December 2015 Ethanol Producer Magazine

INSIDE: DUPONT CELLULOSIC PLANT HOLDS GRAND OPENING DECEMBER 2015

COMMITMENT TO SAFETY Companies Make Employee Protection Top Priority Page 26

FSMA Shifts Focus From Reaction To Prevention Page 34

Ethanol Fire Training Benefits First Responders, Firefighters Page 40 www.ethanolproducer.com

CONTENTS

VOLUME 21 ISSUE 12

DECEMBER 2015

DEPARTMENTS 6

FEATURES

EDITOR'S NOTE An Industry Safe and Sound

By Tom Bryan

7 8

9

AD INDEX THE WAY I SEE IT

26

2012 Shaping Up To Be a Close Game

By Mike Bryan

SAFETY

Focus on Safety

Keeping a lid on lost time accidents with 100 percent buy-in

EVENTS CALENDAR

By Holly Jessen

10 VIEW FROM THE HILL

RFS in the Limelight

By Bob Dinneen

34

REGULATION

Probing the FSMA Rule

Ethanol experts examine rule implementation for DDGS and corn oil

By Susanne Retka Schill

12 DRIVE

RFS Crucial to Clean Energy Future

By Tom Buis

14 GRASSROOTS VOICE

40

Maybe They Have Been Listening

By Ron Lamberty

TRAINING

16 GLOBAL SCENE

Ethanol Know-how When It’s Needed

By Ann Bailey

Firefighters and first responders benefit from ethanol safety training

Brazil, America Can Help Solve Climate Challenge

By Andrea Kent

17 BUSINESS MATTERS

46

CELLULOSIC

Designs on Success

DuPont’s 30 MMgy facility in Iowa is celebrated

By Tim Portz

CONTRIBUTION

Biorefinery Assistance Program Changes Now in Effect

By John Kirkwood

18 BUSINESS BRIEFS 20 COMMODITIES

48

22 DISTILLED

LOADOUT

52 TALKING POINT

Rail, Truck Loading Skid Designs Aim to Mitigate Multiple Risks

Master of Deception, EPA Hides Gasoline Threat

By Dave VanderGriend

EHS professionals face a confusing landscape of regulations and solutions

54 MARKETPLACE ON THE COVER

Marc Berger, safety manager at UWGP

PHOTO: BILL KEEFREY PHOTOGRAPHY

By Pete Singleton

Ethanol Producer Magazine: (USPS No. 023-974) December 2015, Vol. 21, Issue 12. Ethanol Producer Magazine is published monthly by BBI International. Principal Office: 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. Periodicals Postage Paid at Grand Forks, North Dakota and additional mailing offices. POSTMASTER: Send address changes to Ethanol Producer Magazine/Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, North Dakota 58203.

4 | Ethanol Producer Magazine | DECEMBER 2015

EDITOR'S NOTE

An Industry Safe and Sound Most of our readers know that North American ethanol plants are empirically safe places to work. After all, Ethanol Producer Magazine has been

Tom Bryan

President & Editor in Chief tbryan@bbiinternational.com

covering the industry’s strong safety record for years, reporting on how U.S. producers maintain low rates of lost-time incidents, and how they retool safety plans and training programs to stay ahead of the curve. So while the overarching attainment of ethanol plant safety is not headline news—thank goodness—the nuanced, disciplined and very human process of achieving plant safety is always a great story. Truth is, ethanol plant safety runs deeper than sheer statistics (like the fact that only 4.6 percent of ethanol plant employees had a recordable injury last year). As EPM Managing Editor Holly Jessen reports in “Focus on Safety,” on page 26, plant safety is about culture. It’s about trust. It’s about message. It’s about teamwork. It’s about protecting the well-being of employees and safeguarding lives.

Safety necessitates communication, and Jessen reports that ethanol plants and the companies that serve them are increasingly training staff to report and discuss not just why accidents happened, but near misses and latent hazards. Companies are asking their employees to speak up, and man, they are. Novozymes, for example, set a goal for 150 safety suggestions this year and received more than 360. Talk about opening up.

Speaking of group communication, EPM Staff Writer Ann Bailey recently attended an ethanol handling safety seminar in North Dakota, one of 15 seminars in three states put on by the Renewable Fuels Association’s Ethanol Emergency Response Coalition in 2015. In “Ethanol Know-how, When It’s Needed,” on page 40, Bailey reports that more than 4,800 first responders in 29 states have now been taught how to handle emergencies involving ethanol and ethanol-blended fuels. The coalition’s work is making a real difference.

On page 34, we turn from safety to regulatory compliance in “Probing the FSMA Rule.” This in-depth look at how ethanol producers will prepare for the Food Safety Modernization Act is a follow-up to our well-attended Oct. 6 webinar on the same subject.

Susanne Retka Schill, EPM senior editor, explains that FSMA—the most sweeping reform of U.S. food safety laws in 70 years—will affect ethanol producers in several ways. The rule will, for example, oblige ethanol plants to adopt current good manufacturing practices and comply with rigorous hazard analysis requirements. It could also place new supply-chain requirements on producers. No doubt, it will take many, many months to understand the full impact of FSMA. Finally, on page 46, we share images from the grand opening of DuPont’s 30 MMgy cellulosic ethanol plant in Nevada, Iowa. The company celebrated the plant’s substantial completion in late October. The commissioning process is under way.

FOR INDUSTRY NEWS: WWW.ETHANOLPRODUCER.COM OR FOLLOW US: 6 | Ethanol Producer Magazine | DECEMBER 2015

TWITTER.COM/ETHANOLMAGAZINE

VOLUME 21 ISSUE 11

ADVERTISER INDEX

EDITORIAL

President & Editor in Chief Tom Bryan tbryan@bbiinternational.com

2016 Fuel Ethanol Workshop & Expo

56 45

11 18 36 5 30 44 28 3 24 53 2 25 9 42 33 55 19 47 31 43 37

13

32

29

50

15

49 38 3 22-23, 39 51

2016 International Biomass Conference & Expo

Vice President of Content & Executive Editor Tim Portz tportz@bbiinternational.com

2016 National Ethanol Conference Bilfinger Water Technologies

Managing Editor Holly Jessen hjessen@bbiinternational.com

Buckman

Senior Editor Susanne Retka Schill sretkaschill@bbiinternational.com News Editor Erin Voegele evoegele@bbiinternational.com

CPM Roskamp Champion Direct Automation EcoEngineers ERI Solutions, Inc.

Staff Writer Ann Bailey abailey@bbiinternational.com

Fagen Inc.

Fluid Quip Process Technologies, LLC

Copy Editor Jan Tellmann jtellmann@bbiinternational.com

GEA Westfalia Separator Growth Energy

ART

Art Director Jaci Satterlund jsatterlund@bbiinternational.com Graphic Designer Raquel Boushee rboushee@bbiinternational.com

PUBLISHING

Hydro-Klean LLC ICM, Inc.

INTL FCStone Inc.

Iowa Economic Development Authority Iowa Renewable Fuels Association J.C. Ramsdell Enviro Services, Inc. Louis Dreyfus

Chairman Mike Bryan mbryan@bbiinternational.com

MonitorTech Corporation

CEO Joe Bryan jbryan@bbiinternational.com

Nalco, an Ecolab company Nelson Engineering, Inc.

POET-DSM Advanced Biofuels

SALES

Vice President of Operations Matthew Spoor mspoor@bbiinternational.com

RPMG, Inc

Sales & Marketing Director John Nelson jnelson@bbiinternational.com

Swedish Exergy AB

Business Development Director Howard Brockhouse hbrockhouse@bbiinternational.com

Thermal Refractory

Seneca Companies

Senior Account Manager/Bioenergy Team Leader Chip Shereck cshereck@bbiinternational.com Account Manager Jeff Hogan jhogan@bbiinternational.com

Syngenta: Enogen Tower Performance, Inc. Tramco, Inc.

Victory Energy Operations, LLC. Wabash Power Equipment Co.

Circulation Manager Jessica Beaudry jbeaudry@bbiinternational.com 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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DECEMBER 2015 | Ethanol Producer Magazine | 7

THE WAY I SEE IT

2015 Shaping Up to be a Close Game

By Mike Bryan

By the time this article is read, the World Series will have been decided and the Super Bowl will be just weeks away. This whole “Big Game” thing got me to

thinking about how the ethanol industry would have fared this year had we actually kept score.

I would say it has been a pretty tight game so far. One of the things that really helps our game is that, unlike Big Oil, which has very deep pockets, Ethanol has a very deep bench with thousands of players willing to leave everything on the field and fans that never say die.

The game between Ethanol and Big Oil has always been one of opposing tactics. Big Oil’s game plan is “take no prisoners,” while Ethanol’s is “not taking no for an answer.” So the two teams faced-off again this year, as they have for the last 30 years, each with different ideologies and different end goals, but with the same determination to win.

Ethanol managed to hold off a strong offensive (I use offensive strictly in sporting terms) move by Big Oil that was designed to take us out early in the season. But Ethanol was up to the task and while we were not batting 1,000, we did manage to hold Big Oil to a tie game going into the top of the eighth.

In the bottom of the eighth, with Land Use on first and RINs on second, Big Oil tried to knock it out of the park by funding a report by the University of Tennessee that discredited Ethanol’s ability to reduce greenhouse gas emissions. It was hit deep into center field but was caught in what could only be described as a brilliant catch by our team in Washington. That ended the inning with what otherwise, could have been a game winning homer.

8 | Ethanol Producer Magazine | DECEMBER 2015

Ethanol’s coaching this season has been outstanding. Reading Big Oils change-ups, stealing a base or two when we can, and settling for a walk, just to get a man on. The umpiring, on the other hand, has left much to be desired. The EPA, who is supposed to be an impartial plate ump, seems to have continually failed to call Big Oil on balls that were clearly not in the strike zone and more than once called Big Oil safe at home when my grandmother in the stands could have made a better call.

So as we head into the top of the ninth for this 2015 season, it looks like once again Ethanol will have held on to their position as the clean fuel supplier for America’s automotive fleet. But make no mistake, the 2016 season is just around the corner and both teams are preparing for what will almost certainly be a wild season of swings, misses and hits, punctuated by walks, runs and hopefully a few homers.

My only hope is that in 2016 the umpiring is a lot more impartial and the fans come out in even bigger numbers. Spring training is just around the corner and before we know it summer will be upon us. Holy cow, it’s time for a hotdog and a beer.

That’s the way I see it.

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

EVENTS CALENDAR

National Ethanol Conference February 15-17, 2016 New Orleans, Louisiana This year’s program, “Fueling a High Octane Future,” will highlight how ethanol’s high-octane content is driving demand for the fuel both domestically and abroad.

With a 113-octane rating, ethanol is the highest-rated performance fuel in the market and keeps today’s engines running smoothly. Tomorrow's downsized, high-compression engines will require higher octane choices at the pump. Ethanol and higher-level ethanol blends are uniquely poised to help automakers and consumers alike achieve stricter fuel economy and emissions requirements at a reduced cost.

202-315-2466 | www.nationalethanolconference.com

International Biomass Conference & Expo April 11-14, 2016 Charlotte, North Carolina Charlotee Convention Center 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

VIEW FROM THE HILL

RFS in the Limelight

By Bob Dinneen

2015 has been a historic year for the biofuels industry, particularly in terms of the renewable fuel standard (RFS). The ethanol industry began the year on

a high note. In January, the EPA released renewable identification number (RIN) generation data showing that ethanol producers met 2014 statutory RFS requirements, even without a final rule generated by the U.S. EPA. That good news was dampened a few months later when the EPA proposed to slash the RVO blending requirements called for in the RFS.

This was also a year when the industry successfully fended off a number of attacks, including the misinformation campaigns generated by Big Oil, the American Motorcycle Association, and Boat Owners Association of the United States, among others that were designed to mislead the public about ethanol.

2016 will, no doubt, have plenty in store for the biofuels industry. Without further delay, I present my annual in and out list.

OUT

IN

EPA's 2014–'16 RVO proposal

308,000 pro-RFS comments to EPA

Speaker Boehner

Speaker Ryan

Exxon global warming denials

Pope's carbon encyclical

"Blend wall"

USDA's Biofuel Infrastructure Partnership

Candidate obfuscation on RFS

America's Renewable Future

Smarter Fuel Future

Americans for Energy Security and Innovation

Renewable Super Premium

High Octane Fund

Sensenbrenner E15 pique

E15 warranties from Detroit's "Big Three"

Jay Leno's misinformation

Auto expert mythbusting

Advanced Ethanol Council

Advanced Biofuels Business Council

American Motorcycle Association criticism of ethanol

Record turnout for "Free Fuel Happy Hour" at Sturgis, S.D.

Misleading Big Oil ad campaigns

Fuels America pro RFS response

GasBuddy.com

E85Prices.com

Old but informative RFA website

All-new and even more informative Ethanolrfa.org

Food vs. fuel

Food and fuel

Foreign gasoline imports

American ethanol exports

RFS legislation

RFS litigation

Rail congestion

Falling crude by rail demand

Petroleum industry-funded polemics

RFA technical, peer reviewed Author: Bob Dinneen President and CEO, Renewable Fuels Association 202-289-3835

10 | Ethanol Producer Magazine | DECEMBER 2015

) ( % 5 8 $ 5 < ȝ + <$7 7 5 ( * ( 1 & < 1 ( : 2 5 / ( $ 1 6

3 5 2 * 5 $ 0 $ 9 $ , / $ % / ( 1 $7 , 2 1 $ / ( 7 + $ 1 2 / & 2 1 ) ( 5 ( 1 & ( & 2 0

DRIVE

RFS Crucial to Clean Energy Future

By Tom Buis

When EPA Administrator Gina McCarthy spoke with our members at the Growth Energy Advocacy Conference this fall, she said, “President Obama is fully committed to addressing the challenge of climate change, and he knows as well as you do that the RFS is a tool we need to bring to the table. The RFS is a crucial part of a broad, administration-wide strategy to act on climate change and propel us even faster toward a clean energy future.” Now, as countries across the globe gather

in Paris for the United Nations Conference on Climate Change, we’d like to echo McCarthy’s statements and issue a reminder that biofuels are a key part of the climate change solution.

From Nov. 30 to Dec. 11, countries at the conference will aim to reach, for the first time, a universal, legally binding agreement that will enable us to improve air quality and boost the transition towards resilient, low-carbon societies and economies. These important, ambitious goals can be met with the help of biofuels and supportive policies. The renewable fuel standard (RFS) is the most significant carbon reduction policy the United States currently has in place, and similar policies can be adopted in other countries.

As a result of our ethanol policies, the United States reduced its greenhouse gas (GHG) emissions by approximately 37.6 million metric tons in 2014 alone, which is the equivalent of removing 8.4 million automobiles from the road. The RFS, as expanded in 2007, set a goal of producing 36 billion gallons of renewable, domestic fuel by 2022. And if our nation has the resolve, we could almost eliminate our need for fossil fuels used for automotive transportation and replace it with a homegrown, environmentally

12 | Ethanol Producer Magazine | DECEMBER 2015

friendly, renewable fuel. With the tremendous increases in corn yields and more than 1 billion tons of cellulosic biomass in the United States, the possibilities for ethanol are staggering.

According to Argonne National Laboratory, compared to gasoline, ethanol reduces GHG emissions by an average of 34 percent. Ethanol producers are also developing new and innovative ways to produce sustainable biofuels from farm waste and woody biomass, ushering in the next generation of renewable fuels that promise even greater reductions in GHG emissions. Argonne National Laboratory estimates that cellulosic and other advanced biofuels will reduce GHG emissions by 100 percent or more compared to gasoline.

As farming practices continue to advance, more alternative energy sources are used in ethanol production, and pipeline infrastructure is built for distribution, ethanol’s GHG emissions will continue to decline. National policies have encouraged investment, research, technology and innovation that have reduced the energy and environmental footprint of the grain-based ethanol industry and stimulated the production of next-generation biofuels. Ethanol plants have already improved performance in ethanol yield, water utilization and thermal energy application.

With rapidly growing energy demands, our nation and others must invest in homegrown biofuels that are cleaner, cheaper and offer a more reliable supply than fossil fuels. Imagine all of the good we can do for the environment and for our future by increasing the blend of ethanol in our fuel supply.

Author: Tom Buis

Co-chairman, Growth Energy 202-545-4000 tbuis@growthenergy.org

IS MADE HERE.

For years, we’ve been told that cellulosic ethanol is a “fantasy fuel.” And it is.

And now it’s going to change the world. For real.

So we’ve spent a decade planning, researching, and working hard to make that fantasy a reality. ®

POET-DSM.COM

Advanced Biofuels

GRASSROOTS VOICE

Maybe They Have Been Listening

By Ron Lamberty

As I’m writing this column in late October for people to read in late November or early December, it occurs to me that some important events will have happened by that time—events that could change the marketplace for ethanol in the United States for years to come. Even more change could come in 2016, with other

EPA rulings or decisions and an election. And yet, with rules and regulations possibly changing dramatically in the upcoming weeks, months, and years, if I had to make a prediction, I would guess there will be more ethanol sold in 2016 than any other time in history.

Now, that’s absolutely a guess—but it’s a guess based on what I am seeing in that other very important part of ethanol’s world: the retail fuel marketplace. Starting with petroleum marketer trade shows I took part in earlier this year, to the three we attended in September and October, I can report that marketer interest is better than it’s been any time over the past five years. Marketers already selling higher blends of ethanol report some of the highest volume, most profitable times they’ve ever had, and they are telling their fellow marketers about it. Well, they’re telling fellow marketers who don’t have stations near their stores. No reason to help the completion figure out why you’re kicking their butts!

It’s important to have policies that make sure markets are treating ethanol fairly, and there are still plenty of things that need to be accomplished to make sure E85, E15, and other blends can be sold without oil industry manufactured restrictions. But I’m far more encouraged by more petroleum marketers “getting” ethanol, or at least seeing the success of others and wondering what that is all about. Whether it’s renewable identification numbers (RINs), equipment compatibility, or blending economics, ethanol discussions with petroleum marketers at trade shows and events have changed from “Why should I sell E15 or E85?” to “How can I sell E15 or E85?”

It certainly didn’t hurt that the USDA put up $100 million dollars to help stations owners update their fueling equipment for

14 | Ethanol Producer Magazine | DECEMBER 2015

higher blends of ethanol. That funding, which becomes $200 million when coupled with state and, or, private matching funds, becomes even more attractive as marketers are facing another change in the equipment required to accept new Europay, MasterCard, Visa or so-called smart credit cards that contain a microchip.

While a change in card processing equipment a few years ago failed to generate the interest in new equipment many predicted, this change is different. It’s different because this time, if a station owner decides not to install the new technology, he or she will be on the hook for any fraudulent charges made at that station.

And this change is more expensive than the last one. The National Association of Convenience Stores told Congress it will cost $26,000 per station to upgrade, which is only a few thousand dollars less than buying all new dispensers and receiving a 75 percent grant from USDA. Having said that, those issues aren’t the main reason curious marketers are asking about ethanol. They’re hearing about higher customer counts and better margins selling fuels that cost their customers less. They’re beginning to compare their fuel options, and our fuel is making sense more often.

And if more interest from U.S. station owners isn’t enough, at the NACS show, the world’s largest convenience store and fuel retailer trade show, nearly half of the people picking up ethanol information from our booth were from Canada, South and Central America, India, and China. Not people from those nations who now live in the United State, marketers who sell fuel in those countries.

There is growing interest in ethanol in other countries, especially countries where laws are changing to allow ethanol as a fuel choice for the first time. If our laws won’t protect marketer’s ability to provide fuel choices at the pump, we’ll be able to sell it where they will.

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

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 11115010-P1 02/15

GLOBAL SCENE

Brazil, America Can Help Solve Climate Challenge

By Leticia Phillips

International attention turns toward Paris as the United Nation’s COP21 climate summit convenes, bringing us closer than ever to an international agreement curbing emissions to keep global warming below 2 degrees Celsius. While the Intended Nationally Determined Contributions of

most countries to the UN process focus on electricity generation or land use, Brazil’s INDC underlines the impact biofuels can have in meeting the world’s decarbonization goals, and may inspire other nations seeking sustainable economic growth.

In its INDC, Brazil targets greenhouse gas emissions 37 percent below 2005 levels by 2025 with further reductions by 2030. Biofuels are critical to this effort, and will increase their share of the country’s overall energy mix to approximately 18 percent by 2030 through increased ethanol supply, second-generation biofuels, and more biodiesel in the fuel mix.

Biofuels can lower global transportation emissions. The Brazilian experience highlights the transformative power of biofuels to reduce emissions. The World Energy Council reports fossil fuels generate 63 percent of total global emissions, with transportation fuel generating 28 percent of U.S. emissions and 17 percent of Brazilian emissions.

This impact extends beyond ground transport, and the international aviation industry has accordingly committed to carbon-neutral growth through 2020 before declining 50 percent by 2050. This is a particularly exciting application for clean transportation, as multiple companies are developing cellulosic ethanol drop-in fuels for use in any amount with current engines, fueling stations and pipelines.

Ethanol has consistently been proven the cheapest and most efficient fuel feedstock produced at a commercial scale to replace fossilbased transportation fuel. The U.S. EPA has certified sugarcane ethanol 90 percent cleaner than conventional gasoline on a full life-cycle basis, a finding repeatedly confirmed by life-cycle analyses from around the world.

Sugarcane is a leading source of renewable energy in Brazil, supplying over 16 percent of total energy needs and replacing 40 percent of gasoline needs with ethanol, all while using less than 1.5 percent of the country’s arable land. Indeed, improvements in using sugarcane waste (bagasse) could supply more than 20 percent of domestic electricity demand by 2023, up from just 3 percent today.

Some commercial biofuel technologies can reach virtually zero emissions, and recently introduced production techniques and technologies

that could make sugarcane ethanol and advanced cellulosic fuels emissionsnegative in the foreseeable future. Considering these facts, it’s hard to argue with claims that every gallon of biofuel creates long-term climate benefits as well as short-term public health benefits.

Ethanol production can ramp up to meet demand. Even with increased demand for sugarcane ethanol under Brazil’s INDC pledge and expected global demand, scalability won’t become an issue. Since 2011, export volumes to the U.S have reached as high as 541 million gallons in a single year with comparable European exports.

Brazil’s National Agency of Petroleum, Natural Gas and Biofuels estimates installed capacity over 5 billion gallons anhydrous and 4.6 billion gallons hydrous ethanol, based on 383 producing mills, meaning installed capacity was nearly double actual daily output.

Brazil’s sugarcane ethanol producers are investing over $3.5 billion through 2017 in new pipeline, inland waterways and port facilities. Brazil produced 7.3 billion gallons of ethanol in the 2014 harvest season, and preliminary figures for 2015-’16 estimate 7.8 billion gallons of output. In addition, agricultural productivity is increasing, and the Center for Cane Technology estimates it will grow from 7,100 liters per hectare today to 24,500 liters per hectare by 2025.

In this light, sugarcane ethanol can potentially reshape global fuel markets and their resulting emissions as part of an international climate deal.

More than 100 countries grow sugarcane, and most could produce and use ethanol. According to the UN’s Food and Agriculture Organization, only 10 percent of land worldwide available and suitable for cane production is used for sugarcane cultivation.

Together, America and Brazil can help solve the climate challenge.

Reducing transportation sector emissions is key to Brazil’s climate goals, but it’s also central to America, Europe, and China’s INDCs. In a joint statement issued June 30 by Presidents Obama and Rousseff, America and Brazil pledged to increase their biofuels consumption, endorsed cooperation in the “priority area” of biofuels, and “recognized the role biofuels can play in reducing greenhouse gas emissions.”

Together, America and Brazil have built a global biofuels market, showing pragmatic policy can create economic growth and environmental benefits. Now it’s time to turn our experience as the world’s two biggest ethanol producers toward the world’s climate challenge. Let’s work together to develop global solutions encouraging production and consumption, investment and innovation, and smart policy on the road to a low-carbon transportation future.

Author: Leticia Phillips North American Representative, Brazilian Sugarcane Industry Association, UNICA 202-506-5299 leticia@unica.com.br

16 | Ethanol Producer Magazine | DECEMBER 2015

BUSINESS MATTERS

Biorefinery Assistance Program Changes Now in Effect

By John Kirkwood

On Feb. 7, 2014, President Obama signed into law the 2014 Farm Bill, which includes $881 million in mandatory funding for energy programs. In June,

an interim final rule was published in the Federal Register for the Biorefinery, Renewable Chemical and Biobased Product Manufacturing Assistance Program, known as the 9003 Program, by the USDA’s Rural Business-Cooperative Service. The subsequent interim rule, which took effect Aug. 24, incorporates changes required by the 2014 Farm Bill, includes additional clarifications and modifications, and addresses comments published in 2011.

Here are some of the changes that have been implemented.

It is no longer required that a biorefinery produce primarily advanced biofuel in order to participate in the 9003 Program. Some amount of advanced biofuel must be produced, but no specific minimum production level is established. It also allows for the funding of biorefineries that primarily produce renewable chemicals and biobased product manufacturing facilities.

The program now includes a project finance framework to supplement the traditional commercial lending framework. This provides the lender of record with additional flexibility in its credit evaluation process and in response to the types of projects that have been previously accepted into the 9003 Program.

The application process has been separated into two phases. This includes an initial phase-one application, which requires general project information, including preliminary economic and technical feasibility.

Next, subject to invitation from the agency, applicants are required to turn in a phase-two application with detailed planning, engineering, environmental, technical and financial information, including the lender's credit evaluation. This is similar to the two-phase application process used by the U.S. DOE’s loan programs office.

The need for the lender of record to obtain and rely on certain written materials from qualified third parties has been emphasized.

Some examples include independent engineers, accountants, appraisers, and consultants.

A credit rating is no longer required from all applicants for loans of $125 million or more. Instead, an evaluation and rating of the total project's indebtedness is now required from all projects with total eligible project costs of $25 million, which have submitted phase-two applications.

A few common questions regarding the changes to the 9003 Program: Were there any material changes to the existing advanced biofuel portions of the 9003 Program? While the definition of advanced biofuel

has remained unchanged, the agency has eliminated the requirement that a biorefinery produce mainly advanced biofuel in order to qualify.

Instead, a biorefinery is only required to produce some advanced biofuel (a minimum production level is not specified) in order to apply for the 9003 Program. Furthermore, a biorefinery that produces biofuel need not sell the advanced biofuel as biofuel.

Did it change the definition of biorefinery? The subsequent interim rule left unchanged the definition of biorefinery, which is “a facility (including equipment and processes) that (A) converts renewable biomass into biofuels and biobased products, and (B) may produce electricity.” The agency has interpreted this definition to mean that the facility must produce an advanced biofuel and may produce biobased products, including renewable chemicals, and electricity.

What is a renewable chemical? The subsequent interim rule implemented the 2014 Farm Bill's definition of renewable chemical to mean “a monomer, polymer, plastic, formulated product or chemical substance produced from renewable biomass.”

Did the subsequent interim rule change the definition of renewable biomass? No. Corn kernel starch is still excluded from the list of organic matter considered to be renewable biomass.

What is the two-phase application process and how will it affect applicants? For one thing, the application deadlines have been changed from Nov. 1 and May 1 of each year to Oct. 1 and April 1. And, only those applicants with higher phase one-priority scores, out of a scale of 125 possible points, will be invited to submit phase-two applications. A minimum score of 55 points is required in order to be considered for a guarantee.

The agency expects that this two-phase application process will increase the cost to some applicants, namely those invited to participate in the second phase. However, it is expected to decrease the overall cost to the public and to many applicants, namely those not invited to participate in the second phase.

What are the project funding requirements? The subsequent interim rule clarifies that total federal participation under the 9003 Program in a project (the loan guarantee plus any other federal funding) is not to exceed 80 percent of a project's total eligible costs. The remaining 20 percent must be funded from nonfederal sources.

Author: John Kirkwood, Partner Faegre Baker Daniels LLP Energy & Natural Resources Industry Group 317-569-4602 John.kirkwood@FaegreBD.com

DECEMBER 2015 | Ethanol Producer Magazine | 17

BUSINESS BRIEFS Randall Doyal, general manager and CEO at Al-Corn Clean Fuel, Claremont, Minnesota, was reelected to chair the board of directors of the Renewable Fuels Association at its anDoyal nual membership meeting in Omaha, Nebraska. The membership also elected Mick Henderson, Commonwealth Energy in Hopkinsville, Kentucky, as its vice chairman; Jim Seurer, Glacial Lakes Energy LLC in Watertown, South Dakota, treasurer; and Bob Dinneen, RFA, Washington, D.C. president.

Anita Maher-Lewis has been hired as the renewable fuels standard (RFS) program manager at EcoEngineers. She will oversee the compliance program, including RFS registration, renewable identification number (RIN) management and quality assurance programs.

She has over 20 years of experience in the environmental and regulatory arena. Prior to joining EcoEngineers, she managed a team of engineers and geologists in a consulting engineering firm working with clients such as Quik Trip, Casey’s and Hy-Vee.

People, Partnerships & Deals

Ruth Dreessen has been named the new chairman of the board for Gevo Inc., replacing Shai Weiss, who has stepped down from the board. Dreessen, a director since 2012, will remain a Dreessen member of the audit committee, although director Gary Mize will replace her as chairman. Dreessen has 25 years of experience in the chemicals industry and has served on the boards of several public companies. She is currently on the board of Targa Resource Partners LP and is a managing director of Lion Chemical Capital, a private equity firm focused on the chemical industry.

of Optimash enzymes designed for cellulosic conversion. The enzymes are specifically formulated for use in the Galva, Iowa-based 35 MMgy ethanol producer’s corn fiber cellulosic ethanol process.

asdfMichigan Biotechnology Institute announced it has received a patent for innovations in its biomass pretreatment process. The new patented process enables low-cost production of AFEX pretreated biomass, while cost-effectively recycling and reusing the catalyst. Using the technology first developed by a team led by Bruce Dale at Michigan State University, MBI recently achieved the milestone of producing more than 500 batches totaling 15 tons of AFEX pretreated biomass at Two ethanol producers recently joined the MBI’s 1-ton-per-day pilot facility in Lansing, U.S. Grains Council, KAAPA Ethanol LLC, Michigan.

Minden, Nebraska, and Granite Falls Energy LLC, Granite Falls, Minnesota. Other Syngenta announced it has signed agreeethanol-industry firms to become new mem- ments with 16 ethanol plants to use Enobers are Illinois-based DDGS trader Translink gen grain, representing a combined capacity Grains Inc. and Texas-headquartered logistics of more than 1 billion gallons. The hybrid and risk management firm Murex LLC. corn containing alpha amylase enzymes was grown on approximately 225,000 acres this DuPont Industrial Biosciences and Quad year and is expected to top 400,000 acres County Corn Processors announced a multi- next year. The company reports growers year contract for the use of the DuPont suite who plant Enogen earn an average premium

DIEMME® FILTRATION FILTER PRESSES FOR THE BIOETHANOL PROCESS ______

Over the years Diemme® Filtration developed a sound experience in solid /liquid separation in the process of Bioethanol Second Generation production, thanks to its unique know how and its unrivalled R&D capabilities. ______ BILFINGER WATER TECHNOLOGIES www.water.bilfinger.com

18 | Ethanol Producer Magazine | DECEMBER 2015

BUSINESS BRIEFS¦

of 40 cents per bushel. For the ethanol producer, the enzyme-containing corn reduces the viscosity of the corn mash and increases solids loading that can result in cost savings. df Jan tenBensel, a Cambridge, Nebraska, farmer, was appointed by Gov. Pete Ricketts to serve a four-year term on the Nebraska Ethanol Board. He replaces Steve Hanson, Elsie, Nebraska, as a wheat TenBensel production representative on the board. Established in 1971, the seven-member board includes four active farmers, one labor representative, one petroleum marketer and one business representative.

asdfRenewable Energy Group Inc., through its subsidiary REG Synthetic Fuels LLC, received bankruptcy court approval to purchase equipment at the KiOR Columbus LLC production facility in Mississippi, including a 12 million-gallon hydrotreating unit, distillation column and tankage. KiOR’s 15 MMgy facility was designed to produce cellulosic gasoline and diesel from Southern Yellow Pine.

Pat Bowe is succeeding Mike Anderson as president and CEO of The Andersons Inc., effective Nov. 2. Formerly corporate vice president of Cargill Inc. for the Bowe food ingredient and systems platform, Bowe has more than 35 years of experience in the agricultural sector. Anderson, grandson of the company’s founder, will asdfJoule Unlimited Inc. announced its fuel- continue as chairman of the board. grade, trademarked Sunflow-E ethanol has been registered by the U.S. EPA for commer- asdAlgenol LLC is partnering with Fujian cial use in E10 and E15 blends. Earlier this Zhongyuan New Energy Co. Ltd. to develop year, the company announced successful third- projects in Southern China, utilizing carbon party testing had found the fuel conforms with emissions to create renewable fuels. Algenol’s ASTM D4806, the standard for ethanol to be patented technology process can utilize inblended with gasolines, as well as the European dustrial CO2 emissions from power plants as EN 15376. Joule converts carbon dioxide to a feedstock for proprietary algae to produce ethanol directly in a continuous process, us- renewable transportation fuels (ethanol, gas, ing engineered bacteria. This summer, the diesel and jet). ZYNE’s expertise is in delivery company received a favorable review from the renewable fuels.

U.S. EPA on its Microbial Commercial Activity Notice. The company notes this is the first SHARE YOUR INDUSTRY NEWS: To be included in the Busitime the EPA has allowed the commercial use ness Briefs, send information (including photos and logos, if available) to Business Briefs, Ethanol Producer Magazine, of a modified cyanobacterium.

308 Second Ave. N., Suite 304, Grand Forks, ND 58203. You

asdfNovozymes has launched a new enzyme for the ethanol process. Liquozyme LpH is an alpha-amylase effective at low pH that thins the mash by breaking down starch into shorter dextrin chains. A more fluid mash ensures more efficient operational performance for ethanol producers running their production at low pH. Plant trials have shown improved viscosity levels and liquefaction, enabling customers to reduce their use of chemicals for pH adjustment.

may also email information to evoegele@bbiinternational. com. Please include your name and telephone number.

DECEMBER 2015 | Ethanol Producer Magazine | 19

COMMODITIES

Prices & Market Analyses

Natural Gas Report

Natural gas export on verge of reality Oct. 28—After years of talking, financing, and construction, the first cargo of liquefied natural gas (LNG) is set to leave the U.S. Gulf Coast in early 2016. Cheniere Energy’s Louisiana-located Sabine Pass LNG terminal is likely to start up in early 2016 and is slated to become the first of a number of projects to begin operation.

Sabine Pass is currently undergoing a construction project for 2.2 Bcf per day of capacity. The company recently received approval to ramp up exports to a total of 3.6 Bcf per day, with the remainder of that capacity is planned for future development. Although these numbers may seem small in a market that produces well over 70 Bcf per day, the exports will add to growing demand across multiple sectors and could make for a tighter domestic market.

Past conventional wisdom dictated that the U.S. was running out of domestic natural gas supply and production volumes were doomed to a perpetual state of decline. Capital was poured into building out LNG import capability. The idea was that foreign supplies would meet growing domestic demand. Indeed, new construction projects brought import capacity to over 18 Bcf per day,

by Andy Huenefeld

or more than a quarter of U.S. demand in 2010. That capacity has been utilized at an average of less than 4 percent over the past five years, with imports more recently flatlining below 0.5 Bcf per day.

Now, with surging domestic output, the focus has firmly turned to exports. The same firms that rushed to build import capacity are now reversing pipeline flows and converting terminals to facilitate exports. Including Sabine Pass, there are five terminals currently under construction with a total capacity of more than 8.5 Bcf per day, most of which is slated to come online between 2017 and 2019.

While near-term global dynamics have been altered unfavorably for the industry since most of the decisions to invest in LNG exports were made, most of the under-construction volume is already tied to firm long-term contracts. These contracted volumes will still likely be shipped out of a U.S. market, which is expected to find itself as an overall net exporter of natural gas before the end of the decade, a prospect that would have sounded impossible in the not-too-distant past.

Corn Report

Most areas of Corn Belt expected to perform well Oct. 28—Harvest has wrapped up and yield reports have been better than expected. In the USDA’s October supply and demand report, the government increased yields to 168 bushels per acre, up from the first new crop yield report in May, which estimated 166.8 bushels per acre. Excessive rains in areas of the Corn Belt during May and June had analysts projecting yield cuts. As shown in the map, aside from the Eastern Corn Belt, most areas are projected to outperform last year’s yield numbers. Although yields are projected to drop substantially in Illinois, Indiana and Missouri year on year, recent estimates have shown slight rebounds and the departure from normal is not as extensive.

The October report placed corn production at 13.555 billion bushels, down from the previous report despite a yield increase.

Demand for corn was unchanged with corn used for feed pegged at 5.275 billion bushels; ethanol 5.350 billion bushels and exports 1.850 billion bushels. Last year, the above sectors consumed 5.317 billion bushels, 5.207 billion bushels and 1.864 billion bushels respectively.

Prices are finding support this fall, due to lack of movement by the producer. The crop will still be short in areas of the Eastern Comments in this column are market commentary and are not to be construed as market advice.

20 | Ethanol Producer Magazine | DECEMBER 2015

by Jason Sagebiel

Corn Belt due to effects of the excess moisture and the shortfall will make the cash market a bit more volatile in the east when compared to the west. The Eastern Corn Belt will be short again this year, as state stocks in these areas are tight again. This will keep the cash market exuberant.

Regional Ethanol Prices ($/gallon) Front Month Futures (AC) $1.302

DDGS Report

Prices work back up, after season lows Oct 28—DDGS prices started to work higher after seeing their season lows at the beginning of October. U.S. buyers are picking up their usage, and demand from the export market, particularly for containers, has stayed pretty steady.

Compared with last year at this time, freight issues are nearly nonexistent.

Railcars are moving very well throughout the system, barge rates are dropping from their bean harvest seasonal highs, and bulk vessel rates are down around all-time lows, and expected to stay that way for quite a while.

Chinese demand, which has been the price driver all year, has been practically nonexistent for the past two months. After record shipments there for the summer, primarily in bulk ves-

Region

Spot

Rack

West Coast

1.637

1.742

Midwest

1.507

1.552

East Coast

1.319

1.476 SOURCE: DTN

by Sean Broderick

Regional Gasoline Prices ($/gallon)

Front Month Futures Price (RBOB) $1.573

sels, buying has slowed dramatically.

Mexico demand has been very strong, and it’s not clear whether the moisture from Hurricane Patricia won’t have some effect on their corn production, which may boost additional DDGS buying.

Given the effect that Chinese buying has on prices, one would do well to pay attention to the regulatory climate toward DDGS and other U.S. feed products over there. One of the major Chinese ethanol producers recently petitioned the government to institute an anti-dumping investigation of U.S. DDGS, (the decision is still pending) and the import permit system has been cumbersome at times. Any changes could have significant influence on prices for 2016.

Region

Spot

Rack

West Coast

1.740

1.800

Midwest

1.565

1.719

East Coast

1.710

2.012 SOURCE: DTN

DDGS Prices ($/ton) LOCATION

Dec 2015

Nov 2015

Dec 2014

Minnesota

110

115

95

Chicago

138

135

100

Buffalo, N.Y.

140

128

130

Central Calif.

178

178

170

Central Fla.

155

158

145 SOURCE: CHS INC.

Corn Futures Prices

(September Futures, $/bushel) Date

close, bu.

close, ton

Oct. 28, 2015

3.76

134.29

Sept. 28, 2015

3.87

138.13

Oct. 28, 2014

3.65

130.18 SOURCE: FCSTONE

Cash Sorghum ($/bushel)

Ethanol Report

Ethanol prices find trading range Oct. 28—Through the fourth quarter, the ethanol market seems to be confined to a 10-cent trading range. It’s being trapped, not only by a range-bound corn market that seems to be generally directionless, but a supply-burdened crude oil market that has pivoted around the $45 per barrel price level over the past couple months. Ethanol prices have been wandering within the narrow trading confines between $1.50 and $1.60 per gallon as overall demand for ethanol continues to change very little.

Location

by Rick Kment

Supply and production are moderately ahead of year ago levels at this point, but far from an alarming amount. But there seems to be very little in terms of either the corn or the energy markets that point to a major shift in price direction or near-term demand for ethanol. This could lead to additional market stability through the next several months in the ethanol and gasoline markets.

Oct. 22, 2015

Sept. 24, 2015

Oct. 24, 2014

Superior, Neb.

3.38

3.41

3.63

Beatrice, Neb.

3.28

3.29

3.28

Sublette, Kan.

3.39

3.43

3.30

Salina, Kan.

3.33

3.44

3.70

Triangle, Texas

3.33

3.37

3.48

Gulf, Texas

4.53

4.44

5.03

SOURCE: SORGHUM SYNERGIES

Natural Gas Prices ($/MMBtu) LOCATION

Oct. 21, 2015

Aug. 31, 2015

Oct. 22, 2014

NYMEX

2.40

2.69

3.66

NNG Ventura

2.37

2.64

3.69

Calif. Citygate

2.92

3.10

4.20

SOURCE: U.S. ENERGY SERVICES INC.

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

Month

End Stocks

Aug. 2015

956

29,621

19,259

July 2015

976

30,256

19,594

925

28,665

19,259

Aug. 2014

SOURCE: U.S. ENERGY INFORMATION ADMINISTRATION

DECEMBER 2015 | Ethanol Producer Magazine | 21

DISTILLED

Ethanol News & Trends

Nebraskans support ethanol, biodiesel development

PHOTO: NU VU FUELS

NuVu Fuels offers locally produced E85 Carbon Green Bioenery LLC opened its new convenience store, NuVu Fuels, in Ionia, Michigan, located seven miles down the road from the 50 MMgy ethanol plant. On its first day, NuVu Fuels sold 2,500 gallons of fuel, of which 40 percent was a mixture of higher-level blended fuels. Mitch Miller, Carbon Green CEO, wants to bring that percentage up to 70 percent. Besides selling fuels, staff at NuVu Fuels are being trained to answer questions and point out to customers the benefits of ethanol.

Customers have shown interest in what Miller and his employees are telling them

about ethanol and appreciate having a choice of fuels to buy, Miller said. “Nine out of 10 are very open to discussing the differences in the fuels and the benefits.”

In addition, the C-store is selling locally produced products including milk, ice cream and eggs and the coffee is ground on site.

Homemade pizzas and broasted chicken are made in the store’s kitchen, and adding sandwiches and salad is planned. “We’re trying to bring a healthier, more local approach, not only to fuel, but also to our in-store offering,” Miller said.

The 20th annual Rural Nebraska Poll found nearly 60 percent of respondents agreed or strongly agreed that more should be done to develop ethanol or biodiesel energy in Nebraska and 46 percent disagreed that renewable energy sources are too expensive for Nebraska. About 2,000 rural Nebraska residents responded to the poll conducted by the University of Nebraska-Lincoln Department of Agricultural Economics in partnership with the University of Nebraska Rural Futures Institute. In addition to questions on climate change and energy, the questionnaire asked about well-being, community and education.

People who work in the agricultural industry and employees of the food service or personal care occupations are more likely than people with other jobs to agree that more should be done to develop the ethanol or biodiesel energy industry in Nebraska, according to the poll results. About two-thirds, or 67 percent, of this group agreed that more should be done to develop those industries.

Older people and men were more likely to disagree than younger people and women that more should be done to develop the ethanol and biodiesel industries.

DISTILLED Metro gas chain data analyzed for E85 adoption Iowa State University economists Sebastien Pouliot and Bruce Babcock, Center for Agriculture and Rural Development, examined “How Much Ethanol Can Be Consumed in E85?” The economists examined sales data for two metro markets from 2011 through 2014 supplied by a major Midwest retailer.

“Using these new direct estimates of consumer demand, we find that owners of current flex vehicles in all U.S. metro areas would consume 250 million gallons of E85 if it was priced at parity on a cost-per-mile basis with E10, and 1 billion gallons of ethanol if E85 were priced to save drivers 23 percent on a cost-per-mile basis,” they said. If drivers in all metro areas had the same driving distance to E85 stations as the study area, they added, “then more than 1 billion gallons of ethanol would be consumed in E85 in U.S. metro areas, if E85 were priced to save FFV drivers 10 percent on a cost-per-mile basis.”

2015 RINs generation through September Ethanol

D3 Cellulosic Biofuel

D6 Renewable Fuel

Naptha

Nonester Renewable Diesel

1,646,812 1,645,907,359

D4 Biomass-based Diesel D5 Advanced Biofuel

Biodiesel

64,598,566 10,677,308,383

Renewable RNG

50,762,160

36,254,255

406,560,600* 18,556,788

89,202,736

Renewable CNG

6,788,018

5,022

253,729,881

*Combined total of EV1.6 and EV1.7 fuel types SOURCE: EPA RINS DATA BY FUEL TYPE

RINs data shows cellulosic, advanced biofuel growth U.S. EPA RINs generation data through September shows the generation of D3 cellulosic biofuel renewable identification numbers (RINs) tapered off slightly for the month of September, after a steady climb seen each month throughout the year. D6 renewable fuel RINs were down slightly from the previous month, while advanced biofuel D5 RINs continue to climb.

Cellulosic, D3 RINS were down in September at 12.3 million, 1.5 million lower than August’s and the lowest since June’s 12.5 million.

D3 RINs generation for 2015 through September totaled 87.95 million, of that 14.2 million were generated by importers.

Advanced biofuel, D5, reached 24.6 million in September, up from August’s 20.8 million and for the year to date totaled 90.4 million, of which 45.9 million were generated by importers.

D6 RINs, dominated by corn ethanol, totaled 1.22 billion in September, down from August’s 1.26 billion with a nine-month total of 11.02 billion. Of that, 346.5 million were foreign generation or generated by importers.

DISTILLED EPA to review life-cycle impacts of RFS The Office of Inspector General at the U.S. EPA posted a memorandum in mid-October to Janet McCabe, acting assistant administrator, that it would begin preliminary research on the life-cycle impacts of the renewable fuel standard (RFS). â&#x20AC;&#x153;The anticipated benefits of this project are to ensure public health and the environment are protected by verifying the EPA is complying with reporting requirements, and is considering statutorily mandated studies when promulgating the RFS,â&#x20AC;? the memorandum said.

The objectives are twofold, according to the memorandum. One, to find out if the EPA has complied with reporting required by RFS-related laws. Second, to determine if the RFS life-cycle analysis has been updated with information from the National Academy of Sciences 2011 study on biofuels, the EPAâ&#x20AC;&#x2122;s 2011 report to Congress on the environmental impacts of biofuels, and other relevant research or reports on the subject.

LCFS targets 10% carbon intensity reduction in California The California Air Resources Board has re-adopted a Low Carbon Fuel Standard requiring a 10 percent reduction in the carbon intensity of transportation fuels by 2020, determined through a life-cycle analysis using an updated Ca-GREET 2.0 model. The LCFS doesnâ&#x20AC;&#x2122;t require use of a specific fuel, only that regulated parties find a blend of fuels and credits that will meet the target.

The LCFS program requires transportation fuels used in the state to meet a baseline target for carbon intensity. Each year the target is lower, and if the product is above the annual carbon intensity target, the fuel incurs deficits. If a product is below that target, the fuel generates credits that may be used for later compliance or sold to other producers who have

CARB Fuel Pathway Estimates Carbon intensity in grams per megajoule 102.76

ULSD (standard diesel) Gasoline (CaRFG)

99 80.9

Corn ethanol (100% NG)

86.69

Grain sorghum (100% NG)

58.23

Sugarcane base case Biodiesel Soy

51.83

Used cooking oil

19.87

Tallow

32.83

Canola

50.23

Corn oil (from wet DGs)

28.68

Selected fuel pathways showing direct and indirect carbon intensity estimates for 2016-2020 calculated with CA-GREET 2.0. Corn ethanol's CI estimate was adjusted 9.63 g/MJ lower than the initial value due to current levels of energy consumption, ethanol and distillers grains yields.

deficits. In mid-October, Platts reported California LCFS credits traded at an average $64 in September, up from Juneâ&#x20AC;&#x2122;s $28 average.

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45 ethanol producers achieve efficient producer status Four more corn ethanol plants were named efficient ethanol producers by the U.S. EPA in September. Three are Valero Renewable Fuels plants located at Bloomingburg, Ohio, Albion, Nebraska, and Linden, Indiana, all 120 MMgy facilities. The fourth producer named was Carbon Green Bioenergy LLC, a 50 MMgy plant at Lake Odessa, Michigan. The total number of corn ethanol plants achieving efficient producer status is now 45, plus one proposed. Valero now has seven of its 11 ethanol plants on the list.

Using the individual plantâ&#x20AC;&#x2122;s corn consumption, ethanol production, natural gas and electrical use, EPA calculates the greenhouse gas (GHG) reduction compared to the baseline gasoline. Carbon Greenâ&#x20AC;&#x2122;s has a 20.8 percent reduction. Valeroâ&#x20AC;&#x2122;s Bloomingburg plant has a 25.0 percent reduction, Albion, 23.4 percent and Linden, 21.1 percent.

That compares with the industry average of 16.8 percent reduction calculated when the agency first published the rule in 2010.

SOURCE: â&#x20AC;&#x153;ETHANOL INDUSTRY REBALANCES,â&#x20AC;? COBANK, OCT. 2015

Ethanol industry rebalances after record earnings After a year and a half of record earnings, the ethanol industry stabilized in 2015, according to a CoBank ethanol industry report. Margins are expected to remain â&#x20AC;&#x153;modestly positive,â&#x20AC;? on average, for the next 12 to 18 months.

Supply and demand for ethanol has been well-balanced in 2015 and producers have maintained positive earnings. Ethanol production has been at record levels nearly every week in 2015. Ethanol production will rise 2.5 per-

cent this year and another 1 percent in 2016, CoBank estimated. If capacity expansion estimates are accurate, the industry will need to grow ethanol exports by 200 to 350 MMgy during the next two years to maintain capacity utilization of 90 percent.

A stabilized corn market and an ample supply of the commodity should keep markets relatively steady during the next year.

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26 | Ethanol Producer Magazine | DECEMBER 2015

SAFETY

FOCUS ON

SAFETY

Safety takes precedence in the ethanol industry, for producers as well as providers.

By Holly Jessen

At the end of October, United Wisconsin Grain Producers LLC had gone 2,530 days without a lost-time accident. That’s almost seven years of

keeping employees safe, with no employee missing a day of work due to an on-the job accident.

“Everyone from our board of directors on to our CEO and management and our ground-level employees, everyone is 100 percent committed to safety here,” says Marc Berger, UWGP safety manager. That buy-in from employees at every level is vital to success. “You can’t run a safety program where you expect your employees to do things one way and then management does them the exact opposite,” he added. “We certainly cannot expect our employees to care about work performance if we do not first care about and invest in their personal safety and well-being. “ UWGP and Green Plains Inc. are two examples of top-of-thelist ethanol production companies with excellent safety records, according to data from ERI Solutions Inc.

SAFETY FIRST: Tim Politano, at right, places a lockout device on a ferm mash supply valve at UWGP while Marc Berger, back left, goes through a step-by-step safety checklist. Once all steps are complete, maintenance workers can safely enter the ferm tank for inspection.

PHOTO: BILL KEEFREY PHOTOGRAPHY

DECEMBER 2015 | Ethanol Producer Magazine | 27

CONFIRMATION: One of the multiple steps in putting a lockout device in place is visually verfying lockout in the control room. Here, Berger and Terry Medema, board operator, view information on the plants’ fermenters.

PHOTO: BILL KEEFREY PHOTOGRAPHY

PRIDE: UWGP, a 58 MMgy ethanol plant in Friesland, Wisconsin, reports it has one of the best ethanol yield rates in the industry, producing 2.86 gallons of ethanol per bushel of corn.

PHOTO: BILL KEEFREY PHOTOGRAPHY

28 | Ethanol Producer Magazine | DECEMBER 2015

Safety, along with risk management and operational excellence, are core principles on which Green Plains was founded, and remain important to this day, says Todd Becker, president and CEO of Green Plains. “We believe that our employees deserve to work in a safe environment. Our dedicated safety team works hard to ensure that each of our employees are equipped with the tools they need to make their work conditions the safest possible.”

That’s the case for all of Green Plains’ business sectors. “Safety is a

part of our DNA,” says Jeff Briggs, chief operating officer. “The same commitment to safety at our ethanol plants extends across the Green Plains value chain including our cattle company and the terminal and transportation businesses.”

Specifically, in 2014, Green Plain’s Riga, Michigan, facility was identified as the safest ethanol plant to work at, out of the plants that are part of ERI’s safety program. “This was an honor,” Briggs says, “especially as ERI’s safety group reports an employee injury loss ratio of approximately 30 percent low-

THAT’S A WRAP: As the final safety step before maintenance on a ferm tank, a lock is placed on the lockout device and the corresponding lock number is recorded on the lockout permit.

Barry Van Beek, Berger and Kelli Rose celebrate the company's safety record. By the end of October, UWGP had hit 2,530 days without a lost-time accident.

PHOTO: BILL KEEFREY PHOTOGRAPHY

PHOTO: BILL KEEFREY PHOTOGRAPHY

er than the balance of the overall ethanol production industry.”

Out of the 110 ethanol plants ERI works with annually, 86 are part of the company’s safety program, including UWGP and Green Plains, says Nathan Vander Griend, president of ERI. Those facilities work to implement best management practices recommended by ERI, in order to reduce issues that lead to employee injury and meet OSHA’s minimum standards-plus programs.

Seventy of the plants from that group are insured shareholders in Ethanol Risk Management SPC Ltd., the captive reinsur-

ance program company managed by ERI. On average, one-fourth of those 70 plants have zero recordable injuries yearly. For the ethanol plants ERI has data on, only 4.6 percent of employees had a recordable injury or illness and 2.3 percent of employees had a recordable injury or illness that resulted in missed work, restriction from normal duties or being moved to another task.

“There are plants that have gone years— some since initial startup—without having a lost-time incident, proving that it can be done,” Vander Griend says.

Continuous change and improvement is one mark of a great safety program. An-

other vital element is interaction from employees, including management, who lead by example, Vander Griend, says. It’s important to have a high level of participation by all employees overall. He also pointed to interactive, plant or industry-specific training, which engages employees and allows them to give feedback. Finally, he put a premium on open communication while proactively addressing hazards, near misses and any employee concerns.

More About UWGP

Just 27 when he took the safety director job at UWGP in 2006, Berger was fresh

Shutdown Turnaround Cleaning

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PREPAREDNESS: Novozymes employee Randy Cutchin and a Franklin County, North Carolina, firefighter observe the decontamination process at Novozymes' regional headquarters during a mock emergency drill.

PHOTO: JAMIE JONES, NOVOZYMES

(605) 428-4300 www.Direct-Automation.com 30 | Ethanol Producer Magazine | DECEMBER 2015

out of college with a degree in occupational health and safety. He didn’t know much about the ethanol industry, except some negative misconceptions, but he was excited to move back to his hometown of Friesland, Wisconsin. The person doing the job before he was hired was in a combined environmental, health and safety position, which is common in the ethanol industry. But UWGP decided the workload was heavy enough to split into two, with separate safety and environmental positions, he says.

A good safety program goes above and beyond the minimum OSHA requirements, Berger says. It’s proactive, not reactive, he says. And it’s something that has to be worked on continuously, not just do what’s required once a year and then forget about it.

Just looking around an ethanol plant also gives a good indication of whether a facility has a good safety program, he says.

If the facility practices good housekeeping, there’s a pretty good chance its safety programs are also well-maintained. A safe and clean workplace adds to employee pride, he says, adding that it motivates employees to take ownership in their work.

One way Berger keeps the safety program at UWGP current is by networking with other safety professionals. He’s a member of a variety of safety groups, including the National Safety Council as well as state and industry specific groups. Unlike other professions, in the safety field, there are no secrets and everybody wants to share best practices with others. “You are holding yourself back from achieving so much if you are not networking with others,” he says. “The regulations are always changing, and if you don’t keep up with them and network with others, your program will fall behind and eventually fail.”

A great safety program involves all employees, not just the one person with safety in their job title. “If employees take ownership and feel they have a voice in the safety program, they will be more willing to buy into the safety culture,” he says, adding that UWGP employees have been known to step in and stop unsafe situations from happening, when outside contractors visit the plant. “A great safety culture does not just happen, it requires dedication and commitment from top to bottom.”

BREAK TIME: Paramedics set up a sign for an emergency responder rest area at an Novozymes mock emergency drill.

PHOTO: JAMIE JONES, NOVOZYMES

UWGP has a safety committee made up of employees from every department who help out by completing safety audits and job hazard assessments. “The employee is going to know the job inside and out, way more than I would,” he says. “They can also identify each hazard and steps needed to eliminate or protect the employee from these hazards.” Safety committee members are his eyes and ears in the plant.

“Sometimes employees will discuss things amongst themselves, but don’t like to discuss it with management,” he says.

And, any employee can submit information about possible job hazards in a suggestion box, which is checked frequently.

Information about identified hazards, when it will be fixed and by whom is posted in the control room, so employees know their concerns are taken seriously and what the time frame is, Berger says.

Novozymes

Safety isn’t only a concern for ethanol production companies. Companies working within the industry, like Novozymes, also make it a priority. Corporation wide, the company has had reduced safety inci-

dent numbers in the past 12 years. Last year was the best yet, with only 1.7 safety incidents per million working hours.

Specifically, Novozyme’s Blair, Nebraska, campus, where the company produces enzymes exclusively for the biofuels industry, has a very strong safety culture.

Like UWGP, that facility has gone three years without one lost-time accident, says Kyle Nixon, general manager in Blair. The facility also has a total reportable injury rate below 1 percent, meaning any injury requiring aid but that doesn’t require a missed day at work. ‘We’ve got a good streak going here,” he says.

The company’s overall strategy includes three main aspects. The first is a new emphasis on proactive action rather than reactive action, Nixon says. In the past, a lot of energy was spent breaking down what had gone wrong when injuries happened and attention was on near misses.

Now, rather than near misses, management asks employees to share safety suggestions to eliminate hazards. The goal, for 2015, was for 150 safety suggestions. At last count, employees from all departments had submitted more than 360, Nixon says.

DECEMBER 2015 | Ethanol Producer Magazine | 31

SAFETY

PRACTICE RUN: Franklin County, North Carolina, firefighters on scene at Novozymes headquarters. The company makes safety a high priority.

PHOTO: JAMIE JONES, NOVOZYMES

The next aspect of Novozyme’s safety strategy is its five lifesaving rules.

The list includes protecting against falls from heights, working with valid permits when required, validating that equipment is isolated before work begins on it and having specified lifesaving equipment present, obtaining authorization before entering a confined space and not walking under suspended loads. All 118 plant employees wear a badge that displays the list. “We could have somebody die if we don’t follow those rules,” he says. “So we take those very seriously.”

Finally, Novozymes implemented a zero accident program (ZAP). As part of this, managers and line workers are paired up for ZAP walks, working through a checklist of items, searching for possible safety hazards. If something doesn’t look quite right, they take a photo and document it. At first, it was the obvious hazards that were identified. Now, with those items corrected, it’s becoming more difficult to find issues, which Nixon considers a very good thing.

Another important part of Nozozymes’ focus on safety is the company’s “Let’s talk safety” initiative. At every single board meeting, whether it’s a daily, weekly or monthly meeting, the very first topic of discussion is safety. Nozozymes has used the initiative to standardize safety discussions across all its locations, with all employees having discussions on the same weekly and monthly safety topic. For example, while discussing fire safety, a company was brought in to show all employees how to use fire extinguishers properly.

When the topic of forklift safety rolled around, Novozymes made sure all employees were up-to-date on forklift safety training.

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

32 | Ethanol Producer Magazine | DECEMBER 2015

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INCOMING CGMP: Ethanol producers already routinely probe and test incoming grain. Under FSMA, some plants may need to beef up their system for monitoring for mycotoxins.

PHOTO: INTERSYSTEMS INC.

34 | Ethanol Producer Magazine | DECEMBER 2015

REGULATION

PROBING THE

FSMA RULE Work begins to help industry comply with far-reaching food and feed safety rule.

By Susanne Retka Schill

The final rule for the Food Safety Modernization Act came out in September, starting the clock for compliance deadlines that phase in the comprehensive new rule. The U.S. Food and Drug Administration calls it the most sweeping reform of food safety laws in more than 70 years. And, though medicated feed has been regulated for years, the entire supply chain of the feed industry will now be regulated by the FDA through FSMA. The biggest change is a shift in emphasis, from a system that responded to problems (think product recalls) to one that requires facilities to adopt current good manufacturing practices (CGMPs), evaluate risks, and create a preventive control plan for those hazards, where deemed necessary. And, as with every regulation, the new rule comes with recordkeeping requirements.

A working group of 10 ethanol industry experts has been digesting the details of the FSMA final rule to pin down just what producers will need to do to insure distillers grains and corn oil bound for feed are in compliance.

Kelly Davis, director of regulatory affairs at the Renewable Fuels Association and a member of that working group, says the CGMPs are going to be pretty well covered by existing standard operating procedures (SOPs).

Examples are shown in the accompanying illustration. The bigger challenge for the industry lies in the second part of the rule. â&#x20AC;&#x153;The hazard analysis is where most of us will spend our time,â&#x20AC;? Davis says.

Defining CGMPs industry wide and identifying hazards that need controls will be no small task. Recognizing that, the FDA created a public/ private partnership in 2011, enlisting the aid of state and federal agencies, land grant universities and industry associations in a Food Safety Preventive Controls Alliance. The ethanol working group, one of many subgroups in the alliance, is writing a sample food safety plan for the ethanol industry. The

DECEMBER 2015 | Ethanol Producer Magazine | 35

REGULATION

CGMP

Some of the many areas where current good manufacturing practices need to be defined:

PERSONNEL:

good hygiene, protect product from contamination.

WATER SUPPLY & PLUMBING:

adequate toilet and handwashing, proper site drainage.

PLANTS & GROUNDS:

cleaning, pest control, maintenance.

EQUIPMENT: maintenance and sanitation.

SANITATION:

procedures, use of toxic cleaning compounds, storage of trash.

HOLDING & DISTRIBUTION:

avoid contamination and minimize deterioration, proper labeling, transport vehicle inspection.

Some chemical companies focus on this

plan will provide an example for use in training sessions, showing what the CGMPs, hazard analysis and preventive controls might look like.

The example safety plan is just that, an example, explains David Fairfield, vice president of the National Grain and Feed Association and chairman of the animal food subcommittee of the alliance. “FDA has the expectation that each facility will develop a plan that is unique to its operation.” Other committees within the alliance are working on hazard guidance and curriculum development. The animal food curriculum for FSMA implementation is likely to be a 20-hour course, Fairfield says. “It will be robust.”

All the materials will be available free on the alliance website, and courses will be scheduled once the curriculum is finished and approved by FDA. “Completion of this training will be one way to become a qualified individual,” he adds. The rule says each feed manufacturing facility must have a written food safety plan prepared by a preventive control qualified individual and, even though

or that

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36 | Ethanol Producer Magazine | DECEMBER 2015

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.

.

REGULATION the rule says an individual can be qualified through job experience, as the FDA commentary accompanying the rule says, those qualifications may be questioned if the plan is not implemented effectively. Also, the supervising qualified individual does not have to be an employee.

The alliance’s goal is to have the curriculum in place by May, Fairfield says, admitting that may be an ambitious target. The ethanol working group hopes to have its sample ethanol plant food safety plan written by February. Charles Hurburgh, director of Iowa State University’s grain quality initiative and a member of the food safety alliance, reports that ISU is working toward becoming an FSMA training center, and he’s anticipating that among the offerings will be an ethanolindustry-specific training course.

The compliance deadlines are staggered, beginning in September. The current CGMPs need to be in place first, followed by preventive controls one year later. The very largest companies, with more than 500 employees, need to have their CGMPs in place

RISK ASSESSMENT CHART PROBABILITY SEVERITY

FREQUENT (A)

LIKELY (B)

OCCASIONAL (C)

RARE (D)

High-Immediate danger to health and safety of animals or humans.

Medium-Probably will occur in time if not corrected, or probably will occur one or more times.

Low-Possible to occur in time if not corrected.

Very low-Unlikely to occur. May assume hazard will not occur.

I-A

I-B

I-C

I-D

II-A

II-B

II-C

II-D

III-A

III-B

III-C

III-D

IV-A

IV-B

IV-C

IV-D

CRITICAL

AVERAGE

NEGLIGIBLE

CATASTROPHIC (I) High-Imminent and immediate danger of death or severe sickness.

MAJOR (II)

Medium-Danger and sickness may be severe, but it is not immident or immediate.

MODERATE (III)

Low-Sickness or injury may occur, but impact is reversible.

MINOR (IV)

Very low-Sickness or injury is minor.

ASSESSMENT MATRIX: An example of one tool that could be used to evaluate potential hazards and decide which may need preventive controls.

DECEMBER 2015 | Ethanol Producer Magazine | 37

REGULATION

‘At this particular juncture, there really isn’t any particular reason to delay compliance. I would hate to see small producers get overshadowed.’

by September 2016. The next tier of compliance, which will include most ethanol producers, is required to have CGMPs in place by the end of 2017 and preventive controls defined by the end of 2018. Very small companies, with annual sales under $2.5 million, have three and four years to comply with FSMA’s two parts. Davis cautions, however, that although compliance dates might give many ethanol producers another year or two, market dynamics will be at play. “At this particular juncture, there really isn’t any particular reason to delay compliance,” she says. “I would hate to see small producers get overshadowed.”

Hazard Analysis

While CGMPs may not be a big hurdle, the hazard analysis is raising concern.

Two hazards are obvious—mycotoxins and sulfur—but ethanol producers will soon be reviewing all their processing aids to evaluate other potential hazards, and devise preventive controls, if needed.

Speaking in an Ethanol Producer Magazine webinar, Richard Coulter, senior vice president for scientific and regulatory affairs at Phibro Animal Health Corp., explains that for processing aids “it might be as simple as, if I follow the instructions for use at the approved label rate, what residues are likely to result from that?”

Sulfur-containing cleaning compounds, as an example, can be used at different levels, some of which might potentially carry through to the coproduct, requiring a preventive control to be sure safe limits aren’t exceeded. “There might be other processing aids that may be more chemically noxious that require more monitoring, if that’s what the hazard analysis show. Or, if the hazard analysis shows them essentially to be innocuous because

38 | Ethanol Producer Magazine | DECEMBER 2015

of their concentration or the chemical nature, another approach may be appropriate.”

He adds that any processing aids used, be they chemicals for water treatment or antimicrobials or natural aids like enzymes or yeasts, must comply legally by either conforming to an AAFCO definition, having GRAS status, or being an approved food additive. GRAS status—generally regarded as safe—is the most common path used for products in the ethanol industry.

Very few feed industry processing aids have gone through the food additive approval process, but there is a long list of feed definitions maintained by the American Association of Feed Control Officers.

Mycotoxins are expected to be the most significant hazard that shows up on ethanol plants’ food safety plans. They are a well-known issue that the industry watches for when growing conditions are favorable in the corn crop, as the toxins are concentrated in the distillers grains.

Erin Bowers, postdoctoral associate in the grain quality group at Iowa State University, explains corn is susceptible to mycotoxins when favorable weather conditions occur, especially during grain fill.

There are four of interest. Aflatoxins occur in hot, dry conditions, which means they can be problematic in drought years in parts of the Corn Belt and even more frequently in southern corn crops. Vomitoxin (deoxynivalenol) and zearalenone show up in cool, wet conditions and fumonisin is a more prevalent risk in corn grown in conditions in the middle of those extremes.

“At least one type of mycotoxin at every facility is likely to be significant and need preventive controls,” she says, adding that “the risk may differ by year.” FDA has

REGULATION

guidance levels for mycotoxins in corn that differ by the type of toxin, as well as the species consuming the feed. Beef cattle, for instance, can tolerate up to 300 parts per billion (ppb) of aflatoxin, while dairy cattle can only tolerate 20 ppb since the toxin can pass into milk and enter the human food supply.

“No particular management strategy or hazard classification strategy is being mandated by FDA,” Bowers says. “It is important for each facility to have a strategy for incoming grain and it would be wise to have this documented.” The accompanying table shows a risk assessment matrix— one example of a tool that could be used by ethanol plants as they assess their hazards and prepare their food safety plans.

The place to control mycotoxins is during grain receiving, she adds, and there will be more than one acceptable strategy for monitoring incoming grain through sampling and testing. Under the FSMA rule, plants will need to validate their strategy through monitoring outgoing coproducts, creating a response plan for any coproducts that don’t meet specs. “All of these strategies, protocols and test results should be documented and readily available. They could be requested at an inspection,” she adds.

Questions Ahead

DDGS buyers have another challenge.

The final FSMA rule includes a more fully developed section on the supply chain than appeared in the earlier supplemental to the proposed rule. One element of the new rule, for example, is that feed manufacturers must purchase from approved suppliers. At the same time, the rule apparently tries to avoid duplication of efforts by saying if one party along the supply chain has preventive controls in place for a particular hazard, the steps before or after, don’t have to. How will these features of FSMA be implemented?

Feed manufacturers are also being asked to prove their suppliers have adequate food safety plans in place that are being followed. That implies a feed safety auditing system that needs to become more widely adopted. The American Feed Industry Association has a Safe Feed/Safe Food Certification Program in place that is administered by the Safe Quality Food Institute. The National Grain and Feed Association has a feed quality assurance training program. Both of these programs are likely to see adjustments as it becomes clearer what FSMA requires.

How the supply chain requirements in FSMA’s final rule play out for the ethanol

industry will unfold in the months, and probably years, ahead. Questions abound on many fronts. Basing CGMPs on SOPs sounds simple enough, but what happens with those areas in ethanol plant operations where there’s a wide diversity of approaches from plant to plant? Hazard analysis is not entirely new and many plants have individuals with training in FDA’s hazard analysis and critical control points system, but are they sufficiently qualified? Will ethanol plants have to add a position to handle the food safety plans, or will it ultimately dovetail into safety and environmental compliance requirements? Will capital projects be required to comply with potential hazards like preventing bird contamination in grains buildings?

There are no answers to those questions yet and, no doubt, many more will arise as the ethanol industry probes deeper into the FSMA rule.

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

DECEMBER 2015 | Ethanol Producer Magazine | 39

40 | Ethanol Producer Magazine | DECEMBER 2015

Ethanol Know-how When Itâ&#x20AC;&#x2122;s Needed Classroom training provides invaluable information for boots-on-the-ground firefighters and emergency responders.

By Ann Bailey

DECEMBER 2015 | Ethanol Producer Magazine | 41

TRAINING

William â&#x20AC;&#x153;Billâ&#x20AC;? Brobst Jr. knows first-hand that the Renewable Fuels Associationâ&#x20AC;&#x2122;s ethanol safety training makes a difference when it comes to responding to fires.

ALCOHOL PROTOCOL: Ethanol safety training gives first responders valuable information for use in emergencies, like this fire involving an ethanol tanker earlier this year in Ohio.

PHOTO: WILLIAM BROBST JR.

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In the past three years, Brobst, a hazmat captain in the Columbus (Ohio) Division of Fire has responded to both train and tanker ethanol emergencies. In 2012 Brobst responded to an emergency stemming from a train derailment in which a car carrying 2 percent denatured alcohol caught fire and two other cars burst and leaked the fuel.

Earlier this year, Brobst responded to another ethanol emergency, this time one that occurred after an ethanol tanker on the freeway near Columbus overturned and instantly burst into flames. Though Brobst had training in handling hazardous materials fires, he didnâ&#x20AC;&#x2122;t have specific safety training in ethanol emergencies when he and his crew responded to the 2012 train derailment. â&#x20AC;&#x153;We had to research that night what we were dealing with,â&#x20AC;? Brobst says. â&#x20AC;&#x153;We needed to do research on how to fight an ethanol fire.â&#x20AC;? He was able to access the Internet on his smart phone and look up the information, but he could have saved time if he had ethanol safety training, he says.

After the fire, the International Association of Fire Chiefs asked Brobst to give a presentation on the lessons he learned from responding to the railcar ethanol emergency. Since early last year, Brobst has been an ethanol safety instructor, traveling across the United States teaching for the RFAâ&#x20AC;&#x2122;s Ethanol Emergency Response Coalition.

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42 | Ethanol Producer Magazine | DECEMBER 2015

The EERC was developed by RFA to support transporting and handling of ethanol and ethanol-blended fuels safety concerns, says Missy Ruff, RFA technical services manager. The amount of renewable fuels is increasing, which makes it critical that first responders have the knowledge necessary to respond to ethanol and ethanol blended fuel emergencies, she says.

TRAINING

In 2006, the “Training Guide to Ethanol Emergency” training program was launched.

Since then, the RFA has distributed more than 10,000 copies of the DVD across the United Ruff States and internationally, Ruff says. The RFA began holding ethanol safety seminars, funded by a U.S. DOE grant, in December 2010.

The goal is to give attendees the tools they can immediately use in the field and share with other first responder teams. In the past five years, more than 4,800 emergency responders in 29 states have been trained, Ruff says. During 2015, the RFA held 15 seminars in North Dakota, Oregon and Illinois. There is no fee for the seminars, which are targeted at hazmat teams, safety managers, local emergencies planning committees and the general public, she says, adding that attendees receive a certificate at the end of the training.

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Lessons Learned

The seminars cover several areas, including an introduction to ethanol and ethanol-blended fuels, chemical and physical characteristics of ethanol and hydrocarbon fuels and firefighting foam principals.

Using foam instead of water to fight ethanol fires was one of the valuable lessons Brobst learned from his ethanol safety training seminars and something he passed on when the tanker overturned on the interstate near Columbus a few months ago, he says. Responding firefighters knew they should apply foam, not water, to extinguish the fire, after their experience with the rail car fire.

When Borbst arrived, he shared with the firefighters just how the foam should be applied. “You don’t put foam down like you’re fighting a house fire,” he says.

Another point that the ethanol safety seminar drives home to attendees is that emergency responders should be sure of what kind of fire they dealing with before they begin to fight it, says Joel Hendelman,

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DECEMBER 2015 | Ethanol Producer Magazine | 43

TRAINING

an ethanol safety seminar instructor and former Fairfax (Virginia) Battalion chief.

“You have to know the animal you are dealing with,” he told emergency responders and firefighters who attended a RFA Ethanol Safety Seminar in Larimore, North Dakota, in August. “If you don’t know, the bear will eat you. Period.”

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44 | Ethanol Producer Magazine | DECEMBER 2015

When responding to a fire involving railcars or tankers carrying fuel, fire fighters should err on the side of caution and take foam with them, in case the cars or tankers are carrying ethanol, Hendelman says. The foam will also be effective in extinguishing hydrocarbon and gasoline fires, so firefighters have nothing to lose.

“As far as I’m concerned, whenever we get involved with a firefighting situation involving blended fuels, I assume we’re dealing with ethanol,” Hendelman says. “Preplanning is extremely important. I would rather have it and not need it, than need it and not have it.”

Another important lesson the seminars teach is the importance of local emergency responders getting to know ethanol suppliers in their area. “We have got to collaborate with these kinds of operations,” Hendelman told about a dozen emergency responders and firefighters in Larimore.

“We need to put a little fertilizer on these relationships.” Meeting the suppliers’ key personnel and knowing the lay of the land will help the responders fight the fires more effectively, he says. “Let’s be proactive, not reactive.”

The EERC updated its DVD in 2014 and will introduce a new version of the training program in 2016. The new program will include an updated version of the module’s PowerPoint presentations imbedded with instructor notes, instructor manual and student guide. The 2016 version also will include a walk-around rail video, and a video version of each of the modules, Ruff says.

Author: Ann Bailey Staff Writer, Ethanol Producer Magazine 701-738-4976 abailey@bbiinternational.com

DECEMBER 2015 | Ethanol Producer Magazine | 45

IOWA POWERHOUSE: Sen. Charles Grassley, R-Iowa; William Feehery, president, DuPont Industrial Biosciences, and Iowa Gov. Terry Branstad at the Oct. 30 opening ceremony of DuPont’s cellulosic ethanol plant in Nevada, Iowa.

DUPONT’S

CELLULOSIC CELEBRATION

The proof-of-concept facility in Nevada, Iowa, is expected to unlock opportunities in biomass conversion around the world.

By Tim Portz

On a crisp October morning under cloudless skies, William Feehery, president of DuPont Industrial Biosciences gestured to tanks and pipes sitting just beyond a tractor trailer filled with rectangular corn stover bales. “The ripple effect of what you see

behind me will be felt all over the world,” he said, thanking the audience for joining DuPont in the celebration of the opening of what is now the world’s largest cellulosic ethanol production facility.

46 | Ethanol Producer Magazine | DECEMBER 2015

At full capacity, the facility will convert nearly 700,000 bales of corn stover into 30 MMgy of cellulosic ethanol. The plant is the culmination of the company’s effort to commercialize cellulosic ethanol, which began in partnership with the U.S. DOE in 2000. “It’s been a long time coming and we’re proud it’s here,” said Iowa Gov. Terry Brandstad.

DuPont’s challenge now is to bring the facility up to full throttle, a process Jan Koninckx, global business director for biorefineries, DuPont Industrial Biosciences, likened to the shakedown cruise new naval vessels typically take. “We have done this

many times before at DuPont, bringing new technologies online,” he said. “At the same time we know that there is inherently a degree of uncertainty in a first plant. When you start up a third or fourth of fifth plant you can predict this much more accurately.

We expect the first shipments to come in 2016.”

The grand opening was as much of a rally for the renewable fuel standard (RFS) as it was a celebration of the completion of the facility, as the uncertainty swirling around policy is already impacting DuPont’s licensing prospects in the United States. “I think it gets back to what we’ve been talk-

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PHOTO: DUPONT

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STARTING LINE: Collected bales of corn stover will enter the facility via a bale handling skid. When running at full capacity the plant will consume 1 bale per minute, converting that bale into 40 gallons of cellulosic ethanol.

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ing about relative to the RFS,” said Feehery, adding, “interest in the United States is a little bit stalled.” However, he continued, there was growing interest globally and the company had signed a licensing agreement in China.

Once operational, the gallons produced at the facility will be shipped to California where the state’s Low Carbon Fuel Standard offers a premium for fuel with significantly reduced carbon intensity. In conclusion, U.S. Sen. Chuck Grassley observed proudly that DuPont’s new facility would offer the world new ethanol gallons, “without using a single additional bushel of corn or a single additional acre of land.”

Author: Tim Portz Executive Editor, Ethanol Producer Magazine 701-739-4969 tportz@bbiinternational.com

Louis Dreyfus Commodities

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DECEMBER 2015 | Ethanol Producer Magazine | 47

LOADOUT

SAFE LOADOUT: The pump skid shown integrates ground verification with overfill detection and emergency shutdown.

PHOTO: S&S TECHNICAL

Rail, Truck Loading Skid Designs Aim to Mitigate Multiple Risks Protecting operators from falls and ergonomic injuries is one goal, along with assuring positive grounding and avoiding overfilling.

By Pete Singleton

Loading of rail cars and trucks seems, on the surface, to be a very simple process, but it can hide risks that can result in citations and fines or, worse, death. Having spent nearly 22 years helping a multitude of companies that load and unload trucks and rail cars, one thing holds true, project managers, engineers or EHS (environmental health and safety)

professionals face a confusing landscape of guidelines, regulations and solutions offered by various suppliers. They have to consider fall protection, ergonomics, spill containment, vapor recovery, grounding and bonding, overfill prevention, emergency shutdown of systems, plus various permissives to ensure all safety protocols are in place before loading and unloading begins—all with no real standard model of what “good” looks like.

Many companies have adopted their own standard safety protocol based on what good looks like to them and with the intent of meeting regulations and guidelines. Most do a fair job. But following is an example of where the confusion can start.

We have all seen countless articles written about OSHA 1910 Subpart D, OSHA 1926, the General Duty Clause, letters of interpretation on rolling stock and the OSHA Hierarchy of Controls.

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).

48 | Ethanol Producer Magazine | DECEMBER 2015

LOADOUT Only a few aspects of loading or unloading rail cars and trucks are addressed, with the primary one being falls. Out of the gate, one of the first things to consider is how to work safely on top of a rail car or truck that can be 10 to 13 feet above the ground.

Should you use active fall protection equipment like overhead trolley beams or tie off points with full body harnesses and retracting lifelines or should you consider a passive system like guardrails or cages that surround an operator and keep them from falling? This one topic in itself can lead to a lengthy discussion covering products, initial cost, long-term cost of ownership, increased productivity, lower insurance cost, personnel buy-in and adoption, various sizes, lengths and configurations of the cars and trucks, and so forth. Both active and passive fall protection are solutions supplied by many well-qualified manufacturers that meet OSHA and state regulations. Installing fall protection is a necessity when designing and building a truck or rail car loading or unloading rack and it’s best to consult with both internal and external resources to decide which direction to take, because each has it pluses and minuses.

SAFE OPERATIONS: A rail loading rack equipped with a hose handler helps protect operators from lifting and back strain injuries.

PHOTO: S&S TECHNICAL

taken up by a team of all stakeholders from EHS, operations, logistics and engineering looking at the entire loading and unloading process will uncover those risks. At times, it’s good to consider bringing in a third-party consultant to provide an outside perspective.

When doing a process safety analysis, it’s important to look at the entire process from Operator Protection the truck or car arrival to completion of the What other risks exist? And, how does loading or unloading process and departure. one go about identifying and mitigating Consider the loading of a rail car them? A thorough process safety analysis through an open dome. Once fall protection

is in place, the team must consider what the operator will use to load the car. The choices are hoses or loading arms with swivel joints. Hoses can be heavy and difficult to maneuver and can cause lifting, backstrain injuries. Initially lower cost, hoses can rupture and thus require an ongoing cost for inspection and replacement. Hoses can cause a tripping hazard if not stored properly. Heavy valves and cover plates cannot typically be left connected to the hose end, requiring the operator to carry the

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DECEMBER 2015 | Ethanol Producer Magazine | 49

LOADOUT

WELL-GROUNDED: Figure G.1(k). The National Fire Protection Association gives recommendations for grounding tankers being loaded with flammable liquids in NFPA77,

equipment to the top of the car. To mitigate these risks, one can utilize a hose handler, making it easier to swing the hose out to the car and minimizing the heavy lifting.

Replacing hoses is easy and does not require the rack to be shut down. The hose handler allows the hose to be stored away from the loading rack walking and working areas,

eliminating the trip hazards. Loading arms are made of hard pipe and swivels and have a higher initial cost.

Loading arms offer other advantages.

They will not rupture or burst and, with spring balance mechanisms, are easy to move. Heavy valves and cover plates can be hung on the arm ends, further reducing the risk associated with lifting and carrying the equipment to the top of the rail car from the loading rack. Loading arms can last 20plus years, although swivel joints do leak and require seals to be replaced. Depending on the configuration of the loading arm and type of swivel joint, the rail rack must be shut down to do arm maintenance and, in some cases, must be taken down with heavy equipment, increasing rack down time.

Each handling solution has its pluses and minuses and is riddled with confusing information that must be weighed, much like that of the active and passive fall protection systems, in order to make the best choice.

Pumping Protection

Now, letâ&#x20AC;&#x2122;s look at the actual pumping, overfill detection, ground verification, fire suppression and controls. Companies that design and fabricate integrated pump skid packages are an often-overlooked safety resource and are an integral part of any loading rack design. Through controls and automation, permissives and automated shut down of equipment can be designed into the skid package to help minimize or eliminate human error and mitigate risk.

Flammable products, like ethanol, require a means to ensure the car is grounded. A ground verification unit with light indication, so an operator can visually see the car is grounded and bonded and with permissives integrated into the controls system, will ensure the pump cannot be started until a proper ground is made or shut down the pumping process should grounding be lost. The recommendations found in NFPA 77, Figure G.1(k) for typical grounding systems for tank cars or tank trucks loading/unloading stations should be considered, all of which can be monitored through automation.

50 | Ethanol Producer Magazine | DECEMBER 2015

LOADOUT Overfilling of rail cars is another risk that can be mitigated utilizing high-level systems to ensure a car is not overfilled, providing an automatic shut-off when the liquid in the car reaches a pre-determined level. Overfill can occur from inattention, by not shutting down the pump in time, or where the heel of the car was not accounted for and too much product was metered. This risk can be eliminated with well-thought-out controls and automation.

Risk of fire is very real around flammable-product loading. The installation of fire suppression to knock a fire down around the rail car is known, but an overlooked area is the actual pumping skid system. To mitigate the risk, flame and gas detection sensors can be installed on and around a pumping skid system that are tied into the controls and automation package that will shut down the pump, send a signal to alert the control room, and trigger a fire suppression system on the pump skid itself. Such a system will knock a fire down independently of the rail car fire suppression equipment.

These items only cover a few of the risks found around the loading and unloading of rail cars and trucks and mitigation strategies.

Itâ&#x20AC;&#x2122;s of most importance to get a team of all stakeholders together from logistics to EHS, along with external resources, focused on the need to identify and mitigate all risks, helping eliminate confusion. Ideally, a company that can provide a complete solution is best, because it can look at the entire process. Taking the extra effort up front will help your company develop its safe loading standard and will provide a safer work environment, saving money and also making for happier employees, which, studies show, can have a direct impact on your companyâ&#x20AC;&#x2122;s bottom line.

Author: Pete Singleton Vice President, S&S Technical Inc. pete@skidsolutions.com 678-867-7024

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DECEMBER 2015 | Ethanol Producer Magazine | 51

TALKING POINT

Master of Deception, EPA Hides Gasoline Threat

By Dave VanderGriend

We know, it’s a serious matter to accuse an important federal agency of deceiving the public.

However, after extensive review, the Urban Air Initiative has concluded that there is no other word than deception to describe what the U.S. EPA’s Office of Transportation and Air Quality professional technocrats have been doing for many years. In fact, EPA’s ongoing deception makes the Volkswagen “dieselgate” scandal pale in comparison.

The world recently learned that 11 million Volkswagen clean diesel cars contain defeat-device software that reduces real-world tailpipe emissions only when the car is being tested, not when it’s driven on the road. For years, these cars have spewed dangerous emissions 40 times greater than what’s allowed. After the news broke, QTAQ officials did something they should have been doing all along: require diesel vehicles to be tested under real-world conditions instead of in a laboratory with an emissions model. OTAQ’s director attempted to minimize the problem, saying that VW’s cars “account for less than 1 percent of U.S. cars on the road.”

While trying to downplay the issue, the truth is that the EPA is hiding a far greater threat to Americans’ health. More than 250 million cars consume approximately 140 billion gallons of gasoline annually, while diesel consumption is only in the 40 billion gallon range. Yet, despite gasoline’s dominance, the EPA’s primary focus in reducing pollution has been on diesel.

OTAQ contends that gasoline only requires minor tweaking (e.g., sulfur reduction), and that vehicle technology does enough to reduce dangerous gasoline emissions.

However, this is simply not true.

52 | Ethanol Producer Magazine | DECEMBER 2015

At least 30 percent of typical U.S. gasoline consists of toxic compounds including benzene, a known carcinogen, and several suspected carcinogens like toluene and xylene. They are used to boost octane but resist complete combustion.

The result is a mix of particulates and toxins that comes out of the tailpipe as billions of invisible, extremely harmful toxic particles. They penetrate into homes, cars and schools, where they then enter our lungs and bloodstreams. For many years, the EPA has hidden the truth about what consumer gasoline contains, how that gasoline is combusted under real-world driving conditions, and what actually comes out of the tailpipe into the air we breathe.

To hide the real truth, the EPA has concocted hypothetical test fuels (blended with the help of oil industry refining experts) and defective models to predict gasoline emissions.

Real-world measurements of pollution in major cities around the

world prove that EPA’s models are wildly inaccurate, and that exhaust from gasoline pollutants dominate urban environments by almost twice the predicted amount. In fact, EPA’s models fail to account for a majority of the most lethal particle-borne air toxins, ultra-fine particulates, which come almost exclusively from the benzenebased octane compounds the EPA refuses to regulate, despite Congressional directives to do so. Instead they act surprised when VW and other diesel vehicles are polluting more on the street than in the lab, when the EPA knowingly uses test fuels that do not exist at any consumer retail pump. Has your mileage ever matched the sticker miles-pergallon rate?

In recent comments to EPA’s Tier 3 rule, Mercedes Benz noted that the “single most important property in designing a gasoline engine is octane.” For years, car companies have urged EPA to improve gasoline quality by offering consumers

TALKING POINT

Author: David VanderGriend, CEO, ICM Inc.; President, Urban Air Initiative DaveV@icminc.com 316-796-0900

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higher octane gasoline with higher ethanol blends. Ethanol provides clean octane, in contrast to benzene-based dirty octane.

Instead, EPA has done the exact opposite, and aligned itself with oil interests to unfairly put the entire regulatory burden squarely on the automakers, as well as falsely blaming ethanol for increased emissions.

In the 1990 Clean Air Act, Congress directed EPA to reduce the use of benzenebased octane compounds in gasoline “to the greatest achievable extent.” Twenty-five years later, EPA technocrats have refused to obey the law, and used deceptive science to justify their inaction. EPA’s gasoline cover-up is far more serious than its diesel cover-up, because gasoline exhaust is far more pervasive, and its pollutants are far more dangerous to humans.

EPA’s technocrats are smart people.

They are not making these mistakes because they are misinformed about how gasoline composition and octane alternatives impact tailpipe emissions. Reluctantly, we must conclude that this deception has been deliberate. We know it has played out over many years. The VW scandal has finally put the media spotlight on these regulatory practices, and the public is increasingly disgusted as more facts come out.

It is time for the EPA to get real. That is why Urban Air Initiative and its allies have been challenging EPA in court, and in the court of public opinion. The American people have waited far too long to be told the truth about their gasoline, their cars, and what is in the air that they breathe.

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