August 2014 Ethanol Producer Magazine

INSIDE: AN INTEGRATED SOLUTIONS APPROACH TO WATER TREATMENT AUGUST 2014

An FEW

Look Back 30th Anniversary Photo Review Page 34

Plus

Targeted Approach To Technology

Page 28

Going Around Big Oil To Offer E15 Page 40 www.EthanolProducer.com

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CONTENTS

AUGUST 2014

DEPARTMENTS 6

VOLUME 20 ISSUE 8

FEATURES

EDITOR'S NOTE More From Less

By Tom Bryan

7

AD INDEX

10 THE WAY I SEE IT

Ethanol, a Global Commodity

By Mike Bryan

11 EVENTS CALENDAR 12 VIEW FROM THE HILL

Leading the Way in Motorcycle Education

By Bob Dinneen

28

34

OPTIMIZATION

EVENT

Ethanol producers optimize, search for yield improvements

By Susanne Retka Schill

World’s largest, longest running ethanol conference hits 30-year milestone

By Holly Jessen

Toolkit For Ethanol’s Next Stage

Making Connections at FEW

14 DRIVE

Higher Blends Best For America’s Energy Future

By Tom Buis

16 GRASSROOTS VOICE

What’s 1.67 Trillion Divided By 53?

By Ron Lamberty

18 EUROPE CALLING

Champion Time

By Robert Vierhout

20 BUSINESS BRIEFS 22 COMMODITIES 24 DISTILLED

40

46

DISTRIBUTION

Q&A

Independent gas stations go unbranded to sell higher blends

By Holly Jessen

Minnesota-based company takes solution neutral approach

By Ron Kotrba

E15 Retailers Get Creative

Water Sage

54 MARKETPLACE ON THE COVER

CONTRIBUTION

ENERGY

New Technology Reduces Natural Gas Consumption

Draft regulator permits boiler tuning for optimal combustion

By Ed Sanchez

PHOTO: RICH CLARK

48 48

Ethanol Producer Magazine: (USPS No. 023-974) August 2014, Vol. 20, Issue 8. Ethanol Producer Magazine is published monthly by BBI International. 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.

4 | Ethanol Producer Magazine | AUGUST 2014

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EDITOR'S NOTE

More From Less Today, top performing U.S. ethanol plants surrender only 3 to 5 percent of corn’s total fermentable starch, leaving it behind in distillers grains. Considering that producers were giving up twice that amount

Tom Bryan

President & Editor in Chief tbryan@bbiinternational.com

of sugar a decade ago, conversion efficiency gains should rank among the industry’s most important modern achievements. Indeed, ethanol producers are closing in on the theoretical maximum yield from starch alone, and therefore eyeing corn fiber. The arrival of the cellulosic era, however, does not mean that optimizing grain ethanol production is yesterday’s battle. Rather, finding ways to convert corn starch faster, cheaper and more efficiently is a virtually endless pursuit.

In our page-28 feature, “Toolkit For Ethanol’s Next Stage,” we look at decisions, investments and commitments producers have made during their quests for maximization.

EPM Senior Editor Susanne Retka Schill reports that plant optimization, for most, is achieved over time through many interrelated campaigns and process trials. Illinois River Energy LLC, for example, has initiated 30 to 40 projects in recent years, all essentially aimed at incremental production gains. The plant’s story is illustrative of the persistent, step-by-step mindset ethanol producers must have to be competitive in today’s industry.

Retka Schill reports that the latest mechanical treatments like selective milling, cavitation, and ultrasound, along with improved enzyme cocktails and more effective and versatile yeasts, are the current big-ticket spends producers are making to stay competitive. Still, though, the simplest way to make more money in good times is to increase throughput. For that reason, many plants are now hyperfocused on improving reliability and reducing downtime. IRE’s former manager tells us, “[The plant] used to have seven-day shutdowns, two or three times a year, and now it’s five days maybe twice a year.” In other words, being down 10 days a year versus 14 or 21—at 145,000 gallons a day—is a big deal to any profit-minded business.

Plants are making big strides with and without big technology purchases. Pinal Energy in Arizona reduced its downtime and increased its production yields by making distillation modifications and using Six-Sigma methodology to pinpoint the plant’s temperature and pH sweet spot. Similarly, we learn how Novozymes is able to capture plant data that a producer may use to establish its very own “Golden Batch” profile. Think of it as optimization via data analysis.

Process optimization is not synonymous with plant enhancement, of course. The former improves the efficiency of traditional grain ethanol production, while the latter gives a plant the capability to produce new things like cellulosic ethanol, novel coproducts and low-carbon power. Writ large, however, optimization, maximization and enhancement are all about the same thing: getting more from less. And if that isn’t the definition of sustainable, it really should be.

FOR INDUSTRY NEWS: WWW.ETHANOLPRODUCER.COM OR FOLLOW US: 6 | Ethanol Producer Magazine | AUGUST 2014

TWITTER.COM/ETHANOLMAGAZINE

VOLUME 20 ISSUE 8

ADVERTISER INDEX

EDITORIAL President & Editor in Chief Tom Bryan tbryan@bbiinternational.com Vice President of Content & Executive Editor Tim Portz tportz@bbiinternational.com

2014 National Advanced Biofuels Conference 2014 Fall Ethanol Producer Map

Managing Editor Holly Jessen hjessen@bbiinternational.com

Agra Industries American Coalition for Ethanol

Senior Editior Susanne Retka Schill sretkaschill@bbiinternational.com

BBI Project Development

News Editor Erin Voegele evoegele@bbiinternational.com

BetaTec Hop Products

Staff Writer Katie Fletcher kfletcher@bbiinternational.com

Cereal Process Technologies

Buckman CPM Roskamp Champion

Copy Editor Jan Tellmann jtellmann@bbiinternational.com

DuPont Industrial Biosciences Fagen Inc.

ART

Fluid Quip Process Technologies, LLC

Art Director Jaci Satterlund jsatterlund@bbiinternational.com

Growth Energy

Graphic Designer Raquel Boushee rboushee@bbiinternational.com

ICM, Inc.

Hydro-Klean LLC INTL FCStone Inc.

PUBLISHING Chairman Mike Bryan mbryan@bbiinternational.com CEO Joe Bryan jbryan@bbiinternational.com

Jatrodiesel, Inc.

Kennedy and Coe, LLC

Lallemand Biofuels & Distilled Spirits

Methes Energies Midland Scientific Inc. Nalco, an Ecolab Company

SALES

Novozymes

Vice President of Operations Matthew Spoor mspoor@bbiinternational.com Business Development Director Howard Brockhouse hbrockhouse@bbiinternational.com Senior Account Manager Chip Shereck cshereck@bbiinternational.com Marketing Director John Nelson jnelson@bbiinternational.com

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Circulation Manager Jessica Beaudry jbeaudry@bbiinternational.com

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19 52 21 55 53 17 24 50 30 56 3 51 2 20 11 45 44 31 15 25 26 32 5 13 9 8 42 39 43 27 49 33

Customer Service Please call 1-866-746-8385 or email us at service@bbiinternational.com. Subscriptions to Ethanol Producer Magazine are free of charge to everyone with the exception of a shipping and handling charge of $49.95 for anyone outside the United States. 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. Back Issues, Reprints and Permissions Select back issues are available for $3.95 each, plus shipping. Article reprints are also available for a fee. For more information, contact us at 866-746-8385 or service@bbiinternational.com. Advertising Ethanol Producer Magazine provides a specific topic delivered to a highly targeted audience. We are committed to editorial excellence and high-quality print production. To find out more about Ethanol Producer Magazine advertising opportunities, please contact us at 866-746-8385 or service@bbiinternational.com. Letters to the Editor We welcome letters to the editor. Send to Ethanol Producer Magazine Letters to the Editor, 308 2nd Ave. N., Suite 304, Grand Forks, ND 58203 or email to hjessen@bbiinternational.com. Please include your name, address and phone number. Letters may be edited for clarity and/or space.

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AUGUST 2014 | Ethanol Producer Magazine | 7

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Advanced Biofuels

THE WAY I SEE IT

Ethanol, A Global Commodity

By Mike Bryan

Ethanol produced in Brazil, Mexico or Asia is essentially the same commodity that we produce in America. Yet we export product to Brazil

and Brazil exports product to the United States. Admittedly, I don’t know all of the intricacies of why this happens. It does, however, seem odd that ships carrying ethanol pass one another with imports from Brazil to America and America to Brazil, with producers in both countries paying the freight.

As an industry, we seem to operate in isolation from one another globally, each country doing its own thing with very little communication. I don’t know why.

At the International Fuel Ethanol Workshop & Expo in Indianapolis, Phil Madson from Katzen International raised this point on a panel. “Ethanol is a global commodity and we need to start treating it like a global commodity,” he said. One organization working on the political and educational front is the Global Renewable Fuels Alliance. This organization does represent a number of ethanol associations and producers in various parts of the world, with the ultimate goal of collectively building a stronger, more integrated industry. In terms of trade, however, we need to go further.

The oil industry has its flaws, but one thing stakeholders have done very effectively is work together on an international level. Because after all, oil is oil is oil, they have perfected the art of product exchange and in doing so avoid needless shipping costs wherever possible. At the same time, they have built a global story so everyone is singing from the same hymnal. It seems to me that ethanol is ethanol is ethanol. It

10 | Ethanol Producer Magazine | AUGUST 2014

makes no difference where it is produced, the product is the essentially the same, the public relation problems (i.e. food vs. fuel, etc.) are universal, production and maintenance issues are similar and the technological challenges required to move to second-and third-generation ethanol are shared by countries worldwide.

We can continue to address these issues individually or we can come together as a global community multiplying our strength many times over. The ethanol industry has already demonstrated what strength in numbers can achieve. I think it’s time to take ethanol to the next level of a true international commodity that freely flows around the world without restrictions and territorialism.

Are the problems facing ethanol so different in Asia than they are in Argentina that we could not learn from one another and even help one another build their industry? The oil industry thinks globally and it’s time we start doing the same.

That’s the way I see it.

Author: Mike Bryan Chairman, BBI International mbryan@bbiinternational.com

EVENTS CALENDAR National Advanced Biofuels Conference & Expo October 13-14, 2014 Hyatt Minneapolis Minneapolis, Minnesota Produced by BBI International, this event will feature the world of advanced biofuels and biobased chemicals— technology scale-up, project finance, policy, national markets and more—with a core focus on the industrial, petroleum and agribusiness alliances defining the national advanced biofuels industry. With a vertically integrated program and audience, this event is tailored for industry professionals engaged in producing, developing and deploying advanced biofuels, biobased platform chemicals, polymers and other renewable molecules that have the potential to meet or exceed the performance of petroleum-derived products.

866-746-8385 | www.advancedbiofuelsconference.com

National Ethanol Conference February 18-20, 2015 Gaylord Texan Resort & Convention Center Grapevine, Texas The NEC provides attendees with timely information on critical regulatory, marketing and policy issues facing the ethanol industry. Experts will speak to the current market situation, and address how we as an industry can continue to grow through innovation, new technologies and feedstocks, and by developing more diverse and global markets.

202-289-3835 | www.nationalethanolconference.com

International Biomass Conference & Expo April 20-22, 2015 Minneapolis Convention Center, Minneapolis, Minnesota Organized by BBI International and produced by Biomass Magazine, this event brings current and future producers of bioenergy and biobased products together with waste generators, energy crop growers, municipal leaders, utility executives, technology providers, equipment manufacturers, project developers, investors and policy makers. It’s a true one-stop shop—the world’s premier educational and networking junction for all biomass industries.

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International Fuel Ethanol Workshop & Expo June 1-4, 2015 Minneapolis Convention Center, Minneapolis, Minnesota The FEW provides the global ethanol industry with cutting-edge content and unparalleled networking opportunities in a dynamic business-to-business environment. The FEW is the largest, longest running ethanol conference in the world—and the only event powered by Ethanol Producer Magazine.

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VIEW FROM THE HILL

Leading the Way in Motorcycle Education

By Bob Dinneen

Ethanol will once again take center stage in August as 500,000 motorcyclists from all over the world roll into Sturgis, S.D., to celebrate the 74th annual Sturgis Motorcycle Rally. For the sixth consecutive year,

the Renewable Fuels Association is a proud sponsor of the motorcycle rally, leading the way in motorcycle education.

Downtown Sturgis is lined with motorcycles during the rally—often reaching four deep—presenting an opportunity to dispel misinformation that has spread throughout the motorcycle world concerning ethanol use in motorcycles.

Bryan O’Neill, a mechanic and member of the Iron Order Motorcycle Club, spoke at the National Ethanol Conference in February to explain the misleading claims. He noted, “Naysayers are erroneously pointing out so-called problems with ethanol, using catchy terms like ‘phase separation’, to cast ethanol in a negative light. … This is the kind of misinformation that is being spread throughout the motorcycle community that is causing distrust in a product that we have been using for years.”

The Sturgis rally offers RFA a unique chance to reach a half million bikers with a message that not only counters the false information, but highlights the cost-saving, highoctane benefits of ethanol. RFA takes this opportunity to point out that motorcycle manufacturers—including HarleyDavidson, Kawasaki and Yamaha—approve the use of E10 in motorcycles, and explain that ethanol saves American drivers an average of $1 per gallon.

One of the many ways RFA promotes ethanol is through the widely-popular “Free Fuel Happy Hours,” offering a free tank of E10 93-octane fuel to riders at the Sturgis Buffalo Chip campground. The promotion amasses lines 100 bikes long and gives our staff an opportunity to answer questions and dispel concerns about ethanol use in motorcycles.

12 | Ethanol Producer Magazine | AUGUST 2014

READY TO RIDE: Bikers line up to fill up with a free tank of E10, courtesy of RFA, during the annual Sturgis Motorcycle Rally.

PHOTO: RFA

In addition to the “Free Fuel Happy Hours,” RFA maintains a large presence at the Sturgis Buffalo Chip campground. The campground has been the epicenter of the rally since it opened in 1981. Popular names like Florida Georgia Line, Zac Brown Band and ZZ Top grace the main stage where RFA reaches the crowd of more than 100,000 people with a message of “Ride Safe, Fuel Right.”

Last, but certainly not least, RFA gives back to the Sturgis community through sponsorship of the annual “Legends Ride.” The event’s proceeds are donated to local charities, including the Black Hills Special Olympics. All “Legends Ride” participants receive free “Fueled with Pride” giveaways and informational materials on ethanol before they embark on the ride that originates in Deadwood, S.D. The Sturgis Motorcycle Rally allows RFA to directly and effectively educate motorcycle riders on the cost-saving benefits of ethanol. Low-cost fuel is essential to bikers, because as they like to say, “A good long ride can clear your mind, restore your soul and use up a lot of fuel.”

Author: Bob Dinneen President and CEO, Renewable Fuels Association 202-289-3835

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DRIVE

Higher Blends Best For America’s Energy Future

By Tom Buis

The greatest challenge the ethanol industry faces is making higher blends of our product available to consumers nationwide. Producing ethanol

is not the problem, it’s getting the fuel into the marketplace.

The production efficiencies of ethanol continue to improve: less energy, less water, less greenhouse gas emissions and higher yields, which makes our industry the envy of the world.

Meanwhile, all the new oil gains from fracking and tar sands are taking the nation in the wrong direction, higher costs, increased use of resources and greater risks to our environment and air.

Incredibly, despite overwhelming evidence about oil’s dangerous practices and impacts, the renewable fuels industry is blamed by Big Oil and special interests for damaging the environment. It is as if Big Oil is living in an alternate reality. The facts speak for themselves, tens of thousands of spills a year, earthquakes from fracking and who could forget the BP spill in Gulf of Mexico or the Exxon Valdez spill in Alaska? The list goes on and on.

Our industry is often unfairly criticized for receiving federal tax subsidies when, in fact, we volunteered to give up the Volumetric Ethanol Excise Tax Credit in 2011. However, oil tax subsidies began over 100 years ago and continue today. And, if that’s not enough, our industry is blamed for higher food prices. In reality, the World Bank found that the biggest driver of food price increases is the cost of oil. Talk about the fox guarding the henhouse! In all my years in Washington, that is the biggest whopper I have ever heard.

Time and again, Big Oil damages our environment and actively propagates misinformation to keep the American consumer addicted to their product, and fearful of a cleaner, greener homegrown alternative to fossil fuels.

The real reason for all this misinformation is simple. It is a fight over market share. The ethanol industry already has captured 10 percent of the market because of all the benefits it offers to consumers and the oil industry knows we have the capability to secure even more. All of the misleading rhetoric and all of the fights over the renewable fuel standard (RFS) in Congress, along

with all of the efforts to get U.S. EPA to roll back the RFS is for one reason: market share. They are spending millions, not for what’s best for America, or our environment, air, health or energy security, but to simply protect their monopoly on transportation fuels.

The key to success is simple, breaking down the barriers to give consumers a choice at the pump. We know ethanol is a better performing fuel, cleaner, less expensive, higher octane and renewable. And, we have seen consumers actively choose higher blends of ethanol when given the choice. That is why we need to continue to fight to expand infrastructure and availability of higher blends. The demand is there and now we must overcome the legal, regulatory and public relations hurdles Big Oil has put in place in attempts to block market access for our product.

Luckily, we have the facts on our side. In reality, the investment is not the burden, as consumer demand and competitive advantage will mitigate any short term spending with future growth in profit margins. Higher performance and lower fuel costs will keep customers coming back. The only hindrances are the misinformation Big Oil is spreading to mislead consumers about E15.

Independent retail chains are beginning to realize that E15 offers them a price advantage and better margin opportunity.

Chains such as Mapco, Minnoco and Murphy USA and others have all committed to expanding E15 offerings. In fact, retailers who currently have E15 available to consumers have reported the sale of the blend accounts for nearly 30 percent of all sales while providing better profit margins for the retailer.

For anyone who is paying attention, E15 is the clear choice.

Consumers can rest easy knowing that by using homegrown renewable fuels they are investing in American jobs and the American economy. By continuing to fight for our share of the market, spreading the word to our neighbors and increasing availability of higher blends throughout the country, we will win this fight. It is obvious higher blends of ethanol are what is best for America’s energy future.

Author: Tom Buis CEO, Growth Energy 202-545-4000 tbuis@growthenergy.org

14 | Ethanol Producer Magazine | AUGUST 2014

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September 14–19, 2014 A Tradition of Industry Education For 33 years, The Alcohol School has been educating fuel ethanol and distilled beverage producers in the science of alcohol production. The weeklong program is designed for lab, plant, and management personnel and is organized around lectures, laboratory demonstrations, seminars, and plant visits.

The program will cover the process of ethanol and beverage alcohol production from milling and mash preparation through fermentation and distillation.

Enzyme usage, yeast biology, bacterial contamination and control will also be discussed, along with other issues currently affecting both industries.

For More Information Registration is open to fuel ethanol, distilled beverage, and allied industries. Now is a good time to invest in education.

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GRASSROOTS VOICE

What’s 1.67 Trillion Divided By 53?

By Ron Lamberty

We work in an industry that is measured in some very large numbers. Sometimes numbers in the

billions, millions, trillions or quadrillions just meld together as we hear them or read them so that it’s difficult to put them in perspective and compare them to something familiar. Carl Sagan, the “billions and billions” guy some of us remember, created one of the most famous solutions to this large-number challenge when he created a timeline that showed the history of planet earth as if it were one year. Most of what we know of human history happened in the final 60 seconds of Dec. 31, with Columbus discovering America one second before midnight.

I don’t have a chart like that to explain the state of the world’s energy. But there have been some large energy numbers reported in the last month and I found them, and the reaction to them, fascinating.

Last month, BP released its Statistical Review of World Energy, which is widely regarded as the oil industry’s definitive report on how much oil and gas is out there, who has it, and how long it will last. Most news reports about the oil side of the study touted the fact that BP’s estimate of proven reserves (Huh? Is it estimated or proven?) increased from 1.65 trillion barrels of oil to 1.67 trillion barrels.

That’s a lot. One trillion, 670 billion (rounded up) is a big number. The actual BP number looks like this: 1,669,000,000,000.

If you convert that to gallons, it’s 70,980,000,000,000 gallons.

That’s huge, right? BP’s report also increased United States’ proven reserves from 31 billion barrels to 35 billion barrels.

That’s 35,000,000,000 barrels, 1,470,000,000,000 gallons or one and a half trillion gallons of oil.

Even if you take that oil and figure out how much gas you could make for cars, it’s a big number. Utilizing 700 billion gallons of gas in the U.S., 32.5 trillion gallons of gas could be produced from the worldwide proven oil reserves.

16 | Ethanol Producer Magazine | AUGUST 2014

Now, when you divide the 1.67 trillion barrels of oil among the 7 billion (7,180,000,000) inhabitants of the planet, you come up with 232 barrels of oil per person. You could make that into 4,500 gallons of gas and more than 2,000 gallons of diesel fuel. And those numbers are probably low, because a lot of the people on the planet use no fossil oil at all. But think about how much gas you use. How many years would it take you to burn up 4,500 gallons?

Most responses to the article, and especially the comments below, fell into the category of “See, they’re lying. We have PLENTY of oil out there, and they’re probably underestimating that.” Ironically, the brave, “so what” comments came from Americans, who may not have realized that the 35 billion barrels we have, is roughly what we would use in five years. A commenter on one online story about the report said that there were probably 75 billion more barrels in the U.S. that we could recover. He didn’t mention cost, but I suspect those additional gallons would require the same kind of shift in recovery cost that moved us from $20 a barrel to $120 in the past 15 years.

And if it’s there, it would bring the U.S. up to a total of 15 years of oil reserves.

But then there one other number in the report that got most of my attention: 53. The report says we have enough oil left on planet Earth to last 53.3 years. That number stood out because I just celebrated my 53rd birthday. If my dad and the rest of the world had seen a report like this BP report on the day I was born, and did nothing, we would be out of oil by now.

Fifty-three years does not feel like a long time to me. I plan to use my next 53 years to help all of you render that oil number irrelevant.

Author: Ron Lamberty Senior Vice President American Coalition for Ethanol 605-334-3381 rlamberty@ethanol.org

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EUROPE CALLING

Champion Time

By Robert Vierhout

Europe is in the process of reshaping its balance of power. The first step was the European Parliament

elections in May. Later this year there will be a new European Commission and finally a new president of the European Council.

The elections revealed an important shift towards a more “nationalistic” Europe.

As expected, the more eurosceptic powers won in strength that will force the pro-European parties like Christian-Democrats (EPP), Social Democrats (S&D) and Liberals (ALDE) to work more in unison.

Even though out of a total of 751 seats, the EPP kept its leading position (221), it has no other option but to work closely with the S&D (191 seats) to obtain the majority needed to adopt legislation.

Like in a classical prisoner's dilemma, only in this way the Parliament can counterweight the Council of Member States.

This “nationalistic” shift in the balance of power will certainly have an impact on how in the next five years the European Commission will conduct its business. Notwithstanding that JeanClaud Juncker, the designated Commission president, is a true European, he cannot ignore the almost 25 percent of the members of European Parliament that are highly critical of the European Union.

The present Commission has understood this already when it published its 2020-’30 energy and climate policy plans that foresees a much bigger role for the member states than we have seen ever before.

What are the expectations for the biofuel industry and policy under the new balance of power?

With almost 50 percent newly elected members of European Parliament, there must be a good opportunity to reset the discussion on biofuels. Interestingly, most of the members who were highly vocal in the indirect land use change (ILUC) discussion didn't succeed in re-election.

But the emphasis in the debate needs to change. In the past, there was an almost exclusive focus on the environmental impact

of biofuels. Now the industry needs to underline the benefits of biofuels for the economy and the opportunity to increase domestically produced energy.

There might be new opportunities now that the EPP has taken the leadership in three crucially important parliamentary committees: energy, environment and agriculture. The S&D will lead the Economic Affairs Committee, which may signal that for this political group economic recovery is what counts. In the past five years, a German Socialist who had a major influence in the discussion on ILUC—not to the benefit of the industry—presided over the environment committee.

The Green group shrunk in size, which also creates an opportunity. However, the much larger group of eurosceptics could become a force that will express itself against an EU based biofuel policy from the point of view that the market should decide what transportation fuel to use.

The challenge for the European ethanol industry is fourfold: 1) Rebrand by putting more emphasis on economic impact, domestic energy supply, agricultural opportunities, and technology push; 2) Inform new members of Parliament ASAP; 3) Scout for champions or a group of champions who will defend the industry; and 4) Put much more emphasis in the lobby at the national level.

This stage of rebuilding political support for the ethanol industry cannot be underestimated.

The ILUC-debate in the past two years demonstrated the tremendous impact only a few members of Parliament can have on the general perception of biofuels and the direction the decision making can take.

As far as the new European Commission is concerned, it is too early to tell how it will position itself on the biofuel policy.

Also very likely in this institution, we may see a shift that could be to the benefit of the industry. Much, however, will depend on what person (nationality) will head the Climate Action Department. If, again, this will be someone who dislikes biofuels, like the present Commissioner, we are in for a difficult time. Here too, finding a supporter of biofuels, is crucial.

Author: Robert Vierhout Secretary-general, ePURE Vierhout@epure.org

18 | Ethanol Producer Magazine | AUGUST 2014

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BUSINESS BRIEFS Beemer

Steenhard

Valenti

Aventine Renewable Energy Holdings Inc. has announced the promotion of Mark Beemer to president and CEO. He joined the company as acting president in 2012. His responsibilities include corporate turnaround and leadership, strategic planning, capital expenditures, and implementing revenue initiatives through commodity risk management and disciplined financial management. He previously served as chief commercial officer at Osage Bio Energy and served on the board of Hawkeye Renewables. In 2006, he founded Alternative Energy Sources Inc., completing development of two 100 MMgy ethanol plant sites. Aventine also recently promoted Brian Steenhard to the position of chief financial officer.

He joined the company in January 2013, with responsibility for financial reporting, budget and forecast modeling, strategic turnaround business initiatives, and pro-

People, Partnerships & Deals

viding commodity-hedging strategies for risk management. He previously worked at Hawkeye Energy Holdings LLC. In addition, Aventine has announced the promotion of John Valenti. He will now serve as vice president of operation and is responsible for overseeing the companyâ&#x20AC;&#x2122;s four ethanol plants and the development and execution of capital investments. Valenti joined Aventine in 2011 and previously worked at B&G Foods in Portland, Maine.

The Kansas Grain Sorghum Commission and the Kansas Grain Sorghum Producers Association have entered a cooperative agreement that will allow the two organizations to share office space and staff. KGSC will be the administrator of the two organizations.

Norfolk Southern Corp. has announced recipients of its Thoroughbred Chemical Safety Award, which recognizes safe business practices in 2013. Among the 60 recipients are Abengoa Bioenergy, The Andersons Inc., Cargill Inc., Green Plains Inc., Poet Ethanol Products, and Valero Marketing & Supply.

Phibro Ethanol Performance Group has hired Larry â&#x20AC;&#x153;Camâ&#x20AC;? Fowler as senior director technical affairs at EPG, a division of Phibro Animal Health Corp. Fowler will be responFowler sible for the operation and strategic direction of EPGâ&#x20AC;&#x2122;s technical resources. He most recently served as a staff scientist and technical services manager with Novozymes North America.

St1 Biofuels Oy announced it will deliver an Etanolix plant producing waste-based ethanol to North European Oil Trade Oy in Gothenburg, Sweden. The 5 MMly (1.32 MMgy) facility will take in food waste as feedstock. It is expected to be operational early next year.

Syngenta has announced an agreement with Cellulosic Ethanol Technologies LLC, a wholly owned subsidiary of Quad County Corn Processors, to license its Adding Cellulosic Ethanol technology.

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John Campbell, a former Deputy Undersecretary of Agriculture, has joined Ocean Park Advisors, a corporate finance advisory firm.

His duties will be to broaden the companyâ&#x20AC;&#x2122;s relationships, deCampbell velop new business and help execute transactions. Campbell is credited as being one of the driving forces behind the creation of the U.S. biodiesel industry. He was also engaged in the ethanol industry starting in the 1990s, and served as president of the Nebraska Association of Ethanol Producers.

Addax Bioenergy recently announced its facility in Makeni, Sierra Leone, has begun production of sugarcane ethanol and electricity. The company is expected to produce 85,000 cubic meters (22.45 million gallons) per year by the end of 2016. Addax Bioenergy is certified under the Roundtable of Sustainable Biomaterials and complies with the most stringent global sustainability standards.

Dyadic International Inc. has appointed Michael Tarnok to its board of directors.

He will also serve on the companyâ&#x20AC;&#x2122;s audit and compensation committees.

Tarnok has extensive experience in the Tarnok pharmaceutical industry across many key areas including finance, operations and marketing. He is the current chairman and former interim CEO of Keryx Biopharmaceuticals Inc. and spent the majority of his career at Pfizer Inc. Strategic Environmental & Energy Resources Inc. has announced that its subsidiary, MV Technologies, has been awarded a contract to supply one of its H2SPlus systems for removal of hydrogen sulfide (H2S) at the Pixley Biogas anaerobic digestion facility in California. The facility will be constructed adjacent to the existing Calgren Renewable Fuels Biorefinery. Biogas generated by the digester will be used to reduce natural gas consumption at the ethanol production facility.

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Monsanto Co. has appointed Marcos Lutz to its board of directors. Lutz is the CEO of Cosan SA and a director of Cosan Ltd. He joined Cosan in 2007 and has served as CEO of Cosan SA and a director of Cosan Ltd. since 2009. Prior to joining Cosan, Lutz held senior leadership roles at Companhia Siderurgica Nacional SA. His appointment is effective immediately, and he will stand for election to the board at the 2015 annual meeting of shareholders.

Lutz will serve on the science and technology committee and the sustainability and corporate responsibility committee.

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The U.S. Grains Council has promoted Katelyn Parsons to manager of communications. She will be responsible for the development, implementation and maintenance of the USGCâ&#x20AC;&#x2122;s social media, publications and online communications strategies.

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::: $*5$,1' &20 AUGUST 2014 | Ethanol Producer Magazine | 21

COMMODITIES

Prices & Market Analyses

Natural Gas Report

Natural gas prices high due to inventory depletion July 1â&#x20AC;&#x201D;Since early 2014, natural gas futures for 2015 have been pricing at a substantial discount to futures for 2014. Although the harsh winter could reasonably be expected to cause uplift in prices through the traditional heating months of January through March, it does not directly explain why low-demand summer months of the current year are priced at a 30 cents per MMBtu or 7 percent premium to the summer of 2015. While expectations for prices for the upcoming winter have receded slightly, in general, near-term prices remain structurally higher than the corresponding month in the following year.

So why are prices so high? In a word: inventory. 2014 prices have risen steadily in response to the ongoing depletion of storage inventory that began in earnest in mid-January. At the low, inventories were essentially half what they normally are, requiring a steep climb to return to normalcy. Following a bit of a slow start in April, injections into inventory have been going gangbusters, exceeding both the five-year average level and the elevated rate observed in 2013. Despite the improvement, forecasts still suggest that inventory levels will fall far short of the fiveyear average by the end of the summer, leaving the market a little tighter heading into the demanding winter season. If July turns out to be a hot

by Ben Straus

month with higher call on gas-fired generation for power production, lower volumes of natural gas will flow into storage, and the price differential between 2014 futures and 2015 futures may well widen.

Corn Report

Corn crop projections getting bigger, new or increased demand needed

by Jason Sagebiel

July 1â&#x20AC;&#x201D;The quarter ended in June with a sharp drop in the grain These scenarios place a lot of pressure on any upward momentum and soy complexes. Taking its toll on the ag complex is a crop that seems for corn. New and increased demand or a major production issue from to be getting bigger and bigger stocks. weather will be needed for this market to sustain a friendly tone outside The USDA placed June 1 corn stocks at 3.85 billion bushels vs. 7 of general market corrections. billion bushels projected on March 1. Disappearance was 3.154 billion bushels from March to June. The market was looking for disappearance to be 132 million bushels more than what was released.

The report put planted acres at 91.61 million acres, down from 91.691 million acres projected in March and 3.72 million acres less than last year. New crop corn faded fast on the release of that data as some traders were expecting to lose some corn acres due to wetter spring conditions in the northern Corn Belt this spring. The 83.839 million acres expected to be harvested this fall are 91.4 percent of what is planted.

Note this planting number for corn was as of June 1 and the number could be revised. With 83.839 million acres harvested, which is actually lower than what the March report reflected, a yield of 165 bushels per acre still nets a production figure of 13.833 billion bushels. However, carryin should increase and the supply table ultimately be stable from the current new crop estimate.

22 | Ethanol Producer Magazine | AUGUST 2014

Regional Ethanol Prices ($/gallon) Front Month Futures (AC) $2.1290 Region

Spot

Rack

West Coast

2.390

2.990

Midwest

2.140

2.800

East Coast

2.240

2.860

DDGS Report

SOURCE: DTN

Regional Gasoline Prices ($/gallon)

Announcements from China keep coming,

by Sean Broderick roil the market July 1—In mid-June unofficial word came out of China that export licenses were not being renewed or extended. As the volume going in that direction lately was almost 20 to 25 percent of all U.S. DDGS, a change in China’s import pattern was sure to ripple through the market.

Bids dropped about 15 to 20 percent.

With the Fourth of July weekend approaching, it does seem as though prices have settled down and climbed off the lows that resulted from the initial import permit reaction. But this is the second time that announcements from China have resulted in a knee-jerk price reaction in the market and traders are starting to revisit the risk rewards of trading DDGS into China.

Domestically, feeders of all meats and milk animals are still making money but are

keeping purchases very nearby, in spite of forward-feeding margins that they have not seen for a while. Railcars are still moving very slow, which is keeping the local truck markets well supplied. When a producer’s inventory is too high trucks are priced to move, which seems to happen weekly.

Those trucks, which are in high demand now, are sure to get even tighter at harvest, with the look of the crops these days.

Looking ahead, any announcements from China (official or otherwise) are sure to roil the market and the way the corn crop looks today makes it look as though buyers will be in the driver’s seat moving through the summer and into the fall.

Front Month Futures Price (RBOB) $3.099 Region

Spot

Rack

West Coast

3.203

3.493

Midwest

3.095

3.574

East Coast

3.457

3.478 SOURCE: DTN

DDGS Prices ($/ton) Location

Aug 2014

Jul 2014

Aug 2013

Minnesota

160

210

230

Chicago

185

233

263

Buffalo, N.Y.

180

255

229

Central Calif.

217

270

286

Central Fla.

190

261

270 SOURCE: CHS Inc.

Corn Futures Prices

(May Futures, $/bushel) Date

High

Low

Close

Jun 30, 2014

4.41 3/4

4.17

4.18 3/4

May 14, 2014

4.66 1/2

4.57 1/4

4.58

Jun 28, 2013

5.74 1/4

5.40 1/2

5.47 1/4 SOURCE: FCStone

Cash Sorghum ($/bushel) Location

Ethanol Report

Ethanol prices weaken on expected strong corn

by Rick Kment production July 1—Ethanol production through the middle of June reached record high levels based primarily on recent weakness in the corn markets. Lower corn prices and strong profit margins at ethanol plants have helped fuel aggressive production increases through the late spring and early summer. This has quickly moved the overall industry from a tight inventory situation through early spring to another potential round of ethanol supply gluts, which has many market watchers concerned.

Ethanol blender demand is picking up as summer driving increases ahead of

the Fourth of July holiday and the prime of summer vacation season. But it is uncertain just how much long-term support will remain in either the ethanol or RBOB gasoline (reformulated blendstock for oxygenate blending) markets given lack of strong growth in the economy through the summer. Ethanol prices are likely to remain in their current range over the near future with the focus on underlying gasoline demand and corn availability and prices.

June 27, 2013

May 15, 2014

June 27, 2014

Superior, Neb.

6.65

4.48

4.17

Beatrice, Neb.

6.72

4.39

4.13

Sublette, Kan.

6.52

4.59

4.20

Salina, Kan.

6.80

4.59

4.43

Triangle, Texas

6.77

4.76

4.31

Gulf, Texas

5.91

5.57

5.31

SOURCE: Sorghum Synergies

Natural Gas Prices ($/MMBtu) Location

May 21, 2014

June 27, 2014

June 27, 2013

NYMEX

4.37

4.43

3.58

NNG Ventura

4.52

4.57

3.66

CA Citygate

3.58

4.95

3.93

SOURCE: U.S. Energy Services Inc.

U.S. Ethanol Production (1,000 barrels) Per Day

Month

End Stocks

APR 2014

928

27,837

17,356

MAR 2014

907

28,116

17,349

APR 2013

855

25,662

17,645

SOURCE: U.S. Energy Information Administration

AUGUST 2014 | Ethanol Producer Magazine | 23

DISTILLED

Ethanol News & Trends

Patriot Holdings to install ICM cellulosic technology ICM Inc. recently announced Illinois-based Patriot Holdings LLC has signed a letter of intent to implement its Fiber Separation Technology and Generation 1.5 Grain Fiber to Cellulosic Ethanol Technology (Gen 1.5).

FST is a value-added platform technology that increases ethanol yield and throughput. It also increases oil recovery. The technology separates fiber, which will be used to produce cellulosic ethanol via the Gen 1.5 technology. The new systems will build on the Selective Milling Technology system, which Patriot purchased in October.

“Patriot will be setting itself up to lead our industry into cellulosic ethanol, which not only diversifies its plant, but improves ethanol yield to over 3.08 gallons per bushel. Our team is excited to continue working with Patriot as it grows its business,” said Chris Mitchell, president of ICM.

Uses of No. 2 yellow corn in 2011 Seed Feed Exports Ethanol Food and industrial

< 1% 37% 12% 40% 11%

SOURCE: MUMM ET AL. BIOTECHNOLOGY FOR BIOFUELS 2014; "LAND USAGE ATTRIBUTED TO CORN ETHANOL PRODUCTION IN THE UNITED STATES: SENSITIVITY TO TECHNOLOGICAL ADVANCES IN CORN GRAIN YIELD, ETHANOL CONVERSION, AND CO-PRODUCT UTILIZATION"

Study finds yield improvements will reduce acreage use for ethanol production Today, less than 25 percent of U.S. corn acres is required to produce ethanol.

A new study completed by researchers at the University of Illinois’ College of Agricultural, Consumer, and Environmental Sciences has determined that number is likely to be drastically lower in the future.

According to the study, several factors will gradually lower that figure to as little as 11 percent of U.S. corn acres by 2026, assuming adherence to the renewable fuel

Some chemical companies focus on this

standard’s 15 billion gallon ceiling on domestic ethanol production.

The study explores the impact of technological improvements on corn grain production, ethanol production, and their interrelated effect on land use through a variety of scenarios. The researchers found that land area attributed to corn ethanol will consistently drop because plant breeding improvements and new technologies will result in significantly higher yields.

or that

Buckman takes a wider view.

Some chemical companies focus only on process.

Some focus solely on water treatment. Buckman takes a comprehensive approach and looks at the bigger picture — return on investment and environment.

We look at every aspect of your plant’s operation,

© 2014 Buckman Laboratories International, Inc. All rights reserved.

24 | Ethanol Producer Magazine | AUGUST 2014

tailoring chemistries to boost production and increase profitability — from evaporator efficiency to corn oil recovery to water treatment issues. To find out more or to schedule a system audit, contact your Buckman representative or email ethanol@buckman.com.

.

DISTILLED

Tyton plans restart of long-idled NC plant Tyton BioEnergy Systems plans to restart the former Clean Burn Fuels ethanol plant soon. The 60 MMgy facility, located in Raeford, North Carolina, has been idle for more than three years. The plant will initially restart using corn feedstock, but the company plans to transition to the use of energy tobacco in the future.

The facility was purchased by Tyton BioEnergy Systemsâ&#x20AC;&#x2122; partner, Tyton Biofuels LLC. While Tyton BioEnergy Systems is focused on the research and science of tobacco-based fuels and agricultural activities to produce energy tobacco, Tyton BioFuels is a partner company focused on the startup and operation of the ethanol plant.

Tyton plans to develop its energy tobacco and establish local rural processing facilities over the next five years. Those rural processing facilities will produce sugar for use as an ethanol feedstock, oil for biodiesel production and biochar soil amendments.

Average Annual Growth Rate Growth rate in 2013 Ethanol Biodiesel

5.70% 11%

Growth rate end-2008 through 2103 5.60% 11.40%

SOURCE: REN21, RENEWABLES 2014 GLOBAL STATUS REPORT

Report highlights global progress in ethanol production A new report published by Renewable Energy Policy Network for the 21st Century (REN21) provides a global overview of advances in renewable energy development, including those related to global ethanol production.

According to the report, 87.2 billion liters (23.4 billion gallons) of ethanol was produced for transportation fuel last year, up from 82.6 billion liters in 2012. Only 28.5 billion liters was produced in 2004.

The U.S. tops the list of countries that made investments in ethanol and biodiesel

last year. Other tops countries for ethanol include Brazil, China, Canada and France.

Overall, liquid biofuels met about 2.3 percent of global transport fuel demand last year. While ethanol production rebounded following two years of decline, the report states that global investment in new biofuel plant capacity continued its decline from the 2007 peak. Several new advanced biofuel facilities, however, were commissioned during the year.

DISTILLED

Grant supports developing cellulosic pretreatment process The Michigan Translational Research and Commercialization Program for the BioEconomy, launched by Michigan State University and the Michigan Economic Development Corp., has announced grant funding for several projects, with the goal of making their respective technologies broadly available for consumer use. Among the funded projects is a cellulosic pretreatment technology development by MSU professor Bruce Dale.

The patented ammonia fiber expansion (AFEX) pretreatment uses ammonia to make the breakdown of cellulose and hemicellulose in plants 75 percent more efficient than when conventional enzymes are used alone. While acid pretreatment is a common method to break down cellulose into fermentable sugars, it requires the material to be washed and detoxified, which removes nutrients that have to be added back later. The AFEX process, however, does not need to be washed or detoxified eliminating the need to add nutrients to create the cellulosic ethanol. “Using AFEX as the pretreatment process can dramatically reduce the cost of making biofuels from cellulose,” Dale said.

Minister of Environment and Sustainable Resource Development for the Government of Alberta Robin Campbell, (left), Enerkem CEO Vincent Chornet, and Edmonton Mayor Don Iveson cut the ribbon at Enerkem’s municipal waste-to-biofuels and biochemicals facility in Edmonton, Alberta.

PHOTO: ENERKEM INC.

Enerkem celebrates inauguration of Edmonton trash-to-biofuels facility Enerkem Inc. held a grand opening for its commercial-scale trash-to-biofuels plant in Edmonton, Alberta, on June 4.

Construction on the project began August 2010. Once the plant is fully operational, it will have a production capacity of up to 38 MMly (10 MMgy). Using presorted municipal solid waste, it will help the city of Edmonton divert 90 percent of its residential waste stream from the landfill.

“We are proud of the inauguration of our first full-scale biorefinery facility as it is the culmination of more than 10 years of disciplined efforts to scale up our technol-

ogy from pilot and demonstration, to commercial scale,” said Vincent Chornet, president and CEO of Enerkem.

The Edmonton facility is the first of what the company hopes will be a string of commercial developments. As part of its Waste Management investor agreement, Enerkem may be developing up to 20 facilities in North America, Chornet said. With the first plant about to become operational, others have expressed interest. “Nobody wants to be first, but many are willing to be second,” he continued.

DISTILLED

USDA will assume ethanol census survey Over the next several months, the USDA’s National Agricultural Statistics Service will contact ethanol producers across the United States to conduct a monthly Current Agricultural Industry Report survey. The survey will replace a Census Bureau program that was recently discontinued.

According to the USDA, the Current Industrial Report program began in 1904 with the Census Bureau. Due to budget reductions, the bureau discontinued the program in 2011.

Starting this year, the NASS will take over publishing the industrial reports that involve agricultural products used in ethanol plants, and the resulting coproducts.

“As soon as the Census Bureau announced they were discontinuing the Current Industrial Reports, we began hearing from agriculture stakeholders around the country about the impact this decision can have on the industry,” said NASS Administrator Joseph T. Reilly. “The reports are such an important element of sound economic policy planning and are used for market analysis, forecasting, and decision making that we knew we had to provide the data and I’m glad that beginning this year NASS is able to do just that.”

2013 European Ethanol Industry Production capacity Production Consumption Imports Imports percent of consumption Exports

8.8 million liters 6.7 million liters 7.9 million liters 1.2 million liters 15.20% 100,000 liters

SOURCE: EPURE

EU agreement to incorporate ILUC, cap conventional biofuels at 7 percent In June, the European Union Energy Council announced it has reached a political agreement on measures to incorporate indirect land use change (ILUC) into EU biofuel policies and place a 7 percent cap on the use of conventional biofuels. The agreement also encourages the transition to second- and third-generation biofuels.

The proposal must undergo a second reading in the European Parliament before it becomes law.

Rob Vierhout, secretary general of ePURE, the European renewable ethanol industry association, called the agreement “welcome progress” and said

it should pave the way toward a stable policy framework that will restore investor confidence in the biofuel industry. He also noted, however, that more progress needs to be made.

“The proposed ceiling of 7 percent for conventional biofuels could limit the uptake of renewable ethanol as the majority could come from existing biodiesel capacity,” he said. “It is essential that the ceiling is combined with a separate renewables in petrol target as proposed by the European Parliament in its first reading position.”

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OPTIMIZATION

28 | Ethanol Producer Magazine | AUGUST 2014

OPTIMIZATION

Toolkit For

Ethanol’s Next Stage

Forward-thinking producers will build on technological improvements implemented in recent years.

By Susanne Retka Schill

There are multiple options in the ethanol producer’s toolkit in the ongoing quest to improve efficiency and yield. They can be as basic as stay-

ing on top of maintenance and improving the reliability of the dozens of systems in the plant to reduce downtime. Some require systematic approaches to evaluating process parameters to identify the sweet spot. Other efforts may mean investing in new machinery or system upgrades, or choosing from an array of new products, with the accompanying challenge of validating their efficacy. Where have producers focused their attention in recent years and what lies ahead?

“From the moment you start up a plant and start producing ethanol, there’s always a search for, how can I produce more ethanol with less inputs?” said Lars Dunn, director of technical service for DuPont Industrial Biosciences and the 2014 recipient of the Award of Excellence at the International Fuel Ethanol Workshop & Expo.

Hands down, the most important investment of the past five years has been corn oil extraction, estimated to be installed at 90-plus percent of ethanol plants. However, there’s a new round of mechanical improvements underway, Dunn pointed out. The new equipment is designed “to get more of the starch, more of the fermentable sugars out of the matrix of the grain and into solution where it can be converted

to ethanol,” he said. “Things like selective milling, cavitation, ultrasound—some kind of mechanical treatment to get more starch out of the grain.”

At the same time, enzyme companies, like DuPont, Novozymes and others, have developed new enzymes that achieve “the same things as the mechanical means, but without the capital investment,” he said. On top of that, genetic engineers have developed a corn variety that produces its own alpha amylase and yeast that produces its own glucoamylase.

Two ethanol producers, Keith Kor, general manager at Pinal Energy LLC, and Neal Jakel, former general manager at Illinois River Energy LLC, recently acquired by CHS Inc., echoed Dunn in naming the main technologies being adopted across the industry but gave equal emphasis to incremental improvements.

Jakel said the team at IRE has 30 to 40 projects on the books, looking for incremental gains. “You need a plan, both long term and short term,” he stressed. In times of poor margins, such as in 2012, those plans may focus on low-cost, high-return projects, while periods of healthy margins open the door for larger investments. “You have to be ready for that,” he advised, adding that improvements need to be ongoing, if nothing else, to survive the next downturn, and provide returns to investors in spite of the margin environment. One area to focus on, he said, is to improve reliability and AUGUST 2014 | Ethanol Producer Magazine | 29

OPTIMIZATION reduce downtime. “We used to have seven-day shutdowns, two or three times a year, and now it’s five days maybe twice a year,” which, he pointed out, results in a substantial increase in gallons of ethanol produced.

At Pinal Energy, Kor said they reduced downtime significantly through modifications in distillation. The team installed new trays in the beer column and rerouted feeds to run thin stillage through all three evaporators, modifications that reduced fouling and thus downtime.

The big gain at Pinal Energy in Arizona came from a systematic evaluation of process variables, Kor said. The team tested a number of changes. “What happens if we change the pH, increase or decrease enzymes, or change when we pitch the yeast?

What happens if we raise the temperature 5 degrees?” Using Six-Sigma methodology, the Pinal team found the sweet spot, which improved ethanol yield from 2.68 to 2.76 gallons per bushel of corn, according to Kor. Finding the sweet spot has been the goal for Nicholas Giffen, senior scientist, data analyst with Novozymes North America. Speaking at the FEW, he described his work in helping to develop the company’s Golden Batch software. The system uses statistical analyses of operational data to identify correlations among various process parameters to find those giving the best yield: the golden batch. Giffen showed an example from a 110 MMgy plant, and how a statistical method called recursive partitioning found a correlation between slurry solids, cell counts and temperature.

Analyzing multiple fermentations, a certain combination of the three parameters resulted in ethanol yields of 1.2 percent above the average and increased the frequency of golden batches from 15 percent overall to 35.5 percent.

Once the statistical analysis identified the three key parameters, a root cause analysis determined the solids were being impacted by an enzyme issue at low solids.

A cell count issue was caused by inconsistent propagation times and fermentations that were too fast at high cell counts. And, 30 | Ethanol Producer Magazine | AUGUST 2014

PLANT OPTIMIZATION: Pinal Energy took advantage of an extended downtime in the poor margin environment of 2012 to improve plant efficiencies.

PHOTO: SUSANNE RETKA SCHILL, BBI INTERNATIONAL

an analysis of prop temperature found lower temperatures increased viability. Using those insights, the set points for solids and prop temperature were adjusted and plant operators were trained to send the prop at the correct time to ensure proper cell counts. The Golden Batch analysis was then used to validate the implemented changes. In the applications to date, Giffen reported, each ethanol plant has proved to be unique, with different sets of three to five key variables rising to the top in the Golden Batch analysis.

Six-Sigma and Golden Batch are just two systems that can be applied to process control. Other speakers at the FEW described other approaches, including Hank Brittain from OPX Control, who spoke on scoring and improving process control systems; Srinivas Budaraju with Rockwell Au-

OPTIMIZATION â&#x20AC;&#x2DC;In the 1980s, 2.62 gallons per bushel and 10 percent alcohol in the ferms were good. Now itâ&#x20AC;&#x2122;s not. Now we see 16 and 17 percent alcohol in ferms and 2.9 to 3 is the gold standard to achieve for yield.â&#x20AC;&#x2122; Keith Kor

tomation, who discussed model predictive control; Bill Whitlock with Novozymes described InDex, an analytical method for cook process optimization, and Glen Bowen with Ashland Water Technologies spoke on performance-based monitoring in process and water treatment chemical programs.

Trialing Technologies

Conducting proper trials is a big part of evaluating new technologies, and was the focus for other speakers at the FEW. Small, incremental improvements bring potentially substantial profits, but can be hard to validate. Chris Richards with Lallemand Biofuels and Distilled Spirits, outlined the elements of a successful plant trial in the panel on approaches to evaluating new process or technology deployments. The protocol should state the trial objectives and any assumptions, he advised, and outline how the trial will be implementedâ&#x20AC;&#x201D;the duration, how the baseline is to be set, sampling methodology, how comparisons between the baseline and trials are to be done. The protocol should define the responsibilities of the various parties involved and include steps to reduce risk, such as running a trial in a single fermentor and waiting for results before entering the full trial or implementing changes incrementally.

Fred Clark with Arisdyne Systems described his companyâ&#x20AC;&#x2122;s approach to conducting trials, including outfitting a mobile

laboratory to bring to sites to reduce disruptions from the added test runs. Ethanol plant operations are inherently variable with multiple sources, he pointed out, such as feedstock conditions, enzyme and yeast nutrition dosing, ambient and process temperatures, pH, backset and distillation, not to mention time. Everyone struggles to show small yield lifts, he said, yet small, incremental improvements potentially translate into substantial profits.

Looking Ahead

The FEW producer panel in the opening general session posed the question of what the next stage for ethanol innovation will be. Kor and Jakel spoke on the panel, along with James Moe, president of Poet Plant Management, and Paul Koehler, vice president corporate development at Pacific Ethanol Inc. All mentioned the expectation that cellulosic ethanol technologies will be adopted. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s the guys with the strong balance sheets that are in the front of that,â&#x20AC;? Jakel said.

The future will be a continuous evolution, said Moe, â&#x20AC;&#x153;looking at the entire landscape of technology and identifying the opportunities. It may be hardware technology, maybe chemical or cellulosic.

It might be market opportunities in our specific locations. It should be an exciting time in the industry.â&#x20AC;?

Jakel put product diversification high on his list of changes ahead. Many plants are going to build on oil extraction to tool

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AUGUST 2014 | Ethanol Producer Magazine | 31

OPTIMIZATION

‘From the moment you start up a plant and start producing ethanol, there’s always a search for, how can I produce more ethanol with less inputs?’

Lars Dunn

A Strong Partnership For over 15 years, Nalco has used an approach that includes mechanical, operational and chemical expertise combined with innovative technology to help ethanol producers find solutions to water and process challenges. When Nalco joined the RFA in 2005, the industry was just beginning to understand its potential. Today, we’re proud to be part of an industry that produced over 14 billion gallons of ethanol in 2013.

Going forward, we’re committed to partnering with producers to strengthen the business by driving operational efficiencies and sustainability. . . whether it’s conserving more than a billion gallons of water each year, finding new ways to increase corn oil recovery, or introducing better feed and control technology for final ethanol corrosion inhibitor treatment.

Together, we’re fueling a very bright future.

Reinventing the Way Water is Managed ©2014 Ecolab USA Inc. Ecolab, Nalco and the logo are trademarks of Ecolab USA Inc.

32 | Ethanol Producer Magazine | AUGUST 2014

‘You need a plan, both long term and short term.’

Neal Jakel

their distillers grains for the best market near them, be it cattle for producers in Nebraska and Kansas or monogastrics for those further east in the Corn Belt. “The next thing will be precursor chemicals such as biobutanol, adipic acid and succinic acid,” he added.

For Koehler, driving down the carbon score is the focus ahead for Pacific Ethanol’s plants that serve the California market. That will include improvements to existing assets, plus bringing in new feedstocks to add to the corn now used.

Better carbon scores for product being shipped to California is big on Kor’s horizon as well. Pinal Energy will be adding biomass-fueled combined heat and power, he reported. Using wood waste from the Phoenix area just 40 miles north of the plant, Pinal Energy will get between 5 and 6 MW of electrical power plus process steam.

Looking ahead at the ethanol industry, Kor predicted just as producers widely adopted oil extraction in the past five years, the industry is going to move into fiber extraction for cellulosic ethanol in the next five. New coproducts are going to emerge, with corn oil-to-biodiesel very likely, along with zein protein extraction, which has a variety of food and industrial uses, for use in biodegegradable plastics, among others.

“You’re going to see more and more ways to get the best value,” he said, “and we’re going to make plants more efficient.”

“In the 1980s,” Kor continued, “2.62 gallons per bushel and 10 percent alcohol in the ferms were good. Now it’s not. Now we see 16 and 17 percent alcohol in ferms

OPTIMIZATION and 2.9 to 3 is the gold standard to achieve for yield.” Energy use has been nearly halved, he added. “In the early days, energy use was around 40,000 to 44,000 Btu per gallon produced. “Nowadays, we’re at 18,000 to 26,000 Btu per gallon. Nobody thought we’d ever get there, but we did. We’ll continue to see improvement in all these areas.”

Dunn used terms of efficiency in the conversion of fermentable sugars to ethanol to quantify the industry’s improvement. “In the 1980s, we were in the low 80s in efficiency.

We’ve made a big leap in the last decade, going up by 10 percent,” he said. The average in modern ethanol plants is at 92 to 93 percent efficiency, he added. “The really good ones might be up there at 95 percent. What you’re getting at is an improvement of a few percent.

With scale, for a 100 MMGy plant, 2 percent is 2 million gallons. At $2.50-plus a gallon, that’s a substantial amount of money.”

Author: Susanne Retka Schill Senior Editor, Ethanol Producer Magazine 701-738-4922 sretkaschill@bbiinternational.com

INLINE TRIALING: Thanks to a University of Arizona research project, Pinal Energy has two small fermentors fully integrated into the process line which can be used to test process tweaks and new products.

PHOTO: SUSANNE RETKA SCHILL, BBI INTERNATIONAL

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AUGUST 2014 | Ethanol Producer Magazine | 33

FEW

PRODUCTION EXPERTISE: Ethanol producers address issues facing the industry, now and in the future, during the general session.

FULL HOUSE: Attendees take in the general session program on June 10. The 30th anniversary FEW event was held in Indianapolis.

34 | Ethanol Producer Magazine | AUGUST 2014

FEW

Making Connections at

FEW

The 30th anniversary International Fuel Ethanol Workshop & Expo was held in Indianapolis June 9-12.

By Holly Jessen

CORN PROGRESS: Rick Tolman, CEO of the National Corn Growers Association, who is retiring this fall, outlines significant advances in corn farming.

Nearly 560 ethanol producers, representing 86 percent of installed capacity and a total of 205 production facilities, attended FEW this year. Ron Beemiller, president and CEO of WB Services LLC,

and Ray Defenbaugh, president of Big River Resources, participated in the grand opening event. Defenbaugh filled attendees in on Prime the Pump, a new three-year, ethanol producer-led marketing effort to build infrastructure to help retailers offer ethanol blends, and encouraged service providers to support it. “If the industry does well, you will do well,” he said.

The June 10 general session was packed. The keynote address was given by Tom Buis, CEO of Growth Energy, who highlighted the positive changes since last year. Although challenges remain, the industry will triumph if it stays active in the arenas of policy, politics, regulations, public relations and legal battles. “We’re going to win this fight, he said. “It’s not going to be easy but we’re going to win it.”

Two panel presentations featured ethanol producers looking ahead to ethanol’s next stage and long-time members of the industry, who addressed the industry’s future through the lenses of the past. Speaking as part of the producer round table were Paul

WE WILL WIN: Tom Buis, CEO of Growth Energy gave a rousing speech about the industry's fight for market share.

AUGUST 2014 | Ethanol Producer Magazine | 35

FEW

TIRELESS ADVOCATE: Shirley Ball, center, accepts the High Octane award from BBI International representatives Tim Portz and Tom Bryan.

PLANT EXPERTISE: Lars Dunn, who travels around to various ethanol plants as part of his job with DuPont, accepts the Award of Excellence from Tom Bryan.

DATA FLOW: The event featured more than 150 speakers and moderators, including Sharine Ma of Rockwell Automation.

CORN IS KING: The Emerging Corn Production Technologies & Science Forum, an event collocated with FEW, was held June 9. Shown here, left to right, are speakers Fred Below, Beth Calabotta, Robert Little and David Meyer.

FEW

Koehler, vice president of corporate development for Pacific Ethanol Inc., Keith Kor, general manager of Pinal Energy LLC, Neal Jakel, former general manager of Illinois River Energy LLC, James Moe, president of Poet design and construction and Poet plant management, and moderator Tim Portz, executive editor of Ethanol Producer Magazine. The other panel presentation included David Kolsrud, president of DAK Renewable Energy, Dave Vander Griend, CEO of ICM Inc., Phil Madson, president of Katzen International, Larry Johnson, president of LLJ Consulting, Lucy Norton, managing director of Iowa Renewable Fuels and moderator Mike Bryan, chairman of BBI International. Retiring CEO of National Corn Growers Association Rick Tolman also spoke, giving an overview of the state of American corn farming.

Awards were presented to two long-time ethanol industry advocates: Lars Dunn, director of technical service for DuPont Industrial Biosciences, received the Award of Excellence, and Shirley Ball, chairperson of Ethanol Producers and Consumers, received the High Octane Award.

Next yearâ&#x20AC;&#x2122;s FEW is set for June 1-4 in Minneapolis.

Author: Holly Jessen Managing Editor, Ethanol Producer Magazine 701-738-4946 hjessen@bbiinternational.com

FEEDBACK: Marla Luther of the U.S. FDA asks a question following a breakout session presentation.

KICKOFF TIME: Ron Beemiller of WB Services LLC, center, cuts the FEW grand opening ribbon while Tom Bryan of BBI International and Ray Defenbaugh of Big River Resources assist.

AUGUST 2014 | Ethanol Producer Magazine | 37

FEW

VICTORY FIELD: A group of FEW attendees take in a Minor League Baseball game between the Indianapolis Indians and the Durham Bulls on June 11.

MEET AND GREET: Tom Mascara of Connell Brothers Co. of Australia, left, and Jay Shetty of DuPont talk with another FEW attendee.

38 | Ethanol Producer Magazine | AUGUST 2014

NETWORKING: Conference goers enjoy conversation during a break between speaker presentations. The Indiana State Capitol building can be seen in the background.

TALKING SHOP: Jessica Karras-Bailey of RTP Environmental Associates Inc. speaks to other conference goers in the expo hall.

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HEAVY EQUIPMENT: Pat Sexton talks about the New Holland combine on display at this year's FEW.

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AUGUST 2014 | Ethanol Producer Magazine | 39

DISTRIBUTION

REBEL WITH A CAUSE: Good, owner of an independent gas station in Iowa, sells straight premium, E10, E15, E20, E30, E85 and biodiesel blends.

PHOTO: NGAIRE WEST JOHNSON

40 | Ethanol Producer Magazine | AUGUST 2014

DISTRIBUTION

E15 Retailers Get Creative Facing roadblocks from big name gasoline suppliers, nimble gas station owners change course to offer customers midlevel blends.

By Holly Jessen

When Charlie Good, mechanic and owner of Good & Quick in Nevada, Iowa, started preparing to add E15 to his product offerings at his independent gas retail store, he noticed his contract with ConocoPhillips said he couldn’t sell anything with an ethanol content higher than E10. He

called his supplier and was told he’d have to either wait several months, until his contract was up, or pay $30,000 to get out of it. In the end, Good negotiated an agreement that he would put his own canopy up and just fly the ConocoPhillips flag for the remainder of the contract.

Good sees absolutely no downside in letting his ConocoPhillips contract run out and going with an unbranded fuel supplier. Still, he admits it was a difficult decision. “I’m not going to lie to you and tell you I wasn’t afraid of doing this,” he said. “… I know how the big boys can eat you up if they want to.”

Nationwide, there are 135,000 retail gas stations, with 84,000, or 63 percent, under single ownership, says Mike O’Brien, vice president of market development for Growth Energy. And, unbranded or independent retailers,

AUGUST 2014 | Ethanol Producer Magazine | 41

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DISTRIBUTION

ITâ&#x20AC;&#x2122;S A SUMMER THING: Thanks to the U.S. EPA volatility rules, Good had to label E15 for flex fuel vehicle use. Itâ&#x20AC;&#x2122;s confusing for customers, he says.

PHOTO: NGAIRE WEST JOHNSON

some of which are under single ownership and some that are not, are starting to offer E15. Over time, this will give those companies a competitive advantage and, eventually, force major oil brands to start selling it, he adds.

Good agrees, saying that offering alternative fuel blends is a way for independent retailers to survive and excel against oil majors by finding a niche. â&#x20AC;&#x153;I donâ&#x20AC;&#x2122;t believe you will see Caseyâ&#x20AC;&#x2122;s or Kum & Go or any of these majors adapt to these fuels, until the public demands it,â&#x20AC;? he says, naming his two competitors in Nevada.

Since his central Iowa gas station switched to an unbranded fuel, there have been no problems with fuel quality and Good is so confident there wonâ&#x20AC;&#x2122;t be, he 100 percent guarantees the fuel.

So far, the only complaint Good has received is that that store no longer takes ConcoPhillips credit cards. Other than that, his customers couldnâ&#x20AC;&#x2122;t seem to care

less that the canopy no longer displays the name of an oil major. â&#x20AC;&#x153;Brand loyalty means nothing now,â&#x20AC;? he says. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s all about what itâ&#x20AC;&#x2122;s going to cost me.â&#x20AC;?

In fact, the end of May, Good had sold nearly 7,000 more gallons of fuel as compared to the same time last year. â&#x20AC;&#x153;The big mistake that I made was, I only put one blender pump in,â&#x20AC;? he says, adding that although he spent half a million dollars updating his station he wishes he had found the extra money to make all three of his pumps blender pumps. In all, 15 to 20 percent of his fuel sales is ethanol.

There are other benefits. Heâ&#x20AC;&#x2122;s spending 2 to 7.5 cents less a gallon on unbranded fuel stock and saving significantly on credit card fees. His new supplier charges him a 1.7 percent fee on credit card payments from customers, down from 3 percent, his previous rate, saving him about $3,000 in one recent month.

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GROUNDBREAKING: The Mount Ayr Farmerâ&#x20AC;&#x2122;s Co-op gas station, which will be built this fall, received $225,000 in funding from the state of Iowa and the Iowa Renewable Fuels Infrastructure program. Schlapia is at far left and Iowa Gov. Terry Branstad is fourth from the left.

PHOTO: IOWA RENEWABLE FUELS ASSOCIATION

Detour Ahead

Good isnâ&#x20AC;&#x2122;t the only retailer encountering pushback from big-name petroleum distributors attempting to limit retailersâ&#x20AC;&#x2122; options when it comes to selling ethanol blends, says Robert White, director of market development for the Renewable Fuels Association. Thatâ&#x20AC;&#x2122;s been true for E85 but itâ&#x20AC;&#x2122;s particularly been an issue with E15. â&#x20AC;&#x153;The majors, at least until they feel a pinch from competitors, are pretty much either requiring that they put in all new equipment, label it to the nines, which would basically scare off any reasonable person, or they canâ&#x20AC;&#x2122;t put it under their canopy at all.â&#x20AC;?

Darin Schlapia, the branch manager of Creston Farmerâ&#x20AC;&#x2122;s Co-op in Iowa, encountered difficulty when he attempted to negotiate a brand agreement with Cenex for a new Farmerâ&#x20AC;&#x2122;s Co-op location, which will be built in Mount Ayr, Iowa, this fall.

Even though Cenex markets ethanol and

distillers grains and recently acquired a 133 MMgy ethanol plant in Rochelle, Ill., its contract requires gas retailers offer at least two different grades of gas, E10 and straight gas with no ethanol content. In order to sell E15 and other higher blends, as the co-op planned, the gas station would have had to add additional equipment.

Schlapia knew from sales numbers at the Farmerâ&#x20AC;&#x2122;s Co-op station in Afton, Iowa, that the cooperative would sell more gallons of fuel if it offered E15 and other ethanol blends instead of ethanol-free gas. â&#x20AC;&#x153;Afton sells regular 87 gasoline and we might sell 50 gallons a day at the most,â&#x20AC;? he says, adding, for comparison, that the store could sell about 600 gallons of E10 in the same day. â&#x20AC;&#x153;People are definitely choosing the higher ethanol blends. To spend that much money on equipment, just to have another grade of gasoline, was not economical.â&#x20AC;?

The Mount Ayr station will still purchase its fuel from Cenex but, because itâ&#x20AC;&#x2122;s not a Cenex branded station, it isnâ&#x20AC;&#x2122;t

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DISTRIBUTION

GOING MINNOCO GREEN: Retailers that offer E15 and other ethanol blends don’t just have to pay for additional equipment. There’s also the cost of new signage, Klatt says. That’s why funding from the ethanol industry and others, to pay for equipment upgrades, is so attractive to retailers.

PHOTO: MINNOCO

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44 | Ethanol Producer Magazine | AUGUST 2014

allowed to display that logo anywhere.

Schlapia is disappointed in the Cenex stance on E15 and thinks it needs to be reevaluated. And yet, he understands that the company is trying to make sure all Cenex branded stations have a consistent offering of the same fuels, he says.

In Kansas, Scott Zaremba says Phillips 66 created new rules designed to keep him from selling E15 after he’d already moved forward with becoming a registered E15 retailer. The oil company told him he had to sell E15 on a yellow E85 hose, which actually goes against U.S. EPA requirements for selling E15 to heritage vehicles. So he paid $380,000 to get out of his contract and changed the name of his seven gas stations from Zarco 66 to Zarco USA. “They told me if I used anything with 66 in my name they’d hang me out to dry,” he says.

The move was well worth it, in his opinion. “We have to be able to sell whatever products we want out of our retail facilities that we own and we operate,” he says. “… They were just trying to dictate what was going to happen at the facility and we weren’t going to let them.”

In Minnesota, the Minnesota Service Station & Convenience Store Association is working with independent retail stations to band together under one logo and the name Minnoco. So far, four retailers in the Minneapolis, St. Paul area have joined, says Lance Klatt, executive director of MSSA. Although selling alternative fuels isn’t a requirement for Minnoco retailers, most are doing just that. With the help of various funding sources, including Growth Energy, the Minnesota Corn Growers, Minnesota Department of Agriculture and Minnesota Lung Association, Minnoco retailers have received financial support to install equipment to sell E15 and other

DISTRIBUTION

higher ethanol blends. Thatâ&#x20AC;&#x2122;s a big draw for retailers who might not be willing to take a chance on E15 otherwise, Klatt says.

Retailers have responded enthusiastically, appreciating the opportunity to bring new fueling options to their customers and make their own decisions on how to run their business. Klatt expects there will be 25 Minnoco stations offering E15 and higher ethanol blends by November. â&#x20AC;&#x153;Right now we feel like itâ&#x20AC;&#x2122;s the most sought after image in the Minneapolis marketplace,â&#x20AC;? he says, adding that retailers like the look of the logo as well as the opportunity to manage their own brand.

Of those stations already signed up, 15 or 20 percent of their sales are E15, E30 and E85. Thatâ&#x20AC;&#x2122;s driving increased fuel sales to current and new customers. Thereâ&#x20AC;&#x2122;s also work being done in cooperation with the Minnesota Pollution Control Agency and the Minnesota Agriculture Department to

possibly launch E15 statewide, labeling it as the new midgrade fuel, he says.

Author: Holly Jessen Managing Editor, Ethanol Producer Magazine 701-738-4946 hjessen@bbiinternational.com

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Renewable Fuels | Ethanol Group AUGUST 2014 | Ethanol Producer Magazine | 45

Q&A

Water Sage Allan Bly, founder and CEO of U.S. Water Services, discusses the major role water—and his company—play in the ethanol industry.

INTERVIEW BY RON KOTRBA

Water is essential for life—and ethanol production. To the ethanol industry, the name U.S. Water Services is as ubiquitous as they come, thanks to the company’s solid reputation developed over the past two decades, offering ethanol clients increased efficiencies, conservation of resources and boosted profits.

How did U.S. Water Services get its start?

I had been working with Nalco for about 14 years in the sales division and really began seeing a shift in the industry with large-scale rollups taken by General Electric, Danaher and Nalco. I saw a need for a national alternative to middle-market companies that not only offered water treatment, but one that could offer system integration. That’s really what set the whole thing in motion. In 1997, I mortgaged my house, cashed in my 401K and with the help of Stacey, my wife, Randy Meyer, our acting chief sales officer and Mike Bertrang, our acting regional manager for the Minneapolis/St. Paul and surrounding territories, we began our adventure. We started out with zero customers and no revenue, but a unified vision to bring innovative and state-ofthe-art water treatment chemistries together with the equipment and engineering side of the business into an integrated package that maximized on-site efficiencies for the customer.

We got our start in the ethanol industry by providing start-up water treatment services and programs to all but two of the ICM-constructed plants. I think what really helped us keep our stance in the industry, and continue to be a leader, is the fact that we innovate for the customer rather than to the customer. We strive to help them realize continuous improvement, developing

46 | Ethanol Producer Magazine | AUGUST 2014

products that help increase efficiency, production and profitability by removing bottlenecks in their system, which, in turn, help them stay competitive in the market. We realized a long time ago that success isn’t only defined by company growth and milestones; it’s also defined by helping customers realize their success in whatever way that is defined for them.

Could you explain U.S. Water’s integrated solutions approach to water treatment?

What really differentiates us from our competitors is our ability to offer system integration combining water treatment chemistry and process chemistry, engineering, equipment and service that address a variety of concerns including safety, variability control, risk and or exposure mitigation, brand assurance, capital equipment integrity, yield, profitability, final ethanol quality and compliance. Part of the reason U.S. Water has seen so much success in the ethanol sector is our ability to use our integrated approach to find each customer a personalized solution.

One size does not always fit all. By combining chemical, equipment, engineering and service into a seamless program, we provide not only continuous improvement to our customer base, but also measurable immediate and long-term ROI (return on investment).

What does “solution neutral” mean in your approach to water service?

It means that we keep the customer’s best interest in mind. We train our representatives on chemical, mechanical and operational methods so they can focus on, and truly find, the best answer for the customer. It’s not just about the differentiated product offerings

we provide; it’s the knowledge we’ve gained through years of earned industry experience that enables us to package these products together in a solution-neutral way—finding an optimal resolution to your most challenging water, process and energy needs.

How has water use at ethanol plants changed over the past 20 years?

Ethanol plants need a constant supply of water, from 3 to 5 gallons per gallon of ethanol, which equals approximately 500 to 2,000 gallons per minute (gpm), depending on plant size and efficiency. Water conservation is critical as risks of water scarcity, wastewater disposal limitations and sustainability issues mount. Consequently, water use in ethanol production has decreased by half in the past 20 years. The Renewable Fuels Association’s 2014 Ethanol Industry Outlook reports that, in 1994, 5.8 gallons of water was used to produce 1 gallon of ethanol. In 2014, this dropped to 2.7 gallons.

Further efficiencies in water and energy use in the industry are necessary to meet future regulations that will continue to limit water use and impose stricter water discharge regulations. Producers must find ways to minimize water treatment and discharge costs in order to afford costs incurred by potential changes in regulatory compliance requirements. Plant operators must also plan ahead, ensuring they can renew discharge permits, so it is essential to know the plant’s water footprint and operational effects of water quality in dry-grind ethanol production.

How can ethanol producers reuse, recycle and conserve water in their operations?

Q&A

The ethanol production process requires significant amounts of water. Although process flows can be 600 to 1500 gpm, most is recycled within the process. Most of the approximate 40 to 100 gpm of water added to the process is added through the carbon dioxide scrubber. Just as an example, based on U.S. Water’s experience, a mechanicaloperational-chemical program can improve scrubber performance and save 10 to 40 gpm of fresh water.

Other water- and energy-saving techniques include reduction or elimination of direct-injection steamheating and returning condensate to the boiler along with redirecting boiler blowdown to the process, both of which recover high-quality water and energy; cascading water to lower-quality applications and operating cooling and boiler systems at higher cycles of concentration, both of which help conserve water; and using nontraditional water sources such as municipal graywater and plant stormwater.

Two practical complications with water reuse and recycling affect the process side of ethanol production. First, treatment chemicals added to the process remain in the grains, and so must be acceptable and approved for animal feed. Second, anything sent to the beerwell will end up back in the front end and can affect fermentation. The water quality requirements for process water are based on what is bad for the yeast. Limitations on sodium, chloride, sulfate, oxygen, organic acids and even silica are commonly specified.

How big is zero-liquid discharge in the ethanol industry, and how does it work?

While zero liquid discharge (ZLD) systems have primarily been utilized due to a facility’s

inability to discharge water, this impetus is changing as water quality and scarcity are becoming significant issues in many parts of the country. ZLD systems are now in use not only to eliminate discharge, but to save water— potentially reducing freshwater requirements by approximately 30 percent by eliminating wastewater discharges and optimizing water use within the plant. A well-designed system minimizes the volume of liquid waste requiring treatment and produces a clean stream suitable for use elsewhere in the plant. The majority of water in ethanol plants is evaporated, and this must be replaced. The key to reducing overall wastewater flow is to select, and optimize, the equipment and the flow-stream quality generated by the equipment.

An estimated 40 to 50 of the 216 conventional fuel ethanol facilities in the U.S. are operating as ZLD facilities, with several more in the process for discharge- or waterrelated savings. U.S. Water has helped plants achieve ZLD since 2006 with installation of the first-ever cold lime softening ZLD system in a dry-grind ethanol plant in Madera, Calif.

We just completed our 16th ZLD installation most recently at Bushmills and are excited to see the resulting success. We’ve utilized multiple techniques to help customers meet discharge limits and reduce water use, including high-efficiency reverse osmosis, evaporators and crystallizers, as well as utilizing rainwater by using a skimmer and filter system and an evaporation pond to eliminate water discharges.

PHOTO: SATORI PHOTOGRAPHY

AUGUST 2014 | Ethanol Producer Magazine | 47

ENERGY

SEEKING EFFICIENCY: The Plymouth Energy LLC ethanol plant in Merrill, Iowa.

PHOTO: ECM

New Technology Reduces Natural Gas Consumption Installing draft regulator in exhaust stack improves boiler operations, thermal efficiency.

By Ed Sanchez

Making ethanol today is not unlike what the Hatfields did in Appalachia a century ago: set up a still, add the magic ingredients and make product. If you sat down

and chatted with ethanol producers today, the process obviously is more sophisticated now. Among the many efficiency gains

being sought today, they might talk about holding the line or possibly reducing the costs the company pays for natural gas per unit of product, or discuss ongoing efforts to reduce emissions.

The U.S. industrial sector accounts for approximately one-third of all energy used in the country, consuming 32 quadrillion Btu annually while emitting 1,680 million

metric tons of carbon dioxide in the process, according to a May 2005 study of U.S. industrial commercial boilers by the Energy and Environmental Analysis Inc. About 40 percent of this energy consumed in the industrial sector is used to fire boilers to generate steam and hot water. Out of that, it is estimated that 20 to 50 percent of the energy used to fire boilers is lost as

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).

48 | Ethanol Producer Magazine | AUGUST 2014

ENERGY

Plymouth Energy EDR Results Stack Readings, Pre- and Post-Installation Stack Readings (High Fire)

Pre-Install

NG Regulator Pressure (PSI) NG Input Energy (BTU/hr) Flue NOx (PPM) Stack Temperature (0F) Stack Velocity (Ft/Min) Fuel-to-Steam Efficiency (%) Combustion Efficiency (%)

10.0 87,880,000 37 354 5,104 84.26 83.39

Post-Install 7.3 82,875,000 23 349 3,581 89.35 83.93

Steam Production Rate Testing Pre-install Baseline

Test Steam Actual Elapsed NG Regulator Steam Production Number Pressure (PSI) Time (sec) Pressure (PSI) Rate (PSI/min) 1 2

50 - 75 50 - 75

83.00 79.00

10.0 10.0

18.07 18.99

As Found = 18.53 Post Installation

1 2 3 4

71.59 82.90 91.06 77.97

50 - 75 50 - 75 50 - 75 50 - 75

10.0 7.5 7.0 7.3

20.95 18.09 16.47 19.24 As Left = 19.24

3.9% Increase in Steam Production

waste heat. On the high side, that equates to 6.4 quadrillion Btu lost up the stack.

Since ethanol plant boilers are a subset, what solutions are available for operators to reduce wasted heat? Charles Stremick, chief operating officer of Plymouth Energy LLC, Merrill, Iowa, began reviewing the various technological approaches to improve fuel consumption and utilization for industrial boilers with varying cost benefit profiles. Efforts toward greater efficiency historically have been to install systems that will either focus on combustion processes or capture exhaust heat for use in preheating boiler feed water or combustion air, thereby reducing input Btu requirements for process heat loads. These technologies include, but are not limited to, oxygen trim systems, burner control packages, linkageless controls, economizers, flue gas recirculators, modulating dampers and variable frequency drive blower motors.

In larger power boilers, there exist modulating flue dampener systems designed to limit high-negative or excess draft. Excessive draft will pull heat out of the boiler sooner than necessary and before complete heat transfer can occur.

Excessive draft conditions will cause an energy-efficient boiler to operate inefficiently (i.e., combustion and thermal). Optimized modulating draft control systems require a complicated interconnected system of hardware and sensors that cause the flue damper to open or close in response to boiler modulation as well as what is going on in the boiler exhaust stack. History has shown these complex systems are expensive and require a diligent maintenance effort to keep them calibrated.

During his research, Stremick came across a new proprietary technology created by Energy Conservation Management Inc. ECM’s draft regulator

• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •

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AUGUST 2014 | Ethanol Producer Magazine | 49

ENERGY

is an engineered solution that reduces flue stack velocities, allowing for improved heat transfer dwell time and reduced fuel consumption, while maintaining current process heat levels.

After careful review of the various technologies and the associated paybacks, Plymouth Energy chose the ECM solution.

Working with its local partner, Efficium LLC, Sioux City, Iowa, ECM installed its

draft regulator (EDR) technology in both boilers at the Plymouth Energy facility in March.

Installed in the exhaust stack above the roof line, the design of the EDR provides a means to “tune” the boiler for optimal combustion and thermal efficiency, while meeting system load demands and reducing fuel rate consumption at low, medium and high fire rates. Highly developed installation

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50 | Ethanol Producer Magazine | AUGUST 2014

protocols are used to reduce natural gas inputs, excess combustion air, exhaust gas stack temperatures, exhaust velocity and nitrogen oxide (NOx) emissions. These reductions are coupled with improvements in combustion efficiency and fuel-tosteam efficiency, without a reduction in the boiler’s ability to produce steam. A properly installed and tuned EDR leads to a reduction in boiler fuel consumption as illustrated in the accompanying table showing pre- and post-installation stack readings at Plymouth Energy.

Proper installation and tuning of the EDR also increases heat transfer dwell time, resulting in improved heat production level (psi/min) with an increase of 3.9 percent within the boiler system as presented in the accompanying table on Steam Production Rate Testing. The importance of heat transfer dwell time, along with creating an environment for complete combustion, results in a more rapid process heat production capacity with less fuel input.

In addition, the reduction of consumed fuel per unit of product reduces the negative emissions into the atmosphere.

Once the ECM/Efficium team performs the diagnostics of a specific boiler, we quickly determine if this device is beneficial for the client. The unit is installed according to specific procedures, protocols and measurement parameters that ultimately lead to a “hands off ” device for the next 25 years.

When asked how he reached a decision to install the ECM solution over the other technologies utilizing stack gas restrictions, Stremick said, “We looked at other systems, but the cost was much higher and the install required downtime for the plant.” The time targeted for the proposed ECM install was going to coincide with Plymouth Energy’s high margin months, which meant it was imperative that an installation could not affect production.

Plymouth Energy had previously added several other features to its 2,200 HP Superior, two-pass, dry-back, fire tube

ENERGY

power boiler, including a Webster burner, AutoFlame burner control system, oxygen trim, linkageless parallel positioning, and flue gas recirculation system with a Cain economizer and a fixed-drive combustion air blower.

When the results of the installation were complete, ECM presented its findings to the plant management team. “The results did surprise me a bit,” Stremick said.

“They guaranteed 4 percent (in fuel savings) and beat their guarantee by a good margin (almost 2 percent). We are very detailed about tuning our boilers with seasonal changes to make sure they are running as efficiently as possible.” That 6 percent savings goes right to the win column for the company. The white paper on the installation is available at from ECM.

Stremick also pointed out his company was pleasantly surprised by two additional benefits, the first being the elimination of their “boiler rumble,” which is a thermal acoustic harmonic event that often occurs in large power boilers, and second, the notable reduction in the production of NOx emissions. “The NOx was reduced by approximately 38 percent on one boiler and nearly that much on the other boiler as well.

This makes a green company even greener and more competitive in certain states and countries,” Stremick said.

Author: Ed Sanchez Director of Engineering, Energy Conservation Management 480-443-2397 esanchez@ecmgmt.net Contributing Author: Jim Hatfield, freelance writer, Scottsdale, Arizona

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AUGUST 2014 | Ethanol Producer Magazine | 51

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