing reaction time for both board and management. Most experts predict that the competitive environment will get even tougher in the future. Competing and succeeding in this environment requires a board chairperson to accelerate his or her ability to grasp complex issues quickly and completely and requires him or her to obtain information from different sources to stay informed from different viewpoints. Many boards are working in environments that include comprehensive environmental issues, audit and regulatory concerns, increased homeland security issues, higher CEO turnover and multiple perspectives that range from local to global.

Balancing Priorities, Relationships Another chairman challenge is the judicious balance between full board discussion and committee work. Committees are charged with the “leg work” of the board, but the chairman needs to check-in with the committee chair to make certain that full board issues are brought back to the board. A role of the board chairperson is to help the board overcome reluctance to create

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committees and to define key issues or topics that need a committee. For example,

a board may find itself needing to establish a committee to review the recommenda-

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tions of management on new technology issues or purchases. The full board can be a committee. However, this practice can bog Houston down the board, take valuable time and often does not dig into the issues as thoroughly as a small committee can. It is vital to a board’s effectiveness to ensure that Knutson board members not relinquish their education on compensation, audit, nominating committee and finance because “it is the committee’s responsibility.” The full board can struggle with discussion and recommendations brought to them from the committee if this knowledge and education is ignored. The board chair can be

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Defining Difficult Dynamics for the Chairperson Lobbing a bomb: When a large topic is introduced to the board without full discussion. Bullying: Dominant board member who pushes point of view to the exclusion of others. Overly quiet: Rarely speaks out or wants to speak to the chairperson in the hallway rather than the board meeting. Emotionally charged comments: These tend to generate reactions rather than thoughtful objective responses. Founding members: The board member has been a part of the organization and has invested so much that it skews their judgment and thinking ability. They often come across as entitled to having a greater say. Starpower CEO: When the chairperson is more in sync and in step with the CEO than the board so that the role of the chair and the role of the CEO is not clearly separated. The board chair is a position of privilege. As a leader among equals the chair can influence the board to raise itself to a higher level of performance. The board chairperson represents the board in all of his or her interactions inside and outside of the boardroom. The presence as board chair stands out as an exemplary representative of the excellence of the board he or she serves. The following are examples of courageous conversations a chairperson can hold: • Giving the CEO feedback about his/her behavior • Talking to a board member who behaves offensively or makes derogatory comments • Conducting an executive session • Critiquing a board member’s lack of participation • Following up on the status of senior management assignment from a previous meeting.

instrumental in ensuring that this does not occur. A third challenge facing any leader and the boardroom is not an exception. It is the relationships and interactions that

occur in the boardroom between board members. While relationships can be like weather, if it is persistent it engulfs us, and we get used to them in such a way that we don’t see how it is not impacting our

behavior in ways that impede or slow down effectiveness. The longer a board has worked together, the more of a board culture, atmosphere and generally accepted ways of operating is created. This can give the illusion that everything is business as usual when in fact the boardroom is a constantly changing interplay of viewpoints, personalities, organizational issues, marketplace changes, economic impacts and experience, among others. Each board meeting brings its own dynamics that the board chair needs to recognize, adapt to and adjust facilitation techniques to ensure an effective meeting. The more a board chair is aware of his or her own personal leadership style and can adjust his or her response, the more opportunity exists for successfully channeling the meeting dynamics. Establishing protocols for resolving conflict is important for the board and the chair to implement when difficult situations arise. It is important for board chairs to frame difficult issues and topics in a way that will allow other interpersonally talented board members to step in and diffuse emotionally charged comments or lead the discussion toward a neutral ground for a more objective view. Conflict can create opportunity for candid, open discussion that elevates a board to a higher level of dialogue. Astute board chairs can use the energy of these situations to broaden

MANAGEMENT

At their best, the chairperson should be active with the board to identify orientation programs internal and external to the organization that can help accelerate a new board members knowledge and contribution.

views, expose new ideas or identify new concerns that need to be addressed before proceeding with a decision or a vote.

Switching Roles, Board Additions A fourth challenge happens when a chairman must move in and out of the role of being a chairman and into the role of director. Moving between the two roles must be carefully chosen and executed. It is not often that a chairman can remove the leadership hat and ask the board’s permission to speak as a director without undue influence to the situation. At times this happens without intentional thought. A chairperson must be constantly aware of his or her role and influential position during vigorous discussion. The chair should encourage constructive contention while also participating in the debate. If you are a board chairperson you

realize that any upstanding board will include evaluating the chairperson in its board evaluation or peer evaluation process. To reduce the anxiety that this can bring the board should consider the following guidelines: • Select a designated time and place to meet • Create the questions together to ensure consistency and agreement • Make time for dialogue and discussion with the chairperson to ensure full understanding and input. A final challenge is welcoming new members to the board. This can be one of the most enjoyable aspects of a chairperson’s role while being one of the most important duties. We have been in boardrooms where the chairperson did not introduce new and old members to each other and help them know something about each other. At their best, the chair-

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Tracy E. Houston is a senior consultant in governance with Summit Point Consulting. Reach her at tracy.houston@summitpointconsulting.com or (303) 721-3219. Cindy Knutson is the vice president of organizational effectiveness for Summit Point Consulting. Reach her at cindy.knutson@summitpointconsulting.com or (303) 721-3277.

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person should be active with the board to identify orientation programs internal and external to the organization that can help accelerate a new board member’s knowledge and contribution. The chairperson can identify existing board members with different skills, experience and knowledge that can act as mentors for the new board member. The chairperson as leader can ensure a smooth introduction and acceptance of the new board member and shape positive dynamics and board chemistry to continue even with a new personality coming into the boardroom. EP

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RISK

Fuel for Thought: Protecting an Ethanol Production Business By Scott Helmer

ueled by concerns about climate change and U.S. dependence on foreign oil sources, ethanol production is a fast-growing industry that may account for 15 percent of liquid transportation fuels within 10 years. Poised to meet growing demand, the number of ethanol production companies is expanding at a slowing but still rapid pace. While ethanol production provides an alternative fuel source that may help protect the health of the planet and the U.S. economy, some ethanol producers are in need of protection from risks inherent in the operation of an ethanol production business. Fuel production plants are subject to losses that can damage operational infrastructure, shutting down production for long periods of time. Ethanol producers are also at risk due to factors completely beyond their control, such as market fluctuations that affect the price of raw materials necessary to produce ethanol, including

corn prices. The volatility in fuel prices can also have a significant impact on ethanol producersâ&#x20AC;&#x2122; profitability. Fuel production costs depend on raw material expenses, but the market price for finished fuel can also vary considerably. The bottom line: While the ethanol production business holds great promise, individual ethanol producers face a variety of risks that can keep them up at night.

Managing Risks, Getting Sleep So how do ethanol producers take advantage of the great opportunities the industry offers and prudently manage the very real risks unique to the industry? How do they deal with the possibility of significant business losses that can result in lengthy, expensive downtime and the uncertainties caused by fluctuating material and fuel costs? The answer may be a well-designed property insurance policy. However, itâ&#x20AC;&#x2122;s important to bear in

mind that not just any insurance policy will do. Because ethanol producers face risks that are unique to their industry, they should not settle for a cookie-cutter policy offered to every type of business from apple orchards to zinc Helmer mining operations. Ethanol producers need a policy tailored to address their particular concerns. The following are items relevant in evaluating policy offerings. Ethanol producers seeking the peace of mind that comes with adequate insurance coverage need to look beyond regular property insurance policies. Property insurance coverage typically includes business income provisions that provide some measure of protection against income loss. However, if the protection ends there,

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it’s not enough for an ethanol producer. That’s because to determine business income protection limits, insurers typically look at annual income. However, that can vary a great deal for an ethanol producer. Producers who purchase coverage after a year in which income was reduced due to price fluctuations may pay less for their coverage. However, if they suffer a loss during a year in which income is high, they’ll find their coverage isn’t sufficient to cover their losses. On the other hand, producers don’t want to pay too much for coverage they don’t need. That’s why it’s essential to obtain coverage from an insurer with expertise in the industry: a risk management partner who understands the risks posed by market fluctuations. An insurance broker who is also an industry expert can offer coverage that is adequate to cover losses in a profitable year without forcing producers to buy more coverage than they need.

RISK

An added concern for ethanol producers is coverage against utility interruptions. Seamless utility service is vital for ethanol production—more so than for many other types of business. The best approach is a policy that allows producers to estimate their annual incomes and then obtain a refund for overestimates. This type of tailoring is

Addressing Time, Money Factors

possible with an insurance broker who understands the ethanol production industry.

Another factor that makes average business protection policies inadequate for ethanol producers is the limitations on time and money a typical policy carries. For example, most policies provide coverage for income loss only and limit it to 30 or 60 days. Ethanol producers may need much longer to recover from a loss. They have expenses to meet such as payroll for highly skilled workers and ongoing operational expenses that are unique to the industry. A serious incident at an ethanol production facility can knock the business out of commission for months. Ideally, an ethanol producer’s insurance coverage would provide benefits to cover not only the loss of income that would occur while the facility was undergoing reconstruction but would also cover payroll expenses so that the producer could retain the skilled workers needed to get operations going again after repairs are made. Consider that after a loss and during repairs, a smaller ethanol concern may be losing valuable tax credits the business had counted on as a result of projected production volume. A typical business insurance policy wouldn’t factor the loss of income from taxes when determining coverage. An industry expert would discuss such a provision while crafting coverage specifically for an ethanol producer.

Contractual Obligations, Utility Interruptions Another factor that may impact ethanol producers’ ability to recover from a loss is their contractual obligations. In the ethanol fuel production industry, it’s common for producers to sign contracts agreeing to produce a certain amount of fuel for a third party. The contracts often carry stiff penalties for failure to produce and deliver the agreed upon amount. What happens to those contracts

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RISK when a plant is out of commission? A typical insurance policy might cover the loss of income, but would it also cover the funds lost due to a failure to deliver on a contract or pay an amount adequate for the ethanol producer to outsource the work in order to meet the contractual obligation? With the right risk management partnership, ethanol producers can address these specific risks. An added concern for ethanol producers is coverage against utility interruptions. Seamless utility service is vital for ethanol production—more so than for many other types of business. However, many policies severely limit the amount of coverage for losses incurred due to utility interruptions. That might be OK for some types of businesses, but it could have a profound negative effect on an ethanol production plant. A broker who knows the industry would recognize the risk and make sure adequate coverage is available. Another factor that can be critically important in determining whether coverage is adequate is how the insurer values stock. In the event of a loss, some insurers determine the value of lost stock based on how much it cost to produce it. Others determine value strictly by the market, which, as we’ve observed, is subject to significant price swings. How ethanol producers’ policies define stock value can make all the difference between recovering actual losses and being exposed to major unanticipated expenses. Again, the insurance broker’s industry expertise comes into play since an experienced broker would help a client understand this risk and address it.

As with any potentially rewarding venture, the ethanol production business is also subject to a number of risks. Some of those risks, which are often specific to the industry, can derail a successful enterprise, leaving it exposed to catastrophic losses that make recovery unlikely. However, with the right risk management partner, ethanol producers can protect their valuable businesses from losses that a broker who is not an industry expert might not anticipate. For ethanol producers, it pays to take a

look at the business coverage limits with all the special factors affecting their industry in mind. Only by taking into account their unique circumstances can ethanol producers ensure they have the protection they need to fuel their business for years to come despite whatever challenges may rise. EP Scott Helmer is president and CEO of Helmer Risk Management. Reach him at scotth @helmerrisk.com or (877) 435-6371 ext. 226.

Recovering, Moving Forward The ethanol production business offers a multitude of exciting possibilities for success, which is why it is growing at such a rapid rate. It plays a key role in policies designed to address environmental and geopolitical concerns. The industry can also provide much needed jobs that employ highly skilled individuals. ETHANOL PRODUCER MAGAZINE AUGUST 2008

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Treating Digester Off-Gas from Wet Mill Ethanol Production By Kenneth D. Jones, Steve Black and Tony Barnette

Figure 1 . Potential energy savings per 1 MMBtu

$6.96 saved

1,400 1,200 1,000 Standard Cubic Feet

ecently, the Energy Independence and Security Act of 2007 has coupled increasing fuel efficiency standards and renewable fuel use in America. Under this law, ethanol production from dry and wet milling processes is projected to increase. As ethanol production increases, so will waste emissions from fermentation processes. Merichem Gas Technology Productâ&#x20AC;&#x2122;s trademarked LO-CAT technology is a viable alternative for removing hydrogen sulfide from digester gas produced as part of wet milling processes. Use of LO-CAT treated digester gas helps maximize use of valuable natural resources. The majority of ethanol in the United States is produced during dry grind fermentation of total mash from crops such as corn, wheat, barley, milo/sorghum and potatoes. Distillers dried grain with solubles, a cellulosic coproduct of the dry grind process, is valuable as animal feed or fertilizer. Wet milling is more elaborate than

$0 digester gas

800 600 400

$11.60 Natural Gas

200

$4.64 Natural Gas

0 SOURCE: MERICHEM GAS TECHNOLOGY PRODUCTS

dry grind because grain must be separated into its components. After corn milling, corn is heated in a water solution to loosen germ and fiber. In subsequent steps, germ is removed from the kernel, corn oil is extracted, germ meal is added to hulls and fiber to make corn gluten

feed, and gluten is separated to create corn gluten meal for use in animal food. Only the starch of the corn is fermented to produce ethanol. The process also produces wastewater that must be treated before disposal. Although more ethanol is produced

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by dry versus wet milling, increasing demand for ethanol as a biofuel, has prompted increased use of new wet milling processes to maximize the yield of ethanol from many cellulosic materials such as corn stalks, grain straw, paper pulp, municipal wastes, switchgrass and other sources. New processes for fermenting woody and herbaceous biomass are being developed to yield more ethanol. These processes are projected to yield more sulfurous wastewater and sludge. Wastewater and sludge from the new wet milling processes can be treated in anaerobic digesters before disposal. During this digestion process, sour gas containing hydrogen sulfide is produced. When the gas stream is treated by LOCAT, hydrogen sulfide is removed, yielding gas that may be used as an alternative fuel source while meeting environmental standards. Treated digester gas can be used to lower ethanol plant energy costs by lowering natural gas usage.

Potential Energy Savings Natural gas prices have almost dou-

bled since January 2000, reaching $11.06/MMBtu this January. At press time the New York Mercantile Exchange natural gas futures contract settlement price was $11.60/MMBtu. Typical digester off-gas can yield as much as 600 Btu/standard cubic foot (SCF) versus natural gas at 1,000 Btu/SCF. Ethanol production energy costs could be reduced by more than half if energy requirements are supplemented through use of LO-CAT cleaned digester off-gas (Figure 1). Every 1,000 SCF of treated digester off-gas could yield 0.6 MMBtu, equivalent to $6.96 in saved natural gas cost. Actual energy savings may vary based on the availability and composition of treated digester gas. Sour gas is routed to a LO-CAT absorber. The type of absorber used is dependent upon the product gas hydrogen sulfide specification. The conventional liquid full scheme is used when approximately 99.99 percent hydrogen sulfide removal efficiency is required. In fact, as low as 1 parts per million by volume hydrogen sulfide can be achieved in the treated gas. The venturi-mobile bed

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option is used when moderate hydrogen sulfide removal efficiency is required and low pressure feed gas, less than 15 pounds per square inch, is treated. In the absorber, sour digester gas is contacted with LO-CAT solution. Hydrogen sulfide is absorbed from the gas into the LO-CAT solution where chelated iron catalyst promotes a reaction to convert hydrogen sulfide to elemental sulfur. Treated gas then exits the top of the absorber and sulfur rich LO-CAT solution flows to the oxidizer.

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In the oxidizer, LO-CAT solution is mixed with air as elemental sulfur settles to the bottom of the vessel. Oxygen in the air oxidizes (regenerates) the chelated iron in the LO-CAT solution returning it to its active state. In its active state, iron and LO-CAT solution are recycled to the absorber to remove more hydrogen sulfide. Elemental sulfur that settles to the bottom of the vessel forms a 15 weight percent slurry which is removed using a filter. Sulfur is then washed and filtered

resulting in 60 percent to 65 percent sulfur cake. The balance of the cake is water and trace amounts of LO-CAT solution. Wash water is recycled back to the oxidizer.

LO-CAT Chemistry The LO-CAT process was developed to provide an isothermal, low operating cost method for carrying out the modified Claus reaction: H2S + 1/2 O2 H2O + S° The overall reaction is explained using the following equations. • Absorption of hydrogen sulfide: H2S (g) + H2O (l) 1 H2S (aq) + H2O (aq) (1) • Ionization of hydrogen sulfide: H2S (aq) H+ + HS- (2) • Sulfide oxidation: HS- + +++ 2Fe S°(s) + 2Fe++ + H+ (3) • Absorption of oxygen: 1/2 O2 (g) + H2O (l) 1 1/2 O2 (aq) + H2O (aq) (4) • Iron oxidation: 1/2 O2 (aq) + H2O + 2Fe++ 2 OH- + 2Fe+++ (5) Equations 1 and 2 represent the absorption of hydrogen sulfide into the aqueous chelated iron solution and its subsequent ionization, while equation 3 represents the oxidation of hydrogen sulfide ions to elemental sulfur and the accompanying reduction of the ferric (active) iron to the ferrous (inactive) state. Equations 4 and 5 represent the absorption of oxygen from ambient air into the aqueous solution, followed by oxidation of the ferrous iron back to the ferric state. Equations 3 and 5 are very rapid. Consequently, ironbased systems generally produce relatively small amounts of byproduct thiosulfate ions. However, equations 1 and 4 are relatively slow and are the rate controlling steps in all chelated iron processes. It is interesting to note that the chelating agents do not appear in the process chemistry, and in the overall chemical reaction the iron cancels out. So the obvious question is why is chelated iron required at all, if it doesn’t take part in the overall reaction? The iron serves two purposes in

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EMISSIONS

the process chemistry. First, it serves as an electron donor and acceptorâ&#x20AC;&#x201D;in other words, a reagent. Second, it serves as a catalyst in accelerating the overall reaction. Because of this dual purpose, the iron is often called a catalytic reagent. Although there are many metals, which can perform these functions, iron was chosen for the LO-CAT process because it is inexpensive and nontoxic. The chelating agent(s) do not take part in the process reactions. Their role is simply to hold the iron ions in solution. Neither ferrous nor ferric ions are soluble or stable in aqueous solutions. Iron will ordinarily precipitate at low concentrations as either ferric hydroxide or ferrous sulfide. The chelating agents are organic compounds that wrap around the iron in a claw-like fashion, preventing the iron ions from forming precipitates. The LO-CAT process uses a proprietary system of chelating agents to hold the iron in solution over a very wide pH range. LO-CAT has developed into a versatile processing scheme for treating gas streams containing moderate amounts of hydrogen sulfide. Advantages of these systems include the ability to treat both aerobic and anaerobic gas streams, removal efficiencies in excess of 99.9 percent, essentially 100 percent turndown on hydrogen sulfide concentration and quantity, and the production of innocuous products and byproducts.

These qualities benefit the agricultural industry locally and internationally. Specifically, fertilizing companies recognize the benefits of using LO-CAT sulfur to make sulfur-based fertilizer products. Currently LO-CAT sulfur is used for soil pH adjustments, plant nutrients and foliage fungicides. LO-CAT sulfur is nontoxic and has been approved for use by the Organic Materials Review Institute. OMRI establishes standards for crops to receive

organic designation. OMRI follows the guidelines required for compliant use of sulfur under the USDA National Organic Program Rule 7 CFR Part 205. EP Kenneth D. Jones, Steve Black and Tony Barnette are with the Gas Technology Products division of Merichem Chemicals & Refinery Services LLC. All can be reached at (713) 4285000.

Green Fuels, Green Future

The Government of Saskatchewan has recently made changes to the SaskBIO program, making it easier to apply and qualify for funding.

1 2

Investing in Saskatchewan gives you ready access to more assets and raw product than any other province.

The Saskatchewan government offers attractive incentives such as the SaskBIO program, an 80 million dollar program for new and expanding biofuel facilities.

Saskatchewan is a leader in biofuels. In fact, we were the ďŹ rst province in Canada to mandate a 7.5 per cent ethanol blend in gasoline.

Our province offers a young and vibrant workforce, ready and willing to take on new challenges and build careers.

Sulfur Product Elemental sulfur produced by the LO-CAT process has quite profound differences from sulfur produced from other processes. LO-CAT sulfur has a particle size ranging between 8 to 45 microns, which is much smaller than sulfur produced by other processes. The sulfur is produced in a cake form that is 60 percent to 65 percent sulfur, water and trace amounts of LO-CAT solution. These distinct differences give LO-CAT sulfur softer particle texture, hydrophilic nature and water miscibility, and faster soil absorption characteristic and degradation.

ETHANOL PRODUCER MAGAZINE AUGUST 2008

To learn more about biofuels investment opportunities in Saskatchewan, please visit www.ei.gov.sk.ca/SaskBIO

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EFFICIENCY

Plant Expansion Through Membrane Integration By Christian Roy

PHOTO: GREENFIELD ETHANOL

hile market factors determine the cost of raw materials and selling prices, processing innovations can reduce the cost of producing fuel ethanol. Aside from hedging and smart marketing practices, producers have little control over the costs of corn, distillers grains and ethanol. However, producers do have control over savings associated with reducing energy consumption. A large portion of the energy consumption in ethanol production comes from extracting water from the fermentation liquor product stream. Here is where advanced membrane separation technology for dewatering a water-rich ethanol stream can be used to produce energy savings of as much as 50 percent compared to the conventional distillation and molecular sieve dewatering solution. Although molecular sieves combined with distillation have proven effective to separate water and ethanol, their use can be energy intensive. Molecular sieve units produce a purge

GreenField Ethanol's plant in Chatham, Ontario, is making use of membrane separation technology to dewater ethanol.

stream which contains between 60 percent and 80 percent ethanol that is recirculated and reboiled in the distillation column. Molecular sieve units are comprised

of a water adsorption cycle during which an ethanol/water vapor mixture circulates across the molecular sieve bed. During this regeneration cycle, fresh ethanol is injected into the molec-

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EFFICIENCY

system consumes less energy than the conventional molecular sieve regeneration method, and it enables significant unloading of the distillation column. The system can increase plantâ&#x20AC;&#x2122;s overall fuel ethanol production by approximately 20 percent to 30 percent. The membrane dehydrates the molecular sieve purge stream at a reduced cost. The water-rich stream can be directed toward the front end of the plant or is eliminated through the beer column. The membrane retentate endproduct is fuel ethanol at 99 percent or higher. The skid-mounted Siftek system can be easily integrated to the facility during plant maintenance shutdown.

How the Technology Works

ular sieve bed in a counter current flow with respect to the water adsorption cycle. The binary mixture is sent to the rectifier for reprocessing. The molecular sieve accounts for approximately onethird of the rectifying column total load. Also, molecular sieves may adsorb fuel oil over time. Vaperma, a Canadian-based compa-

ny has developed a trademarked Siftek membrane system, which has been designed to increase throughput capacity and save energy. With the Vaperma process configuration, the molecular sieve unit liquid phase purge stream is vaporized and dehydrated in the twostage Siftek membrane cartridge configuration. The membrane dehydration

ETHANOL PRODUCER MAGAZINE AUGUST 2008

Through the application of membrane technology the ethanol producer to achieve increased throughput capacities and reduced energy consumption. Siftekâ&#x20AC;&#x2122;s polymeric membrane technology combines solvent and high temperature resistance with a strong proprietary hollow fiber that can be used in a variety of new industrial applications. The membranes are vapor phase separation units that allow the preferred permeation of water over other vapor components in a gas mixture. These membranes are made of a special blend of

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GreenField's Growth Continues GreenField Ethanol, formerly Commercial Alcohols, is Canadaâ&#x20AC;&#x2122;s largest ethanol producer. The innovative company announced in March that it and Enerkem, a Quebec-based leader in gasification and the synthesis of biofuels from cellulose, a collaborative partnership to design, build and operate commercial-scale cellulosic ethanol plants. Vincent Chornet, president and chief executive officer of Enerkem, said at the time that the companies had secured a Canadian location for their first 10 MMgy plant. GreenField has operation plants in Tiverton and Chatham, Ontario and Varennes Quebec. It also has a 200 MMly (52.8 MMgy) facility under construction in Johnstown, Ontario, which will be Canadaâ&#x20AC;&#x2122;s largest once it comes on line. The company is also developing a 145 MMly (38.3 MMgy) plant in Hensall, Ontario.

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polymers selected for their specific morphological and chemical properties. The driving force for the separation phenomena is the ratio of the water partial pressure on the lumen and shell sides of the membrane. The high permeability of water across the membrane is due to its relatively high combined adsorption and diffusion rates. The water/ethanol mixture is slightly pressurized into the bundle of hollow fibers. Dehydration of the water/ethanol vapor mixture occurs by selective permeation of water vapor across the active thin layer of each polymeric hollow fiber. Thousands of hollow fibers form a membrane cartridge bundle which is housed inside a stainless steel vessel. Cellulosic materials as feedstocks that will not compete with food supplies are considered to be the future of fuel ethanol. Conversion of cellulosic biomass to ethanol is challenging because

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EFFICIENCY

the sugar concentration is far below that of corn or sugarcane. Processing cellulosic materials to ethanol also requires the removal of huge volumes of water from the fermentation liquor. The membrane solution is an attractive option for dewatering cellulosic ethanol as it is even more effective with an increase in the amount of water present in the feed.

Successful Pilot Testing Recently, Vaperma and Greenfield Ethanol Inc. of Toronto, Ontario, successfully reported the operation of a Siftek pilot plant over a period exceeding 4,000 hours. The test involved the “all-in-one step” reprocessing of a 60 percent to 90 percent ethanol/water blend into a 99 percent fuel-grade anhydrous ethanol at Greenfield’s 25 MMly (6.6 MMgy) plant in Tiverton, Ontario. The first actual industrial field trial enabled the production of approximately 200,000 liters (5,300 gallons) of fuel-

grade ethanol. As a result of that field trial, energy savings of 40 percent of actual energy consumption were obtained. The savings represent 3 cents per liter (11.4 cents per gallon). Commenting on the impact of this new membrane separation technology, Greenfield CEO Robert Gallant said “The unit in Tiverton used substantially less energy and therefore fewer greenhouse gases were created in the process, reducing the plant’s carbon dioxide footprint.” Still under field testing, the Siftek membrane at Tiverton processes 1.5 cubic meters per day of feed originating from the beer column. That was enough to encourage Vaperma and Greenfield to move on to a large-scale test of a 7.5 MMly (2 MMgy) membrane. In mid-June at the International Fuel Ethanol Workshop and Expo, Vaperma announced that it had installed its Siftek field demonstration system at

ETHANOL PRODUCER MAGAZINE AUGUST 2008

GreenField’s plant in Chatham, Ontario. The unit is expected to reach full production capacity by the fall of 2008. “We are confident that the full-scale unit will give conclusive results in reducing our energy costs and consumption compared with conventional technologies,” Gallant said. The Chatham project is also equipped with auditable greenhouse gas protocol and software for measuring the emission reduction benefits generated with the membrane system, thereby creating tradable carbon credits. At this point, Vaperma’s technology has been shown to be low in maintenance with membrane cartridge replacement predicted not to be needed on average until after three years of continuous operation. EP Christian Roy is co-founder of Vaperma Inc. and co-inventor of Siftek polymer membrane technology. Reach him at (418) 839-6989.

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PUMPS

Pump Technologies Provide Greater Efficiencies By Tom Stone

s national gasoline prices continue to rise, the national media has focused its attention on the hardships these historically high prices have foisted on the motoring public. However, the price increases have also had a profound impact on the people and companies that move the product from the refinery through the many twists and turns of the supply chain until it reaches the consumer’s gas tank. Simply put, the current pricing trend is transforming all areas of the petroleum industry and petroleum jobbers, terminal operators and marketers are being forced to find ways to wring costs out of their businesses. On top of that, the task facing today’s jobbers, terminal operators and retailers is complicated by the fact that the motor fuel supply is becoming increasingly complex with the addition of new fuels, reformulations of old fuels and federal mandates governing the use of alternative fuels. One alterna-

tive fuel that has received increased play since the dawn of the new century is ethanol, which has been backed by a high-profile, auto-industry-driven advertising campaign and support from legislators in Corn Belt states where most ethanol feedstocks are grown and harvested. In reality, ethanol has been a prominent part of the nation’s motor-fuel supply chain since it began being used as a 10 percent oxygenate and octane booster in unleaded gasoline nearly 30 years ago. More recently, the big push for increased ethanol use is in its 85 percent ethanol/15 percent gasoline form, known as E85. While the E10 that’s been used in the country’s motor fuel pool for three decades does not require any engine modifications, E85 can only be used in flexible-fuel vehicles that have been specifically designed for that task. Looking beyond the consumer impact, terminal operators face a variety

of questions that they need answers to before they can start moving ethanol through their plants. Because of its unique properties, ethanol-blended fuels generally cannot be shipped by a petroleum product pipeline due to operational issues, mainly ethanol’s affinity for water, which is a byproduct found at some level in all petroleum pipeline systems. Thanks to that—and coupled with the fact that the majority of ethanolproduction facilities are located near the sources of their feedstocks in the Midwest—most ethanol (and other biofuels) are transported chiefly by truck, barge and rail, creating an increase in terminal traffic and the need for more efficient plant processes. For example, common E10 requires only one incoming truck loaded with ethanol for every 10 outgoing trucks leaving the terminal with E10. By contrast, E85 necessitates 8.5 incoming loads of ethanol for every 10 outgoing loads of finished motor fuel.

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transports of every possible drop of valuable product, eliminating waste by ensuring more precise blending consistency in biofuels operations.

Sliding Vane Technology Offers Efficiencies

Regardless of how the various feedstocks and finished motor fuels enter and exit the terminal, there is no question that

processes must be found to streamline the loading and unloading process, efficiently strip lines and clear tanks and

As petroleum terminal operators modify and expand existing facilities or upgrade newly acquired terminals in order to handle higher volumes and new alternative fuels, the search for greater efficiency, lower maintenance costs, better line-clearing capabilities and more accurate blending processes is prompting many companies to take a new look at a long established and proven pumping technology. The sliding vane pumpâ&#x20AC;&#x2122;s concept has been around for more than a century and provides the essential solution for streamlining loading/unloading operations, optimizing line stripping and transport tank clearing, and offers volumetric consistency in blending applications. The concept of sliding vane pumps is simple, as is the comparison to the

competing technologies of centrifugal pumps and internal gear pumps. Centrifugal pumps employ only one force—increased velocity—to move product. Increased product movement thus becomes a function of increased speed. In turn, higher speeds require engines with more horsepower and greater power consumption. At the same time, centrifugal force is an inefficient mover of any residual product remaining in the line. Internal and external gear pumps provide a mechanical solution for moving product. Therefore, as soon as the pumps are placed in service the gears begin to wear and flow rates drop. Additionally, due to the wear, volumetric consistency may be compromised in blending applications. Sliding vane pumps are designed with unique “self-adjusting” vanes that allow them to maintain near-original volumetric performance during the life of the pump—meaning these pumps are not subject to the efficiency-robbing slip that occurs from wear in gear pumps. This feature also ensures the kind of volumetric consistency required to meet biofuelblending standards. Compared to a centrifugal pump, a sliding vane pump requires 25 percent to 30 percent less horsepower to move the same volume of product. These pumps have long been common in the transportation industry and are increasingly installed in new construction of biodiesel and ethanol production plants. As terminal operators refit and expand, sliding vane pumps are emerging as an effective and efficient technology for petroleum bulk plant and terminal operators. Sliding vane pumps have a series of vanes (normally made of a nonmetallic composite) that freely slide into or out of slots in the pump rotor. When the pump driver turns the rotor, centrifugal force, push rods and/or pressurized fluid causes the vanes to move outward in their slots and bear against the inner bore of the pump casing forming pumping chambers. As the rotor revolves, fluid flows into the area between the vanes (pumping 254

PHOTO: BLACKMER

PUMPS

Motor speed vane pumps provide improved efficiency and energy consumption to ethanol producers and transporters.

chambers) when they pass the suction port. This fluid is transported around the pump casing until the discharge port is reached. At this point the fluid is pushed out into the discharge piping. Each revolution of a sliding vane pump displaces a constant volume of fluid. Variance in pressure has minimal effect. Energy-wasting turbulence and slippage are minimized and high volumetric efficiency is maintained. Sliding vane pumps are also self-adjusting. As a result, the system eliminates fluid slip that wastes energy in other types of pumps. Further, since the vanes constantly adjust to accommodate for wear, unlike gear pumps that are not self-adjusting, sliding vane pumps maintain near-original and consistent volumetric performance over time. Since each revolution of the pump positively displaces a constant volume of product, bulk-plant operators know—by monitoring speed and flow rate—that they have delivered the exact amount of fuel their customers have ordered. Sliding vane pumps also provide a tremendous amount of suction capability, which benefits terminal operators by stripping lines and leaving no heel in tankers. Because of the design of the pump’s rotor and independent sliding vanes, sliding vane pumps are easy to maintain at peak performance levels and, if necessary, can be completely rebuilt with piping attached. Worn vanes can be replaced, by removing the outboard head assembly, sliding out the old vanes, inserting the new ones and reinstalling the head. In a matter of minutes, the pump can be back

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PUMPS in operation. Simple vane replacement also requires no special tools. For owners of petroleum terminals, the result is optimized operating efficiency, more consistent blending, less power consumption, repair, maintenance, and wasted or contaminated product, more speed and precision in loading and unloading. With bulk plants already challenged by high oil prices and required to wring more costs out of their operations—and facing the prospect of handling a more diverse mix of precisely specified fuels—sliding vane technology provides the best available solution. Although vane pumps may require a higher upfront investment than other types of pumps, they measurably reduce a terminal's operating and lifecycle costs to produce a justifiable return on investment. Yet the paradigm of making upfront investments in return for long-term savings has become the norm throughout much of the American economy. The U.S. construction industry, for example, has in recent years shifted increasingly to the concept of "green building" and away from its traditional focus on initial capital costs. The petroleum industry, which itself aspires to be "green," can do no less.

Conclusion In summary, rising oil prices have increased the cost for petroleum wholesalers to finance their inventories and accounts receivable, creating a need to squeeze ancillary spending out of their operations by boosting efficiency

and eliminating waste. At the same time, the high fuel prices are also leading to increased market shares for biodiesel and ethanol, requiring petroleum-terminal operators to face a reality that indicates that U.S. production of ethanol and other biofuels will triple between now and 2013. This will force many terminal operators to either modify or expand their storage facilities and traffic capacity, or get out of the game. Compliance with government and industry standards for fuel specifications will only become stricter in that time, increasing the demand for precise blending at the terminal. With a need to boost operating efficiencies and the prospect of upgrading or expanding terminal facilities, growing numbers of bulk plant operators are investigating sliding vane pump technology and discovering they can optimize performance and get measurable returns on their investments. A concept proven over a 100-year period, sliding vane pumps consume less power, require less maintenance, offer high suction that helps clear lines, tanks and transports, and deliver precise volumetric consistency in both loading/unloading and blending applications. In short, sliding vane pumps provide a viable, efficient solution for the challenges of operating a petroleum bulk plant in today's marketplace. EP Darren Wight is a freelance writer based in Knoxville, Ill. For more information on Blackmer sliding vane pumps, visit www. blackmer.com or contact Jim Becker at becker@blackmer.com or (616) 475-9390.

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ADVANCING CLEAN ENERGY BEYOND THE BREAKTHROUGH. What goal do you want to reach next? Increase production … use less energy … improve one or many aspects of your process? Your energy-saving solution is full of opportunities to do it more efﬁciently. SSOE can help. We’ll respond to your ethanol production challenges with a dedicated team ready to apply an arsenal of experience in alternative energy solutions. The more complex the problem, the better a ﬁrm with comprehensive capabilities can help you solve it. Let’s get started. SSOE is sixty-years long and hundreds of process engineering challenges deep. Find out more at www.ssoe.com or contact 651. 726 . 7660.

www.ssoe.com

POLICY

The Farm Bill: Planting Seeds of Renewable Energy By Matthew E. Ross

n May 22, 2008, Congress overrode President George W. Bushâ&#x20AC;&#x2122;s veto to enact the Food, Conservation and Energy Act of 2008, more commonly known as the farm bill. The bill recognizes the value that rural and agricultural land can play in the renewable energy economy, both in terms of the renewable fuels that can be grown or harvested into energy and the use of key real estate available for the siting of renewable energy projects. Although many of the more lucrative tax provisions, grants and other incentives were pared down prior to enactment, the farm bill is an important first step in shining light on the valuable role that agricultural and rural landsâ&#x20AC;&#x201D;and the raw materials found on themâ&#x20AC;&#x201D;can play in the renewable energy industry.

The farm bill, by directing certain incentives and public attention to farm-based and other rural bioenergy projects, should help breathe new life into these types of projects.

In the past, the Energy Policy Act of 2005 and industry players created considerable public attention around cornbased ethanol and solar and wind power. Less attention was paid to various wasteto-energy technologies including landfill gas-to-energy, wood and crop waste biomass, anaerobic digestion of animal solid waste, and gasification of municipal solid waste. Certainly, there were incentives available to some of these technologies, such as production tax credits and fiveRoss year depreciation for certain biomass technologies and other qualifying facilities, and the availability of tax-exempt bonds for certain landfill gas and municipal solid waste projects. However, projects in these and similar areas, while generally worthwhile and commercial, were not given as much attention by the press, project developers and lenders. This lack of focus made these types of projects more difficult to develop and finance even though in many cases they offered potentially much greater returns than wind or solar if the technical challenges could be successfully met. Without as many financial incentives, such projects had to work harder to get off the ground. The Farm Bill, by directing certain incentives and public attention to farm-based and other rural bioenergy projects, should help breathe new life into these types of projects.

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POLICY Earlier versions of the farm bill had significantly more robust incentives for both farms and project developers to install renewable energy equipment on rural and agricultural land. However, in the interest of building a strong majority, many of those provisions were stripped out in conference before the bill was submitted to the president with the promise that they would be readdressed in other energy legislation this year. However, what remains is not insignificant. Congress has demonstrated a real interest in harnessing both the raw material and real estate that agricultural and rural lands have to offer as well as diversifying Americaâ&#x20AC;&#x2122;s energy portfolio.

Making Way for Innovation, Development Some of the more interesting technologies that are boosted by the Farm Bill are the various waste-to-energy possibilities that either extract methane from, or burn, various types of waste

POLICY

Additional provisions legislators may want to consider in the future would include increased renewable portfolio standards and renewable fuels standards, a national mandatory carbon emissions trading regime, and appropriations for more robust grants and incentives for these technologies and projects.

streams and use the resulting product to produce either natural gas or electricity. For example, the USDA has estimated that there are 150 million animal units (cows, swine and poultry) that collectively produce more than 2 billion tons of waste per year in the United States. If just 10 percent of this total waste stream were able to be captured and converted to energy via anaerobic digestion or gasification, that would create either approximately 110 billion cubic feet of natural gas per year or about 32,230 megawatt hours of electricity per year. Further, there are countless millions of tons of food and other organic wastes that are created in farming operations nationwide. Harvesting that waste, as well as tapping the prolific cellulosic and other woody biomass located on rural and agricultural land, could be a vital source of energy. Here is a closer look at some of the provisions that bode well for biomass and other biofuels development: Biorefineries â&#x20AC;&#x201D;The USDA provides 1) grants of up to 30 percent of project costs to assist in the development and construction of demonstration-scale biorefineries (facilities that convert renewable biomass into biofuels or electricity) to demonstrate the viability of one or more processes for converting renewable biomass (including various forms of plant material, waste material and animal waste) into advanced biofuels

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(fuels derived from cellulosic biomass, vegetative waste, animal waste and biogas), and 2) loan guarantees of up to 80 percent of project costs (or 90 percent of a loan amount), up to a maximum of $250 million, to fund the development, construction and retrofitting of commercial-scale biorefineries. This provision allows for companies to implement innovative solutions to convert things like plant material, waste material, and animal waste into advanced biofuels. In addition, the USDA will enter into contracts with producers of advanced biofuels and will provide funding to help the development, construction and retrofitting of commercial scale biorefineries. Repowering â&#x20AC;&#x201D;The farm bill encourages biorefineries already in operation as of the date of the enactment of the Farm Bill to install new systems or produce new energy from renewable biomass by allocating $35 million in mandatory funding for 2009 and $15 million in discretionary funding for each of 20092012. R u r a l E n e r g y f o r A m e r i c a â&#x20AC;&#x201D;The USDA and U.S. DOE will create a program to promote energy efficiency and renewable energy development by agricultural producers and small rural businesses. In particular, the program will provide grants for energy audits and renewable energy development and other financial assistance for energy efficiency improvements and renewable energy systems. Grants provided under this section can cover 25 percent of the project costs and, combined with loan guarantees, can be used for 75 percent of the total project costs. The farm bill sets aside mandatory funding of $55 million in 2009, $60 million in 2010 and $70 million in each of 2011 and 2012, as well as discretionary funding of $25 million in each of such years. Additional provisions legislators may want to consider in the future would include increased renewable portfolio standards and renewable fuels standards,

a national mandatory carbon emissions trading regime, and appropriations for more robust grants and incentives for these technologies and projects.

bill is a step in the right direction, although more robust incentives will be necessary for this industry sector to reap the seeds that were sown with the farm bill. EP

Progress One Step at a Time In a world of $130 per barrel oil, global warming, aging energy infrastructure and transmission congestion, it is in Americaâ&#x20AC;&#x2122;s interest to look for as many other creative opportunities to produce renewable energy as possible. The farm

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Tom Stone is the director of marketing for Grand Rapids, Mich.-based Blackmer. Reach him at stone@blackmer.com or (616) 2489252.

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21st Ethanol Conference & Trade Show

Biofuelsmarkets Americas September 9-10, 2008

European Forum for Industrial Biotechnology

August 12-14, 2008

Buenos Aires, Argentina

September 15-17, 2008

Qwest Center Omaha, Nebraska This event, hosted by the American Coalition for Ethanol, reviews the status of the ethanol industry each year, while looking ahead to the future. Agenda topics will include ethanol transportation, blending, cellulosic ethanol, distillers grains, midlevel ethanol blends and the renewable fuels standard in the Energy Independence & Security Act of 2007. (816) 333-9400 www.ethanol.org

EVENTS

Officially supported by the Argentine Biofuels and Hydrogen Association, last year’s inaugural event focused on the biodiesel market. Due to popular request, this year's event has been expanded to include BioPower Americas, a concurrent event. The joint general session will include discussion of the “bio revolution,” the global industry, climate change, energy supply and demand, finance and investment, sustainability, and feedstocks. The second day of the event will break the agenda into the two groups: biofuels and biopower. +44 207 801 6333 www.greenpowerconferences.com

Hotel Bloom Brussels, Belgium This inaugural event aims to bring together a senior and international group of biotechnology producers, chemicals and plastics suppliers, biomass and biorefinery representatives, end users from a wide variety of industries, and academia. Topics of discussion will include biofuels, biorefineries, biobased products, Europe’s knowledge-based bioeconomy, Asia’s perspective, chemicals, financing and commercialization, among many others. +44 (0) 1372 802101 www.efib2008.com

CALENDAR

International Distillers Grains Conference & Trade Show

World Biofuels Symposium

Biofuelsmarkets Africa

October 19-21, 2008

November 20-21, 2008

October 19-21, 2008

Tsinghua University Beijing, China

Cape Town, South Africa

Indianapolis Marriott Downtown Indianapolis, Indiana This event, organized by BBI International Inc., aims to educate and empower the end users of distillers grains, and enhance customer outreach activities worldwide. The agenda will include topics such as distillers grains supply and demand; exports, particularly in Asia; fractionation; and global feeding trends, especially in poultry, swine and cattle. (719) 539-0300 www.distillersgrainsconference.com

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This fourth annual event, organized by BBI International Inc., will explore the world energy issues that China currently faces, specifically in regard to biofuels. Topics of discussion will include advances, opportunities and challenges in biofuels technologies and production. An agenda will become available as this event approaches. (719) 539-0300 www.worldbiofuelssymposium.com

The approval of the Biofuel Industrial Strategy for South Africa in December 2007 provides fresh impetus to the country’s biofuels market, along with a foundation and road map to push the market forward. The initial 2 percent biofuels penetration scenario (400 million liters per year) will create 25,000 jobs, according to the strategy. This third annual event will bring together executives from across the continent to discuss strategies that will enhance development of a sustainable, regional biofuels industry. +44 207 801 6333 www.greenpowerconferences.com

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Biofuelsmarkets East Africa

Texas Biofuels Conference & Expo

NextGeneration Biofuelmarkets

September 17-18, 2008

Amsterdam, Netherlands

September 16-18, 2008 Kilimanjaro Hotel Kempinski Dar Es Salaam, Tanzania This inaugural event will particularly focus on Tanzania, Uganda and Kenya. The case-study-led agenda will include presentations and panels that review the current status of the biofuels market in this region, and address the expanding opportunities for the production of feedstocks and biofuels for use in Africa and for export. Agenda topics include financing; sustainability; feedstocks; biofuels production; and blending, marketing, distribution and transportation. +44 207 801 6333 www.greenpowerconferences.com

Hilton Austin Airport Austin, Texas This third annual event will take an in-depth look at the latest regulatory, agricultural and technical developments impacting the renewable fuels industry in Texas. Special attention will be given to the Energy Independence & Security Act of 2007 and the impact it will have on the future of renewable fuels in Texas. (512) 358-1000 www.biofuelevents.com

October 6-7, 2008 This fourth annual event will bring together key players pioneering the development of next-generation biofuels to address the latest developments in creating the cost-competitive, industrial-scale production of next-generation biofuels technologies. An agenda will become available as this event approaches. +44 207 801 6333 www.greenpowerconferences.com

Canadian Renewable Fuels Summit

Waste to Energy

National Ethanol Conference

D e c e m b e r 1 0 - 11 , 2 0 0 8

February 23-25, 2009

December 1-3, 2008

Bremen, Germany

San Antonio Convention Center San Antonio, Texas

Hilton Hotel Lac Leamy Hull, Quebec Themed “Growing Beyond Oil,” the Canadian Renewable Fuels Association’s fifth annual event will continue to discuss the progress, challenges and opportunities facing the Canadian biofuels market. It will focus on policy and marketing, and will be attended by a number of industry representatives from all levels of the ethanol and biodiesel industries. (519) 576-4500 www.canadianrenewablefuelssummit.com

This event will focus on waste as a resource, biofuels, economical plant operation and the reduction of greenhouse gas emissions. It includes a trade show, which will showcase state-of-the art machinery, engineering and services for the generation of power, heat and mobility from waste materials and renewable resources. More than 160 exhibitors and 2,000 delegates from around the world are expected to attend. +49-421-3505-347 www.wte-expo.com

ETHANOL PRODUCER MAGAZINE AUGUST 2008

This event will cover the industry’s impact on the U.S. economy, the environment, food prices and the international market. A record of nearly 2,500 people attended in 2008. An agenda will be available as the event approaches. (202) 289-3835 www.ethanolrfa.org

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