INSIDE: WORLD BIOFUELS SYMPOSIUM PREVIEW JULY 2008
Airborne
Fagen and Air Show Pilot Greg Poe Take to the Skies to Promote Ethanol
Plus: Keith Kor’s Mission: Creating the True Low-Cost Producer How Coskata Can Make Ethanol for Less Than $1 a Gallon Researchers in Wales Study a New Feedstock
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inside JULY 2008 . VOLUME 14 . ISSUE 7
features
152 USE Ethanol Takes to the Skies Air show pilot Greg Poe and Fagen Inc. have embarked on an aerial mission
76 PROFILE Minnesota’s Innovative Ethanol Man
to prove that ethanol is a viable, powerful and clean alternative to
From the installation of wind turbines to the selling of carbon credits on the
petroleum-based fuel. By Rona Johnson
Chicago Climate Exchange, Keith Kor isn’t afraid to do what it takes to make Corn Plus LLLP a true low-cost ethanol producer. By Ron Kotrba
162 EMPLOYMENT Workforce Future Many ethanol producers have had to find and train people to manage and
90 PROCESS Anaerobic Organisms Key to Coskata’s Rapid Rise
operate their plants because the industry grew faster than the available pool of
Coskata Inc.’s claim that it can produce ethanol for less than $1 per gallon won
qualified workers. As the industry moves to cellulosic ethanol processes,
it a partnership with General Motors Corp., and it’s caused others to
finding skilled employees may become even more challenging.
wonder just how this is possible. By Jessica Sobolik
By Craig A. Johnson and Tom Bryan
Page 142
Page 172
Page 222
102 TECHNOLOGY Cellulosic Ethanol Path is Paved with Various Technologies
172 OUTLOOK Blame it on Price-Distorting Agriculture and Trade Policies
There are several processes being developed to commercially and economically
While many blame ethanol for rising food prices, some researchers say the
turn cellulose into ethanol. Although some may view it as a race to see who can
culprit is government policies that have caused global land-use patterns to shift
upscale first, others believe it’s more important to have complementary
over several decades. By Anduin Kirkbride McElroy
technologies focused on the same outcome. By Jessica Ebert
112 INDUSTRY Promoting Positive Perceptions Just as palm oil producers recieve negative press about sustainability, corn producers have taken a lot of shots below the belt as dialogue over reducing greenhouse gas emissions and dependence on petroleum heats up. The Malaysian Palm Oil Council and the National Corn Growers Association discuss how they deal with the negative publicity. By Susanne Retka Schill
122 EVENT China to Host World Biofuels Symposium
182 POLICY National Forest Biomass Off-Limits for RFS Lawmakers are attempting to change the renewable fuels standard in the Energy Independence & Security Act of 2007 to include the use of slash piles and other waste material from national forests to make cellulosic ethanol. By Hope Deutscher
192 SORGHUM Sweet Harvest Ismail Dweikat, a researcher and geneticist at the University of Nebraska-Lincoln, says sweet sorghum can out-perform corn and sugarcane as an ethanol feedstock. By Timothy Charles Holmseth
This fifth annual conference provides an opportunity for biofuels producers and suppliers to find out what the Chinese are doing to keep up with their growing
202 RESEARCH Grass: Not Just Another Plot
energy demand. By Craig A. Johnson
Scientists in Wales are zeroing in on processes to make ethanol from the country’s plentiful grasslands. By Susan Aldridge
132 PRODUCER Poetry in Motion Poet LLC has been in perpetual growth mode since it began producing ethanol
212 FEEDSTOCK Fresh-Squeezed Ethanol Feedstock
20 years ago. Today, the company is the world’s largest ethanol producer with
A Florida research chemist is working on a way to efficiently and
23 plants in operation. By Kris Bevill
commercially convert citrus peels to ethanol. The millions of tons of citrus waste produced in the state could be turned into 30 MMgy to 50 MMgy of
142 EDUCATION What Comes First? A. Renewable Fuels Industry B. Education
renewable fuel. By Kris Bevill
In response to a growing need for more qualified employees, Nebraska,
222 BRAZIL Pipeline Projects on Hold
North Carolina and Iowa are developing biofuels training programs.
Three major ethanol pipeline projects in Brazil have been tabled despite the
By Hope Deutscher
fact that the country’s production is expected to continue to grow. By Elizabeth Ewing
ETHANOL PRODUCER MAGAZINE JULY 2008
7
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inside JULY 2008 . VOLUME 14 . ISSUE 7
departments 11 Advertiser Index 14 The Way I See It By Mike Bryan In the Shoes of the Oil, Gas Industry
20 Business & People 26 Commodities 28 View From The Hill By Bob Dinneen Like a Rolling Stone
29 RFA Update 34 Industry News & BIObytes 48 Plant Construction List 60 Our Plant By Craig A. Johnson Options and Opportunities
62 In the Field By Susanne Retka Schill Ethanol Insurance Covers Delivery Contracts
64 Up Front By Kris Bevill and Anduin Kirkbride McElroy Full Circle
66 Flex Factor By Timothy Charles Holmseth E85: More Popular, Easier to Find
68 Business By Bryan Sims Finding Creativity in Ethanol Project Finance
70 Drive By Toni Nuernberg Putting Ethanol on the Offensive
contributors 232 CONTROL
Plant-Wide Optimization of Sterling Ethanol LLC Sterling Ethanol set an industry record by going from the start of construction to production. Now operational, the plant is using advanced process control techniques to improve efficiency just as quickly. By Srinivas Budaraju, Maina Macharia and Dave Kramer
240 COMPLIANCE
Beating the Environmental Enforcement Squeeze As with all renewable fuels, the ethanol industry has come under increased scrutiny. Environmental management systems boost compliance and earn regulator favor. By Timothy A. Wilkins
246 EQUIPMENT
Under Pressure Underground: Gravity Pressure Vessels Convert Waste into Biofuels Many companies are studying a variety of processes to commercialize the conversion of cellulose to ethanol. Gravity pressure vessel technology provides another option for converting municipal solid waste to fuel. By Peter Hurrell and Zbigniew “Zig” Resiak
250 INNOVATION
A Multi-Prong Approach to Carbon Neutrality By focusing on regionalized biomass sources and processing techniques suited for specific crops, cellulosic ethanol producers could create a product with little to no life cycle greenhouse-gas emissions. By Stephen Paley
254 ANALYSIS
Debunking the Myths of the Food-versus-Fuel Debate Ethanol has recently received a great deal of blame for a variety of ills. However, the facts show that the accusations are typically baseless and misguided. By Kenneth C. Reed
258 MARKET
Overcoming Ethanol’s Growing Pains As one matures, growing pains are unavoidable. So it is with the ethanol industry’s maturation process. Infrastructure and consumer acceptance are just two of ethanol’s current—and temporary—growing pains. By Rick Kment
262 MEXICO
Assessing the Impact of Mexico’s Biofuels Law Mexico recently enacted its federal Law for the Promotion and Development of Biofuels, marking the nation’s push toward biofuels. Will it help Mexico match the momentum of its northern neighbors? By Raul Felix
266 WATER
Case Study: Sound Water Management Reduces the Environmental Footprint of Two Ethanol Plants
284 Events Calendar
Balancing environmental sustainability with maximized production and minimized investment can be a difficult task. Better water management presented such an opportunity for two Midwestern ethanol plants. By Tony Stanich and Jason Van’t Hull
286 EPM Marketplace
270 SAFETY
Playing It Safe: Areas of Focus for Safety Compliance While the production of ethanol carries inherent risks, ethanol plants are widely seen as safe. However, accidents can occur to even the most safety-conscious, and damage to a facility can result in significant business losses. By Darren Small
274 FERMENTATION
Ethanol Production Monitoring Using Ion Exclusion HPLC Ethanol producers strive to improve plant throughput by reducing analysis time and improving monitoring techniques. The basic principles of the ion exclusion high-performance liquid chromatography (HPLC) provide an excellent resource. By Michael McGinley and Jim Mott
278 MANAGEMENT
Improving Business Operating Consistency, Performance Ethanol Producer Magazine: (USPS No. 023-974) July 2008, Vol. 14, Issue 7. Ethanol Producer Magazine is published monthly. Principal Office: 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. Periodicals Postage Paid at Grand Forks, North Dakota and additional mailing offices. POSTMASTER: Send address changes to Ethanol Producer Magazine/Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, North Dakota 58203.
Fluctuating commodity markets can be a risk or an opportunity. The board of directors can capture a plant’s hidden value to assure profitability in challenging times. By Scott McDermott
BPA Worldwide Membership Applied for October 2006
ETHANOL PRODUCER MAGAZINE JULY 2008
9
Small valves can save you a small fortune. Whether you are outfitting an existing or new ethanol plant, Metso Automation’s NELES R-Series control valves provide up to three and a half times the flow capacity of an eccentric plug valve, so smaller valves can be specified. And small is good when it leads to huge cost savings. Up to a $25K savings in control valves for a typical 115 million gallon ethanol plant. JAMESBURY® high-performance butterfly valves combine compact size with a higher flow capacity to significantly reduce processing costs and boost revenue. Their proprietary seat and sealing technologies deliver superior tight shut-off in a range of ethanol production applications. No wonder 2 out of 3 ethanol plants prefer JAMESBURY and NELES valves. Intelligent Reliability. Intelligent Choice.
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Ad Index 140 & 141 2008 International Fuel Ethanol Workshop & Expo 126 A&K Railroad Materials Inc. 44 Adams Building Contractors 135 Advanced Trailer Industries 156 Aecometric Corp. 267 Aeroglide Corp. 154 Aesseal Inc. 200 Afton Chemical Corp. 37 & 159 Agra Industries Corp. 23 Agri-Systems 69 Alfa Laval Inc. 144 Allegheny Coupling Co. 130 American Railcar Industries Inc. 180 American Stainless & Supply 190 Amistco Separation Products Inc. 155 Anguil Environmental Systems Inc. 6 Anhydro Inc. 50 Antioch International Inc. 148 Anton-Paar USA 224 Aqua Power Inc. 249 Aquatech International Corp. 51 Ascendant Partners Inc. 208 Astoria-Pacific International 209 Atec Steel 231 Barr-Rosin Inc. 179 & 234 BBI Project Development 120 BBI International Community Initiative to Improve Energy Sustainability (CITIES) 94 Best Energies Inc. 43 BetaTec Hop Products Inc. 149 & 296 Biofuels Australasia 171 Biofuels Canada 129 Biofuels Recruiting 210 & 233 Biomass Magazine 184 Biothane Corp. 185 Blackmer 265 Boulay, Heutmaker, Zibell & Co. 151 Brock Grain Systems 204 Brown, Winick, Graves, Gross, Baskerville & Schoenebaum 63 Buckman Laboratories Inc. 56 Buhler Inc. 12 Burns & McDonnell 125 Calbrandt 195 Caldwell Tanks Inc. 194 Camco Chemical Co. Inc. 243 Central States Group 214 Centrisys Corp. 157 Cereal Process Technologies LLC 127 Check-All Valve 30 Chief Industries Inc.— Agri-Industrial Division 93 Christianson & Associates PLLP 119 CIT Group Inc. 134 Clifton Gunderson LLP 236 Cloud/Sellers Cleaning Systems 24 ConAgra Trade Group Inc. 245 Cooling Tower Depot Inc. 32 Coverall Building Systems 235 Crown Iron Works/Harburg Freudenberger 169 Davenport Dryer LLC 71 dbc SMARTsoftware Inc. 16 & 17 Delta-T Corp. 124 Distillers Grains Quarterly 229 DTN 25 DuPont Chemical Solutions Enterprise 244 Duratech Industries International Inc. 237 Durr Systems Inc. 282 Eaton Corp. Filtration Division 40 Eco-Tec Inc.
109 161 73 273 65 201 67 115 219 88 3 & 72 253 188 176 280 99 107 196 158 86 225 257 57 298 128 18 & 19 95 4&5 2 74 189
ETHANOL PRODUCER MAGAZINE JULY 2008
150 198 118 136 47 46 41 45 260 53 87 137 261 218 85 217 252 197 259 55 92 271 281 54 84 10 251 206 42 275 228 81 205 181 255 96 58 268 97 8
Eisenmann Corp. Electro-Sensors Inc. Emerson Power Transmission Encore Business Solutions Inc. Engineered Storage Products Co. ethanol-jobs.com Ethanol Technology ETS Laboratories Exothermics Inc. Faegre & Benson LLP Fagen Inc. Farms Technology LLC Frazier, Barnes & Associates LLC FCStone LLC Federal Equipment Co. Fermentis First Capitol Risk Management LLC Fläkt Woods Flottweg Separation Technology Inc. FWS Technologies Gamajet Cleaning Systems Inc. GATX Corp. Genencor International Inc. Geopier Foundation Co. Gordon Technologies GreenShift Corp. Harris Group Inc. Hydro-Klean Inc. ICM Inc. Indeck Power Equipment Co. International Distillers Grains Conference and Trade Show 2008 International Process Plants Interstates Cos. Intersystems Inc. ISCO Industries LLC ITT Industries Goulds Pumps John Zink Co. LLC Kahler Automation Corp. Kaltron Absorbents Katzen International Inc. Kennedy & Coe LLC Koppers Inc. L.B. Foster Co. Lai-Pro LLC Larox Corp. Lechler Inc. Legris Transair Louis Dreyfus Louisiana Chemical Equipment Co. Ludeca Inc. Management Recruiters of Atlanta Mapcon Technologies Inc. Marcus Construction Co. Mason Manufacturing Inc. McC Inc. Mechanical Supply Co. Metso Automation Midland Scientific Inc. Midwest Towers Inc. Miller Insulation Co. Mist Chemical & Supply Co. Mongan Bockman Munters Corp.-Des Champs Products National Corn-to-Ethanol Research Center National Ethanol Conference Natwick Associates Appraisal Services Nestec Inc. New York Blower Co. Nexen Marketing USA Inc. North American Bioproducts Corp. Novozymes
33 272 82 277 166 39 83 239 31 186 300 221 104 226 108 75 248 36 227 263 256 297 174 299 139 264 138 191 35 & 167 238 146 215 230 116 131 145 175 106 216 177 80 168 160 78 & 79 276 59 178 164 211 101 52 98 117 110 114 220 147 121 170 100 279 38 207 247 269 105 187 241 242 111 89 199 283 165
OPW Fuel Management Systems OPW Fluid Transfer Group Ortman Drilling & Water Services Outokumpu Stainless Inc. Papailias Inc. Paragon Enterprises LLC Petroleum Equipment Institute PhibroChem Pioneer Hi-Bred International Inc. Piper Jaffray & Co. Poet LLC Praj Industries Ltd. Primafuel Inc. Pro-Enviornmental Inc. ProQuip Inc. R&R Contracting Inc. R.J. O’Brien and Associates LLC RailWorks Track Systems Inc. Reimer Welding Inc./Granatus Consulting Renewal Service Inc. Resonant BioSciences LLC Renewable Fuels Association Rev Tech LC Robert-James Sales Inc. Robinson Industries Inc. Roeslein & Associates Inc. Romer Labs Inc. Ronning Engineering Co. Inc. Roskamp Champion SafeRack LLC Salco Products Inc. Sandmeyer Steel Co. Sartorius Omnimark Corp. Seneca Waste Solutions Siemens Energy & Automation Inc. Siemens Water Technologies Corp. Smar International Co. Spraying Systems Co. SPX Flow Technology SSOE Inc. Strongform Nationwide Industrial Builders Sturtevant Inc. Sukup Manufacturing Co. Sulzer Chemtech USA Inc. Swanson Flo-Systems Co. Syngenta T.E. Ibberson Co. TDC Dryers Tower Tech Inc. Tranter Phe Trico TCWind Inc. Tri-Mer Corp. U.S. Energy Services Inc. U.S. Tsubaki Inc. U.S. Water Services Univar USA Inc. Val-Fab Inc. Vaperma Inc. Veolia Water Solutions & Technologies Verenium Corp. Victory Energy Operations LLC Vogelbusch USA Inc. Volkmann Railroad Builders Inc. W. Soule & Co. W.S. Tyler USA Wanzek Construction Inc. Watson-Marlow Bredel Pumps Weaver Boos Consultants Inc. WestMor Industries LLC WINBCO World Biofuels Symposium - China Yellow Springs Instruments Inc. Zeochem LLC Zook Enterprises LLC
11
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E D I TO R I A L
A RT
PUBLISHING & SALES
Kathy Bryan Editor-in-Chief kbryan@bbibiofuels.com
Jaci Satterlund Art Director jsatterlund@bbibiofuels.com
Mike Bryan Publisher & CEO mbryan@bbibiofuels.com
Tom Bryan Editorial Director tbryan@bbibiofuels.com
Sam Melquist Graphic Artist smelquist@bbibiofuels.com
Joe Bryan Vice President of Media jbryan@bbibiofuels.com
Jessica Sobolik Managing Editor jsobolik@bbibiofuels.com
Elizabeth Slavens Graphic Artist bslavens@bbibiofuels.com
Matthew Spoor Sales Director mspoor@bbibiofuels.com
Dave Nilles Contributions Editor dnilles@bbibiofuels.com
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LETTERS TO THE EDITOR We welcome letters to the editor. Send your letter to: Ethanol Producer Magazine Letters, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203 or e-mail to jsobolik@bbibiofuels.com. Letters should include the writer’s full name, address and telephone number, and may be edited for purposes of clarity and space.
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COPYRIGHT © 2008 by BBI International
ETHANOL PRODUCER MAGAZINE JULY APRIL2008 2008
13
The Way I See It In the Shoes of the Oil, Gas Industry
I
magine for a moment that Henry Ford’s plan for automobiles to run on alcohol fuels came to fruition near the turn of the 20th century. Imagine that during the past 100 years, alcohol fuels were used in every automobile produced. The ethanol industry had built a trillion-dollar infrastructure to support the distribution of the fuel, and it powered the world. Now imagine that oil was discovered 30 years ago. It appeared to be abundant and cheap, and the gasoline produced from it fit into the distribution and retail infrastructure created by the ethanol industry. Its developers and supporters soon rallied around this new fuel and began talking about making it part of the world’s energy pool. Support was growing in Congress and other political circles on a global scale. After all, it had the potential to generate billions of dollars of revenue for whichever state or country developed its oil resources. I suspect the ethanol industry would react as the oil industry has done: with vehement opposition. We would rail against gasoline’s real and perceived problems. We might even invent a few negative studies and reports about this new “oil-based gasoline” that was threatening our century-old uncontested reign in the market. At first, it was just 10 percent, and while we were opposed to giving up any market share, it became clear that the movement was strong and the trend inevitable. So the ethanol industry finally acquiesced and accepted 10 percent gasoline blends, and we profited from the financial incentives this new fuel was receiving. Hold on a minute! Now politicians are talking about raising the percentage and mandating the use of gasoline. It’s no longer a 10 percent blend; now there's talk of 20 percent or even 85 percent blends of gasoline. There is legislation being considered that would require every new vehicle to be flexible-fuel capable. This little fledgling industry has gone from being a nuisance to actually threatening our ethanol market share. Oil refineries begin to spring up in Texas, Oklahoma, Pennsylvania and dozens of other states. At first, they are small, but they quickly increase in size. The oil boys seem to have the ear of politicians, who are saying we need to find another source of energy because ethanol has nearly peaked in its production capability. It’s wrong, we say! Ethanol has been the foundation of the world’s energy needs for 100 years. We can produce more; we simply need to open up the vast forest reserves of Canada. We begin to fight the opposition, even when we know the advancement of oil and gasoline is inevitable. We resist at every corner, pouring our vast financial resources into warding off the insidious forward advance of gasoline. We create stories about gasoline. It doesn’t matter if it’s the truth or a lie— this is war! We fight on, even though we know it's a war we can’t win. Far fetched thoughts, perhaps? Just imagine for a moment what we might do if the shoe was on the other foot. While it doesn’t make it right, sometimes it’s good for us to walk a mile in someone else’s shoes. That’s the way I see it!
Mike Bryan Publisher & CEO mbryan@bbibiofuels.com
14
ETHANOL PRODUCER MAGAZINE JULY 2008
Letters to t h e
Editor
W
here did you get the number of 84,000 British thermal units (Btu) per gallon of ethanol produced for an energy demand (in the May 2008 feature, “A Cheaper ‘Whey’ to Make Ethanol”)? Nobody that I know of in the industry approaches that number. Even the oldest, most inefficient plants are in the 50,000-Btu-pergallon range. Newer plants are less than 30,000 Btu per gallon during the summer. Also, as a former food science professor at the University of Illinois at Urbana-Champaign, I believe cheese whey typically contains approximately 5 percent lactose with the rest mostly water, so where do you get cheese whey at 16 percent solids without evaporating a lot of water, which greatly raises the energy cost? Even if all the cheese whey in the United States was converted to ethanol, you would produce less than 300 million gallons of ethanol, with tremendous energy and transportation costs through trucking all of that watery cheese whey around. It seems like someone left out all of the negative aspects. I would like to see a waste product like cheese whey used, but unless there is only one giant cheese plant in the United States adjacent to an ethanol plant and a low-energy method to reduce water, turning cheese whey into ethanol doesn’t seem very attractive, either economically or energetically.
W
hy can't hydrous ethanol—say 80 percent to 90 percent ethanol by weight—be delivered to refineries where the ethanol could be extracted from the water in a liquid-liquid extraction scheme using straight-run naphtha as the extracting agent before this is blended into the final gasoline mixture? With a specific gravity of 0.7 for straight-run naphtha, there would be no problem not having enough gravity difference to effect the phase separation. The water-rich phase leaving the bottom (with, say, 20 percent ethanol content) could be redistilled to 80 percent to 90 percent ethanol before undergoing extraction again. Finally, the straight-run naphtha, rich in ethanol, could then be blended into the final gasoline mixture. If necessary, a small amount of anhydrous ethanol could be added to make sure no water "drops out." Also, instead of linking your ethanol plants with coal plants, which defeats the purpose, consider using the atmospheric vortex engine for your energy (see www.vortexengine.ca). It runs on waste heat and convective available potential energy, which is plentiful in Iowa, especially during the spring and summer. Jerry Toman ScM, ChE
Larson B. Dunn Jr. Plant Manager Lincolnway Energy LLC Nevada, Iowa
Correction from our June 2008 issue: In the Industry feature on page 134, the photographer’s name was misspelled. His name is Mark Tade.
ETHANOL PRODUCER MAGAZINE JULY 2008
15
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BUSINESS&PEOPLE
Business& People Ethanol Industry Briefs Business BBI launches subsidiary, partners with Fagen BBI International Inc. announced the formation of a wholly owned subsidiary BBI BioVentures LLC in April. The new company will develop and operate multiple cellulosic ethanol plants in the United States. Fagen Inc. will be BBI BioVentures’ preferred engineering, procurement and construction contractor. “Fagen’s ethanol plants operate flawlessly, and its experience is crucial to the success of BBI BioVentures,” said Mark Yancey, vice president of project development for BBI International. Construction of the new company’s first plant is scheduled to begin later this year with start-up to follow in the second half of 2009. Its capacity will likely be 4 MMgy to 5MMgy, but future plants could be as large as 20 MMgy. EP
Novozymes expands Novozymes, one of the world’s leading biotechnology companies, has expanded its customer service branch to the heart of biofuels production in the United States. A grand opening was held in April for the company’s new customer solution office at the Iowa State University Research Park in Ames, Iowa. The facility employs a handful of scientists who are available to help customers with troubleshooting. “We continue to see strong growth in the fuel ethanol industry in the Midwest and are excited to officially open our doors,” said Andy Fordyce, vice president of sales and customer solutions for Novozymes. EP
20
Provista to help build ethanol terminal
AltraBiofuels creates cellulosic ethanol company
Provista Renewable Fuels Marketing, a limited liability company under CHS Inc., has signed a letter of intent to partner with Trans Load Ltd. Inc. and Blendstar LLC to construct and operate an ethanol terminal in Birmingham, Ala. Once operational, Provista will be the exclusive supplier of ethanol products to the terminal, while Trans Load and its Birmingham warehousing and transloading operation will be responsible for the placement and offloading of railcars. Texas-based Blendstar LLC will handle the engineering, construction and back-office accounting of the new storage facility. According to John Litterio, director of renewable fuels wholesale marketing for Provista, the first phase of construction will allow the terminal to store approximately 5 million gallons of ethanol per month, while a second phase will expand capacity between 6 million and 7 million gallons per month. EP
California-based ethanol producer AltraBiofuels Inc. has created a research and development venture called Edeniq, which will focus on cellulosic ethanol technology development and licensing. Larry Gross, former chief executive officer of AltraBiofuels, will lead the new company. Kenneth DeCubellis, AltraBiofuels’ vice president of business development and commercial operations, will be CEO of the parent company. AltraBiofuels’ first 100 MMgy corn-based ethanol plant in Coshocton, Ohio, came on line in February. The company said production began at its second corn-based plant in Cloverdale, Ind., in May. A third plant in Nebraska has been put on hold indefinitely. EP
Share your Industry Briefs To be included in Business & People, send information (including photos or illustrations if available) to: Industry Briefs, Ethanol Producer Magazine, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. You may also fax information to (701) 746-5367, or e-mail it to jsobolik@bbibiofuels.com. Please include your name and telephone number in all correspondence.
UOP raises adsorbent prices The increased costs of chemicals such as potassium chloride and sodium hydroxide have caused the price of UOP LLC’s molecular sieve adsorbents used for ethanol dehydration to rise, the company announced in April. Company spokeswoman Susan Gross said the price increase will vary by product but will be no more than 15 percent for any given unit. “Molecular sieves are a product and a technology that we’re heavily invested in and have been for a long time,” she said. “We actually make those products for many different markets with ethanol being one of the key segments for that product.” EP
ETHANOL PRODUCER MAGAZINE JULY 2008
BUSINESS&PEOPLE
Sponsored by
Business Central Illinois Energy sold The sale of Central Illinois Energy Coop Inc., an ethanol plant under construction in Canton, Ill., was completed when the plant was bought out of bankruptcy by some of its original creditors, including Credit Suisse. The bank was one of the original lenders of the $90 million loan for the plant’s construction. The plant’s name has been changed to Riverland Biofuels LLC, and hiring has begun to finish the project in late 2008 or early 2009. The plant filed for bankruptcy in December 2007 after contractors began leaving the job site and construction costs skyrocketed to $130 million. EP
Monsanto, Mendel partner Monsanto Co. and Mendel Biotechnology Inc. have partnered to develop crops for cellulosic ethanol. They will apply Monsanto’s crop testing, breeding and seed production expertise to perennial grass seed varieties that Mendel is developing for use in biofuels and other commercial applications, according to Monsanto spokeswoman Sara Duncan. Since its formation in 1997, Mendel has had an ongoing business relationship with Monsanto. The companies have previously worked together on the development of biotechnology traits of corn, soy, cotton and canola. In October, Monsanto announced its increased investment in Mendel, in part to support the growth of Mendel’s new BioEnergy Seeds & Feedstocks business. EP
ETHANOL PRODUCER MAGAZINE JULY 2008
Southridge closes finance deal Dallas-based ethanol plant developer Southridge Enterprises Inc. secured a $6.6 million finance deal with private investment firm Nexus Lotts Capital Corp. in April. According to Southridge, the funding will be “used for the construction of the company’s previously announced sugarcane-based ethanol plant in El Salvador and a land purchase in Texas.” Southridge intends to build a 15 MMgy ethanol dehydration plant in El Salvador, where it plans to export hydrous ethanol from Brazil, dehydrate it and then export it to the United States. In a second phase of construction, the company will build a 5 MMgy sugarcane-based ethanol production facility colocated with the dehydration plant. Southridge will also use some of the funds to build a 50 MMgy natural-gas-fired, dry-grind ethanol plant near Dallas. EP
Amaizing Energy receives upgrade Amaizing Energy LLC has installed an automatic self-cleaning slurry strainer/mixer from Erie, Pa.-based Fluid Engineering to improve the fermentation process at its 55 MMgy ethanol plant in Denison, Iowa. The strainer/mixer turns the plant’s slurry into a homogeneous mixture, reducing the amount of enzymes used by approximately 10 percent to 30 percent. Amaizing Energy had been using Fluid Engineering’s Model 107, which is now used as a backup to the new Model 763 when it’s shut down for maintenance. The new model was originally designed as a labor-saving device, and there is now a large market for it worldwide, Fluid Engineering said. Its equipment could also be used in cellulosic ethanol production EP
VeraSun receives rail safety honor VeraSun Energy Corp., one of the nation’s largest ethanol producers, has received safety awards from both BNSF Railway Co. and Union Pacific Railroad for safe product handling during 2007: the BNSF Product Stewardship Award and the Union Pacific Chemical Transportation Safety Pinnacle Award. To be eligible for the BNSF award, companies must ship a minimum of 500 loaded tank cars with no accidental releases. VeraSun shipped more than 2,300 tanks cars from its ethanol production facility in Aurora, S.D., during 2007. The Pinnacle Award is based on safe loading techniques, secured shipments and no accidental releases. It is open to all chemical shippers. EP
Praj inaugurates R&D center Praj Industries Ltd. dedicated its new integrated biotech research and development center April 21 near the company’s headquarters in Pune, India. Covering five acres, the center includes 12 laboratories, seven clean-room facilities, a biodiesel pilot plant and a cellulose-to-ethanol plant. Praj Chairman Pramod Chaudhari said bench-scale experiments have been completed on a cellulosic ethanol process involving novel pretreatment followed by fermentation with a specific microorganism. “Commercialization of the process is on the drawing boards,” he said. EP
21
People Poet adds vice presidents In April, Poet LLC announced the addition of two vice presidents to its team. David Bearden began overseeing Poet’s legal team as vice president and general counsel in Bearden January. Previously, he served as principal deputy general counsel of the Navy in Washington, D.C. Rob Skjonsberg began his role at Poet as vice president of government affairs in Skjonsberg November 2007. He is responsible for advocating Poet’s public policy positions. He previously served as chief of staff for the state of South Dakota. EP
VeraSun names plant managers In May, VeraSun Energy Corp. announced the promotion of Shannon Robinson to the position of plant manager at its 110 MMgy ethanol plant in Charles City, Iowa, and the appointment of Alan Hieb as the plant manager of VeraSun Welcome LLC, a 110 MMgy ethanol plant under construction in Welcome, Minn. Robinson joined VeraSun in April 2007 as the engineering manager for VeraSun Hartley LLC, a 110 MMgy ethanol plant under construction in Hartley, Iowa. A month later, he transitioned into the role of operations manager in Charles City and has been the plant’s acting plant manager since December. Hieb joined VeraSun after more than 25 years with The Amalgamated Sugar Co. LLC. He held several positions with the company, most recently as plant manager of a sugar beet factory. EP 22
U.S. Energy hires price risk manager
Brock Grain hires fabrication manager
Minneapolis-based U.S. Energy Services Inc., which specializes in managing clients’ energy costs, has hired Art Smith as a price risk manager to communicate risk management and energy commodities markets information to its customers. He took the position in April. Previously, Smith was an executive professor at the Global Energy Management Institute at the University of Houston. EP
Shawn White has been named fabrication manager at Brock Grain Systems, part of the CTB Inc. family of companies based in Milford, Ind. He will oversee activities in the steel storage department and the fabrication department’s production lines, which manufacture Brock’s corrugated steel grain storage systems in Kansas City, Mo. EP
MGPI appoints lab manager, project engineer MGP Ingredients Inc. announced in May the addition of Monique Huber as its quality assurance laboratory manager. She is responsible for managing all quality assurance Huber laboratory functions, including in-plant laboratories, in-process and finished product analysis, and laboratory support for products produced at MGPI’s facility in Kansas City, Kan. Huber has been with Tulva MGPI for nearly 20 years. In addition, MGPI hired Arya Tulva as project engineer. He will manage projects in all divisions of the company, including the alcohol division. Previously, Tulva worked for Koch Industries Inc. in Singapore and recently received a Master of Science degree in engineering management from the University of Kansas. EP
Glacial Lakes hires commodities managers Watertown, S.D.based Glacial Lakes Energy LLC has hired Brad Kohls, who will become the grain commodities manager at the company’s 100 MMgy ethanol plant Kohls near Mina, S.D. It also hired Roger Hansen, who will become commodities manager at the company’s 100 MMgy ethanol facility in Watertown. Hansen was general manager of Wood Lake, Minn.Hansen based Equity Elevator and Trading Co. for the past 18 years. Previously, Kohls was a grain merchandiser with CHS Inc. and a new sales manager at J&D Construction Inc. in Montevideo, Minn. EP
ETHANOL PRODUCER MAGAZINE JULY 2008
Manage inputs/outputs among 135 facilities Operators of 64 grain elevators Merchandise over 25 different feed ingredients Physically handle ethanol, denaturant, crude oil and natural gas
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©ConAgra Foods, Inc. All Rights Reserved.
COMMODITIES REPORT Natural Gas Report
What are the experts saying? May 16—U.S. Energy Services’ 20th Annual Client Energy Conference was intended to provide clients with meaningful, energy-related information that can be used to better manage their energy cost exposure. This year experts talked about worldwide liquefied natural gas (LNG) and deep off-shore drilling developments, biogas/landfill gas alternatives and technical pricing analysis. Speakers also addressed the weather, and domestic and international economic trends. Here are a few key points: 1. $8/MMBtu is the new $6/MMBtu (Larry Marshall)— Recently, when prices dropped to near $6/MMBtu, it typically signaled a relatively good time to hedge. Marshall believes the new number indicating a good time to hedge is $8/MMBtu.
By Casey Whelan, U.S. Energy Services Inc.
2. LNG imports will not necessarily push prices down (Damien Dafour)—Worldwide LNG liquefaction capability continues to develop worldwide. The United States will have to compete with other countries to attract the volumes to its shores. Unfortunately, competing countries currently have higher prices for natural gas and generally tie the price to oil. LNG may actually serve to increase prices as we are forced to pay a “world price” for natural gas. 3. The declining dollar has been influential in commodity price increases (Bill Ford/Ron Denhardt)—There is a very strong correlation between the drop in the value of the U.S. dollar and the increase in commodities. If the dollar continues to drop, commodities will likely continue to increase. With respect to oil, a 1 percent decrease in the value of the dollar has corresponded with a 5 percent increase in oil prices. If that relationship holds, a further 5 percent drop in the dollar could lead to oil prices near $150 per barrel. 4. There was little optimism that prices would go back to historic levels (all speakers)—There seemed to be a consensus that high prices are likely to be with us for a while, despite short periods of softening prices. However, there are far more factors that will keep prices high than will push prices down. EP Casey Whelan, vice president of strategic initiatives, can be contacted at cwhelan@usenergyservices.com.
Corn Report
Yield trends the focus of summer May 19—Corn is planted and analysts will now try to determine if the delayed plantings will impact trend-line yields. One caveat in the marketplace is determining how many more corn acres can be obtained due to the economic situation of corn versus soybeans before the March 31 planting intentions were released. Ideas of corn gaining 2 million acres or more may not be as forthright as initially thought. However, expectations of that sector gaining 1 million to 1.5 million acres are highly probable. One thing to note is that every 1 bushel deviation in yield is a reduction of 80 million bushels. The U.S. corn carry-out currently rests below the 1 billion-bushel mark and below the 8 percent carry-out-touse ratio. This will leave the market vulnerable to any potential weather issues that come during the summer growing season. This will offer the corn market an opportunity to be explosive when corn and the words hot, dry, and/or drought are used in the same sentence. It is crucial for the United States to have utopic growing conditions to ensure an inventory buffer as the 2009-‘10 crop year approaches. Any deviation on production will continue to lead to mild corn rationing not only domestically, but abroad. Corn should feel a comfort level into early summer in the upper $5.80s to low $6s per bushel until the weatherman offers a bleak forecast. 26
By Jason Sagebiel, FCStone
The graph reveals the August yield estimates versus the final yield as reported by the USDA. It seems as though the August-to-final number has declined the past two years. Since 1984, when the final yield number has declined since August, it has never done so more than two years in a row. EP ETHANOL PRODUCER MAGAZINE JULY 2008
COMMODITIES REPORT DDGS Report By Sean Broderick, CHS Inc.
Distillers grains enters summer doldrums May 19—Distillers grains, as May’s mid-point passes, has started its summer doldrums early. Usually, once it starts to get warm, demand drops significantly as animals eat less and feeders work off their normally full pipelines. This doesn’t usually happen until mid-June at the earliest, but we aren’t usually coming off of early spring highs either. There is an enormous—relatively speaking—amount of unsold distillers grains hitting the market at once. This would be understandable if it was all from plants that were just starting up, but a considerable supply is being made by operating plants that did not want to sell out ahead. The amount of October/September “new crop” being done is as low as we have ever seen. Generally, 30 percent of a plant’s production would be sold. This year, it
might be 5 percent at most. No one expects users will not use distillers grains, but it certainly makes a case for everyone waiting until the last minute to book their needs. Export demand seems solid, with the lower prices enticing those that have been sitting on the fence. Inclusion rates are at the maximum for animals that are feeding for energy, as distillers grains prices dip below 80 percent of corn value. Low protein prices are keeping it out of some diets, but values are surprisingly close to parity. Chicago Board of Trade futures activity is going to dictate prices, creating the baseline for distillers grains direction. Underlying all of that is the amount of feed that has yet to be sold and will be pushed into a spot market. EP
Regional Ethanol Prices (Monthly averages in cents per gallon)
BULK SPLASH/ TRUCK (rack) TOP OFF (rack)
REGION
SPOT
West Coast
369.875
266.43
Midwest
254.698
253.44
266.23
East Coast
259.969
----
297.247 Source: OPIS
Regional Gasoline Prices (Monthly averages in cents per gallon)
REGION
SPOT
RACK
RETAIL
West Coast
302.922
307.374
376.348
Midwest
297.106
302.488
356.619
East Coast
292.028
302.39
357.776 Source: OPIS
DDGS Prices ($/ton) JULY 2007
JULY 2008
JUNE 2008
Minnesota
160
160
95
California*
200
206
140
Chicago, Ill.
155
170
102
Buffalo, N.Y.
160
170
115
Central Florida
195
200
134
LOCATION
*Central Valley
Source: CHS Inc.
Corn Futures Prices (July corn, $/bushel) HIGH
LOW
CLOSE
May 19, 2008
5.93 1/2
5.82
5.86 1/4
April 18, 2008
6.16 1/2
6.04
6.13
May 18, 2007
3.79 3/4
3.70
3.71 1/4
DATE
Ethanol Report By Spencer Kelly, OPIS
Spot ethanol sales slow May 16—Midwest ethanol prices held fairly flat into mid-May, but that was in the face of huge gains for gasoline and blending economics assuring more discretionary blending demand. Rolling into the second half of the month, trading ebbed and prices started to falter. Chicago spot ethanol held in the upper $2.50s per gallon for nearly a month, but buying waned and thinning markets found prices shifting into the $2.50- to $2.55-per-gallon range. Producers getting $2.50 per gallon or more from prompt plant FOB loading into truck or rail retreated to around $2.45 per gallon heading into second half of May. The swift turn in ethanol markets turned steeper outside the Midwest. West Coast rail prices done at $2.63 per gallon by midmonth dropped nearly a dime since the end of April, with local in-tank deals off even more to $2.55 per gallon.
271.844
New York ethanol revealed slack, with May barges falling into the middle $2.50s per gallon. There was more talk about ethanol imports perhaps satisfying Harbor demand. Calculations indicated Brazilian cargoes could enter the Harbor at around break-even against spot prices and lay in at much less if duty-drawback provisions were used to erase most U.S. tariff impact. Still, ethanol blending economics remained extremely favorable with soaring petroleum prices. New York Harbor ethanol averaged $2.61 per gallon through the first half of May, offering a $1.03 per gallon cost advantage, after federal blender credits, versus Harbor RBOB averaging more than $3.13 per gallon. EP For more information, contact OPIS Ethanol & Biodiesel Information Service at (888) 301-2645.
ETHANOL PRODUCER MAGAZINE JULY 2008
Source: FCStone
Cash Sorghum Prices ($/bushel) MAY 16, 2008 APRIL 15, 2008 MAY 30, 2007 3.52 3.40 3.39 3.63 3.55 3.92
5.46 5.50 5.49 5.61 5.56 6.24
5.24 5.31 5.31 5.41 5.51 6.07
Superior, Neb. Beatrice, Neb. Sublette, Kan. Salina, Kan. Triangle, Texas Gulf, Texas
Source: Sorghum Synergies
Natural Gas Prices ($/MMBtu) MAY 16, 2008 APRIL 18, 2008
MAY 16, 2007
NYMEX
11.07
10.65
7.86
N. Ventura
10.27
9.92
7.226
Calif. Border
10.80
9.87
7.34 Source: U.S. Energy Services Inc.
U.S. Ethanol Production Output (barrels/day) February 2008
513,000*
January 2008
510,000
February 2007
386,000
*all-time monthly high
Source: U.S. Energy Information Administration
27
VIEW FROM
THE HILL
Like a Rolling Stone I cannot say in good faith that this column wasn’t influenced by Bob Dylan, as I was listening to his particular brand of social commentary when writing it, but the idea of a rolling stone is one that I keep coming back to when I think about America’s ethanol industry. The old saying is that a rolling stone gathers no moss. Indeed, it is hard to make anything stick to an object in motion. There may be few industries seeing the kind of innovation and evolution that has come to define U.S. ethanol producers. In the past five years, America’s ethanol production has soared. Between 2001 and 2006, our industry grew nearly 300 percent from just more than 1.5 billion gallons of annual production to nearly 5 billion gallons. In and of itself, that kind of production increase is impressive and a testament to the ability of American farmers and renewable fuel producers to meet growing demand. Still, the industry continues to roll along. Coinciding with the growth in production ability has been a commitment to improved efficiency and a willingness to develop and adopt new technologies. During that same Dinneen 2001-‘06 period, American ethanol producers reduced energy and water use, improved ethanol yields and dramatically increased efficiency. According to Argonne National Laboratory, ethanol production in 2006 was 22 percent more efficient than in 2001. In addition, water use was down 27 percent and total energy use decreased nearly 22 percent. When you stop to consider that these improvements occurred during a period of phenomenal growth, you gain an appreciation of how quickly the industry is evolving. Still, the industry is rolling along. The growth within the industry and the continued improvements in our industry’s already-green footprint is indeed exciting. However, perhaps the most revolutionary developments are occurring as industry partners with the federal government and private investors to expand the basket of feedstocks from which it produces ethanol. Without question, the starch-based industry in existence today will continue to provide the kind of strong foundation upon which all these new technologies will flourish. Whether the stalk of corn itself, wood chips from America’s forests, citrus waste from the coastal states or municipal waste found coast to coast, the materials America’s ethanol producers use to make ethanol will continue to expand. The technologies that will convert these “waste” materials are much closer to commercialization than many people realize. All across the nation, these technologies are being proven out at the pilot-scale level. The day is not far off when every corner of America will be engaged in developing a renewably fueled future. Again, the industry rolls along. Belaboring the rolling stone metaphor is intentional. It is meant to impress upon those reading this column not familiar with the subject that America’s ethanol industry is constantly marching forward toward that next horizon. Shortsighted critics of this industry cannot counter the argument that ethanol production continues to evolve, so they choose to ignore it. In doing so, they seek to maintain the status quo for generations of Americans to come. However, ignoring the rapid advancements being made in ethanol and biofuel production around the world doesn’t stop those advancements from moving forward. Working together with our friends in Congress and across the globe, this industry will keep rolling along.
Bob Dinneen President and CEO Renewable Fuels Association
28
ETHANOL PRODUCER MAGAZINE JULY 2008
RFA UPDATE
RFA dispels food price myths On April 30, the Renewable Fuels Association held a press conference to discuss the real reasons behind the recent rise in food prices. The event, held in Washington, D.C., included former Secretary of Agriculture John Block, National Farmers Union President Tom Buis, RFA President Bob Dinneen and National Corn Growers Association CEO Rick Tolman. “A complex set of factors are at work helping to drive food prices higher around the world,” Block said. “Singling out biofuels like ethanol for all or even the majority of the blame misses the boat.” The primary factors contributing to rising food prices include skyrocketing oil prices, surging global demand for grain and meat from nations such as China and India, hedge fund speculation on commodity markets, droughts in Australia and elsewhere, a weak U.S. dollar encouraging exports, and agricultural policies around the world that have limited the productivity of farmers from Europe and Asia. “I find it ironic that efforts to reduce our dependence on oil are being blamed for increased food costs when, in fact, record-high oil prices are playing a far greater role in increasing grocery prices than ethanol production,” Buis said. “America’s farmers and ranchers have been feeding the world for more than 200 years and will continue to provide safe, high-quality products, while at the same time playing a significant role in reducing our addiction to oil.” A complete transcript of the event is available at http://www.ethanolrfa.org/objects/documents /1692/food_and_fuel_presser.pdf. To watch the complete press conference or listen to the audio, visit http://www. ethanolrfa.org/industry/conference/blog/.
The RFA criticized Texas Gov. Rick Perry’s decision to seek a waiver of the renewable fuels standard. Reducing the use of ethanol, as sought by Perry, will not appreciably reduce grain prices for livestock producers and food processors in Texas. However, eliminating 4.5 billion gallons of fuel from the marketplace—as the 50 percent waiver would do—will increase gasoline and diesel prices even more. “Tampering, adjusting or removing the requirements will not have the impact on grain prices that Gov. Perry seeks, nor will it bring the food price reductions he claims,” said RFA President Bob Dinneen. “The skyrocketing price of oil, surging global demand for grains and meat, poor harvests around the globe and a weakened U.S. dollar are the real factors determining world grain and food prices.”
Dinneen’s lobbying efforts noted The Hill, a congressional newspaper published daily when Congress is in session, recently named RFA President Bob Dinneen one of Washington, D.C.’s most effective lobbyists. He was one of 61 lobbyists or lobbying groups named “the best in the business for America’s business sectors.” The publication noted, “An assortment of interests opposed a new mandate that would boost renewable fuels production fivefold, but Dinneen and the RFA got it through.”
ETHANOL PRODUCER MAGAZINE JULY 2008
www.ethanolRFA.org
Opposition to Texas governor’s waiver request
29
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BIObytes
INDUSTRYNEWS
Ethanol News Briefs Poet cancels one plant, buys methane for another Poet, the world’s largest ethanol producer, has canceled plans for a 65 MMgy facility near Glenville, Minn., due to permitting delays. Larry Ward, vice president of project development at Poet, said the possibility still exists for a plant to be built in that location but not for several more years. Meanwhile, Poet’s 100 MMgy plant in Chancellor, S.D., will begin purchasing methane from a local landfill to use as an energy source at the facility.
Advanced biofuel promotion group emerges A nonprofit organization has been formed to promote advanced biofuels. Pending an application for Internal Revenue Service 501(c)(5) agricultural organization status, Frederick, Md.-based Advanced Biofuels USA intends to provide individuals, farm coops, start-up companies and large producers with the resources necessary to advance common objectives. According to founder Joanne Ivancic, the organization’s immediate focus is to recruit those who share the same interests with the organization. For more information on how to become a member, visit www .advancedbiofuelsusa.org.
Community college receives biofuels grant Central Carolina Community College in Pittsboro, N.C., received a $195,000 grant from the Biofuels Center of North Carolina in May. The funds will be used to purchase equipment for a biofuels production laboratory, which will be built in the college’s Sustainable Technology Building later this year. Starting this fall, the college will offer an Associate in Applied Sciences degree in Alternative Fuels. Biofuels instructor Andrew McMahan was recently hired to develop a curriculum for the new program.
GPRE receives R&D grant for algae research In April, Green Plains Renewable Energy Inc. received preliminary approval from the Iowa Power Fund for a $2.3 million continued on page 36 34
Senators respond to RFS waiver grocery bill. “We believe the EPA Contradicting statements have should begin the process of examinalmost become the status quo in the ing alternatives that ease the severe food-versus-fuel debate. Shortly after economic and emerging environmenresearchers from Texas A&M tal consequences that are developing University released a study stating in America as a result of the manthat ethanol production has not date,” the letter stated. impacted the price of food, fuel or Not to be undermined, 16 senafeed in the Lone Star state, Texas Perry tors led by Chuck Grassley, R-Iowa, Gov. Rick Perry asked the U.S. EPA and Tim Johnson, D-S.D., sent their for a 50 percent waiver from the own letter to Johnson that same day. renewable fuel standard (RFS) in the “While we’re all sympathetic to those Energy Independence & Security struggling to cope with the higher Act of 2007. cost of food both domestically and "We appreciate the good inteninternationally, we must be intellectutions behind the push for renewable ally honest about the real causes fuels,” said Perry in a statement McCain behind the increases,” the letter said. It released by his office April 25. “In fact, we’re diversifying our state’s energy portfo- mentioned the Texas A&M study as proof that lio at a rapid rate, but this misguided mandate is relaxing the RFS wouldn’t result in lower corn significantly affecting [Texas families’ food bills]. prices. The American Coalition for Ethanol also There are multiple factors contributing to our skyrocketing grocery prices, but a waiver of RFS responded to the waiver request. “The U.S. levels is the best, quickest way to reduce those ethanol industry welcomes an examination of the facts regarding higher food prices, as costs before permanent damage is done." Texas A&M’s Agricultural & Food Policy opposed to the vast amounts of misinformation Center research stated that higher energy costs that have led these senators to question their are the driving force behind rising food and feed own carefully planned energy legislation,” said costs, and that the overall effect of ethanol and Brian Jennings, executive vice president of its coproducts on agriculture and the economy ACE. “While we may not be able to top ethanol opponents' well-funded public relations camis complex. Another study released around the same paigns, we are absolutely certain that an examitime echoed those findings. The University of nation of the facts will confirm ethanol's role in Madison-Wisconsin’s Department of reducing gas prices and its minimal impact on Agricultural & Applied Economics released a food prices.” Following the policy set forth by the study that examined the overall effects of ethanol production on U.S. corn prices. It con- Energy Policy Act of 2005, the EPA sought cluded that if ethanol was the only factor in the comments on Perry’s RFS waiver request for 30 increased price of corn, the average cost of a days. Johnson can grant a full or partial waiver if bushel of corn for the first quarters of 2007 and it’s determined that implementation would 2008 would be $2.95. The study also found that severely harm the economy or environment of a exports have had a more significant effect on the state, region or the entire country. A waiver could also be granted if the EPA determines price of corn than ethanol production. In addition to Perry’s request for an RFS that there is an insufficient amount of domestic waiver, a letter signed by 24 U.S. senators, includ- renewable energy. The agency must decide on ing presidential nominee John McCain, R-Ariz., the waiver request within 90 days of receiving it. was submitted to EPA Administrator Stephen Johnson on May 2, urging him to reconsider the —Kris Bevill RFS and its impacts on the average American’s ETHANOL PRODUCER MAGAZINE JULY 2008
INDUSTRYNEWS
RINSTAR releases RIN validation study The Clean Fuels Clearinghouse, which operates the RINSTAR Renewable Fuels Registry, performed a study on the number of valid renewable identification numbers (RINs) transacted on the registry between April 8 and June 10. When company President Clayton McMartin announced the study during a webinar on RIN validation that his company hosted in May, he said final results from the study would be available for purchase around June 17. “The study will serve to provide statistically relevant insight into the [renewable fuels standard (RFS)] program,” McMartin said. It’s an internal survey of all transactions made on the registry, which includes 59 companies that interact with than 400 other companies. They average approximately 1,200 transactions daily. McMartin said halfway through the study, there had been 14,154 individual off-system RIN purchases—transactions between a RINSTAR member and a nonmember—representing 150 million gallons of ethanol. In preliminary study results of off-system RIN transactions, McMartin said the daily average of errors was between 4 percent and 5 percent. “I think actual failure rates outside of RINSTAR could be double,” he said, estimating as much as an 8 percent failure rate across the entire supply chain. At this rate, he said the financial impact from lost product value and administrative costs could total more than $70 million at the 2008 RFS level of 9 billion gallons per year. The RINSTAR registry validates and certifies that each RIN is the correct number and isn’t a duplicate of another. It does so by comparing it against the regulations and all of the RINs that have been transacted within RINSTAR. Between Sept. 1, 2007— when the RFS went into effect— and May 13, the registry had processed the sale of 130,000 RINs, which represent more than 2 billion gallons. “Our initial emphasis was to keep bad RINs out of the registry,” McMartin said. “Once we got our
IT’S TIME TO GET ROLLING
feet under us, we started capturing the invalid RINs and the types of failures.” He said typical failure types are incorrect identification numbers, duplicate RINs, different companies having titles to the same RIN, too many or too few numbers within the actual RIN, and failure to split the RIN after sub-batches are created. Some of these errors are simple typos or administrative errors, while others are a result of late transfers or bad bookkeeping. RINSTAR recently introduced a certification program for RINs. It gives a silver star certification to RINs that have been validated against the regulations and the RINSTAR database. RINs receive a gold star certification if they have a complete history of title, meaning that all transactions took place among RINSTAR members. This represents the highest level of accuracy. The creation and transfer of RINs began Sept. 1, in accordance with regulations set forth by the U.S. EPA. RINs are mechanisms the EPA created to ensure compliance with the RFS in the Energy Policy Act of 2005. A RIN is a unique, 38digit serial number assigned by producers and importers to each gallon or batch of renewable fuel produced. Within the 38 numbers are sections that identify the year produced, the company and facility that produced the fuel, the nature of the fuel, and how many gallons the number represents. The number stays attached to the fuel until it’s blended into gasoline or diesel. An obligated party acquires RINs when blending with a renewable fuel, or it can purchase RINs to satisfy blending requirements.
ETHANOL PRODUCER MAGAZINE JULY 2008
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Ethanol News Briefs
Farm bill provides advanced biofuels incentives
continued from page 34
grant to fund the research and development of algae-based biofuel feedstock production. The grant will allow GPRE to conduct a 195-day test to determine the viability of algae production at its ethanol plant in Shenandoah, Iowa. According to Scott Poor, corporate council director of investor relations for GPRE, the project is expected to sequester the plant’s carbon dioxide to produce approximately eight kilograms of algal biomass per day.
Survey: Canadians support biofuels A poll conducted by Praxicus Public Strategies Inc. in April on behalf of the Canadian Renewable Fuels Association shows that 74 percent of Canadians support the 5 percent national standard for ethanol and the 2 percent national standard for biodiesel. Sixty-seven percent of Canadians support increasing the national renewable fuel blend for ethanol and biodiesel. Approximately 264 MMgy of ethanol and 26.4 MMgy of biodiesel are produced in Canada, according to the CRFA. To view the poll results, visit www.greenfuels.org. continued on page 38
The recently passed energy title in the Farm, Nutrition and Bioenergy Act of 2007 includes $1 billion for renewable energy programs and energy crops. Existing ethanol producers will also get some help in replacing their fossil fuel use with renewable energy in a $35 million program. Jack Huttner, vice president of biorefinery development for Genecor, the enzyme division of Danisco AS, said the farm bill’s $320 million loanguarantee program is an important incentive for companies facing high risks in developing new technologies. The loan guarantees, combined with the production tax credit for up to $1.01 per gallon through 2012, will help the advanced fuels industry compete with the corn-based ethanol industry that has much cheaper operating costs and lower capital investment costs, he said. However, at least one promising measure in the bill, the Biomass Energy Crop Transition Assistance Program, came with no designated funding. The crop assistance provision provides the USDA with a great deal of flexibility in designing the details of the program, said Anna Rath, vice president of commercial development for Ceres Inc. “It will be important to allocate sufficient funding,” she added. The biomass crop assistance program will be available for either biorefineries or grower groups to apply for up to a 75 percent cost share on the establishment of
PHOTO: SENATE COMMITTEE ON AGRICULTURE, NUTRITION AND FORESTRY
BIObytes
Senate Agriculture Committee members, led by Chairman Tom Harkin (at the podium), announce the passage of the Farm, Nutrition and Bioenergy Act of 2007.
energy crops, plus an undeclared amount for ongoing annual payments to growers until a biorefinery begins to purchase the feedstock. The legislation recognizes the differing commitments for feedstock production, she said, allowing five-year contracts for herbaceous crops and 15-year contracts for woody crops. The energy title also included $120 million for the Biomass Research & Development Initiative to improve feedstock development and the efficiency of biofuels production. It also established a Forest Bioenergy Program to address the use of woody biomass for energy. —Susanne Retka Schill
INDUSTRYNEWS
U.S. presidential candidates’ views vary on biofuels McCain, R-Ariz., has said he’s in favor With so many issues being discussed in of using switchgrass, sugarcane the 2008 U.S. presidential race, and ethanol to reduce the nation’s the candidates have minimal time dependency on foreign oil, but he during a presentation to discuss hasn’t delivered a financial plan as in depth their views on all the to how he will support the topics. Therefore, EPM has comadvancement of those fuels. piled a brief summary of the Although he said he supports renewable fuels agendas of ethanol, McCain is the only candiRepublican nominee Sen. John date who has taken a stance McCain, and democrat nominees against ethanol subsidies. He said Barack Obama and Hillary Obama the industry is mature enough to Clinton. At press time, the demoexist without government help. cratic presidential nominee hadn't According to McCain’s Web site been selected. (www.johnmccain.com), he views There are a few similarities ethanol subsidies and the current between the candidates—but also ethanol tariff as a cause of higher some glaring differences. Obama, transportation and food costs. D-Ill., and Clinton, D-N.Y., have “Ethanol subsidies, tariff barriers plans to continue funding and sugar quotas drive up food research for cellulosic ethanol and prices and hurt Americans,” other types of biomass-derived Clinton McCain said on the Web site. fuels. Both have a $150 billion, According to Clinton’s Web site 10-year investment plan to fund the continuation of renewable energy technologies. (www.hillaryclinton.com), if elected presiObama hasn’t mentioned where the money dent she will require that 60 billion gallons for his plan will come from, but Clinton has of renewable fuel be made available to stated that one-third of her $150 billion motorists by 2030. Clinton has pledged to plan will be provided by a Strategic Energy double the government’s investment in basic energy research, including a new fedFund partially financed by oil companies.
eral research agency. She would also create a Strategic Energy Fund that would include tax credits for gas station owners who install E85 pumps at their facilities, as well as loan guarantees for the commercialization of cellulosic biofuels. Obama’s plan also requires that 60 billion gallons of renewable fuels be used by 2030. In addition, Obama has placed emphasis on biomass-derived fuels. If elected, Obama would offer tax incentives, cash prizes and government contracts toward the development of “the most promising technologies.” According to his Web site (www.barackobama.com), Obama’s goal is to have 2 billion gallons of cellulosic ethanol on the market by 2013. Obama is the only candidate to promote a venture capital fund for renewables. His energy plan includes $50 billion for a Clean Technologies Venture Capital Fund that will “ensure that promising technologies move beyond the lab and are commercialized in the U.S,” Obama said on his Web site. —Kris Bevill
BIObytes
INDUSTRYNEWS
Ethanol News Briefs continued from page 36
All Fuels tests enzymes for cellulosic ethanol In May, Iowa-based All Fuels & Energy Co. began testing the first of 10 enzymes that its subsidiary AFSE Enzyme LLC has identified for cellulosic ethanol production. All Fuels is proposing a 100 MMgy corn and cellulosic ethanol plant near Manchester, Iowa. The company purchased a 150-acre site there and has secured $2.3 million in private equity financing. It has also brought an investment bank on board to help it look into acquiring and financing an existing ethanol facility.
Oklahoma seeds switchgrass acres The nonprofit Samuel Roberts Nobel Foundation is managing the seeding of 1,100 acres of switchgrass near Guymon, Okla., fewer than 35 miles from Hugoton, Kan., where Abengoa Bioenergy New Technologies is constructing a 13 MMgy cellulosic ethanol plant. California-based Ceres Inc. will be providing seed and agronomic direction for the demonstration switchgrass project, and Idaho continued on page 40
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Golden Grain to supply corn oil content. The plant is unique, Mason City, Iowa-based but as feedstock costs soar, Golden Grain Energy LLC many in the biodiesel indusand Madison, Wis.-based try are looking for alternaBest Energies Inc. have tives to soy oil. “We want to received $200,000 from the partner with other biodiesel Iowa Department of plants to include them as Economic Development owners,” Wendland said. He Board to support their intent also intends to work with to extract corn oil to produce more than one ethanol plant biodiesel. in the deal. “We’re actively According to Walter recruiting other ethanol Wendland, president and companies, so they can vertichief executive officer of cally integrate their corn-oil Golden Grain Energy, a letproduction and turn it into ter of intent was signed biodiesel. In the end, it won’t between his plant and Best just be Golden Grain and Energies in February to extract corn oil from Golden Corn oil can be extracted during the ethanol Best Energies. It’ll be four or Grain Energy’s distillers producer process in order to produce five ethanol plants and biodiesel plants that work grains. He said the partner- biodiesel. ship is a “work in process” and will result in a sep- together.” The first $100,000 from the board will be in arate company, Corn Oil Bio-Solutions LLC, which is slated to come on line in the first quarter the form of an industry loan, while the other half will be a grant used for project costs, Wendland of 2009. Best Biodiesel in Cashton, Wis., a subsidiary said. The funding was provided under Iowa’s of Best Energies, will use the corn oil as a feed- Value-Added Agricultural Products and Processes stock in its biodiesel production. Its proprietary Financial Assistance Program. Its mission is to technology will convert the corn oil into ASTM- fund and support research into value-added revquality biodiesel. Best Biodiesel is designed specif- enue streams for the state’s agricultural industry. ically to use corn oil. Most biodiesel companies avoid using it because of its high free-fatty-acid —Craig A. Johnson
ETHANOL PRODUCER MAGAZINE JULY 2008
INDUSTRYNEWS
Argonne: Ethanol plants decrease water, energy use Water and energy consumption by ethanol plants was the focus of a survey conducted by the Renewable Fuels Association in 2007. Afterward, the RFA asked Argonne National Laboratory to perform a statistical analysis of the survey data. The results recently came in, and they confirm that ethanol plants are using less water and energy than before. The RFA’s survey asked 22 operating dry and wet mills—representing 1.81 billion gallons of annual production—what their energy and water usage was in 2006. Those answers were compared with similar data collected by the USDA in 2001. Argonne’s analysis found that: Ethanol yields increased 6.4 percent in dry mills and 2.4 percent in wet mills. Total energy use (fossil fuels and electricity) decreased 21.8 percent in dry mills and 7.2 percent in wet mills. Dry mills decreased electricity use by 15.7 percent alone. Water use decreased 26.6 percent in dry mills. According to the Argonne analysis, ethanol production totaled 1.77 billion gallons in 2001. By 2006, that amount had increased to 4.9 billion gallons, representing a growth of 276 percent.
Dry-grind ethanol plants were using 26.6 percent less water in 2006 than they were five years ago.
Despite the decrease in water and energy usage, some in the industry believe it should be even lower. Keith Kor, general manager of Corn Plus LLLP in Winnebago, Minn., said he believes the amount of water and energy each plant will be allowed to use will be allotted by the government someday. “I think within the next three years, whether it be state or federal, governments are going to step in and say,
‘Ethanol plants, this is how much water you can use. Get there,’” he said. “We’re trying to get it down to where it takes one gallon of water to make one gallon of ethanol.” To do so, Kor said his plant has been developing technology that is designed to capture most of the water that is being used during the process. “I’m looking at some technology right now that I’m hoping will be able to capture all the water,” he said. “Our plant has looked at capturing as much water as possible.” The technology being tested at Corn Plus has had positive results, which Kor said will be publicly released in the near future. Because of the need for water to make slurry, hydrolyze the starch and execute the distillation process, water is always going to be needed, Kor acknowledged. “I know some plants say they have a zero discharge, but that’s not true,” he said, explaining that some water is always lost going out the stack. Kor said he believes water is going to be a valuable commodity in the future. “We need to run our plants efficiently,” he said. “I think we want to be good stewards of the land and do whatever we can to reduce [usage].” —Timothy Charles Holmseth
INDUSTRYNEWS
BIObytes Ethanol News Briefs continued from page 38
National Laboratory will develop the harvest and processing system in coordination with Abengoa Bioenergy.
Iowa Interstate Railroad purchases locomotives Iowa Interstate Railroad in Cedar Rapids, Iowa, plans to purchase 12 new locomotives to accommodate the production of five new ethanol plants that will begin shipping on IIR’s regional system next summer. The locomotive units have 4,400 horsepower and are 18 percent more fuelefficient than traditional alternatives. Ethanol plants in the Iowa cities of Cedar Rapids, Menlo, Atlantic and Council Bluffs, along with a new plant in Annawan, Ill., are expected to increase railroad traffic by 25 percent to 30 percent in 2009.
E85 incentives increase in Indiana It will now be more appealing for Indiana retailers and fleets to add E85 pumps to their operations, as state legislation recently passed that makes businesses and “local units” eligible for upward of $20,000 each. Towns, cities, counties and local fleets are also eligible for the funds. The Indiana State Department of Agriculture said there has been a great deal of interest continued on page 42
CleanTech Biofuels, Merrick to build MSW-to-ethanol plant CleanTech Biofuels Inc. and its Denverbased engineering firm Merrick & Co. are partnering with Hazen Research Inc. to construct and operate a municipal-solid-waste-to-ethanol plant at Hazen Research Inc.’s eight-acre research facility in Golden, Colo. CleanTech Biofuels has an exclusive worldwide sublicense agreement with a company called HFTA in Livermore, Calif., for state-of-the-art technology developed by scientists at the University of California, Berkeley. The patented technology utilizes nitric acid rather than sulfuric or hydrochloric acid to hydrolyze cellulosic material for the production of ethanol and other fuels from biomass. CleanTech Biofuels has also obtained a nonexclusive worldwide license for all other cellulosic biomass feedstocks for ethanol production. “The nitric acid isn’t corrosive to metal,” said Michael Kime, chief operating officer and general council for CleanTech Biofuels. “It has a chemical characteristic called ‘passivity,’ which means it forms a protective coating on metals, so you can use lower-grade metals and readily available commercial equipment to use the technology in the commercial setting versus other acid-hydrolysis processes. We think that this technology is going to prove to be much better for commercial appli-
cations than any of the prior acid-hydrolysis technologies that have been tried or are currently in use.” CleanTech Biofuels purchased and reassembled a reactor system at the Hazen facility. In the first phase of the project, the system is optimizing reaction conditions for the process-engineered fuel derived from municipal solid waste and other cellulosic feedstocks including corn stover, wood waste and switchgrass. “We believe that [the first stage] is unique technology compared with anyone else in the marketplace,” Kime said. In the near future, Kime added, the project should move to Phase Two, in which a demonstration facility will be built on Hazen’s research site. Hazen will maintain all permits, licenses and other approvals necessary to complete the project. Once operational, the facility will take in four tons of municipal solid waste daily and produce approximately 36,000 gallons of cellulosic ethanol per year. Aurora, Colo.-based Merrick & Co., which owns and operates an ethanol production facility at the Coors Brewery in Golden, is currently working on several cellulosic ethanol projects being developed in the United States. —Hope Deutscher
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INDUSTRYNEWS
Positive first-quarter earnings reflect diversification Despite volatile corn prices continuing to compress ethanol plant operating margins, many of the nation’s top producers and companies highly involved in the industry still managed to see an upswing in their first-quarter 2008 earnings reports. Much of the first-quarter success was attributed to diversified ethanol producers pulling in positive profits. These ancillary business segments contributed to additional revenue that would have otherwise been lost if dependent on ethanol production alone. Cambridge, Mass.-based Verenium Corp., a pioneer in the development of cellulosic ethanol production, posted total revenues of $15.2 million, compared with $11.3 million the same quarter a year ago. The company’s specialty chemicals and enzymes business did especially well, reporting $11.2 million in product revenue. Omaha, Neb.-based ethanol producer Green Plains Renewable Energy Inc. reported a net income of $9.9 million. This was an improvement over the fourth quarter of 2007, the company’s first quarter of ethanol production, when it reported a net loss. Pre-tax earnings of $12 million for the first quarter included net gains of $6.7 million from commodity derivatives.
Brookings, S.D.-based ethanol producer VeraSun Energy Corp. posted a 257 percent increase in revenues totaling $516.5 million. Its net income increased to $7.6 million, compared with a net loss of $300,000 during the same quarter last year. Total revenues increased by $372 million, compared with $144.5 million in the same three-month period last year. Pacific Ethanol Inc. reported net sales of $161.5 million, an increase of $62.3 million compared with $99.2 million during the first quarter of 2007. According to the company, “this increase in net sales is primarily due to a substantial increase in sales volume, which was partially offset by lower average sales prices.” Despite volatile prices and heavy demand for its corn, soybeans and wheat processing, Archer Daniels Midland Co. generated a 42 percent increase in its third-quarter earnings. The Decatur, Ill.-based company posted net earnings of $517 million, compared with $363 million during the same quarter last year. Conversely, the operating profit of ADM’s Corn Processing Segment took a hit, decreasing $79 million for the quarter “due to increased net corn and manufacturing costs, principally energy,” the company said. Privately owned agri-giant Cargill Inc. reported net earnings of $1.03 billion, up 86
ETHANOL PRODUCER MAGAZINE JULY 2008
percent from $553 million during the same period a year ago. According to Cargill spokeswoman Lisa Clemens, the company’s earnings from producing, trading and distributing ethanol and biodiesel globally impacted less than 3 percent of the company’s first-quarter results. Despite record oil prices impacting its refining business, Marathon Oil Corp. still managed to garner a 2 percent increase of its first-quarter net profits. The Houston-based oil, gasoline and ethanol refiner and supplier earned a net income of $731 million, compared with $717 million during the same quarter last year. Revenues rose 38 percent to $18.1 billion versus $13 billion last year. CSX Corp., a Jacksonville, Fla.-based transportation company, reported that its firstquarter revenues rose due to the increased transport of ethanol. CSX generated significant growth in six of its 10 markets, resulting in first-quarter revenues of $2.7 billion, a 12 percent increase from the same quarter last year. First-quarter earnings were up 63 percent from last year. Total earnings at CSX for the quarter were $351 million. —Bryan Sims
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BIObytes
INDUSTRYNEWS
Ethanol News Briefs shown in the total $1 million funding available since it was announced in April.
MSU releases corn varieties for cellulosic ethanol Michigan State University researchers have introduced the third in a series of corn varieties—dubbed Spartan 1, 2 and 3— that are genetically modified to express different cellulase enzymes in the stalk and leaves. Together, the enzymes convert cellulose into glucose for fermentation into ethanol. The three varieties of corn can be blended with regular corn stover in a cellulosic ethanol plant. Negotiations are underway with a number of seed companies to license the Spartan varieties.
Gateway Ethanol defaults on $53 million note Six weeks after Gateway Ethanol LLC halted ethanol production in Pratt, Kan., to restructure its finances, it defaulted on a 2006 note acquired to fund the 55 MMgy dry-grind facility. Notice was posted in a quarterly U.S. Securities and Exchange Commission filing April 17, one week after Minneapolis-based Dougherty Funding LLC notified Gateway Ethanol of the $53.4 million default. The plant’s SEC continued on page 44
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Killing bad bugs without residues PureMash, a system developed by Resonant Biosciences LLC, greatly reduces bacterial contamination in ethanol plants without leaving antibiotic residues in the distillers grains, said company President Allen Ziegler. The system is based on a water-purification technology that uses chlorine dioxide and hydrogen peroxide to kill bacteria. Yeast are resistant to the chemicals’ antiseptic properties. Because chlorine dioxide doesn’t react with organics such as starch and sugar or compounds such as ammonia like pure chlorine does, it can be used directly in the fermentation process. Chlorine dioxide also attacks biofilms that coat the insides of tanks, pipes and other equipment. “Where we found most of the infections coming from in these plants is actually the heat exchangers,” Ziegler said. “A lot of the antibiotics will not get [those infection sources].” Bacteria in the biofilms are more resistant to antibiotics and antiseptics, and can be a source of reinfection in an ethanol fermentation tank. The system is integrated into a plant’s distributed control system, allowing full control and monitoring of the process. That also gives the plant a paper trail to review if needed Testing in several ethanol plants showed the system was successful, and PureMash received registration from the U.S. EPA in February. PureMash is now commercially available
PHOTO: RESONANT BIOSCIENCES LLC
continued from page 40
The PureMash system controls bacteria in ethanol plants without using antibiotics.
through Ethanol Technology in Milwaukee. Ten ethanol plants have signed up to have the system installed. Ziegler said the system is available through a leasing arrangement with monthly payments that are approximately the same as many plants pay for antibiotics. “We are matching their antibiotic pricing, but [the plants] are showing higher ethanol production and much less variation in ethanol production,” he said. “They don’t see the wild swings in ethanol production anymore. With a little more history under our belt, I think we will be able to put a better number on the real cost of our system, but we should be right in the middle of what an average plant spends on antibiotics.” —Jerry W. Kram
ETHANOL PRODUCER MAGAZINE JULY 2008
INDUSTRYNEWS
Researchers create cellulose-producing microbe
OF
TEX AS AT A USTIN
cyanobacteria was well-suited for enzymatic breakdown. The easily fermentable cellulose and sugars produced by the new cyanobacteria may also be applied to existing technology found at conventional corn-based ethanol facilities. The fermentation process releases carbon dioxide, which in turn can be used to feed the cyanobacteria. The cyanobacteria require a few micronutrients and fixed nitrogen to thrive, as well as sunlight for an energy source. Therefore, the cyanobacteria could be grown in open-pond production facilities on nonagricultural land, or in closed-loop photobioreactors. In fact, both are possible, depending on the strain of cyanobacteria, according to Brown. The open-pond system would allow the cyanobacteria to be grown in briny water and/or areas not typically suited for agricultural production. Another potential benefit is that cyanobacteria fix nitrogen from the atmosphere, eliminating the need for nitrogen-based fertilizers that are used to raise corn. Brown, who has devoted much of his personal career to RS VE NI S: U this and similar projects, said he and Nobles continue to collect PHOTO laboratory data. Two of their patent applications were recently published in the U.S. Patent and Trade Office. However, the next step is scaling up the process in a demonstration facility. Brown cautioned that despite its potential, commercializing the cyanobacteria-to-ethanol process carries plenty of risks. “Scaling up is the hard thing, [along with] figuring out capital costs with new technologies,” he said. IT Y
While the ethanol industry’s quest to convert agricultural residues to fuel continues, researchers at the University of Texas at Austin may have found another avenue for cellulosic ethanol production. A newly created microbe—a strain of cyanobacteria, commonly called blue-green algae—is capable of producing cellulose, sucrose and glucose, all of which have potential for ethanol production. University of Texas Professors R. Malcolm Brown and David Nobles Jr. created the cyanobacteria by giving them a set of cellulose-making genes from a non-photosynthetic bacterium called Acetobacter xylinum, which is commonly used for producing vinegar. The new cyanobacteria produce a relatively pure, gel-like form of cellulose that can be easily broken down into readily fermentable sugars. They also secrete sucrose and glucose, which are already prominent sources of ethanol, most commonly in the form of sugarcane and corn, respectively. Brown told EPM that Acetobacter bacterium is the most prolific cellulose producer in the world. Its cells divide every three to four hours, compared with up to once per day for many plants. Scientists are struggling with converting plant-based cellulose into ethanol due to the enzymatic and mechanical costs associated with existing processes. Plant-based cellulose contains crystalline-like lignin and hemicellulose structures that must be degraded with acids or cellulase enzymes. Brown said his “eureka moment” came when he realized the low molecular weight and noncrystalline form of cellulose produced by the
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filing indicated that it was working with Dougherty Funding to resolve the matter and disputed that the loan was in default.
European companies to advance cellulosic ethanol
PHOTO: SÜD-CHEMIE AG
In May, European companies Süd-Chemie AG and Linde Group agreed to jointly develop and market cellulosic ethanol production plants that would use feedstocks such as wheat straw, corn stover, grasses or wood. Süd-Chemie, one of the world’s leading manufacturers of catalysts and adsorbents, will provide its knowledge of biocatalysis and bioprocess engineering, while Linde, a worldleading gases Süd-Chemie headquarters and engineering company, and its subsidiary Linde-KCADresden will provide engineering expertise in the areas of biotechnology and chemistry. Together, they will assist potential customers in planning and constructing these plants worldwide. EP
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Greenfield partners to clean up Chernobyl contamination Greenfield Project Management Ltd. announced an agreement with PvT Capital GmbH in May that will expand Greenfield’s plans to produce ethanol from biomass crops grown on contaminated soil. Both companies were planning separate biofuel projects to remediate the land affected by the Chernobyl nuclear disaster in 1986. They decided to pool their resources to jointly develop Greenfield’s proposed ethanol plants in Mozyr and Bobruisk, Belarus, and expand them into biomass biorefineries. The plants will be able to produce ethanol, biodiesel, biogas and green electricity with a relatively small amount of waste ash left over, which will contain radioactive isotopes and be stored in safe locations. “We are coming into this project as both a shareholder and as a technology partner and leader,” said Chris Verbakel, chief operating officer of PvT Capital. “This partnership marks our entry into Belarus and represents another step in the implementation of our international expansion strategy.” The partnership also included the Centre for Environmental Research, part of the Helmholtz Association of Research Centres. Helmholtz professors Frank-Dieter Kopinke and Holger Weiss
will provide the projects with advice, supervision and certification to make sure that products from the area are free of contamination. Scientists from Helmholtz will also supervise tillage programs and their impact on decontamination, the implementation and further development of technologies involving the biomass sources and resulting biofuels, the storage of the decontaminated byproducts, and working conditions during the revitalization of the soil. Greenfield and PvT plan to eventually expand their projects into Russia and Ukraine, as well. In December 2007, PvT Capital made an agreement with the government of Ukraine to develop biofuels facilities that would aid decontamination of 400,000 hectares (990,000 acres) of the country. The 18-mile perimeter surrounding the Chernobyl Nuclear Power Plant is still too radioactive to inhabit. At least 70,000 square miles (45 million acres) in Belarus, Ukraine and Russia are less contaminated, but still too radioactive to grow food crops. Planting biomass crops for fuel production will naturally remediate the soil more quickly than if it was left fallow. —Jessica Sobolik
ETHANOL PRODUCER MAGAZINE JULY 2008
Proposed Canadian regulations focus on distillers grains In April, the Canadian Food Inspection Agency issued a draft regulatory proposal pertaining to distillers grains. In response, the U.S.-based National Grain and Feed Association asked the regulatory agency to reconsider its proposals—mostly for fear of disrupting cross-border trade between the United States and Canada. The NGFA is asking for the CFIA’s reconsideration of four broad aspects of its proposal, which if accepted as drafted could adversely affect U.S. distillers grains from entering into Canada and vice versa. One of the NGFA’s concerns is the agency’s approval of four antimicrobial agents (penicillin, streptomycin, ampicillin and virginiamycin). “Part of the CFIA’s proposal is related to the use or approval of those four different antimicrobials, and in the United States, only one product received no objection to its use during fermentation—virginiamycin,” said Dave Fairfield, NGFA director of feed services. While the United States produces far more distillers grains than Canada, the weak U.S. dollar has led to an increase in U.S. distillers grains exports in the past several months, which might increase importation of Canadian distillers grains into the United States. Until production in Canada increases, however, most of the NGFA’s worries over the agency’s proposals concern their potential to dramatically restrict U.S. distillers grains exportation northward. Fairfield said 317,000 tons of distillers grains were exported from the United States into Canada in 2007. Another major aspect of the CFIA draft rule changes that concerns the NGFA is the proposed requirement that distillers grains be labeled
ETHANOL PRODUCER MAGAZINE JULY 2008
with guarantees for maximum moisture, sulfur sodium and phosphorus. The NGFA asserts that other feeds aren’t subject to similar maximum-concentration limits. Instead, most U.S. feed products are required to meet minimum crude protein and fat, and maximum crude fiber. CFIA spokesman Alain Charette told EPM the agency is still discussing its proposed regulations on distillers grains and is taking the opportunity to hear from everyone wishing to voice opinions. “Something to remember is that there have not been any safety concerns with distillers grains products in Canada—at least that I’m aware of,” Fairfield said. “It’s the CFIA’s job to regulate the safety of feed ingredients. We just want them to be science-based and to be harmonized as much as possible with U.S. regulations to minimize any trade disruptions. We simply feel there is no real justification to propose these regulatory policies that could inhibit trade. We think the system is working well now and don’t want to disrupt that.” At press time in mid-May, the CFIA was expected to release a revised draft proposal before its May 30 stakeholder meeting in Ottawa. In 2007, the CFIA announced its intention to draft regulatory policy with respect to distillers grains from ethanol production because some additives, enzymes and processing aids used in making fuel alcohol were never approved for use in food or beverage-alcohol production. “That was the reason the CFIA started down that path,” Fairfield said. —Ron Kotrba
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NEW PROJECT
PROJECT COMPLETE
PLANT EXPANSION
EXPANSION COMPLETE
INDUSTRY
Ethanol Plant Construction Gap Between Corn, Cellulose Emerges
T
his month’s plant construction list includes five plants that have
years, the price has shot up 61 percent. These costs are transferred direct-
recently started production. This is great news, and the teams
ly from suppliers to consumers in the form of additional shipping fees, driv-
that worked hard to bring these projects to fruition deserve a pat
ing up the cost of all construction materials substantially.
on the back. However, the elephant in the room is the lack of
new projects filling the list’s vacant spaces.
In April, Pacific Ethanol Magic Valley LLC finished construction of its 50 MMgy facility in Burley, Idaho. In May, Glacial Lakes Energy-Mina (former-
The lastest corn-fed plant to break ground was Clean Burn Fuels in
ly Aberdeen Energy LLC) completed construction of its 100 MMgy plant
Raeford, N.C., in January. Will this be the last corn-based ethanol plant to
near Mina, S.D. One month after it brought a 60 MMgy ethanol plant on line
break ground? Some in the industry think it’s likely. “That’s probably it until
in Coshocton, Ohio, AltraBiofuels Inc., finished its second facility: Altra
the cellulosic plants start coming,” said one project coordinator.
Indiana LLC, a 92 MMgy plant in Cloverdale, Ind., which may be expanded
Verenium Biofuels Louisiana, the first U.S. cellulosic ethanol commer-
in the future. EPM was able to confirm that Marysville Ethanol LLC, a 50
cial demonstration production plant, came on line in May. At 1.4 MMgy, the
MMgy plant in Marysville, Mich., completed construction in late 2007.
plant may portend a sea change in industry growth. The newest plants on
Finally, Show Me Ethanol LLC’s 55 MMgy plant in Carrollton, Mo., also
this construction list are slated to complete construction by the third quarter
started production in May.
of 2009. After that, a void may occur … or this list may contain more cellulosic ethanol plants than corn-fed plants.
—Craig A. Johnson
The reasons for the slowdown in corn-fed ethanol plant construction are myriad. The Federal Reserve Board recently said 80 percent of domestic banks are tightening their lending standards on commercial real estate loans. This increase in equity to debt may ultimately make it too cumbersome for new projects to be financed in “traditional” ways. This, and the soaring cost of construction materials and the fuel needed to bring them to a site, makes the cost of building a plant an overwhelming burden. Ethanol facilities that may have been marginal competitors if they had come on line a year ago are no longer viable projects. One of the most significant costs for construction is the cost of diesel. Between April 2007 and April 2008, the retail cost of diesel rose by nearly
EPM will remove seemingly inactive projects from this list if: 1. Our good faith attempts to contact project representatives go unanswered for three straight months. 2. Through exhaustive means, we are unable to verify the continued advancement of a project. 3. The Renewable Fuels Association, as well as project representatives, are notified and given a reasonable amount of time to verify the project’s current status. To provide updates to this list, contact Craig A. Johnson at (701) 7468385 or cjohnson@bbibiofuels.com.
31 percent, according to the Bureau of Labor and Statistics. In the past four
48
ETHANOL PRODUCER MAGAZINE JULY 2008
Construction Represents 3.86 Billion Gallons Annually
Project Complete
Altra Indiana LLC
Calgren Renewable Fuels LLC
Location Cloverdale, Indiana Ethanol marketer General contractor F.A. Wilhelm Construction Distillers grains marketer Process technology Vogelbusch Carbon dioxide marketer Capacity 92 MMgy Broke ground Feedstock corn Start-up date Synopsis of progress This plant began production in mid-May. Congratulations Altra Indiana LLC!
undeclared undeclared undeclared October 2006 May 2008
Location General contractor Process technology Capacity Feedstock
Pixley, California W.M. Lyles Co. Lurgi Inc. 52 MMgy corn
Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date
Calgren Renewable Fuels
J.D. Heiskell & Co. N/A March 2007 May 2008
Synopsis of progress N/A
Altra Nebraska LLC Location General contractor Process technology Capacity Feedstock
Carleton, Nebraska undeclared Vogelbusch 113 MMgy corn
Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date
undeclared undeclared undeclared undeclared spring 2008
PHOTO: BRIDGEPORT ETHANOL LLC
Synopsis of progress Construction of this plant has been postponed indefinitely.
Archer Daniels Midland Co. Location General contractor Process technology Capacity Feedstock
Cedar Rapids, Iowa undeclared
undeclared 275 MMgy corn
Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date
Archer Daniels Midland
undeclared undeclared June 2007 third quarter 2009
Bridgeport Ethanol LLC
Synopsis of progress This project is moving forward. No further information was available at press time.
Archer Daniels Midland Co. Location General contractor Process technology Capacity Feedstock
Columbus, Nebraska undeclared
undeclared 275 MMgy corn
Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date
Archer Daniels Midland
undeclared undeclared July 2007 fourth quarter 2008
PHOTO: BRIDGEPORT ETHANOL LLC
Synopsis of progress This project is moving forward. No further information was available at press time.
Bridgeport Ethanol LLC Location Design/builder Process technology Capacity Feedstock
Bridgeport, Nebraska ICM Inc. ICM Inc. 50 MMgy corn
Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date
undeclared Colorado Ag Services undeclared September 2007 September 2008
Synopsis of progress Construction crews have begun pouring roads. Rail materials arrived on-site in early May and were slated to be installed by early June. Structural steel and all tanks are complete. Electrical and piping work has begun.
ETHANOL PRODUCER MAGAZINE JULY 2008
Bridgeport Ethanol LLC
49
Cardinal Ethanol LLC Location Design/builder Process technology Capacity Feedstock
Union City, Indiana Fagen Inc. ICM Inc. 100 MMgy corn
Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date
Murex CHS Inc. N/A February 2007 fall 2008
PHOTO: CARDINAL ETHANOL LLC
Synopsis of progress Water treatment building, energy center, process area and administrative building are being enclosed. Offices in the administrative building and process area are substantially complete. Molecular sieves are being installed and insulated. Pumps, motors and other equipment are being installed in the process area. Motors and pumps are being installed in the tank farm, where piping has begun.
Cilion Ethanol LLC Location General contractor Process technology Capacity Feedstock
Keyes, California Harris Construction Praj Industries Ltd. 55 MMgy corn
Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date
undeclared undeclared N/A July 2006 second quarter 2008
Synopsis of progress N/A
New Project
Location General contractor Process technology Capacity Feedstock
Cardinal Ethanol LLC
Clean Burn Fuels LLC Raeford, North Carolina Biofuels Design Katzen International 60 MMgy corn
Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date
undeclared undeclared N/A January 2008 May 2009
PHOTO: CARDINAL ETHANOL LLC
Synopsis of progress Construction of the distillers grains building is underway. Footings for the pipe rack have been poured, and installation of the pipe rack is set to follow.
Ethanol Grain Processors LLC Location Design/builder Process technology Capacity Feedstock
Obion, Tennessee Fagen Inc. ICM Inc. 100 MMgy corn
Ethanol marketer Aventine Renewable Energy Distillers grains marketer CHS Inc. Carbon dioxide marketer undeclared Broke ground December 2006 Target start-up date October 2008
Synopsis of progress Green Plains Renewable Energy Inc., which owns Ethanol Grain Processors, has entered into a merger agreement with VBV LLC. The companies will create a vertically-integrated ethanol company with an expected operating capacity of 330 MMgy. The transaction is anticipated to close by late summer. Despite this, construction at this site continues though no further information was available at press time.
Cardinal Ethanol LLC
A Leader in Railroad Engineering for the Biofuels Industry s %XPERTISE 2AILROAD %NGINEERING AND #IVIL $ESIGN s %XPERIENCE /VER ETHANOL BIODIESEL AND GRAIN SHUTTLE PROJECTS s %XCELLENCE #OMMITTED TO EXCEEDING YOUR EXPECTATIONS
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50
Phone: 402.289.2217 www.Antioch-Intl.com
ETHANOL PRODUCER MAGAZINE JULY 2008
First United Ethanol LLC Location Design/builder Process technology Capacity Feedstock
Camilla, Georgia Fagen Inc. ICM Inc. 100 MMgy corn
Hawkeye Renewables Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date
Eco-Energy First United Ethanol undeclared January 2007 summer 2008
Synopsis of progress N/A
Project Complete
Location Designer/builder Process technology Capacity Feedstock
Shell Rock, Iowa Fagen Inc. ICM Inc. 110 MMgy corn
Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date
Eco-Energy undeclared N/A July 2007 first quarter 2009
Synopsis of progress Construction continues. No further information was available at press time.
Glacial Lakes Energy-Mina (formerly Aberdeen Energy LLC)
Holt County Ethanol LLC
Location Mina, South Dakota Ethanol marketer undeclared Design/builder Fagen Inc. Distillers grains marketer undeclared Process technology ICM Inc. Carbon dioxide marketer N/A Capacity 100 MMgy Broke ground November 2006 Feedstock corn Start-up date May 2008 Synopsis of progress Construction is complete, and hydro-testing is underway. Corn is being delivered to the site. At press time, a grinding date was set for the first week of June. Congratulations Glacial Lakes Energy-Mina!
Location General contractor Process technology Capacity Feedstock
O'Neill, Nebraska Adams Construction Vogelbusch 100 MMgy corn
Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target completion date
undeclared undeclared N/A July 2007 late 2008
Synopsis of progress N/A
GreenField Ethanol Location General contractor Process technology Capacity Feedstock
Johnstown, Ontario SNC-Lavalin Group ICM Inc. 200 MMly (53 MMgy) corn
Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date
Commercial Alcohols Commercial Alcohols
undeclared October 2006 fourth quarter 2008
PHOTO: GREENFIELD ETHANOL
Synopsis of progress With more than 270 workers on-site, construction is focused on the water pretreatment area and the second phase of the tank farm. Foundations have been poured for the hammer mill building.
Hawkeye Renewables Location Designer/builder Process technology Capacity Feedstock
Menlo, Iowa Fagen Inc. ICM Inc. 110 MMgy corn
Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date
Eco-Energy undeclared N/A July 2007 fourth quarter 2008
Synopsis of progress Construction continues. No further information was available at press time.
GreenField Ethanol
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Call 303-221-4700 or visit www.ascendantpartners.com ETHANOL PRODUCER MAGAZINE JULY 2008
51
Project Complete
Homeland Energy Solutions Location Design/builder Process technology Capacity Feedstock
Lawler, Iowa ICM Inc. ICM Inc. 100 MMgy corn
Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date
undeclared undeclared N/A May 2007 January 2009
Marysville Ethanol LLC
Location Design/builder Process technology Capacity Feedstock
Synopsis of progress Two wells were drilled and scheduled to be completed by the end of May. All fermentation tanks are erected and enclosed. The holding area for tanks and dryers is substantially complete, and work has begun on the water treatment and distillers grains areas.
Marysville, Michigan Fagen Inc. ICM Inc. 50 MMgy corn
Bluffton, Indiana Fagen Inc. ICM Inc. 101 MMgy corn
undeclared undeclared N/A August 2006 December 2007
Synopsis of progress This plant started production in late 2007. Congratulations Marysville Ethanol LLC!
Indiana Bio-Energy LLC Location Design/builder Process technology Capacity Feedstock
Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Start-up date
NEDAK Ethanol LLC Ethanol marketer Aventine Renewable Energy Distillers grains marketer CHS Inc. Carbon dioxide marketer N/A Broke ground November 2006 Target start-up date August 2008
Synopsis of progress All equipment has been placed with only minor finishing work remaining on some of the tanks. All grains equipment is substantially complete, and all process vessels are finished. Some work remains on the water treatment building, and piping and electrical work is underway.
Location General contractor Process technology Capacity Feedstock
Atkinson, Nebraska Delta-T Corp. Delta-T Corp. 44 MMgy corn
Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date
Eco-Energy Frahm and Deitloff N/A June 2006 second quarter 2008
Synopsis of progress Administrative offices, and the lab and control room areas in the main process building are being enclosed. Concrete for tower pads is being poured, and towers are being erected. Bridges between the distillers grains dryer and the grain-handling area are also being erected.
Nexsun Ethanol LLC Location Design/builder Process technology Capacity Feedstock
Ulysses, Kansas ICM Inc. ICM Inc. 40 MMgy corn/milo
Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date
undeclared undeclared undeclared August 2007 late 2008
Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date
Noble Americas Corp. Perdue Farms BOC Gases July 2006 2008
PHOTO: INDIANA BIO-ENERGY LLC
Synopsis of progress N/A
Indiana Bio-Energy LLC
Northeast Biofuels LLC Location General contractor Process technology Capacity Feedstock
Volney, New York Lurgi Inc. Lurgi Inc. 100 MMgy corn
Synopsis of progress N/A
Rebuilding Clean Energy
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ETHANOL PRODUCER MAGAZINE JULY 2008
Northwest Renewable LLC Location General contractor Process technology Capacity Feedstock
Longview, Washington Makad Construction Corp. Lurgi Inc. 55 MMgy corn
Patriot Renewable Fuels LLC Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date
U.S. Ethanol LLC Lansing Trade Group undeclared November 2006 fourth quarter 2008
Synopsis of progress Foundation work in the grain-handling area continues. Foundation work for fermentors is complete.
Location Design/builder Process technology Capacity Feedstock
Gibson City, Illinois Fagen Inc. ICM Inc. 100 MMgy corn
Location General contractor Process technology Capacity Feedstock
Eco-Energy Ag Motion Inc. N/A October 2007 second quarter 2009
Location Design/builder Process technology Capacity Feedstock
Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Start-up date
Pacific Ag Products LLC
undeclared February 2007 April 2008
Location Design/builder Process technology Capacity Feedstock
Provista UBE Ingredients N/A November 2006 August 2008
Fostoria, Ohio Poet Design & Construction Poet Design & Construction 65 MMgy corn
Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date
Poet Ethanol Products Poet Nutrition N/A August 2007 fourth quarter 2008
Synopsis of progress Construction continues. No further information was available at press time.
Pacific Ethanol Stockton LLC Stockton, California W.M. Lyles Co. Delta-T Corp. 50 MMgy corn
Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date
Poet Biorefining-Fostoria Kinergy Marketing
Synopsis of progress Production began in April. Congratulations Pacific Ethanol Magic Valley!
Location General contractor Process technology Capacity Feedstock
Arthur, Iowa Fagen Inc. ICM Inc. 110 MMgy corn
Synopsis of progress Work to set a gas line remains, and piping and electrical work is underway.
Pacific Ethanol Magic Valley LLC Burley, Idaho Parsons RCI Inc. Delta-T Corp. 50 MMgy corn
Murex undeclared undeclared February 2007 summer 2008
Platinum Ethanol LLC Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date
Synopsis of progress Out of eight fermentation tanks, six are substantially complete. Concrete pouring for the grain silos has begun and was slated to be finished by the end of May.
Project Complete
Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date
Synopsis of progress The grains-receiving area is nearly complete. Some minor work continues on the process building and energy center. Most efforts are focused on the water treatment facility, and electrical and piping work.
One Earth Energy LLC Location Design/builder Process technology Capacity Feedstock
Annawan, Illinois Fagen Inc. ICM Inc. 100 MMgy corn
Poet Biorefining-Marion Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date
Kinergy Marketing Pacific Ag Products LLC
undeclared April 2007 third quarter 2008
Synopsis of progress Construction continues. No further information was available at press time.
THE ROAD TO SUCCESS IS FILLED WITH TWISTS AND TURNS. FORTUNATELY, WE ALREADY KNOW THE WAY.
Location Design/builder Process technology Capacity Feedstock
Marion, Ohio Poet Design & Construction Poet Design & Construction 65 MMgy corn
Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date
Poet Ethanol Products Poet Nutrition N/A May 2007 December 2008
Synopsis of progress Construction continues. No further information was available at press time.
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ETHANOL PRODUCER MAGAZINE JULY 2008 KAC.9084_7.5x3.375_EPM_4C 1
53 2/18/08 5:28:55 PM
Poet Biorefining-North Manchester North Manchester, Indiana Poet Design & Construction Poet Design & Construction 65 MMgy corn
Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date
Poet Ethanol Products Poet Nutrition N/A third quarter 2007 first quarter 2009
Synopsis of progress Construction continues. No further information was available at press time.
Location General contractor Process technology Capacity Feedstock
Location Design/builder Process technology Capacity Feedstock
RPMG undeclared N/A July 2006 June 2008
Terra Grain Fuels Inc. Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date
undeclared undeclared N/A October 2007 2008
Synopsis of progress N/A
Project Complete
Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date
Synopsis of progress The plant began testing and expected to take grain in early June.
Route 66 Ethanol LLC Location Tucumcari, New Mexico General contractor APS/United Stainless Process Technology Process technology United Stainless Process Technology Capacity 10 MMgy Feedstock corn/milo
Superior, Iowa Agra Industries Delta-T Corp. 50 MMgy corn
Location General contractor Process technology Capacity Feedstock
Belle Plaine, Saskatchewan Ethanol marketer EllisDon/VCM Contractors & Engineers Distillers grains marketer
Delta-T Corp. 150 MMly (40 MMgy) wheat
Carbon dioxide marketer Broke ground Target start-up date
undeclared undeclared undeclared September 2006 2008
Synopsis of progress N/A
Show Me Ethanol LLC Richmond, Missouri ICM Inc. ICM Inc. 55 MMgy corn
Ethanol marketer Eco-Energy Distillers grains marketer Ray-Carroll County Grain Growers Carbon dioxide marketer undeclared Broke ground February 2007 Start-up date May 2008
PHOTO: SOUTHWEST IOWA RENEWABLE ENERGY LLC
Location Design/builder Process technology Capacity Feedstock
Superior Ethanol LLC
Synopsis of progress Construction is substantially complete. The plant has begun commissioning, and hydro-testing is underway. Congratulations Show Me Ethanol LLC!
Southwest Iowa Renewable Energy LLC Location Design/builder Process technology Capacity Feedstock
Council Bluffs, Iowa ICM Inc. ICM Inc. 110 MMgy corn
Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date
Lansing Ethanol Group
Bunge undeclared November 2006 August 2008
Synopsis of progress Structural steel erection for the process building continues. The rail loop is nearly complete.
54
Southwest Iowa Renewable Energy LLC
ETHANOL PRODUCER MAGAZINE JULY 2008
Tharaldson Ethanol LLC Location General contractor Process technology Capacity Feedstock
Casselton, North Dakota Wanzek/Valley Engineering Vogelbusch 100 MMgy corn
VeraSun Janesville Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date
undeclared undeclared N/A June 2007 December 2008
Synopsis of progress Crews are working to overcome some minor weather delays. Site paving is underway. On-site storage is 50 percent complete. Work on the rail loop is 65 percent complete.
Location Design/builder Process technology Capacity Feedstock
Dyersville, Iowa Fagen Inc. ICM Inc. 110 MMgy corn
Provista UBE Ingredients N/A November 2006 second quarter 2008
Location Design/builder Process technology Capacity Feedstock
Welcome, Minnesota Fagen Inc. ICM Inc. 110 MMgy corn
Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date
VeraSun Energy VeraSun Energy N/A November 2006 second quarter 2008
Synopsis of progress According to the company Web site, construction continues. No further information was available at press time
VeraSun Hankinson Hankinson, North Dakota Fagen Inc. ICM Inc. 110 MMgy corn
Provista UBE Ingredients N/A January 2007 third quarter 2008
VeraSun Welcome LLC Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date
Synopsis of progress According to the company Web site, construction continues. No further information was available at press time.
Location Design/builder Process technology Capacity Feedstock
Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date
Synopsis of progress According to the company Web site, construction continues. No further information was available at press time.
VeraSun Dyersville Location Design/builder Process technology Capacity Feedstock
Janesville, Minnesota Fagen Inc. ICM Inc. 110 MMgy corn
White Energy Plainview LLC Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date
Provista UBE Ingredients N/A August 2006 June 2008
Synopsis of progress According to the company Web site, construction continues. No further information was available at press time.
Location Design/builder Process technology Capacity Feedstock
Plainview, Texas Fagen Inc. ICM Inc. 100 MMgy corn/milo
Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date
Murex The Scoular Co. undeclared October 2006 second quarter 2008
Synopsis of progress N/A
VeraSun Hartley LLC Location Design/builder Process technology Capacity Feedstock
Hartley, Iowa Fagen Inc. ICM Inc. 110 MMgy corn
Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date
VeraSun Energy VeraSun Energy N/A November 2006 second quarter 2008
Synopsis of progress According to the company Web site, construction continues. No further information was available at press time.
ETHANOL PRODUCER MAGAZINE JULY 2008
55
Standards for tomorrow. We see food, feed, and fuel. What do you see? Fractionation makes it all possible.
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:OU R P L A N T 60
Options and Opportunities
P
utnam County is the smallest in Illinois, equaling 166 square miles. In that county in the north-central part of the state, the town of Hennepin rests on a bluff overlooking the Illinois River. Walking by the river, one is likely to see ships filled with grain drift by or perhaps the bald eagles that nest near the power plant, Hennepin’s first major industry. Like many rural communities, growth is slow in this town of 700. However, on April 20, Hennepin witnessed the start-up of its second major industry: Marquis Energy LLC. This 100 MMgy ethanol plant, pronounced MAR-kwis, is privately owned by three investors who initiated their design plans in December 2004. Two years were spent on development and planning, with construction lasting approximately a year and a half. All in all, the project finished on time and under budget. Mark Marquis, president and chief executive officer of Marquis Inc., cites the dedication and professionalism of the vendors, and specifically the teams from Fagen Inc. and ICM Inc. as crucial to meeting Marquis Inc.’s construction goals. Marquis has led his company for more than 30 years, owning and operating two grain elevators, a retail fertilizer and chemical plant, and a trucking company. Marquis also built two wholesale barge docks, and operates a fleet of barges and a tugboat on the Illinois River.
Although much has changed in the ethanol industry in the past four years, which may have altered the plans of other plants midway through construction, Marquis’ plan remained constant. He believes his plant has some benefits that may be common to many plants across the industry but aren’t often found in one single plant. For Marquis and his team, one benefit is location. “This is probably one of the top sites in the country,” he says. Hennepin is at the end of a 13-mile rail spur near Highway 80, which runs east and west through northern Illinois. The plant is located on a Norfolk Southern Class I railroad, which brings the eastern United States within easy reach. It’s also positioned on the banks of the Illinois River. “Barge is the lowest cost-per-unit freight and gives us a real advantage,” Marquis says. Another important benefit is the company’s additional revenue streams. In addition to ethanol and distillers grains, Marquis Energy is considering marketing its corn oil to local biodiesel producers. “We think there’s a good opportunity to implement some efficiency gains over the next year or two,” says Marquis of the company’s corn-oil extraction plans. In terms of immediate efficiencies, Marquis says that his plant is the first 100 MMgy ethanol facility to use only steamtube dryers for its distillers grains. “Most plants have a natural
ETHANOL PRODUCER MAGAZINE JULY 2008
LOCATION DESIGN/BUILDER PROCESS TECHNOLOGY CAPACITY FEEDSTOCK ETHANOL MARKETER DISTILLERS GRAINS MARKETER CARBON DIOXIDE MARKETER BROKE GROUND START-UP DATE
Hennepin, Ill. Fagen Inc. ICM Inc. 100 MMgy corn Murex NA Ltd. CHS Inc. N/A September 2006 April 2008
gas, forced-air dryer,” he says. “These dryers are six rotary steam-tube dryers that operate at 225 degrees (Fahrenheit), as opposed to 650 degrees for the typical natural-gas dryer.” Not only does this allow the facility to realize an energy savings, it produces a higher-quality product. “Because it dries at a lower temperature, we get better color and flowability,” Marquis says. For many companies, getting into the ethanol industry can be a challenge. Seeing a plant through to completion takes drive and endurance. For Marquis Energy, getting into
the industry in an ideal location made all the difference. Its site offers options and opportunities that are sometimes difficult to find. However, Marquis looks at the big picture: what ethanol means to the local community and society at large. “We’re happy to be Americans in a free country, where you can have a business plan, carry it out and see it be successful,” he says. —Craig A. Johnson PHOTO: MARK MARQUIS, MARQUIS ENERGY LLC
ETHANOL PRODUCER MAGAZINE JULY 2008
:OU R P L A N T
MARQUIS ENERGY LLC
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:INTHEFIELD
T
Ethanol Insurance Covers Delivery Contracts
his cropping season, John Deere Risk Protection Inc. began offering the industry’s first ethanol policy for corn producers to cover their risk when contracting corn with ethanol plants. “It received a tremendous amount of interest,” says Andy Caruso, underwriting manager for JDRP. “Prior to the introduction of the JDRP ethanol policy, there was not a crop insurance policy offered that addressed the exposures a farmer faces should they experience a yield shortfall and can’t fill a delivery contract.” The new ethanol insurance supplements a producer’s traditional crop insurance. Multi-peril crop insurance (MPCI) is purchased by farmers wanting protection against crop shortages due to natural perils. In addition to hail, it covers drought, insect damage, disease and floods. Depending on the coverage chosen, it can also provide protection for low yields and price fluctuations, as well as payments for prevented planting and replanting expense. While private companies administer the crop insurance policies, the MPCI program is actually a USDA program with rules set by the Federal Crop Insurance Corp. The premium is subsidized by the federal government.
Caruso says the ethanol policy works on top of the JDRP multi-peril policy, which must be a crop revenue coverage policy or revenue assurance policy with fall-harvest price options. If a producer has a qualifying yield shortfall below his or her contracted volume—and the price to replace those short bushels is above the MPCI planting, harvest and contract prices—the ethanol policy will cover the difference up to 75 cents per bushel. The policy was approved in 10 states in the Corn Belt: South Dakota, Nebraska, Kansas, Minnesota, Iowa, Missouri, Wisconsin, Illinois, Indiana and Ohio. A simplified example demonstrates how the policy would work: A farmer contracts with his local ethanol plant to deliver 50,000 bushels of corn at $5 per bushel. A hailstorm wipes out half of his crop, and the ethanol plant has to pay $5.50 per bushel for the replacement bushels. The multiperil/crop revenue coverage policy that the farmer purchased has a spring price of $4 and a harvest price of $4.75. Since the farmer had a yield shortfall and the replacement price is higher than all three of
the other prices—the contract price, the policy’s spring price and harvest price—the payout for the supplementary ethanol insurance policy would be 50 cents per bushel, based on the difference between the $5.50 replacement price and the $5 contract price (the highest of the three prices). A shortfall of 25,000 bushels multiplied by the 50-cent difference would net an ethanol insurance payment of $12,500. That payment would be on top of any potential payout from the MPCI policy. Caruso says the new policy was developed at the request of several agents and farmers. “Currently, the federal MPCI programs for crop revenue coverage and revenue assurance establish the price based on the Chicago Board of Trade,” he says. However, basing the price on the futures market in Chicago doesn’t fully address a farmer’s risks or costs that are present locally, such as transportation costs, basis risk or administrative fees. “When developing a product like this, it is important to understand the marketplace, as well as insurance principles,” Caruso adds. “We believe in listening to our John Deere crop insurance agents to get their input and make sure we end up with a policy that is relevant to the exposure. In this case, we had a customer group that utilized delivery contracts, but believed traditional crop insurance did not provide enough coverage should they choose to contract a significant amount of their corn.” —Susanne
Retka Schill
PHOTO: JOHN DEERE
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:UP FRONT
Full Circle
C
arl Sitzmann was meant to be in the ethanol business. His first taste of the industry came more than 25 years ago when he worked as a production supervisor at Archer Daniels Midland Co.’s ethanol plant in Peoria, Ill. He worked for ADM for three years before deciding to explore the food and chemical industry. In April 2007, he returned to the ethanol industry as chief executive officer of E Energy Adams LLC in Adams, Neb. When he signed on, construction of the 50 MMgy plant was only 50 percent complete. Since beginning production in October, the facility has continually exceeded nameplate capacity, thanks to his leadership. According to Sitzmann, the most effective thing he can do from a management standpoint is treat all stakeholders as customers. He says that kind of relationship creates loyal, lasting and productive relationships. The people are what Sitzmann enjoys most about the ethanol business, but he also really enjoys the smell of an ethanol plant—and hopes to be around it for many more years.
isn’t related to my job. From construction to hiring to policy creation to commodities to finance and investor relations, the one element that ties it all together is people management and leadership. Q: What’s unique about your plant? A: We have a number of unique features that enhance our operation. We’re located more than 50 miles from the nearest ethanol plant, which makes corn origination easier for us, and we have extra corn storage onsite, which enables us to capture harvest prices and the corn carry. In terms of people, we have an excellent management team and are very fortunate to have quite a few operations people that came from the ethanol industry. This was instrumental to our successful start-up and our exceeding nameplate capacity ever since. Q: What are you working on at the moment? A: Now that we are operational, I am focusing on production process optimization and strategic planning. We are participating in benchmarking with other ethanol plants with the goal of becoming more competitive and increasing our profitability. There are
currently many opportunities in the industry, and we are analyzing the ones that will be the biggest added value for our shareholders. Q: Where do you see the ethanol industry in five and 20 years? A: The ethanol industry is very young with many changes to come in the next five, 10 and 20 years. New technologies will be the biggest observable changes, while the drivers behind these changes will still be the same as now—alternative, renewable fuels produced efficiently and economically with the goal of reducing our dependency on foreign oil while protecting the environment. Much will change in the next five years, but I hope to still be heavily engaged in the ethanol industry. The dynamics are quite exciting. In 20 years, I want to be lying on a beach reading Ethanol Producer Magazine.
—Kris Bevill and Anduin Kirkbride McElroy
Q: Please describe a typical work week for you. A: I’m still waiting for one of those. No two weeks have been alike so far. There are so many dynamics involved in constructing and starting a plant. There is no facet of the company that
Name Carl Sitzmann Title Chief Executive Officer Plant E Energy Adams LLC in Adams, Neb. Hometown Le Mars, Iowa Education Bachelor of Science degree in Agricultural Engineering from Iowa State University; Master of Business Administration degree from the University of South Dakota
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ETHANOL PRODUCER MAGAZINE JULY 2008
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:FLEXFACTOR 66
E85: More Popular, Easier to Find
W
hat may have been modest consumer interest in E85 in the past has been steadily increasing, especially as gas prices rise this summer and families start taking vacations. Drivers are looking for cheaper options, and E85 may be one of them. To meet that growing need, Alternative Fuel Distributors Inc. in Wilmington, Del., has proposed to build 1,000 convenience stores offering only E85 and other alternative fuels along the East Coast within the next three years. These stores will be called “Go Green Stations,” and the company expects 100 of them to be open by the first quarter of 2009 in Pennsylvania, New Jersey, Maryland and Delaware. The E85 is expected to sell for $2.25 to $2.50 per gallon, compared with the projected $4 per gallon for regular gasoline. Currently, there are only 20 E85 stations between New York and Richland, Va. To reach this goal, the company intends to file a registration statement with the U.S. Securities and Exchange Commission for an initial public offering of up to 2 million Class A membership units. Formed in June 2007, the company has additional plans to develop wholesale distribution points in New Jersey, Pennsylvania and Maryland for its convenience stories located between Washington D.C., and New York. In addition to this company’s goal for increasing E85 pumps, two U.S. states recently reached E85 pump milestones, as well. “We opened our 100th E85 station [April 11],” says Cary Aubrey of the Indiana State Department of Agriculture, who believes the skepticism surrounding
E85 is rapidly disappearing as consumers become more educated. “I think the average consumer has figured out exactly what E85 and ethanol is. I see a lot of changes in the average consumer on their thoughts toward homegrown independence.” As consumer opinions of E85 change, so does vehicle marketing by automobile manufacturers. “Now the car manufactures have decided to start flagging vehicles that are flex-fuel and putting those in commercials,” he points out. In Indiana, sizable grants recently became available to businesses and municipalities to assist with the costs of installing E85 infrastructure. Aubrey says the reaction to the financial assistance has been huge. “The phone has been ringing off the hook,” he says. Wisconsin opened its 100th E85 station in May in conjunction with the state’s American Lung Association celebrating its 100th anniversary during Clean Air Month. Several promotional events were held statewide with the help of the Wisconsin Corn Growers Association, General Motors Corp., the Wisconsin Office of Energy Independence, Wisconsin Clean Cities, and the Ethanol Promotion and Information Council. —Timothy Charles Holmseth
ETHANOL PRODUCER MAGAZINE JULY 2008
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:BUSINESS 68
Finding Creativity in Ethanol Project Finance
A
s consolidation, compressed operating margins and a volatile commodities market continue to persist within a maturing ethanol industry, the traditional financing strategies employed by ethanol plant developers that were effective two to three years ago are rapidly withering. With the amount of senior debt financing becoming more limited and ethanol developers becoming increasingly hesitant to put forth more equity, the result is a financial hurdle that many plants can’t cross. As a result, more creative finance mechanisms have emerged, one of them being tax-exempt bonds. Tax-exempt bonds—also known as solid waste bonds—are issued by a municipal, county or state government entity on behalf of developers, whose interest payments aren’t subject to federal income tax. According to John May, managing director of St. Louis-based Stern Brothers & Co., incorporating tax-exempt bonds into ethanol project finance is an effective finance strategy for ethanol developers, depending on the unique circumstances of the project. “The issuance of tax-exempt bonds is an important strategy because the buyers of the bonds, which are typically highyield mutual funds, are a new source of debt capital and a separate source of debt capital from the banks,” May says. “We think it’s an indispensable part of financing strategy for these ethanol plants in the current market. The ability of commercial banks to continue to provide financing for [greenfield] ethanol plants is limited at this point.” According to May, the increased importance of taxexempt bonds in ethanol project finance is the result of extensive commercial bank lending during the ethanol industry’s rapid expansion over the past four to five years. “The reason why the commercial banks are limited in their ability to provide loans is that a number of these
banks have been doing nothing but that for several years,” May says. “They have developed an exposure or a concentration of risk in the ethanol sector, and banks have to be diversified in the loans that they make across industries.” Although the integration of taxexempt bonds is one of several finance strategies currently being employed by ethanol developers, lenders caution against one potential drawback. Mutual funds aren’t a substitute for a relationship bank. A bank’s role is to be closely engaged with the developer to solve problems if they come up during the life of a project, and bondholders aren’t typically set up to be relationship managers. According to Mark Barrata, vice president and manager of First National Bank of Omaha’s Renewable Fuels Group, this structure could be problematic if a credit arrangement has to be revisited. For this reason, the ideal structure should include bank debt andbond debt. “Banks are more flexible and the senior
lending group understands that’s part of the business in this industry, whereas for bond issuers, it runs contrary to really how they’re built,” Barrata says. “I would say from my view, it’s not something that we would consider to be the new paradigm.” With the growth of the cornbased ethanol industry inevitably slowing, another benefit of taxexempt bonds is their availability to finance new technologies at existing plants, such as fractionation, anaerobic digestion and biomass energy. This tax-exempt financing strategy may be the most important one for developers seeking to differentiate their ethanol facilities technologically as the industry transitions to cellulosic ethanol. “I think that solid waste bonds are a growing piece, although it’s kind of a specialized niche where it has to be evaluated in the context of the particular plant you have,” Barrata says. —Bryan Sims
ETHANOL PRODUCER MAGAZINE JULY 2008
The power of G Answering the global call for ethanol
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:DRIVE 70
Putting Ethanol on the Offensive By Toni Nuernberg
D
ecember 1776 was a desperate time for George Washington and the American Revolution. The ragtag Continental Army, encamped along the Pennsylvania shore of the Delaware River, was exhausted, demoralized and uncertain of its future. Washington’s army—after narrowly escaping British troops and retreating into Pennsylvania—was viewed as merely an annoyance soon to be swatted into oblivion like a bothersome bee at a picnic. 2008 may feel like similarly desperate times for the renewable fuels movement and the U.S. ethanol industry. Dogged by naysayers from environmentalists to the oil industry and humanitarian organizations to others within American agriculture, we find our industry accused of causing a global food crisis. At this point in the American Revolution, Washington recognized he had to do something and quickly. His decision was to attack the British. The Ethanol Promotion and Information Council, through the Renewable Fuels Now campaign, has followed Washington’s lead, attacking our foes in the food-vs.fuel war of words. The ethanol industry is under-funded by today’s standards—particularly compared to our opposition which is prepared to invest in protecting their profits. We are outmanned by multiple enemies
Fix to Food Prices” and and outgunned by the “Biofuels Not to Blame for issue of human hunger. World Food Crisis” have The ethanol industry is been issued to nationfacing a long battle, but wide media. one we must not concede. To win the war and Our battleground is the protect the future of our media, and our weapon is industry, EPIC will continthe positive facts about ue to mount campaigns ethanol. telling the ethanol story. Daily, ethanol is strikNow more than ever, we ing strategic blows. From Nuernberg must not retreat. We must National Corn Grower Association CEO Rick Tolman’s protect the future of our industry and interview with CNN and a 30-minute redouble our efforts to continue CNBC segment featuring EPIC demand creation for our product. In our campaign to present the Deputy Director Robert White, to editorials, letters to the editor and facts, I am often reminded of the pro-ethanol opinion pieces, the food- words of Thomas Paine: “Such is vs.-fuel war of words is being waged the irresistible nature of truth that all it asks, and all it wants, is the liberty with the truth about ethanol. Hundreds of editorials, letters of appearing.” As a valued member of the to the editor and pro-ethanol opinion pieces have been distributed in industry, I invite you to visit www.driresponse to ethanol-negative edito- vingethanol.org and www.renewrials and articles from publications in ablefuelsnow.org for regular updates major and mid-sized markets across on the food-vs.-fuel battle. the country. In addition to a lengthy EPICgenerated opinion response to Time Toni Nuernberg is the executive magazine editors in March, EPIC director of the Ethanol Promotion and also issued a statement to the Information Council. Reach her at nationwide media, refuting the many tnuernberg@epicinfo.org or (402) incorrect statements found in the 932-0567. Time cover story “The Clean Energy Scam.” Major news services such as CNN, Fox, Scripps News Service and the Associated Press also have been targeted through personal contact providing corrections and factual information about the importance of ethanol in addition to details of the true causes of rising food prices. Finally, pro-ethanol public statements such as “Changing Renewable Fuels Standard Not the
ETHANOL PRODUCER MAGAZINE JULY 2008
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PROFILE
Minnesota’s Innovative
Ethanol Man Novel energy sources and coproduct streams abound at Corn Plus LLLP, an average-sized ethanol plant in southern Minnesota that functions in a far-from-average way. That’s because the man at the helm, industry pioneer Keith Kor, is willing to take chances. This is his story. By Ron Kotrba Photos By John Cross
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PROFILE
f one looks at the roots of ethanol what inevitably is found are passionate Midwesterners who fostered an amazing dream. Conversely, this dream has shaped those influential men and women into who they are today. The success of fuel alcohol in the United States would remain just a reverie were it not for the devotion of entire careers to the cause: Stimulating the depressed rural economy through value-added production—of acute interest to the struggling American farmer—and governmental interest in increasing energy independence, which was naturally of interest to good, hardworking Midwesterners. It was in the 1980s, as the U.S. government determined to become unlocked from the two energy crises of the previous decade, and when Minnesota farmers sought to add value to their crops, that Keith Kor got his start in the fuel alcohol business. Of all the individuals responsible for the success of today’s ethanol complex, there is perhaps no better adaptor and industry role model than Kor, general manager of Corn Plus LLLP in Winnebago, Minn. A Minnesota native, Kor was born in the small town of Tracey and raised in Rochester, home of the famous Mayo Clinic, where world leaders are sent for expert diagnoses and treatment. Like the
I
‘Back in 1982 I liked the idea of energy independence, and [more than 20 years later] we started to see natural gas costs going up and asked ourselves, “How can we control that?’”
advanced medicine practiced at Mayo, Kor has implemented more technological advances in Winnebago’s little corner of the ethanol world than any other ethanol refinery on the planet: reducing natural gas consumption in the process by more than 50 percent by combusting its solubles from stillage in a fluidized bed boiler; prilling the resulting ash and making $150 a ton selling it back to the local farmers as fertilizer; pelleting its distillers grains to hit the growing cornburning stove market; installing two towering wind turbines on the property for the plant’s electrical power needs; selling carbon credits on the Chicago Climate Exchange gained from its reduced consumption of natural gas; the current
PROFILE
Kor, left, works closely with plant manager Matt Rynearson to keep operations running smoothly at the plant.
trial of microwaving distillers grains, which if implemented in full would eliminate the need for a thermal oxidizer and could boost water conservation at the plant; and more. And what is the reason for all of this uniqueness and
environmentally beneficial complexities? The answer is simple: It’s all about taking his plant and his people to new heights by adapting to the ever-changing markets. It helps that Kor is not afraid to take risks. “It’s like I once told somebody, I’ll either be searching the want-ads looking for a job, or I’ll be on the front of a magazine.” The ultimate impetus for all of his risk taking and innovation required to fabricate such a unique facility in what some might say is otherwise a sea of cookie-cutter ethanol plants, is to be “the true low-cost producer,” Kor says. That and, of course, because he likes doing it. “I tell my kids, don’t take a job that you don’t like,” he tells EPM. “Even if it pays less, take a job that you enjoy. For me, I still enjoy going to work to this day.” Kor’s father was a pipe fitter by trade—apropos influence for an ethanol man-to-be. His mother worked in an electron microscope laboratory at the Mayo Clinic. As a boy, he dreamt of becoming a major league baseball pitcher. No doubt the Minnesota Twins topped his list of favorites. After graduating from Mayo High School in 1970, Uncle Sam called Kor to service and he spent three years in the U.S. Army during the Viet Nam War. “I went into heavy equipment in the combat engineering unit,” he says. “I drove road
PROFILE WWW.STRONGFORM.NET
P.O. BOX 315 208 BAKER ST. N. DEER CREEK, MN 56527 PHONE 218.462.2607 FAX 218.462.2508 Matt Rynearson, right, and Kor continually strive to be the true low-cost producer.
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graders and bulldozers. I had orders for Viet Nam—10 of us had orders for Viet Nam. And then we all went home on leave and afterwards, out of the 10, five of us got orders to Germany and five got orders to Viet Nam.” Kor was one of the five that went to Germany. This was when former President Richard Nixon began de-escalating the troops. One can only imagine how Kor’s life would have been different if he were in the group sent to Southeast Asia during such brutal chaos. After serving three years in the U.S. Army, Kor returned to his childhood town of Rochester and through the GI Bill he enrolled in general classes at the local community college. Perhaps it was his mother’s professional influence that prompted Kor to transfer to La Crosse, Wis., where he embarked on a two-year curriculum in the radiology program. In the meantime, between young
adulthood, preparations for war and post-secondary schooling, Kor found the love of his life. He played on a softball team with his future wife’s brother, and one day after playing softball he was invited to help with his teammate’s housewarming party. “That’s where we met,” he says. Kor invited Joan for breakfast and the rest is history. The Kors married and have three sons: Joshua, Jacob and Johannes. “My wife and children have been very supportive throughout my career,” he says.
Enter Ethanol In the early 1980s, Kor and his wife were in a bad car accident. “The chord that connects my knee cap was severed, so I was laid up,” he explains. “So in the mornings I would get up and go down to the restaurant to have breakfast and these two guys were talking about building an ethanol plant in Houston, Minn.—Dale Morris and
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PROFILE
‘We needed to try and get more value out of what we have, and be a low-cost producer by cutting our energy costs—so that’s what we did.’
Bob Gross. Well I got to talking with them and I finally asked if they had anyone to build their plant.” Kor told them his wife comes from a family of 12, all of whom were in construction. He asked the early ethanol industry pioneers if he could put a crew together for them and they liked the idea. “Obviously I couldn’t do much other than supervise with my leg in a cast, but we got the crew together and put up the building and everything for them,” Kor says. “When we got done Dale asked if I’d like to work with him. I said, ‘Sure, but I don’t know anything about alcohol.’ He said, ‘Well, you ever drank any?’ I said, ‘Yep,’ and he said, ‘Good enough.’” Such was Kor’s introduction to fuel alcohol in Minnesota in 1982. His ethanol career at the Houston plant began by working in the trenches as an operator. The plant, Alcon Industries, produced a half-a-million gallons per year, which is miniscule compared with today’s standards. But times were different then. Influential pioneers like Kathy Bryan, now president of BBI International and Ralph Groschen, agriculture marketing specialist with the Minnesota Department of Agriculture, were pushing the idea of a still on every hill; representing the then-futuristic idea of local production and consumption. After two years of knowledgebuilding in Houston, Kor accepted a position as plant manager in Elgin,
Iowa, at a 2 MMgy ethanol refinery called Elgin Alcohol. After his stint as plant manager there, Kor was hired by Butler Research and Engineering of Minneapolis. The famous juice-maker Tropicana bought a sugarcane plantation in Jamaica and wanted to ferment the sugarcane in one part of Jamaica and then ship it to the capital city of Kingston where the dehydration plant was located. Tropicana contracted with BRE, and Kor was sent to Jamaica as chief operations manager to train the Jamaicans, troubleshoot and expedite equipment movement from the United States to Kingston. That alcohol was destined for the United States with Houston, Texas, as the port of entry. “A lot of people were upset about bringing duty-free alcohol into the United States,” Kor says. Eventually he returned to the United States and got out of the alcohol business for a while. After a year or so, he became interested in an ethanol plant that was being built in Hopkinton, Iowa. The plant developers planned to use cheese whey as a feedstock and it was built across the street from Swiss Valley, the largest cheddar cheese plant in Iowa. The cheese-whey-to-ethanol plant ran for a year and a half, until the Swiss Valley cheese plant shut down. “It sold all its equipment and moved out of town,” says Kor, who was the ethanol plant manager. “So then we had to come up
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with another feedstock.� Kor and his team went to work to devise new and unusual feedstocks. “We started using root beer barrels, marshmallows, gummy bears, those red and white mints you get from Pizza Hut, white sugar, potato starch, Willy Wonka juice—anything that had sugar,� he says. “When I’d go to the restaurant in the morning, people would say, ‘Oh I see you’re doing root beer barrels today,’ because they could smell it in town.�
Then There was Corn—Plus While in Kentucky at Alltech’s Alcohol School, Kor bumped into Bill Wells from Delta-T Corp., who asked him to come to Winnebago on a consulting basis and lend an outsider’s perspective on some of the troubles Corn Plus was having. This was in 1995, and the plant had just started the year before. “I looked at all aspects of the
Kor says he knew nothing about making alcohol when he first got his start in the industry in the early 1980s. Now, 25 years later, he manages one of the world’s most interesting ethanol plants.
plant and gave a written report to Steve Core, who was the general manager of Corn Plus at the time,� Kor says. What he offered in that report was optimiz-
ing strategies to make Corn Plus run smoother with happier employees. “Productivity was not very good,� he says. Cross-training employees was one
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PROFILE
recommendation Kor gave, meaning that the distillation operator would know how to do the front-end operator’s job if need be. “Let’s say the distillation operator called in sick then they would have to bring in the other distillation operator who was on his day off,” he says. The idea was that when an employee earned a day off, they should be able to enjoy it and not worry about getting called into work. “Plus they were running 12-hour shifts, four days on and four days off,” he says. “Well, by the end of the fourth day, they were so tired they could care less what happened at the plant,” Kor says. Today the plant schedules its cross-trained employees to work three days on and two days off, and every other weekend each employee would receive a three-day weekend. “It helps to have a happy workforce,” he says. During his observation of plant operations, Kor found that Corn Plus
ETHANOL PRODUCER MAGAZINE JULY 2008
was adding limestone and calcium chloride to the front end because it was thought to be a necessity for the enzymes. But the calcium was plugging up the heat exchangers, and the evaporators were constantly fouling. “About every three weeks they had to hydroblast the evaps because they were filling up with calcium,” he says. After eliminating this practice the fouling eventually diminished. Kor also noticed that the plant used narrow gap plate and frame heat exchangers, which kept plugging. “We eventually changed those to wide gaps,” he says. After reading Kor’s report, Core asked the Minnesota ethanol man if he’d be interested in moving back to his home state and to work as plant manager of Corn Plus. Kor accepted and served in that position from 1995 to the end of 2001. He took over as general manager in January 2002. As plant manager for years and with his operating experi-
ence, Kor was well-versed in the operations and process aspect of running an ethanol plant. And thanks to his predecessor’s willingness to involve him in board meeting activities when he was the plant manager, he gained an insider’s perspective of the executive side of things—and the financials. “When Core left I was familiar with how the board operated, and what they were looking for,” Kor tells EPM. “When the roles changed I had to be in tune with the financial side of it, and what the board liked was that I could do both. I knew how the plant ran so I could help down there, and I was already familiar with the business side but knew I needed to learn more.” The roots of the ethanol industry and Kor’s vision for Corn Plus are really one in the same. “Back in 1982 I liked the idea of energy independence, and [more than 20 years later] we started to see natural gas costs going up and
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Kor was first introduced to Corn Plus in the mid ’90s when, as a consultant, he was asked to provide an outsider’s opinion and assess the plant’s hang-ups. Shortly after his report he was offered the plant manager’s position, which he accepted.
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asked ourselves, ‘How can we control that?’” he explains. A representative from Corn Plus’ electrical provider, Alliant Energy, asked Kor what the biggest bottleneck at the plant was. “I told him we were pushing the plant and making a lot of syrup, and I said it sure would be nice if we could burn that as a fuel. About a month later he said, ‘You know what? I think we can do that.’” Tests were run using a small fluid bed reactor at an independent lab in Golden, Colo., and the tests were successful. “People in the industry were saying, ‘You can’t burn water,’” Kor says. This all took place during the onset of the big ethanol boom when many plants were looking at expanding capacity. “I told my board that instead of going that route we needed to try to get more value out of what we have, and be a low-cost producer by cutting our energy costs—so that’s what we did,” Kor says. “We looked at
the fluid bed very hard. It was a tough decision because capital costs were expensive. But it’s been running now for three years straight. It’s been an amazing project. It’s already paid for itself. And now we’re getting 25 tons of ash a day out of it and we’re generating revenue. In the original business plan that ash was going to a landfill and costing us money—now we’re getting $150 a ton for it and generating revenue. In this time of tight margins, it’s a nice and welcome income stream,” he says. While that venture propelled Corn Plus to new innovative heights, not all that Kor touches turns to gold—perhaps in due time however that could change. For instance, Kor had a plan to pelletize the plant’s distillers grains for resale—under the trademarked name Corn Glow—to the home heating market for use in corn burning stoves. At that time, distillers grains prices were low and the
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ETHANOL PRODUCER MAGAZINE JULY 2008
PROFILE
venture looked profitable. It also seemed that with all the new plants and more distillers grains entering the market, prices would remain low. “But the problem we ran into last winter was the price of distillers grains went up to $140 to $150 a ton,” he says. “In order to make these 40-pound bags of pelleted distillers grains work, and not lose whatever we’d get from the distillers grains market, we’d have to charge $6 a bag, and wood pellets generally sell for $4.50 a bag. So that’s where we ran into a snag with that.” But again, the character trait that makes many men successful in their trade is the willingness to take risks. Sometimes the bet is good; other times it is not; but one never knows unless they give it a shot. In the spring of 2008, Corn Plus became the first ethanol plant ever to sell carbon credits on the Chicago Climate Exchange. “An independent auditor came in and verified all of our syrup flow rates, gas savings—everything—just to make sure that what we said we were saving, we were actually saving,” he says. The validation process took six months, and its first credits were sold for an average of $5.92 per ton. After the wind towers, and microwaving distillers grains trials, Kor says the next step for Corn Plus is water use. Microwaving distillers grains increases the plant’s electrical requirements, but if all the moisture from the grains can be captured and recycled—at a rate of 50 percent to 60 percent, which he says is feasible—it would amount to appreciable reductions in the overall water use at the plant. Other avenues of interest are ultrasound technology, which could increase alcohol concentration by 0.2 percent or more, corn oil extraction,
and possibly building a biodiesel plant on-site to utilize the oil extracted from the back end of the plant.
No Time to Rest Once Kor decides it’s time to retire, he really won’t be retired. “When I retire I don’t want to be sitting in a rocking chair doing nothing,” he says. “I want to be active—helping someone put a project together, consulting, something like that.” And when Kor finds time to get away from the world of ethanol for a week or two, he enjoys the great fishing and hunting opportunities found in Minnesota, and spending time with his beloved family. Not surprisingly, Kor is an aspiring inventor. “I have an idea I would like to patent,” he tells EPM. “It’s got nothing to do with ethanol—it’s
ETHANOL PRODUCER MAGAZINE JULY 2008
sports related. I have a prototype already built, and I would someday like to get that into the marketplace.” While many in the ethanol industry know Kor, or know of him, he says what people might not know about him is that he doesn’t have a college degree. “I guess I’d like people to know it’s good if you can get a college degree—that will help—but don’t feel that just because you don’t have a degree that you can’t accomplish things in life,” he says. “If you work hard at it—you can accomplish those things in life. It’s just that without one the road might be a little harder, but you can do it.” EP Ron Kotrba is an Ethanol Producer Magazine senior writer. Reach him at rkotrba@bbibiofuels.com or (701) 7384962.
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ANAEROBIC ORGANISMS KEY TO COSKATA’S RAPID RISE Not many people were familiar with Coskata Inc. when General Motors Corp. announced its partnership with the Chicago-based ethanol technology company in January. Since then, Coskata’s business has accelerated at a rapid pace, making thermochemical ethanol production from biomass a near-term reality. By Jessica Sobolik
fter General Motors Corp. announced a strategic partnership with Coskata Inc. at the North American International Auto Show in Detroit in January, a typical business day for Wes Bolsen, Coskata’s vice president of business development, changed instantly. A flood of questions and concerns ensued—many from the ethanol industry— because Coskata was relatively unknown at that time. Plus, the company says it can produce ethanol from ag and forestry waste, and municipal solid waste—even tires—for less than $1 per gallon, far cheaper than other technologies. “Some people get angry when we talk about the $1-per-gallon production cost,” Bolsen tells EPM. “I don’t know why except that it’s such a provocative statement. Some of those people
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have been working so long in a different direction.” That “different direction” is an enzymebased cellulosic ethanol conversion process, a direction Coskata didn’t follow. Instead, the company avoids the expensive pretreatment of cellulose, uses no enzymes on the front end and doesn’t deal with slurry, which varies depending on the quality of the feedstock. Despite some doubters, others are taking notice of Coskata’s technology. “We’ve had interest from the White House, various state governors and conference planners,” Bolsen says. Since the GM announcement, he was invited to speak at the National Ethanol Conference, the Washington International Renewable Energy Conference, the World Congress on Industrial Biotechnology and Continued on page 92
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A sample of Coskata’s proprietary organisms PHOTO: COSKATA INC.
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Bioprocessing, and the International Fuel Ethanol Workshop & Expo. In all of his speaking engagements, Bolsen finds himself answering this question a lot: How is this method of inexpensive ethanol production possible?
The key to Coskata’s ethanol production process is anaerobic organisms that were found at the bottom of a lagoon on the campus of Oklahoma State University years ago. A man named Ralph Tanner not only discovered these “bugs,” but also found that when they eat carbon monoxide and hydrogen, they secrete ethanol. Around the same time, Aaron Mandell of Cambridge, Mass.-based GreatPoint Energy was developing a process to turn coal into synthetic natural gas through gasification. In 2005, he read a paper published by Tanner that detailed his discovery and syngas-to-ethanol idea. Mandell called his friend and fellow entrepreneur Todd Kimmel of Advanced Technology Ventures in Silicon Valley, Calif., and Kimmel and Rathin Datta, founder of technology, manufacturing and marketing company Vertic Biosolvents, went to Oklahoma in early 2006 to see the organisms first-hand. They liked what they saw. Mandell secured rights to license the technology, and the group quickly reached out to Vinod Khosla of Khosla Ventures for some financial help. “In one meeting, [Khosla] decided this [technology] could have a major impact,” Bolsen says. “He looks for truly disruptive technologies. He saw Coskata’s feedstock flexibility and knew it could be a worldwide, transformative technology.”
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PHOTO: COSKATA INC.
Origination
Coskata engineer Mike Sura holds one of the company’s patented bioreactors.
With financial backing, the technology was moved from Oklahoma to Argonne National Laboratory, just outside of Chicago, where GreatPoint Energy incorporated Coskata in July 2006. Five staff members came on board, including Kimmel and Datta. Kimmel has since returned to Advanced Technology Ventures, and although Datta doesn’t work at Coskata full-time, he remains the company’s chief scientific officer. Bolsen joined Coskata in February 2007, along with former Dow Chemical Site Manager Richard Tobey. When the contract with Argonne National Laboratory expired, Bolsen
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PHOTO: JESSICA SOBOLIK, BBI INTERNATIONAL INC.
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Inside the bioreactor are hundreds of membranes that resemble straws. Syngas goes through the insides of the membranes, while the organisms feed on the syngas from the outside of the membranes.
says Coskata chose to remain in the Chicago area because the Midwest has amazing talent at research companies such as Abbott Labs, Eli Lilly & Co., Dow Chemical Co. and Nalco Co. An office was opened in Warrenville, Ill., a Chicago suburb, in May 2007. In October 2007, the company hired its Chief Executive Officer William Roe, formerly chief operating officer of Nalco. The company now has 40 people on staff, 30 of whom are microbiologists. “When you have a technology, you don’t let money stop you from getting the best people,” Bolsen says, adding the combined intellect at Coskata makes it a world-
ETHANOL PRODUCER MAGAZINE JULY 2008
class research institute. “We think this is the only highthroughput screening facility. We can look at 150,000 different organisms per year. Some of those are mutations of the original organism because you want to breed for higher-value traits, higher production, more tolerance for oxygen and chemicals, and robustness.” However, even without genetically modifying the organism found at the bottom of the Oklahoma lagoon, Bolsen says it has the capability to produce ethanol on a commercial scale.
The Process Behind its immaculate lobby, offices and conference rooms in Warrenville, a laboratory allows the company to test its technology on a pilot scale. Since the first quarter of 2008, the company has been growing organisms in various fermentors. It isn’t using biomass as a feedstock, but it’s running the equivalent of stranded natural gas, industrial waste gases and methane from landfills through a commercially available catalyst to produce synthesis gas. The syngas is then directed through membranes resembling hundreds of straws inside a four-foot plastic tube, called a bioreactor, a piece of equipment that allows the company to avoid high stainless steel costs. The organisms are placed outside the membranes, but because they seek out the carbon monoxide and hydrogen in the syngas, they affix themselves to the outside of the membranes. They secrete ethanol, which is then rinsed out of the tube with water. A distillation process separates the ethanol from the water, which is recycled. This set-up allows for a continuous-flow process as opposed to a batch process. Bolsen wouldn’t reveal the specif-
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PHOTO: COSKATA INC.
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Roe, right, speaks with Pennsylvania Gov. Edward Rendell during the announcement of Coskata’s commercial demonstration facility in Madison, Pa.
ic capacity of each bioreactor, but he did say on a 100 MMgy scale, a large number of membranes could produce thousands of gallons of ethanol per day. The company continues to tweak the organisms and the process in which the organisms come into contact with the syngas, all with the intent of increasing production and lowering costs. For example, Bolsen says the company has patented a process called vapor permeation, which would replace the distillation process. Distillation is necessary in the corn-based ethanol process because the ethanol has to be separated from the remaining solids. However, in a gas-based ethanol/water mixture, there are no solids, making distillation unnecessary. With this technology, Roe points out that Coskata initial-
ly intended to build, own and operate its own ethanol production plants. However, a 100 MMgy commercial-scale plant would mean $3- to $4-per-gallon in capital costs. Roe says Coskata has now decided to license its technology to large companies “with large balance sheets” to increase its own cash flow before owning and operating plants. “So now we have to go out and get partners, such as large feedstock players who want to make ethanol but don’t have the technology,” Roe says.
Commercial Demonstration Coskata found a biomass feedstock partner for its commercial demonstration plant in Madison, Pa., which is approximately 30 miles southeast of Pittsburgh. On April 25 at the Pittsburgh Convention Center, Pennsylvania Gov. Edward Rendell announced Coskata’s relationship with Westinghouse Plasma Corp., which owns and operates a pilot-scale plasma gasifier. “Corn-based ethanol and biodiesel made from soybeans is a readily available, established technology that can bridge the transition from foreign oil to advanced fuels like cellulosic ethanol,” Rendell told a group of state legislators, government officials and company representatives, including Beth Lowery, vice president of energy and environment for GM. “By reducing our dependence on conventional fossil fuels in favor of more cost-effective biofuels like Coskata’s product, we can help mitigate the effects of higher fuel prices on the food market, while strengthening our economy and our national security.” This commercial demonstration facility will produce approximately 40,000 gallons of ethanol per year. Construction of the modular design is already underway by Continued on page 96
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Who’s Who at Coskata William Roe, chief executive officer
Wes Bolsen, vice president of business development Bolsen grew up on a farm in central Illinois, the fifth generation in his family to do so. He left the farm in the early 1990s because at that time farming was, in his words, “tough.” From there, he unknowingly established several key connections beneficial to his future employer Coskata. He earned a master’s degree in business administration at the Stanford Graduate School of Business, where he met Vinod Khosla, who eventually invested in Coskata’s technology. Before joining Coskata, Bolsen was chief financial officer at ICM Inc., which will build Coskata’s first commercial-scale ethanol plant. He spent much of the Christmas of 2007
between Chicago and Detroit in preparation for GM’s partnership announcement in January. At one point, he visited nine countries in 90 days, and racked up 100,000 miles on his frequent-flier account last year.
Richard Tobey, vice president of research and development Tobey was among those first interested in alternative energy technology following the Arab oil embargo in 1973 when crude oil spiked to $30 per barrel. At that time, he was earning a chemical engineering degree at Michigan Technological University, and he began conducting projects on alternative energy. “The whole thing fascinated me,” he says. He graduated and intended to continue Left to right: Bolsen, Tobey and Roe work in alternative energy for a petroleum company. “I became disillusioned,” he says. “Alternative energy wasn’t on their radar at that time.” Instead, he joined Dow Chemical Co., which was looking into alternative energy until oil prices dropped in the early 1980s. He says his goal at Coskata is to make renewable fuels compete equally with oil without the help of subsidies.
PHOTO: COSKATA INC.
Roe had just entered early retirement in June 2007 after 29 years with Nalco Co., the world’s largest industrial water treatment company, which is down the street from Coskata. Although he had spent the past six years as chief operating officer at Nalco, he wanted to start a not-for-profit foundation to make a difference in the world. However, when Coskata contacted him and detailed its plans for renewable fuel, he came out of retirement and joined the team as chief executive officer. “Everything lined up,” he says. “The technology was compelling. I immediately liked the people here and their conviction. The capper was the company’s belief that we (as a nation) have a real issue: a profusion of consumption. One start-up won’t change the world, but many will, so I wanted to contribute to getting the technology started.” Some day, he intends to return to those not-for-profit plans, but for now, he has found a purpose at Coskata.
PHOTO: COSKATA INC.
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This computer-generated image shows the modular design of Coskata’s commercial demonstration plant that will produce ethanol in Madison, Pa.
Continued from page 94
Zeton Inc. in Burlington, Ontario. It will be installed in Madison in early 2009 with production slated to begin in March or April. Roe says the modular design makes it easy to decommission and relocate the facility in the future. Adjacent to Westinghouse, it will convert various biomass sources such as wood waste, ag waste (including sugarcane bagasse) and
municipal solid waste into syngas using Westinghouse’s gasifier. Roe says the wood chips will come from the Southeast, the bagasse will come from Louisiana or Brazil, corn stover will come from the Midwest, and switchgrass will be provided by leading energy crop companies such as Ceres Corp. The plasma gasifier, which was developed in collaboration with NASA in the 1960s to simulate a space shuttle re-entering the Earth’s atmosphere, generates temperatures equal to the surface of the sun (as high as 20,000 degrees Fahrenheit). It will heat the various biomass sources to 1,800 degrees Fahrenheit, creating syngas. The gas is cooled to approximately 100 degrees before it’s fed to the ethanol-producing organisms. Bolsen points out that Coskata technically isn’t producing “cellulosic ethanol,” a term that would suggest extracting cellulose from plant material instead of gasification. He says if you extract cellulose from plants, you still have a percentage of plant matter left over. With gasification, Coskata converts the entire plant into syngas. The process can also convert used tires, which don’t contain any cellulose at all. The fuel produced at the Pennsylvania facility will be tested by GM in its flexible-fuel vehicles (FFVs) at its proving grounds in Milford, Mich. The auto manufacturer aims to ramp up the number of FFVs it produces in the coming years, but before it does, it wanted to solidify a fuel technology that
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would sustainably produce renewable fuels for years to come. This is how GM found Coskata.
Roe credits Bolsen for getting GM’s attention. “In April 2007, Wes thought it would be a good idea to let major automakers know about [our technology],” Roe says. “Most said ‘no thanks.’” GM was an exception. Behind closed doors, the auto manufacturer was planning to increase its FFV offering to 50 percent of its fleet by 2012. However, it wanted to make sure ethanol would be readily and sustainably available for years to come. Recognizing corn-based ethanol might not be the fuel of the future, it compiled a list of 18 cellulosic ethanol companies to explore. When Bolsen called GM, Coskata wasn’t on the list. GM conducted due diligence on those 18 companies for approximately eight months, and as if fate planned it, the auto manufacturer decided to invest an undisclosed amount in Coskata in late 2007. It was the first time GM had invested in a nonautomotive company in nearly 20 years. “Its process seemed to make sense to us,” says Mary Beth Stanek, GM’s director of environment, energy and safety policy. “We think all of those companies will have success, but we had to work with efficient processes that are affordable and ready to go.”
PHOTO: COSKATA INC.
GM Invests
Roe, center, shakes hands with Wagoner at the North American International Auto Show in Detroit in January. Khosla, left, was also in attendance.
In October 2007, Coskata wanted to publicly announce its technology, but GM had a better idea. Why not announce GM’s ownership stake in Coskata at the North American International Auto Show, an event attended by 700,000 people? Coskata agreed, and on Jan. 13, GM Chairman and Chief Executive Officer Rick Wagoner introduced the world to Coskata. “We came out of stealth mode with GM’s announcement,” Bolsen says, adding it was one of GM’s most mediacovered announcements. Stanek agrees. “We did receive a very
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positive response from a companyimage standpoint,” she says. “It made sense to align with a leading-edge company that could bring about ethanol from waste. It is a good decision.” GM sold approximately 400,000 FFVs last year and aims to ramp up to 800,000 by 2010. By 2012, it will be producing approximately 1 million FFVs. In addition to manufacturing, GM works on policy-related issues on Capitol Hill and distribution concerns with gas retailers to ensure a fuel supply for its consumers. “GM has had good success with retailers across the country, such as Meijer and Kroger, to market E85,” Stanek says. “We’re looking to promote the fuel. When Coskata opens, we’ll make sure retailers will merchandise its fuel.” With that said, Stanek adds that GM isn’t in the fuel business. “We have to focus on our products, but there are things we’d like to enable, such as this technology,” she says. She points out that because Coskata is making ethanol so cheaply and is located closer to the end market, consumers will be getting quite a deal compared with gasoline. On May 1, GM announced a similar investment in Mascoma Corp.,
another company on its list of cellulosic ethanol technologies. “[Mascoma’s technology] is a different approach but with a lot of good science,” Roe says. “I think of GM’s [investments] as bookends. One is a fast strike (Coskata) and one is more long term (Mascoma).”
Future Plans With its first demonstration plant sited and a key partnership with GM solidified, Coskata aims to announce a full-scale commercial plant site, alongside a new partner, by the end of this year. Bolsen says the company’s next goal will be to enter the commercialscale market through various partnerships, one of which is Colwich, Kan.based ICM Inc., Bolsen’s former employer. “We’re ready to commercialize,” Bolsen says. “We want to open a 50 MMgy to 100 MMgy plant, which will take two years to build, and we’re working on the engineering right now.” To reach that end, he says ICM was an obvious choice. “I knew the quality of ICM and respected Dave Vander Griend, and it is the best [company] at commercializing,” he says. A strategic alliance was announced by GM Vice President Troy Clark at the Chicago
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Jessica Sobolik is Ethanol Producer Magazine managing editor. Reach her at jsobolik@bbibiofuels.com or (701) 3730636.
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Auto Show in February. Construction of the commercial-scale plant is slated to begin in 2009 and end in 2011. Financially, Coskata will be conducting its third round of equity funding, which Bolsen says will hopefully be the last before the company starts collecting revenue. “When you’re a small company, you’re a takeover target, but right now, we may plan a potential public offering,” he says. There are also plans to add more staff members. Earlier this year, Coskata added a chief financial officer, and it also plans to hire a vice president of manufacturing to rapidly commercialize the company’s technology. With all the business being conducted in Coskata’s front offices, Bolsen reiterates that the company isn’t getting ahead of itself either. “We were put in the public light very quickly, but we’re still focused on research,” he says. EP
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TECHNOLOGY
Cellulosic Ethanol Path is Paved With Various Technologies In the midst of rising oil prices, the economics of producing cellulosic ethanol are becoming increasingly favorable and several companies are steadfastly moving to commercialize various process technologies. It would be easy to view this development as a race pitting one technology against the other but is that really the case? Is one approach better than another? By Jessica Ebert
he development of technologies for the production of ethanol from biomass feedstocks such as wood dates back to the years leading into the first two world wars. Germany, in particular, being a land poor in petroleum began developing internal sources of fuel. Much of the country’s war machine, in fact, was powered by locally produced ethanol. The process technology of choice at this time was a biological approach consisting of concentrated or dilute acid hydrolysis to release simple sugars from wood followed by microbial fermentation of those sugars to ethanol. Although pioneered by the German war effort, the United States, Russia and others followed suit, establishing their own wood-to-ethanol plants. But this was not the only approach to the self-sustaining production of renewable fuels being spearheaded by warring nations. Scientists in coal-rich Germany had been developing a thermochemical process for the conversion of coal into synthesis gas that was subsequently reformed into fuel using a
T
ETHANOL PRODUCER MAGAZINE JULY 2008
catalyst. This approach, dubbed the Fischer-Tropsch process for its originators, researchers Franz Fischer and Hans Tropsch, was also used in South Africa to produce liquid fuels from coal and natural gas during the years of apartheid. “A lot of people talk about when is cellulosic ethanol going to become a reality,” says Brian Duff, director of technical studies and engineering for BBI International. “Technically, it’s been a reality since the ’30s.” The main difference between the years of the world wars and now is the reality of the cost of producing cellulosic ethanol at commercial scale. “The programs in the ’30s and ’40s weren’t based on economics,” Duff says. “They weren’t based on making money. They were based on the war footing and the need to create alternative fuels. Now that oil has tripled in cost, it’s making [cellulosic ethanol] technology look more economical.”
Technologies at a Glance To jump-start the commercialization of technologies for the production of ethanol from lignocellulosics, the
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U.S. DOE announced in early 2007, a $385 million plan to fund the construction of six large-scale biorefineries. The conversion technology employed by half of these plants will be a biological fermentation process, essentially an extension of the grain ethanol industry’s approach. “It was a logical progression of technology to go from starch hydrolysis to cellulose hydrolysis,” says Robert Brown, a mechanical engineer at Amesbased Iowa State University who studies gasification and fast pyrolysis of biomass. “The problem is that Mother Nature intended starch as a storage carbohydrate while cellulose is part of a tough composite material evolved to resist biological degradation.” There are basically three steps required to overcome this recalcitrance of cellulosic feedstocks. The first is a pretreatment step using dilute acid or
steam explosion to separate the cellulose from lignin and hemicellulose. This is followed by a hydrolysis step, which breaks apart the cellulose into small sugar units, using concentrated acid, dilute acid or enzymes. The sugars are finally fermented to ethanol using microbes such as the common brewer’s yeast. The remaining DOE-funded biorefineries will use a thermochemical process to produce cellulosic ethanol or a hybrid of the biochemical and thermochemical approaches. The thermochemical conversion of biomass can be carried out through a couple of different processes. In pyrolysis, biomass is converted to a bio-oil using moderate temperatures in an oxygen-starved environment. In the thermochemical approach called gasification, biomass is converted to a gaseous mixture of carbon monoxide and hydrogen by heating it to rela-
tively high temperatures with no oxygen or very limited amounts of oxygen. The synthesis gas is then cleaned and either exposed to a catalyst, which reforms the gas into a liquid fuel, or in the hybrid approach, the syngas is fed to microbes, which transform it into ethanol. “Gasification was developed in the early 1800s and even catalytic conversion of syngas to fuels dates back to the 1920s,” Brown explains. “Many people assumed that thermochemical technology was already mature and that if it was not economically feasible today it never would be. However, this assessment falls short.”
The First to Break Ground The six DOE-funded plants are expected to be on line by 2011. The first company to break ground on its plant was Range Fuels Inc., a privately held gas-to-liquids company based in
Broomfield, Colo. The first phase of the biorefinery, which is located in Soperton, Ga., will produce 20 MMgy of ethanol from leftover wood residues from timber harvesting. Using heat, pressure and steam in a two-step thermochemical process developed by Robert “Bud” Klepper, the company’s chief technical specialist and inventor, biomass is converted into syngas, which is then passed over the company’s proprietary catalyst and transformed into mixed alcohols, predominantly ethanol. “I think today, thermochemical is leading the way,” says Mitch Mandich, chief executive officer of Range Fuels. “But it’s not something that just happened overnight.” He explains that Klepper has been working on the technology for the better part of a decade. “He’s built three pilot plants over that period of time and he’s experimented with the technology. When we founded
PHOTO: RANGE FUELS
TECHNOLOGY
This is an aerial view of the site for Range Fuels’ Soperton, Ga., cellulosic ethanol plant.
the company in July of ’06 we looked at the technology and decided that it was really a scale-up in that we could take Bud’s patents and augment those patents
and really begin to commercialize the process at a larger scale,” Mandich says. “We’re showing that we think we can bring a thermochemical approach to the
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market much faster and cheaper and with less risk.” These are the keys to attracting investors, who are showing increasing interest in these technologies. Range Fuels, for example, recently expanded its Series B financing to more than $100 million. However, investors are not abandoning companies that are moving forward with biological-based cellulosic ethanol technologies. Mascoma Corp., an advanced cellulosic ethanol company based in Cambridge Mass., recently announced that it raised $61 million in a third round of financing including a $10 million equity investment by Marathon Oil Corp. Mascoma develops proprietary microbes at its laboratories in Lebanon, N.H. These microbes are engineered to express the enzymes needed to degrade cellulose and to process the resulting sugars into ethanol in a single step, explains Jim Flatt, senior vice president of research and development. “Anytime you can simplify a process
you reduce the amount of capital equipment required and you can also increase yield, so your operating costs can also decrease,” Flatt says. The technology is called consolidated bioprocessing and Mascoma plans to use this process to produce ethanol later this year at a demonstration plant, which is currently under construction in Rome, N.Y. In addition, the company recently received a $26 million DOE grant for the construction of a 2 MMgy switchgrass-toethanol plant in the Niles Ferry Industrial Park, in Monroe County, Tenn. “This plant is the final stepping stone to a full-scale commercial biorefinery,” he says. Likewise, Lignol Energy Corp., a British Columbia, Canada-based company, is fine-tuning a biochemical process that features a unique biomass pretreatment step. This project has also received significant backing including $20 million in equity and a recent $30 million grant from the DOE, according to Ross
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MacLachlan, president and chief executive officer of Lignol. The technology was pioneered by Kendall Pye at the University of Pennsylvania, and developed by General Electric Corp. throughout the 1980s. The pretreatment step differs from other biological approaches by extracting lignin upfront. This leaves two streams for further processing: a highpurity lignin stream and a very clean pulp, which requires half the amount of enzymes typically needed to break the cellulose into fermentable sugars. “Because we spend more money and more time upfront in our process to make it easier for the enzymes to work, we use fewer enzymes,” MacLachlan explains. “In addition, we’re producing more than just ethanol. We’re producing other biochemicals. By doing these two things we’ve discovered that you can build cellulosic ethanol plants on a smaller scale than competing technologies while still being profitable.” The company is currently expand-
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ing its pilot facility in British Columbia and expects to be producing more than 26,000 gallons of ethanol per year starting this summer. In addition, this pilot plant will be used to test new equipment, enzymes and biological agents in an industrial setting. The results from these evaluations will be used to inform the construction of a small-scale biorefinery in Colorado, which MacLachlan projects will be completed by 2011. In the end, the race to commercialize cellulosic ethanol may not really be about which technology is better or more economical than another. Each approach comes with its advantages and disadvantages therefore investors continue to invest in all three platforms. “The new renewable fuels standard is so aggressive with respect to the production of cellulosic biofuels that there is growing awareness and we should not be betting the farm on one technology pathway,” Brown says. Similarly, MacLachlan, doesn’t view
PHOTO: LIGNOL ENERGY CORP.
TECHNOLOGY
MacLachlan stands in the company’s cellulosic ethanol pilot plant in Vancouver, British Columbia, Canada.
the growth of the industry as something marked by a single dominant technology. “What you’re going to find is that there will be a lot of technologies out there, any of which will be appropriate for different feedstocks and different parts of
the world,” he says. “I’m hoping that everyone does well because, the truth of it is, the industry needs to have several successful projects and successful companies seeing their technologies deployed.” Flatt sees the industry evolv-
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Mascoma scientists prepare a laboratory fermentation vessel for use at the company’s research facility in Lebanon, N.H.
ing into something of a hybrid where up-front biological processes will be integrated with thermochemical processes for maximum efficiency and cost effectiveness. “It’s based on the simple
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observation that lignocellulosic feedstocks are roughly two-thirds sugar and one-third lignin. Sugars are very efficiently converted to things like ethanol, and biochemical processes have an
inherent advantage when it comes to converting sugars,” he explains. “Thermochemical processes on the other hand do have some inherent advantages in converting the lignin component.” The race then, may just center on striving—as a nation—to become energy independent, pitting financial, environmental and security needs against time. “I think they should be viewed as complementary technologies that are gearing up toward the same goal,” Duff says. “One may establish itself as superior in economic terms as we go down this road but I would absolutely not admit that it was a done deal yet,” he adds. “The jury’s still out.” EP Jessica Ebert is an Ethanol Producer Magazine staff writer. Reach her at jebertserp@yahoo.com.
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PROMOTING POSITIVE PERCEPTIONS As the world grapples with the weighty issues of energy independence, climate change and food versus fuel, corn ethanol and palm oil’s roles are often unfairly criticized or misunderstood. EPM takes a look at how palm oil and corn producers deal with negative publicity. By Susanne Retka Schill
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PHOTO: SUE RETKA SCHILL, BBI INTERNATIONAL
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alm oil and corn producers share a regrettable fate—bearing the brunt of an onslaught of publicity that may contain an ounce of truth but is buried under tons of misinformation. The National Corn Growers Association, the Renewable Fuels Association and other ethanol proponents have been working overtime since articles in Science and Time magazines and several daily newspapers have taken a dim view of corn ethanol. Those articles prompted multiple letters to the editor, and led to a press conference in late April where the NCGA, RFA, National Farmers Union and former Secretary of Agriculture John Block attempted to correct misinformation. A few days later, a Business Week article, “Is ethanol getting a bum rap?” concluded that while corn ethanol is not a perfect fuel, it isn’t the demon it is made out to be. Debunking demonization is not an easy task when outdated and biased information gets repeated multiple times by reporters who aren’t doing their homework. Just as the biofuels bashing was gaining steam, this EPM staff writer traveled to Malaysia to learn about the palm oil industry and was struck by the similarities and differences in the experiences of the two countries and their dominant crops. The Malaysian Palm Oil Council hosted a group of international journalists at the first International Sustainable Palm Oil Conference. The familiarization program was part of the MPOC’s continuing campaign to get its message out. Organized in 1990 as a response to an anti-palm oil campaign surrounding health concerns, MPOC has been ramping up its efforts to combat palm oil’s negative public image. “From organizing seminars and participating in exhibitions, we have moved into organizing our own trade fairs,” says Yusof Basiron, MPOC chief executive officer. “For the past two years we have used our Web site aggressively to deliver our messages. Road shows and missions are also held to
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address specific issues.” Engaging in dialogues with nongovernmental organizations (NGOs) and European Union parliamentarians in The Hague, Brussels and London have been positive, he says. “The results have been most encouraging as we see a better understanding of palm oil amongst users.”
Nation-Building Commodity The first International Sustainable Palm Oil Conference was held in Sabah, the Malaysian state on the island of Borneo, which leads the country in palm oil production. Malaysia is the world’s largest palm oil exporter and only recently was surpassed by Indonesia as the world’s largest producer. Together, the countries produce 85 percent of the world’s palm oil. Prior to the conference, the journalists were led on a tour of an oil palm plantation. The drive from the airport at Sandakan, Sabah, took the journalists outside of the city and through oil palm plantings that went on for miles. The oil palm trees are interspersed with mixed native rainforests and rural communities that lined newly built roads. Until the past few decades, the population mainly lived near the coast, subsisting on a fishing economy. As the journalists traveled ETHANOL PRODUCER MAGAZINE JULY 2008
through the countryside and toured an oil palm plantation, they learned that the crop has helped to lift the country out of poverty. Fifty years ago, in a program reminiscent of the U.S. Homestead Act, settlers were given a tract of land if they would develop it for agriculture. The World Bank and United Nations supported the project, which resulted in nearly 90 percent of the Federal Land Development Authority lands being planted to oil palms, 10 percent to rubber trees, and the remainder to sugarcane, other crops and villages. Today, production from those small land holders makes up 40 percent of the country’s palm oil production, with the remainder coming from large, corporate plantations, many of which were converted from coconut and rubber when those crops became less profitable. “Ironically, when commodities such as palm oil help poor farmers to earn a better income, the NGOs claim that they are harming the environment,” Basiron says. “NGOs are putting pressure on developing countries and shutting their commodities out from developed-country markets.” Environmental groups in Europe, in particular, have been hammering at the palm oil industry saying they are responsible for the loss
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of rainforests and critical habitat for wildlife. The criticism is unfair because the country has set aside 60 percent of its land area in permanent forest reserves, Basiron says. Only 24 Basiron percent of its land area is devoted to agriculture, compared with 70 percent in the United Kingdom, 49 percent in Germany and 45 percent in the United States. Furthermore, the Malaysian palm oil industry says its growers are responding to concerns being raised by those critical of their environmental and social performance. For example, wastewater from oil palm milling operations is no longer dumped into the waterways, but treated and recycled. Plantation managers demonstrate their corporate social responsibility by building schools for the children of Indonesian immigrant workers who aren’t eligible to attend Malaysian schools. The plantations pro-
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vide housing and recreational programs for those workers. And, in discussions similar to those that occur in the Midwest among corn farmers, oil palm producers discuss best management practices to reduce soil erosion, breeding programs to improve yields and optimal fertilization programs. Sustainability is now the issue at the forefront of the Malaysian palm oil industry. In 2003, when the WWF (World Wide Fund for Nature) Switzerland proposed an international forum to address deforestation and wild habitat concerns, Malaysian producers were among the founding members of the Roundtable for Sustainable Palm Oil. Over several meetings, principles and criteria for sustainable palm oil production were developed. Malaysian producers were among those testing the feasibility of applying those principles on the ground prior to their final adoption last fall. Now, each palm oil producing country is developing an implementation plan for its industry to be reviewed by the
Palm oil is an attractive feedstock for biodiesel producers because it yields 635 gallons of oil per acre, compared with soybeans at 48 gallons per acre or rapeseed (canola) at 127 gallons per acre.
RSPO. This spring’s International Sustainable Palm Oil Conference was the first such conference held to share the progress being made, the work being done on a certification system and to review recent research and projects on environmental and sustainability issues. “Our main goal was to address the issues hurled against palm oil related to deforestation, greenhouse gas emissions and peat soil usage,” Basiron says. “NGOs were invited to present their findings and thoughts.”
ETHANOL PRODUCER MAGAZINE JULY 2008
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The Power of Misinformation The Malaysian Palm Oil Council was formed to counter claims made in an anti-saturated fat campaign that started in the 1980s and indicated that palm oil was not healthy. The MPOC tells the story of the tropical oil scare in an article in its spring issue of the Global Oils and Fats Business Magazine. “Researchers familiar with palm and coconut oils couldn’t understand all the criticism,” Bruce Fife wrote. “Studies clearly showed that the tropical oils do not promote heart disease.” Fife recounts details of the controversy in his book, The Palm Oil
Miracle, published in 2007. The palm oil industry feels vindicated now that hydrogenated fats have been exposed as health hazards. The industry is trying to get the message out that palm oil is a healthy source of dietary fats containing antioxidants, vitamins A and E and boosting good cholesterol levels. If that information about palm oil is surprising to an American reader, it demonstrates the long-lasting power of negative publicity once it enters the popular consciousness.
U.S. Sustainable Efforts U.S. farmers have faced much of the same scrutiny as oil palm growers in Malaysia and that could intensify as
more land is used to produce biofuels feedstocks. Already, the biodiesel industry has organized a sustainable feedstock task force to assess and improve the
industry’s enviromental impact and social responsibilities while still maintaining an economically viable business. The formation of the task force was announced by the directors of the National Biodiesel Tolman Board at their winter conference in February. The corn growers joined a similar effort last year facilitated by the Keystone Center in Keystone, Colo., says Rick Tolman, chief executive officer of the National Corn Growers Association. Announced in August 2007, the center launched a sustainability effort with the goal of developing broad participation by the fall of 2008. Producer and conservation organizations as well as businesses throughout the agricultural supply chain are part of the initiative including the NCGA, the American Soybean Association, United Soybean Board, Bunge Ltd., Cargill Inc.,
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Conservation International, DuPont, General Mills, Grocery Manufacturers Association, Mars Inc., Monsanto, National Cotton Council of America, the Nature Conservancy and the WWF U.S. “This project has worked to help establish benchmark sustainability criteria and develop strategies for improvement,” Tolman says. “The corn industry is moving ahead with this. We’ve always been interested in improving production while at the same time reducing environmental impacts. We’ve seen a lot of success here,
thanks to technology that improves nutrient efficiency, for example, or sustainable agriculture practices such as reduced tilling.” Engaging in discussions with many stakeholders on sustainability criteria can be a way to talk with environmentalists about the challenges of balancing competing priorities. The initial Keystone principles, like the sustainable palm oil principles, include profitability concerns, best management and environmentally responsible production practices.
There’s no guarantee the criticism will dissipate, however. “While the RSPO has succeeded in formulating principles and criteria for the supply of certified [sustainable] palm oil, some NGOs and state governments in developed countries refuse to recognize the good work of the RSPO,” Basiron says. “New goal posts are being erected to frustrate the exporters.” He points to the formation of the Malaysian Palm Oil Wildlife Conservation Fund as evidence of the industry’s willingness to work with environmentalists. “We have always welcomed any opportunity to work with the NGOs to improve the practices in the industry,” Basiron says. Similarly, the NCGA has worked with various environmental organizations over time, but the current round of negative publicity is troublesome, Tolman says. “We find it frustrating that there appears to be a well-funded concerted campaign against corn ethanol,” he says. “It is not only using disinformation, but it portrays corn growers and ethanol producers as committing crimes against humanity and stealing food from the hands of the starving. We’re not like that. It’s not just a disservice to the truth, it’s unethical.” Tolman believes a backlash is brewing, however, especially when the huge impact of higher oil prices is considered. “We know the truth is on our side, and we are making progress bit by bit,” he says. “What helps us is to find creative ways to get the message out in a simple, understandable way, drawing mental pictures and telling stories in addition to presenting a slate of facts.” “Every industry should know better how to defend itself,” Basiron says. “The world has become far more complicated today.” EP Susanne Retka Schill is an Ethanol Producer Magazine staff writer. Reach her at sretkaschill@bbibiofuels.com or (701) 738-4962.
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CHINA TO HOST WORLD BIOFUELS SYMPOSIUM China’s energy needs are expected to increase by nearly 50 percent in the next 12 years. Because much of this energy will be used by the country’s burgeoning middle class to fuel its cars, keeping up with new demand for transportation fuel is going to be challenging. By Craig A. Johnson
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ne of the world’s oldest civilizations, China has cultures that stretch back more than 6,000 years. Not only is it home to the world’s longest continuously used written language system, it is the birthplace of paper, gunpowder and printing. China is the world’s most populous country, and everything the Chinese do seems to be on a scale unimaginable in other parts of the world. From the Great Wall to the Three Rivers Dam, China has a habit of “supersizing” its infrastructure. With an annual gross domestic product that has increased by roughly 10 percent a year since 2001, a growing middle class has begun to put a strain the country’s energy needs. With this incredible growth comes a requisite rise in energy consumption. China accounted for 38 percent of total worldwide demand for oil in 2006. Along with this rise in consumption, China has recently received a measure of criticism for its contribution to global warming. As a result, biofuels in China are growing in popularity and scope.
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PHOTO: BBI INTERNATIONAL
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Biofuels professionals from around the world are expected to attend the fifth annual World Biofuels Symposium in Tsinghua University in Beijing.
China’s stated goals of strengthening energy security by reducing its dependence on foreign oil, and mitigation of carbon emissions are laudable. However, another serious concern is its lagging rural economy. Coastal areas have seen soaring growth, yet much of the country’s interior has felt few of the effects. Building a strong biofuels
industry is the key to a steady, balanced approach to growing the economy.
A Meeting of East and West This fall, at Tsinghua University in Beijing, China, ethanol professionals from across the world will assemble for the fifth annual World Biofuels Symposium. The event, which will take
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place over three days in October, promises industry professionals an experience like no other. Representatives from various countries will be in attendance, but one highlight for American attendees will be the opportunity to interact with their counterparts in other countries. Kurt Markham, director of the Minnesota Department of Agriculture’s
PHOTO: BBI INTERNATIONAL
The mission of the MDAis to look for opportunities to help Minnesota’s agricultural economy adapt and thrive in the global marketplace. To that end, the symposium strives to create a forum for sharing information and resources between countries.
The symposium will be a place for U.S. biofuels representatives can meet with their counterparts from other parts of the world.
Agricultural Marketing Services division, which is known for its forwardthinking policies in the United States, is one of the event organizers. “At the last symposium, we had attendees from about 15 different countries,” he says. “It really is a world biofuels symposium.” The mission of the MDA is to look for opportunities to help Minnesota’s agricultural economy adapt
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and thrive in the global marketplace. To that end, the symposium strives to create a forum for sharing information and resources between countries. “For people who cannot easily travel here to the U.S., like Iraq and Viet Nam…there’s an opportunity for those countries to learn about what the U.S. is doing, what China is doing, the sharing of information and policy and the technical
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things you are not expecting to learn, opportunities you are not expecting to see.” In the past, attendees have been the people who offer technology and services to the ethanol industry. While the Chinese are certainly interested in renewable fuels, the country has opportunities in other areas. “China is growing,” Bryan says. “They want to
The World Biofuels Symposium is a great networking opportunity for those in the biofuels industry.
aspects of the biodiesel industry.” Kathy Bryan, co-founder and president of BBI International, points to this information sharing as one way to approach the conference. “Every
‘China is the world’s third-largest producer of ethanol and a growing economy in terms of purchasing power. Many Minnesota companies have been doing business in China for years.’
conference is a networking opportunity,” she says. “The WBS is a particularly good opportunity for attendees to look at options they hadn’t thought of before. There are always going to be
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eat more beef, there’s more methane they’re putting into the atmosphere as a result of cattle herds—they have a responsibility to find ways to deal with that in the most environmentally sustainable ways.” Markham points to the types of business opportunities available in the country. “China is the world’s thirdlargest producer of ethanol and has a growing economy in terms of purchasing power,” he says. “Many Minnesota companies have been doing business in China for years. 3M has been in China for more than 20 years; Hormel Foods has been in China for seven years and has two slaughterhouses in China.”
Historical Ethanol Production Data for China 15000
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Snapshot of a Growing Industry According to the USDA Foreign Agricultural Service, China produced about 1.27 million metric tons (425 MMgy) of ethanol in 2006 from cassava, corn and sweet potatoes. In 2007,
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1,450,000 2007
Metric Tons of Production
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China increased its production by 12.5 percent to 1.45 million metric tons (485 MMgy). This is a small increase compared with what China intends to do in the next several years. In fact, according to the FAS, due to environmental and security concerns, China expects to produce between 3 million and 4 million metric tons (1 billion to 1.3 billion gallons) by 2010. Since 1975, China has been a net importer of oil. Today, China produces as much as 70 percent of its energy from coal, using imported oil for most of its transportation sector. Oil consumption is growing rapidly as China’s emerging middle class develops a taste for beef and the American fetish for driving new cars. However, looking ahead, China seems to be moving away from using corn or other food grains for ethanol production. As of 2007, China has all but ceased granting licenses to build more corn-ethanol plants. While sweet potatoes will probably be used into the foreseeable future, according to the USDA, cassava is likely the feedstock of choice for future ethanol plants. Just as in the United States, research into cellulosic ethanol is of interest. And like the United States, until the cost to produce ethanol from cellulosic feedstock materials comes down, it may be some time before large-scale production begins. China, as of 2007 (the period for which most figures are reported), currently has four operating ethanol plants. The total annual capacity of the plants is 1.2 million metric tons (425 MMgy). Actual production figures for 2005, show that the plants combined produced
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920,000 metric tons (308 MMgy). Three of the plants currently producing are corn based, with one, the 200,000-metric-ton (67 MMgy) plant at Henan, Nanyang, using wheat. As China moves forward, none of the three plants under construction are expected to use corn as a primary feedstock. Two of the plants, both owned by China Resources Alcohol Co., will be in Guangxi, and Hebei. The first intends to use cassava, the second a combination of corn and sweet potatoes. The third plant under construction in China, a 100,000 metric ton (33 MMgy) per year plant in Hubei, intends to use rice—the first of its kind. As these plants come on line, China will be looking for other ways to limit its need for foreign oil. The USDA estimates China’s overall consumption at 1.2 million metric tons (40 MMgy) of diesel in 2006 and 40 million metric tons (13.4 MMgy) of gasoline. With growth accelerating at double-digit speed, automobile use increasing by 11.8 percent annually, for example, events like the World Biofuels Symposium are only going to become more important to securing China’s energy future. For more information about the conference, which will be held Oct. 19-21, visit the Web site at www.worldbiofuelssymposium .com. EP Craig A. Johnson is the Ethanol Producer Magazine plant list and construction editor. Reach him at cjohnson@bbibiofuels.com or (701) 738-4962.
ETHANOL PRODUCER MAGAZINE JULY 2008
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Poetry in Motion With 23 plants in operation and three under construction there’s no doubt Poet LLC has been growing constantly since it first began producing ethanol from corn 20 years ago. EPM takes a look back at the company’s early years and explores its future. By Kris Bevill
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“T
he genius of the United States is not best or most in its executives or legislatures, nor in its ambassadors or authors or colleges, or churches, or parlors, nor even in its newspapers or inventors, but always most in the common people."—Walt Whitman Jeff Broin changed the name of his family’s business from Broin Companies to Poet LLC in 2007 to represent, rather than describe, what the company does. “A poet takes everyday words and turns them into something valuable and beautiful,” he says. “We use the creativity that comes from common sense to leave things better than when we found them.” Broin, who is a bit of a poet himself when he talks about the ethanol industry, has developed the company’s strategy around the common sense of the “common people.” He has used that strategy to grow the company into the largest ethanol producer in the world.
Groundwork for Success The Broin family started in the ethanol business 20 years ago. Lloyd Broin and his sons, Jeff and Rob, began experimenting with ethanol production in 1983 at their farm in Wanamingo, Minn., as a way to make more money from their corn. By 1986, they were ready to begin commercial production. Their first family-owned plant opened in 1988 in Scotland, S.D., and, with 22-year-old Jeff Broin as general manager, was soon operating at its capacity of 1 MMgy. Broin says he could never have predicted then that the company would develop into the enterprise it has become. “We were just really trying to start a business in the ethanol industry that was profitable,” he says. “We focus much more on being successful than we do on being large. I think that focus on success has helped to make us one of the largest in the industry.” In 1991, the Broins expanded their Scotland facility for the second time, increasing production to 2.7 MMgy. By 1994, the facility was expanded so many times it was producing 600 percent more ethanol than it had initially been capable of when it first became operational. The Scotland plant is still in operation today. The facility produces 10 MMgy of ethanol and is the site of Poet’s research and development team. Jeff says a pilot cellulosic ethanol plant that the company is working on will be built later this year next to the Scotland facility, continuing the initial location’s vital role in Poet’s success.
301 SW Adams, Suite 900 • Peoria, Illinois 61602 www.cliftoncpa.com 134
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The first facility used by Poet (then Broin Companies) to produce ethanol on a commercial scale was located in Scotland, S.D. The plant had an operating capacity of 1 MMgy in the first year of operation.
The Scotland facility currently produces 10 MMgy of ethanol, and also serves as the research and development center for Poet’s operations. A pilot cellulosic ethanol facility is expected to be built next to the Scotland facility later this year.
Technology is Key Major technological breakthroughs were made in 2000 when the company began work on its Broin Project X (BPX) technology. Once it was perfected in 2004, BPX eliminated the cooking phase of the ethanol production process, saving the company an immense amount of money compared with traditional fermentation methods. The first plant to use the BPX technology was Poet’s Emmitsburg, Iowa, facility. Today, BPX is used in all but two of Poet’s 23 plants. Jeff says it’s simply not economical to use BPX in the two facilities currently operating without it. He says that all current and future Poet facilities have and will continue to be designed to operate using that technology. In addition to saving money, BPX technology cre-
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Then and Now: As Poet celebrates its 20th anniversary this year, EPM takes a look at changes in the industry in the past two decades. 1988:
2008:
Bushel of corn: $1.75
Bushel of corn: $6
Number of E85 pumps nationwide: 0
Number of E85 pumps nationwide: 1,558 as of May 1 (Source: NEVC)
E85 compatible vehicles: 0
E85 compatible vehicles: 6 million (Source: NEVC)
Poet’s operating ethanol plants: 1
Poet’s operating ethanol plants: 23 as of May 1
Poet’s annual production: 1 million gallons
Poet’s annual production: 1.33 billion gallons as of May 1
U.S. ethanol production: 845 million gallons
U.S. ethanol production: 8 billion gallons (Source: Renewable Fuels Association)
ates dried distillers grains that have more nutritional value than those produced using traditional methods, according to Poet. The company developed and trademarked its Dakota Gold brand of distillers grains in 1995 and
started Poet Nutrition to market the feed product. Since then Poet has gained a reputation as a supplier of one of the highest quality feed products on the market. Poet Nutrition currently produces more than 3 million
tons of distillers grains annually and Broin says he expects to see distribution of that product to continue to grow in the United States and abroad. “We’ve been very aggressive at building international markets for our Dakota Gold brand,” he says. “We’ve been pretty successful in the Pacific Rim and we’re establishing markets in Europe. We’ve done a lot of exporting to Mexico.” In 2006, the company made an announcement ushering in a new era in ethanol production. The Broins began work on “Project Liberty” their cellulosic ethanol technology. An $80 million grant from the U.S. DOE in 2007 sealed the deal for the company to explore a new type of ethanol production in the United States. “Our commitment to cellulosic ethanol began more than seven years ago when we developed the BFrac technology,” Broin says. BFrac fractionation tech-
PRODUCER
nology allows the producer to split the corn kernel into germ fiber and endosperm. Jeff explains that the endosperm portion of the kernel can be used for ethanol producBroin tion, while the fiber portion (the hull of the kernel) can be used to produce cellulosic ethanol. The company plans to make ethanol from the corn cobs and is developing methods to harvest the corn and the cobs in one pass over a field. Poet is currently conducting significant research and development toward the production of cellulosic ethanol at its research center in Scotland. The company has also partnered with the DOE to design and build its first commercial-scale cellulosic ethanol facility in Emmitsburg, Iowa.
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The Evolution of an Industry Giant While it is clear that a lot of ingenuity and hard work contributed to Poetâ&#x20AC;&#x2122;s success, several significant changes have played a role in the evolution of the company as well. Lloyd and Rob got out of the ethanol business in 2007 when Jeff bought their shares of the company. He became chief executive officer and changed the name to Poet. The company expanded to eventually include more than 1,300 employees, but the company headquarters are still in Sioux Falls, S.D., and Broin has no intentions of ever leaving. When the Broin family started its ethanol business, plants were cooperatively owned by the farmers who sold corn to them. Broin tells EPM that every Poet facility is now its own limited liability corporation and no longer uses the co-op model. The company
has, however, stayed true to its co-op roots by continuing to offer ownership opportunities to local growers. But today, farmer-owners are free to sell their crop anywhere and arenâ&#x20AC;&#x2122;t required to own a share of a Poet facility in order to sell their crops to the plant.
Maintaining Leadership Because of the recent criticism of the ethanol industry, leaders like Jeff spend much of their time talking about the merits of ethanol and de-legitimizing arguments against it, but he says heâ&#x20AC;&#x2122;s happy to do it. As a founding member of Ethanol Promotion and Information Council and the Renewable Fuels Now coalition, Broin says he accepts all opportunities to speak about ethanol, whenever possible. Does he think all the negative views on ethanol will impact its future as a fuel? No, but he does envision a combination of traditional and cellu-
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Poet Facts: Poet has three 68 MMgy ethanol plants scheduled to come on line in the fall of 2008: Marion, Ohio; Fostoria, Ohio; and North Manchester, Ind. To date, Poet has built 29 ethanol facilities and operates 23 of those plants. Poet has built 18 ethanol facilities in the past six years. In 2007, more than 76,000 square feet of space was added to Poet headquarters in Sioux Falls, S.D. in order to accommodate its growing staff. Poet employees more than 1,300 people
losic ethanol as the fuel of the future. “We continue to make grainbased ethanol more efficient all the time and improve the economics,” he says. “Cellulosic ethanol is going to be highly challenged to meet the standards set forth by [corn-based] ethanol.” Grain-based ethanol has been the launch pad for cellulosic ethanol and, in Broin’s opinion, both forms will be competitive in the future. Traditional ethanol plants will still be the cornerstone of Poet as the company works toward meeting its cellulosic goals. The company has opened 18 new ethanol production facilities in the past six years at various locations throughout the Corn Belt and is focused now on Indiana and Ohio. The company is on track to open 65 MMgy facilities in North Manchester, Ind., Marion, Ohio, and Fostoria, Ohio, in the fourth quarter of this year and more expansions are planned at Poet facilities throughout 2009. Broin revealed his poetic side at a recent plant opening in Alexandria, Ind., when he talked about a “renewable revolution” to the more than 1,000 people who attended. His quiet but forceful voice asked them to recall a simpler time in our nation’s history. “The American farmer was important at one time,” he reminded them. “Over 95 percent of [the people of] this country were farmers. It will return.” EP Kris Bevill is an Ethanol Producer Magazine staff writer. Reach her at kbevill@bbibiofuels.com or (701) 3730636.
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EDUCATION
In the past five years ethanol plants have popped up across the countryside, but the vast number of employees required to run those plants has not materialized as quickly. That has led renewable energy companies, ethanol plants, technical colleges and universities to collaborate and provide the much-needed training of tomorrowâ&#x20AC;&#x2122;s ethanol producers. By Hope Deutscher
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ith nearly 200 ethanol production plants dotting the U.S. landscape, the Ethanol Promotion and Information Council estimates the industry has created almost 238,541 jobs in all sectors of the economy—more than 46,000 jobs in the manufacturing sector. EPIC also projects the increase in gross output resulting from the ongoing production of a 50 MMgy ethanol plant supports the creation of more than 800 jobs in all sectors of a local economy; a 100 MMgy plant will generate almost 1,600 new jobs. It is estimated that by 2022 more than 1.1 million jobs could be created as a result of the ongoing production of ethanol and the construction of new capacity. In the past five years, the ethanol industry has doubled its annual production capacity, and production demands will top 36 billion gallons by 2022 to meet federal standards. All across the country, skilled indi-
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viduals are considered to be the key to the continued success of the ethanol industry, prompting plant managers, renewable fuels companies and educational institutions to work together to train and educate the leaders of tomorrow’s ethanol plants.
Nebraska Training Program Nebraska ranks second in ethanol production nationally, and is the largest ethanol producer west of the Missouri River. Twenty-two ethanol plants provide more than $1.4 billion in capital investment in the state and employ approximately 1,000 Nebraskans. In 2005, no formal ethanol training programs existed in Nebraska, which isn’t surprising, as the entire industry was experiencing a major shortage of trained, qualified technicians. To remedy the situation, the Nebraska Ethanol Board requested assistance from the community college system to develop a statewide training
curriculum and program. In 2006, Northeast Community College in Norfolk, Neb., and its partners received a grant for about $2 million from the U.S. Department of Labor under the president’s Community-Based Job Training Grants Initiative. NECC and its partners are using the funds to develop an ethanol production and management degree program, and short-term training programs. NECC and the Applied Information Management Institute authored the grant application on behalf of Central, Metropolitan, Mid-Plains, Southeast, and Western Nebraska community colleges. Other partner organizations include Nebraska Workforce Development, nine ethanol production companies, six ethanol associations, and statewide educational institutions and governing organizations. The organizers of the Nebraska Renewable Fuels Training program decided early on they wanted to have a statewide training program. “We have
ETHANOL PRODUCER MAGAZINE JULY 2008
one similar program so that people throughout the state of Nebraska are trained the same way for the needs of the ethanol industry,” says Chuck Pohlman, project director for the Nebraska Renewable Fuels Training program and dean of agriculture, health and sciences at NECC. In July 2007, the Nebraska Coordinating Commission for Postsecondary Education unanimously approved NECC’s proposal for an associate of applied science degree in renewable fuels. “We started the associate degree last fall and we just got our certificate program approved,” Pohlman says. “Within a year the certificate program will be online. We will start with some online this summer and we will also have a land-based program on campus.” NECC offers a two-year degree in renewable fuels technology; in addition, beginning this fall, all of the six community colleges will offer a 17-credit certifiwww.siemens.com/water
cate program in renewable fuels technology. The program is specifically designed for students who want to upgrade or obtain new skills to work in the ethanol industry. The 17-hour certificate program includes courses in ethanol process fundamentals, mechanical fundamentals (pumps), piping and instrumentation diagrams, fundamentals of electricity for renewable fuels, process dynamics, microbial ecology, and instrumentation and control. If a student wants to obtain an associate’s degree, completed coursework within the certificate program will apply to the two-year associate of applied science degree in renewable fuels technology, Pohlman says. “In our two-year program we want to have someone who, when they are done, basically has a little bit of everything as far as the ethanol industry—some electromechanical, safety, the science part of the lab, maintenance,” he says. “There’s something in there that should make for phone: 800.525.0658
PHOTO: NORTHEAST COMMUNITY COLLEGE
EDUCATION
Instructor Randy Sigle, left, shares information with student Tammy Suckstorf
a really good shift supervisor when they are done.” The training partners envision the associate of applied science degree in renewable fuels technology will lead to
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select bachelor’s degrees at local fouryear colleges. “There’s an opportunity to have a two-plus-two with these four-year colleges and have [students] more on the level of either plant engineers or the head lab person who has a bachelor’s degree in chemistry so that they can help train and work with the people who have two-year degrees,” Pohlman says. An annual Ethanol Production and Management Symposium is slated to begin during the third year of the grant. Also envisioned are dual-credit and ethanol career exploration opportunities for high school students and training activities integrating student support services provided by the community colleges and the local career center. According to the Nebraska Renewable Fuels Training Web site (www.ethanoltraining.org), ethanol plants across the state have a wide variety of jobs, with salaries ranging from $25,000 to $100,000, that are open and in need of trained workers—or individuals willing to be trained. From high-school educated students to individuals beginning a second career path, Pohlman says, the specialized training provides many benefits— from hands-on experience to an intern-
PHOTO: NORTHEAST COMMUNITY COLLEGE
EDUCATION
Pictured is the first class of students enrolled in the two-year associate degree program at NECC. Bottom row left to right: Bob Funke; Brett Nelson; Clark Kullbom; Dave Murray; second row left to right: Randy Sigle, instructor; Andrew Roberts; Tammy Suckstorf; Chuck White; Joe Delancey; top row left to right: Andrew Roberts; Justin Jakub; Mark Janke. Not in the picture are Luis Lemus; Kevin Bretschneider; and Andrew Roberts, who started the program in January.
ship at a local ethanol plant. Through the use of a simulator, the college will provide students with the experience of operating an ethanol plant. “We can have 18 students at one time in a room working on six different ethanol plants and it’s exactly what you see on the monitor screens in [ethanol plant] control rooms and what’s happen-
ing during cooking, fermentation, and distillation. We can screw things up, like having the temperature too high on the fermentation, and they have to troubleshoot. That’s something they won’t get if they take traditional college courses. We are going to have the equipment and the facilities to be able to give them hands-on experience.”
EDUCATION
Pohlman says there was so much interest in the program, recruiting wasn’t necessary for the first class of 14 students currently enrolled in the two-year associate degree program at NECC. “I started last fall with great anticipation for the ethanol program, and it is as good as I had hoped,” says Shane Manchester a student from Dunkerton, Iowa, who was quoted in a press release about the program. “After just one semester, I could walk through an ethanol plant and understand just about everything that is happening throughout the whole ethanol process.” Educators realize there will be ebbs and flows in class size—but Pohlman says there is a lot support for the college biofuels training programs throughout rural Nebraska where ethanol plants greatly add to the local economy.
Central Carolina Gets Biofuels Grant The Biofuels Center of North Carolina recently awarded a $195,000 grant to Central Carolina Community College’s Biofuels Program. The funds will be used to purchase equipment for the college’s Biofuels Production
Laboratory at its Chatham County Campus in Pittsboro, N.C. Andrew McMahan, coordinator and curriculum developer for Central Carolina’s Biofuels Program, says the grant money will be used to customize the training program to meet industry needs. “We’ll have biofuels training resources that will be more comprehensive than those at any university in the state. The college is at the cutting edge on biofuels and we’re positioned to be state leaders in workforce development for this emerging industry.” Since 2001, Central Carolina has offered biofuels training through its Continuing Education Department. The college also plans to offer an associate in applied sciences degree in alternative fuels. “In our biofuels program, we are training students for the biofuels industry we have in North Carolina today, which is biodiesel,” McMahan says. “We are also looking forward to the day when we are able to turn any cellulosic material, such as wood chips and sweet potatoes, into fuels.” A Sustainable Technology Building, which will house the sustainable biofuels, sustainable agriculture, and green build-
ing programs, is being constructed on the Chatham campus. The Biofuels Center of North Carolina, located in Oxford, was established in 2007 with a $5 million appropriation by the state’s General Assembly. The center focuses on implementing the state’s Strategic Plan for Biofuels Leadership, and facilitates and supports the development of a sustainable biofuels industry in North Carolina.
Iowa’s Training Program Iowa is the leading ethanol producer in the United States, and it continues to grow. According to the training needs assessment of 10 ethanol plants conducted by Ruth Consulting Group, if the state wants to retain this position and attract new ethanol plants, Iowa must be able to provide a suitable workforce. From producers to educators and students, training is the key to providing and maintaining the workforce of the biofuels industries. Iowa Biofuels Training International is a nonprofit organization providing a one-stop resource and training center for the industry. Through a network of community colleges, four-year institu-
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EDUCATION
Anton Paar at FEW 2008
the years,” Clancy says. “Several hundred employees have gone through the Renewable Energy Group training process. The folks at Iowa Biofuels Training International came to us and said we’d like to put together a curriculum so that we can offer biodiesel training in Iowa and throughout the United States—they have even had folks from Europe visit to learn about specific pieces of the renewable fuels industry.” Clancy says REG’s own on-site training is more specific to its technologies and processes, but IBTI provides the necessary education to get someone started in the industry. “It’s hard right now to find people who have prior experience in the biodiesel industry,” Clancy says. “When we hire employees, and when the network plants hire employees, they are looking for people who have some mechanical background, are comfortable with computers, willing to learn and want to know about renewable fuels. Then we have to take them through training.” As in Nebraska, Clancy says students attending programs through IBTI are usually second-career individuals interested in getting into the renewable fuels industry. “As we grow we’re going to need employees who have experience and any sort of training that they can have before they come on board helps to expedite their training process and get them into the biodiesel industry more quickly,” she says. For more information on Iowa Biofuels Training International, visit www.biofuelstraining.org; for more information on Nebraska Renewable Fuels Training program visit www.ethanoltraining.org. EP
Get a closer look at our new solutions for fermentation monitoring - on special display at this year’s Fuel Ethanol Workshop, Booth 329, 331.
Hope Deutscher is the Ethanol Producer Magazine online editor. Reach her at hdeutscher@bbibiofuels.com or (701) 373-0636.
tions and experts, IBTI coordinates and provides comprehensive training programs for full-time ethanol and biodiesel laboratory, maintenance and operations positions. The organization also will match educational institutions and biofuels producers with potential workers. Renewable Energy Group Inc. of Ames, Iowa, which manages, operates and markets biodiesel plants, developed the biodiesel training curriculum for IBTI. Alicia Clancy, spokeswoman for REG, says the company had to train
employees for its wholly owned 12 MMgy Ralston, Iowa, facility. “We started training employees at that facility in 1996— how to make biodiesel, how to maintain it, the electrical system, safety training and that sort of thing,” Clancy says. REG now owns or manages a network of seven commercial-scale biodiesel production facilities. “At a 30 MMgy year facility, you are talking about approximately 30 employees per plant—so that’s quite a few employees that the Renewable Energy Group has trained throughout
Exceeding expectations
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Anton Paar® USA 800-722-7556 info.us@anton-paar.com www.anton-paar.com
ETHANOL PRODUCER MAGAZINE JULY 2008
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Ethanol
Takes to the
Skies Ethanol is the fuel of choice for Greg Poe but rather than using it in his flexible-fuel vehicle he uses it to fuel up his high-performance, aerobatic Fagen MX-2 airplane. By Rona Johnson
Air show pilot Greg Poe, back seat, flies his Fagen MX-2 over the construction site of the First United Ethanol LLC plant in Pelham, Ga. The plant is being built by Poe’s sponsor Fagen Inc. of Granite Falls, Minn. Craig Collins, Fagen’s plant construction manager, is in the front seat. PHOTO: GREG POE AIR SHOWS
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PHOTO: GREG POE AIR SHOWS
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hen air show pilot Greg Poe cartwheels across the sky in a maneuver he calls the Poe Pinwheel, the last thing he needs to worry about is the fuel that’s powering his airplane. His Fagen MX-2 plane was built for aerobatic flying and it runs best on 85 percent to 95 percent ethanol. “There are times when I’m flying the airplane literally upside down 15 feet above the runway, pulling a lot of gforce and tumbling the airplane nose over tail,” he says. Poe became aware of the benefits of using ethanol when a mutual friend introduced him to the Fagens, who own Fagen Inc., a designer and builder of fuel-ethanol plants based in Granite Falls, Minn. The Fagens were looking for a way to promote and educate the public about ethanol and their company, and Poe was in the market for someone to sponsor his air show. “We were introduced and spent some time talking about what they wanted to accomplish, and what my needs were in order to do that,” Poe says. In June 2006, they entered into a long-term contract. “As we did that I had a new airplane built, one that we thought would really serve Fagen’s needs and what they are trying to accomplish and let me demonstrate aerobatic flying and the use of ethanol better,” he says. Poe flew that airplane in 26 air shows in 2007. “We
Poe wows air show audiences with his aerobatic flying and educates them about ethanol. He uses 85 percent to 95 percent ethanol to fuel his Fagen MX-2 aerobatic airplane.
did some minor modifications,” he says. “We increased the size of the fuel supply lines, and we increased the size of the fuel pump so it had a little more output and that’s really about it.” The engine is considered a flexible-fuel engine because it can run on standard aviation fuel (100 low lead)
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‘Our engine runs significantly cooler on ethanol than it does with regular fuel, we get more horsepower than we do with regular fuel and, of course, it is just so clean.’
and ethanol blends. “When we are at a show and actually performing we try to run a mix of anywhere from 85 [percent] to 95 percent ethanol,” he says. “We mix just a little bit of 100 low lead with it but we try to run with a majority of it on ethanol because the engine runs so much better. We’re so much happier when we can run ethanol fuel.” Although Poe and his team are more than satisfied with their airplane’s performance using ethanol, making the switch wasn’t something that they did lightly. “We took it a step at a time knowing that I was going to launch an airplane on ethanol fuel,” Poe says. “You need to know that it’s right.” Poe relied on his operations manager, Dax Wanless, who has about 16 years experience in aviation aircraft
ETHANOL PRODUCER MAGAZINE JULY 2008
Poe’s Feature Maneuvers: Triple Vortex: a vertical tumble where the Fagen MX-2 spins like a top Hover: zero miles per hour forward speed Tsunami: the Fagen MX-2 appears to tumble like a wave Newton’s Folly: the Fagen MX-2 seems to defy the laws of physics Corkscrew: a wild, spinning ride following an 11 g pull to vertical Poe Pinwheel: The MX-2 cartwheels across the sky
mechanics and inspection, and research from Baylor University in Texas and the University of South Dakota. ”We very carefully would just use a small mix of ethanol at first and continue to change that ratio using less aviation fuel, and then we looked at the numbers from the engine monitoring equipment that would give us the temperatures and the fuel flows, and those kinds of things that we needed to know,” Poe says. “Our engine runs significantly cooler on ethanol than it does with regular fuel, we get more horsepower than we do with regular fuel and, of course, it is just so clean.” The aerobatics are just one aspect of Poe’s air shows, the other is education. People who attend the air shows get
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‘The airplane that I fly might be likened to an Indy car or a Nascar in that it’s made specifically for very, very aggressive unlimited aerobatic flying.’
pamphlets filled with ethanol facts and they have an opportunity to talk to Poe. “The questions are simple and very straight forward,” Poe says. “Where do I get it? How does it work? What does it cost? What are the mileage differences?
Why should I not use it? Why should I use it?” He also fields questions from other pilots. Although there are a few other airplanes that run on ethanol, they aren’t doing the same kind of aerobatic flying
maneuvers that Poe is doing. “We are the only ones at this time on the circuit that you would call an unlimited aerobatic airplane,” Poe says. “The airplane that I fly might be likened to an Indy car or a Nascar in that it’s made specifically for very, very aggressive unlimited aerobatic flying.” He believes, however, that more pilots would use ethanol if they had access to the fuel and were set up to use it. “People in the industry are watching what we’re doing and hear us talking about how much we like ethanol but we’re set up for that, we have support from our sponsor to help make all of that happen,” he says. Fagen not only sponsors the air show pilot but also secures the denatured ethanol that’s used to fly the airplane from plants where they have a relationship. The fuel is carried from show to show in a 24foot support trailer. Poe believes it’s just a matter of time before the infrastructure is in place to make the fuel more readily available for airplanes.
Inspired by Space Travel Poe’s interest in flying started in the 1960s when he was in grade school in Boise, Idaho, where he has lived most of his life. “The space program was getting heated up and that captured my imagination,” he says. “I followed it, really paid attention to all the missions on television and I would read all I could.” When he was a teenager he saved up $2,000 from part-time jobs to go to a local flight school.
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By the time he was 19 years old he had completed his flight training and was ready to get into some serious flying. “I became a commercial pilot, an instrument pilot, a flight instructor and did anything I could to fly,” he says. That included odd jobs, such as towing gliders and aerial banners for advertising. Then he became interested in aerobatic flying and started to get into some competitions and honed his skills. He also trained under a flight instructor and learned the basics, and worked as a test pilot for a company in Wyoming. “Beyond that it’s a matter of how far you want to take it,” Poe says. “It’s up to the individual to determine how much gas do you want to buy to put in that airplane. And you have to keep practicing, just out of a love and a passion for it.” Poe’s goal was to get into doing air shows, which not only costs a lot of money but also takes dedication. “There is no such thing as an overnight sensation in this business,” says Poe, who is 45 years old and has been flying in air shows for 15 years. Although Poe’s job may look dangerous as it is meant to thrill and entertain audiences, he doesn’t consider himself a daredevil and he doesn’t like the term stunt pilot. “The word stunt conjures up the notion that you are going to go try something and you hope it works,” he says. “If I was that uncertain about what I’m doing, I think I’d go fishing instead. I’m not a set your hair on fire, jump off of a building type of guy.” What Poe does takes a lot of practice and it’s highly choreographed.
as he will be performing in 22 air shows across the country for several million live audience members. “While I am flying there’s an air show announcer who explains to the crowd that I am running on ethanol fuel, so at the very least you raise the awareness level.” He also works with the local media in the communities where he has air shows, going so far as to take journalists up in the air with him. “We just flew the Columbus show and we were on the
front page of the local newspaper with a very large story about our use of ethanol, Fagen’s support of us and what we are doing,” he says. Although Poe practices his craft to perfection that doesn’t always make his job easier. He says the hardest maneuver he does is one he developed about 10 years ago called the Poe Pinwheel. “The reason it’s the hardest is the speed of the airplane, the angle of the airplane, they have to be just right and then the
Reaching the Public Poe is confident that his message about ethanol is being heard
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‘We don’t want to get stuck with standard aviation fuel because the airplane just doesn’t run as well.’
way that you input the controls needs to be just right or the airplane won’t go into that maneuver,” he says. “You really have to finesse the airplane to make it work or you will botch the maneuver and then it’s not very interesting looking.” The one thing he doesn’t have to worry about when he does that difficult maneuver is his fuel. “We’ve reached the point now where we just started being very cautious about ethanol to where we’re sure we’ve got enough for every time I fly,” he says. “We don’t want to get stuck with standard aviation fuel because the airplane just doesn’t run as well.” For more information about Greg Poe Air Shows visit his Web site at www.gregpoe.com. EP Rona Johnson is the Ethanol Producer Magazine features editor. Reach her at rjohnson@bbibiofuels.com or (701) 738-4962.
Poe’s Air Show Schedule: June 14
Thunder over Nampa, Nampa, Idaho
June 28-29
Arctic Thunder 2008, Anchorage, Alaska
July 3
Dubuque Airshow, Dubuque, Iowa
July 19-20
Duluth Air & Aviation Expo, Duluth, Minn.
July 28-31
EAA Air Venture, Osh Kosh, Wis.
August 8-10
Fly Iowa, Storm Lake, Iowa
August 16-17
Offutt Air Force Base Airshow, Omaha, Neb.
August 20
Thunder over the Boardwalk, Atlantic City, N.J.
August 23-24
Indianapolis Airshow, Indianapolis
September 13-14 Gunfighter Skies 2008, Mountain Home Air Force Base, Idaho October 4-5
Amigo Airshow, El Paso, Texas
October 11-12
Alliance Airshow, Fort Worth, Texas
November 1-2
Lackland Airfest, San Antonio
December 8-11
International Council of Air Shows Inc. Convention, Las Vegas
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EMPLOYMENT
Workforce Future Growth projections in the ethanol industry are being scaled back in response to the slowdown in new plant construction. As the current generation of ethanol companies mature, locating highly-skilled employees may be challenging. By Tom Bryan and Craig A. Johnson Photos By Craig A. Johnson
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K
risti Jean doesn’t work with biofuels. She is seated, and on the screen in front of her are enlarged images of black and white cubes. The only sound in the room comes from a medium-sized cooling fan. “This is sugar,” she says, magnifying the image, then closing it and opening another. “This is Splenda,” she says, pointing at what looks like a fuzzy worm but in crisp detail. “That’s what happens with the addition of just a little chlorine.” The machine next to her is an electron microscope, the newest piece of hardware available to students entering the Wahpetonbased North Dakota State College of Science’s Biofuel’s Technology Program. Jean is the program director for the counterpart program in nanoscience technology. Students entering the biofuels program study alongside students in nanoscience in the hope that developing an understanding of one another’s field will generate inquiry and advances in both fields. This kind of “cross-pollination” is intended to lead to greater awareness of the broad range of skills needed in modern and future ethanol plants. Students graduating from the program will be prepared to enter an industry that will increasingly look toward “lean manufacturing.” Companies will likely be searching for employees with a broad skill set and the capability to not only understand the science and engineering behind the manufacturing processes used, but also have the ability to work with their hands in the operation, calibration and repair of the equipment used in the industry. According to Michael Burke, program director for the biofuels technology program, students preparing to enter the ethanol industry need to be prepared for the industry’s mutability. “This industry is going to change with time, as we move from starchbased to cellulosic-based [ethanol],” he says. “There is an under-
standing today that what is in place now isn’t going to be the focus five years from now.”
Finding Talent AGRI-associates Inc. recruiter Dick Johnson sees education as a vital component in developing a strong workforce. “This industry is not doing an adequate job of producing people of plant manager caliber,” he says. “The people coming up through the ranks, generally, are not college educated. They’re local young people who are hired to come in and run the plant, they’re trained by Fagen Inc. and ICM Inc. personnel, and they have high school degrees for the most part. The plant manager should to be a chemical engineer, and have someone with a biology or microbiology degree in the lab,” Johnson says. One difficulty stems from the way new plant operators start out in the field. Production managers tend to come up through the ranks, beginning their career on 12-hour shifts as part of a 16-person team operating a typical 100 MMgy plant. The ethanol industry needs to not only attract new college graduates with chemical engineering degrees, but then convince them to work for $12 to $20 an hour while they learn the plant, Johnson says. In addition to the 12 production team members, there are four shift supervisors, one production manager and one plant manager. This leaves limited avenues for advancement to management position. According to Johnson, another problem is that many students can’t seem to stay in school. “[Schools with ethanol production curriculums] have trouble keeping students in school for two years,” he says. “Companies are coming in after the student has only been there a year and pulling them out. That’s an indication of the advantage seen by the employers to that kind of training.”
EMPLOYMENT
Tom Branhan, chief executive officer of Glacial Lakes Energy LLC in Watertown, S.D., echoes Johnson’s concern over not finding and developing talent. “Overall it’s getting harder and harder to find qualified people to run these plants. And it’s getting harder to retain those people. With so many new ethanol plants, people are jumping ship looking for better situations.” One way to combat this problem is to hire locally, which Branhan says Glacial Lakes tries to do whenever possible. “What we’ve done here is go to hiring local folks who are more apt to stay in the area because they have roots here, and putting a lot of time and effort into training those people,” he says. “This includes sending them to technical schools and classes. What you’re doing is to train those people, bring them up to speed, you pay them well, give them decent benefits, and you hope that their roots—a wife that works here, family in the area—keeps them here.” Glacial Lakes goes further than most when it comes to investing in employees. In order to realize the greatest return on their investment, the company will hire a plant manager in advance. “We’ll hire a plant manager a year before we let him go into a new plant,” Branhan says. “They have to train here, at Watertown in our corporate office for a full year, before we’ll let them go and operate a facility. That’s not easy for a grassroots plant, obviously, since they don’t have a plant to train in.” The investment in the plant manager is the most important for Glacial Lakes since much of the plant’s success hinges on their competence. However, the company also looks to build a solid team to surround this person. “We’ll hire an operations manager six months in advance and a maintenance manager at that same time. Then they’ll go to the new plant a month, or month-and-a-half before it starts up. By the time they leave here they’re highly com-
North Dakota State College of Science’s new electron microscope will allow biofuels and nanoscience students to see deep into their subject.
petent and highly trained. If they’re not, we have plenty of time to make a change. Secondly, they take our culture. They know our culture from being here a year. And thirdly, when they go to a job fair they know the kind of people they need.”
Local, Local, Local If the general managers of Wentworth, S.D.-based Dakota Ethanol LLC and Goldfield, Iowa-based Corn LP characterize industry norms, turnover has been less of a concern. “To be honest, I haven’t had to do much hiring because we have a very stable workforce,” says Scott Mundt, general manager of Dakota Ethanol. “I guess that lack of turnover has kept me out of the hiring marketplace.” Mundt and his managers understand the importance of
EMPLOYMENT
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employee retention strategies, but he credits a simpler factor for their success. “What we provide is a good job for this area,” he admits. “We’re a good addition to the economy here, and these are interesting and competitive jobs.” Wentworth is a tiny community— officially only a couple hundred people live there—that is seven miles from Madison, S.D., and 40 miles from Sioux Falls, S.D. Most of Dakota Ethanol’s employees live within 20 miles of the plant, Mundt says. Likewise, Corn LP’s staff is comprised almost entirely of local people. “We have really been fortunate in our ability to hire qualified local people,” says Brad Davis, the general manger. “Quite frankly, there are a few exceptions, but we have had the best luck hiring local people who have never worked in the ethanol industry and training them in. … I think that’s one of the reasons we haven’t suffered like some companies do with turnover.” But there are exceptions. Davis says Corn LP has at times hired experienced ethanol plant employees for specialty positions. “Some positions you just can’t train in quickly,” he says. “You need them to hit the ground running.” While Mundt was not employed by Dakota Ethanol when the plant started up in 2001, Davis was on board with Corn LP well before the plant started up in late 2005. The plant’s management team— plant manager, maintenance manager, etc.—was put in place before the other 35 or so employees were hired, Davis says, explaining that Corn LP usually keeps between 37 and 39 people on staff. “We run on coal,” he explains. “That means we need three or four more people than a typical plant our size.”
Reputation is Everything Every new ethanol plant must quickly prove to locals that it is an upstanding employer. However, as part of the Golden-Eagle Co-op, Corn LP was “a bit of a different animal,” says Davis, who manages both the ethanol plant and the
cooperative that owns and operates it. “We already had an established reputation,” he says. “People knew we were a good place to work and we had that going for us from the start. … On the other hand, we hired the entire staff of the ethanol plant at startup, and we didn’t transfer any employees out of other positions at the cooperative. They were all new hires.” It is also becoming increasingly common for ethanol plants to hold job fairs prior to their startups. Davis says Corn LP didn’t exactly hold a job fair, but it did put on a program introducing the company to the community. He says the event was a sort of an “ethanol 101” seminar combined with information about the ethanol plant and the cooperative. “We talked about ethanol production, the dangers, the myths … and we explained our culture— what it already was and what we thought it would become,” Davis says. “Being already established as a cooperative we were able to really tell people with confidence what kind of company they might be working for.” Davis says job fairs and pre-startup hiring programs are effective because they give employers and potential employees a chance to get familiar with each other. The key, Davis says, is to make the process easy and straightforward for job candidates. “We let them know exactly what was going on,” he says. “They walked away knowing how our hiring process worked, from applications to interviews to hiring. By the time someone got their resume in to us, they totally understood the program and they knew it would be a certain amount of days before they would be contacted. It wasn’t a job fair, perhaps, but it was a big information meeting and it was great to have.” The challenge of hiring and training an entire staff is now well behind Corn LP and Dakota Ethanol. Today, they’re focused on the art of employee retention. With 162 ethanol plants now on line in the United States—nearly 20 starting up since the beginning of the year—and another 42
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under construction, some producers might be concerned that their competitors will be “picking off ” their managers and operators. But while Davis and Mundt had distinctly different views of “headhunting,” neither feared that they would lose people to the practice as the industry’s build-out to 200-plus facilities continues. “We think [headhunting is an] absolute taboo,” Davis says. “We don’t do it. You’re robbing Peter to pay Paul. It’s a chain reaction that increases the wage factor by X … and if you’re not careful you can increase various salaries 30 percent to 40 percent by playing that game, trying to pick off employees from your competitors. I do not believe we have ever hired someone that way.” However, that’s not to say Corn Plus hasn’t hired people that have worked at other ethanol plants previously. “We have advertised jobs and brought someone in from a plant in another state or a long ways away,” he says. “But we haven’t actively gone out to a nearby facility and taken an employee. What we have done is different than if someone is living in an area where they could potentially work at three different ethanol plants and never leave the community they’re living in. Three ethanol plants within an easy commute … a person could work them pretty well if the plants allowed themselves to be worked. So we think that’s taboo and we don’t touch it.” While Mundt is not a strong advocate of headhunting, he sees the practice virtually inevitable in a growing, competitive industry. “I am never one to stand in the way of someone who is going to improve themselves or improve their career,” he says. “And if that means employees with some ethanol background end up moving from one plant to another—hopefully in a vertical promotional type of move—I think that’s good.” Mundt says the fear of losing employees to new ethanol plants that have come on line since the start of 2008 doesn’t keep him up at night. “We’ve had some new plants come on line in the region and it
really hasn’t been a big issue,” he says. “Some people have expressed interest, and I have been open to it if people can improve their career or their life situation. I certainly don’t want to stand in the way of that. So far, we’ve been lucky with low turnover.” Davis essentially shares Mundt’s confidence when it comes to employee retention. He knows Corn LP is a good place to work, and he’s lost few if any employees to headhunting so far. “The possibility of losing employees is always a concern and anyone in management that chooses not to believe that it could affect them is probably going to get picked off,” he says. “Given that you are competitive in the areas of reimbursement, which includes wages and fringe benefits, then there is absolutely nothing more important than your culture and the reputation of your company, and to treat your employees with respect. They absolutely have to enjoy coming to work. If you’ve got that, you have little to worry about. … As we all know, job satisfaction is not 100 percent reimbursement. There are so many other things that are a part of that. At the same time, that doesn’t mean you can risk being uncompetitive in the job market either.” If and when ethanol plants do lose people, hiring locally is always ideal. Dakota Ethanol only loses about one employee a year. When that happens, Mundt says he relies on resumes that come from referrals, walk-ins and advertising in the local media. “We just screen through resumes and search for the best candidates,” he says. Both Mundt and Davis say local employees are loyal, reliable and often ready to start working immediately. “We’ve been lucky where we really have not had the need for a specialty person that we couldn’t find locally,” Davis says. “They’ve all been trainable positions and people who could be hired locally.” But as all employers in small towns know, hiring locally has its drawbacks. Employers in these communities say they
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often feel like the “low-hanging fruit” has already been picked. “Honestly, you really do have to be careful with the candidates that are out there,” Davis says. “There’s sometimes a reason why certain individuals are not working. So you’re always looking for those employees that have the potential to be great employees, you know, great finds for the company.”
Big Picture Jobs at U.S. ethanol plants for the most part, seem to be fixed. With the exception of a few title differences, there does not appear to be much variation in positions from plant to plant. And despite the innovation that’s taking place at many of these facilities, newly created positions are few and far between. “We’re not seeing those new positions here,” Mundt says. “The tasks that need to be accomplished by ethanol plant employees these days have remained pretty consistent.
Typically plants our size—50 MMgy—have 35 to 40 people. A 100 MMgy plant might have 50 to 60 people. But it’s remarkably similar in the staffing. Sometimes you’ll see things tweaked a little bit in the departments but overall it’s pretty consistent. You just don’t hear about a 50 MMgy plant being run with 25 people, and likewise you don’t see them being run with 70 people; 40 is kind of where it’s at. Not much is changing in that respect. Although job titles and functions may vary—and some people wear several hats—the workforce is fairly standard and unchanging. It’s a 24/7 operation that is really focused on one thing—ethanol production—and we’re able to do that with relatively few people.” As one would assume it’s easier to find good ethanol plant employees in the Midwest, where the facilities are concentrated, than on the East or West coasts, where many people are still unfamiliar with the
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renewable fuel and few plants exist. Mundt says being in the heart of ethanol country puts Dakota Ethanol in a strong hiring position. In the Upper Midwest, the available workforce, like vendors and service providers, are simply comfortable with ethanol plants. “That’s something we even see from the suppliers and service providers we buy equipment and services from,” he says. “They are starting to see higher levels of expertise—technical expertise and knowledge about ethanol production—and that’s a benefit to this industry,” Mundt says. “When you’re novel and new and on the outskirts of the Corn Belt, I would look at that as more challenging.” Almost nothing is more important to the reputation of the workplace as wordof-mouth. It’s important that employees enjoy their jobs and tell people about it. “We have 175 people who work between the ethanol plant and the cooperative,” Davis says. “Those people live in the surrounding communities and attend church and school meetings together, socialize in restaurants and bars and frankly it’s hard to attend any function where at least part of the conversation doesn’t turn to work. Negative conversations about a particular workplace can devastate you. Positive ones will help you. It’s extremely important.” Like any good business, the ethanol industry must remain cognizant of its greatest asset: people. Creating a solid team takes time and money, surely, but putting employees together is not enough. Developing their skills, honing them and turning them into the best team possible are the single greatest challenges for any company. EP Tom Bryan is editorial director and Craig A. Johnson is plant list and construction editor for Ethanol Producer Magazine. Reach them at tbryan@bbibiofuels.com and cjohnson@bbibiofuels.com or (701) 7384962.
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OUTLOOK
Blame it on
Price-Distorting Agriculture and Trade Policies The latest controversy over food versus fuel started in February when two different studies theorized that demand for corn to make ethanol would not only increase food prices but also alter global land-use patterns and could have a devastating affect on climate change. But some researchers say the recent hike in food prices is the product of agriculture and trade policies that have caused global land-use patterns to shift over several decades. By Anduin Kirkbride McElroy
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T
he now infamous studies that were published in Science magazine this February claimed that land-use change for biofuel crops actually increases overall greenhouse gases because it incites land-use change elsewhere in the world. These studies, published as food and fuel prices rose, incited a “biofuel backlash,” as one mainstream media headline termed it. Suddenly, it seemed as if corn ethanol was being attacked on all fronts, being blamed for higher food costs, fuel costs and even climate change. EPM spoke with an emissions expert and a land-use expert who say that agriculture and trade policies have much more to do with food prices and land-use change than ethanol. They even suggest that ethanol may be helping the situation. First, it’s important to understand what is meant by land-use change impacts, as it’s the core of the debate. There are direct and indirect impacts from land-use change. When land is put into production for the first time, there are three primary direct impacts, according to Don O’Connor, president of (S&T)2 Consultants Inc., which specializes in greenhouse gas emissions calculations and transportation policy. The direct impacts are change in soil carbon and change in above ground biomass and nitrogen emissions from the application of fertilizer. “When you grow any crop and cultivate the soil and add fertilizer, you get emissions that arise from that,” O’Connor says. “When you apply nitrogen fertilizer, some small amount ends up adding to the environment. Tilling the soil can change the carbon content, depending. There are also methane emissions independent of cultivation use.” This much is fairly well studied and understood, he says. Greenhouse gas emissions calculations from direct impacts are standardized across the globe and used in compliance with measurements for the Kyoto treaty and
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national regulations. “Lifecycle analysis models, like GHGenius, allow you to look at where the land you’re putting into production comes from,” O’Connor says. “You can factor in the soil carbon impact and what the biomass was. You have to develop a scenario on what might happen with soil carbon. You need to understand the future scenario of what you’re modeling and whether increased production is coming from fertilizer, land or distillers grains displacement.” Also understood is how to measure a change in these emissions. Practices such as no-till, reducing summer fallow and more precise application of fertilizer have dramatically affected emissions from production agriculture in recent years. “In Canada, the greenhouse gas emissions from land-use change have changed dramatically for the better over the past 15 years,” O’Connor says. “Of cropland remaining as cropland, in 1990 there were 2.6 million tons of carbon dioxide equivalent stored in the soil on an annual basis. In 2005, that increased to 10 million tons per year. That’s just from changes in agriculture practices.” Less understood are the indirect impacts. The studies published in Science magazine said land conversion affects markets, with the worst case scenario being that farmers in Brazil are forced to turn rainforest land into farmland to meet the demand for soybeans that American farmers aren’t meeting. “All of the studies [in Science magazine] quickly go into chopping down rainforests,” O’Connor says. “The fact is the UNFAO (United Nation’s Food and Agricultural Organization) says we’re only using onethird of the world’s arable land. We could use underutilized pasture land.” Beyond that, O’Connor questions whether the idea of indirect impacts is the right way to look at the issue. “The interesting thing is indirect emissions deal with a future scenario, so no one can be proved right or wrong,” O’Connor says. “If you’re already doing
ETHANOL PRODUCER MAGAZINE JULY 2008
Driving Food Prices Down It wasn’t too long ago that food policy think tanks and aid organizations were decrying farm policies in the United States and Europe that depressed food prices. That’s right, low food prices were the problem. In July of 2003, Kevin Watkins, head of research at the aid organization Oxfam International, wrote an article urging developed countries to reform farm policies. “Industrial country agricultural support is destroying the livelihoods of poor farmers across the developing world, reinforcing an unequal pattern of globalization in the process,” he wrote, explaining that northern agricultural policies were destroying the markets on which subsistence farmers depended. “High levels of agricultural support translate into increased output, fewer imports, and more exports than would otherwise be the case. Small farmers in developing countries suffer damage through various channels. Subsidized exports undercut them in
ETHANOL PRODUCER MAGAZINE JULY 2008
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putting more land into production. We don’t have all the answers. Ethanol is at the beginning, and it will definitely affect the development and use of more land.” The food debate is intrinsically tied to land use, O’Connor says. “It’s the question of where does the additional productivity come from. If you increase demand too far, too fast, the systems can’t respond. If biofuels can be criticized for anything, it’s that they were too profitable in 2004 and 2005. That increased demand, and brought to the forefront a situation that has been simmering on the backburner for a long time.”
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it, indirect emissions have become direct emissions.” He argues that land productivity is really the issue. “I’m not convinced that we need to bring new land into production,” he says. “World corn production is 700 million tons per year. We could get about 50 percent more corn without bringing a single additional acre into production.” The many ways to increase productivity include changing the variety of crop that’s produced and increasing fertilizer. “There are a lot of things that can be done other than increasing land,” O’Connor says. “The studies ignored those. It all has to do with productivity and how much production you can get out of the land. If you don’t apply the best techniques, the same amount of land produces less of a product every year. Then you either need more land or better management to get the same amount of product.” Of course, there are impacts from increasing productivity in other countries as well, but O’Connor considers those direct, local impacts. If farmers increased productivity, direct emissions would be increased, but on a per unit of corn basis it’s not going to have a significant impact, he says. “Most of the lifecycle analysis has been done on a high-input basis,” O’Connor says. No one has looked at a low-input scenario and done a lifecycle analysis on that.” Soji Adelaja, the director of the Land Policy Institute at Michigan State University, agrees that there’s a choice between converting land and increasing efficiency. “I’m concerned about implications for chemicals,” Adelaja says. “Whenever market demand increases, there are two ways to respond: increase efficiency (chemicals) or increase by
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global, and even local, markets, driving down household incomes. Meanwhile, those seeking access to northern markets have to negotiate some of the world's highest trade barriers.” In May of that same year, Africa Recovery, a United Nations organization, concurred in an article by Gumisai Mutume. “The practice of paying such subsidies to farmers in industrial nations is facing increased opposition from developing countries, which charge that subsidies foster unfair trade and flood world markets with cheap goods, thereby eroding commodity prices.” The subsidies distort the whole commodities trading system, O’Connor says. “We have trade barriers and trade subsidies that are more prevalent than many other commodities,” he says. “As a result, we totally distorted commodities. That made it impossible for producers in developing countries to survive. The way the world has responded to the problem of not enough food in the right places in the past has been the wrong thing to do. It’s like the proverbial fish. What we’ve been doing is giving people fish rather than putting in place an environment where people can fish for themselves. We’ve done that by putting subsidized food products on them.” The subsidies O’Connor is referring to aren’t small. “It’s hard to find a sector that has had more government involvement in fundamental production economics than production agriculture,” he says. “The developed world has been supporting agriculture to the tune of $250 billion for the past 40 years. That represents one-third of farmers’ revenue. What that has done has been great for farmers in the United States and Europe, but if you happen to be in a country whose government is so poor they can’t afford to subsidize, local farmers can’t grow
ETHANOL PRODUCER MAGAZINE JULY 2008
OUTLOOK
‘If anything, biofuels have improved sustainability of food in the developed world, and have the potential to do it in the developing world. But they can’t do it overnight.’
a crop and make money. One could argue that we’ve had a food crises brewing for the past 50 years. Farmers’ ability to plant next year’s crops were dependent on their government’s ability to bail them out of their current situation. That is not a sustainable proposition.” These backward agriculture and trade policies have significantly contributed to decreased productivity in the developing world. There are, of course, social, political and economic factors as well. For example, look to Haiti’s recent rice crisis. According to reports, Haiti went from being almost entirely self-sufficient in rice production to being almost totally dependent on U.S. rice exports, mostly because the local farmers couldn’t compete with the cheap grain. O’Conner points to Peru’s sugar industry as similarly affected by trade policy. “I went to Peru and looked at their sugar situation to make ethanol,” O’Connor says. “In 2005, they almost had sugar production up to the level it was in 1968. In 1968, the government nationalized the sugar industry and made foreign companies leave the country. By the early 1990s, the industry was depressed and foreigners were brought back in. Most sugar plantations ended up with foreign participation. In 2005, production was almost back up to where it was. You will find examples of that in many countries.” Brazil is an example of distorted corn markets. It is the world’s third largest corn producer after the United States and China. “The average yield is 40 percent of what it is in the United States,” O’Connor explains. “Instead of 150 bushels per acre, it’s 60. Nitrogen fertilizer application is only 20 percent of that in the United States. At $2 per bushel and zero government support, they can’t afford to fertilize. They depend on what’s leftover from the soybean crop.” “To a certain degree, higher crop prices are a good thing,” O’Connor says. “Now, $4 corn means that it’s sustainable. A producer in Brazil can afford to put fertilizer on his crop at $4 bushel. If that happens, a producer in an even less developed country can afford to get back into the agriculture business and not be driven by the subsidies of the developed
ETHANOL PRODUCER MAGAZINE JULY 2008
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OUTLOOK
world.” Adelaja cautiously agrees that higher food prices can be good—at least for farmers. “Farmers are price pickers,” Adelaja says. “They don’t set the price of their products—markets set it. Agriculture products are competitive. If farmers are price pickers, profitability will drive up in agriculture. Does that increase in profitability turn into viability? It may bring a new viability to farms that could
enhance the long-term viability of agriculture land.” Cost isn’t the only reason that many farmers in developing countries can’t afford to use production inputs. “Markets are not well defined to provide inputs,” Adelaja says. “Theoretically, productivity could increase, but there are some strategic barriers that are not conducive. In many countries we’re talking about peasant farmers. They are subsistence farmers
who have to feed themselves. If food prices go up can they afford to increase the use of inputs in production?” Adelaja adds there are many issues that have kept productivity down in developing countries. “There are financial, market, credit and mechanization issues,” he says. “They have the whole issue of crop loss and limited access to chemicals and fertilizers. They will have to use inputs more intensely. The chemical part is of most concern. If more countries are increasing productivity to feed themselves, then we need to worry about the environmental implications of increased chemicals. The other thing to keep in mind is that in many developing countries, migration is from rural areas to urban areas. Can rural capacity meet demand? There are real constraints to agriculture development in many countries, and real questions of whether they can even do it.” “This is an extremely complicated issue,” O’Connor says. “What bothers me most about these senior officials blaming biofuels for the food crisis is, I think they’re trying to divert attention from their actions for the past 40 years. This problem has been brewing for an awful long time. If anything, biofuels have improved sustainability of food in the developed world, and have the potential to do it in the developing world. But they can’t do it overnight. They’ve been kicked around for past 30 years. They have a chance if corn is $4 or $5 per bushel, but they have no chance if corn is $2 per bushel. These government officials who’ve been bringing us $2 corn have a lot of explaining to do.” EP Anduin Kirkbride McElroy is an Ethanol Producer Magazine staff writer. Reach her at amcelroy@bbibiofuels.com or (701) 738-4962.
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National Forest
Biomass Off-Limits for RFS In national forests from Arizona to Montana, thousands of slash piles left by the timber industry could be used to produce cellulosic ethanol. Before that can happen, the language in the Energy Independence & Security Act must be changed. By Hope Deutscher
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rom renewable energy companies to private organizations, many entities see the potential for energy derived from biomass sitting in piles in the United States’ 155 national forests. The Energy Independence & Security Act of 2007, which was signed into law in December, includes a historic 36 billion-gallon renewable fuels standard (RFS), a portion of which will be made from biomass. A last-minute change in the legislation’s definition of renewable biomass, however, prevents almost all federal land biomass—such as trees, wood, brush, thinnings, chips and slash—from counting toward the mandate if it is used to manufacture biofuels. “At times we get calls for prospective biomass consumers and cellulosic ethanol investors who want to know how much wood the Black Hills can provide,” says Blaine Cook, a forest silviculturist with the Black Hills National Forest, who is also the biomass coordinator for the forest. Currently there are 3,126 slash piles in the Black Hills National Forest from saw timber harvest and thinning, which Cook says is equivalent to 239,000 green tons. And there are slash piles totaling more than a million tons (air dry) that are 1 to 4 years of age in the forest. U.S. Sen. John Thune, R-S.D., notes that biomass was eligible to be counted toward the 2005 RFS, but when the 2007 energy package was crafted behind closed doors, it changed the way that waste material from national forests could be used. “America’s national forests provide one of our greatest renewable resources,”
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Thune says. “To exclude slash piles and other wastes from within our national forests to be counted towards the renewable fuels standard simply makes no sense. It is unfortunate that the harmful definition of renewable biomass was inserted by the House Democratic leadership at the last minute, and it is critical that Congress fix this definition before the new RFS rules take effect on Jan. 1, 2009.” The U.S. Forest Service, timber and alternative energy groups have met with South Dakota’s congressional delegation to discuss the exclusion of this biomass from the federal Energy Bill. Thune and U.S. Rep. Stephanie Herseth Sandlin, D-S.D., have since introduced separate bills to change the definition of renewable biomass, as it was written in earlier versions of the bill. The legislation also promotes the development and use of cellulosic ethanol derived from woody biomass on federal lands. The Black Hills National Forest, a dense ponderosa pine forest covers an area 125 miles long and 65 miles wide in western South Dakota and northeastern Wyoming. “This provision not only discourages the use of such biomass, but in doing so could result in a decrease in responsible forest management by denying land managers an important outlet for the excessive biomass loads that often accumulate on public lands,” Herseth Sandlin says. “Amending the definition of renewable biomass in the Energy Bill will greatly improve our ability to manufacture renewable energy from our forestlands, both public and private, all over the country. This would bring tremendous benefits, not only to our environment, to forest health, and to our
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national security, but it will also provide an economically viable outlet for forest byproducts that could revitalize the local economies of hundreds of small forest communities across the country, including those in the Black Hills.” Herseth Sandlin’s bill significantly broadens the definition of cellulosic ethanol within the RFS to include more biomass gathered from federal land and would allow RFS credit for broad categories of biomass from nonfederal and tribal lands including agricultural commodities, plants and trees, algae, crop residue, waste material (including wood waste and wood residues), animal waste and byproducts (including fats, oils, greases and manure), construction waste, and food and yard waste. The Renewable Biofuels Facilitation Act was cosponsored by a geographically diverse and bipartisan group, including representatives Greg Walden, R-Ore., Peter DeFazio, D-Ore., Bart Stupak, D-Mich., Mike Ross, D-Ark., Chip Pickering, R-Miss., Jo Ann Emerson, R-Mo., Bob Goodlatte, R-Va., Jo Bonner, R-Ala., and John Peterson, R-Pa. Under the proposed legislation, biomass projects conducted on federal lands would still have to comply with federal and state law, as well as applicable land management plans. On Feb. 7, the Senate Energy and Natural Resources Committee held a hearing on the RFS. The National Forest System and Forest Service, an agency of the USDA, manages 155 national forests and 222 research and experimental forests, as well as 20 national grasslands and other special areas, covering more than 192 million acres of public land. The national forests, which were first called forest reserves, began
PHOTO: SARAH ASHTON, FOREST BIOENERGY
POLICY
Slash piles, consisting of tree tops and limbs left by the logging and timber industry, lie in a clearing of the forest.
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POLICY with the Forest Reserve Act of 1891. The act allowed presidents to establish forest reserves from timber-covered public domain land. Throughout the years, leaders and visionaries have worked with scientific and conservation organizations, and forest professionals to retain millions of acres of federally designated forest land for future generations. Black Hills National Forest officials say their goal is to have a healthy forest that is green, diverse and productive, and provides homes for wildlife and fish. The forest is actively thinned to fend off mountain pine
beetles and reduce the risk of crown fires. The logging and timber industry also helps the forest service thin the forest. “We’re thinning and logging in areas of high risk from insects and fire so the bugs can’t get established and fires can burn at low intensity,” says Dave Thom, Black Hills national resources staff officer. Trees that are thinned and logged, and treated with prescribed burns don’t have to compete with so many other trees for water and nutrients. They grow faster, are healthier and result in stronger more resilient forests, Thom says.
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Energy Source KL Process Design Group, a biofuels design-build company based in Rapid City, S.D., recently started a cellulosic ethanol facility in Upton, Wyo. The company is utilizing wood chips from private landowners in the Black Hills. “The Black Hills National Forest has several pockets of private landowners within in it so we will be utilizing those particular pockets of wooded area for now. And, of course, our hope is that on the back end the Energy Bill will be changed and open that up.” A juvenile corrections facility south of Custer, S.D., which just put in a biomass furnace, and a Rapid City cabinet maker are also using wood waste from the forest. All three sources just want a couple trucks a week, Cook says. “The remaining piles out there reach a point of starting to decay and once the wood fiber starts to go, after about a year and a half, they are burned,” he says. Tom Martin, media relations manager for KL Process, says the company is working with the state’s congressional leaders to change federal policy. “We’re trying to work hard with our congressional leaders in South Dakota to perhaps get some concessions on that or even turn it around,” Martin says. “We don’t think from a usable standpoint that it makes a lot of sense, it kind of takes the teeth out of the cellulosic part of the Energy Bill, and so we’re working hard to try and get that turned around a bit.” At public meetings, KL Process President Dave Litzen has said the biomass in the Black Hills National Forest slash piles could produce 30 million gallons of ethanol.
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Not everyone supports the idea of taking waste wood from a national forest and using it for energy. WildEarth Guardians, a conservation group based in the southwestern United States supports climate and energy change through energy conservation and appropriate sustainable ETHANOL PRODUCER MAGAZINE JULY 2008
POLICY energy, but it doesn’t support rewriting the renewable energy legislation to include biomass from federal forest lands. "The bottom line is that we don’t believe our federal forests have a role in the new energy economy,” says Bryan Bird, WildEarth Guardians’ Wild Places program director. “As much as we are striving for new clean energy sources—and biofuels and biomass may have a role in that—we don’t think the federal forest lands are a place for that.” WildEarth Guardians was formed earlier this year when two regional conservation groups in the southwestern United States, Forest Guardians and Sinapu, merged to create one organization dedicated to protecting and restoring wild places, wildlife and wild rivers from the Great Plains and desert Southwest across the Rockies and through the Intermountain West. Bird, who has more than a decade of experience in grassroots efforts working on national forest policy and management, oversees WildEarth Guardians’ hands-on ecosystem restoration project and is responsible for monitoring and challenging proposed activities on public lands such as off-road vehicles, logging and road building that threaten areas within the southern Rockies, the Gila Bioregion, and the Sagebrush Sea. For several decades there was a balanced control of federal forest policy, with the logging industry setting the agenda and policy of federal national forests and, to some degree, the Bureau of Land Management, Bird says, adding that grassroots activists like himself want to maintain the management of the national forests as was originally intended. “For many years the management of these national forests was driven by timber economics and people,” he says. “Public land activists worked hard to shift that balance back towards, not only multiple use, but what we consider to be the real value
of our national forest systems which is providing air, water, wildlife and recreational opportunities. Those values far outweigh in our mind—in my mind—any that would come from producing a biofuel or electricity from biomass.” Bird says it’s that background that lays the foundation for his belief that public forests are not the appropriate place to source plant matter for biofuels. “As federal forest advocates, we are concerned that if we start to look to our federal public lands as a first for plant matter for bio-
ETHANOL PRODUCER MAGAZINE JULY 2008
fuels we’ll be back at square one where economics drive the management and policy of our federal forests. And unless there are incredibly strong safeguards in place to avoid that, we’re going to have to continue to not support sourcing from federal forests.” It’s a big assumption that only waste wood from the national forests would be used for renewable energy, Bird says. “Coming from a purely scientific, ecological perspective, a forest wastes nothing,” he says. “Forests have existed for millenniums without human intervention … insect infesta-
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POLICY tions, natural fires these are all critical regulating processes in natural forests. We tend, as humans, to look at fire and insects as somehow a blight or unnatural. … and yes, ascetically they can be. But from an ecological perspective if you are looking at these forests for their natural value and what they do from an ecological services perspective, those fires and insects serve a purpose. They are removing and refreshing these forests. It’s a false assumption to say that there is waste that comes from a natural forest.” Bird says he is supportive of cogeneration—for example, colocating a biofuels facility with a mill that has waste matter that would otherwise go to a landfill or incinerator. But he would like to see the national forests off limits. “We may begin, what I consider, mining our forests for energy, mining our public lands for energy,” Bird says. ”Whether it’s liquid fuel or electricity what we worry about ultimately is that if you open the door a crack to this concept of we can meet some of our energy needs from public forests, that door will get kicked open very quickly—we won’t be able to control the tide and we’ll be back to square one where these lands are being damaged and destroyed for our energy needs.” Bird, who is a Sierra Club member and chairs the national forest committee, says a policy has been developed by the commit-
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tee which is in line with the renewable Energy Bill, as it is currently written. However, representatives from the South Dakota Chapter of the Sierra Club have said their local chapter doesn’t oppose using wood waste from the national forests for energy. But they also don’t want the Black Hills National Forest to be used a as a fuel farm, and they insist that any biomass gathered for alternative fuels should be done within the existing forest management plan.
Burning Versus Benefitting Headquartered in Rapid City, the Black Hills Forest Resource Association is a nonprofit, membership-supported organization devoted to improving forest management, decision-making and policies on the Black Hills National Forest. BHFRA members support protecting the Black Hills’ forest environment while maintaining its relationship with dependent communities and economies. BHFRA Director Tom Troxel says the association supports HersethSandlin’s bill. “When the loggers are logging, they bring the trees into the landing where the tops and limbs are cut off,” he says. “And so we have these great big piles at every landing. For the most part they are just burned and there’s nobody that wants them left in the woods. The wildlife biologists don’t want those piles left at the landings. If those [slash piles] were all left in the woods, it would be a fire hazard and really,
anything that we can do now that would encourage any sort of utilization of that is common sense. If we can utilize it rather than burn it, then I think it benefits all around.” As more companies around the country research the use of wood waste as an economical alternative fuel source, Troxel says he would like to see federal policy support for that. “I’d like to see federal energy policy such that it would encourage use of these piles,” he says. “It’s an economic benefit and it fits into the whole energy independence a lot of folks are thinking about for the United States. If there’s a way that we can produce this energy here at home with our own resources, that’s a plus.” Troxel says for the foreseeable future there is energy potential from the biomass supply in the Black Hills National Forest. “I think there’s going to be an ongoing and continuous need for forest management in the Black Hills,” he says. “What I foresee for management strategies and logging systems is that there will be slash piles for a long time into the future that will be available for some sort of utilization.” EP Hope Deutscher is the Ethanol Producer Magazine online editor. Reach her at hdeutscher@bbibiofuels.com or (701) 3730636.
ETHANOL PRODUCER MAGAZINE JULY 2008
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SORGHUM
SWEET HA RV ES T Many years have passed since sweet sorghum made its debut in the 1800s as a possible substitute for sugarcane. The crop is now back by popular demand, this time as a potential ethanol feedstock. By Timothy Charles Holmseth
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ne hundred and fifty years ago sweet sorghum plants could be found swaying in the winds across southeastern United States. A U.S. patent officer brought the plant to the United States in 1853, according to the National Sweet Sorghum Producers and Processors Association. The plant was of interest as a substitute for sugarcane, but extracting dry sugar from the syrup proved to be too difficult. Sorghum production peaked in the 1880s and declined as it faced competition from sugarcane and sugar beets. Today, sweet sorghum is making its second debut as a versatile feedstock that can be used for food, fuel and animal feed. “It is the only crop that can save the United States,” says Ismail Dweikat, an associate professor at the University of Nebraska-Lincoln. An agronomy and horticulture expert, Dweikat says the speed bumps, headaches, economical and political challenges the nation presently faces as it attempts to wean itself from foreign oil could be avoided if we would focus on using the sugar from this 18-foot-tall energy crop to produce ethanol. “Despite controversy, support for nonpetroleum fuels remains strong,” he says. Dweikat spoke to attendees at the 13th annual National Ethanol Conference in February in Orlando using this quote from George Washington Carver to kick off his presentation: “I believe that the great Creator has put ores and oils on this
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earth to give us a breathing spell. As we exhaust them, we must be prepared to fall back on our farms, which is God’s true storehouse and can never be exhausted. We can learn to synthesize material for every human need from things that grow.” Dweikat believes that sweet sorghum can do the job of producing ethanol for the nation, and he’s giving it his personal letter of recommendation. Sweet sorghum is appealing on several fronts, he explains. “It doesn’t need additional irrigation so you can save money on irrigation,” he says. “It doesn’t need as much nitrogen as corn—50 to 60 pounds of nitrogen will give you a full crop of sweet sorghum,” he says, noting that one pound of nitrogen is required for each bushel of corn produced. Dweikat explains that the total biomass stover from corn is 4 to 5 tons per acre plus 150 to 180 bushels of grain per acre. Sweet sorghum trumps corn when produced and sold to cellulosic ethanol plants. Sweet sorghum typically yields 14 tons of biomass per acre. “If you are selling it for $40 a ton, that’s about $560 per acre. That would outDweikat produce corn, with less output,” he says, noting they both go for about $40 per ton. “Sweet sorghum requires half the amount of water that sugarcane needs,” Dweikat says. “It has more sugar on a plant
ETHANOL PRODUCER MAGAZINE JULY 2008
than sugarcane. “On a one crop basis, sweet sorghum out-produces sugarcane because sweet sorghum matures within 100 to 120 days, while it takes the first sugarcane crop one year to mature. Also on a volume basis, sweet sorghum has a higher sugar content than sugarcane. As sweet sorghum requires less water (one-third less than sugarcane) and has a higher fermentable sugar content than sugarcane (which contains more crystallizable sugars), it is better suited for ethanol production. Also, sweet sorghum-based ethanol is sulfur-free and cleaner than molasses-based ethanol, when mixed with gasoline,” he explains. Sizing it all up, Dweikat says quite plainly, “The more sugar, the more ethanol.” The net energy ratios of sugarcane and sweet sorghum are similar, with 1 input rendering 8 outputs, he says. “In corn … [the ratio] is 1:1.25,” he adds. David Cukierman, president and chief executive officer of Ethano Peru LLC in Houston, also finds that sweet sorghum is a better ethanol feedstock compared with corn. “The average corn yield in the U.S. is about 150 bushels per acre. The average ethanol yield per bushel is 2.8 gallons per bushel,” he explains. “That equates to an average production rate of 420 gallons per acre.” And it looks even better in certain areas of the country that have optimal growing conditions. The average sweet sorghum yield in the United States corresponds with two cuttings per year, in comparison to the four cuttings it renders
PHOTO: ISMAIL DWEIKAT
SORGHUM
These sweet sorghum plants reached 17-feet-tall in September 2007 at Lincoln, Neb. The plants were rain fed and grown in rotation with soybeans.
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in Peru, Cukierman explains. They are planning to test their hybrids in the South Texas Valley near the Rio Grande, he says, adding that cuttings are determined by global longitude and latitude and three annual cuttings are expected in that region. “[Ethano Peru] strongly believes that sweet sorghum is the future and the answer to the foodversus-fuel controversy based on tests with our own hybrids in Peru,” Cukierman says. Sweet sorghum also wouldn’t interfere with food production because it can be grown on marginal land, Dweikat explains. “You don’t have to use your best land,” he says. It’s also drought tolerant, he says describing that the plant behaves much like a camel. “It is more drought-tolerant than corn,” Dweikat says.
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Most commonly grown in Texas, Louisiana, Oklahoma, Nebraska, Florida, Kansas and Iowa, sweet sorghum has garnered some attention, and significant money has been invested to advance its growth. “In Florida, they have just approved a $54 million ethanol plant based on sweet sorghum ethanol,” Dweikat says. “In Louisiana, they are going to plant 750 acres this year to replace sugarcane because it requires less irrigation.” Testing is also underway in Nebraska and Texas, he notes. The crop has proven to be durable under the relentless heat of the Texas plains, where corn doesn’t thrive as well. “The Southeast grows pretty crap-
py corn,” says Juerg Blumenthal, associate professor and state sorghum cropping specialist at Texas A&M University. “One-hundred-bushel corn is common.” Biomass sorghum can endure periods of stress much better than grain sorghum or corn, he says. Although sweet sorghum can be grown a little further north, it has some issues with the cold winters, Dweikat explains. “The problem in the Midwest is that it gets killed by the freeze so you have to re-plant it every year, like corn” he says. “That’s one of the limitations here in the United States.” However, continuous testing and hybrids are being pursued to address the plants’ tolerance for cold. “We are trying to make sweet sorghum a cold-tolerant plant by introducing a rhizome to it,” Dweikat notes. He says indicators of sweet sorghum’s viability can be found across the globe where much testing is taking place. “In terms of acreage, the premier country that is using [sweet sorghum] now for ethanol is India,” Dweikat says. Belum Reddy, the principal sorghum breeder for the International Crops Research Institute for the SemiArid Tropics in Andhra Pradesh, India, says a future exists for this plant. “In the past 35 years, the ICRISAT has been doing continuous research to develop improved sorghum hybrid parents, varieties and hybrids,” he says. The crop is especially of interest because it can be used for food, animal feed and ethanol. “Farmers can harvest the grain for their food and then sell
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the surplus in the market,” he says. “The stalks of the sweet sorghum plants have sugar-rich juice in them. They can be crushed and used by a distillery to produce ethanol. The crushed stalk, after the juice is extracted [and the stripped leaves], can also be used as animal feed.” At a distillery not far from ICRISAT, sweet sorghum juice is being converted into ethanol at a rate of 10,000 gallons per day, Reddy says. “Ethanol can also be produced from grain sorghum,” he says, although ICRISAT encourages farmers to sell sorghum grain for ethanol only after all their food needs are met. With testing underway on several continents, sweet sorghum production is being observed in a variety of climactic conditions. With 750 acres of testing grounds on the coast of Peru, Cukierman says his company is rapidly discovering methods that will lead to sweet sorghum’s production as an ethanol feedstock on a worldwide basis. One issue producers face is finding seed, but research into corn hybrids is being used to remedy that situation. “In their native countries, seed is saved from sorghum plants by farmers to plant the next generation crop,” Cukierman says. Over time plant breeders discovered and applied hybrid vigor to corn that rendered a higher yield than either parent, and the concept eventually reached sorghum. “It involves producing and maintaining a male and a female line,” he says. Ethano Peru’s experimentation with hybrid seeds for sweet sorghum
has shown promising results. “Hybrids of sweet sorghum for Peru are very fast growers,” Cukierman explains. The cycle for one crop is 90 days to harvest. With that short of a growing cycle, four crops per year could be produced. Although the cost involved in breeding, producing, storing and marketing hybrid seed makes the cost of production relatively high, that cost is not prohibitive because the performance of the seeds is so high and more gallons of ethanol are produced with sweet sorghum, Cukierman says. Dweikat points to Brazil and its research advances over the past 30 years using sugarcane to prove that energy independence can be obtained. “[Brazil] announced last year that they soon expect to be oil free,” he says.
A Viable Biomass Alternative How does sweet sorghum fare in the viability arena? Dweikat says the plant meets or exceeds expectations. The criteria for determining the viability of biomass use for biofuels centers on four general areas: energy balance, materiality, sustainability and economics, he observes. “Does it yield more energy than is required to produce it?” he asks rhetorically, pointing out that sweet sorghum does. “Can it be produced at a large enough scale to be meaningful in terms of fuel supply?” he continues, stating that sweet sorghum certainly can. “The U.S. is capable of producing 1 billion dry tons of biomass annually—enough for 60 billion gallons of ethanol per year, [which is] 30 percent of today’s trans-
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PHOTO: ISMAIL DWEIKAT
PHOTO: ISMAIL DWEIKAT
SORGHUM
Adam Liska, a post-doctoral research associate, stands in front of a mature rain-fed field of sweet sorghum variety M81E grown at Havelock, Neb. in 2007. The crop was planted in rotation with soybeans and no additional nitrogen was applied.
Pictured is a sweet sorghum harvester and crusher designed and built by Harold Witulski of Beatrice, Neb. The plants were harvested and directed via belts to the crusher. The squeezed juice is then deposited into a mounted tank that contains yeast for fermentation.
portation fuel usage,” Dweikat explains, noting the numbers include agricultural and forestry wastes, grains and perennial bioenergy crops. He says the country can produce at that level “and continue to meet food, feed and export demands.” Is sweet sorghum a solution to the food-versus-fuel issue? Dweikat, Cukierman, Reddy and Blumenthal believe it because it’s not raised for human consumption. Sweet sorghum experiences a short vegetative period at a very high photosynthesis
rate, which is why it can produce more sugar than any other crop. It has low water requirements, grows on marginal land, experiences little disease or pest attacks, and produces good cash flow at a low investment per acre. “[It has a] high conversion to alcohol, and therefore to ethanol,” Cukierman says. EP
II
Timothy Charles Holmseth is an Ethanol Producer Magazine staff writer. Reach him at tholmseth@bbibiofuels.com or (701) 7384962.
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7i½ÛiÊ> Ài>`ÞÊ >ÃÌiÀi`ÊÊ Ì iÊ iÜÊÜ>ÛiÊ Ê«iÀv À > ViÊvÕi Ê>`` Ì Ûið )F YOU RE SERIOUS ABOUT ACHIEVING HIGH PERFORMANCE IN BIOFUELS YOU LL BENEFIT FROM !FTON S "IO4%#» ADDITIVE SOLUTIONS 3UPPORTED BY EXTENSIVE FIELD TESTING /%- PARTNERSHIPS AND STATE OF THE ART RESEARCH FACILITIES OUR "IO4%# ADDITIVES DELIVER LEADING EDGE SOLUTIONS BOTH FOR THE ENVIRONMENT AND FOR MAXIMUM PERFORMANCE IN FUELS FROM BIODIESEL TO ETHANOL 3O IF YOU RE LOOKING AT THE POSSIBILITIES LOOK TO !FTON FIRST FOR MORE OF THE ALTERNATIVES YOU NEED TO RIDE THE WAVE OF THE FUTURE ¹ !FTON #HEMICAL #ORPORATION IS A WHOLLY OWNED SUBSIDIARY OF .EW-ARKET #ORPORATION .93% .%5 WWW AFTONCHEMICAL COM
RESEARCH
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Grass:
NOT JUST ANOTHER PLOT We know cows like it—and by eating certain varieties, they give more milk. So do these grasses’ higher sugar content also mean greater ethanol output? By Susan Aldridge
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G
rass is everywhere—on golf courses, football fields, parks, in your garden and, of course, wherever cows are content. Could we use it for transport fuel? That idea is under consideration in several places around the world, including Wales—and in Wales, cows in fact may be a guide for researchers studying cellulosic ethanol. Steve Kelly, a molecular biologist at Swansea University in Wales, is one scientist working on a process that may eventually let motorists tank up on “grassohol” from the very meadows past which they drive on their next holiday. Kelly’s is a two-step process, using high-sugar, low-lignin, highly digestible variants of ryegrass. These grasses were developed at the Institute of Grassland and Environmental Research at Aberystwyth University in Wales through conventional crossbreeding techniques, particularly with the AberDart and AberMagic varieties (see sidebar). Researchers have deliberately avoided the laboratory techniques of genetic modification, which directly alter the genetic makeup of the plants, because it is controversial in Europe. Among the concerns is that genetically-modified (GM) crops will spread into the natural ecosystem. Grass is wind-pollinated, and the scientists don’t want to risk gene transfer to non-GM plants.
High-Sugar Grass Grains and sugarcane dominate ethanol production now because fermentation of starch is relatively easy. Producing ethanol from second-generation feedstocks means breaking down cellulose, which forms the cell walls of trees, grasses and other plants. Plants build cellulose from carbon, hydrogen and oxygen during photosynthesis. Cellulosic fibers stiffen stems, roots and leaves—but its very toughness presents scientific and technical challenges in extracting ethanol. Grass breeds developed by Germinal Holdings Ltd. of Banbridge, Northern Ireland, have the attention of researchers in Wales. AberDart HSG Ryegrass is a diploid perennial high in sugar content. The Germinal Holdings Web site trumpets that “stock cannot get enough of it.” Greater utilization of the protein in the grass means greater production of milk and meat, Germinal Holdings says. Another variety, AberMagic HSG Ryegrass, is a new perennial with limited availability in 2008. Germinal Holdings calls AberMagic “the next generation” of high-sugar grasses bred by IGER for higher sugar levels. If it makes the cows happy—maybe it can fuel your car.
PHOTO: WARMLIGHT INSTITUTE OF BIOLOGICAL, ENVIRONMENTAL AND RURAL SCIENCES
RESEARCH
This isn’t just any Welsh landscape: This ryegrass includes a variant developed by cross-breeding without any genetic-modification technology, which is controversial in Europe.
Juiced The first step for Kelly and colleagues is processing the grass to extract a water-soluble juice that contains fructans (fructose oligomers and polymers). Kelly’s team has cloned genes for enzymes that can hydrolyze these fructans. They insert the fructans into the fermenting yeast to optimize the process.
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Donnison
The second step is fermenting the relatively dry, stable lignocellulose fraction residue. This involves use of enzymes that can break down the plant cell walls. Iain Donnison, leader of the bioenergy and biorenewables program at the Aber Bio Centre at Aberystwyth University and one of Kelly’s main collaborators, says preliminary calculations
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PHOTO: WARMLIGHT INSTITUTE OF BIOLOGICAL, ENVIRONMENTAL AND RURAL SCIENCES
suggest ryegrass could be as good as or better than wheat or sugar beets as a source of ethanol.
Grassy Landscapes
PHOTO: INSTITUTE OF BIOLOGICAL, ENVIRONMENTAL AND RURAL SCIENCES
European farmers are wondering what to do with all that grass if livestock donâ&#x20AC;&#x2122;t graze it.
Swanseaâ&#x20AC;&#x2122;s Kelly is well-schooled. He studied molecular biology with Nobel Prize winner Sir Paul Nurse, who shared the 2001 prize for work on key regulators of the cell cycle. That positions Kelly to push forward a genomic approach in meeting the challenges of producing ethanol from biomass. Wales, on Englandâ&#x20AC;&#x2122;s west, is famous for its grassy landscapes. No surprise, it is trying to build its biofuels involvement in part on all that grass. The Welsh government is funding a planned Centre of Excellence in Biorefining at the universities of Aberystwyth, Bangor and Swansea, with additional funding from the European Union. In a region where mining once drove the economy but has since diminished in importance, the purpose of the center is to provide research and guidance for business to create new employment and preserve existing jobs. Backers seek commercial partners as well. â&#x20AC;&#x153;This,â&#x20AC;? says Kelly hopefully, â&#x20AC;&#x153;is a good time to invest in this area of science.â&#x20AC;? He pushes ahead with his work on ryegrass to establish a better understand-
Can Walesâ&#x20AC;&#x2122; plentiful grasslands work as a feedstock for transport fuels?
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‘We believe ethanol from grass could be comparable in yield to wheat and beet, and the key advantage is that it could be lowinput, as it is a perennial crop. If it is grown with clover, which fixes nitrogen, then not much fertilizer is needed.’ ing of the grasses and the key microbes associated with processing them. Ryegrass represents an important prospective source of biomass because it is present on two-thirds of the agricultural land in the United Kingdom. At the same time, European Union efforts to reform agricultural subsidies encourage farmers to decrease the number of animals grazing on their land. “So, farmers are wondering what they can do with this excess of grass.” Donnison says.
Cows Like It Grass stands out from other prospective perennial feedstocks for its
ETHANOL PRODUCER MAGAZINE JULY 2008
Willow is Another Way Grass is not the only source of ethanol under investigation in the United Kingdom. Richard Murphy of Imperial College in London notes that willow has great genetic diversity, so there are plenty of varieties that can be explored. Moreover, it is well-adapted for growth in the United Kingdom and elsewhere in Europe, where it is a traditional species. “Willow is a permanent crop, so the stems growing above ground are harvested and will then regrow,” Murphy says. “It requires very little by way of fertilizer input. It is well-adapted for growth in wet soils too.” Nor does willow require the best arable land. Processing willow into ethanol, however, is not easy. In willow, the vast majority of the fermentable biomass occurs in the form of lignocellulose—of which about 50 percent is cellulose itself, and another 25 percent or so hemicelluloses and related compounds. “Getting sugar from starch is easy, but it requires a great deal of science, technology and engineering to break down the plant cell wall,” Murphy says. “All of this is potentially available for fermentation. But breaking it down is a big step—that is the challenge.” Lignocelluloses can be broken down with heat or chemicals but this approach, obviously, uses energy or environmentally unfriendly substances such as acids. Using a mixture of enzymes is a better approach but, as Murphy points out, it requires the relevant enzymes. Novel technologies include direct microbial action. Exploring willow varieties is also a key prospect. “There are some interesting opportunities here in willow to seek varieties which will release their sugars more easily than others,” Murphy says. Rothamsted Research of Harpenden, United Kingdom, a leading organization in this research, has a collection of more than 1,000 willow genotypes, an ideal hunting ground for good ethanol sources. “The Rothamsted team has a good understanding of its genomics,” Murphy says. “This means that we are able to work to identify genetic markers for willows that may be superior producers of bioethanol. These could then be bred as a biofuel source.” The willow work is progressing well but is some way from commercialization. Murphy points to issues such as land access, technical processing and fuel pricing, as well as the basic science. “My personal view is that this is where we need to be headed with biofuels,” he adds. “We need to develop this as much as we can, for it will be a good, economic fuel.”
high soluble carbohydrate (sugar) content. Indeed, IGER has bred ryegrasses from varieties such as AberDart and AberMagic to select for this high-sugar content, originally because cattle grazing on high-sugar grasses gave a higher milk and meat yield. Now it appears that the
same grasses can also provide a high potential ethanol yield. Donnison’s team is scaling up. “We believe ethanol from grass could be comparable in yield to wheat and beet,” Donnison says, “and the key advantage is that it could be low-input, as it is a peren-
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Biogas can produce three times more mileage than either ethanol or biodiesel per unit of land.
nial crop. If it is grown with clover, which fixes nitrogen, then not much fertilizer is needed.” The work tracks research published earlier this year showing the economic feasibility of producing ethanol from switchgrass. Researchers at the USDA and the University of Nebraska-Lincoln carried out field trials on 10 plots of 15 to 20 acres each on marginal cropland on 10 farms in the U.S. Midwest. Measuring inputs, biomass yield, estimated ethanol
output, greenhouse gas emissions and net energy, researchers found that switchgrass produced more than six times the renewable energy compared with nonrenewable energy consumed. Researchers also calculated that emissions of greenhouse gases from switchgrass ethanol would be 94 percent lower than regular gasoline.
Producing Hydrogen Meanwhile, back in the United Kingdom, Richard Dinsdale of the University of Glamorgan in Pontypridd, Wales, has found yet another use for grass. Collaborating with IGER researchers, Dinsdale is working at producing hydrogen. Using anaerobic organisms—mainly Clostridium cultures—to produce hydrogen and methane, Dinsdale and colleagues are now working on a variety of techniques to improve hydrogen yield from grass stocks. Biogas can include both methane and hydrogen, depending on the nature of the fermentation process. It can be piped off, compressed and used as a transportation fuel. Dinsdale’s figures suggest that, as a transport fuel, biogas can produce three times more mileage than either ethanol or biodiesel per unit of land. He and his colleagues are currently building two pilot plants to establish key engineering parameters and seeking funding to extend the work beyond 2009. Biogas is already used in Germany, Austria, Sweden and Italy—but not yet much in the United Kingdom or the United States. Dinsdale believes biogas ought to have a big future as a transportation fuel in the United Kingdom. However, existing liquid-fuel infrastructure inhibits its development. In any case, researchers say that 30 acres can fuel a London bus for a year. If true, evidently the cows knew it first. EP Susan Aldridge is a London-based freelance writer and editor specializing in biotechnology, medicine, health and chemistry.
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FEEDSTOCK
Fresh-
Squeezed Ethanol Feedstock
Seventy-five percent of U.S. oranges are grown in Florida. The Sunshine Stateâ&#x20AC;&#x2122;s citrus processing industry produces nearly all of the orange juice consumed in the country, resulting in up to 5 million tons of citrus waste each year. Options for turning that waste into something useful are limited, so the possibility of using citrus waste as a feedstock for ethanol plants is being closely monitored. By Kris Bevill
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PHOTO: USDA-ARS CITRUS AND SUBTROPICAL PRODUCTS LABORATORY
A
mericans love oranges. According to the USDA, the fruit consistently ranks third among the nation’s favorite fresh fruits and it’s the No. 1 fruit juice. Americans consume two-and-a-half-times more orange juice than apple juice, making juice production a huge industry for Florida citrus processors. But before you drink that next glass of OJ, consider that half of the orange used to make that juice becomes waste material. In fact, the Florida citrus industry produces 3.5 million to 5 million tons of citrus waste every year. Which begs the question: What possibilities are being explored to turn that waste into something useful, and who’s brave enough to try? Bill Widmer, a research chemist at the USDA Agricultural Research Service’s Citrus and Subtropical Products Laboratory in Winter Haven, Fla., has been working on the conversion of citrus peels to ethanol the past four years. His work is a continuation of research first conducted in the 1990s by Karel Grohmann, who developed the conversion process. At the time of Grohmann’s research, gas prices were relatively low and enzyme costs were high. When Widmer took on the project four years ago, gas prices were substantially higher and enzyme costs had come down enough to make it possible to further explore citrus-peel-to-ethanol technology. Widmer set out to modify the process into something that would be economically feasible and that could be a continuous process for commercialization purposes.
Citrus waste at a Florida processing facility is moved by conveyor to a peel bin for further processing.
Technology His research was a success. Four years ago it took $12 to $15 worth of enzymes to produce 1 gallon of ethanol. Widmer was able to lower the enzyme cost to approximately
ETHANOL PRODUCER MAGAZINE JULY 2008
FEEDSTOCK 80 cents per gallon and create a pretreatment process capable of running on a continuous basis. The process consists of using the raw waste citrus peels and treating them to remove the peel oil present in the waste stream before liquefying the peels to begin the conversion to ethanol.
PHOTO: USDA-ARS CITRUS AND SUBTROPICAL PRODUCTS LABORATORY
Widmer
Orange waste being processed into ethanol at the USDA/ARS citrus lab’s 100 gallon pilot system in Winter Haven, Fla.
The peel oil removed in the pretreatment process is called d-limonene and is considered to be a valuable byproduct of citrus peel conversion. Widmer has developed a way to remove the oil and recover it for use in solvents and as a fragrance in cleaning products. “D-limonene has a value of 50 cents to $1 per pound,” Widmer says. “If we were to convert citrus peel to ethanol and only get ethanol it wouldn’t be feasible, but for every gallon of ethanol we produce, we also get one pound of d-limonene.” Widmer says it costs approximately $2 to produce 1 gallon of ethanol and producers can expect to receive $1.50 to $2 per gallon of ethanol sold. Add to that approximately 75 cents per pound of d-limonene recovered, and the additional revenue of pelletized animal feed that can be produced from leftover waste and the citrus peel conversion process is a money maker.
The Players Widmer says there are three patents pending concerning his research. The USDA and Southeast Biofuels LLC have rights to all three patents. In April, Xethanol Corp. announced that Southeast Biofuels had entered into a cooperative research and development agreement with the USDA Agricultural Research Service, under the direction of Widmer. The agreement will compliment a $500,000 grant Southeast Biofuels received from the state of Florida in January as part of the state’s Farm to Fuel Initiative.
PHOTO: USDA-ARS CITRUS AND SUBTROPICAL PRODUCTS LABORATORY
FEEDSTOCK
Fermented orange processing waste before the ethanol is removed.
The company plans to construct a $6 million pilot plant in Auburndale, Fla. The plant will be colocated on property owned by Cutrale Citrus Juices USA Inc. At press time, Widmer told EPM that Southeast Biofuels has yet to sign with the processor so construction has not
begun on that plant, but he expected a deal to be worked out between Southeast Biofuels and Cutrale Citrus soon. After initial testing, Xethanol plans to expand the plant to produce up to 8 MMgy of ethanol from about 800,000 tons of citrus waste annually supplied by Cutrale.
Jay Levenstein, Florida’s deputy commissioner of agriculture and consumer services, says his department supports the continued development of citrus waste to ethanol. “The quicker we have a local ethanol supply, the better,” he says. At press time, Florida Gov. Charlie Crist was expected to sign a new energy bill that would mandate all fuel sold in the state to be E10 by 2010. Refiners there have already begun preparing for an increase in demand for ethanol. Kinder Morgan, one of the world’s largest pipeline transporters and terminal operators, has begun preparations at one of its Central Florida Pipeline Co. pipelines so that it may begin shipping ethanol via pipeline by the end of this year. Oil companies including Shell, Exxon Mobil Corp., Chevron Corp. and BP will all be selling E10 at their retail stations in Florida by the end of the summer. The market is there—all Florida needs is a reliable, viable local supply. Levenstein says the agriculture department will continue to support cit-
FEEDSTOCK rial delivered to us via conveyor and we’ve got a continuous supply of feedstock for seven or eight months of the year. By colocating, having a continuous supply and by piggybacking on top of the citrus processors permits, the project becomes a lot more economically attractive.” Stewart formed his technology company two years ago to focus on converting citrus waste to ethanol and received a $250,000 grant from the Farm to Fuel program for that purpose last year. Citrus Energy and FPL Energy LLC have teamed up to start a commercial-scale citrus-peel-to-ethanol plant. FPL is the nation’s leader in wind energy and operates the two largest solar fields in the world. The company is branching out into citrus-peel-to-ethanol production as part of its strategy to become a clean energy company, according to project manager Cindy Tindell. Tindell says that although the FPLCitrus Energy project has a long way to go, their planned 4 MMgy plant could be operational in two years. Cost of feed-
rus-waste-to-ethanol projects through grant programs such as the Farm to Fuel Initiative. He says the department would ultimately like to see citrus growers benefit economically from these projects via cooperative agreements with processors, somewhat like the ethanol co-ops in parts of the Midwest. In order for citrus-peel-to-ethanol facilities to be successful, it is vital for those plants to be colocated with citrus processors. Because the waste product is 80 percent water, the product needs to be converted within 10 hours of its production, Widmer says. “Even though the d-limonene is a stabilizer, it is localized so there are parts [of the waste] that will ferment and rot in a very short time,” he says. David Stewart, president of Citrus Energy LLC in Boca Raton, Fla., also believes that colocating is the key to a successful ethanol plant. “We’ve got a little niche feedstock and we’ve got to play to the strengths of that feedstock,” he says. “We basically just get the mate-
stock, capital and technical factors all need to be considered in developing this project. “The technology is there at a price,” Tindell says. The proposed FPL/Citrus Energy plant will cost $35 million to $45 million to build, which when broken down will cost producers $10 for each gallon of ethanol made. Stewart says they are negotiating with citrus processors and, as soon as a lease is signed, construction on a plant can begin. The technology is ready to be used, Stewart says. “We’re using enzymatic hydrolysis,” he says. “There are various technologies out there on biomass conversion to ethanol, from gasification to acid hydrolysis or some combination thereof. Ours is relatively straightforward, but actually building a commercial plant is a challenge. It’s the same challenge that people using wood waste are facing. There are a lot of pilot plants and small-scale facilities but actually building a commercial facility is yet to be done.” Southern Gardens Citrus is the
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Southern Gardens Citrus uses an elaborate conveyor system to move 850,000 tons of oranges each year from truck to plant. The only current option for usage of citrus waste is animal feed, a product that costs producers as much to make as it does to sell.
third-largest grower of oranges in Florida and produces 120 million gallons of not-from-concentrate orange juice each year. President Rick Kress is cautiously optimistic about converting citrus waste into ethanol. “Technology-wise, it’s doable,” he says. “Commercially it’s yet to be determined. It’s very expensive. Questions are still to be answered, but we always have to look at the opportunity. We have to take the steps to utilize every ounce of whatever we purchase.” Southern Gardens Citrus will process 850,000 tons of oranges this year, half of which will become waste material.
Current Waste Uses From the citrus processor’s viewpoint, it may be less profitable to process waste into ethanol today than it would have been a year ago. It is illegal for processors to dump citrus waste into landfills, so they must dry the waste product and turn it into pelletized animal feed. Feed prices have increased dramatically over the past year, which means that what was once a break-even citrus waste solution at best for processors has become slightly more lucrative. According to Widmer, the price of pellets has fluctuated from $40 to $80 per ton and cost producers $50 to $90 per ton to produce for almost two decades. However, at one time last summer pellet prices hit $180 a ton. Widmer says the stability of pellet prices is unsure. In the meantime, fuel costs are certain to increase which should keep ethanol an attractive option for producers. Kress says that while processors have benefited from the rise in feed prices, their production costs have gone up cutting into profits. “Making animal feed is very expensive because it takes a lot of energy to dry the feed material to a suitable moisture level,” he says.
Future Possibilities While ethanol may prove to be cost effective, Kress says he is still concerned about how to deal with the waste after 218
ETHANOL PRODUCER MAGAZINE JULY 2008
FEEDSTOCK state could produce 30 MMgy to 50 MMgy. That amount would help satisfy local demand and would keep more money in the local economy. However, Widmer will be exploring even more potential uses for waste in the next few years. While much progress has been made, there is more research to be done. He hopes that by 2014 there will be multiple uses for citrus waste. His group is researching citrus waste as a cement additive, paper product additive and material for removing heavy metals from wastewater. He says that because citrus
E
Piles of citrus processing waste will be loaded into a feed mill for processing into pulp pellets for cattle feed. Pelletized feed is currently the only commercial use for citrus waste available to processors.
ethanol production. Fifty pounds of waste material used to produce ethanol will leave behind 45 pounds of waste. It may be possible to turn that remainder into animal feed, but the nutritional value of the product is debatable because carbohydrates are lost in the ethanol production process. Southern Gardens and Citrus Energy are currently conducting nutritional analysis of the waste. Stewart says it is a mistake to think that there is no food value in the byproduct. “If you look at corn to ethanol, a very significant part of the revenue is distillers grains and we are the same,” he says. “We would have something called distillers peels that is very palatable to cows and has a significant feed value.” “The [citrus] industry has a lot of interest in value-added coproducts from citrus processing waste because they feel they’re not making much on cattle feed,” Widmer says. With fruit and juice price fluctuations the juice industry is up and down and many producers have found it hard to make a profit some years,” he says. If all the citrus waste in Florida were to be used in ethanol facilities, the
Kris Bevill is an Ethanol Producer Magazine staff writer. Reach her at kbevill@bbibiofuels .com or (701) 373-0636.
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waste has good ion exchange capacity and water holding capacity, these uses are real possibilities. “We will not have a commercial product ready in 2009,” he says. “We hope that in the next five years we’ll have some of these materials ready and hopefully people will be interested in them. It’s all a matter of industry interest.” EP
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BRAZIL
Pipeline Projects
On Hold Brazilian ethanol pipeline projects are budding, but not all will bloom. By Elizabeth Ewing
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BRAZIL
ETHANOL PRODUCER MAGAZINE JULY 2008
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BRAZIL
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n the past few months three major ethanol pipeline projects, through roughly the same corridor of Brazil’s existing and future center-south sugar cane production belt, have been tabled by separate groups interested in extending their downstream footprint in the industry and capitalizing on the growing export potential of the world’s largest cane ethanol producer. All three investor groups—one representing Brazil’s state oil company, a second the established center-south cane industry and a third deep-pocketed private equity investors—are banking on Brazil becoming the world’s main international ethanol exporter, supplying the North American, European and Japanese markets with their marginal ethanol needs. Brazil is already ramping up its ethanol production in preparation for expansion into international markets. The local cane crop, which has traditionally expanded about 6 percent a year, has seen annual expansion at more than 10 percent. This year’s crop, however, is expected to grow by 16 percent to more than 550 million metric tons (606 million tons) in an effort to meet growing domestic and international demand. Brazil’s cane sector is expected to attract $17 billion in investment over the next six years by market estimates. Most of this expansion will be directed to ethanol production to supply Brazil’s growing flexible-fuel automobile fleet that now makes up more than 90 percent of all new car sales. Until last year, slightly more than half the country’s cane crop was directed to sugar and the rest to ethanol production. But this season, a full 58 percent of the main center-south’s crop is expected to go to ethanol production, according to the Brazilian Cane Industry Association (Unica).
ETHANOL PRODUCER MAGAZINE JULY 2008
BRAZIL Although Brazil’s ethanol exports have been relatively flat over the past few years at just more than 3 billion liters (793 million gallons), it will increasingly become a larger ethanol exporter. Ethanol production from the main center-south crop will grow to 24.3 billion liters (6.4 billion gallons) this season, from 20.3 billion liters (5.4 billion gallons) in the previous, and exports should grow to 3.9 billion liters (1 billion gallons) from 3.1 billion (819 million gallons) last season, with the United States continuing to make up for just over half of those volumes. Plinio Nastari, president of cane sector analyst Datagro, says Brazil's ethanol fuel production would have to grow by 3 billion liters (793 million gallons) a year through 2025 to keep up with demand at home and abroad. “Through 2015, ethanol exports will remain limited to roughly 7 billion liters (1.8 billion gallons)," Nastari says. “But the shift has already begun … as sugar has been the driver of Brazil’s cane industry for several hundred years, so ethanol will now take over as the main force behind cane expansion.” He estimated that in 2015, U.S. legislation would cap the amount of ethanol from corn and U.S. demand for alternative fuels. That could potentially help boost Brazil's international ethanol sales, which are expected to grow to 25 billion liters (6.6 billion gallons) by 2025. Japan with the world’s second-largest automobile fleet will also be a major importer of Brazilian ethanol, and it is this market that is of interest to Brazil’s state-run oil and gas company Petrobras. The company recently bought a 90 percent stake in Exxon Mobil’s Okinawa oil refinery, and Petrobras’s chief executive, Jose Sergio Gabrielli, says that it may serve as a staging point for Brazilian ethanol exports to Japan and the rest of the fast-growing Asian region. One of the main problems that Petrobras and other major ethanol exporters are facing is the lack of offloading infrastructure in the destination markets. Other potential markets for Brazilian ethanol include the European Union, which is currently debating its biofuels directive. According to the proposal currently being debated by the European Commission, 10 percent of all transport fuels consumed in the trade bloc by 2020 must be biofuel blends. Currently, Unica is directing much of its lobbying efforts toward the European Union, which has the potential to import significant volumes of Brazilian ethanol. “There’s a lot of pressure against the biofuels directive and we are focusing on educating people about the virtues of Brazil’s cane-based ethanol,” says Unica President Marcos Jank. “The debate is heated right now, because of concerns about food inflation, but we continue to believe that Brazilian ethanol meets all the requirements of the directive in terms of [carbon dioxide] reduction,” he adds.
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BRAZIL Petrobras Partners With Mitsui Petrobras announced earlier this year that it entered into a joint venture with Japanese trading house Mitsui and local construction company Camargo Correa to build a designated ethanol pipeline that will run from Goias state in Brazil’s center-west to Petrobras’s Paulinia refinery in Sao Paulo state. The venture will be called PMCC Projetos de Transporte de Alcool. The GoiasPaulinia leg is part of an ethanol export corridor which will also eventually include ethanol-only legs between Paulinia and Guararema, which in turn will link up with the coastal terminals in Sao Sebastiao in Sao Paulo state and Ilha D’Agua in Rio de Janeiro state. The line is expected to have the capacity to ship 12 million cubic meters (12 billion liters or 3.2 billion gallons) of ethanol annually. Brazil has moved ethanol fuel through pipelines for decades with great success but they are multiuse ducts, so the ethanol is tainted with traces of gasoline, diesel and other fuels. That is not a problem for the local fuel distributors but it is for foreign buyers. All ethanol exports in Brazil come to the port by truck or railcar. This is the main bottleneck that will
Three pipeline projects developed by different investor groups in anticipation of an increase in Brazilian ethanol exports have been put on hold.
With a pipeline, these costs would decline significantly,” Padua Rodrigues adds. Petrobras has also teamed with Mitsui as a minority shareholder in about 20 separate ethanol plant projects in Brazil but recently said that it is slowing the development of these plants until Japan shows stronger signs of making an E2 blend mandatory in
limit the future expansion of Brazilian ethanol exports. The construction of pipelines is considered key for the export market to expand, according to Antonio de Padua Rodrigues, technical director for Unica. “We estimate that freight costs represent 15 percent of the free-on-board price of ethanol exports between Ribeirao Preto and the port of Santos.
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BRAZIL
‘Ethanol pipelines should have been built yesterday because the ports are already at their capacity limits.’ its retail fuel market. It still plans to export 4.7 billion liters (1.2 billion gallons) of the biofuel by 2012. "We are also looking at the South Korean, South African and U.S. markets,” says the company’s supply director, Paulo Roberto Costa. Roberto Gianetti da Fonseca, an economist who is director of trade at the Sao Paulo Industry Federation (Fiesp), estimates that demurrage cost for ships waiting to load ethanol at Latin America’s largest port of Santos has surpassed $30 million a year because of a lack of sufficient storage capacity. He estimates port ethanol storage capacity needs at about $50 million to $60 million in investments to bring them up to par with current ethanol export levels. “It’s not enough to only think about production, we are leaving out important logistic decisions,” da Fonseca says, alluding to the nearly 90 new ethanol mills that will be coming on line in the next few years.
ETHANOL PRODUCER MAGAZINE JULY 2008
“Ethanol pipelines should have been built yesterday because the ports are already at their capacity limits.” Petrobras has also secured an agreement from the states of Mato Grosso do Sul in the center-west and Parana, which has one of Brazil’s new ethanol export terminals. Mato Grosso do Sul is also seen as one of the main frontier cane regions. The project is expected to require investments of about R $2 billion (U.S. $1.25 billion). But although the Paranagua export terminal has been in place for a couple of years, it has not yet exported a drop because of regulatory and technical problems. Petrobras has said it would allow the private sector third parties access to its ethanol pipelines but the company has a bad history in allowing access to its natural gas pipelines, which has prompted private investors to push ahead with their own projects.
Cosan, Copersucar, Crystalsev Form Joint Venture Petrobras’s entrance into Brazil’s ethanol industry has sent shudders through Brazil’s cane industry, which realizes the benefits the state-run giant can have in opening foreign markets, but also fears its monopolistic and predatory tendencies in the local fuels markets. Almost in response to Petrobras’s pipeline investment announcements, Brazil’s biggest sugar and ethanol producer Cosan soon after formed a joint venture with Sao Paulo Sugarcane, Sugar and Ethanol Producers Association known as Copersucar and sugar and ethanol trader Crystalsev to build a designated ethanol pipeline in the state of Sao Paulo, which accounts for about 65 percent of Brazil’s cane output. The three giants of Brazil’s sugarcane sector, which are essentially competitors, will make initial investments of R $20 million (U.S. $11.5 million) apiece in the jointventure company called Uniduto Logistica that will plan and install an ethanol-only pipeline between the oil refinery in Paulinia, in Sao Paulo state to an ethanol offloading terminal on the state’s coast. Other investors may be brought on at a later time, Cosan says, as the project costs are expected to run to R $1.5 billion (U.S. $914 million).
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BRAZIL Brenco’s Big Investors Recent expansion and interest in Brazil’s cane ethanol sector has birthed at least three major private equity groups dedicated to investing in the sector, some of them have raised money by floating shares on the London AIM exchange—Infinity and Clean Energy Brazil, while another has amassed a cadre of deep-pocketed backers. The private equity fund Brenco, also known as the Brazil Renewable Energy Co., includes
investors such as former U.S. President Bill Clinton, Vinod Khosla, who was one of the co-founders of Sun Microsystems, America Online founder Stephen Case, Hollywood producer and Democratic fundraiser Steven Bing, and former World Bank President James Wolfensohn. Brenco plans to invest $1 billion in a 1,100-kilometer (683 miles) ethanol pipeline, which is expected to be completed by 2011 with a capacity to deliver 4 million liters (1.1 million gallons)
of ethanol a year. The company is currently applying for the necessary licenses from Brazil's environmental protection agency, Ibama, and the National Petroleum Agency. The plan is to build a pipeline from Alto Taquari in Mato Grosso state via Mato Grosso do Sul, Goias and Sao Paulo state to Brazil’s main port in Santos. The pipeline will link six terminals: in Alto Taquari in Mato Grosso state; Costa Rica in Mato Grosso do Sul state; Paranaiba in Goias state; Sao Jose do Rio Preto and Paulinia in Sao Paulo state; and Santos port. Brenco has been investing heavily in the past year and a half but as of this year doesn’t have any operational mills. It expects to have 10 mills working by 2015, two of which will be in Mato Grosso and will be ready to start crushing sugarcane in March 2009. Brenco has 30,000 hectares (74,132 acres) of sugarcane plantations in Mato Grosso, Mato Grosso do Sul and Goias. Despite optimism regarding pipeline construction, Unica is convinced that not all of the proposed pipelines will be built. “There is simply not enough demand for three ethanol pipelines,” Jank says. “The external market simply isn’t developed enough—only 15 percent of our production was exported,” he adds. Jank says that Unica is working with all the players involved to agree on a single project. “This process is very complex and it takes a long time to develop these projects.” Jank adds that the biggest concern for the industry is Petrobras control. “Petrobras has proven that it is very successful at using monopolies to its advantage,” he says. For a project to be successful, it will need participation from all sectors, he concludes. EP Elizabeth Ewing is a journalist covering biofuels from Sao Paulo, Brazil.
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Plant-Wide Optimization of Sterling Ethanol LLC By Srinivas Budaraju, Maina Macharia and Dave Kramer
S
terling Ethanol LLC was built to help meet the United States’ growing demand for ethanol and to diversify agricultural investment in the northeastern Colorado region known for its high corn yields. Owned and operated by local investors, the 40 MMgy facility started up in November 2005, just seven months after the start of construction. The feat is a record for the ethanol industry. The facility, located two hours northeast of Denver, is accomplishing its goals. Since the first truck of ethanol left the plant Nov. 23, 2005, it has continued to supply fuel and improve corn prices for the region. However, plant management felt it could do more, leading to a project that implemented a plant-wide advanced process control (APC) solution to maximize production, monitor yield and minimize energy costs per unit of ethanol. The project resulted in an 18 percent increase in throughput. The following describes the facility’s process design and produc-
tion challenges, and the steps taken to improve them.
Process Description Sterling Ethanol is a dry-grind ethanol plant employing the unit operations shown in Figure 1. The mash preparation has four key sub-processing units: milling, slurry mixing, cook and liquefaction. Sterling Ethanol’s corn is ground and hydrolyzed with hot water in the slurry mixing tanks. Enzymes are also added. The corn is further fractured through the cook section by pumping it through a hydroheater, providing the enzymes more access to the starch. In the cook section the corn slurry mixture is heated to sterilize the fermentation feed and to activate enzymes that make the starch more soluble. The excess heat is used as direct steam injection and is the heat source for the third distillation tower and side stripper in the distillation units. The flow from the cook process goes to holding tanks where glucoamylase
enzyme is added to break down the starch into glucose. Yeast digest the glucose and convert it to ethanol. The liquefaction slurry is pumped through heat recovery exchangers as fermentation feed. Sterling has four 580,000-gallon fermentors and each is allowed to ferment for 35 to 50 or more hours depending on production rate decisions. The fermentation process is controlled based on sugar availability, enzyme dosing strategies and temperature management during fermentation. After the fermentation is complete a fermentor product is “dropped” to a 750,000-gallon beer well. This vessel is continuously fed to a beer column. The beer well is the feedstock reservoir for the distillation unit, and it allows distillation operation to run continuously without having to slow down or speed up for the batch fermentor cycles. The beer column feed contains approximately 10 percent unfermentable solids, 12.5 percent ethanol
The claims and statements made in this article belong exclusively to the author(s) and do not necessarily reflect the views of Ethanol Producer Magazine or its advertisers. All questions pertaining to this article should be directed to the author(s).
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ETHANOL PRODUCER MAGAZINE JULY 2008
CONTROL
Biomass Magazine is a trade journal serving companies that use and/or produce power, fuels and chemical feedstocks derived from biomass. Collectively, these biomass utilization industries are positioned to replace nearly every product made from fossil fuels with those derived from plant or waste material. The publication covers a wide array of issues on the leading edge of biomass utilization technologies, from biorefining, dedicated energy crops and cellulosic ethanol to decentralized power, anaerobic digestion and gasification. Itâ&#x20AC;&#x2122;s all here.
www.BiomassMagazine.com and 87.5 percent water. The Sterling plant columnâ&#x20AC;&#x2122;s overhead vapor feeds a vacuum rectifier distillation column while the bottom stream consisting mostly of water and solids (known as whole stillage) is directed to inventory tanks. We will follow the alcohol process flow and then return to the stillage processing. In the rectification tower, the alcohol is separated close to the azeotropic point. At the azeotropic point, ethanol and water cannot be separated any further by distillation. This product is referred to as 190-proof alcohol (95 percent alcohol by volume). From an intermediate inventory tank the 190-proof product feeds three parallel molecular sieve absorbers after a sieve feed vaporizer to dehydrate the alcohol to less than 1 percent water by weight. The side stripper recovers the trace amounts of ethanol off the bottoms flow. The side stripper at Sterling receives its feed and overhead cooling from the rectifier bottoms flow controller. It is reboiled using vapors from
ETHANOL PRODUCER MAGAZINE JULY 2008
the cook flash tank or steam directly from the boiler systems. Water for the side stripper bottoms is recycled back to the cook water section. Stillage off the beer column bottom is pumped to a whole stillage tank. The whole stillage is then processed into cattle feed that has a maximum moisture content specification for the distillers wet grains with solubles. This is done through centrifuges and evaporators. The DWGS is then sold to local cattle feedlots. Liquid off the centrifuges is known as thin stillage. Thin stillage must be concentrated to syrup before it is added to the DWGS. This is done with two-stage evaporators. Some of the thin stillage is recycled as backset to the fermentation feed system to minimize freshwater use. Backsets also have some nutritional value to the fermentation operation.
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Production Challenges When Sterling encountered challenges increasing production rates, management considered resolving
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Figure 1 Corn Grain Receiving
Ammonia Enzymes
Corn Mash
Fermentation
CO 2
Mash Preparation
Beer
Distillation
190 Proof Ethanol
Whole Stillage
Centrifugation backset
Wet Grains
Thin Stillage
Process Condensate
Maximize plant throughout Maximize Fermentation yield Optimize enzyme utilization Maximize Ethanol recovery Minimize energy/gallon Ethanol
Corn Meal
Side-stripper Water recycle
APC Objectives:
Evaporation
Dry-grind ethanol plant production flow SOURCE: PAVILION TECHNOLOGIES
Syrup
Dehydration
200 Proof Ethanol
Product Storage
Fuel Ethanol
them internally with engineering studies and operational tests. Both consume time and require capital decisions. APC technology is commonly applied in refining and petrochemical plants and is known for its model predictive control of processes for better coordination of controls, allowing for higher efficiencies, yields and production rates. Simply increasing fermentation rates and dropping fermentors faster does increase production, but has a negative impact on ethanol yields. Model predictive control can simultaneously improve yields and capacity, and a calibrated plant model can be used to trade-off capacity and yield for best economic results. Pavilion Technologies agreed on the need to optimize the entire plant operation with APC technology. Being a new plant, there were several operational challenges, including low fermentor yields, overpurified ethanol products and low throughputs. The objective was to ramp up the profitability of the plant.
CONTROL Plant APC Optimization The APC solution called for three controllers connected together so that when one changes the feed rate or other objectives, the other controllers follow suit. This coordinated control ensures smooth operation and serves to identify bottlenecks that can be eliminated by process modifications. The three controllers include one focused on the batch fermentation, which is the heart of the plant, and two more managing the continuous plant sections on either side of the batch fermentors. The cook/milling section is controlled to manage and stabilize fermentation feed, along with coordinating the fermentation feed on target with the rest of the facility. The unsteady-state, timedependent batch fermentation quality controllers optimize end of batch yields within the current plant fermentor cycle time. A single back-end controller manages all continuous plant sections after the fermentor, including distillation, molecular sieves, evaporation, cen-
Table 1 Date
Batch
Action
Results
669
Slurry/water balance APC control implemented
Solids increased from 31.2 percent to 33.7 percent. Ethanol went up
Month 2
741
Fermentation APC and constant GA dosing implemented
Ethanol at drop increased
Month 4
773
Solids SP increased from 33 percent to 34.5 percent
Ethanol at drop increased
784
Fermentation APC GA dosing in closed loop. Solids SP increased to 35 percent
Ethanol increased
Month 1
Month 4.5
Fermentation improvements through the course of APC implementation SOURCE: PAVILION TECHNOLOGIES
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ETHANOL PRODUCER MAGAZINE JULY 2008
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CONTROL trifuges and stillage tanks. Pavilion’s non-linear process optimizer was crucial for the success of the plant-wide optimizer because while the plant had an objective of increasing production rates, the fermentation batch yields more ethanol from the starch if allowed to remain longer in the batch. However, longer batch times reduce overall ethanol throughput, so tradeoffs have to be made between higher production rates and gradually decreasing yield. This necessitated the use of a non-linear optimizer.
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Optimization Results The APC and plant optimizer system stabilized the plant, increasing overall production, yield and energy efficiencies. The distillation-stillage (back-end) controller was implemented with the control objectives to: Increase ethanol production Improve control of the distillation columns to produce 190-proof product within specification limits Operate the pressure-swing adsorption molecular sieves to produce 200-proof alcohol at the lowest operat-
ing cost and thus increase sieve ethanol yields by producing product at specification limit Manage the molecular sieve feedstock inventory tank, utilize its surge volume and to link sieve production rates to the distillation tower feeds. This allows for steadier plant controls in the distillation section. Respond to disturbances, especially those caused by fermentation drops to the beer well and beer mash train exchanger switches Utilize the surge volume of the syrup tanks, and whole and thin stillage. The specific energy of the plant’s distillation section is controlled by the addition of the right proportions of heat/feed ratio. Changes in the feed to the distillation tower provide feedfoward information. The downstream rectification section’s heat and evaporator heat sources are adjusted to provide the optimum heat. All relationships of 190 proof, stripper distillation tower temperature profile and the hydraulic limits are accounted for, allowing the APC to make correct adjustments to keep these variables on specification. The APC project helped identify operational problems with the side stripper distillation tower separation. However, the APC system was able to operate even with malfunctioning equipment and still stabilize the operation. On a mini-turnaround, the trays were cleaned and corrected, and the full potential of the distillation column realized. When feed rates are adjusted to the distillation, the beer column bottoms (whole stillage) rates change. Inventory tanks in whole stillage and liquid residue of the centrifuge systems (thin stillage) are adjusted to ensure the distillation stillage. The APC solution only changes rates within the tank limits with a calculated estimate of upper and lower inventory capacities calculated over a predictive time horizon. In addition, the evaporator’s energy requirements and distillation energy requirements are balanced by the APC strategy.
ETHANOL PRODUCER MAGAZINE JULY 2008
CONTROL The ethanol loss via the side stripper bottoms decreased so significantly that the methanator, which wasn’t working properly before the controller installation, started working efficiently. 200proof product operated closer to the maximum 0.9 percent Karl Fischer upper limit, allowing for an increase in ethanol yield of the distillation process. The specification limit for certified storage tanks of ethanol is a Karl Fischer value of 0.89 percent and the APC was able to run at the limit without violating it because of the predictive capability of the distillation-stillage APC controller. The difference between the preAPC mean value of 0.596 and the postAPC mean value of 0.870 shows a 46 percent increase in the Karl Fischer values of the final ethanol. The post-APC mean value of 0.87 percent for the Karl Fischer is run at the specification limit of 0.89 percent. Slurry/water balance APC (continuous) were fundamental to the improvement of the fermentation process. The slurry controls the quality of feedstock to the fermentation process. It accomplishes the following objectives: Balances load and energy between mills to achieve efficient milling Manages the fermentation inventory (fermentation gap control) with the water balance Controls the liquefaction solids and slurry percentage solids to provide consistent slurry and liquefaction solids to the fermentors Optimizes backset to ensure a consistent feedstock to fermentation Manages energy utilization with backset Controls the contributions of water sources to maintain a consistent water quality in the fermentation feed Stabilizes slurry pH and temperature conditions to cook and liquefaction Slurry solids variation was reduced substantially, providing a more stable input to the fermentors. This increased
the activity and reduced stress factors on the yeast to improve the fermentation. Table 1 shows the changes in the slurry solids to the fermentors, indicating a significant reduction in the variation of the solids content.
Process Optimization Results The APC project is showing production improvements. The controller uptime is near 100 percent, which indicates a high operator acceptance. The payback period for the project is a few months.
ETHANOL PRODUCER MAGAZINE JULY 2008
The batch fermentation APC is most difficult to control as it is not solvable with traditional APC approaches. However, Sterling’s plant personnel and Pavilion focused on this section to run tests and trials to achieve sequential improvements through the project implementation staging. The fermentation controller had the following control objectives: Maximize end-batch ethanol concentration Calculate optimal temperature profile
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CONTROL
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Accelerate and control starch hydrolsis to glucose Accelerate and control glucose fermentation to ethanol To calculate optimal glucoamalyze enzyme feed strategy. Any small improvement in Sterling’s fermentors and beer well has a significant impact on the overall profitability of the plant. In addition, each fermentor holds significant corn inventory such that intelligent, designed plant testing is required to avoid losing revenue and weeks of infections and/or stillage handling issues from a single “bad” fermentor. Many fermentation control challenges initially existed. Fermentation is a biological process and not easy to model because of numerous trace quality factors that impact the yeast activity and the fermentation environment. In addition, there are many unmeasured disturbances variables: corn and water quality, and unknown fermentable starch quantities. The data used to model, which is historically archived by plants, was sparse due to the sampling regiments. U.S. dry-grind ethanol plants use highperformance liquid chromatography (HPLC) data which is only sampled at set schedules. Sampling and HPLC analysis take hours, so this lab-quality data was not sufficient for real-time control of the plant. Online in-situ analyzers to measure accurate key fermentation product qualities, dextrins, glucose, lactose, acetic acid and ethanol were not available. Also the process was known to be nonlinear with complex interactions of all feed quality and environmental conditions of the fermentors. Pavilion leveraged first-principle modeling using scientific principles of biological fermentation processes in a hybrid combination with an analysis of the HPLC empirical data to ensure that the fermentation models were customized for the specific feedstock. The models were then run to establish the
optimum staging for glucoamylase and temperature trajectory modulations. Pavilion developed an innovative unique batch model predictive control algorithm and online HPLC data calculations that allowed for the implementation of real-time quality control for the fuel ethanol fermentors. It’s believed that the fuel ethanol industry is unique in this advanced use of such a batch model-based control algorithm. Table 1 summarizes the fermentation improvements through the course of the project implementation. The most dramatic improvement in the process was the overall production rate which increased from 124,128 gallons per day to 146,000 gallons per day, which is equivalent to a 17.6 percent production increase in the plant. Energy improvements that are generally demonstrated from the APC were not auditable because the plant added a steam turbine, which increased energy costs (natural gas) but produced electricity for the facility and therefore reduced electrical power import. This was a significant cost saving to Sterling Ethanol. Overall, the APC project achieved an increase in fermentation ethanol yield, an 18 percent increase in production rate, improved energy efficiencies (impacted by significant process change), and higher ethanol and DWGS quality control. The APC was able to hold plant capacity above 18 percent of the preAPC performance. The APC project has improved the plant controls substantially and achieved the economic objectives set out by Sterling Ethanol. The controller uptime is near 100 percent, which indicates a high operator acceptance. EP Srinivas Budaraju is a senior applications engineer with Pavilion Technologies. Maina Macharia is the manager of project engineering for Pavilion Technologies. Dave Kramer is the general manager of Sterling Ethanol LLC.
ETHANOL PRODUCER MAGAZINE JULY 2008
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COMPLIANCE
Beating the Environmental Enforcement Squeeze By Timothy A. Wilkins
E
thanol and other biofuels such as biodiesel, in addition to being renewable energy sources that reduce dependence on imported oil, have long been considered nontoxic, biodegradable and environmentally friendly. Tell that to The New York Times. Its widely publicized 2008 article, alarmingly titled “Pollution is Called a Byproduct of ‘Clean’ Fuel,” described an Alabama biodiesel plant that allegedly released a “ribbon of oil and grease” that “resembled Italian salad dressing” into local waterways. The article asserted that such discharges “can be hazardous to birds and fish,” and contains quotes making charges such as “a vegetable oil spill is just as deadly as a crude oil spill.” Before dismissing this as reporting from a source that neither understands nor cares about the ethanol industry, consider a 2007 newspaper story from ethanol country. “Biofuel Plants Generate New Air, Water, Soil Problems for Iowa,” declared the Des Moines Register & Tribune, in a piece that began: “Iowa's ramped-up ethanol and biodiesel fuel production led to 394 instances over the past six years in which the plants fouled the air, water or land or violated regulations meant to protect the health of Iowans and their environment.” That 70 percent of these “instances” related to excess iron in groundwater discharges was buried deep in the text. Of course, contrary to what’s often said by news media and environmental groups, regulated environmental indicators are getting better and compliance levels are improving. However, there is huge political and media pressure to keep enforcement penalties
high (they’re now up to $32,500 per violation per day) and growing. Anything less than perfection is used as proof that polluters are being “coddled.” The result is an enforcement squeeze in which smaller and smaller compliance items become a bigger and bigger risk—in terms of enforcement, civil and criminal penalties, and negative public relations—for any business covered by environmental regulations. The ethanol industry is moving squarely to the center of this enforcement squeeze under the pressure to meet renewable fuels standard targets. According to the Wilkins Renewable Fuels Association, more than 145 ethanol biorefineries operate in 26 states and 55 more are under construction. Under this kind of expansion pressure, it’s tempting to neglect environmental permitting and compliance requirements as burdensome paperwork. But the enforcement squeeze doesn’t just require the right piece of paper—it’s about fines, penalties and jail time for lack of compliance.
Regulatory Burden While the biofuel industry's focus on environmental regulation understandably has been drawn toward fuel standard concerns, it is essential that ethanol manufacturing, terminal and transportation companies not lose sight of the complex and bur-
The claims and statements made in this article belong exclusively to the author(s) and do not necessarily reflect the views of Ethanol Producer Magazine or its advertisers. All questions pertaining to this article should be directed to the author(s).
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ETHANOL PRODUCER MAGAZINE JULY 2008
COMPLIANCE
densome environmental regulatory compliance requirements that apply to their facilities, much as they do to other fuel refiners and handlers. Federal, state and, in some circumstances, local laws and regulations provide for, among other things: Complex and costly permitting and controls on the emission of pollutants to the air and releases of pollutants
through wastewater and stormwater discharges Control over the generation, classification, handling and disposal of wastes Management practices, planning and reporting relating to many types of hazardous materials A laundry list of permitting, registration, control, testing, monitoring,
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ETHANOL PRODUCER MAGAZINE JULY 2008
inspection, planning, prevention, training, reporting and recordkeeping requirements relating to all of the above. A summary of what producers face was provided by the U.S. EPA Region 7 in its November 2007 publication, “Environmental Laws Applicable to Construction and Operation of Ethanol Plants.” Even a few examples from the EPA’s 100-plus page manual show the compliance risks that ethanol and biodiesel producers carry if they are ignorant of these laws. National Environmental Policy Act If federal money is involved to construct an ethanol plant, it’s subject to NEPA and the project developer must prepare a detailed statement assessing the environmental impact of activities that significantly affect the environment. The NEPA assessment must include all potential environmental and human health impacts involving wetlands, water quality, hazardous waste and air quality. Clean Air Act Ethanol plants need to obtain a Title V operating permit if the plant has the potential to emit quantities greater than 250 tons per year (recently raised by the EPA from the previous 100ton level) of any particulate or chemical deemed a hazard to air quality. The primary sources of air emissions from ethanol plants include the grain handling units, boilers, distillers grains dryers, fer-
SERVICES Environmental Permitting and Compliance (Air, Land, Water) Civil Engineering and Land Development Services Wetland Identification, Delineation and Mitigation Land Surveying and Construction Layout Natural Wastewater Treatment Systems Geotechnical Engineering Services Environmental Due Diligence, Investigation and Remediation Construction Quality Assurance and Materials Testing Solid Waste Facility Design and Permitting
241
COMPLIANCE
The principle of regular, consistent assessment that applies to financial compliance should also apply to environmental compliance.
mentation and distillation units, emergency equipment such as backup generators, and even emissions from equipment leaks. Clean Water Act If there is a potential for placing dredge or fill materials into surface water during ethanol plant construction or expansion, the act requires a Section 404 permit. To minimize the impact of site runoff on water quality, a storm water permit must be obtained for discharges to waters from any construction activity that disturbs one or more acres of land. In addition, EPA’s Spill Prevention, Control and Countermeasures rules require significant plan preparation, construction of containment, training, inspections and other activities relating to the storage of oils. Safe Drinking Water Act An ethanol plant is subject to the requirements of the act if it uses an injection well to dispose of storm water, wastewater or indus-
ly related to the production of ethanol. Plant operation sources could include gasoline, spent solvents, lab packs, various paint wastes, used oil, waste ethanol, waste lamps and batteries. Hazardous waste must be properly disposed at a permitted treatment, storage or disposal facility, with detailed waste handling records required by the act. There are plenty of other environmental regulatory traps for an unwary industry. For example, the thousands of additional acres of corn needed to meet proposed renewable fuel targets need to comply with the Endangered Species Act. The act prohibits intentional modification or degradation of the endangered species habitat and requires a complex permit process for lawful activities that unintentionally degrade habitat. There are already confrontations between habitat preservation groups and corn farmers. In 2007
trial fluids, or has an on-site septic disposal system. If a municipal water supply is used for cooling or processing water, check with the system operator to identify additional compliance requirements. Emergency Planning and Community Right to Know Act This act requires facilities with regulated chemicals above threshold quantities (including ammonia and chlorine) to notify the state emergency response commission and the local emergency planning committee within 60 days after first on-site use. Ethanol plants are subject to the act’s spill reporting provisions if they release more than 100 pounds of waste ethanol within any given 24-hour period. Resource Conservation and Recovery Act All ethanol plants are capable of generating some quantities of hazardous waste. However, the hazardous waste being generated might not be direct-
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ETHANOL PRODUCER MAGAZINE JULY 2008
COMPLIANCE Ducks Unlimited and the Audubon Society, among others, pressured the USDA to reverse previous approvals of devoting conservation lands to corn-based ethanol, due to alleged wildlife habitat encroachment.
Compliance Strategy Given the complexity and consequences of these regulatory requirements, sound management of ethanol facilities requires careful attention to compliance assurance efforts. Facility owners and operators who wish to avoid the severe liability from environmental violations should pursue a strong environmental management program, starting with the employment of highly qualified internal and external environmental, technical and legal experts to help design, administer and troubleshoot their compliance efforts. However, maintaining compliance over time requires two essential elements. First, periodic checkup audits are essential. Regular review of environmental compliance status is absolutely essential. There is no environmental compliance “finish line.” Even under the best of circumstances, laws change, key people leave and regulated equipment breaks down. Without frequent, comprehensive, independent compliance assessments with the assistance of fresh, expert eyes, companies inevitably overlook certain duties and fall out of compliance. In the absence of periodic audits, even where companies make a strong effort to comply, some of the many complicated compliance obligations producers face will always slip through the cracks. Auditing efforts should not be undertaken lightly, though. Uncovering legal violations—obviously a prerequisite to fixing them—can lead to significant and costly compliance obligations, evidence that might be used against you, and potentially damaging enforcement consequences. Companies should consult with experienced legal counsel about the best ways of using audits to get better while protecting themselves against the potential negative consequences of their proactive efforts. Second, systematic management approaches provide direction. No company would audit its books on the premise of,
“We’ll get to it when we can.” The principle of regular, consistent assessment that applies to financial compliance should also apply to environmental compliance. One of the most effective tools for assuring compliance is a formal environmental management system that begins with a strong statement by the board of directors or the CEO supporting the need for compliance, followed by documenting and implementing a step-by-step compliance program. The key elements of most environmental management systems include: Periodic evaluation of all the ways
ETHANOL PRODUCER MAGAZINE JULY 2008
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each facility or operation interacts with the environment Written, measurable objectives and performance criteria (including legal compliance) for each facility or operation documented Written plans and procedures for achieving objectives and evaluating performance, as measured against calendars to ensure timely completion Written assignment of all environmental responsibilities to specific positions and personnel Documented training of all
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employees on their responsibilities and procedures Periodic internal and independent auditing to confirm the effectiveness of the process Systems to track performance, and document and demonstrate correction and prevention, and Regular management review with updating of the environmental management system to reflect the feedback received. Even companies that do not implement a full, formal environmental management system can benefit from evaluating their current environmental management efforts against the elements of an effective program.
Compliance Help, Cautions Software tools help efficiently manage environmental management system implementation and maintenance tasks. These can include project scheduling and management, documentation of training efforts, audit report compilation, and scheduling of corrective or preventive actions. Environmental management system software shared on an enterprisebased system gives easy online access to routine environmental and environmental management system documents and records. The system database can provide an online calendar for—and shared e-mail notification of—environmental management system milestone audit events, including deadlines for permits and other compliance requirements. By centralizing all environmental compliance management documents, data and activities into a single shared network, environmental management system software can be invaluable for smaller companies that may otherwise lack the time and resources to address crucial environmental concerns. A systematic approach to compliance—the right people, policies and support tools— institutionalizes continuous improvement and has a much better chance of succeeding and earning regulatory favor than informal or ad hoc approaches. Don’t assume that creating an environmental management system automati-
ETHANOL PRODUCER MAGAZINE JULY 2008
COMPLIANCE cally ends compliance problems, however. Unfortunately, environmental management system approaches can raise many potential legal and liability concerns, from the legal issues associated with auditing to the establishment of written policies, procedures and statements about environmental duties that might become evidence to help establish company liability or even criminal responsibility. Consider these lessthan-obvious compliance pitfalls: Periodic environmental compliance audits, if not properly and promptly acted upon, can give regulators more evidence to take harsher actions against a company. Thanks in part to the SarbanesOxley Act, companies risk regulatory sanctions for failing to disclose the financial impact of environmental problems. Senior managers who have responsibility for the provision of resources for environmental compliance or who become aware of environmental problems without immediately addressing them can face personal criminal liability as “responsible corporate officers.”
The environmental laws are constantly changing and each company's exposure to liability shifts accordingly. Companies should launch an environmental management system and auditing efforts only after consulting legal professionals who are experienced in environmental auditing and compliance. The right legal guidance can reduce the potential liability risks of uncovering and creating evidence of legal violations, for example by appropriately using legal privileges and policy protections while addressing possible concerns. Experienced counsel can also help identify the best strategies for correcting problems, documenting the solutions, working with the relevant agencies, and obtaining protections from federal and state programs that offer opportunities for leniency or immunity from liability. Companies participating in the biofuels industry should take pride in their efforts to make and distribute renewable fuels and to pursue the betterment of our environment. But participating in a “green” industry by itself does not exempt companies from complying with the com-
plex, costly and cumbersome regulatory requirements that apply to all industrial facilities. Environmental compliance assurance requires vigorous management effort and the assistance of qualified technical and legal experts who can help design and implement an effective environmental program. Periodic, comprehensive auditing of environmental compliance status and strong systems for environmental management are potentially costly and can be both difficult and risky to implement but, done right, these measures offer the best hope for maintaining and demonstrating ongoing compliance with the complex environmental laws and regulations that govern your biofuels company. EP Timothy A. Wilkins heads the environmental practice of the international law firm of Bracewell & Giuliani LLP. Reach him at timothy.wilkins@bgllp.com. This information is provided for general educational purposes; it is not meant to offer, and is not a substitute for obtaining, specific legal advice. This article represents the personal comments of the author and does not constitute a legal position or opinion of Bracewell & Giuliani LLP.
EQUIPMENT
Under Pressure Underground: Gravity Pressure Vessels Convert Waste into Biofuels By Peter Hurrell and Zbigniew â&#x20AC;&#x153;Zigâ&#x20AC;? Resiak
T
he first attempt at commercializing a process for ethanol from cellulose occurred in Germany in 1898 and involved the use of dilute acid to hydrolyze the cellulose to glucose. A similar process is in use today. Cellullose molecules are polymer chains of different forms of cellulose bound together with lignin. The process works by de-polymerizing the lignocellulose, freeing the celluloses from the lignin, which are then hydrolyzed to the simpler sugars for fermentation to alcohol. The process uses acid as a catalyst. Dilute acid may be used under high heat and pressure, or concentrated acid can be used at lower temperatures and pressure. The mixture must be neutralized and cleaned, and yeast fermentation is used to produce alcohol. Many chemical processes work better using subcritical or superheated water under pressure. These conditions have been used in the chemical and food industry for more than 180 years. Examples include dilute-acid hydrolysis of celluloses and starch to saccharides, the extraction of instant coffee, extracting indigo dye from woad, and treating wastewater sludge through wet-air oxidation. In all of these applications, the process used has generally remained a batch procedure where the water is pumped into a pressure tank and a heat exchanger. After treatment the resulting liquid is returned through the heat exchanger, which pre-heats the inflow which moves through a pressure-regulating valve before being released to normal pressure. The process depends on energy- intensive mechanical and electrical pumps and pressure tanks. It has
mostly been used for small-scale production since the mixing requirements and the need to add chemicals while maintaining temperature and pressure limits the potential for scale-up. In 1967 James Titmas modified the process with the aim of making the best use of the pressure and heat from the subcritical water process. His goal was to convert biomass to useful materials using wet oxidation, pyrolysis and hydrolysis. To accomplish this, he placed the pressure vessel below ground in a borehole. Using gravity and heat from the process minimizes the amount of energy needed and creates continuous flow. Another advantage is that being underground creates an environment for efficient thermal insulation, a small plant footprint, and improved health and safety. To obtain the natural pressure needed to maintain the temperature in subcritical water, the reactor has to be placed no more than 7,200 feet underground. This is within the capabilities and expertise of the oil drilling industry. The accuracy and skill of drilling wells vertically, straight and lining them to preserve water aquifers is also well proven. The technique has been proven in use. The U.S. EPA and Bow Valley Energy used a 4,200-feet deep vertical-tube reactor based on a 1982 patent for the wet-air oxidation of sewage sludge with heat recovery at Longmont, Colo. After modification, parts of this plant were moved to Apeldoorn, Netherlands, where it was used to treat sewage sludge from 1992 to 2004. The plant out-performed its design expectations. In its later years the use of Taylor bubble and heat recovery was abandoned in favor of product recovery follow-
The claims and statements made in this article belong exclusively to the author(s) and do not necessarily reflect the views of Ethanol Producer Magazine or its advertisers. All questions pertaining to this article should be directed to the author(s).
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ETHANOL PRODUCER MAGAZINE JULY 2008
EQUIPMENT
ing the Titmas approach. The gravity pressure vessel provides a simple way of making the subcritical water process continuous. It uses the heat released from the controlled wet oxidation of process contaminants to drive the water flow, much in the same way as an autogenic thermal airlift pump. This greatly increases production capacity because the gravity pressure vessel works as a continuous, lin-
ear, plug flow reactor with high internal heat and pressure recovery and no moving parts. This makes the process easy to control and scale-up without the need for multiple arrays of pumps, pressure tanks or complex controls. The gravity pressure vessel is comprised of a long steel pipe, shaped like a test tube, of a fixed diameter between 12 and 24 inches. The annulus of an open-ended steel
pipe creates updraft and is suspended within the test tube. This updraft protrudes above the test tube and descends to within a few feet of its concave bottom. Small bore steel pipes are suspended in the updraft to inject steam and chemicals, for temperature control, cathodic protection and cleaning. The diameter of the tube and updraft pipes is governed by hydraulics of the supercritical water and the need for a self-cleansing velocity as well as the small bore pipes. The entire gravity pressure vessel is freely suspended inside a steel-lined borehole, which is cemented into the ground. A pressure cap is placed over the space between the gravity pressure vessel and the borehole and a vacuum is applied to the void between the enclosed space to form a thermal barrier between it and the borehole. Through the top of the gravity pressure vessel the pipes connecting to the gravity pressure vessel include a feed solution to the annulus formed between the updraft and the test tube. A pipe is used for discharging the treated solution from the updraft with the smaller pipes at the top. The process defines the depth of the gravity pressure vessel.
Wet-Air Oxidation of Sludge Wet-air oxidization of sludge should be carried out at a depth of 6,000 feet. Sludge at 3 percent to 6 percent dry solids passes down the outer annulus and oxygen is injected near the bottom. Oxidation is
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EQUIPMENT rapid, raising the temperature to 600 degrees Fahrenheit. The treated material rises through the updraft to the outlet for final treatment, degassing and heat capture. As it rises, it passes heat through the updraft to pre-heat the descending sludge prior to oxidation. The process achieves more than 95 percent destruction of biological/chemical oxygen demand and neutralizes all inorganic material. Since sludge can be processed as a liquid, it can be taken directly from sewage treatment works. There is no need for expensive drying as required for other processes such as incineration. The process is self-sufficient in energy and even generates a surplus, which can be converted into electricity.
Dilute-Acid Hydrolysis of Biomass Dilute-acid hydrolysis of cellulose to sugars requires a 1,600- to 2,000-feet deep gravity pressure vessel. The biomass mash containing 8 percent to 12 percent dry solids flows down the outer annulus and steam is injected at the bottom to initiate a temperature rise. Oxygen is added at the entry to the updraft to burn off dissolved lignin. Acid is then added. As the cellulose disassociates to saccharides (sugars), the temperature rises to 460 degrees
Fahrenheit. An alkali is injected, immediately neutralizing the acid. Once autogenic thermal balance is established, the steam supply is cut. Heat from the rising saccharide solution passes through the updraft to pre-heat the cellulose mixture that is descending in the outer annulus. Using the gravity pressure vessel increases the efficiency of converting biomass to sugars by twoto three-fold, greatly enhancing the potential of producing ethanol for biofuels and other applications. Most ethanol today is made from crops rich in sugar and starch, raising concerns about elevated food prices and fuels inflation. Using a gravity pressure vessel in subcritical water to convert non-food biomass to ethanol is an important part of the solution. Ethanol can be made profitably from a wide range of biomass sources including non-food crops. Using municipal solid waste as a raw material has the added advantage of being a steady source of biomass throughout the year, unaffected by seasons, climate, disease or international pricing cartels. The gravity pressure vessel process can assist the household waste industry because it changes a waste material that currently incurs a cost to treat to a raw material that can create an income from treatment. As
biomass represents approximately 60 percent of municipal solid waste in the United States (66 percent in the European Union and 87 percent and more in Asia), it is profitable to convert to ethanol. Sewage sludge, which contains approximately 30 percent biomass, can also be treated and converted in the plant. Municipal solid waste-to-ethanol facilities work in three identifiable stages. The first is preparing the biomass by shredding, settlement in water to remove inert materials, maceration and thickening. The second is to treat the biomass with supercritical water, and passing it through a settlement tank and molecular sieves to clean it. In a third stage, the contained saccharides are converted to ethanol. The process plant and equipment used are standard to the wastewater industry and are enclosed and covered. There are no airborne emissions from the treatment of waste. Dioxins cannot be produced since the working temperature is low. Smells and particulates are avoided. Water from the process is recycled and any residual will be treated for discharge to inland waterways. The carbon dioxide produced can be used as the acid in the hydrolysis reaction with the rest available for sale or sequestration. Using municipal solid waste to make ethanol betters all existing and projected
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EQUIPMENT environmental targets for treatment. It eliminates landfilling and cuts out the greenhouse gases that would otherwise be emitted from landfill or from the treatment process. The process is entirely carbon negative and qualifies for carbon credits. Ethanol made from municipal solid waste offers major benefits toward biofuels substitution targets in any country without affecting the food economy. A municipal solid waste-to-ethanol plant is affordable. Its capital cost can be significantly less than 40 percent of an equivalent incineration plant, and is simple and more economical to operate and maintain. The income from municipal solid waste tipping fees and/or the sale of ethanol can finance the design, construction, operation and maintenance of a plant within a few years without fees increasing above current landfill charges.
equivalent thermal destruction plant. The process is not dependent on food crops such as wheat and corn, but takes commercial advantage of industrial waste with a high cellulose content such as paper and wood, municipal solid waste (after separation of the recyclable materials), sewage sludge and other cellulose materials that would otherwise be disposed of. The ethanol produced is an effective use of bioenergy resources, in terms of both greenhouse-gas emissions and monetary value, which takes on the wider environmen-
tal impacts, and contributes to sustainable emission reductions needed to fulfill a low carbon economy. EP Peter Hurrell is managing director of GeneSyst International Inc. U.K. and Ireland. Reach him at hurrellconsult@aol.com. Zbigniew â&#x20AC;&#x153;Zigâ&#x20AC;? Resiak is the program director for Indiana Ethanol Power. Reach him at zresiak@rwa.com or (317) 780-7249.
In Conclusion Superheated (subcritical) water is an environmentally benign solvent that has many applications. Until recently it has been used in a batch process, but the gravity pressure vessel makes it possible to turn this process into a continuous or linear process. Gravity pressure vessels also find their use in the wet-air oxidation of sewage sludge, which produces surplus energy, but the quantity of sludge that can be treated in a standalone treatment facility is limited to the larger urban areas or regional centers. A particularly interesting application of the gravity pressure vessel is in the conversion of biomass to saccharides in order to make ethanol fuels, using dilute-acid hydrolysis. This process can be economical using a wide range of biomass materials, including nonfood crops and waste such as municipal solid waste. While the yield of ethanol from some materials may be higher than municipal solid waste, this can be offset with a tipping fee. The process also promises an environmentally friendly solution for municipal waste and an alternative to landfill and incineration. GeneSyst International Inc., which has developed and patented a gravity pressure vessel reactor with the aim of transforming municipal solid waste to ethanol, calculates that a comparable municipal solid waste-to-ethanol plant can cost less than 40 percent than an
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INNOVATION
A Multi-Prong Approach to Carbon Neutrality By Stephen Paley
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everal charges have recently been leveled at the biofuels industry. Misinformed critics have cited indirect land use issues, the food-versus-fuel debate, and the destruction of the Amazon rainforest as reasons to halt or eliminate the production of fuel ethanol. It’s become clear the issues aren’t going away anytime soon. However, the industry is heading in a direction that will likely leave the accusations even more baseless. This article depicts an avenue of growth that greatly
increases industry profit while eliminating negative connotations permanently. Many promised future technologies may not materialize, or else may cause unexpected harm. Plug-in hybrids would save a large amount of crude oil but only by dramatically increasing the use of coal to make electricity. Any oil saved in one country is likely to be used elsewhere, so the world would end up burning the same amount of oil and a huge additional amount of coal—a scenario for catastrophic climate change. Although solar
Several cellulosic processes can use mixtures of all types of biomass or cellulose including old newspapers and the organic portion of garbage, which is the third-largest source of the greenhouse gas methane in the atmosphere.
cells will have important local application, electricity generated for the nation by solar cell arrays in the desert Southwest is unlikely. Most of the energy is lost when transforming low-voltage direct current put out by solar cells to high-voltage alternating current for long distance transmission. If done properly, ethanol can pick up much of the slack in a way that’s sustainable, largely through a better match between suitable local biomass and a specific type of cellulosic ethanol production.
Cellulosic Ethanol, Limited Agricultural Acreage The United States needs a cellulosic production process that uses little energy per unit of ethanol produced (i.e., high energy gain). Many companies are developing such a process. Infinite Renewable Energy has developed a microorganismbased, low-temperature, low-pressure process with an energy gain of 11:1 that generates almost no pollution per unit of ethanol produced. The cost of producing
The claims and statements made in this article belong exclusively to the author(s) and do not necessarily reflect the views of Ethanol Producer Magazine or its advertisers. All questions pertaining to this article should be directed to the author(s).
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ethanol using this process is 70 cents per gallon. Such processes tend to be low cost and require low energy inputs, but they must also have a short cycle time to be commercialized, which takes some doing. Several cellulosic processes can use mixtures of all types of biomass or cellulose including old newspapers and the organic portion of garbage, which is the third-largest source of the greenhouse gas methane in the atmosphere. Using forage sorghum, which grows across much of the nation, less than 10 percent of U.S. farm acreage would produce enough biomass to replace all U.S. imported oil with cellulosic ethanol. Other high-yielding ethanol crops that can be grown in the southern United States include sugarcane and a less waterintensive miscanthus/sugarcane hybrid developed at Texas A&M that yields 10,000 gallons of cellulosic ethanol per acre annually. Cellulosic ethanol requires processing of so much biomass per unit of ethanol that it should be grown and transported no further than 20 miles from the distillery, or else transportation (and energy)
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costs become excessive. This, in turn, dictates a distillery size between 20 MMgy and 50 MMgy. This economic formula encourages local production by smaller distilleries and localized consumption of ethanol.
Achieving Carbon Neutrality Ethanol can be produced in a carbon negative manner (â&#x20AC;&#x153;Coupling Carbon Sequestration with Novel Cellulosic Ethanol Technology,â&#x20AC;? December 2006 EPM), but even without that ethanol made by a low energy process with suitable biomass grown within 20 miles of the distillery will be almost carbon neutral. The only reason ethanol is not carbon neutral is the fuel and energy-intensive materials used to cultivate and harvest biomass, and the energy used to transport the biomass and convert it into ethanol. Biofuel crops requiring little cultivation, which also reduce production costs, are thus desired. Weeds grow without any cultivation and some are prime candidates for cellulosic ethanol. The cellulosic process can be made even closer to carbon neutral. Lignin,
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Colombia can become the Saudi Arabia of cellulosic ethanol production, but must prevent unregulated expansion of maralfalfa at the expense of grasslands and rainforest.
Fueling the Future
another easily separated component of biomass, if burned as fuel to power the ethanol-making process, introduces no fossil fuel carbon to increase the carbon positive nature of ethanol production, according to Argonne National Laboratories’ “Well-to-Wheel Energy Use and Greenhouse Gas Emission of Advanced Fuel/Vehicle Systems” report released in June 2001. The microorganism-based process needs so little energy that it can be powered by the lignin in the biomass. The minerals left over after making ethanol can be returned to the local fields from which they came. A crop rotation cycle of food crop, biomass and fallow would enable sustainable production of both biomass and food provided climate change does not become pronounced. The result of the described cost and energy optimizations would produce ethanol that is almost carbon neutral.
Expanding Feedstock Sources Kcpaf_lbgqgle _lb Rp_bgle Dgmak <j]q^mk ;geeg\ala]k `Yk Z]]f gf] g^ l`] d]Y\af_ e]j[`Yf\ak]jk Yf\ ljY\]jk g^ _jYafk$ gadk]]\k Yf\ ja[] af afl]jfYlagfYd Y_ja[mdlmjYd [geeg\alq eYjc]lk kaf[] )0-)& Af Y\\alagf lg ]phgjl Yf\ \ge]kla[ \akljaZmlagf Y[lanala]k$ o] g^^]j [mklgear]\ jakc eYfY_]e]fl kgdmlagfk lg eYfY_] [geeg\alq hja[] jakck& @gmdscjq Mncp_rgmlq D<;geeg\ala]k `Yk Y _jgoaf_ hj]k]f[] af l`] Zag^m]dk k][lgj& L`] _jgmh ak ]phYf\af_ alk ]l`Yfgd hjg[]kkaf_ gh]jYlagfk af :jYrad Yf\ `Yk [gee]f[]\ gh]jYlagfk Yl alk ]l`Yfgd Yf\ Zag\a]k]d hjg\m[lagf ^Y[adala]k af l`] Mfal]\ KlYl]k& Al ak [gfkljm[laf_ Y\\alagfYd ]l`Yfgd [YhY[alq af l`] Mfal]\ KlYl]k Yk o]dd Yk Y\\alagfYd Zag\a]k]d [YhY[alq af 9j_]flafY& ?pmslb rfc Umpjb G^^a[]k Yf\ ^Y[adala]k af :]abaf_$ :m]fgk 9aj]k$ ;Yd_Yjq$ <]d`a$ ?]f]nY$ @gmklgf$ CYfkYk ;alq$ E]eh`ak$ HYjak$ Hgjl%;Yjla]j$ K g HYmdg$ K]Ylld]$ Kaf_Yhgj] Yf\ Oadlgf _an] mk Y eYbgj hj]k]f[] af gn]j -( [gmflja]k lg k]jn] gmj [mklge]jk& uuu,JBAmkkmbgrgcq,amk
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Maralfalfa, a crop requiring little or no cultivation and used as a cattle feed in Colombia, can produce sufficient biomass to produce 10,000 gallons of cellulosic ethanol per acre per year. One must be careful, however, deploying a process for cellulosic ethanol in South America that can use mixtures of all kinds of biomass. It could provide another reason for clearing rainforests since the cleared vegetation itself could be used to make ethanol. Colombia can become the Saudi Arabia of cellulosic ethanol production, but must prevent unregulated expansion of maralfalfa at the expense of grasslands and rainforest. Another place to greatly expand production of low-cost ethanol without expanding biofuel crop acreage is Brazil, which uses 3 percent of its acreage to grow sugarcane for ethanol production. If Brazil switched to a cellulosic process it would increase its ethanol production by 30 percent and reduce its cost to about 54 cents per gallon. One can grow many times the biomass per acre per unit of time by growing microalgae instead of rooted, land-based plants. Microalgae also require considerably fewer resources and much less energy to grow and harvest. We propose to grow and harvest microalgae in shallow desert freshwater pools. Using desert or arid, sparsely vegetated grassland for this purpose would not put net greenhouse gases into the atmosphere. The microalgae would need to have high cellulose content (approximately 40 percent), be hardy enough to withstand extremes
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INNOVATION of daytime to nighttime temperatures, and outgrow stray, undesired stains that enter the pool. Many candidates of microalgae have these properties that can be adapted to local conditions. Water for this process could be provided by a low-cost, low-energy process of large-scale desalination. There may be merit to growing microalgae (phytoplankton) on the surface of the ocean for use as biomass. Stimulated growth of ocean algae has been demonstrated and could be carried out over a large (but—by choice—not continuous) area of ocean using a “fertilizing agent” in concentrations of parts per billion sprayed onto the ocean from an aircraft. Enough microalgae could be grown in this manner to supply sufficient biomass for the entire world to abandon most energy applications of oil. If phytoplankton is grown at sea for biomass, it would make sense to manufacture carbon-negative ethanol aboard large ships. The energy needed to power the process might be provided by easily separated lignin-like compounds in microalgae. Thus, fuel might not have to be brought to the ship to manufacture ethanol. Similarly, freshwater for ethanol manufacturing could be obtained from the ocean by reverse osmosis desalination. Finally, another kind of microalgae could be used in a “bubbler” device to capture the carbon dioxide released during the biofuel-making process, rendering the ethanol carbon negative. These algae are to be disposed of in the deep ocean to sequester the carbon they capture. Since the ship is already at sea, disposal is simple. When its tanks are full the ship can come close to shore and offload its ethanol through buoy-supported lines.
least palatable, by the large profit increase for growers and producers that the new path enables. Two-thirds of all pioneering inventions during the first 70 years of the 20th century came from individuals and small companies, according to Thomas W. Harvey in “Technical Ventures—Catalysts for Economic Growth.” Today such companies have difficulty gaining credibility and their innovations often go unrecognized. It is risky for small companies to apply for a patent that threatens a multinational company because changes in patent law enable
the innovation to be stolen. Without patents, publishing in peer-reviewed journals—another source of credibility—is denied. Consequently, innovations needed for industry development may go unrecognized if they come from small companies. This daunting obstacle must be overcome to achieve sustainable, carbon-neutral fuel production. EP Stephen Paley is the principal scientist at Agricultural Management Systems. Reach him at spaley1ams@aol.com or (405) 721-0064. The late George K. Oister contributed invaluable discussions and insights to this article.
The Need for Innovation Many forms of cellulosic ethanol technology exist and there are various ways to implement them. Not all are equivalent. The motivation to follow a different path--to replace oil with a sustainable carbon-neutral process of fuel production and use--is evident as greenhouse gases in the atmosphere continue to rise and crude oil prices continue to soar. Change is made attractive, or at
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Debunking the Myths of the Food-vs.-Fuel Debate By Kenneth C. Reed
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thanol is currently on trial, charged with causing world hunger and civil unrest. It is alleged that the corn and other grains used to produce biofuels has led to severe food shortage and disrupted food security around the world. Alternative fuel production has been blamed for high food prices at the grocery store and causing a “silent famine” among the world’s poor. Some have gone as far as to claim that production of ethanol and biodiesel from grain is a “crime against humanity.” To the charges, ethanol pleads “not guilty.” The purpose of this article is to set forth the truth and debunk the myths about ethanol and biodiesel. The public deserves to know the truth so that they can discern fact from fiction and propaganda. Armed with truth, consumers will be less inclined to succumb to biased media hype, special interest group propaganda and knee-jerk decision making by political leaders. The truth will expose the real culprits behind high food prices and the hunger crisis. The real perpetrators of the current world food crisis are fear, greed, rising demand, dwindling supply, prolonged drought in Argentina, heavy rains and flooding in the Midwest United States and other parts of the world, and foreign government decisions to reduce grain exports in an effort to drive down domestic prices. These factors all play a pivotal role in the price and availability of food. In 2008, the U.S. ethanol industry is expected to consume approximately one-third of the nation’s projected corn output. However, field corn used for ethanol production is not
used for human consumption. The actual net impact of ethanol production on food prices in the grocery store amounts to a few pennies. Compare this to the following facts. Truth No. 1: A barrel of crude oil sold on the New York Stock Exchange for $75 in July 2007. On May 7, 2008, this global commodity sold for $122 per barrel. By May 9, the price hit $126 per barrel. It takes approximately six weeks for a barrel of oil to make its way from the refinery to consumers’ gas tanks. In addition, oil companies switch from winter gas to summer blends, a process that results in an upward spike in gas prices. Truth No. 2: Consumers paid approximately $2.78 per gallon for gas in April 2007. On May 7, 2008, the nationwide average cost of gas was $3.61 per gallon. The American public will soon feel the effects of $126 per barrel oil and the summer change-over as the cost of a gallon of fuel will likely exceed $4 and move toward $4.50 by the time this issue of EPM is printed. Truth No. 3: Rice is the No. 1 food staple for nearly one-half of the world’s population. The record price of $894 per ton was set on May 6, 2008. The previous record was set in May 2007 when the price was $327.25 per ton. Much of the world’s population that relies on rice as its primary dietary supplement is poor and has been the hardest hit by this sharp increase. Truth No. 4: Thailand, the world’s largest rice exporter, ships one-third of all rice exports. The world is gripped by the fear that Thailand will soon restrict rice shipments, thereby furthering the global food crisis. The Thai government has said it will not
The claims and statements made in this article belong exclusively to the author(s) and do not necessarily reflect the views of Ethanol Producer Magazine or its advertisers. All questions pertaining to this article should be directed to the author(s).
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impose such restrictions. Nevertheless, worry has caused consumers to hoard rice
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which has lead to a $2 to $3 increase in price in the grocery store. Sam’s Club and
Costco have placed limits on bulk rice purchases claiming their decision is based on recent supply-and-demand trends. Truth No. 5: Fear concerning Thailand’s potential to restrict rice exports is fueled by the fact that other major world exporters (India and Vietnam) indicated that they will reduce rice exports in an effort to drive down domestic prices. China, Egypt and Cambodia have imposed such restrictions. Truth No. 6: In December 2007, the price of wheat topped $10 per bushel. This was after experts had predicted that wheat would sell for $3.80 per bushel by June 2007. At press time, May 2008 wheat was selling for $12.92 per bushel, having fallen from $19.80 per bushel in February 2008. This price volatility is coupled with the fact that the world’s wheat supply has diminished to its lowest level in 60 years. Truth No. 7: A bushel of corn sold for an average price of $3.40 in June 2007. By May 5, 2008, a bushel of corn sold for $6.02. Soybeans sold for an average of $6.35 per bushel in 2007 and reached
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$6.00
Price Per Bushel
$5.00
$4.00
$3.00 Jan. ‘07 Feb. ’07 Mar. ‘07 Apr. ’07 May ‘07 June ’07 July ‘07 Aug. ’07 Sept. ‘07 Oct. ’07 Nov. ‘07 Dec. ’07 Jan. ‘07 Feb. ’07 Mar. ‘07 Apr. ’07
Date Prices received for U.S. corn SOURCE: USDA NATIONAL AGRICULTURE STATISTICS SERVICE
$13.32 per bushel by May 2008. Corn and soybeans are the primary feedstock for producing ethanol and biodiesel fuels. Truth No. 8: Developing nations such as China and India
have become more affluent, resulting in increased food consumption, particularly meats, poultry and vegetable oils. People who once ate approximately 97 pounds of meat per year are now eat-
ANALYSIS ing 242 pounds of meat per year. Increased meat consumption requires increased livestock which requires a significant increase in feed grain. This increase in demand for grain has been a trend for the past five years, significantly impacting worldwide supply and a cause of surplus levels dwindling to their lowest point in 60 years. Truth No. 9: At press time, prolonged drought in Argentina, floods in the Midwest United States and heavy rains in other areas of the world have slowed the planting season for farmers. Unless the weather changes soon, crop yields will be significantly less in 2008. Lower supply, worldwide population growth and increased demand results in higher prices. Add to these factors the decline in the value of the U.S. dollar and the shift of investment dollars into global commodities and the ingredients exist for higher food prices in the grocery stores. At the same time everything is rising in price, household incomes have remained flat or declined. Unfortunately, the poor of the world suffer the most. Civil unrest in areas of the predominantly poor have nothing to do with production of ethanol but everything to do with the widening gap between the “haves” and the “have-nots.” Truth No. 10: This time, ethanol and biodiesel are here to stay. In prior generations, major oil companies and special interest groups have been able to block the penetration of biofuels into the market. With rising energy costs, increased concern for global warming and greater emphasis on reducing America’s dependence on foreign oil, the time is right for the United States to invest in alternative fuels. The renewable fuels industry achieved $25.4 billion in revenues in 2007 from sales of 15 billion gallons of fuel. The market is projected to grow to $81.1 billion per year by 2017. Major oil companies raked in $123 billion in profits this past year while the price at the gas pump reached levels which might force people to choose between driving and eating. Some American truckers are unable to afford to fuel the trucks that deliver most of this country’s food to the stores. Truckers have paid in excess of $22 billion more for fuel in 2008 than they did in 2007. Higher prices are passed from the truckers to the
stores and from the stores to the consumers. The sad truth is that there is no food shortage. Food is in the store and rotting on the floors of the warehouses, but the people of the world are increasingly unable to afford to purchase it due to severe price increases fueled by ungodly price increases for oil. If it had not been for the availability of ethanol and biodiesel as a competitive alternative to petroleum-based fuels, the price of gas would be even higher than it is now.
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In conclusion, the charges against ethanol and biofuels are wrong. At best, those who promote these charges are misinformed. At worst, these people and groups are part of an effort to reverse U.S. government policies that promote alternative fuel development. EP Kenneth C. Reed is chairman and CEO of Natural Alternative Fuels Inc. Reach him at kcreed@naturalalternativefuels.com or (248) 460-3233.
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For more information, visit www.gatxrail.com 257
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Overcoming Ethanol’s Growing Pains By Rick Kment
G
rowing pains are a natural part of any lifecycle. As we age and mature, growing pains are all but certainties. There are relatively few problems in the first few stages of a lifecycle. For example, a newborn child essentially has few problems through its infancy. Everyone pays it due attention and showers it with love. However, as the child begins to mature, challenges begin to arise, and with each new phase in life comes a new set of difficulties. In particular, most remember the growing pains that consumed us during our teenage years. This is true in our lives as well as for the still-maturing ethanol industry. At the mid-point of 2008, the ethanol industry is experiencing some adversity. As the industry continues to mature, it is important to examine and understand these challenges. In a sense, the commercial ethanol industry has grown out of its infancy and is reaching its teenage years. It is now in a phase where it is growing quickly but experiencing some awkward difficulties figuring out how to handle its development.
Ethanol Economics Prompted by a surge in political support and financial investors, the biofuels industry has continued its strong move toward steadily increased production. This has been especially prevalent in the rapid growth of the corn-based ethanol market during the past two years. However, since early 2008 the industry has seen a decrease in the financial support from investors
to finance the construction of new plants. A number of reasons exist for this falloff in investor interest, but ultimately, the industry is experiencing a tightening of the market. Many of the newer plants that have come on line in the past two years are still paying off debt and thus having a harder time remaining profitable. Neeley Biofuels— DTN’s hypothetical ethanol plant based in South Dakota—is showing a slight loss due to sharply higher input costs. Plant operators are facing input prices that are Kment double to triple the costs that they initially anticipated when these plants were being constructed. In addition to input costs, transportation issues also hinder plants. Whether transporting ethanol by truck or train, high energy prices—primarily diesel fuel—have increased the cost of transporting ethanol from the production facility to end users. Despite these challenges, profit margins rebounded slightly during the spring months of 2008, which helped increase the profitability at most plants. With a number of new plants coming on line either in 2008 or early 2009, the capacity to produce 13 billion to 15 billion gallons of ethanol per year will most likely be met in 2009 or 2010.
The claims and statements made in this article belong exclusively to the author(s) and do not necessarily reflect the views of Ethanol Producer Magazine or its advertisers. All questions pertaining to this article should be directed to the author(s).
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Ethanol Infrastructure Similar to a young teenager without a driverâ&#x20AC;&#x2122;s license desperately trying to meet up with friends at the mall, the ethanol industry is still struggling with fundamental transportation issues.
Across the country, states are beginning to blend significant amounts of ethanol into their gasoline. In particular, southeastern states such as Florida, Louisiana, Mississippi and Georgia have begun blending or increased blending of
Ethanol futures price $3.00
Price per gallon
$2.50
$2.00
$1.50
August 07
September 07
October 07
November 07
December 07
January 08
February 08
March 08
SOURCE: DTN
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Keeping focus on long-term production and continued advancements toward commercializing cellulosic ethanol should be the focus of ethanol producers. ethanol. Although eager to supply the product, transporting ethanol to these states has proven to be more difficult than expected. Unlike gasoline, ethanol isn’t shipped
in established pipeline systems. The fundamental problem is that the majority of ethanol is produced in the Midwest, or Corn Belt, and must be shipped to highly populated areas, which are typically on the
Creating a legacy of ethanol process design and technology
Pioneered SSF (Simultaneous Saccharification and Fermentation)
Introduced molecular sieve technology in 1981
First large-scale flexible feedstock plants for wheat, corn, barley and sugar
100+ plants in more than 30 countries
Designing the Future of Ethanol for Over 50 Years
coasts. The pipelines, however, were meant to move gasoline in the opposite direction—from the coast to inland regions of the country. Transporting ethanol through pipelines also raises concerns regarding water getting into the ethanol. Currently, the majority of ethanol is shipped via rail. However, railways have since become overly congested. In addition, few ethanol terminal locations are large enough to unload unit trains of 80 cars or more. Currently, additional unit train facilities are being built to alleviate this bottleneck. The majority of locations can handle approximately three to 10 railcars. This still leaves much of the country to rely on the trucking industry to ship ethanol to the closest terminal location, which has proven to be costly with the ever-rising fuel prices. As the industry continues to increase overall production and demand steadily grows, transportation will be a long-term challenge that will not only damper but add to the cost of the delivered product.
Consumer Perception, Acceptance Every teenager will say how important it is to have the right image and the struggle to win acceptance from their peers. Again, the same is true for the ethanol industry. Consumer perception and acceptance of corn-based ethanol continues to waver. Like a nasty rumor circulating through the cafeteria, speculation and finger pointing has tarnished the reputation and credibility of the ethanol industry. This is due in large part to higher energy costs, increased food prices and environmental concerns. Yes, corn prices and food costs have risen in part due to the increased demand for ethanol, but to say the ethanol industry is the culprit behind these factors would be a broad overstatement. Increases in corn prices have also been significantly impacted by the surge in investment interest in commodities. This interest has been spurred by the fact that commodities are perceived as “safer” investments with higher returns than many areas in the stock
513.351.7500 / WWW.KATZEN.COM 260
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MARKET market. Also, the issue of increased food prices is far more complicated than simply pointing a finger at corn prices. On a broader scale, there are several factors behind the rise in food prices. According to a report by the Center for Agricultural and Rural Development at Iowa State University, there is a close and significant correlation between energy prices and food prices. The report estimated that a 10 percent increase in energy costs would lead to a 5 percent increase in retail food prices. Other factors such as labor costs and an increased demand from the booming Asian economies also can be factored into higher food costs. The environmental issues are hitand-miss as well. It has been reported that ethanol indirectly creates an indirect land usage issue in which land in other countries (rainforests and wildlife-rich territories) is being used to produce inputs for the biofuels industry. From this theory, some are saying the ethanol industry is more detrimental to the environment then petroleum gasoline. However, in order to correctly make that argument a study would have to take into account the indirect environmental affects of the petroleum industry and urban sprawl. To my knowledge, no such study has been completed to accurately contrast the two. I believe consumers are confused, and rightfully so. It seems as though everyone wants an idealistic solution to the countryâ&#x20AC;&#x2122;s dependence on oil that has no pollution or adverse affects to any facet of society or inconvenience to the general public. Unfortunately, there is no such solution. In fact, very few alternative options, such as hydrogen-powered cars, are commercially viable. Even commercial industrialization of cellulosic ethanol is still a few years away. As the industry matures, however, advancements will be made. It is also important to note that the U.S. Energy Bill has already planned to cap the production of corn-based ethanol at 15 billion gallons per year. Consumers must realize that
corn-based ethanol and biodiesel, although not the perfect and end-all solution, are currently our most viable alternatives to reprieve the overall net issue of reducing the use of petroleum fuels. Keeping focus on long-term production and continued advancements toward commercializing cellulosic ethanol should be the focus of ethanol producers. In addition, the industry needs to continue to be proactive in providing the public with a well-rounded perspective to the countryâ&#x20AC;&#x2122;s current, hot-button issues (increased costs
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and environmental concerns). So a significant part of maturing, as the ethanol industry continues to do, is learning to recognize and overcome the bigger challenges that face it at various stages of development. In its teenage years, the ethanol industry is experiencing some challenging hurdles. But, as we all did in life, the industry will eventually overcome these huddles as it continues to mature. EP Rick Kment is a biofuels industry analyst with DTN. Reach him at rick.kment@dtn.com.
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MEXICO
Assessing the Impact of Mexico’s Biofuels Law By Raul Felix
I
n the past five years, developers, researchers, small production facilities and financiers of projects in the biofuel industry argued in different forums that it was important for the Mexican government to enact a biofuels law to provide the certainty needed for the development of the biofuels market. It now appears that the old saying “be careful what you wish for, you may just get it” is completely applicable for this legislative development. The Law for the Promotion and Development of Biofuels, which was published Feb. 1 in the Federal Official Gazette, became effective Feb. 6. Several surprises were offered for those same advocates of regulations and instruments. The biofuels law clearly states in its title that its main objectives are the promotion and development of biofuels in Mexico. However, it does not create a direct incentive for those that desire to participate in this nascent industry. Most of the content of the biofuels law is aimed at describing the prerogatives of different ministries within the federal administration to regulate the development of the biofuel industry in Mexico. For example, the biofuels law mandates the formation of an Inter-Ministerial Commission for the Development of Biofuels with the participation of the following ministries: Energy (SENER), Environment & Natural Resources (SEMARNAT), Agriculture, Cattle, Rural Development, Fisheries and Food Supply (SAGARPA), Economy (SECON) and Tax Collection and Administration (SHCP). Another of its main objectives is to promote and regulate the development of the agricultural sector in
Mexico. This law is aimed to fully expand on constitutional articles 25 and 27 section XX that discuss the state planning tool of the federal executive to orient the economic development and the development of the rural sector in Mexico. It’s also aimed at developing the national policies for the promotion, marketing and use of renewable energy. In the past, one of the main discussions among potential developers of biofuel projects in Mexico was the potential interference by the state-owned oil and gas monopoly (PEMEX) in the development of this market. This was the consequence of the market not being regulated and being open to anyone that would risk participating in it. There was a lingering risk of the potential legal recharacterization of biofuels as part of the traditional fuel market dominated by PEMEX. The most positive aspect of this biofuels law is the fact that it generates an independent legal definition for biofuels and a separate legal framework for their regulation that is not to be limited by traditional fossil fuels laws being applied. Biofuels are described as the “fuels obtained from biomass derived from organic material in the following activities: agriculture, cattle activities, forestry activities, aquaculture, algaeculture, fisheries products, households, commercial, industrial, from microorganism, enzymes, and derivatives of the foregoing that are produced by technological sustainable processes that comply with the specifications and quality norms issued by the competent authorities.” Further, this law defines biogas as the “gas produced by the biolog-
The claims and statements made in this article belong exclusively to the author(s) and do not necessarily reflect the views of Ethanol Producer Magazine or its advertisers. All questions pertaining to this article should be directed to the author(s).
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ical conversion of biomass as a consequence of the decomposition process.â&#x20AC;? The regulation of this sector would in the medium- to long-term allow energy companies, producers and individuals to participate in the development of a new regulatory framework for a new alternative energy market. It would be possible to develop several projects for mass production, distribution
ETHANOL PRODUCER MAGAZINE JULY 2008
and marketing of biofuels in Mexico after obtaining the applicable permits. SENER will be responsible for overseeing the development of this market and it will effectively regulate those companies and individuals that may produce, store, provide transportations services, transport by pipelines and market biofuels in Mexico. SENER has been empowered with the exclusive authority to dictate the criteria for
the acquisition of biofuels to PEMEX, its subsidiaries, the Federal Electric Commission and Light & Power Company. Further, it will be responsible for designing the introductory program for biofuels in Mexico that will allow the use of ethanol mixed with gasoline and direct distribution of biodiesel to the general public. Companies that produce a biofuel that may substitute a traditional fuel may be authorized to produce, store or market it in Mexico, and as long as they secure all the applicable permits, they may freely enter and compete in this market. SEMARNAT was expressly entrusted with overseeing the environmental impact of those facilities devoted to the production, storage, transportation, distribution and marketing of biofuels. This effectively expands the catalog of federally regulated activities contained in article 28 of the General Law of Environmental Equilibrium and Protection. It will also regulate all activities involving biofuels that may generate air emissions, wastewater or waste. The biofuels law expressly prohibits changing the zoning from forestry to agricultural for the production of crops devoted to this industry. Therefore the production of crops for the biofuel industry will be limited to those areas where the prior authorized use was agricultural, limiting the expansion of potential biofuel production areas. SAGARPA will regulate the develop-
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MEXICO ment of any corn-based biofuel production facilities in Mexico. SAGARPA will not authorize any project of this nature until the “existing corn inventories exceed the national demand.” The biofuels law does not specify if this restriction would be applicable to all or certain varieties of corn. It’s expected that this issue will be clarified in the regulations to the biofuels law. Therefore, it appears that no corn-based biofuel production facilities may be authorized in Mexico. Oddly enough, this restriction would not preclude a corn producer in Mexico from exporting its harvest to biofuel facilities being developed abroad nor would it limit the importation of biofuels from countries other than Mexico. In our opinion, this provision was politically motivated to avoid any potential public backlash for price variations of corn in the internal market that could be partially attributed to the increase of the demand by this type of project. It essentially postpones the development of corn-based production facilities until a significant change occurs in the current production of corn in Mexico. The incentives and programs to be developed by federal, state or municipal authorities under this law will be aimed at 1) the development of the infrastructure required for the production of crops, 2) local farmers and crop producers, 3) individuals and companies that contribute to the development and modernization of the infrastructure required for biofuel production, and 4) researchers and developers of technology for biofuel production. The biofuels law makes reference to other programs that are already being developed for the promotion of the agricultural sector and it establishes the parameters and general guidelines to be followed by the ministries that form part of the Inter-Ministerial Commission for the Development of the Biofuels market, in coordination with federal, state and local governments, to generate new incentives and benefits for project developers. It appears that Congress did not evaluate the potential impact of the biofuels law on projects that are currently being implemented in Mexico that generate, store or use biogas such as landfill proj-
ects, manure treatment systems and management of organic wastes (as provided in article 3 and 24 of the biofuels law). This is especially relevant because biogas is considered to be part of the broader definition of biofuels as provided by the biofuels law. As a result, once SENER publishes its guidelines and criteria for such permits, new biogas projects should secure said permits. Consequently, the requirement to secure a permit from SENER for the production or storage of biofuels may have a negative impact on biogas projects with registrations pending under the Kyoto Protocol's Clean Development Mechanism. This is especially relevant for the current administration because more than 80 percent of the Clean Development Mechanism projects that have received a letter of approval by the Mexican Inter-Ministerial Climate Change Commission are for capturing, storing or using biogas. As of Jan. 23 the Mexican Designated National Authority issued 154 of its 184 letters of approval to projects that would sequester or reduce methane/biogas to the atmosphere. As part of the validation process, the Designated Operational Entities that are charged with verifying the Clean Development Mechanism registration and emissions reductions of qualifying projects may potentially require evidence that the project developer has secured the applicable permits from SENER. Fortunately, all five ministries that participate in the newly formed Inter-Ministerial Commission for the Development of Biofuels are also part of the Inter-Ministerial Climate Change Commission and SENER play an active role on both commissions. SHCP is an invited member of the Climate Change Inter-Ministerial Commission. SENER, if it so chooses, has the authority to exclude these projects of the permitting process by expressly exempting them from the licensing requirements in the regulations related to the licensing process (as provided in section IV of article 12 of the biofuels law). The biofuel law provides for the following sanctions: 1) fines that range from 1,000 to 100,000 days of minimum wage (approx-
MEXICO imately $5,000 to $500,000), 2) cancellation of the permits, 3) temporary or definitive, partial or total shutdown of the facilities. Although Mexico has yet to participate in large-scale biofuels projects, there is a tradition in several areas of the country and specific industries for the direct use of biomass and biogas. With the enactment of the biofuels law a first step has been taken to assure predictability of the legal framework for this market. However, there will be a transitional period during which each authority will set up its specialized teams and will work together on the commission and to develop the regulations, guidelines and Official Mexican Standards for the operation of this market. This adjustment period may be confusing for both the facilities that are already using biomass and biogas and for investors planning to start-up new projects. Each authority will have to face an adjustment or trial-and-error period until they effectively set up the regulations, directives, requirements and standards for biofuel projects. The previous could bring instability to decision makersâ&#x20AC;&#x201D;instability that could cause certain investments to flee to other countries. The objectives of this law are laudable. However, it falls short of delivering immediate incentives to promote the development of these alternative fuels in Mexico. Energy companies that have already developed the know-how and technology abroad or in Mexico for biofuel production and commercialization could clearly expand their horizons and consider Mexico as a viable market for mass commercialization, distribution or production of biofuels. Further, Mexico will grant companies privileged access to the North American, European, Japanese and Latin American markets. Prior to a regulation of biofuels in Mexico, the greatest fear among players in this sector was the potential re-interpretation of the existing norms for fossil fuels to expand their scope to incorporate biofuels. This was particularly important, because prior to the enactment of the biofuels law, PEMEX, as the preponderant player in the national energy market, could easily hinder the marketing of
biofuels substitutes to its traditional fuel portfolio. Under this independent legal structure, other energy companies and start-ups could directly participate in the development of the biofuel market as long as their product proves to be competitive compared with the current fossil fuels offered in Mexico. Mexico has a wide array of topographic and climatic conditions that range from tropical forests in the southern part of the country, vast coastal areas, a mild climate in the central part of the country, and mountainous areas and arid regions that will allow the adaptation of several varieties of crops that have been used in other latitudes for successful biofuel projects. In addition, Mexico has already issued a law that will regulate the use of genetically modified organisms (the Biosafety Law for Genetically Modified Organism) that may potentially open the door for the use of specific types of energy crops under controlled conditions. Mexicoâ&#x20AC;&#x2122;s current administration has established as part of its National Strategy on Climate Change the need to diversify its fuel alternatives and to introduce the use of biofuels. It has also evidenced that, due to the fact that biofuels do not have a constitutional limitation for the participation of private investment, it wishes to open this sector to both national and foreign investment. The biofuels law, notwithstanding its shortcomings, provides a foundation for the development of a viable alternative energy market in Mexico. Unlike the traditional fossil fuel sector that depends on the state-owned companies in Mexico, the biofuels law is setting the basis for the establishment of a differentiated legal framework for biofuel projects, which may open the door to the creation of new incentives that shall generate the direct participation of private developers, with the federal government serving as a regulator and promoter for the development of this market. EP Raul Felix is the coordinator of the Climate Change & Renewable Energy Practice in Mexico for Baker & McKenzie. Reach him at raul.felix@bakernet.com or +52 (656) 629 1300.
WATER
Case Study: Sound Water Management Reduces the Environmental Footprint of Two Ethanol Plants By Tony Stanich and Jason Van’t Hul
B
alancing environmental sustainability with maximized production and minimized investment can be a difficult task. Recent studies show significant improvements in energy usage in dry-grind ethanol plants. However, more needs to be told about the work being done to reduce water usage as well. An ethanol plant producing 100 MMgy of ethanol will displace nearly 2.8 million barrels of crude oil per year, but it also consumes 300 million to 600 million gallons of water. This equates to a water ratio of three to six gallons of water used per gallon of ethanol produced. As discussed in EPM’s March 2007 article “Water Efficiency is a Result of Sound Water Management,” process water accounts for only one-third of the required water in the plant. The other two-thirds come from utility systems—the bulk from the cooling system. The article emphasized the necessity of a sound water management process to reduce the plant’s water usage. The article reviewed key inputs, outputs, critical activities, resources needed and the critical constraints the process must manage. The water management process it discussed could be applied to any plant design regardless of the feedstock or site requirements. Required inputs include understanding what type of ethanol production process design is being built, the resulting plant water balance, the ion constituents (quality) of the incoming water sources, and the water discharge constraints (National Pollutant Discharge Elimination System permit). Environmental discharge, capital and operational costs all
become critical constraints that the process must take into consideration. Resources needed include analytical laboratories, historically accurate modeling services, pilot trial capabilities and on-site expertise to implement the solution. All of these result in an output including specific water pretreatment equipment, effluent discharge estimations, and operating parameters of the water-based processing equipment including the largest user, the cooling tower. The overwhelming response to the Van’t Hul March 2007 article combined with the heightened debate on the environmental impact of ethanol production led Nalco Co. and two Midwestern ethanol plants to develop a case study for the industry. One of the major goals of this process implementation is to reduce the plant’s water ratio. Many steps within the process have an effect on this goal. The case study mainly focuses on the effects of cooling water Stanich treatment modeling, chemistry and control, and briefly discusses the effects of pretreatment equipment. The case study highlights two new 110 MMgy plants where Nalco, in conjunction with the customer, their engineering firm
The claims and statements made in this article belong exclusively to the author(s) and do not necessarily reflect the views of Ethanol Producer Magazine or its advertisers. All questions pertaining to this article should be directed to the author(s).
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and equipment supplier, worked to reduce the water ratio (gallons of water used per gallon of ethanol produced) from a notreatment ratio of 26.73 for Plant No. 1 (Chart 1) and 6.26 for Plant No. 2 (Chart 2) to 2.78 and 2.67, respectively. Additional constraints on the team includ-
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ed environmental discharge issues that required the design and implementation of a zero-liquid discharge system. This necessitated the reduction of water usage because every unnecessary drop of water brought into the plant places additional load on the zero-liquid discharge system.
Chart 1
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WATER Chart 2
the production process? First, the cooling tower utilizes significant amounts of water due to the enormous levels of heat generated in the process that must be removed. The two primary places heat needs to be removed are within the fermentation process and in distillation. Cooling water is used to cool incoming mash and maintain temperature throughout fermentation. In distillation, vacuum is maintained on the columns via the 190 condensers. Heat is transferred to the water and cascades through the cooling tower at which point the heat is released via evaporation. In the case of the 110 MMgy design, the resulting evaporation amounts to 2.33 gallons per gallon of ethanol, or 256 MMgy for each plant. This number remains fixed in both plants due to their identical designs. Cycles are determined by the amount of ion concentration that can build up in the cooling tower before deposition, corrosion or fouling begins. These types of issues can cause substantial process inefficiencies and equipment failures.
SOURCE: NALCO CO.
The customer, engineering and equipment design team implemented a similar water management process as discussed and modeled the pretreatment equipment for the plant to substantially reduce the water ratio in each case. High ion content suppressing cooling tower cycles substan-
tially elevated the water ratio in each plant (moderate levels of treatment would have been necessary to meet process requirements). A few questions need answering. First, why does the cooling tower need so much water in the first place? Second, what are cycles and what is their impact to
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WATER Concentration is caused by water being evaporated (tower evaporation) at a faster rate then it is being replaced (tower makeup) with lower levels of the problem ions. Concentration, and thus cycles, can be extended by the mechanical removal of the problem ions or through the addition of chemistries. These chemistries modify either the pH of the water or interact directly with the precipitate, but both techniques aim to avoid any scale formation throughout the cooling system. In order to more effectively visualize the process, think of a pan filled with hard tap water and then boiled (evaporated) to dryness. A residual will be left on the pan. This residual is the dissolved ions left after the water is evaporated. If the pan is filled to the level prior to boiling (bringing in fresh makeup) and no water is allowed out of the pan (tower blow-down), the ions would have concentrated in the pan twice. In other words, the pan would now have two cycles. The more often the boiling pan example is repeated, cycles will continue to increase until dissolved ions precipitate out of solution. This is the same phenomenon happening in the cooling tower. However, as mentioned earlier, the tower has added chemicals and is constantly blown down before precipitation and then deposition occurs. To reduce the water use in the cooling system, makeup water must be reduced, and because evaporation is fixed, blowdown must be reduced as well. However, as illustrated in the boiling pan example, a precipitation and potential deposit condition could be created. Therefore, to accomplish water reduction and avoid any deposit formation, a balance must be reached between treatment equipment needed to remove the ions, cycles of concentration, chemical limits of the inhibitors, pH of the water, and the resulting capital and operational costs of each. The pretreatment equipment solution (cold lime softening and reverse osmosis) in both plants reduced the ion content to produce cooling tower makeup water to safely achieve design specification of four cycles of concentration. In most normal water scenarios, three to four cycles are generally targeted in order to project a worst-case scenario for sizing of the pretreatment equip-
ment. However, in this instance, all parties realized that more could be done. Nalco applied its patented 3D TRASAR optimizer technology and determined that it was possible to substantially increase the cycles in both facilities. The optimizer takes into account all of the relevant variables and creates a recommendation by integrating industry accepted solubility models with thousands of chemical performance results to predict the success of the program. The optimizer can also estimate impact to assets through predicted corrosion rates, effect on heat exchange efficiencies through predicted scaling and microbial potential. The modeling technique is iterative in nature as one variable can cause the entire model to break down and violate the constraints discussed above. After running the 3D TRASAR optimizer, the customer agreed to safely increase their tower cycles at Plant No. 1 from a design of four to an optimized 6.2 and at Plant No. 2 from a design of four to
ETHANOL PRODUCER MAGAZINE JULY 2008
an optimized eight cycles. Refer to the green column in Charts 1 and 2 to see the optimized impact. Implementation of the water management process set these operational parameters. However, to realize these gains, excellent monitoring and control is required. This will be delivered through Nalco’s patented 3D TRASAR chemistry and controller. The result? This Midwestern ethanol producer will reduce its projected annual water usage by 36 million gallons at Plant No. 1 and 73 million gallons at Plant No. 2 for a total of more than 100 MMgy. EP
Tony Stanich is Nalco Co.’s global marketing manager. Reach him at astanichiii@nalco.com or (630) 305-1901. Jason Van’t Hull is an industry technical consultant with Nalco Co. Reach him at jvanthul@nalco.com or (605) 330-1280.
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SAFETY
Playing It Safe: Areas of Focus for Safety Compliance By Darren Small
N
ew ethanol plants have been sprouting up throughout the United States over the past few years as the growing demand for renewable fuel draws new players into the industry. More than 160 ethanol plants have been built in the United States and more than 40 plants are under construction. These plants are being built according to the latest technology and safety standards, and contractors strive to get projects up and running quickly. With so many new plants going up so quickly and with new entrants getting into the field, mistakes can happen. Even the most experienced, safety-conscious producers need to remain cognizant of possible accidents. The industryâ&#x20AC;&#x2122;s rapid growth is reason enough to focus on the potential risk of these situations. The process of ethanol production carries inherent risk because it involves distilling corn into ethyl alcohol. The flammable liquid, when handled improperly, could create a fire resulting in death, injury and significant property damage and loss of revenue. Insured property damage, including the loss of business income, could easily range from $100 million to $200 million. Ethanol production is a single-train process. If any of several critical components of the process is disrupted, the entire operation could be shut down for an indefinite period of time. Damage to the facility, therefore, could result in a significant loss of business income. The insured losses from damage to the plant and a disrup-
tion of the production process could be steep, but the economic losses could be even worse. For every dollar of insurable loss, ethanol producers can face that much or more in economic losses. The economic losses could include, for instance, the losses of staff, market, feedstock, and additional costs in order to meet contractual obligations. It could also result in the loss of senior managementâ&#x20AC;&#x2122;s focus on the business at hand. While property damage is a signifiSmall cant concern for ethanol producers, as with any industrial-sized producer, they also face the potential for losses from workplace injuries and a variety of third-party liability claims. The following is a look at the variety of concerns ethanol producers should remain cognizant of prior to and during operation. While the industry has a tremendous safety track record, accidents can happen at any industrial facility over time.
Fire Hazard In businesses that deal with highly flammable liquids, fires are an ever-present threat that could put a facility out of production for months. While fires are a serious risk for any industry, they can be especially hazardous for ethanol producers if the fire is being fueled by ethyl alcohol.
The claims and statements made in this article belong exclusively to the author(s) and do not necessarily reflect the views of Ethanol Producer Magazine or its advertisers. All questions pertaining to this article should be directed to the author(s).
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Standard fire suppression foams are not 100 percent effective in fighting
ethyl alcohol fires. Unless firefighters use an alcohol-resistant foam, these fires can
be difficult to extinguish. Fires can start in a number of different areas. The key area of concern is in the distillation process where high concentrations of alcohol are produced. Fires can also occur in the natural gasfired distillers grains dryers if particulate matter or pieces of grain get stuck in the dryer. The fuel tank storage area is another area where safe handling procedures are of utmost importance. Ethanol producers store both the finished ethanol product as well as gasoline (denaturant) in these fuel storage tanks. Lightning strikes, vehicle impacts and other external events can cause damage to this area of the plant. Contractors need to follow proper â&#x20AC;&#x153;hot workâ&#x20AC;? procedures when welding or doing similar work to minimize the risk of starting a fire. Ethanol producers also need to take precautions in the ethanol load-out area, where the flow of liquid from storage tanks to a railcar can create static elec-
SAFETY
RFA Focuses on Safety The Renewable Fuels Association continues to keep a strong focus on ethanol plant safety. The RFA’s Plant & Employee Safety Committee is developing recommendations that will assist ethanol plants in meeting Process Safety Management Standards. OSHA requires the proper training of plant personnel in the safety procedures of an ethanol plant. For additional resources and information regarding ethanol plant safety, visit http://www.ethanolrfa.org/industry/resources/safety/.
tricity. Sparks could trigger fires. The railcar and load-out area need to be grounded to prevent static electricity from building up. Finally, as with any grain-handling system, explosions can be caused by dust, which can conduct electricity. The right mixture and amount of oxygen and dust stirred up from grain storage and handling can trigger an explosion. Such incidences, although infrequent, occur at grain elevators and handling facilities.
Natural Disasters, Premises Liability In addition to fires, property can be damaged by natural catastrophes. In the states where many of these ethanol plants are located, such as Nebraska, Iowa and Minnesota, the main
risks typically stem from floods or tornadoes. E3 Biofuels suffered minor tornado damage during its construction. Although not much can be done to avoid a natural catastrophe, ethanol producers can take steps to reduce the risk of a fire or explosion. To mitigate these risks, ethanol producers should follow National Fire Protection Association Standards as well as other ethanol and insurance industry guidelines. Any damage to their property can set back production, disrupt operations and result in a significant loss of revenue. But events causing losses can arise on other fronts as well. As with all companies, ethanol producers could experience losses from workers’ compensation claims, bodily injury claims, product liability claims, fines and clean-up costs for pollution discharges.
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SAFETY Ethanol plant workers and visitors should remain vigilant at all times to avoid slips and falls. Something as simple as a contractor forgetting to wear a safety harness could result in a slip-and-fall incident. To minimize premises liability, ethanol producers should make sure to restrict the areas where visitors can wander to keep them from inadvertently injuring themselves. Ethanol producers should make sure their facilities meet Occupational Safety and Health Administration safety standards to minimize the risk of injury for their own employees and any contract workers. Producers should also ensure that contractors have the appropriate insurance so that they are indemnified for any accident that was the result of the contractor failing to follow proper procedures. Producers are also at risk if one of the trucks hauling their ethanol product gets into an accident. Even though the truck drivers are not employed by the ethanol producers, the producer can still be a target in any bodily injury or property damage lawsuit related to the accident. Ethanol producers should make sure that their contracts with the distributors or haulers, which employ the drivers, have hold-harmless clauses and that they are named on the insurance certificates so that they are indemnified in case of an accident or a spill.
the distillers grains potentially unsafe for consumption. If there is any adverse effect, the ethanol producers could be sued by the farmers who used the product. In spite of the risks, ethanol producers have experienced few significant losses. The industry has been spared the complete loss of a plant and has not experienced any significant restrictions in the availability of insurance. With losses low, insurers have been more than willing to insure the property and operations of ethanol producers.
By understanding their risks and taking steps to mitigate them, ethanol producers can continue to avoid a major loss, keep workers and visitors safe, and keep their operations running smoothly. EP Darren Small is assistant vice president of Chubb & Son and the biofuel segment leader for Chubb Commercial Insurance. Reach him at (908) 903-2000.
Product Liability Product liability claims are also a potential problem for ethanol producers. Ethanol itself is highly regulated and there is not much risk of a product liability claim related to it. However, ethanol producers are at risk for product liability claims if the distillers grains sold to farmers is contaminated with mycotoxins and harms the livestock. The problem begins with the corn that producers use to make the ethanol. Corn can occasionally contain mycotoxins, which are produced by several families of fungus. During the ethanol production process, the mycotoxins in the corn can become concentrated, making
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273
FERMENTATION
Ethanol Production Monitoring Using Ion Exclusion HPLC By Michael McGinley and Jim Mott
T
he current process for generating ethanol from biological sources relies on the use of amylase enzymes to break down complex starches into simple sugars, followed by yeast fermentation to convert the sugar to ethanol. Regular monitoring of the process by high-performance liquid chromatography (HPLC) allows operators to track the breakdown of starches to simple sugars as well as monitor ethanol production after yeast has been introduced. Organic acids are also monitored in the HPLC run, allowing operators to assess if microbial contamination is affecting the fermentation process and if remediation steps such as antibiotic addition are necessary to maximize ethanol yield. The HPLC method used for ethanol monitoring, ion exclusion chromatography, uses several different separation modes (gel filtration, ion exchange and reversed phase) to separate compounds of interest. This separation method has been around for more than 20 years, yet still remains the most popular for fermentation monitoring due to the ability to separate different classes of compounds (sugars, organic acids and alcohols) all in one chromatographic separation. The method is a simple and rugged isocratic method using a dilute acid mobile phase. However, some sample preparation of the fermentation broth is required to ensure good chromatographic performance and a reasonable column lifetime.
Many ethanol producers are expanding their operations by adding additional fermentors. In order to continue using existing HPLC equipment for monitoring of more fermentors, increased analytical throughput is needed. The current ion exclusion HPLC method is a multimodal separation so increasing throughput can be a challenge. However, some minor changes can be implemented McGinley that can reduce the analysis time by up to 50 percent, from a 24-minute to 12minute run time. This article discusses the basic principles of the ion exclusion HPLC analysis, along with a review of sample preparation methods to ensure proper cleanup and minimize instrument down time will be reviewed. Also discussed are ways to Mott reduce analysis time and increase throughput.
Materials and Methods Analyses were performed using a Shimadzu LC-20AT LC system equipped with a SIL-10AF autosampler, degasser and a RID-10A RI detector. Data were collected using Class-VP Version 7 software.
The claims and statements made in this article belong exclusively to the author(s) and do not necessarily reflect the views of Ethanol Producer Magazine or its advertisers. All questions pertaining to this article should be directed to the author(s).
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FERMENTATION
Filtered aliquots of 10 microliters were injected on HPLC operating at a flow rate of 0.6 milliliters per minute. The HPLC column was heated to 65 degrees Celsius (149 degrees Fahrenheit). Run time was 24 minutes for the 300-mm column and 14 minutes for the 150-mm column. SecurityGuard cartridges were regularly changed every 100 runs or whenever static increased 10 percent above initial values. Fifty percent methanol was used in the autosampler needle wash to avoid bacterial contamination.
Results and Discussion
Various dimensions of Phenomenex Rezex ROA columns were used (150 millimeter (mm) by 7.8 mm and 300 mm x 7.8 mm). Guard columns were Phenomenex SecurityGuard Carbo-H+ 4 mm by 3 mm cartridges. Aqueous mobile phase (0.005 N sulfuric acid in water) was purchased from Chata Biosystems Inc. By definition, a 1 N
solution contains one equivalent per liter. Several samples from various fermentation time points were generously provided by ICM Inc. The ethanol HPLC testing standard was obtained from Midland Scientific. Crude samples from fermentation time points were filtered using a 0.20micron Phenex-RC syringe tip filter.
An HPLC run of a fermentation standard using the Rezex ROA 300 mm by 7.8 mm column is shown in Figure 1. Note that the early eluting peaks (Dp4+, Dp3, maltose and glucose) represent the different degrees of polymerization of the various saccharides present in the sample. Monitoring of these peaks during early time points of the fermentation run gives operators a good indication as to the progression of the various amylases used to break down starches to simple sugars, and dictate when yeast is added to the fermentor to start generating ethanol. The later eluting peaks (lactic acid, glycerol, acetic acid and ethanol)
FERMENTATION Figure 1
When itâ&#x20AC;&#x2122;s not designed for your needs, performance suffers.
An ethanol fermentation standard was run on a 300 mm by 7.8 mm column. Note the excellent separation of all the components of interest. 1) Dp4+, 2) Dp3, 3) Maltose, 4) glucose, 5) lactic acid, 6) glycerol, 7) acetic acid, 8) ethanol SOURCE: ICM INC.
represent the organic acids and alcohols generated during the fermentation. Monitoring
of these peaks gives an operator an indication as to the fermentation endpoint and
Figure 2
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The bioethanol fermentation standard was run on a 150 by 7.8 mm Rezek ROA column. Note the limited resolution of the early eluting oligosaccharide peaks in the standard. In early fermentation monitoring such peaks may not be resolved. 1) Dp4+, 2) Dp3, 3) Maltose, 4) glucose, 5) lactic acid, 6) glycerol, 7) acetic acid, 8) ethanol. SOURCE: ICM INC.
ETHANOL PRODUCER MAGAZINE JULY 2008
FERMENTATION reveals when bacterial contamination is severe enough to warrant addition of an antibiotic to limit bacterial byproducts that may inhibit ethanol production. The standard in Figure 1 shows idealized separation of compounds. Early in the fermentation, the oligosaccharide and saccharide peaks can be so abundant that resolution between components is reduced. Later in the run, as sugars are converted into ethanol, resolution of the saccharides is more in line with what is seen in the HPLC standard. Conversely, early in the process, ethanol, glycerol and organic acid peaks often are below detection limits and increase as fermentation progresses. Resolution of key components will also tend to decrease over time as sample contaminants build up on the column. The key to maintaining resolution and increasing column lifetime is using a guard column system such as the SecurityGuard cartridge system. One method for reducing HPLC run time is by reducing the length of the column used. An example is shown in Figure 2 where the fermentation standard is run on a 150 mm by 7.8 mm (half the length of the typical 300 mm column used). As expected, the run time using a shorter column is significantly reduced from 24 to 13 minutes. If one looks closely, while the resolution of the late eluting organic acid and alcohol peaks are acceptable, the early eluting oligosaccharide and saccharide peaks are significantly reduced. Since the separation of oligosaccharides is based primarily on a gel filtration mechanism, there is a limitation on how much the column length can be shortened and still maintain resolution of key saccharide peaks. While the analysis of early time points from a fermentation run may need the increased resolving power of the longer 300 mm by 7.8 mm column, it may be practical to use a 150 mm by 7.8 mm column for later time points, where saccharide peaks are smaller. This is most practical in a larger operation where multiple fermentors are used and multiple HPLCs might be used for monitoring.
Alternatively, for sites where only one HPLC is used, a column-switching valve might be employed to switch to the shorter column later in a fermentation run.
Conclusion Simple steps such as using guard columns and filtering samples can greatly increase the reliability of the method as well as improve column lifetime (thus reducing analysis cost). For larger operations, shorter columns can be used in some circumstances to reduce analysis time for monitoring, potentially reducing
ETHANOL PRODUCER MAGAZINE JULY 2008
the need for additional analytical equipment. EP Michael McGinley is a biochromatography product manager at Torrance, Calif.-based Phenomenex Inc. Jim Mott is the senior technical support specialist in Shimadzu Scientific Instruments Inc.’s Midwest regional office in Lenexa, Kan. Reach him at jamott @shimadzu.com or (913) 888-9449.
Visit us at FEW Booth #909
Activating Your Ideas. . . … in stainless for ethanol. Fermentation, storage and pressure vessel tanks for ethanol and other bio-fuel projects around the world are now being constructed in LDX 2101® stainless sheet and plate from Outokumpu. This lean duplex is practical and economical — delivering high mechanical strength for weight reduction savings; low nickel content for price stability; and high resistance to stress corrosion cracking. Outokumpu is a global leader in stainless steel. Our vision is to be the undisputed number one in stainless, with success based on operational excellence. Customers in a wide range of industries use our stainless steel and services worldwide. Being fully recyclable, maintenancefree, as well as very strong and durable material, stainless steel is one of the key building blocks for sustainable future. What makes Outokumpu special is total customer focus — all the way, from R&D to delivery. You have the idea. We offer the world’s best stainless steel, technical know-how and support.We activate your ideas at www.outokumpu.com/stainless/na.
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MANAGEMENT
Improving Business Operating Consistency, Performance By Scott McDermott
V
olatile feedstock and ethanol prices, pressure on profit margins, emerging technologies and increasing competitive scale are all challenges to success in the ethanol business. Changing markets are creating both opportunities and risk. The good news is that there is hidden value locked inside most ethanol plants just waiting to be found. The direction a given plant takes to capture this hidden value will depend on the board of directors’ short-term and long-term visions for the business. If management does not know where it wants to go, the outcome is left to chance. Ethanol plant boards and management have many options around what they can do to position their business for long-term sustainability. Most plants focus on increased scale (expansion, mergers and acquisitions), but there are other options as well. For example, plants can take steps to diversify inputs, products and energy utilization, develop higher value products, integrate in a new complementary or non-complementary business, or cash out all or part of their investment. Most of these initiatives represent major undertakings for the business and will likely entail the need to raise or realign capital and take on risk because there are no guarantees of business success. While most plants are likely to take on some of these bigger initiatives over time, things can be done today to increase efficiency, performance and flexibility. A good test of the readiness of an organization includes asking the questions in Figure 1.
If the answer is “no” or you do not know the answer to more than a couple of the questions in Figure 1, there is probably an improvement opportunity within the business that will make it better, cheaper and/or faster. Industries such as oil and gas, chemicals, power generation, pharmaceuticals, commercial agriculture processing and others have been utilizing this systems approach to managing their businesses for years. The management mantra is “you can’t manage what you can’t/don’t measure.” A key challenge is: How well are you leveraging information within the organization to improve consistency and performance across the organization? Is the organization collecting local, regional and national prices (basis) and tracking local and regional production and storage trend data to support grain origination, ethanol and distillers grains marketing and risk management? The commodity markets are undergoing one of the largest structural changes in history, and the outlook is for more volatility. Many ethanol companies are making decisions on corn origination based on the way their corn market behaved in the past instead of the current market realities. Do you have written, strategic marketing plans for the product streams? Do you truly understand the factors that are driving the local, regional and national markets? If you are not tracking and analyzing market trends in your own backyard, how will you make quantified and informed decisions on physical and financial risk management? All plants are trying to improve performance every day, but
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).
278
ETHANOL PRODUCER MAGAZINE JULY 2008
MANAGEMENT
many are doing it with the same tools they have always used: clipboards and check-
ETHANOL PRODUCER MAGAZINE JULY 2008
lists. Few plants are capturing this information electronically in a form that can be
used to monitor trends, make real-time informed decisions and support proactive maintenance using predictive modeling. Itâ&#x20AC;&#x2122;s not easy to do. There is a wealth of valuable information from the laboratory, manufacturing system and operators that is rarely being collected in a way it can easily be used to analyze and improve performance. The exception is the larger commercial processors who focus on operational excellence across all of their manufacturing businesses, including ethanol. These companies have invested in the information systems and aligned management and employees around operational performance improvement. As a result, these companies have better and more consistent starch conversion, better utilization of enzymes and yeast, a lower instance of infection and a better ability to catch infections early and adjust. They also have a more optimal balance between batch cycle times and ethanol yield, a more consistent ethanol concentration from distillation, and lower utility usage. In this environ-
279
MANAGEMENT Figure 1.
Is the board and management aligned around a long-term vision for the business? Strategic Objectives Meet Focused Execution
Does the board have a long-term vision for the business?
Board & Senior Management
Does senior management have what they need to be successful?
Operations and Plant Management
Market Analysis and Risk Management
Business and Finance
Information Systems How do Information Systems support Continuous Improvement? How has your local basis environment changed? Are you taking an enterprise view to managing risk? Do you have strategies to mitigate risk? How do you quantify capital at risk in your organization?
Are you maximizing ethanol yield? Are you minimizing and diversifying energy utilization? Is your preventative maintenance program driving up-time? Are you using best practices for safety, regulatory and environmental compliance?
Is accounting aligned to support the business? Is human resources aligned to support the business? Are you in a financial condition to reach your objectives? Do you understand what determines the value of your business and what will maximize shareholder value?
These questions provide a good test of readiness for an organization. SOURCE: ASCENDANT PARTNERS INC.
ment the organization is more proactive instead of reactive and is therefore a more consistent and higher performing business. Another key focus area that supports improved consistency
280
and performance is predictive and preventative maintenance. Basically, all of the ethanol plants are using some type of maintenance management system, but their approach to maintenance
ETHANOL PRODUCER MAGAZINE JULY 2008
MANAGEMENT management varies greatly. Most companies use these systems as a checklist to inventory parts and make sure staff is doing regular maintenance. Others are taking this concept to a higher level, and the result is greater overall asset utilization, lower emergency downtime and overall lower maintenance costs. Some examples are seemingly small things such as routine hands-on inspection of equipment, replacement of lubricating fluids, and annual cleaning and replacement of specific equipment. Another example is using more sophisticated equipment and control systems that can monitor specific aspects of different equipment to aide in determining repair/replacement needs prior to failure instead of using time-based rules of thumb to determine when to replace parts and equipment. Some companies are also implementing oil analysis techniques, vibration monitoring and thermal imaging to further increase a proactive strategy to maintenance. The same companies are also putting into practice world-class safety and regulatory compliance programs. The result is a more disciplined and well-run business, better employee engagement and insurance rates, and an environmental record the company can use to show the world its commitment to sustainable business practices. By improving consistency and performance at the core of the business, it is much easier for the supporting function to plan and support the business. Management will have a clear strategic direction and alignment with the board, which in turn allows them to give clear direction and create clear accountability for staff. Training, compensation and recognition can then be clearly tied to meeting management and board objectives, which motivates staff to contribute to making the business better because they understand how they and their peers contribute to creating a successful business. Instead of budgeting and capital planning being a painful and timely process, it becomes a fluid part of the proactive approach to doing business. When the right information is available, this process improves from being a once per year exercise to continuous improvement. Decisions
ETHANOL PRODUCER MAGAZINE JULY 2008
are easily quantified and prioritized relative to the business objectives and bottom line impact. Companies can easily justify capital expenditures that have immediate payback instead of waiting months or even years to identify the issue and pull together all of the information to justify the investment. In the end, the owners of the business have a more valuable business because they can clearly show prospective buyers or investors why and how they are successful. Potential buyers or investors have transparent and tangible proof that what they are
buying or investing in will run well. Organizations can also quickly evaluate the implication of new opportunities such as mergers and acquisitions, expansions and new business lines, all while increasing the odds of success. EP Scott McDermott is a partner with Ascendant Partners Inc. Reach him at (303) 221-4700.
Biofuelâ&#x20AC;&#x2122;s #1 Source for Shell & Tube Heat Exchangers
MASON MFG, INC. Decatur, IL z 217-422-2770 z www.masonmfg.com 281
Biomass ’08 Technical Workshop: Power, Fuels and Chemicals July 15-16, 2008 Alerus Center Grand Forks, North Dakota Last year, this event attracted nearly 400 people and 40 exhibitors from more than 230 entities. Hosted by the Energy & Environmental Research Center, this year’s workshop will offer presentations on new technology developments, and opportunities for the economic production of power, transportation fuels and chemical feedstocks from biomass. Topics will include ethanol from lignocellulosics, renewable policies and incentives, and biomass feedstocks and agriculture. (701) 777-5246 www.undeerc.org/Biomass08
EVENTS
EPAC Ethanol Conference
July 23-24, 2008
Hilton Garden Inn Kalispell, Montana
Hilton Minneapolis Airport-Mall of America Hotel Minneapolis, Minnesota
This 18th annual event, hosted by Ethanol Producers and Consumers and themed “Ethanol: Fuel and Food,” will address many of the issues surrounding the ethanol industry. Agenda topics will include the food-versus-fuel debate, distillers grains in human diets, an update on the Canadian ethanol industry, flexible-fuel vehicles and E85, marketing and consumer polls, pricing, financing, and cellulosic ethanol. (406) 785-3722 www.ethanolmt.org
This fourth annual event, hosted by Christianson & Associates PLLP, will address current financial issues evolving within the biofuels industry. Agenda topics will include financial reporting, insurance, human resource issues, compliance with Sarbanes-Oxley Act Section 404, taxation updates, environmental issues, industry benchmarking and risk management. (320) 441-5526 www.christiansoncpa.com/biofuelsconference.cfm
CALENDAR
European Forum for Industrial Biotechnology
Biofuelsmarkets East Africa
September 15-17, 2008
Kilimanjaro Hotel Kempinski Dar Es Salaam, Tanzania
Hotel Bloom Brussels, Belgium This inaugural event aims to bring together a senior and international group of biotechnology producers, chemicals and plastics suppliers, biomass and biorefinery representatives, end users from a wide variety of industries, and academia. Topics of discussion will include biofuels, biorefineries, biobased products, Europe’s knowledge-based bioeconomy, Asia’s perspective, chemicals, financing and commercialization, among many others. +44 (0) 1372 802101 www.efib2008.com
284
Biofuels Financial Conference
July 20-22, 2008
Texas Biofuels Conference & Expo
September 16-18, 2008
September 17-18, 2008 Hilton Austin Airport Austin, Texas
This inaugural event will particularly focus on Tanzania, Uganda and Kenya. The case-study-led agenda will include presentations and panels that review the current status of the biofuels market in this region, and address the expanding opportunities for the production of feedstocks and biofuels for use in Africa and for export. Agenda topics will include financing; sustainability; feedstocks; biofuels production; and blending, marketing, distribution and transportation. +44 207 801 6333 www.greenpowerconferences.com
This third annual event will take an in-depth look at the latest regulatory, agricultural and technical developments impacting the renewable fuels industry in Texas. Special attention will be given to the Energy Independence & Security Act of 2007, and the impact it will have on the future of renewable fuels in Texas. (512) 358-1000 www.biofuelevents.com
ETHANOL PRODUCER MAGAZINE JULY 2008
Farm to Fuel Summit July 30-August 1, 2008 Rosen Shingle Creek Orlando, Florida Registration is open for this event, which stemmed from the Farm to Fuel Initiative developed by Florida Agriculture Commissioner Charles Bronson to promote the production and distribution of renewable energy from Florida-grown crops, agricultural wastes and other biomass. Topics of discussion will include the U.S. farm bill, the Energy Independence & Security Act of 2007, the Florida energy bill, and biofuels infrastructure, among many others. (850) 488-0646 www.floridafarmtofuel.com/summit_2008.htm
21st Ethanol Conference & Trade Show
September 9-10, 2008
August 12-14, 2008
Buenos Aires, Argentina
Qwest Center Omaha, Nebraska Registration is open for this event, hosted by the American Coalition for Ethanol. The conference will review the status of the ethanol industry each year, while looking ahead to the future. Agenda topics will include ethanol transportation, blending, cellulosic ethanol, distillers grains, midlevel ethanol blends and the renewable fuels standard. (816) 333-9400 www.ethanol.org
NextGeneration Biofuelmarkets
Bioenergy Americas
Officially supported by the Argentine Biofuels and Hydrogen Association, last yearâ&#x20AC;&#x2122;s inaugural event focused on the biodiesel market and was attended by 220 participants from 17 countries. Due to popular request, this year's event has been expanded to include biofuels, biomass and biopower generation. An agenda will become available as this event approaches. +44 207 801 6333 www.greenpowerconferences.com
International Distillers Grains Conference & Trade Show
World Biofuels Symposium
October 6-7, 2008 Amsterdam, Netherlands
October 19-21, 2008
Tsinghua University Beijing, China
This fourth annual event will bring together key players pioneering the development of next-generation biofuels to address the latest developments in creating the cost-competitive, industrial-scale production of next-generation biofuels technologies. An agenda will become available as this event approaches. +44 207 801 6333 www.greenpowerconferences.com
Indianapolis Marriott Downtown Indianapolis, Indiana The U.S. ethanol industry is now capable of producing more than 8 billion gallons of ethanol, and another 4 billion gallons of capacity is under construction. This means that approximately 13 million tons of distillers grains could hit the market by 2009. Producers and manufacturers around the world must take advantage of the sheer volume, price and quality of this product. This event, organized by BBI International, will seek to educate and empower end users and enhance customer outreach activities worldwide. (719) 539-0300 www.distillersgrainsconference.com
ETHANOL PRODUCER MAGAZINE JULY 2008
October 19-21, 2008
This fourth annual event, organized by BBI International, will explore the world energy issues that China currently faces, specifically in regard to biofuels. Topics of discussion will include advances, opportunities and challenges in biofuels technologies and production. An agenda will become available as this event approaches. (719) 539-0300 www.worldbiofuelssymposium.com
285
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SearchPath of Chicago 815-261-4403 www.searchpath.com/chicago
Lanser Public Affairs, LLC 262-797-7876 www.lanserpublicaffairs.com
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Boiler Systems
Process Engineering Associates, LLC 865-220-8722 www.processengr.com Vogelbusch USA, Inc. 713-461-7374
www.flaktwoods.com
Computer Software
Control System Integrators, Inc. 319-377-6538 x19 www.csystemi.com
www.vogelbusch.com
Equipment & Services Agitation Equipment Custom Metalcraft Inc. 417-862-0707 www.custom-metalcraft.com
Factory Sales and Engineering, Inc. 985-867-9150 www.fsela.com Rentech Boiler Systems, Inc. 325-794-5701 www.rentechboilers.com
Lean Technologies LLC 701-352-9620 www.leantechnologiesllc.com
Centrifuges
ICM, Inc. 316-796-0900
Westfalia Separator,Inc. 201-784-4322
Grisley Components, Inc. 303-756-6474
www.grisley.com
Conveyors—Pneumatic
Centrifuge Repair
Ceco Abatement Systems, Inc. 630-493-0624 www.cecoenviro.com/Abatement
www.icminc.com
Conveyors—Enclosed
Catwalks
Nosnhoj Services Inc. 317-887-6436
Air Pollution/Odor Control
290
www.johnzink.com
Compressors
Control Systems Bachelor Controls 785-284-3482
www.eclipsenet.com
www.nosnhojinc.com
Blower Engineering 800-388-1339 www.blowerengineering.com Gusmer Enterprises, Inc. 847-277-9785 www.gusmerenterprises.com
www.wsus.com
ETHANOL PRODUCER MAGAZINE JULY 2008
EPM MARKETPLACE W.S. Tyler 1-800-321-6188
Decanters
www.wstyler.com
Fractionation—Corn Buhler Inc. 763-847-9900
www.buhlergroup.com/us
FWS Technologies 204-487-2500 Sturtevant Inc. 781-829-6501
www.fwsgroup.com
www.sturtevantinc.com
Gas Detectors UE Systems, Inc. 914-592-1220
www.uesystems.com
Gaskets
FEECO International, Inc. 920-468-1000 ICM, Inc. 316-796-0900
Distillation Equipment SRS Engineering Corporation 800-497-5841 www.srsengineering.com
Dryers—Flash Barr-Rosin,Inc. 630-659-3980
www.barr-rosin.com
www.aeroglide.com
MonitorTech Corp. 866-682-6771
www.monitortechgrp.com
Lantec Products, Inc. 617-265-2171
Grain Handling & Storage Sukup Manufacturing Co. 641-892-4222
www.sukup.com
Heat Exchangers CMC Letco Industries 417-831-1528
www.cmc-letco.com
Custom Metalcraft Inc. 417-862-0707 www.custom-metalcraft.com
Reach your customers
www.lantecp.com Your Solution. Advertise Today.
Dryers—Ring
GEA NIRO Inc 410-997-8700
EPM MARKETPLACE www.niroinc.com
HRS Process Technology, Inc. 623-915-4328 www.hrs-americas.com www.barr-rosin.com
Dryers—Rotary Drum
Barr-Rosin,Inc. 630-659-3980
Ronning Engineering Company, Inc. 913-239-8118 www.ronningengineering.com
Evaporators
Davenport Dryer, LLC 309-786-1500 www.davenportdryer.com
Aeroglide Corporation 919-851-2000
www.icminc.com
Emissions Testing & Reduction
Dryers—Other
Barr-Rosin,Inc 630-659-3980
www.feeco.com
Emission Monitoring Systems
Dryers—Fluid Bed Aeroglide Corporation 919-851-2000
Allegheny Coupling Company 814-723-8150 www.alleghenycoupling.com
Fermentors WINBCO Tank Company 641-683-1855
www.aeroglide.com
www.barr-rosin.com
Your Ad HERE
EPM MARKETPLACE With all contact information placed in one convenient location, Ethanol
www.winbco.com
Producer Magazine not only contains top editorial content but also a useful
Filters
directory in each publication. Whether a
Eaton Filtration 800-656-3344 ext 581 BruceClaw@eaton.com
first-time advertiser wanting to raise
Larox 301-543-1200
frequent display advertiser looking for
www.larox.com/cpi
awareness of your business or a added exposure, EPM Marketplace is
Your Solution. Advertise Today.
EPM MARKETPLACE
ETHANOL PRODUCER MAGAZINE JULY 2008
Filtration Equipment BWF America 800-733-2043
the perfect solution. www.bwf-america.com 291
EPM MARKETPLACE GETTING ANSWERS FROM FIELD TO FUEL
Lubrication Systems
SGS ALTERNATIVE FUEL SERVICES
Summit Industrial Products has lubricants and greases for conveyors, dryers, cooling tower pumps, gearboxes, blowers, compressors, motor bearings and CO2 recovery.
SOLUTIONS FOR INVESTORS, PRODUCERS, MANUFACTURES, SUPPLIERS, TRADERS AND CLIMATE CHANGE PROJECT DEVELOPERS. SGS is the global leader and innovator in inspection, verification, testing and certification services with over 48,000 employees and 1000 offices worldwide. SGS Alternative Fuels Services business lines work together across industries covering the supply chain, thinking globally and acting locally.
Call today for a distributor in your area.
800.749.5823
CONTACTS IN NORTH AMERICA
Howie Nelson, Tel: 952-892-6372,
P.O. Box 131359 Tyler, TX 75713
howie.nelson@sgs.com Marla Fortner, Tel: 281-478-8234, marla.fortner@sgs.com
www.klsummit.com
Go to our website and enroll for news updates from SGS
Maintenance Services Joule’ Industrial Contractors bbosher@jouleinc.com www.jouleinc.com
WWW.SGS.COM/ ALTERNATIVEFUELS
Maintenance Software Mapcon Technologies, Inc. 800-922-4336 www.mapcon.com
Instrumentation Instrument Associates 708-597-9880 www.instrumentassociates.com Process Sensors Corp. 508-473-9901 www.processsensors.com
SGS North America, Inc. 281-478-8234 www.sgs.com/alternativefuels Trilogy Analytical Laboratory 636-239-1521 www.trilogylab.com
Loading Equipment Shimadzu Scientific Instruments 800-477-1227 www.ssi.shimadzu.com
SafeRack 866-761-7225
www.saferack.com
Jet Cookers www.pro-sonix.com
EPM MARKETPLACE With all contact information placed in
Laboratory-Equipment
one convenient location, Ethanol Astoria-Pacific International 800-536-3111 www.astoria-pacific.com
Producer Magazine not only contains top editorial content but also a useful
Laboratory—Supplies
directory in each publication. Whether a first-time advertiser wanting to raise www.midlandsci.com
Laboratory-Testing Services
awareness of your business or a frequent display advertiser looking for added exposure, EPM Marketplace is
Eurofins GeneScan, Inc. 504-297-4330 www.gmotesting.com Midwest Laboratories 402-334-7770 292
CBT Wear Parts, Inc. 888-228-3625 Prater-Sterling 630-679-3254
www.cbtwearparts.com
www.prater-sterling.com
CPM/Roskamp Champion 800-366-2563 www.cpmroskamp.com
Millwright
ProSonix Corporation 800-849-1130, x. 801
Midland Scientific, Inc. 800-642-5263
Mills-Hammer
www.midwestlabs.com
the perfect solution.
Agri-Systems 406-245-6231
www.agrisystems.net
Mixers KINEMATICA, INC. 631-750-6653
www.kinematica-inc.com
Moisture Analyzers Sartorius Mechatronies-Omnimark 800-835-3211 www.sartorius-omnimark.com
Molecular Sieves Gordon Technologies 570-279-8086 Vaperma, Inc. 418-839-6989
www.gtsieve.com
www.vaperma.com
ETHANOL PRODUCER MAGAZINE JULY 2008
EPM MARKETPLACE Motors
Pumps
QA Test Products
Trico TCWind, Incorporated 320-693-6200 www.tricotcwind.com
Phenomenex 310-212-0555x3328
www.phenomenex.com
Pipe American Stainless & Supply 800-845-5511 www.americanstainless.com ISCO Industries 800-345-4726 Robert-James Sales, Inc. 800-666-0088
www.isco-pipe.com
www.rjsales.com
Pipe窶認ittings Robert-James Sales, Inc. 800-666-0088
www.rjsales.com
St. Louis Pipe & Supply 800-737-7473 www.stlpipesupply.com
Pipe窶認langes Robert-James Sales, Inc. 800-666-0088
www.rjsales.com
Pressure Vessels
Yamada America, Inc. 800-990-7867 www.yamadapump.com
Your Ad HERE Your Solution. Advertise Today.
EPM MARKETPLACE
RTO Media Lantec Products, Inc. 617-265-2171
www.lantecp.com
Resource Recovery Eco-Tec, Inc. 905-427-0077
EPM MARKETPLACE With all contact information placed in one convenient location, Ethanol Custom Metalcraft Inc. 417-862-0707 www.custom-metalcraft.com
Producer Magazine not only contains
WINBCO Tank Company 641-683-1855
directory in each publication. Whether a www.winbco.com
frequent display advertiser looking for www.harrisgroup.com
Safety SimplexGrinnell 800-746-7539
www.simplexgrinnell.com
Seals Aesseal Inc. 865-531-0192
www.aesseal.com
first-time advertiser wanting to raise awareness of your business or a
Process Control Harris Group Inc. 206-494-9422
top editorial content but also a useful
www.eco-tec.com
added exposure, EPM Marketplace is the perfect solution.
Sensors Electro Sensors 800-328-6170
www.electro-sensors.com
Separation Equipment Puritan Magnetics, Inc. 248-628-3808 www.puritanmagnetics.com
ETHANOL PRODUCER MAGAZINE JULY 2008
293
EPM MARKETPLACE Separators
Thermal Oxidizers
Westfalia Separator,Inc. 201-784-4322
Used Equipment
www.wsus.com
Steel Suppliers Chapel Steel 800-320-6042
davidj@chapelsteel.com
Outokumpu Stainless 847-517-4050
www.outokumpu.com
for VOC, CO & PM ABATEMENT
Storageâ&#x20AC;&#x201D;DDGS Laidig Systems, Inc. 574-256-0204
PROVEN RELIABILITY
www.laidig.com
Structural Fabrication Cherokee Steel Fabricators, Inc. 903-759-3844 www.cherokeesteelfabricators.com
EISENMANN Corporation Crystal Lake, Illinois 815.455.4100 es.info@eisenmann.com
Tanks Agra Industries, Inc. 715-536-9584 Brown-Minneapolis Tank 281-252-9809 CMC Letco Industries 417-831-1528
www.agraind.com
www.bmt-tank.com
www.cmc-letco.com
Custom Metalcraft Inc. 417-862-0707 www.custom-metalcraft.com Federal Equipment Company 800-652-2466 www.fedequip.com Greenberry Industrial 541-757-8458 www.greenberryinc.com Paragon Trailer Sales 800-471-8769 www.paragontrailer.com WINBCO Tank Company 641-683-1855
www.winbco.com
Thermal Energy American Waste Removal 505-417-9933 www.americanwasteremoval.com
Your Ad HERE Your Solution. Advertise Today.
EPM MARKETPLACE
Reach your customers
ICM, Inc. 316-796-0900 Pro-Environmental, Inc. 909-989-3010
www.icminc.com
www.pro-env.com
VOC Scrubbers Lantec Products, Inc. 617-265-2171
Turbines-Gas
Valve Actuators
Kawasaki Gas Turbines 281-970-3255x18 www.kawasakigasturbines.com
Rotork Controls,Inc. 585-247-2304
EPM MARKETPLACE With all contact information placed in one convenient location, Ethanol Producer Magazine not only contains top editorial content but also a useful directory in each publication. Whether a first-time advertiser wanting to raise awareness of your business or a frequent display advertiser looking for added exposure, EPM Marketplace is the perfect solution.
www.lantecp.com
www.rotork.com
Valves Central States Group 800-318-2747 www.centralstatesgroup.com Check-All Valve Mfg. Co. 515-224-2301 Metso Automation 508-852-0215
www.checkall.com
www.metsoethanol.com
Wastewater Treatment Services Biothane Corporation 856-541-3500x501
www.biothane.com
Water Treatment Your Solution. Advertise Today.
EPM MARKETPLACE 294
Aquatech International Corporation 724-746-5300 www.aquatech.com
ETHANOL PRODUCER MAGAZINE JULY 2008
EPM MARKETPLACE Siemens Water Technologies 800-525-0658 www.siemens.com/water
Lender Representatives
Miscellaneous
Greenman Funding 888-802-7678 greenman.funding@verizon.net
Ethanol Production Existing Producers
Risk Management
Louis Dreyfus Commodities 402-844-2680 LDCommodities.com
R.J. O’Brien 800-621-0757
www.rjobrien.com
Future Producers
R.J. O’Brien 800-621-0757
www.rjobrien.com
Syntec Biofuel, Inc. 604-648-2092
www.syntecbiofuel.com
Software-Accounting Encore Business Solutions 204-989-4330 www.encorebusiness.com
Finance Accounting Christianson & Associates PLLP 320-235-5937 www.christiansoncpa.com Kennedy and Coe, LLC 800-303-3241
www.kcoe.com
Appraisals Federal Appraisal & Consulting, LLC. 908-823-0607 www.federalappraisal.com
Legal Services Attorneys BrownWinick Law Firm 515-242-2400 www.biofuellawyers.com Dorsey & Whitney LLP 612-343-8275
www.dorsey.com
Faegre & Benson, LLP 612-766-6930
www.faegre.com
Stoel Rives LLP 612-373-8800
www.stoel.com/biofuels
Marketing Distillers Grains CHS, Inc. 651-355-6271
Natwick Associates Appraisal Services 800-279-4757 www.natwick.com
Transportation www.chsinc.com
ConAgra Trade Group 402-595-4125 www.conagratradegroup.com
Landstar Carrier Group 920-487-3877
Hawkeye Gold, LLC 515-663-6429
Rail
www.hawkgold.com
Due Diligence Harris Group Inc. 206-494-9422
www.harrisgroup.com
Equity Procurement Greenman Funding 888-802-7678 greenman.funding@verizon.net Jordan, Knauff & Company 312-254-5900 www.jordanknauff.com
Insurance Armor Companies, Inc. 612-501-5654 acline@armorcompanies.com Chubb Insurance 312-454-4250 ERI Solutions, Inc. 316-927-4294
chubb.com
ETHANOL PRODUCER MAGAZINE JULY 2008
www.landstar.com
Fuel Ethanol
Ameritrack RailRoad Contractors, Inc. 765-659-2111 www.ameritrackrailroad.com
C&N Ethanol Marketing Corp. 952-854-6675 www.candncompanies.com
Blacklands Railroad 903-439-0738 www.blacklandsrailroad.com
ConAgra Trade Group 402-595-4125 www.conagratradegroup.com
Rail Consulting
Noble Americas Corporation 626-585-1705 www.thisisnoble.com Provista Renewable Fuels Marketing 651-355-8519 www.provistafuels.com
Antioch International, Inc. 402-289-2217 www.antioch-intl.com TKDA 651-292-4602
www.tkda.com
Rail Ties
Your Ad HERE Your Solution. Advertise Today.
EPM MARKETPLACE erisolutions.com
Heavy Highway Transport
Thompson Industries, Inc. 317-859-8725 www.thompsonindustries.net
Railcar Moving Heyl & Patterson Inc. 412-788-9810
www.heylpatterson.com 295
EPM MARKETPLACE
RAILCAR MOVING
The CUB™ is an electromechanical machine designed to move single railcars or groups of cars. Some advantages of the CUB™ are: •Safety of Personnel •One Person Operation •Little Maintenance Requirements •Low Investment/Operating Costs
Ask about our complete line of Railcar Moving Devices
www.heylpatterson.com P
412-788-9810
F
412-788-9822
Shuttlewagon 816-767-0300
E
info@heylpatterson.com
www.shuttlewagon.com
Railcar Parts Salco Products, Inc. 630-783-2570
www.salcoproducts.com
Utilities Natural Gas
Contact Mark Rundle at marundle@integrysenergy.com or (608) 222-5170.
124 W. Broadway, Suite 300 Madison, Wisconsin 53716 www.integrysenergy.com
Utility Integrys Energy Services 608-235-2547 www.integrysenergy.com
296
ETHANOL PRODUCER MAGAZINE JULY 2008
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EXPANDING? UPGRADING? Keep Your Plant Running with our In-Stock Stainless PVF Robert-James Sales—the leading distributor of in-stock stainless pipe, fittings, valves and flanges—got your new plant up and running when it was built. Now look to us to service all your continuing MRO requirements. Over 80% of all orders are shipped the same day from our nine regional warehouses. We also ship the larger size products up to 54” in diameter demanded by the biofuel processing industry today.
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Buffalo, NY Cleveland, OH Cincinnati, OH Chicago, IL Indianapolis, IN Minneapolis, MN South Plainfield, NJ Raleigh, NC Tavernier, FL
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Contact the Robert-James Sales location nearest you and ask for a free copy of our comprehensive, up-to-date CD. It outlines our stainless product line including reference charts, graphs and tables to help you calculate what your processing plant needs.