INSIDE: CORN VARIETY INCREASES PLANT EFFCIENCY AUGUST 2015
STAR OPERATOR Energy Systems Chief Shines in Minnesota Page 42
Technologies Tweak Dehydration, Transform Distillation Page 36
Digging into the Details of Successful Product Trials Page 30
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2015:
THE YEAR OF
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CONTENTS
AUGUST 2015
DEPARTMENTS 6
VOLUME 21 ISSUE 8
FEATURES
EDITOR'S NOTE Low Risk And Reward By Tom Bryan
7
AD INDEX
10 THE WAY I SEE IT
Queensland to Implement Biofuels Mandate By Mike Bryan
11 EVENTS CALENDAR
30
TESTING
Trialing Innovation
New products put to the test
By Susanne Retka Schill
INNOVATION
Drilling into Distillation, Dehydration Technologies introduced to help relieve bottlenecks
By Susanne Retka Schill
12 VIEW FROM THE HILL
36
EPA Must Listen To the People By Bob Dinneen
14 DRIVE
Decade of Success Under the RFS By Tom Buis
16 GRASSROOTS VOICE
EPA’s RFS RVOs: WTF? By Ron Lamberty
18 GLOBAL SCENE
Ethanol Working to Benefit Brazil, America, the World By Leticia Phillips
42
PROFILE
50
FEW
Operations Leader Optimizes Aging Plant
‘Promoting Innovation Connecting the Industry’
By Holly Jessen
By Holly Jessen
Bob Jewell’s efforts save water, electricity, natural gas, among other benefits
Revisiting the 31st annual International Fuel Ethanol Workshop & Expo
CONTRIBUTION
20 BUSINESS BRIEFS 22 COMMODITIES 24 DISTILLED 64 BUSINESS MATTERS
Iowa Supreme Court Says ‘No’ To Natural Gas Tax Challenge By Francina Dlouhy
66 MARKETPLACE
56
SPOTLIGHT
ACE Dreams Big, Values Grassroots
Association focuses on personal stories to garner support for ethanol
By Holly Jessen ON THE COVER Bob Jewell is energy systems chief at Chippewa Valley Ethanol Co. PHOTO: LANE OLSON
4 | Ethanol Producer Magazine | AUGUST 2015
60
CORN
New Corn Traits Yield Homegrown Enzymes
Plymouth Energy trials demonstrate performance impacts
By Tim Tierney
Ethanol Producer Magazine: (USPS No. 023-974) August 2015, Vol. 21, 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.
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EDITOR'S NOTE
Low Risk and Reward Ethanol producers who host new product trials can get perks in exchange for their accommodations. Plants willing to test out and scale-up novel
Tom Bryan
President & Editor in Chief tbryan@bbiinternational.com
things are given opportunities to be first to market with new wares, for example, and they sometimes land discounts on future product purchases and licensing fees. These rewards haven’t always been risk-free, of course—stories of trials gone wrong exist—but sophisticated planning has made serious blunders rare. In “Trialing Innovation,” on page 30, EPM Senior Editor Susanne Retka Schill reports on how today’s ethanol industry vendors have turned product and technology trials into relatively low-risk opportunities for producers to boost throughput or make efficiency gains. The story explains that ethanol plants and their vendor partners usually take several weeks or months to plan trials, establish patent protections and gather baseline data. Vendors understand that producers will host trials only when the upside is clear and the risk is low. Demonstration-scale testing comes up again in our page-36 feature, which takes a look at debottlenecking applications aimed at helping producers accommodate greater throughput. In “Drilling into Distillation, Dehydration,” Retka Schill reports on four new technologies designed to enable ethanol plants to free up their molecular sieves, or replace them altogether, to accommodate greater flow rates and more. Our cover story, on page 42, highlights one ethanol plant employee who has helped drive continuous change at an Upper Midwest facility. In “Operations Leader Optimizes Aging Plant,” EPM Managing Editor Holly Jessen introduces us to Bob Jewell, the veteran energy systems chief at Chippewa Valley Ethanol Co. in Benson, Minnesota. With nearly two decades of cross-disciplined ethanol plant experience under his belt, Jewell is currently overseeing the installation of a new high-efficiency boiler at CVEC. Like so many optimization projects Jewell has been a part of at CVEC, the new energy center will add yet another layer of improved reliability and efficiency to the plant’s operations. With many of our readers attending the American Coalition for Ethanol’s annual conference in Omaha, Nebraska, in mid-August, we offer a timely update on the Midwestbased ethanol trade organization. In “ACE Dreams Big, Values Grassroots,” on page 56, Jessen lays out the group’s clear-eyed vision for market growth. ACE, as they say, is good people. Finally, I want to thank everyone who attended this year’s International Fuel Ethanol Workshop & Expo in Minneapolis. What a show! With over 2,000 people, including 500-plus producers, in attendance this year, it was the best-attended FEW since 2009. That robust turnout says a lot about the state of our industry—committed and steadfast. Check out the photos on page 50.
FOR INDUSTRY NEWS: WWW.ETHANOLPRODUCER.COM OR FOLLOW US: 6 | Ethanol Producer Magazine | AUGUST 2015
TWITTER.COM/ETHANOLMAGAZINE
VOLUME 21 ISSUE 7
ADVERTISER INDEX
EDITORIAL
President & Editor in Chief Tom Bryan tbryan@bbiinternational.com Vice President of Content & Executive Editor Tim Portz tportz@bbiinternational.com Managing Editor Holly Jessen hjessen@bbiinternational.com Senior Editor Susanne Retka Schill sretkaschill@bbiinternational.com News Editor Erin Voegele evoegele@bbiinternational.com Copy Editor Jan Tellmann jtellmann@bbiinternational.com
ART
Art Director Jaci Satterlund jsatterlund@bbiinternational.com Graphic Designer Raquel Boushee rboushee@bbiinternational.com
PUBLISHING
Chairman Mike Bryan mbryan@bbiinternational.com CEO Joe Bryan jbryan@bbiinternational.com
SALES
Vice President of Operations Matthew Spoor mspoor@bbiinternational.com Sales & Marketing Director John Nelson jnelson@bbiinternational.com Business Development Director Howard Brockhouse hbrockhouse@bbiinternational.com Senior Account Manager/Bioenergy Team Leader Chip Shereck cshereck@bbiinternational.com Account Manager Jeff Hogan jhogan@bbiinternational.com Account Manager Tami Pearson tpearson@bbiinternational.com Circulation Manager Jessica Beaudry jbeaudry@bbiinternational.com
2015 National Advanced Biofuels Conference & Expo 58 2015 Fall Ethanol Map 67 Arisdyne Systems 33 BBI Project Development 65 BetaTec Hop Products 17 Buckman 27 CPM Roskamp Champion 44 Direct Automation 55 EcoEngineers 11 Fagen Inc. 9 Florida East Coast 48 Fluid Quip Process Technologies, LLC 34 Gamajet 45 Growth Energy 2 Hydro-Klean LLC 35 ICM, Inc. 63 INTL FCStone Inc. 39 J.C. Ramsdell Enviro Services, Inc. 20 Lallemand Biofuels & Distilled Spirits 13 Leaf Technologies 25 Louis Dreyfus 62 Mason Manufacturing, LLC 21 MPW Industrial Services 59 Nalco, an Ecolab company 38 NCAT, Inc. 24 New Holland Agriculture 8 Novozymes 15 Phibro Ethanol Performance Group 19 POET-DSM Advanced Biofuels 68 Solenis LLC 3 Sukup Manufacturing Co. 49 Syngenta: Enogen 28-29 Thermal Refractory 32 Tower Performance, Inc. 41 Tranter 26 U.S. Grains Council 61 U.S. Water Services 5 Victory Energy Operations, LLC. 40, 46-47
Traffic & Marketing Coordinator Marla DeFoe mdefoe@bbiinternational.com 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 2015 | Ethanol Producer Magazine | 7
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THE WAY I SEE IT
Queensland to Implement Biofuels Mandate By Mike Bryan
The state of Queensland in Australia will be introducing legislation in Parliament that would, according to its press release, “Provide the first step toward growing our biofuels and biomanufacturing industries.” Currently the introduction rate would be 2 percent,
however, there is strong pressure among ethanol stakeholders to set the target higher. “By increasing the mandate over time and in a measured way, we will help to ensure sustainable growth of both supply and demand,” said Mark Bailey, Queensland government minister of main roads, road safety and ports as well as energy and water supply. This mandate has already met stiff opposition from the oil industry in particular and has been, as one might expect, politicized by those in opposition such as raising fuel prices, engine performance, consumer acceptance, environmental concerns and more. The difference, however, with this proposed legislation is that it does have significant bipartisan support. The government has held numerous regional meetings across the state and has sought considerable input from all concerned parties. There is a bit of a twist in this proposal that sets it apart from previous proposals in that the legislation would aim to create a foundation for a broader biomanufacturing climate. The Queensland government said that this legislation, “will provide certainty to the biofuel industry so that it can invest, innovate, grow and create jobs. While a thriving biofuels industry is highly beneficial in its own right, it will also help create the foundation for a new high-value, knowledge-based biomanufacturing industry for Queensland.”
The Liquid Fuel Supply (Biofuel Mandate) Amendment Bill 2015 prescribes a phase-in of ethanol blended fuel, with a 2 percent target to commence by July 1, 2016. While the legislation also prescribes a mandate for biodiesel, they have stated that further consultation would be required on that issue. This has raised concern from biodiesel manufactures who strongly believe the mandate for ethanol and biodiesel, should be enacted concurrently. The primary ethanol feedstock in Queensland will be from the sugarcane industry, primarily in the far north and sorghum grown mostly in the southern region of the state. Currently, there is only one grain-to-ethanol plant in the country, located in Dalby, Queensland. The largest producer in Australia is Manildra, based in the state of New South Wales, using mostly a wheat-based feedstock. In late June, when this was written, the chances of this legislation being adopted were quite good. The issues to be resolved will be the percentage, the ability of petroleum retailers to opt out based on supply, and a number of other factors such as consumer education, compliance and reporting requirements and penalties for noncompliance. It’s a great step in the right direction for a country that has not had a great deal of environmental focus from state and federal government. It is the hope of the biofuels and biomanufacturing industry that it will attract investment and help build a clean, renewable energy future for the state and the country. That’s the way I see it.
Author: Mike Bryan Chairman, BBI International mbryan@bbiinternational.com
10 | Ethanol Producer Magazine | AUGUST 2015
EVENTS CALENDAR ACE Conference August 19-21, 2015 Hilton Omaha Omaha, Nebraska
ACE’s annual conference is tailored to the interests and needs of the people of ethanol, the folks in the trenches. It’s a gathering of ACE’s commitment to connect ethanol producers with the farmers, researchers, retailers, and support businesses to continue what all of them started a long time ago. It’s also an excellent place to learn and share ideas. And, it has all the fun of a family reunion. 605-334-3381 | www.ethanol.org/events/conference
National Advanced Biofuels Conference & Expo October 26-28, 2015 Hilton Omaha Omaha, Nebraska Produced by BBI International, this national 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. 866-746-8385 | www.advancedbiofuelsconference.com
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International Biomass Conference & Expo April 11-14, 2016 Charlotte, North Carolina 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. 866-746-8385 | www.biomassconference.com
2016 International Fuel Ethanol Workshop & Expo June 20-23, 2016 Wisconsin Center Milwaukee, Wisconsin Now in its 32nd year, the FEW provides the ethanol industry with cutting-edge content and unparalleled networking opportunities in a dynamic business-tobusiness environment. As the largest, longest running ethanol conference in the world, the FEW is renowned for its superb programming—powered by Ethanol Producer Magazine —that maintains a strong focus on commercial-scale ethanol production, new technology, and near-term research and development. The 2014 event drew more than 1,800 people from over 31 countries and from nearly every ethanol plant in the United States and Canada. 866-746-8385 | www.fuelethanolworkshop.com
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VIEW FROM THE HILL
EPA Must Listen to the People By Bob Dinneen
The U.S. Constitution, one of the most important documents in our nation’s history, begins with three simple, yet very powerful, words: “We the people.” Over the course of my career,
I have been fortunate to work on behalf of the people. I have also had the pleasure of working with people who are passionate about the biofuels industry. Folks who wholeheartedly believe that renewable fuels can reduce our nation’s dependence on foreign oil and revitalize rural economies. In August, Washington, D.C., changes character, transforming itself from a bustling city into a more sedate town. August is when members of Congress return to their home districts and states. While at home, these members often host town hall meetings where they give their constituents—their people—an update on what is happening in Congress, take questions, and listen to concerns. After all, as public servants, members of Congress are supposed to represent the people. But members of Congress are not the only representatives of the people. Our government institutions are also charged with looking out for the best interests of the people. In June, officials from the U.S. EPA traveled to Kansas City, Kansas, for a public hearing that gave the agency a chance to hear what the people had to say about the agency’s implementation of the renewable fuel standard (RFS). People from all walks of life, from farmers in the heartland to academics in our nation’s largest cities, attended the hearing because they wanted the EPA to hear their voices. And what the EPA heard was a near unanimous chorus of frustration with the way the agency is implementing the RFS. Conrad Clement of Conrad Clement Farms summed up the feeling of those in attendance when, during his testimony, he called the RFS “America’s most successful policy in 40 years,” but charged that the EPA was “tearing [the RFS] apart.” Clement urged the EPA to “endorse the original RFS as it was.” I’ve said time and time again that there is nothing wrong with the RFS that cannot be fixed by what is right with the RFS. All the EPA has to do is to implement the statute as Congress intended. But
12 | Ethanol Producer Magazine | AUGUST 2015
instead of setting the renewable volume requirements at the levels that Congress established, the agency is proposing to cut them by 20 percent, or a total of 11.3 billion gallons, over the course of three years. I can assure you that the oil companies will happily fill the void with gasoline and diesel fuel refined from dirtier and more costly sources of crude oil. Under the RFS, ethanol produced at current levels has virtually wiped out our nation’s need to import finished gasoline, reducing these imports from 600,000 barrels per day a decade ago to near nothing today. Ethanol also drastically reduces greenhouse gas emissions, removing the equivalent of 8.4 million cars from the road each year. Instead of building on the success of the RFS, however, the EPA showed in its proposal that it clearly bought into Big Oil’s false claims that ethanol has reached its saturation point at a 10 percent ethanol blend, and that higher-level ethanol blends, such as E15 and E85, are not yet available enough to justify a higher blending requirement. The EPA proposal is creating a tsunami of RINs. When EPA considers whether the supply of renewable fuel is “adequate” to meet statutory volumetric requirements, stocks of RIN credits must be taken into account. After all, RINs represent gallons of renewable fuels that were produced and are part of the physical fuel supply. To completely dismiss carryover RINs from the determination of available supply is not only illogical but also creates disincentives for investing in pumps and technology. The EPA needs to let the RIN market work as intended to drive investment and innovation. I commend the EPA for going to the heart of the conversation and holding the hearing in the Midwest, but the agency cannot simply discard the comments at the next convenient opportunity. The EPA must listen to the voice of the American people, who have an outspoken desire for a strong RFS, and not the oil industry.
Author: Bob Dinneen President and CEO, Renewable Fuels Association 202-289-3835
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DRIVE
Decade of Success Under the RFS By Tom Buis
Ten years ago, the renewable fuel standard (RFS) was passed by a bipartisan Congress and signed into law by President George W. Bush. This month, we are not only commemorating the creation of our nation’s most successful energy policy in the past 40 years. We are also celebrating a decade of job creation, clean air, innovation, and increased energy independence and consumer choice. But even as we are celebrating these victories, the U.S. EPA is deliberating the fate of the RFS. In its latest RFS proposal for 2014’16, EPA unfortunately chose to side with the obligated parties who have deliberately refused to live up to their obligation to provide consumers with a lower-cost, higher-performing, homegrown, renewable fuel option at the pump. Everyone in Congress, as well as all parties in the renewable fuels and oil industries, knew when this legislation was debated and passed into law that the ambitious goals of the RFS could only be met by introducing higher blends into the market. Now those obligated parties, controlled primarily by Big Oil, are being rewarded for their refusal to live up to their obligation. EPA should instead reward the hardworking men and women who embraced this promise and built ethanol plants, communities and families in towns across rural America. The RFS has been a clear success. Today, because of the RFS, there are more than 200 ethanol biorefineries across the country and dozens of projects that will make advanced or cellulosic biofuels. The renewable fuels industry supports nearly 400,000 good American jobs that will never be outsourced. The RFS is the only policy to ever have loosened the oil industry’s stranglehold on the liquid fuels marketplace and the only policy that will help us kick our dangerous addiction to foreign oil. Since the enactment of the RFS in 2005, our dependence on foreign oil has been cut by more than half, from 60 percent to 27 percent.
14 | Ethanol Producer Magazine | AUGUST 2015
And, instead of sending nearly a billion dollars a day overseas, we are investing right here at home. At the same time, the RFS enables competition that benefits us all and gives consumers the sorely needed ability to choose a fuel that meets their price and performance needs. By using increasing amounts of biofuels under the RFS, greenhouse gas emissions will ultimately be reduced by 138 million metric tons—the equivalent of taking 27 million cars off the road. In 2014 alone, the 13.4 billion gallons of ethanol blended into gasoline in the United States helped reduce greenhouse gas emissions by approximately 38 million metric tons, which is the equivalent of removing roughly 8 million cars from the road. EPA’s proposal would jeopardize our ability to realize all of these important goals contained in the RFS. I hope EPA was listening when hundreds of ethanol supporters from across the country made their way to Kansas City to personally testify about the importance of renewable fuels in their lives. I hope EPA was watching when Iowa’s Gov. Terry Branstad ignited the Rally for Rural America with the cry, “Don’t mess with the RFS!” And most of all, I hope EPA carefully read the thousands upon thousands of detailed comments submitted by supporters of our industry. Just as we successfully commented on the original 2014 RVO proposal by EPA, which ultimately forced EPA to reconsider its initial flawed rule, we are confident that our comments will highlight the changes that are necessary to meet the goals of the RFS. Our message is clear—EPA should uphold the original intent of the RFS passed by Congress and provide our industry with the certainty we need to continue to succeed.
Author: Tom Buis
CEO, Growth Energy 202-545-4000 tbuis@growthenergy.org
GRASSROOTS VOICE
EPA’S RFS RVOs: WTF? By Ron Lamberty
When the U.S. EPA dumped the renewable fuel standard’s (RFS) required volume obligation (RVO) numbers for 2014, 2015 and 2016 on the last Friday in May, I’m sure many of you thought, “WTF?” Me too. I thought, “What’re they figuring?”
OK, I thought that other version, too—but after reading EPA’s proposed rule, I wondered how they ended up where they did. Sometimes, they seem to “get it.” They appear to have learned RINs don’t increase fuel prices and even seem to get why we complain about obligated parties refusing to comply with the law. But in the end, EPA seems to channel Homer Simpson when he said “Just because I don't care doesn't mean that I don't understand.” They get it … but they’re doing nothing about it. But maybe they don’t get it. EPA laments E15’s lack of impact on ethanol volume while ignoring all the roadblocks they’ve created themselves. They don’t seem to realize every station that sells E15 sells more than 10 percent ethanol overall, exceeding the socalled “blend wall.” There is ample proof most stations could sell E15 with little equipment expense, and the absence of real-world damage from E15 should give pause to EPA’s belief in both those ghost stories. But it hasn’t. Instead EPA is “figuring” heavily on the blendwall in its proposed RVOs for 2015 and 2016. The term blendwall is used 34 times in the rule, and EPA says “The ability to go beyond the E10 blendwall is a function of actions taken by various fuel market participants, including obligated parties, renewable fuel producers, distributors and marketers, gasoline and diesel retailers, and consumers.” Having apparently bought in to refiners’ arguments that everyone has to pitch in to get past the blendwall, EPA seems to be ignoring the fact that everyone else already has. The only “fuel market participants” that have refused to take a single step to get over the blendwall are the obligated parties—who are, by definition, the only ones required by law to do so. Renewable fuel producers have been ready to provide the required volumes for more than two years.They applied for a waiver for E15 to provide an option motorists could use in existing
16 | Ethanol Producer Magazine | AUGUST 2015
vehicles, and fuel marketers could blend and sell using existing equipment. The ethanol industry has spent millions on promotional and educational programs, all the while battling oil-industry misinformation campaigns and efforts to take away every tax break or grant program that would help marketers help oil companies meet the statutory RVOs. Auto manufacturers have produced vehicles capable of using 85 percent ethanol for almost 20 years, and are going on year four of cars and light trucks that specifically approve E15 as a fuel. All in all, cars and light trucks built and warrantied for E15 outnumber “premium only” vehicles about three to one, and diesel cars and light trucks by five or six to one. Even if EPA doesn’t trust its own numbers, manufacturer approved E15 vehicles are more widely available than all the premium and diesel vehicles on the road. With those numbers in mind, obligated parties still require branded stations to sell premium gasoline, and diesel fuel is widely available, while oil company supply agreements specifically prevent station owners from offering E15. Oil companies have also sued EPA every year to avoid complying with the RFS. Those are the actions taken by obligated parties to get past the blendwall. They don’t want to. But that’s understandable. That’s Big Oil being Big Oil. No, the real problem with the weakening of the RFS is that the obligated parties know they aren’t really obligated. All Big Oil has to do is read the last two proposed rules to know EPA doesn’t want to enforce the law. They go to great lengths to redefine supply as what oil companies are comfortable selling and defend Big Oil blendwall mythology while ignoring all the roadblocks they’ve jointly established to make sure the imaginary wall stays in place. The RFS will work if EPA remembers what their E and P stand for, and do their job. Big Oil has responded like this to every fuel regulation change in history, EPA has always held its ground, and Big Oil has always (reluctantly) complied. They would this time, too.
Author: Ron Lamberty Senior Vice President American Coalition for Ethanol 605-334-3381 rlamberty@ethanol.org
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GLOBAL SCENE
Ethanol Working to Benefit Brazil, America, the World By Leticia Phillips
In late June, Brazilian President Dilma Rousseff visited Washington, D.C., to strengthen the relationship between two of the Western Hemisphere’s biggest nations. But as with any successful relationship, compromise is key on
important issues, and Rousseff discussed several bilateral issues critical to the global ethanol trade with President Obama. The issue: The renewable fuel standard (RFS) is significant for both America and Brazil’s ethanol industries, and was a central topic during Rousseff’s visit. The U.S. EPA identifies sugarcane ethanol as an advanced biofuel because it reduces emissions 61 percent compared to gasoline. Between 2012-’14, more than 1 billion gallons of sugarcane ethanol flowed from Brazil to the U.S., and while sugarcane ethanol comprised only 2 percent of all renewable fuel consumed by Americans, it provided nearly 15 percent of U.S. advanced biofuel supply. EPA’s recent RFS proposal significantly reduced target volumes for advanced biofuels below congressionally mandated levels, but increased requirements for advanced biofuels in 2015 and 2016. Our position: Reducing RFS target volumes threatens the future of U.S. ethanol supplies. EPA should protect the RFS’ integrity by maintaining volume requirements for advanced biofuels, and should guard against using the regulatory process to impose anticompetitive requirements on foreign biofuels. The issue: Brazil and the U.S. must consider transportation sector emissions as negotiators work toward an international climate change agreement at the United Nations Climate Change Conference, on Dec. 21. The World Energy Council reports fossil fuels currently represent 63 percent of all global emissions, with transportation fuel generating 28 percent of total U.S. emissions and 17 percent total Brazilian emissions. Transportation emissions aren’t limited to ground transport, and biofuels must become viable alternatives to aviation fuel. The international aviation industry is committed to growing at a carbon-neutral rate until 2020 then reducing emissions 50 percent by 2050, but biofuel production and consumption must expand to achieve this goal. Preserving the environment is a key aspect of this drive. Deforestation has fallen sharply across the Amazon rainforest, and Rousseff pledged to “restore and reforest” 12 million hectares by 2030 during her visit. Brazil’s sugarcane ethanol industry has also expanded innovative sustainability
efforts to help slow climate change, including promoting a double-crop system in production, expanding mechanized harvesting instead of preharvesting burning techniques, and using leftover plant material for bioenergy. Our position: Ethanol is arguably the cheapest and most sustainable option available to replace fossil-based transportation fuel at large scale. Some commercial technologies can reach virtually zero emissions, and every gallon of biofuel creates long-term climate benefits and shortterm public health benefits. The U.S. and Brazil must work together to develop solutions on a global scale, including incentive policies (tax or environmental) to encourage production and consumption, private sector cooperation to drive investment and innovation, and measures to protect the environment. The issue: California’s Low Carbon Fuel Standard administers a market-based approach to reducing carbon intensity from transportation fuels 10 percent from a 1990 baseline by 2020 through the California Air Resources Board. CARB is readopting the LCFS to reflect new indirect landuse change modeling and carbon intensity life-cycle analysis, both of which confirm sugarcane ethanol as the lowest-carbon biofuel available at commercial scale today. While this is primarily a state issue, LCFS readoption will have a major impact on America’s single largest transportation fuels market and other states launching their own LCFS policies. Our position: Brazilian sugarcane ethanol is uniquely positioned to help reduce emissions. UNICA encourages CARB to work with Brazil’s technical representatives to capture nuances like electricity cogeneration from biomass and the double-crop production system, and encourages the federal government to support smart biofuels policy at the state level. Brazil and the U.S. show pragmatic public policy and cooperation can create economic growth and environmental benefits for both countries. Earth has an urgent need for low-carbon, sustainable transportation fuels, and as the world’s two biggest ethanol producers and exporters, our countries have much to share in experience and technology. Brazil and the U.S. have a responsibility to collaboratively build a global biofuels market providing clean, affordable, and sustainable solutions to the planet’s growing energy needs. Brazil’s government and sugarcane ethanol industry are committed to not only expanding the mutually beneficial relationship with America, but to growing the international biofuels market. Author: Leticia Phillips North American Representative, Brazilian Sugarcane Industry Association, UNICA 202-506-5299 leticia@unica.com.br
18 | Ethanol Producer Magazine | AUGUST 2015
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BUSINESS BRIEFS The National Renewable Energy Laboratory recently recognized the professionals behind the lab’s greatest achievements for the past year. Min Zhang was named distinguished innovator Zhang for her work to support the U.S. Department of Energy’s Bioenergy Technology Program by engineering advanced microbes to further the adoption of cellulosic biofuels. Zhang has contributed 80 peer-reviewed papers, numerous meeting abstracts, and 21 issued patents. She helped transfer foundational biotechnologies to companies with three commercial licenses incorporating her innovations, including DuPont’s cellulosic ethanol facility in Nevada, Iowa. Arisdyne Systems Inc. has announced that Ryan Heuer, a 15-year ethanol industry veteran, will contribute additional technical sales and business development expertise to the company and take the lead coordinating and directing current Controlled Flow Cavitation solutions for starch and corn fiber conversion initiatives to the ethanol market. Prior to joining Arisdyne Systems, Heuer worked in plant operations at the High Plains plant in Colwich, Kansas, followed by 10 years with Novozymes, with an interim
People, Partnerships & Deals
three years at ICM marketing and selling large-capital, new technology equipment. Norfolk Southern Corp. has recognized 66 customers with its Thoroughbred Chemical Safety Award for 2014, including Abengoa Bioenergy of Illinois’ Granite City, Illinois, plant, Cargill Inc., Green Plains Renewable Energy, Southwest Iowa Renewable Energy LLC, and Valero Energy Corp. aGodavari Biorefineries Ltd., an Indiabased manufacturer of foods, biofuels, specialty chemicals, power and related products using sugarcane as the primary feedstock, recently announced that it has raised $15 million in equity from funds managed by Mandala Capital. The investment is part of Godavari’s strategy to enhance returns by strengthening the portfolio of higher-margin products to address the significant and growing demand for chemical products made from renewable feedstock. Funds invested by Mandala Capital will support the development of a new manufacturing plant for specialty chemicals, increased ethanol production capacity, debottlenecking of existing plants, and strengthening the company’s utility infrastructure. It will also fund an expanded facility for research and development.
STRONG.
The Renewable Fuels Association has been awarded the 2014 TRANSCAER Achievement Award. This is the third year in a row that RFA has been awarded this honor as it continues working to ensure first responders have the proper training and resources to respond to ethanol-related emergencies. The award is given to recognize the achievements of individuals, companies, and organizations which have gone beyond the normal call of duty to advocate, demonstrate and implement the principles of TRANSCAER. TRANSCAER is a volunteer coalition that works to ensure our nation’s emergency responders are educated with the most up-to-date information to ensure they and their communities are prepared to handle hazardous material disasters. Sweden-based Taurus Energy AB and Canadian-based Lallemand have signed an agreement for collaboration with respect to the development, marketing, sale and licensing of Taurus' Gen 2 XyloFerm yeast platform on the U.S. market. Ag Growth International Inc. has announced the previously disclosed arrangement to acquire the Westeel division of Vicwest Inc. was completed in May. Headquartered in Winnipeg, Manitoba, Westeel provides grain storage solutions offering a wide range of on-
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farm and commercial products for the agricultural industry. Aras recently announced Poet LLC has selected the Aras PLM Solution Suite to drive product development and engineering best practices, improve processes and product tracking, and improve visibility into product-related data throughout the enterprise and extended supply chain. Poet will implement Aras as an integral part of its product development processes, tracking product and process data and ensuring visibility to all participants in the process. The USDA has announced the appointment of Seth Meyer as the World Agricultural Outlook Board chairman. Meyer previously served as senior economist with the Office of Chief Economist Meyer on assignment to WAOB. Meyer will be responsible for the monthly forecasts of the World Agricultural Supply and Demand Estimates report and the work of the Joint Agricultural Weather Facility. Meyer will also serve as Program Chairman for USDAâ&#x20AC;&#x2122;s largest annual meeting, the Agricultural Outlook Forum. Meyer joined USDAâ&#x20AC;&#x2122;s Office of the Chief Economist in 2013 as a senior economist for domestic agricultural policy. Prior
to joining USDA, he spent the previous two years as a part of the Food and Agriculture Organization of the United Nations in the Global Perspectives Studies Unit. Meyer also spent 12 years as a researcher and faculty member with the University of Missouriâ&#x20AC;&#x2122;s Food and Agricultural Policy Research Institute. Aventine Renewable Energy Inc. has appointed Jeff Ewing as director of risk management, marketing for the companyâ&#x20AC;&#x2122;s four ethanol plants, including two in Pekin, Illinois, and two Ewing in Aurora, Nebraska. Ewing began his career in commodities in 1980, and has been in the wet milling and ethanol industry as a supply chain manager and director of risk management since 2005. Most recently, Ewing served as director of trading and hedging with Abengoa Bioenergy in Chesterfield, Missouri, from 2011 to 2015. His prior involvement in the ethanol and wet milling industry also included serving as director of supply chain for Roquette America Inc. in Keokuk, Iowa, from 2006 to 2008, and as director of risk management for Hawkeye Energy in Ames, Iowa, from 2008 to 2011. asdGevo Inc. has entered into an agreement with FCStone Merchant Services LLC to
originate and supply corn for its plant in Luverne, Minnesota. Engaging FCStone to conduct Gevoâ&#x20AC;&#x2122;s corn purchasing at Luverne is expected to free up more than $1 million of working capital, which has previously been tied up in corn inventory. The Roundtable on Sustainable Biomaterials kicked off its annual General Assembly meeting with a delegation vote on the new â&#x20AC;&#x153;Low iLUC Risk Biomass Criteria and Compliance Indicators.â&#x20AC;? The standard was approved by consensus and will be an optional module for operations undergoing RSB certification. asdfBruce Jamerson has joined Ensyn Corp.â&#x20AC;&#x2122;s board of directors. He will represent Ensynâ&#x20AC;&#x2122;s Preferred A shareholders, replacing Bill Weld, who continue to serve on the board, having been elected to do so Jamerson by Ensynâ&#x20AC;&#x2122;s shareholders in the last annual general meeting. Jamerson has served as chairman and CEO of Mascoma Corp. and was president and a board member of VeraSun Energy Corp. He is currently president of Conifer Investments LLC and holds board positions with Benson Hill Biosystems and Novita LLC.
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COMMODITIES
Prices & Market Analyses
Natural Gas Report
Lower production may impact prices July 1—Natural gas production growth in 2014 was spectacular. While 2015 was expected to be muted on the growth front, substantial declines in domestic dry gas production were not anticipated. June data has challenged this forecast. Industry reports suggest two reasons for the decline in production. Producers from the Marcellus shale formation have seen margins decline throughout 2015, ultimately causing shut-in production in the region. Simultaneously, projects for midstream gathering and transmission out of the region have caused a temporary reduction in flow out of the region as pipeline maintenance and upgrades have reduced the amount of gas that can escape the already constrained northeast production area. Maintenance that was directed toward increasing the overall takeaway capacity from the region was expected to be complete by mid-June, but delays extended the projects to upgrade Transco’s Leidy line through the last week of the month. A look at daily domestic production on the accompanying chart hints at the possibility that the slide may be reversed or at least stabilizing near 72 Bcf per day. If production remains in the range of 72 Bcf per day through the summer, it would be sufficient to maintain a robust rate of injection and drive inventories close to the maximum capacity level. If production continues to decrease, the risk of storage shortages is lower and prices
by Ben Straus
will respond accordingly. While it’s still a bit early to declare that domestic production is stabilized, the last two weeks of data are encouraging for natural gas buyers.
Corn Report
Too much rain could still impact corn market July 1—The market has been under pressure as the major corn growing region got planted early and has received beneficial moisture. This had slowed producer movement and encouraged managed money to garner a short position in corn. Such a position has put additional pressure in the market. A reversal in the market such as what was observed prior to the June USDA report and at June month-end allowed the producer to take advantage of a bounce and make sales. As a consequence, this relaxed the cash market. In the June USDA supply and demand report there was only one significant change in the old crop demand table, a reduction of corn used for ethanol. The USDA decreased ethanol corn demand by 25 million bushels and, as a result, increased carryout by the like amount, to 1.876 billion bushels. We are still relatively early in the growing season. At this time too much rain, preventing plantings of soybeans and slowing corn progression, could be a factor. However, outside influences may play a big role such as the U.S. dollar, soybean market, corn demand from ethanol and the livestock sectors and even more so producer movement. The June Comments in this column are market commentary and are not to be construed as market advice.
22 | Ethanol Producer Magazine | AUGUST 2015
by Jason Sagebiel
30 acreage offered more insight on revised acreage estimates (watch soybeans) and the stocks report. The report indicates how much corn is left on and off the farm and this could influence cash markets during the latter part of the growing season.
Regional Ethanol Prices ($/gallon) Front Month Futures (AC) $1.577
DDGS Report
Rack
1.720
1.700
Midwest
1.560
1.717
East Coast
1.660
1.755
Regional Gasoline Prices ($/gallon) by Sean Broderick
of several bulk DDGS vessels at the same time and, suddenly, protein supply in China was no longer an issue. Prices in the U.S. went from 130 percent-plus the value of local corn down to 115 percent in a short period as shipments were delayed and, or cancelled. Eventually, Chinese soymeal will be consumed and DDGS demand will pick up again. There is already interest for fourth quarter shipments, albeit at lower values than what is being quoted today, and lower percentage of corn values are incenting domestic demand. The question is whether Chinese sales that are on the books will actually end up shipping, or be re-sold back in the U.S. Normally, this time of the year corn crop conditions influence DDGS prices as well. But this year, is all about China.
Front Month Futures Price (RBOB) $2.020 Region
Spot
Rack
West Coast
2.606
2.747
Midwest
2.215
2.438
East Coast
1.888
2.641 SOURCE: DTN
DDGS Prices ($/ton) LOCATION
Ethanol rallies on weather concerns
by Rick Kment
December corn futures rallied 34 cents per bushel higher over the last week, creating significant market support ahead of the much-anticipated June USDA acreage and stocks reports. This led to a similar rally in nearby and deferred ethanol futures, pushing prices over 12 cents per bushel higher at the end of June. The focus on additional potential gains is keeping many buyers aggressively looking for short- and long-term product just in case summer sees even higher prices.
Jul 2015
Jun 2015
Jul 2014
Minnesota
120
160
160
Chicago
157
185
185
Buffalo, N.Y.
160
175
180
Central Calif.
195
214
217
Central Fla.
178
204
190 SOURCE: CHS Inc.
Corn Futures Prices
(September Futures, $/bushel) Date
close, bu.
close, ton
June 26, 2015
3.93
140.18
May 26, 2015
3.62
129.29
June 26, 2014
4.39
156.79 SOURCE: FCStone
Cash Sorghum ($/bushel) Location
Ethanol Report
July 1—The middle of summer brings an uncomfortable silence in the energy and ethanol markets as we are past the early summer driving surge, but still not quite sure about expectations for the rest of the year. Ethanol also faces grain markets that can post significant shifts based on weather and planted acre announcements, which can greatly affect production levels. Corn markets through the last of June have rallied aggressively with traders focusing on extremely wet conditions in the Midwestern Corn Belt. This pressures production levels and increases the potential that some soybean acres won't be planted.
Spot
West Coast
SOURCE: DTN
DDGS working back into US rations with price drop July 1—Going into July 4, the demand from China, which had been keeping DDGS prices well above the levels that worked into U.S. rations, has dropped off. And, so have prices. Since last month, values have been off about 25 percent, to the point where it is being more widely considered for inclusion by U.S. feeders that effectively had kicked it out. Chinese soymeal availability is widely considered to be the reason for the decreased demand, as South American soybean boats, some of which were late to ship, began arriving in earnest in the late spring. Like they do here in the U.S., feeders there were presented with the cheaper per-unit-of protein soymeal, and DDGS, which was being primarily being used for its protein content, fell out of favor as a ration staple. Couple that with the delivery
Region
June 26, 2015
May 15, 2015
June 26, 2014
Superior, Neb.
4.13
4.41
4.17
Beatrice, Neb.
4.18
4.18
4.13
Sublette, Kan.
3.89
3.89
4.20
Salina, Kan.
4.28
4.36
4.43
Triangle, Texas
4.04
4.04
4.31
Gulf, Texas
5.85
5.85
5.31
SOURCE: Sorghum Synergies
Natural Gas Prices ($/MMBtu) LOCATION
June 30, 2015
April, 30 2015
July, 1 2014
NYMEX
2.77
2.75
4.46
NNG Ventura
2.71
2.49
4.34
Calif. Citygate
3.17
2.67
4.67
SOURCE: U.S. Energy Services Inc.
U.S. Ethanol Production (1,000 barrels) Per Day
Month
End Stocks
Apr. 2015
930
27,910
20,787
Mar. 2015
951
29,489
20,865
Apr. 2014
928
27,837
17,356
SOURCE: U.S. Energy Information Administration
AUGUST 2015 | Ethanol Producer Magazine | 23
DISTILLED
Ethanol News & Trends
Proposed RVOs
(in million gallons / proposed percentage standards) 2014 Cellulosic biofuel Biomass-based diesel Advanced biofuel Total renewable fuel
2015
2016
2017
33 / 0.019%
106 / 0.059%
206 / 0.114%
n/a
1,630 / 1.42%
1,700 / 1.41%
1,800 / 1.49%
1,900
2,680 / 1.52%
2,900 / 1.61%
3,400 / 1.88%
n/a
15,930 / 9.02%
16,300 / 9.04%
17.400 / 9.63%
n/a
SOURCE: U.S. EPA
EPA issues RFS proposal On May 29, the U.S. EPA released a proposed rule containing 2014, 2015 and 2016 renewable volume requirements (RVOs) under the renewable fuel standard (RFS), along with a proposed 2017 RVO for biomass-based diesel ahead of its June 1 judicial deadline. According to the EPA, the proposed 2016 RVO for cellulosic biofuel is six times higher than actual 2014 volumes, while the 2016 RVO for total renewable fuel is approximately 9 percent higher than actual 2014
24 | Ethanol Producer Magazine | AUGUST 2015
volumes. The agency also pointed out the proposed 2016 RVO for advanced biofuel is about 27 percent higher than actual 2014 volumes, with the 2017 biomass-based diesel RVO 17 percent higher than 2014 volumes. The proposal has been criticized by members of the biofuel industry for its use of its “blend wall” methodology, which prevents the RVOs from accounting for more than 10 percent of transportation fuel. A final rule is expected to be released by Nov. 30.
CHS purchases second ethanol plant CHS Inc. has acquired its second ethanol plant. In June, the company announced the acquisition of the Annawan, Illinois-based Patriot Renewable Fuels ethanol plant from Patriot Holdings LLC. The 125 MMgy plant will be rebranded as CHS and its 68 employees will become CHS employees. In June 2014, CHS purchased the former Illinois River Energy plant, which is located in Rochelle, Illinois. “CHS will pursue ethanol manufacturing ownership in strategic current and new geographies that allow us to add value for our owners across our ag business and energy enterprise from inputs to valueadded fuel and feed ingredients to the marketplace,” said Gary Anderson, CHS senior vice president of North America grain marketing and renewable fuels. Gene Griffith, Patriot Holdings chairman, president and CEO, said CHS was a marketer of the plant’s distillers dried grains with solubles (DDGS) and ethanol products. “CHS is the right fit to take this business to the next level,” he said.
DISTILLED
Mascoma, BESC developnew yeast strain Mascoma LLC and the Department of Energy’s BioEnergy Science Center have developed a strain of yeast that could help significantly accelerate the development of biofuels from nonfood plant matter. C5 FUEL, engineered by researchers at Mascoma and BESC, features fermentation and ethanol yields that set a new standard for conversion of biomass sugars from pretreated corn stover, converting up to 97 percent of the plant sugars into fuel. According to researchers, while conventional yeast leaves more than one-third of the biomass sugars unused in the form of xylose, Mascoma’s C5 FUEL efficiently converts this xylose into ethanol in less than 48 hours. The new approach also converts hemicellulose, which significantly increases overall sugar yield and thereby increases the level of ethanol produced. In fact, the new strain of yeast simultaneously yields 97 percent conversion of xylose and glucose, and does so in a significantly shorter period of time than existing approaches.
Taurus Energy announces EPA approval of its XyloFerm yeast Sweden-based Taurus Energy AB recently received notification from the U.S. EPA that its 90-day Microbial Commercial Activity Notice review has been completed without objections. The achievement puts Taurus Energy in the position to commence commercial production and sales of its trademarked Taurus XyloFerm yeast in the U.S. Taurus Energy specializes in a genetically modified yeast for cellulosic ethanol, which it has been working to bring to market since 2006. The company has been working with customers building second generation ethanol plants in the U.S. In early May, Taurus Energy was selected as the yeast provider for a cellu-
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reliability
MOVING FORWARD: A Taurus Energy employee works in the lab. The company recently hit a milestone that brings it one step closer to bringing its cellulosic ethanol yeast to the U.S. market. PHOTO: TAURUS ENERGY AB
losic ethanol demonstration plant under development in France. The company also recently signed an agreement with Lallemand Biofuels & Distilled Spirits for U.S. development, marketing, selling and licensing of its XyloFerm yeast for cellulosic ethanol.
performance
yield
DISTILLED
Genscape announces generation of D6 Q-RINs Genscape has announced that its Q-renewable identification number (Q-RINs) were generated within the U.S. Moderated Transaction System for the first time in late April. According to the company, four ethanol plants are now generating Q-RINs, with more expected to come online in the coming months. Genscape is the EPA approved QAP provider for all four of these facilities, including three Poet facilities. “Poet understood early on that a number of its customers would recognize the premium associated with the Q-RINs was small when compared to the value brought by the availability of having an affirmative defense in most instances of fraudulent RINS in the marketplace,” said Bob Whiteman, chief financial officer of Poet Ethanol Products. Information released by Genscape notes that the introduction of D6 Q-RINs indicates that ethanol facilities see value in QAP services. Obligated parties are showing an interest in D6 Q-RINs as a means to reduce the burden of internal compliance teams, said the company.
1 billion dry tons of biomass has the potential to produce Emissions reductions of
500 million tons per year
1.5 million jobs 50
92
billion kWh of electricity
billion pounds of biobased chemicals and bioproducts
60
billion gallons of biofuels
DOE previews 2016 Billion-Ton Study update A recent U.S. Department of Energy webinar, titled “A Changing Market for Biofuels and Bioproducts,” included preview of the 2016 U.S. Billion-Ton Study update, which is currently scheduled for release in June 2016. The event was presented by DOE’s Bioenergy Technologies Office. The DOE’s first version of the Billion-Ton Study was released in 2005 and aimed to determine how much biomass might be available in the U.S. in the future. It also addressed changes in resources and what the drivers of those changes might be. During the webinar, Bryce Stokes of CNJV explained that the initial update, published in 2011, added additional ele-
ments to the analysis, including certain metrics related to cost, supply and biomass location. The next update, scheduled for release next year, will expand to address issues related to sustainability, quality, costs and raw material losses. It will also address algae. The updated report is expected to feature a new forestry model that looks at land use change and some of the implications associated with demand of raw materials for housing, pulp and paper, and other wood uses. Laurence Eaton of Oak Ridge National Laboratory said the 2016 update would also look at an extended timeline, through 2040.
DISTILLED
St1 Biofuels inaugurates Swedish ethanol plant St1 Biofuels Oy recently announced its first Etanolix plant delivered to the international market was inaugurated in Gothenburg, Sweden. The 5 MMly (1.32 MMgy) ethanol plant is fully integrated into the functions and logistics of the St1 oil refinery in Gothenburg, which yields benefits associated with the use of residual heating and cooling and shared product distribution. Refinery staff will operate the new plant. The facility takes in recycled feedstocks, such as biowaste and process residue from local bakeries and converts that feedstock into transportation fuel. According to St1, four similar Etanolix plants are already located in Finland, along with one Bionolix plant that produces ethanol from biowaste from shops and households. The company’s first Cellunolix plant, which takes in sawdust as feedstock, is expected to begin production in Kajaani, Finland, next year. “Building the ethanol plant in Gothenburg is a significant launch on the international market for us. Our scalable Etanolix concept is a finished export product,” said Patrick Pitkänen, head of business development and sales at St1 Biofuels.
ePURE report highlights state of EU ethanol industry
EU fuel ethanol production Year
ePURE, the European renewable ethanol association, has released its annual 2015 State of the Industry Report, which illustrates that although the industry has faced a difficult year, there are reasons to be optimistic the situation will improve. “Last year was a difficult year for the European ethanol industry. We had a situation whereby domestic prices collapsed by 30 percent, a damaging trend that was primarily driven by the uncertainty surrounding Europe’s biofuels policy. But the outlook is beginning to be more positive. This report shows that the European renewable ethanol has been a success story for Europe but it can contribute much more under the right policy conditions,” said Robert Wright, secretary general of ePURE.
Some chemical companies focus on this
Volume (in billion liters)
2009
3.1
2010
3.8
2011
4.0
2012
4.3
2013
4.9
2014
5.6
SOURCE: ePURE
According to ePURE, Europe produced 6.6 billion liters (1.74 billion gallons) of ethanol last year, up 13 percent from 2013. Capacity was 7.8 billion liters, with a utilization rate of 85 percent. Europe consumed more ethanol than was produced, with an estimated 2014 consumption level of 7.7 billion liters. Approximately 600 million liters of ethanol were imported, accounting for less than 10 percent of total consumption.
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,
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.
© 2014 Buckman Laboratories International, Inc. All rights reserved.
AUGUST 2015 | Ethanol Producer Magazine | 27
Ironically, the latest breakthrough in the field of energy, is a field. While most innovation begins with the seed of an idea, the greatest advance in the making of ethanol starts with a seed. The first corn seed technology specifically developed to increase the efficiency of ethanol production, Enogen corn can reduce costs by up to 10% and helps generate more ethanol per bushel than any corn feedstock ever grown. Recently named AgriMarketing’s Product of the Year, Enogen is definitely making waves in the field of energy. ®
© 2015 Syngenta. Enogen®, the Alliance Frame, the Purpose Icon, and the Syngenta logo are trademarks of a Syngenta Group Company. Syngenta Customer Center: 1-866-SYNGENT(A) (796-4368). www.FarmAssist.com MW 11114036-SP 12/14
PHOTOS: SUSANNE RETKA SCHILL, BBI INTERNATIONAL
30 | Ethanol Producer Magazine | AUGUST 2015
TESTING
Trialing Innovation New products undergo extensive research and collaboration before real-time testing. By Susanne Retka Schill
The ethanol industry is known to be innovative.
But, whether it’s testing a new feedstock, incorporating a new enzyme, yeast or other fermentation aid, or perhaps tweaking a parameter or trying out a new piece of equipment, the innovation must be put to the test. Every new technology introduced to the ethanol industry must first prove itself at commercial scale. In practical terms, that means ethanol plants must be willing to conduct trials. But when a lost fermenter, or even an hour of downtime, can cost tens of thousands or even more than $100,000 to the bottom line, the risks involved in conducting trials are big. For companies like Novozymes and Lallemand Biofuels and Distilled Spirits, whose enzymes and yeasts form the foundation of the ethanol process, the business of conducting trials is taken very seriously. “We have a lot of respect for the fact our customers are running a business,” says Kevin Cox, director of technical services for bioenergy at Novozymes. “We’re coming in with our products and we know we need to be seamless. Our objective is to bring value to the customer process and ensure smooth operations.” And, while it might be tempting to think of ethanol producers as guinea pigs when doing trials, Jim Miers, TransFerm product manager for Lallemand, says that isn’t the case. “The way we’re looking at trials is actually to make plants better, to make them more efficient, more profitable.” Planning for a successful trial begins with setting expectations and talking though the protocol. “Several weeks in advance of the trial, we will sit down with the customer to review and align expectations around operational adjustments and product benefits,” Cox says. Similarly, Lallemand sets up a meeting with a group from the plant that can include the general manager or CEO, plant, operations and lab managers. “I like to have as many people involved so we can make sure, when the trial is done, there’s not a thought in their minds that, ‘We should have looked at this.’” Protocols can run several pages long, including a description of the plant, the trial objectives and expectations, the sponsor’s personnel com-
AUGUST 2015 | Ethanol Producer Magazine | 31
TESTING mitment, operation parameters, data collection—the specific details covering all aspects. Nondisclosure agreements have become standard as well, outlining information and trade secrets to be kept confidential. Protecting intellectual property—particularly when doing trials on precommercial products—is important for companies that invest resources into research and development. “In general, once a concept is published or described publicly, it changes the landscape for patentability,” Cox explains. Thus, keeping new innovations quiet is important—and for both parties. “A lot of our customers have innovation they are developing as well,” Cox says.
Baseline Start
The next step after planning is gathering baseline data. “If you’re going into a trial situation, you’re comparing with the baseline—which was how the plant was running before,” Cox explains. “It’s really important to maintain consistent operating conditions, as much as possible, between the baseline and the trial period. That allows you to do an apples-to-apples comparison.” It can be a challenge at times, he adds,
because plants to have to run their businesses, and a trial may require operational changes. “As much as we can keep the process steady and consistent, we will get the best possible evaluation of the technology.” When the trial itself starts, the Novozymes scientists watch the process data closely, looking for product fingerprints—measureable indicators that the products are working as expected. “Once we see the fingerprints, we are confident the products are running correctly, then we are able to demonstrate and capture the benefits the enzymes provide.” A high percentage of the Novozymes technical services team are trained statisticians, he adds, “who can really dig into the data to insure adequate and fair comparisons.” Lallemand approaches trials in much the same way. “When we go into a trial, we want a month’s worth of baseline data, so we can compare a month’s worth of data from the trial,” Miers says. The first three weeks of a trial are covered by a Lallemand tech specialist working on site, followed by remote coverage for the remainder of the trial through a daily phone call and the daily sharing of data by email. “The first couple of weeks we focus on
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TESTING enzyme load and yeast to avoid different stressors and find where the plant’s yield is best,” Miers says. “Yield is key in all these plants, so over the course of the five to six weeks, we’re looking at yield and what will be the best conditions for yield—the temperatures, the pH, and so on.” All trials are a minimum of 42 days, he continues. “It’s a commitment on both sides. Not only are they committed to running the trial but it’s a commitment of our resources going out and focusing on making sure that we do our very best to get them what they’re expecting. We promise a range of expectations. We need to succeed in that.” The protocol is much the same when running the first commercial trials of brand new technologies, both gentlemen report. New products are well tested and understood before they hit full-scale fermentations. The biggest difference is that more specialists from the companies will be involved in the first trials, generally being on site for the entire length of the trial.
Project Payoff
The obvious benefit of a new enzyme by Novozymes or a yeast from
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Lallemand will be yield improvement. Even a seemingly modest improvement of 1 percent brings a significant return to a 100 MMgy plant. There are other positives, however. Doing a product trial can benefit plants that may not be running as smoothly as they’d like, Miers suggests. “When we have a plant with some variability, we do our very best to help them stabilize it so we can run the trial sooner than later.” He adds that the stability of plants overall has improved. “The industry has become more educated—they take a more technical approach to running.” “The biggest benefit for customers from running trials is access to new technology,” Cox says. “There’s lots of great technologies being developed. Trials gives them a chance to evaluate them and see how they fit in to their process.” There are different philosophical approaches, he adds. “Some folks want to be first movers, they want their hands on the best and brightest new technology when it first comes out. There’s certainly an advantage to going first because you get to capitalize on the benefits in advance of everyone else.” Others prefer to wait, letting the
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Test Tanks PHOTO: SUSANNE RETKA SCHILL, BBI INTERNATIONAL
Pinal Energy LLC, A 60 MMgy corn-ethanol plant in Maricopa, Arizona, has pint-sized fermentation tanks nestled in the middle of its fermentation tanks that are fully integrated into the plant. They were installed as part of a University of Arizona research project on sweet sorghum as an alternative feedstock. Since then, Pinal has found the system useful for other product trials, even one looking at watermelon rejects as a feedstock.
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TESTING first movers test out new technologies and work through any issues that might arise. â&#x20AC;&#x153;The industry has evolved,â&#x20AC;? Cox continues. â&#x20AC;&#x153;It is much more sophisticated. And complex. These plants are getting really good at refining their ability to manage and analyze their data. The products are much more complicated as well. It requires a more sophisticated trial approachâ&#x20AC;&#x201D;not just enzymes, but all technologies being evaluated.â&#x20AC;? Both Novozymes and Lallemand have technical service teams that bring their experience in conducting multiple trials each year to each new plant trial. Smaller companies may not have the same resources to deploy, but Miers suggests all vendors do their best. â&#x20AC;&#x153;Every company, every vendor, is out there to help the facility be better.â&#x20AC;? Author: Susanne Retka Schill Senior Editor, Ethanol Producer Magazine 701-738-4922 sretkaschill@bbiinternational.com
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INNOVATION
INDUSTRIAL DEMONSTRATION: Whitefox Technologiesâ&#x20AC;&#x2122; membrane distillation is being tested at Pacific Ethanolâ&#x20AC;&#x2122;s plant in Madera, California. Delivered flat on a semitrailer, it was set up alongside the distillation and will be treating a portion of the regen stream from the molecular sieves, reducing energy load and addressing a cooling water limitation. PHOTO: WHITEFOX
36 | Ethanol Producer Magazine | AUGUST 2015
Drilling into
INNOVATION
Distillation, Dehydration Companies aim to tweak and transform key systems to reduce energy use and resolve bottlenecks. By Susanne Retka Schill
Optimization efforts most often look at boosting yield, but as finely tuned and balanced as ethanol plants are, any increase in ethanol has to be matched by increases in the multiple systems that follow. Distillation and dehydration are two that
often create bottlenecks. Two companies introduced systems aimed at relieving that bottleneck at the International Fuel Ethanol Workshop & Expo in June, although many others have taken up the challenge. Whitefox Technologies Ltd. has developed a membrane technology that has been used in Europe for more than a decade, explains Stephan Blum, chief technology officer. Primarily used for potable alcohol and integrated into chemical processes for things like perfumes, the company is now introducing it to the fuel ethanol industry. “We had to adapt our technology so that it can survive in the larger scale and rougher environment that we see in the biofuels industry,” he says. “When the plants get larger, the technology has to become more robust.” Whitefox has developed a bolt-on application that can treat part or all of the regen/recycle stream in the molecular sieves. “If you take regenerate or recycle streams out, and eliminate the feedback loop into distillation, the whole system should run quite a bit more stably,” he adds. With about 21 percent of the mole sieves’ capacity taken up by the regen/recycle stream, moving that forward through the Whitefox membrane technology could increase capacity through the sieves. During the summer, he adds, it could also address the need to slow the sieves down because of the limitations in cooling capacity due to high heat and humidity.
Whitefox began commissioning its first system in June at one of Pacific Ethanol’s facilities. Blum described it as an industrial-scale demonstration plant. “There we will treat a portion of the regen stream in order to give them a capacity increase of roughly 7 percent or reduce energy consumption by avoiding their cooling water limitation.” The goal is to help the company continue to reduce its energy use, and thus its greenhouse gas emissions. The skid is designed to verify the technology and, based on those results, decide the best size and integration strategy to meet the plant’s needs. A membrane system could ultimately replace the current distillation and dehydration systems in a plant, Blum says, but Whitefox’s approach has been to design a bolt-on that doesn’t require major changes to a plant. “We can treat the side streams and it doesn’t interfere with the main product stream. It’s easier to integrate.” As the technology becomes better understood and known, he envisions multiple ways it can be integrated. “The thing is, distillation in itself is not energy inefficient. Even though you add steam and evaporate, you reuse that heat somewhere else in the process so your net energy consumption is quite low. The distillation process is also a cleaning process, which helps to keep the entire process reliable. A combination with distillation is often an intelligent procedure.”
Hydroheater Application
Hydro-Thermal Corp., well known in the ethanol industry for its jet cookers, has turned its experience into finding a solution to the molecular sieve bottleneck. Gary Bymers, international sales manager, described the company’s 200 proof vapor depressurization system in a presentation at the FEW in MinAUGUST 2015 | Ethanol Producer Magazine | 37
INNOVATION neapolis. “The idea is to debottleneck and, in the process, there are energy savings. The total amount of cooling water is reduced and the total amount of heat that’s used in the system is also reduced.” Rather than recycling vapors through the mole sieves, piping is modified, he explains. “The piping changes the direction so the 200 proof vapors come down and are mixed with the flow in a recirculation area through our low-pressure hydroheater. You increase the total amount of product recaptured instead of recycling back through the
sieves.” The change adds approximately 2 gallons per minute (gpm) to product flow and, by adding plates to the 190 proof heat exchange, the heat recovery from the 200 proof product is used to increase the temperature of the 190 proof sieve feed from between 130 to 140 degrees Fahrenheit to about 185 degrees. The main savings come from reducing the load on the cooling water heat exchanger and condenser and increasing the temperature to the vaporizer, but the most significant benefit comes from the boosted flow rate of 200 proof product.
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38 | Ethanol Producer Magazine | AUGUST 2015
The company has one installed at Dakota Ethanol LLC, a 50 MMgy ethanol plant in Wentworth, South Dakota, Bymers told the audience at FEW. In addition to installing Hydro-Thermal’s depressurization vapor hydroheater skid and adding plates to the 190 heat exchanger, the system involves upsizing the existing 200 proof pump from 15 to 25 horsepower with a variable frequency drive. The bottom line benefits can be significant, Bymers adds. In a 100 MMgy plant, the steam usage can be reduced by 2.9 million Btu, which at a natural gas cost of $4 per MMBtu works out to an annual savings of approximately $126,000. The big benefit, though, is from the 2 gpm increase in product flow, which works out to about 5 percent increase in throughput. In addition, fusel oil upsets are minimized. “That’s a positive operational impact that’s hard to quantify,” he says. Other companies are working on improved distillation and dehydration technologies as well. India-based Praj Industries Ltd. spoke at FEW in Minneapolis about its patented EcoSmart technology, which could be used by corn ethanol plants interested in diversifying and adding beverage or industrial alcohol capability while lowering energy and water use. Two years ago at the FEW, California-based Membrane Technology and Research Inc., a well-established California-based company in separation technologies for refineries, hydrogen separation and gas clean-up, described its research and trials on a low-energy membrane distillation. And Zeochem AG, which says 70 percent of the plants in North America use its molecular sieve technology, is reportedly working on improvements that will be introduced in the next couple of years. In Japan, Hitachi Zosen Corp. has developed a dehydration technology using a zeolite separation membrane.
Novel Distillation
In addition to those looking at ways to improve existing systems and reduce the load on molecular sieves, there are a two companies developing radically different technologies. In Kansas, brothers Dick and Sam Burton have formed the startup company Distillation Technologies Inc. to commercialize
INNOVATION sieves,â&#x20AC;? he says. The distillation system operates at 104 degrees Fahrenheit, producing 99.5 percent alcohol in one pass with an energy savings calculated at 75.6 percent less than standard distillation. The technology can also be applied to water purification, Burton adds, and could potentially replace the evaporators in a whole stillage treatment system. The Burtons finalized an agreement with Easy Energy Systems Inc. in midJune to build and conduct pilot scale testing on both ethanol distillation and water
purification systems. Minnesota-based Easy Energy Systems has developed a modular ethanol production system targeted at waste streams. One of the limitations of many alternative waste-based feedstocks is that the alcohol concentrations are lower than in a conventional corn-ethanol plant, explains Jonathan Scarfpin, vice president of business development for Easy Energy Systems. â&#x20AC;&#x153;That makes distillation energy costs quite high.â&#x20AC;? Of equal interest, he adds, is the application of the technology to water purification.
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#.9#;5 )419+0) MINI-SAM1: The core invention of Drystill Holdings is a stripper absorption module, which passes distillation vapors through an absorption medium, shown here at the pilot plant built to validate the technology in Ontario.
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PHOTO: DRYSTILL
their technology. The proof of concept for the trademarked Bubble Spray Distillation has been achieved at bench scale, with the help of Kansas City-based Midwest Research Institute and Aerosol Research and Engineering, says Dick Burton. Theyâ&#x20AC;&#x2122;ve received a patent on the ethanol distillation concept and have a second patent pending on using the method for water purification. â&#x20AC;&#x153;We take the beer and infuse air into it and saturate it and spray it through some special nozzles into a vacuum chamber, the distillation column. We replace the stripper section with our equipment,â&#x20AC;? Burton explains. â&#x20AC;&#x153;When the fluid is sprayed into the column, aerosol-sized droplets come out. Each of the droplets has a bubble inside. The bubble grows exponentially inside the vacuum chamber and explodes. It creates tens of thousands of very small droplets. Those nano droplets now have surface tension relieved on them and they readily vaporize at half the energy.â&#x20AC;? Burton adds that the low-vacuum environment also relieves the azeotropic bond. â&#x20AC;&#x153;You can make pure ethanol at one pass, without molecular
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AUGUST 2015 | Ethanol Producer Magazine | 39
INNOVATION
Progress Report Whitefox Technologies Ltd.
Commissioning on its industrial demonstration scale membrane technology system started in June at Pacific Ethanol Madera LLC, a 40 MMgy ethanol plant in Madera, California.
Hydro-Thermal Corp.
The companyâ&#x20AC;&#x2122;s 200 proof vapor depressurization system is installed at Dakota Ethanol LLC, a 50 MMgy ethanol plant in Wentworth, South Dakota.
Distillation Technologies Inc.
Proof of concept was achieved at bench scale for Bubble Spray Distillation, with an agreement reached with Easy Energy Systems Inc. in June for pilot scale testing.
Drystill Holdings Inc.
Pilot-scale testing has been done on the companyâ&#x20AC;&#x2122;s pass-through distillation technology and discussions are under way for potential demo-scale testing. In Ontario, Drystill Holdings Inc. has completed testing on a pilot plant in collaboration with Fielding Chemical Technologies at Mississauga. Drystill has developed pass-through distillation technology utilizing a patented stripping absorption module that achieves separation at room temperatures. Pass-through distillation adds two steps in the middle of the basic evaporating and condensing functions of distillation. The module first absorbs the evaporated gases in a liquid medium of concentrated salts and then boils the absorbed material
out in a desorption step before condensation. With the middle absorption step running at higher temperatures, the heat recovered there can be used in the evaporation step. Drystill estimates a 50 percent energy reduction when compared to a traditional system. Drystillâ&#x20AC;&#x2122;s chief technology officer, Ian McGregor, says the system could be incorporated into the existing cooling circuit of a fermentation tank to continuously remove wet ethanol from the live fermentation broth. â&#x20AC;&#x153;Because low-temperature distilla-
tion permits ethanol to be removed during fermentation,â&#x20AC;? he says, â&#x20AC;&#x153;it opens up new opportunities for improved fermentation and hydrolysis.â&#x20AC;? The removal of the ethanol during fermentation could shorten fermentation time and permit yeast and enzyme recycling. McGregor also envisions it being used in continuous fermentation. â&#x20AC;&#x153;The fermentation tanks would be smaller in size than batch tanks and be equipped with some means of mixing to ensure that the broth is nearly homogeneous.â&#x20AC;? As the broth moves from one tank to the next, a room-
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40 | Ethanol Producer Magazine | AUGUST 2015
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MISSISSAUGA PILOT: Drystill Holdings partnered with Fielding Chemical Technologies to build a pilot-scale system to validate its novel pass-through distillation system. PHOTO: DRYSTILL
temperature still removes a portion of the ethanol in the broth moving between tanks. “Product inhibition would be eliminated, the total residence time reduced to less than 20 hours, and the biocatalyst culture would remain healthy and numerically superior to unwanted species.” First, though, Drystill’s pass-through distillation process needs to be validated at larger scale. Company CEO Christopher Belcher reports discussions are under way with potential partners to move the process from pilot to demonstration scale.
Innovation Challenge
Working on novel technologies is not for the faint of heart. Presentations to potential ethanol industry partners were quite frustrating, Burton says, “They laughed at us.” Even the patent office asked for more extensive documentation to explain the science behind the novel technology, he says, adding he and his brother have worked on this for seven years. McGregor speaks of a similar experience. “We’ve been struggling for six years to make people aware that we’ve got something here,” he says. Early on, an industry insider cautioned them that their initial idea to apply membrane technology to
replace molecular sieves would be a hard sell. “He said nobody really has much of an issue with incumbent technology.” But he and several others told McGregor and his partner, if they could use membranes to separate ethanol from the live fermentation broth, it would be a real boon to second-generation ethanol. “Yet, we’ve accomplished this, and we can’t seem to get the right people interested. Or, the people that have an interest are timid. Or they are already committed to another technology. Or. Or. Or.” McGregor says he’s become philosophical. “It’s going to take time. Be faithful. Keep on track. Do what has to be done and try to spread the word.” Author: Susanne Retka Schill Senior Editor, Ethanol Producer Magazine 701-738-4922 sretkaschill@bbiinternational.com
AUGUST 2015 | Ethanol Producer Magazine | 41
KEEPING BUSY: Robert Jewell says there's no shortage of things to do in his career at Chippewa Valley Ethanol Co. For example, he does a lot of work on the facilityâ&#x20AC;&#x2122;s water permits. PHOTOS: LANE OLSON
42 | Ethanol Producer Magazine | AUGUST 2015
PROFILE
Operations Leader Optimizes Aging Plant
When Ethanol Producer Magazine asked for nominations of rock star operators, the name of an industry veteran of almost two decades rose to the top.
By Holly Jessen
Robert Jewell, energy systems chief at Chippewa Valley Ethanol Co. has worked at the Benson, Minnesota, ethanol plant for about 13 years. He also worked at a nearby
ethanol plant in Morris, Minnesota, which today goes by the name DENCO II, bringing his total time working in the ethanol industry to just short of 18 years. He has worked primarily in utility or energy centers, although, he has also operated distillation and evaporators as well as cook and fermentation lines. Currently, Jewell supervises four full-time energy system operators, as well training and cross-training employees in energy system operations. Prior to his career within the ethanol industry, Jewell worked as a facility manager of a company that manufactured flexible circuit interconnect solutions used in the computer, networking, communication, storage, consumer, medical, and electronic industries. He also worked as a foreman at a wastewater treatment plant and a maintenance technician. Jewel provided EPM with information about some of the projects he has managed, past and present. Currently, Jewell and the CVEC team are working toward installation of a new high-efficiency boiler, expected to come online later this year. Specifically, itâ&#x20AC;&#x2122;s a 2,500 horsepower, 3 pass, 86,250-pound-perhour water back, fire tube steam boiler. The project was initiated after the
AUGUST 2015 | Ethanol Producer Magazine | 43
PROFILE
FULL STEAM AHEAD: Jewell, standing at right, supervises employees working as energy system operators at CVEC.
company installed a regenerative thermal oxidizer and repurposed the old thermal oxidizer as a waste heat boiler, he says. However, due to inefficiency, it was later repurposed into a steam generator, leading to the soon-coming instillation of the new boiler. “This project will provide improved system reliability and improved energy efficiency,” he says. He has also worked to identify and implement numerous other steam plant optimization measures. One benefit the company has been able to reduce boiler makeup water use by 74 percent. Specifically, in a year, CVEC is able to use about 1.7 million gallons less reverse osmosis (RO) water and about 3.6 million gallons of soft water feed to the RO. This saved the company about $15,000 in a year, by reducing natural gas use. Additional benefits include savings due to lowered chemical use as well as less wastewater discharge. Also on his radar was optimizing the plant’s cooling systems and reducing chiller operational requirements. Jewel was able to devise and implement measures that re44 | Ethanol Producer Magazine | AUGUST 2015
sulted in an annual 32 percent average annual reduction in chiller operating hours in the past four consecutive years, compared to the previous five years. “This equates to avoiding 726 hours or 30 days of operation annually,” he says, adding that it has saved the company more than $20,000 yearly in electrical costs, resulted in improved fermentation and process cooling capabilities as well as reduced routine maintenance expenses. Another project Jewell worked on was managing installation and temporary operation of a prototype system that helped the plant displace propane use in the winter of 2012-’13. CVEC, along with other ethanol plants, was hit hard by propane shortages and high prices, which many ethanol plants use as fuel during natural gas curtailment periods. Though a relationship with another company, CVEC was able to conduct performance testing on a proprietary liquid natural gas vaporization or re-gasification system that was still in R&D. Without the backup system, the plant may have had to temporarily idle due to restricted availabil-
PROFILE
ity of natural gas and propane fuel, he says, he says, adding that the ROI was less than a week.
Words of Praise
Vincent Copa, process engineer for CVEC, says Jewell is vital to the company’s goal of completing infrastructure upgrades at the nearly 20-year-old ethanol plant. “One thing that puts Bob head and shoulders above others is his ability to mediate between departments,” he says. “Engineering wants the most efficient project with the best ROI (return on investment). Operations wants something they can understand and operate intuitively. Maintenance wants easy access to items that require periodic maintenance or calibration. These are not mutually exclusive goals, but Bob seems to ask the right questions at the right times so that the entire staff gets on the same page.” When asked to describe Jewell, Andrew Zurn, engineering manager said, “In a nut shell, he’s technically competent, detail orientated, dependable, hardworking,
honest, has a knack for operating equipment and writes a dang nice report.” In fact, Jewel’s report-writing skills leave Zurn feeling a little envious. Jewel uses those skills to track equipment operation and documents that information in a detailed and organized manner by including photos and notes. “This skill was particularly valuable when CVEC commissioned and eventually made sustained operating runs on the commercial scale Frontline BioEnergy gasifier here at CVEC,” he says. “Bob functioned as the chief operator of the gasifier throughout all phases of startup through sustained operation.” CEVC’s gasifier, which was used to generate steam and replaced pipeline natural gas, was completed in the spring of 2008, in the midst of high natural gas prices, and isn’t operational today.
Other work
But Jewell’s performance doesn’t just shine in his work at CVEC. He’s involved in multiple activities that benefit ethanol and the industrial sector in general, including AUGUST 2015 | Ethanol Producer Magazine | 45
CORN BIOREFINERY: The 50 MMgy Benson, Minnesota, plant where Jewell works produces fuel ethanol, some of which it blends into E85. Other products are distillers grains, corn oil, wet cake, syrup, and its trademarked Glacial Grains Spirits, which is used in food, beverages, cosmetics and pharmaceuticals.
serving on two advisory boards. Currently, heâ&#x20AC;&#x2122;s in his sixth year as an appointed industry representative of the State of Minnesota Department of Labor and Industry Construction Codes Advisory Council. Established in 2008, the advisory council works to â&#x20AC;&#x153;to review laws, codes, rules, standards, and licensing requirements relating to building construction,â&#x20AC;? according to the Minnesota Department of Labor and Industry website. Among other things, â&#x20AC;&#x153;it may make recommendations about ways to eliminate
inconsistencies, to streamline construction regulation and construction procedures and to improve procedures within and among jurisdictions.â&#x20AC;? He has also served for more than two years on Minnesotaâ&#x20AC;&#x2122;s boiler licensing advisory board, which collaborated on legislation with various representatives of government, industrial, institutional and commercial business sectors. As a result, boiler engineer licenses were reclassified in order to address the issue of licensed opera-
tor staff shortages and to more closely represent current operations across the state. In addition to the license reclassifications, the Minnesota Legislature created a provisional first-class engineer license, which allows currently licensed second-class A or B engineers to serve as shift engineers at 500plus horsepower boiler plants, he said. This allows for on-site training and certification of second class engineers to operate sitespecific systems that previously required a first class licensed operator.
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Since the inception of the provisional first-class A or B boiler licensing program in Minnesota, a total of 90 provisional licenses have been issued to employees working at 36 separate companies, including nine ethanol plants. At this time, there are 46 active individual provisional licenses for this in the state of Minnesota. â&#x20AC;&#x153;It is not uncommon for industrial facilities to struggle with staffing challenges regarding filling and keeping people in 1A or 1B licensed operator positions,â&#x20AC;? he explains. â&#x20AC;&#x153;The provisional
licensing program has given all sectors of industry, including ethanol, another means for addressing staffing shortages regarding those positions and complying to the state operator licensing and steam plant attendance requirements.â&#x20AC;? Last, but not least, Jewell writes technical articles about water quality, water conservation and water sustainability for some Minnesota Rural Water Association publications and other organizations. Although the articles arenâ&#x20AC;&#x2122;t written specifically for the
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3URYHQ 9LFWRU\ (QHUJ\ +HDW 5HFRYHU\ 6ROXWLRQV ; :DVWH +HDW %RLOHUV ; 0RGXODU 5HFWDQJXODU (FRQRPL]HUV ; 7XEXODU $LU 3UH KHDWHUV ; &RPSOHWH (QHUJ\ $XGLWV 6ROXWLRQV ; &RQGHQVLQJ (FRQRPL]HUV
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ethanol industry, the subject matter is relevant to the ethanol industry. Author: Holly Jessen Managing Editor, Ethanol Producer Magazine 701-738-4946 hjessen@bbiinternational.com
FEW
Chris Standlee, Abengoa, and Dan Cummings, POET-DSM Advanced Biofuels, listen while Ray Defenbaugh, Big River Resources, talks during the general session ethanol producer roundtable. Also participating were moderator, Tom Bryan, BBI International; Paul Koehler, Pacific Ethanol; Mike Jerke, Guardian Energy Management, and Jan Koninckx, DuPont.
Bob Dinneen, president and CEO of the Renewable Fuels Association, gives a keynote presentation.
50 | Ethanol Producer Magazine | AUGUST 2015
Defenbaugh, center, accepts the High Octane Award from Tim Portz, left, and Mike Bryan, both of BBI International.
FEW
About 2,000 people gathered in Minneapolis June 1-4 for the 31st annual International Fuel Ethanol Workshop & Expo. By Holly Jessen, Susanne Retka Schill PHOTOS: GAMUT ONE STUDIOS
Brooke Coleman, executive director of the Advanced Ethanol Council, speaks about the state of the advanced ethanol industry.
John Caupert, center, accepts the Award of Excellence from Portz and Bryan.
This year, one in four FEW participants—500 of the 2,000 attendees—was an ethanol producer. A total of 179 U.S. ethanol plants were represented at the conference, as well as six Canadian ethanol plants and 11 advanced ethanol plants in North America. When international attendees were added to the list, 210 conference-goers represented ethanol, advanced biofuels or biodiesel facilities. FEW started June 1, with the Ethanol 101 preconference event, where about 60 people, most new to the ethanol industry, had a chance to learn the basics. That evening, kicking off the full conference, Growth Energy CEO Tom Buis gave brief remarks critical of the U.S. EPA’s proposed renewable volume (RVO) obligations announced Friday, while praising USDA Secretary Tom Vilsack’s announcement of a new round of infrastructure grants. Ron Beemiller, CEO of WB Services, cut the ribbon to open the doors for the welcome reception. About 140 speakers gave presentations at the general and breakout sessions in four concurrent tracks on June 2 and 3, covering multiple topics on production and operations, leadership and financial management, coproducts and product diversification and cellulosic and advanced ethanol. But first, attendees gathered for the general session,
AUGUST 2015 | Ethanol Producer Magazine | 51
FEW
Tom Bryan, president of BBI International and editor in chief of Ethanol Producer Magazine, and Tom Buis, CEO of Growth Energy, role play before the expo grand opening and welcome reception June 1.
One of the many breakout sessions included presentations by Jessica Karras-Bailey, RTP Environmental Associates Inc.; moderator Paula Emberland, ERI Solutions Inc.; Charles Hurburgh Jr., Iowa State University; Will Babler, Atten Babler Risk Management LLC, and Chip Whalen, Commodity and Ingredient Hedging LLC.
52 | Ethanol Producer Magazine | AUGUST 2015
Chris Gerken of ICM Inc. asks a question after a breakout session presentation.
FEW where Ray Defenbaugh, president, CEO and chairman of Big River Resources LLC, was announced as the winner of the High Octane Award and John Caupert, director of the National Corn-to-Ethanol Research Center, received the Award of Excellence. Bob Dinneen, president and CEO of the Renewable Fuels Association, took the stage next, giving a 13-point keynote presentation on what the U.S. EPA has gotten wrong in its proposed renewable volume obligations to implement the renewable fuel standard (RFS) in 2014, ’15 and ’16. Brooke Coleman, executive director of the Advanced Ethanol Council, then took the stage to say that the big question, whether EPA knows it or not, is if RFS2 will be implemented or if the oil industry will win the fight to stick with RFS1. Five ethanol producers then participated in the ethanol producer roundtable, wrapping up the 2015 FEW general session. On June 4, the final day of FEW, attendees participated in a tour of Poet Biorefining-Lake Crystal before stopping at Hennen’s Auto Service, a carrier of the Minnoco brand of midlevel ethanol blends. The 2016 FEW is set for June 20-23 in Milwaukee, Wisconsin. Author: Holly Jessen Managing Editor, Ethanol Producer Magazine 701-738-4946 hjessen@bbiinternational.com
ICM Inc. employee Sarah Dalrymple stands at the company's booth at FEW.
Susanne Retka Schill Senior Editor, Ethanol Producer Magazine 701-738-4922 sretkaschill@bbiinternational.com
Moderator Brendan Jordan, Great Plains Institute, introduces a panel presentation on cellulosic and advanced ethanol. The speakers include, seated from left, Aaron Hawkins, Novozymes; Ray Roach, Valicor Inc.; Delayne Johnson, Quad County Corn Processors, and Peter Reimers, Arisdyne Systems. AUGUST 2015 | Ethanol Producer Magazine | 53
FEW
Kelly McLaughlin and Lowell Pless talk to an FEW attendee who stopped by the Tracerco booth.
The Sawtooth Brothers entertain FEW attendees June 3 at Nicollet Island.
54 | Ethanol Producer Magazine | AUGUST 2015
Biofuels Automation employees Jeff Wicker, left, and Hans Alwin discuss how the the Foxboro Level Transmitter could be used in new corn oil storage applications at ethanol plants.
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Sally Jorgenson, Solenis LLC, at right, speaks to Kamolttip Wongkolkitsilp of Siamex, about Solenis' antibiotic-free fermentation additives.
A group of FEW attendees listens to Mike Dishman, Poetâ&#x20AC;&#x2122;s regional vice president, during a tour of the Poet Biorefining plant in Lake Crystal, Minnesota.
(605) 428-4300 www.Direct-Automation.com AUGUST 2015 | Ethanol Producer Magazine | 55
SPOTLIGHT
STRENGTH IN NUMBERS: In March, about 70 ACE members and supporters met with 160 congressional offices representing 43 states during the group's 2015 fly-in event.
ACE Dreams Big,
Values Grassroots The man who led the effort to form the American Coalition for ethanol was 67 years old when he took on the project. Almost 30 years later, the organization is still fighting for farmers and all people of the ethanol industry.
PASSION FOR ETHANOL: Merle Anderson waves to attendees of the 2014 ACE Ethanol Conference. The 28th ACE conference is set for Aug. 19-21.
By Holly Jessen PHOTOS: DOMESTIC FUELS
TALKING SHOP: Sen. John Thune, R-S.D., far left, speaks to Jaron Anderson, American Motor Club Marketing. Bill Couser, center, a cattleman, stands in front of the U.S. Capitol during the 2015 fly-in. At right, Brian Jennings, executive vice president, speaks at the 2014 ACE conference.
Member-defined goals for 2015-’16 1. Prioritize E15 in our retailer outreach. 2. Continue educating retailers and automakers about the benefits of flex fuels such as E85 and emerging opportunities for clean octane fuels such as E25/E30.
The story has a familiar beginning, with $2 a bushel corn and determined farmers seeking ways to add value to their crops. For the American Coalition for Ethanol, the name Merle Anderson comes to the forefront. “Merle and his banker traveled to Lincoln, Nebraska, to learn more about ethanol, and he came back with evangelistic passion,” says Brian Jennings, executive vice president of ACE. “He devoted blood, sweat, and tears to form ACE as a true coalition, a big tent for organizations and people from all walks of life who wanted to support ethanol.” Jennings adds that while others had a hand in forming ACE, Anderson’s tenacity, determination and passion helps define the organization today. In the early days, ACE did everything from lobbying at the state government level, working with farmers on organizing and investing in projects to build ethanol plants and sponsoring yellow dime and nickel days at gas stations where ethanol-blended fuel was sold. “One of ACE’s first initiatives was Operation Prairie Fire, which persuaded government fleets to use ethanol-blended fuel,” Jennings says. “Eventually, ACE sponsored dirt-track races and held educational seminars for mechanics.”
3. Maintain strong support for the renewable fuel standard while building momentum for other demand drivers. 4. Continue empowering people of all walks of life to be effective grassroots advocates.
As the organization matured, it got involved on a federal policy level. Although the industry as a whole eventually got on board, ACE was the first to publically support the renewable fuel standard (RFS), he says. The group also developed a market development campaign and was the first to work directly with retailers, encouraging the sale of ethanol-blended fuel. The market development piece is currently one of ACE’s main focuses. “Today we’re putting a great deal of time and money into a new way to increase ethanol demand called Flex Fuel Forward, a campaign featuring retailer-to-retailer interaction about how to succeed and profit by offering E15 and flex fuels to consumers,” he says. While much has changed over the years, a few core things have remained constant. “First, we’ve always punched above our weight,” Jennings says. “The tenacity and passion that Merle Anderson and our founders brought to the table is alive and well today.” And, thanks to leaders like Anderson, Orrie Swayze, Scott Parsley and others, ACE will always be a member-driven organization. “Our most important characteristic is that we’re grassroots,” he says, adding that “our members are the heart and soul of ethanol.” Dave Sovereign represents Golden Grain Energy LLC on the ACE board of directors.
Fast Facts about ACE
Headquarters: Sioux Falls, South Dakota Founded: Dec. 28, 1987 Incorporated: March 25, 1988 Current staff: Six Golden Grain has been a member of ACE since 2006. He considers ACE a tightly run ship with good legislative connections. “We feel as a board that we get great value for the dollars of our membership there,” he says, adding that Golden Grain also maintains memberships with other organizations as well. One of the things ACE does well, Sovereign says, is making sure that the national and state groups, such as the Renewable Fuels Association, Growth Energy, state ethanol production groups and the national and state corn growers groups, are all communicating with each other. Specifically, he mentioned Jennings’ skills as a “great consensus builder.” Author: Holly Jessen Managing Editor, Ethanol Producer Magazine 701-738-4946 hjessen@bbiinternational.com
AUGUST 2015 | Ethanol Producer Magazine | 57
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AUGUST 2015 | Ethanol Producer Magazine | 59
CORN
DIRECT DELIVERY: Plymouth Energy has steadily increased the amount of corn bought directly from farmers, many of whom contract to raise an enzyme-containing variety. PHOTO: SYNGENTA
New Corn Traits Yield Homegrown Enzymes
Plymouth Energy collaborates with corn growers to increase plant efficiency and make ethanol more sustainable. By Tim Tierney
Ethanol plants are constantly looking for opportunities to increase efficiency. Sourcing alpha
amylase enzyme directly from area corn growers and working with them to enhance grain quality is not only helping Plymouth Energy be more efficient, it’s helping make ethanol more sustainable. In 2013, a desire to increase yield and throughput, and decrease energy usage led the Merrill, Iowa-based ethanol producer to enter into a commercial agreement with Syngenta for use of Enogen corn enzyme technology. It began with a two-month trial of Enogen corn and a baseline evaluation.
“We were excited at the potential benefits we believed Enogen could bring to our operation,” says Eamonn Byrne, CEO of Plymouth Energy. “Key performance indicators for us included viscosity, fermentation performance and ethanol drop concentration. The key to these plants is very simple, the more you can get through them, the more money you make, once things are profitable. Everybody is looking at ways of trying to improve efficiency. The other thing we’d been looking at for a long time was yield enhancement. Obviously, if you can get more gallons out of the same bushel of corn, that adds to your profitability as well.”
CONTRIBUTION: 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).
60 | Ethanol Producer Magazine | AUGUST 2015
CORN
TRAILBLAZING: The 50 MMgy Plymouth Energy plant at Merrill, Iowa, worked with Syngenta to trial the Enogen corn variety that expresses alpha amylase. PHOTO: SYNGENTA
Reduced Viscosity
During the trial at Plymouth Energy, Enogen grain was metered into the cook system. Liquid alpha amylase was shut off and viscosity measured. A 40 to 50 percent decrease in viscosity was noted after only 12 hours. This viscosity reduction converted the corn mash from a consistency resembling oatmeal into one more like water, ultimately requiring less energy to pump mash through the plant, and causing less wear and tear on plant equipment. In fact, during the trial, natural gas usage decreased by 9 percent, offering the potential for significant cost savings. â&#x20AC;&#x153;We have seen a huge difference in viscosity,â&#x20AC;? says Nathan Hesse, plant manager. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;ve observed an increase in yield due to the ability to increase our solids. The plant runs a lot quieter today and we have more operational flexibility. In fact, increased flexibility and the freedom to operate between ranges is one of the benefits I appreciate the most. The viscosity break is so great and thereâ&#x20AC;&#x2122;s so much freedom around that. We can run without a mixer. We can run with higher solids. I can speed up or slow down fermentation. I would have a hard time going back to traditional alpha. Plus, keeping the enzyme dollars at home definitely helps the community.â&#x20AC;? Compared to baseline data collected, Enogen showed a 2 percent increase in yield. Plymouth Energy showed an increase in production of approximately 12 percent per day in ethanol production over baseline
data conditions. These results were proven even while the average beer feed rates for production remained the same between the baseline phase of the trial and the performance run phase. â&#x20AC;&#x153;The decrease in energy usage was pretty dramatic,â&#x20AC;? Byrne adds. â&#x20AC;&#x153;You donâ&#x20AC;&#x2122;t need as much electricity to push a less viscous product around your plant because youâ&#x20AC;&#x2122;re jumping your solids from 32 to 34, or 35â&#x20AC;&#x201D; an almost 10 percent increase. â&#x20AC;&#x153;These types of improvements help make ethanol more sustainable. We saw a reduction in greenhouse gas emissions from a plant that was already very efficient. It reduced them more. Youâ&#x20AC;&#x2122;re using less natural gas per gallon of ethanol produced, and less electricity per gallon and youâ&#x20AC;&#x2122;re basically putting an extra 10 percent of product through the same fixed overhead, obviously thatâ&#x20AC;&#x2122;s going to make it more efficient from a greenhouse gas perspective and make the product ultimately more sustainable,â&#x20AC;? he says.
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When trade works, the world wins.
Simplifying Grain Tracking
Enogen was introduced in 2011 and Syngenta estimates that, in 2015, nearly 1,000 growers will plant it on approximately 225,000 acres in 10 states. Currently, nine plants have contracted Enogen corn and now either use, or plan to use, Enogen grain to produce ethanol. Enogen growers are required to follow stewardship guidelines which include planting non-Enogen border rows around an Enogen cornfield, cleaning out planters and combines,
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AUGUST 2015 | Ethanol Producer Magazine | 61
CORN
Creating Opportunity Since 1851. TRACER TRAIT: Purple kernels included in bags of Syngenta's Enogen corn make it easier to visually track and segregate the enzyme-containing corn. PHOTO: SYNGENTA
Partnership Connecting Your Supply to the Domestic and Global Marketplace.
Community Active Participation in the Communities Where We Live and Work.
Commitment Supported by the Reliability and Financial Security of Louis Dreyfus Commodities.
Louis Dreyfus Commodities 62 | Ethanol Producer Magazine | AUGUST 2015
LDCom.com
and dedicating bin space for all Enogen grain. To simplify grain tracking, Syngenta introduced a new tool this year. The Enogen Value Tracker—a naturally derived, nongenetically modified purple tracer trait—will be included in select bags of Enogen hybrids. According to Jack Bernens, head of Enogen at Syngenta, this stewardship innovation will help reduce the chance of misdirecting Enogen grain. “Since the introduction of Enogen corn enzyme technology in 2011, Syngenta has voluntarily implemented comprehensive stewardship protocols to mitigate potential commercial concerns about Enogen corn affecting unintended processes,” Bernens says. “The Enogen Value Tracker offers growers a way to help make this simple, effective protocol even easier.” Bernens adds that it’s important to note that the new tracker seed does not contain Enogen corn enzyme technology. Enogen seed bags containing the tracker will include a physical mixture of approximately 95 percent Enogen seed and 5 percent Enogen Value Tracker seed to aid quick and easy identification. The Enogen Value Tracker will appear as randomly dispersed purple plants across an Enogen field (inside the border rows) and will represent up to 5 percent of the plants in a given field. The grain produced from these purple plants will be comprised of both yellow and purple kernels to make for easy visual tracking of Enogen corn from harvest through storage and processing, helping to ensure this high value grain is delivered to its intended destination. The Enogen Value Tracker is part of an ongoing Syngenta commitment to providing Enogen corn enzyme technology to the market in a manner that offers benefits to growers, ethanol plants and biofuels production, while respecting the other uses of the corn crop. According to Byrne, corn growers and ethanol plants will appreciate the Enogen Value Tracker and the opportunity to simplify the grain tracking it provides. “We have a very strong stewardship program in place,” he says. “The Enogen Value Tracker is another step to help ensure the integrity of the process. This new tool will give everyone comfort in helping to direct the correct grain to the correct system.”
CORN Enhancing Grain Quality
Corn feedstock is the single biggest input cost for an ethanol plant, and ethanol yield per bushel is one of the biggest drivers of plant profitability. Higher grain quality means higher ethanol yield per bushel. Chris Tingle, head of Enogen marketing at Syngenta, says ethanol plants are increasingly seeking not just clean, dry corn, with little or no damage and foreign material, but also grain with quality characteristics that can help maximize ethanol production. “A growing demand for high quality feedstock is creating opportunities for plants and growers to work together to increase grain quality,” he says. “By supplying the quality grain that ethanol plants want—all year long— growers can maximize profitability while helping ethanol plants increase efficiency.” To help ethanol plants gain access to higher, more consistent quality grain, Syngenta is working with Plymouth Energy and other producers to introduce the Ethanol Grain Quality Solution, a protocol designed to help increase corn yields and drive grain quality through insect control, early-season weed management, glyphosate weed resistance management and crop enhancement. The Ethanol Grain Quality Solution provides the ethanol plant and its growers more, highquality grain, while improving grower returnon-investment. “Growers with a contract can receive an additional 10 cents per bushel premium above the current Enogen contract premium by following protocols outlined in the Ethanol Grain Quality Solution,” Tingle explains. “Plus, growers who do not have an Enogen contract, can receive 10 cents per bushel for any additional bushels of corn produced under the Ethanol Grain Quality Solution protocol, provided those bushels are delivered to the ethanol plant.” Byrne notes that Plymouth buys approximately 80 percent of its grain directly from local farmers. “Over the past five years, the trend has definitely been from commercial elevator corn to farmer-sourced grain,” he says. “For the most part, farmer-sourced corn will always be more pure, particularly when you know your farmer. You’re getting a more consistent product and consistency is the name of the game in ethanol production.” Author: Tim Tierney Head, Enogen Business Accounts, Syngenta timothy.tierney@syngenta.com 612-801-9775
AUGUST 2015 | Ethanol Producer Magazine | 63
BUSINESS MATTERS
Iowa Supreme Court Says ‘No’ To Natural Gas Tax Challenge
By Francina Dlouhy
On April 10, 2015, the Iowa Supreme Court found that although the state’s excise tax on the delivery of natural gas “does not produce uniform results for taxpayers,” it is not unconstitutional because the legislature had “a rational basis for writing it the way it did.” In 1998, Iowa restructured its tax on natural gas providers. Before then, Iowa had taxed natural gas utility companies on the value of the property they owned in the area they serviced, i.e., an ad valorem property tax. The replacement taxing scheme imposes an excise tax on the delivery, consumption or use of natural gas. Under that excise tax, the state is divided into 52 geographic areas, each with its own tax rate imposed on the number of therms delivered into that geographic district. Interstate pipelines are exempt from the tax, but the tax is imposed on state regulated utilities that remove natural gas from interstate pipelines and deliver it to customers. Utilities pass the tax on through the varying rates they charge customers. The replacement tax is also imposed on consumers that directly connect and draw natural gas from interstate pipelines, treating a “direct connect” consumer as delivering the natural gas to itself. Ethanol plants (as well as any other plants that tap directly into interstate pipelines) pay the tax based on the amount of gas they consume using the rate prescribed for their location. Little Sioux Corn Processors, a consumer of a substantial volume of natural gas, filed a lawsuit arguing the excise taxing system was unconstitutional because: 1. The varying tax rates for different geographic areas leads to disparate results for similar plants. Little Sioux compared itself to a biorefining plant located in Emmetsburg that is directly connected to the interstate pipeline. However, because the other plant is within the Emmetsburg district, which has a replacement tax rate of zero, it does not pay any tax. (The Court observed that the tax rate could be zero in many municipal districts.)
64 | Ethanol Producer Magazine | AUGUST 2015
2. Plants that receive natural gas from state regulated utilities pay less tax per therm because the utilities often allocate the tax burden among customers, so that high-volume customers pay tax at the lower rate than imposed on a customer that directly connects with the interstate pipeline. Little Sioux argues that penalizes interstate commerce. Even though the Court acknowledged that Little Sioux was paying a higher rate of tax on deliveries of natural gas than paid by other direct consumers in other districts in the state or purchasers from utilities, the Court refused to find that this amounted to unconstitutional discrimination under the United States Constitution or the Iowa Constitution, or that it violated the Commerce Clause of the United States Constitution. In a lengthy and strongly worded opinion, the Court found that because the intent of the replacement tax scheme was to protect individual customers from rate swings in tax bills and to provide stable revenue streams for local governments, the scheme was lawful. The Court also rejected, in short order, the second argument that the utilities’ allocation of the tax burden discriminated against interstate commerce, saying that under the tax all therms delivered into a geographic area are taxed at the same rate. This case reflects how difficult it is to bring a challenge to a taxing scheme on either state or federal equal protection grounds. For ethanol producers facing this issue, the best bet is pushing for legislative reform of a system that is clearly unfair yet surprisingly not unlawful. While the decision is bad news for Little Sioux, it certainly lays out several glaring disparities in the replacement tax scheme that could provide ammunition for arguing for legislative reform. Author: Francina Dlouhy Partner, Faegre Baker Daniels 317-237-1210 francina.dlouhy@FaegreBD.com
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