JULY 2020
HI-PRO
PARADIGM Next-Gen Coproducts Prompt Industry Shift PAGE 38
ALSO
2020 Ethanol Producer Awards PAGE 20
Ethanol Eyes Diesel Market PAGE 46
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ADVERTISER INDEX 2020 Int'l Fuel Ethanol Workshop & Expo
60-61
ACE American Coalition for Ethanol
75 & 82
AGI Tramco
65
Apache Stainless Equipment Corp.
17
Archangel Inc.
49
Associate Editor Matt Thompson | mthompson@bbiinternational.com
Ascensus Specialties
36
Associate Editor Luke Geiver | lgeiver@bbiinternational.com
Battelle
7
BetaTec Hop Products
84
Bion Companies
78
CTE Global, Inc.
73
D3MAX LLC
42-43
DSM Bio-based Products & Services
31
DuPont Nutrition & Biosciences
23
EISENMANN Corporation
48
Ethanol Producer Magazine
83
Ethanol Producer Magazine's Webinar Series
68
Fagen Inc.
66
Fluid Quip Technologies, LLC
25
Growth Energy
2
Hengye, Inc.
64
Hydro-Thermal Corporation
14
ICM, Inc.
11
Indeck Power Equipment Co.
13
Interra Global Corporation
56
J.C. Ramsdell Enviro Services, Inc.
51
Lallemand Biofuels & Distilled Spirits
18
Leaf â&#x20AC;&#x201C; Lesaffre Advanced Fermentations
74
Mason Manufacturing, LLC
67
McC Inc.
45
Midwest Ironworks
72
MoistTech
40
Natwick Associates Appraisal Services
57
NLB Corp.
9
Novozymes
19
Phibro Ethanol Performance Group
53
POET LLC
69
Premium Plant Services, Inc.
79
ProQuip, Inc.
16
RPMG, Inc.
59
Solar Turbines Incorporated
37
Solenis LLC
52
Sukup Manufacturing Co.
71
Trinity Rail Group
8
Trislot USA, Inc.
44
Trucent
3
Victory Energy Operations, LLC
15
Visionary Fiber Technologies
41
WINBCO
58
Zeochem LLC
50
EDITORIAL Editor Lisa Gibson | lgibson@bbiinternational.com
DESIGN Vice President of Production & Design Jaci Satterlund | jsatterlund@bbiinternational.com Graphic Designer Raquel Boushee | rboushee@bbiinternational.com
PUBLISHING & SALES CEO Joe Bryan | jbryan@bbiinternational.com President Tom Bryan | tbryan@bbiinternational.com Vice President of Operations/Marketing & Sales John Nelson | jnelson@bbiinternational.com Business Development Director Howard Brockhouse | hbrockhouse@bbiinternational.com Senior Account Manager/Bioenergy Team Leader Chip Shereck | cshereck@bbiinternational.com Jr. Account Manager Josh Bergrud | jbergrud@bbiinternational.com Circulation Manager Jessica Tiller | jtiller@bbiinternational.com Marketing & Advertising Manager Marla DeFoe | mdefoe@bbiinternational.com Marketing & Social Media Coordinator Dayna Bastian | dbastian@bbiinternational.com
EDITORIAL BOARD Ringneck Energy Walter Wendland Little Sioux Corn Processors Steve Roe Commonwealth Agri-Energy Mick Henderson Aemetis Advanced Fuels Eric McAfee Western Plains Energy Derek Peine Front Range Energy Dan Sanders Jr. Customer Service Please call 1-866-746-8385 or email us at service@bbiinternational.com. Subscriptions Subscriptions to Ethanol Producer Magazine are free of charge to everyone with the exception of a shipping and handling charge for anyone outside the United States. To subscribe, visit www. EthanolProducer.com or you can send your mailing address and payment (checks made out to BBI International) to: Ethanol Producer Magazine Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. You can also fax a subscription form to 701-746-5367. Back Issues, Reprints and Permissions Select back issues are available for $3.95 each, plus shipping. Article reprints are also available for a fee. For more information, contact us at 866-746-8385 or service@bbiinternational. com. Advertising Ethanol Producer Magazine provides a specific topic delivered to a highly targeted audience. We are committed to editorial excellence and high-quality print production. To find out more about Ethanol Producer Magazine advertising opportunities, please contact us at 866-746-8385 or service@bbiinternational.com. Letters to the Editor We welcome letters to the editor. Send to Ethanol Producer Magazine Letters to the Editor, 308 2nd Ave. N., Suite 304, Grand Forks, ND 58203 or email to lgibson@bbiinternational.com. Please include your name, address and phone number. Letters may be edited for clarity and/or space.
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Please recycle this magazine and remove inserts or samples before recycling
COPYRIGHT Š 2020 by BBI International
4 | ETHANOL PRODUCER MAGAZINE | JULY 2020
Contents
38 JULY 2020 VOLUME 26
ICM, INC.
AD INDEX
6
PUBLISHER'S NOTE Grit and Gratitude
FEATURES 20 AWARDS
2020 Ethanol Producer Awards
EVENTS CALENDAR
10
GLOBAL SCENE Coronavirus and Climate Change
By Tom Bryan
38
CLEARING THE AIR M-m-m-my Corona: Staying Positive After Testing Positive By Ron Lamberty
14
BUSINESS BRIEFS
80
MARKETPLACE
62
ISTOCKPHOTO.COM
COPRODUCTS
46
INNOVATION
Doubling for Diesel
New technology could make ethanol suitable for compression engines By Matt Thompson
54
BUSINESS
Risk Reoriented
Pandemic forces ethanol industry to rethink risk, margins and capital investment By Luke Geiverl
Quality Unconcern By Susanne Retka Schill
70
Masters of the Market
By Lisa Gibson
FEEDSTOCK
U.S. ethanol producers largely unaffected by poor corn quality
High-protein coproducts have ethanol producers reimagining business models
By Andrea Kent
12
62
The back stories on five inspiring industry achievements
By Tom Bryan
9
TBD
ISSUE 7
DEPARTMENTS 4
54
SPOTLIGHT
Sukup: Steel, Bolts and Relentless Innovation Grain bin builder embraces change, quality and safety By Matt Thompson
72
SPOTLIGHT
Piping Pros, Shutdown Specialists
Midwest Ironworks builds regional business with national reach By Matt Thompson
CONTRIBUTION 76 TECHNOLOGY
Tried and True, But New
Electrostatics shows promise in high-protein feed applications By Kyle Flynn
ON THE COVER
A close-up look at the high-protein feed produced by ICM Inc.'s Fiber Separation Technology, which washes out fiber before fermentation. PHOTO: ICM Inc.
Ethanol Producer Magazine: (USPS No. 023-974) July 2020, Vol. 26, Issue 7. Ethanol Producer Magazine is published monthly by BBI International. Principal Office: 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. Periodicals Postage Paid at Grand Forks, North Dakota and additional mailing offices. POSTMASTER: Send address changes to Ethanol Producer Magazine/Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, North Dakota 58203. ETHANOLPRODUCER.COM | 5
Publisher's Note
Grit and Gratitude Giving out awards is a pleasure. Our trade associations do it often and well, and Ethanol Producer Magazine, too, has a rich history of announcing accolades during our industry’s big summer event—the FEW. It’s one of the best parts of my job, but I had concerns about doing it this year. I worried that our award recipients might be too worn down by the pandemic—and too busy climbing out of it—to care about the recognition of a trade journal. I’m glad I was wrong. Even while recovering from the worst downturn in our industry’s history, the winners of our 2020 Ethanol Producer Awards found the time, and grace, to talk to us. And while only one of the awards was directly tied to actions taken during the crisis, each recipient shared candid information—on and off the record— about the realities of producing ethanol during COVID-19. Each of our five unassuming winners—Southwest Iowa Renewable Energy LLC; Marquis Energy-Wisconsin; Ace Ethanol LLC; Trenton Agri Products LLC; and the Element LLC partnership formed by ICM Inc. and The Andersons—share the story behind their accomplishments, starting with our Board of the Year, on page 20. A couple of those Ethanol Producer Awards are connected to technologies that result in higher-protein coproducts, which may someday supplant ethanol as our industry’s principal sell. As Lisa Gibson reports in “Masters of the Market,” on page 38, high-protein technologies are substantively altering the ethanol industry’s feed coproduct stream. And managing this opportunity will require ethanol plants to not just change their processes, but their business models. Market transformation of a different kind is the subject of our page-46 feature, “Doubling for Diesel,” by Matt Thompson. In this story, we share the disruptive proposition of ClearFlame Engines, which is developing a novel technology that could make it possible for ethanol to be used in compression-ignition engines, potentially opening up a market as big and promising as E15. As the industry begins its long march toward normalcy, it’s once again readjusting the way it manages risk, in terms of both commodities hedging and capital management. In “Risk Reoriented,” on page 54, Luke Geiver explores the industry’s current understanding of “normal” margins as it nestles into more forward-looking risk programs and measured growth investment. Finally, in “Quality Unconcern,” on page 62, Sue Retka Schill reports that U.S. ethanol plants have been largely unaffected by the poor-quality corn harvested sporadically from late 2019 to early 2020. Many ethanol plants have reported weak and damaged corn arriving at their gates, but most have still achieved adequate production yields in spite of it. It’s unexpected good news, and we’ll take it. Tom Bryan President BBI International
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Upcoming Events Int'l Fuel Ethanol Workshop & Expo August 24-26, 2020
CHI Health Center Omaha Omaha, Nebraska From its inception, the mission of this event has remained constant: The FEW delivers timely presentations with a strong focus on commercialscale ethanol production—from quality control and yield maximization to regulatory compliance and fiscal management. FEW is the ethanol industry’s premier forum for unveiling new technologies and research findings. The program is primarily focused on optimizing grain ethanol operations while also covering cellulosic and advanced ethanol technologies.
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Biodiesel Production Technology Summit August 24-26, 2020
CHI Health Center Omaha Omaha, Nebraska The Biodiesel Production Technology Summit is a new forum designed for biodiesel and renewable diesel producers to learn about cutting-edge process technologies, new techniques and equipment to optimize existing production, and efficiencies to save money while increasing throughput and fuel quality. 866-746-8385 | BiodieselTechnologySummit.com
CHI Health Center Omaha Omaha, Nebraska
The ACE Conference is a must-attend event for industry leadership. Relaying timely updates on public policy, market development, board of director training, and much more, this event combines the detail of high-level training courses with all the fun of a family reunion. 605-334-3381 | Ethanol.org/events/conference
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Global Scene
Coronavirus and Climate Change
Andrea Kent
Vice President of Government and Public Relations, Greenfield Global Board Member, Renewable Industries Canada 833.476.3835 andrea.kent@greenfield.com
This winter, countries around the globe introduced months of unprecedented lockdown and shelter-in-place restrictions to stop the spread of COVID-19. An economic shutdown is the worst possible way to get environmental improvement, full stop. However, only a few weeks into lockdown, many noticed fresher air, and earnest talk began of this being a serious wake-up call about the environment. Whether governments in Canada will capitalize on this moment, however, remains to be seen. The pandemic quickly cut down car traffic and saw oil prices plummet, a combination that set off a record 5 percent drop in annual carbon emissions from the burning of fossil fuels. Environmentally impressive but not at all perfect. First, this record cut in global emissions is still less than what scientists say is needed every year this decade to avoid disastrous climate impacts for much of the world. Second, even with remarkably less traffic, air pollution did not improve. Analysis by NPR shows that while car traffic decreased by 40 percent across the U.S., ozone pollution dropped only by 15 percent or less, which is to say barely at all, compared with levels over the past five years. Part of the reason is continued air pollutants beyond those from passenger cars, like emissions from trucking, refineries, petrochemical plants and coal power. But the more important lesson is that merely driving less, in and of itself, does little to improve climate outcomes unless we find ways to make sustained improvements. Put another way, the long-term solution remains cleaner fuel, not fewer cars. Next come automobiles. On the surface, having a car can seem unnecessary when working from home and getting more purchases delivered. However, an April survey by Capgemini Research Institute suggests otherwise. Capgemini surveyed more than 11,000 potential buyers in 11 countries that account for 62 percent of global vehicle sales. It found half of all global respondents said they plan to drive their cars more in the future and will rely less on public transportation and ride-sharing services such as Uber and Lyft. The reason: “greater control of hygiene.” At the same time, one-third of those surveyed said they plan to buy a car in 2020, with 45 percent of those potential buyers under age 35. That’s a significant percentage, considering that 79 percent of people ages 25 to 35 currently do not own cars. Policymakers need to take note, especially when projecting post-pandemic vehicle fleets and fuel mixes. As I write this, many jurisdictions are beginning to reopen. Consumers are emerging eager to return to a semblance of “normal”—including driving and the associated carbon and tailpipe emissions. Ethanol blended in gasoline is proven to reduce both, and those designing Canada’s Clean Fuel Standard and proposed provincial increases to E15 in Ontario and Quebec should take note. Even though the pandemic delivered an unprecedented shock, the prospect of a green recovery will ultimately be decided by the strength of our climate policies and the content of our gas tanks.
10 | ETHANOL PRODUCER MAGAZINE | JULY 2020
Grassroots Voice
M-m-m-my Corona: Staying Positive After Testing Positive
Ron Lamberty
Senior Vice President American Coalition for Ethanol 605.334.3381
rlamberty@ethanol.org
“Ooh, my little pretty one, my pretty one, when you gonna give me some time, Corona?” With apologies to The Knack, the coronavirus gave me some of its time starting with a positive COVID-19 test the last day of March and officially ending the first of May. The time in between included a couple days of struggling to breathe, then struggling to remain calm so it wouldn’t get worse, and a week of sleeping 18 to 20 hours but not feeling rested because my lungs weren’t getting oxygen out of the air they brought in. Massive quantities of antibiotics and a couple more weeks of sleeping more than I was awake eventually got me back to feeling close to normal. One thing was certain during my uncertain times. Every time I woke, ads with slow piano background music and pictures of empty buildings and empty streets told me about another company, founded many years ago, that has always cared about people. Caring about people like me was their main business, I think. And right now, today, more than ever, during these uncertain, difficult, unprecedented times, those companies want me to stay safe. They wanted me to know about social distancing and staying home, that they’re here to help and I can count on them. Especially if I need to buy some of their stuff, which they’re still selling (to help everyone), and will ship to my house without anyone ever touching it. They said we’ll all get through this, together. And they meant it—because the piano music got faster, and the picture was a sunrise and a tree with buds on the branches. Meanwhile, the Power by People people of the ethanol industry were out doing good, like we knew they would. With plants slowed or shut down, and without multimillion-dollar ad budgets to tell people they care and want them to be safe and healthy, ethanol people were instead doing the actual work of caring for others and helping them be safer and healthy–even battling the federal government to be allowed to help people stay safe and healthy by providing ethanol (sometimes free of charge) for surface disinfectant and hand sanitizer. Deeds, not words. It’s no surprise, coming from an industry helping keep pump prices low for decades, while loud oil industry mouthpieces lie to consumers and politicians, accusing ethanol of doing the opposite. Oil companies, Astroturf enviros, and even the current U.S. EPA cast doubt on ethanol’s environmental benefits with misinformation campaigns and intentionally false “studies” and calculations, yet ethanol continues to provide the lion’s share (most of the other animals’ shares, too) of pollution reduction and greenhouse gas reduction in transportation. And speaking of animals, ethanol plant slowdowns and shutdowns caused concern among livestock producers who rely on feed produced by those plants, shredding the tired “food vs. fuel” meme, proving ethanol plants don’t use corn’s “food,” they improve it and return it to the food supply as high-quality feed. My original plan for this column was to explain how USDA’s Higher Blends Infrastructure Incentive Program rollout would be challenging because of c-store market conditions, and while true, it just sounded whiny. Ethanol producers have been hit harder than most industries, with devastating COVID-19 volume losses exacerbated by historically low oil prices from Russia and Saudi Arabia’s tough guy contest, and being largely ignored by federal assistance programs—while oil gets theirs. I don’t get it. No one’s making hand sanitizer with gasoline. These uncertain times prove ethanol plants make delicious animal feed and healthy, economical fuel. Play the fast piano music and let’s put that HBIIP money to work!
12 | ETHANOL PRODUCER MAGAZINE | JULY 2020
BUSINESS BRIEFS PEOPLE, PARTNERSHIPS & PROJECTS
DuPont announces new alpha amylase blend DuPont Nutrition & Biosciences has announced the launch of Spezyme HN, the latest in the Spezyme line of alpha amylase enzymes, and a new inclusion in the suite of Xcelis Ethanol Solutions. The new blend—combining an alpha amylase with a thermostable phytase—was designed for ethanol plants operating under harsh conditions. “This is a significant development for
said Josh Naylor, marketing coordinator for DuPont Biorefineries. “Spezyme HN is designed to perform extremely well in harsh low-cation or high-temperature liquefaction the industry right now, particularly follow- conditions. This gives plants unprecedented ing the success of clean-in-place solutions flexibility in how they run their front-end that lead to lower cations in the ethanol operations.” production process, which has traditionally caused challenges for alpha amylases,”
Export Exchange 2020 moved to 2021 Export Exchange 2020 has been postponed until 2021 due to international travel uncertainties. The U.S. Grains Council, along with event partners Growth Energy and the Renewable Fuels Association, released a statement in mid-June announcing the event’s deferment. “As a result of the coronavirus and our concern for the around the globe to come to this event, safety of our attendees who travel from we’ve decided to postpone Export Ex-
change until the same time next year,” said USGC President and CEO Ryan LeGrand. The biennial event is now scheduled for Oct. 6-8, 2021, in Kansas City, Missouri. Export Exchange brings more than 200 international buyers and end-users of coarse grains and coproducts—including distillers grains—together with about 300 U.S. suppliers and agribusiness representatives.
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14 | ETHANOL PRODUCER MAGAZINE | JULY 2020
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Business Briefs
Research center awarded $500,00 for ethanol plant CCS The North Dakota Industrial Commission, through its Renewable Energy Program, has awarded $500,000 in matching funds to the Energy & Environmental Research Center, for continuing work on the stateâ&#x20AC;&#x2122;s first integrated ethanol plant carbon capture and storage (CCS) project. The research will use the Red Trail Energy LLC ethanol facility near Richardton, North Dakota, as a case study, building on the successful outcomes of three phases of work since 2016. A guidance document will be produced as part of the project, serving as a resource for other North Dakota biofuels plants interested in CCS. Four years ago, the commission awarded EERC $490,000 to study the feasibility of CCS at Red Trail Energy. The initial round of work established carbon sequestration as an economical option for reducing the plantâ&#x20AC;&#x2122;s carbon intensity rating, which would position it to enter low-carbon fuel markets. At that time, a geologic formation, located approximately 6,400 feet below the ethanol plant site, was identified as the targeted injection point for potential geologic storage of the CO2. According to previous studies conducted by the EERC, the formation appeared to be an ideal storage target. â&#x20AC;&#x153;This project continues to help maximize the marketability of North Dakota ethanol through evolving CCS incentive pro-
grams,â&#x20AC;? the commissioners said in a joint statement. The North Dakota Industrial Commission, consisting of Gov. Doug Burgum, Attorney General Wayne Stenehjem and Agriculture Commissioner Doug Goehring, oversees the Renewable Energy Program. The stateâ&#x20AC;&#x2122;s legislature established the program in 2007 to provide funding for research, development, marketing and education to foster growth of renewable energy including wind, biofuels, biomass, solar, hydroelectric, geothermal and hydrogen. Based in Grand Forks, North Dakota, the EERC partners with industry to develop energy and environmental technologies. It is part of the University of North Dakota, but operates independently, much like a business.
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Business Briefs
SIRE starts expansion of on-site Monarch habitat Having just passed the one-year anniversary of seeding its Monarch Fueling Station, Southwest Iowa Renewable Energy recently began expanding its pollinator habitat to 20 acres. All of the acreage is inside of SIRE’s rail loop, which would otherwise be planted with grass. “Southwest Iowa Renewable Energy is committed to finding ways to innovate and that commitment doesn’t stop with the plant itself,” said SIRE CEO Mike Jerke. “Creating habitat for monarch butterflies and other pollinators inside our loop track, with area we previously would have considered unusable, seemed like a great way for us to innovate the use of our land around the plant.” SIRE began planning the project in 2018 and seeded seven acres last spring. Iowa Renewable Fuels Association Habitat Establishment Coordinator Kevin Reynolds helped SIRE start the project. “SIRE’s decision to expand their project is indicative of just how committed they are to protecting Iowa’s environment,” Reynolds said. “I have worked with several biofuel plants across Iowa now, and it is exciting to see the enthusiasm they’ve had for creating and protecting this critical monarch butterfly habitat.” Several U.S. ethanol plants are hosting pollinator habitat on their properties, including Trenton Agri Products in Trenton, Ne-
16 | ETHANOL PRODUCER MAGAZINE | JULY 2020
braska, which won Ethanol Producer Magazine’s 2020 “Good Neighbor Award” (see page 32). Coincidentally, SIRE was awarded “Board of the Year” (see page 20). Reynolds said SIRE would have seen some greenery popping up among the initial seven acres last year, but most of the growth would have occurred under the ground as the plants must develop a strong root system. He said SIRE can expect the same growth pattern for the newly planted acres while plants on the original plot should expand above the ground even more this growing season.
Business Briefs
Aemetis to produce pharma- and food-grade alcohol Aemetis Inc. is taking steps to produce larger volumes of pharma- and food-grade alcohol for sanitizer products, while simultaneously moving forward with multiple advanced biofuels projects. Pivoting to supply alcohol for hand sanitizer during the COVID-19 pandemic, the company has continued to operate its ethanol plant in Keyes, California, while simultaneously moving forward with renewable
natural gas and cellulosic ethanol projects. Now, Aemetis is upgrading the facility to make larger quantities of alcohol for personal care and industrial markets. “To a large extent, the ability to continue to operate our California plant while fuel ethanol demand and price declined significantly during Q1, and then recovered
recently in Q2, has been due to our rapid conversion of alcohol production to produce hand sanitizer alcohol,” said Eric McAfee, chairman and CEO.
Amid CEO succession, Pacific Ethanol focuses on high-end alcohol Pacific Ethanol Inc. has announced a new focus on high-quality alcohol production while planning for leadership succession. The company’s board of directors has appointed current Chief Operating Officer Mike Kandris as co-president and co-CEO. Neil Koehler will retire as CEO and president Sept. 30. PEI Chairman Bill Jones said, “Demand for high-quality alcohol, the primary
ingredient for hand sanitizers and disinfectants, has grown significantly since the onset of the COVID-19 pandemic. As COO, Mike has been a dynamic leader and was pivotal in implementing operational efficiencies and logistical modifications that increased the volume of high-quality alcohol at our Pekin, Illinois, campus. We are confident Mike will advance additional initiatives and drive the next phase of our diversified strategy.”
ETHANOLPRODUCER.COM | 17
18 | ETHANOL PRODUCER MAGAZINE | JULY 2020
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Awards Ethanol Producer Awards
%2$5'
2) 7+( <($5 SOUTHWEST IOWA RENEWABLE ENERGY LLC Nominated By: Robert White, Renewable Fuels Association
Ethanol Advocate, Presidential Host Southwest Iowa Renewable Energy has had a marathon year, accommodating a presidential visit, managing change and showing poise in the face of a national crisis. By Tom Bryan After a lifetime of running farms and ag enterprises in and around Harrison County, not much surprises Karol King—he’s seen it all in western Iowa—but a phone call from Mike Jerke early last summer was a once-in-a-lifetime stunner: The president of the United States was coming to their ethanol plant, and they had just days to prepare. “Mike called after finding out about the possibility of Trump making his big E15 announcement in the area, and it was starting to look like they had chosen our plant,” says King, chairman of the board for Southwest Iowa Renewable Energy LLC, a 130 MMgy ethanol plant near Council Bluffs, Iowa. “Mike was looking for our approval, and we said, ‘Absolutely, yes. Anything that draws
20 | ETHANOL PRODUCER MAGAZINE | JULY 2020
national attention to ethanol and E15, we support.’ We told him to do whatever was needed to make it happen, and his team went to work.” In the days leading up to President Donald Trump’s June 11, 2019, visit to SIRE, it was an allhands-on-deck effort to make sure the plant, and the entire surrounding property, was tidy, safe and ready to host not only the president—along with his Secret Service detail and administrative entourage—but hundreds of media and invited guests from around the country. “I didn’t realize just how many invitations went out, and from how far people were coming,” King says. “It was amazing to see that much enthusiasm.” President Trump dropped in on SIRE, offi-
STRIDES OF INFLUENCE: President Donald Trump tours Southwest Iowa Renewable Energy with plant CEO Mike Jerke (blue shirt) and Renewable Fuels Association President and CEO Geoff Cooper on June 11, 2019. PHOTO: RENEWABLE FUELS ASSOCIATION
cially, to celebrate the final rule issued by the U.S. EPA, less than two weeks earlier, to lift the summertime restriction on E15, making it possible for the higher ethanol blend to be sold year-round. During his speech, President Trump hailed the decision as a step toward greater energy independence and lower prices at the pump. “Those savings go right into the 'Necessity is the mother of invention, pockets of hard-working famiacross our land,” he told the and we think there lies crowd. Trump was joined on is still a pathway for stage by an area farmer, a local participation in that business owner and a SIRE emmarket. We just need ployee, after touring the facility to figure out what our and grounds with Jerke, CEO of SIRE, and Renewable Fuels next move is.' Association President and CEO Mike Jerke Geoff Cooper. Southwest Iowa Renewable Energy, LLC
Reflecting back on the whirlwind Trump visit, a year later, King says he’s proud of how quickly and diligently SIRE’s personnel worked to accommodate the president. Jerke, too, reflects back on the event with a sense of deep appreciation for his team and his board. “We knew it was going to be challenging, but with a supportive board behind us, good people on the ground and excellent guidance from the White House advance team, everything came together nicely,” he says. “Everyone put in long days—and it was hectic—but when the president arrived on the ground, it was all very organized and prescribed.” Now, 13 months later, still not out of the COVID-19 crisis—and with the president’s reputation in ethanol country dented by his administration’s liberal allocation of small refinery exemptions (SREs)—SIRE was ratcheting up production after throttling back during the spring downturn. “We certainly feel better about things now, as compared to early May or early April, but we have a long way to go,” Jerke says, adding that he feels more obligated than ever to be vocal about stopping the EPA from granting more unqualified SREs. He says SIRE’s board encourages him, and other management personnel, to be vocal industry advocates. Often, that simply means standing up for what’s right. “We just do what we can to help educate people on the SRE issue, and once they see it for what it is—real abuse, and a travesty—they get it,” he says. “It’s easy to be passionate when you know you’re on the right side of an issue.”
Consistency Through Change
SIRE’s board of directors, small today compared to its 14-member structure during construction, is settling into its new form after two major departures in the past year. After the plant was built, more than a decade ago, SIRE’s board was drawn down to seven
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members. King says the board has consisted of both “independent” ag-based shareholders and “industry” seats held by outside companies with a stake in the facility. SIRE’s longtime seven-member board included one representative of ICM Inc., the plant’s design/builder, and two representatives of Bunge, also an original investor. Recently, ICM exercised its option to exit SIRE, and Bunge also negotiated buyout terms. And while ICM and Bunge have departed SIRE, both King and Jerke say they have deep respect for what those members, and others, contributed. “Boards are reflective of the people that are there today, but also consistent leadership over time,” Jerke says. “Our successes over the years represent the collective efforts of all those folks working together. No question, those different people pushed SIRE to where it is today.”
Currently, SIRE’s board consists of King and four other members, all with western Iowa ag connections. They include Mick Guttau, Hubert Houser, Ted Bauer and Jill Euken. Jerke says the way the board manages today, and over the years, is empowering. “SIRE has it figured out,” he says. “Karol and I talk all the time, but at the end of most of our discussions, he reminds me that he’s not interested in micromanaging. That sort of relationship comes from a place of confidence and it requires trust and transparency. At the end of the day, our board is effective because it has good leadership.” Likewise, King says, freeing up the plant’s management and personnel to make day-to-day decisions makes SIRE operationally effective. “Our core mission has remained constant over the years,” he says. “We look out for shareholder interest and support management. The personnel at SIRE work for Mike—they report to him—and we try to stay out of his way and let him lead.”
Courage During COVID
While the ethanol market suffered during the pandemic, SIRE stepped up to produce hand sanitizer when it was truly needed. The plant has made headlines for
LARGE-SCALE OPERATION: Southwest Iowa Renewable Energy was brought online in 2009 with a 110 MMgy nameplate capacity. The facility later expanded to 130 MMgy and now consumes more than 44 million bushels of corn annually. PHOTO: SOUTHWEST IOWA RENEWABLE ENERGY
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FREEDOM FUEL: A large U.S. flag, suspended from a crane cable, rippled in the summer breeze when President Donald Trump arrived at Southwest Iowa Renewable Energy in June 2019. PHOTO: SOUTHWEST IOWA RENEWABLE ENERGY
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POTUS PREP: After several days of preparation and planning, SIRE personnel and other attendees milled about the facility grounds as they anxiously awaited the arrival of President Trump on June 11, 2019. PHOTO: SOUTHWEST IOWA RENEWABLE ENERGY
a self-branded product dubbed “SIREtizer,”which it has produced and bottled at the facility. Since March, SIRE has produced and distributed thousands of gallons of SIREtizer across Iowa. “We’ve donated product to area hospitals and first responders,” Jerke says. “We’ve also sold product. We delivered hand sanitizer to restaurants, which helped some of them jumpstart their curbside offerings. We also provided alcohol to other entities that were positioned to make product. That went well, and it provided an important cash flow we hadn’t counted on. First and foremost, it was about fighting this pandemic and rising to a national need, but the cash flow was significant to us given the dire situation all producers were in.”
Jerke says the U.S. Food and Drug Administration’s latest guidance, issued on June 1, “took the industry backwards” in terms of being able to supply alcohol for hand sanitizer. “We’ve let our customers know that this new guidance exists, and if they are able to refine our product to those more stringent specifications, we’re happy to supply it within the framework of that guidance,” he says, adding that SIRE plans to continue to pursue sanitizer-related opportunities. “Necessity is the mother of invention, and we think there is still a pathway for participation in that market. We just need to figure out what our next move is.”
CHAIRING THROUGH CHANGE: SIRE board chairman Karol King has been involved with the ethanol plant since its inception and has successfully led the Council Bluffs, Iowa, company through several transitions. PHOTO: SOUTHWEST IOWA RENEWABLE ENERGY
24 | ETHANOL PRODUCER MAGAZINE | JULY 2020
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Awards Ethanol Producer Awards
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MARQUIS ENERGY-WISCONSIN Nominated By: Jim Rattunde, Marquis Energy
Getting Careers Flowing Just north of the famed dells of the Wisconsin River, Marquis Energy is earning a reputation as a career-building employer in an area laden with seasonal jobs. By Tom Bryan Marquis Energy’s decision to keep its Necedah, Wisconsin, etha- foreign to Marquis, due to its strong adherence to plant safety and nol plant up and running, with enhanced health protocols in place, emphasis on employee health. Even before the pandemic, the Neceduring the pandemic—which kept its employees productive and dah facility had mandatory monthly training meetings and required safe—is another notch in a long list of quiet contributions the com- on-line training. Employees there say management continuously ispany has made for its personnel, and they for it, over the years. And sues safety-related bulletins and e-mails regarding potential incidents, with so much uncertainty in the world, workplace stability—trusting or “near-misses,” along with corrective actions. And, this spring, the your employer to look out for you—is more important than ever. plant was nearing 500 days since a lost-time workplace incident. The management team at Marquis Energy-Wisconsin Employees First understands that obligation and considers their employ“Marquis has done well with safety, at each of its ees’ wellbeing priority No. 1. facilities, and I think that can be credited to the way we Plant Manager Jeff Knutson says that at no time communicate,” Knutson says. “We talk about safety conhas this corporate priority been more clear than during stantly—we bring it up in meetings with intention—and COVID-19, when Marquis suspended in-person meetif there’s something that we need to improve on, from a ings, temporarily closed its administrative building and safety aspect, we get on it right away. We don’t let it go.” restricted third-party contractors from site visits. He Knutson says Marquis personnel have an app on says the team also made its own alcohol-based cleanKnutson their phones and tablets (Velocity EHS Software) that ing agent and used it to sanitize the facility. “We’re still enables the staff to document and record observations, essentially closed off to outside people,” he told EPM in early June. “If we absolutely need something done, we’ll make excep- and make notes, to improve plant safety. “It’s just one of those costtions, but we’re trying not to allow contractors on site right now, for effective ways to go after the low-hanging fruit of plant safety and try to prevent people from getting hurt,” Knutson says. “If there’s an the safety of our team and our community.” Rolling out new protocols for COVID-19 didn’t seem totally incident at any Marquis location, management is immediately noti26 | ETHANOL PRODUCER MAGAZINE | JULY 2020
SAFETY FIRST: Marquis Energy-Wisconsin Environmental Health Safety Coordinator Andy Hare logs some office time before making his rounds in the plant. Sometimes it’s just easier to keep your hardhat on. PHOTO: MARQUIS ENERGY
fied, and we make necessary adjustments to our processes to reduce the likelihood of repeating the same type of incident again.” Marquis is also progressive about employee health and wellness. For example, employees are offered annual wellness screenings, which include a multi-panel blood test. It’s a unique benefit that has alerted at least a couple of employees to medical conditions they were unaware of. Knutson, who held positions with four other ethanol plants before settling in with Marquis nine years ago, says the way the company cares for its employees is distinct. “The owners of this company really place an emphasis on health, and the employees appreciate that.”
Career Focused
Necedah is a small community north of Wisconsin Dells, which swells with tourists each summer. And while plant personnel enjoy small-town living, the region affords them the amenities of a more metropolitan lifestyle. “It’s a town of 700, but there’s a lot more going on here than people sometimes realize,” Knutson says, explaining that the plant is just a short drive from Castle Rock Lake, which flows into the Wisconsin River and its scenic dells. It’s a stunning area, but one not known for an abundance of goodpaying, year-round career opportunities. So, the Necedah ethanol plant is not only an appreciated local business, but a sought-after place of employment. “There are other good places to work in the region, but our focus is on having a career versus a job,” Knutson says, explaining that Marquis works with regional high schools and colleges to make sure young people know about career opportunities in ethanol, “even if it’s years later when they come back home.” Of course, working at an ethanol plant isn’t for everyone. “At the end of the day, this is a refinery, and it is shift work,” Knutson says. “We hire people that understand that. It’s an opportunity to earn a good living, but it comes with sometimes having to work weekends, nights and holidays. It’s a real commitment.” Marquis Energy-Wisconsin is a 50-person plant—part of a larger
THE FIXERS: Marquis Energy-Wisconsin maintenance technicians Johnny O'Loughlin (left) and Pete Lambert are at the ready to fix and repair any compromised equipment at the facility. PHOTO: MARQUIS ENERGY
HANG TEN: Adrian Palamaruk, Marquis Energy-Wisconsin maintenance manager, keeps it light while getting things done on a cold day. PHOTO: MARQUIS ENERGY
300-person company—that makes a point of providing opportunities for advancement and career growth within the organization. The company prides itself on fostering professional career paths for its employees, and Knutson says that hinges around continuing education and training. “We also believe it’s important for employees to participate in leadership classes, seminars and online learning,” he says. “There are a lot of different ways to further your skillset—not just attending a four-year college—and we try to provide those avenues. The longer you’ve been employed here, the more promotable you are, but you also have to put in that time to further your skillset, if that’s something you’re interested in pursuing.” Employees at the plant say they appreciate coaching sessions and one-on-one meetings with supervisors that encourage an open, twoway dialogue. Employees are given a voice, frequently asked about their needs, and sometimes even asked to evaluate their supervisors. Marquis’ ownership group is proud of the fact that so many of its employees are former or current military personnel, and first responders in the community. “I don’t know the exact percentage— it’s probably 20 percent of our people—that are giving their time as EMTs, fire fighters, rescue, or just volunteering around the community,” Knutson says. “We try to hire the right person for the right position, and that often ends up being someone with military experience. We’re fortunate to have veterans in our workplace.”
DIRT WORK: Jim Rattunde, Marquis Energy-Wisconsin groundskeeper (right), and Ashton Knutson, enjoy a moment of levity after tackling a dusty job on the ethanol plant's grounds. PHOTO: MARQUIS ENERGY
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ACE ETHANOL LLC Nominated By: John Nelson, BBI International
Taking Corn Fiber to the Max In Stanley, Wisconsin, Ace Ethanol LLC is becoming a pacesetter in the corn fiber-toethanol race after installing a technology that gives the plant a strong D3 RIN advantage. By Tom Bryan When the U.S. EPA approved Ace Ethanol’s Part Ace was cleared to start optimizing the economics of 80 registration for corn-fiber-to-ethanol production this cellulosic ethanol production—generating one D3 RIN spring—qualifying the facility to generate D3 RINs—it credit for each gallon of output from its newly comwas not just another project milemissioned D3MAX corn-fiber-tostone, but a critical validation and ethanol plant in Stanley, Wisconsin. 'The commissioning definitive green light to go. Three months into it, despite “Securing that D3 approval was largely smooth, the pandemic and economic downwas never in question, but it was oband I believe we’ll turn, ACE Ethanol is producing viously a required step in our projappreciable volumes of cellulosic look back on this ect schedule,” says Neal Kemmet, ethanol, running the plant at roughproject as a huge CEO of Ace Ethanol LLC. “Getpercent of design capacity and success—and the ly7080percent ting cleared to generate D3 RINs of design yield. And wasn’t a ‘mission accomplished’ first of many D3MAX while the facility will climb toward installations.' moment for us, but a gateway to the capacity for some time, it is already next stage in our ongoing cellulosic one of the highest-volume celluMark Yancey D3Max LLC journey.” losic ethanol plants in the world. To participate in the U.S. ReIn fact, the D3MAX plant is apnewable Fuel Standard, and generate renewable iden- proaching a rate of nearly 3 MMgy, increasing Ace’s tification numbers, or RINs, producers must meet the overall yield to more than 3.1 gallons per bushel. The registration requirements in Title 40 CFR Part 80 of plant’s commissioning and early operation has not been the RFS. Landing that critical EPA approval in March, without unique challenges: equipment upgrades and
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BIG BUILD: The D3MAX beer well sits just outside the process building that houses most of the new corn fiber-to-ethanol process. PHOTO: ACE ETHANOL LLC
process tweaks have occurred along the way. But Ace has not reported a substantive shutdown of the D3MAX plant, and is producing tens of thousands of gallons of cellulosic ethanol weekly. While Ace is not revealing exact production numbers, the new process will push the plant’s corn oil yield up to about 1.4 pounds per bushel (from 0.9 pounds per bushel), while its distillers coproduct has decreased in volume and increased in protein concentration. Construction of the plant, which Ace owns and operates, utilizing the patented D3MAX technology under license, began in late 2018. “Ace did a fantastic job commissioning and starting up the plant,” says Mark Yancey, chief technology officer of D3MAX, reflecting on the tough winter that ensued after project builder Fagen Inc. broke ground. Yancey says those first months were fraught with cold-weather challenges—snow and ice slowed work to a crawl at times—but the work progressed, day by day, through the second, third and fourth quarters of 2019, until it was substantially complete in January and commissioned in early 2020. For Yancey and his team at D3MAX, the commissioning of the plant was a long time coming. Patents on the trailblazing technology had been filed more than a decade earlier, but the platform wasn’t introduced to the industry until capital investment in 2016 kick-started its demonstration at pilot scale. “With that equity, we were able to design and build a portable, skid-mounted pilot plant,” Yancey says, explain-
PAIRED UP: Two decanters, which produce the wet cake feedstock for the D3MAX process, are positioned near a massive pretreatment reactor in the process building. PHOTO: ACE ETHANOL LLC
ing how exploratory meetings with Ace resulted in the ethanol plant’s directors agreeing to host the pilot plant, running extensive testing throughout 2017. “I think we ran into unexpected things most every week, but we learned from them, and we worked through many phases of development in order to come up with what we think is an ideal process for converting corn fiber to ethanol,” Kemmet said prior to construction.
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COLLABORATING COLUMNS: The D3MAX beer column (tallest column on the left) produces approximately 70-proof alcohol, allowing precise measurement of the amount of cellulosic ethanol produced by the facility. A Whitefox ethanol recovery system upgrades the alcohol to 200-proof, resulting in significant energy savings and reduced production costs. PHOTO: ACE ETHANOL LLC
Ace set specific performance goals for the pilot testing, and ultimately D3MAX satisfied those marks. “The D3MAX pilot process was able to meet or exceed our performance goals,” Kemmet said after the pilot tests were complete. “Based upon the pilot testing, we believe D3MAX has the potential to significantly improve our company’s financial performance. We are in the process of finalizing pilot testing and will be working to ensure that we can seamlessly integrate the technology into our existing process. Once we have all the pieces in place, the final decision on installation will be made by our board of directors and the Ace membership.” With the pilot demonstration achieving prescribed thresholds, Ace’s board voted in the spring of 2018 to approve a fullscale construction project. Work began on the detailed design of the plant that summer and most of the process engineering was complete by the time excavation and foundation work got underway that fall. Yancey says Ace was the perfect partner for a novel cellulosic ethanol plant. “They were engaging and candid throughout the entire process,” he says. “Like every major construction project involving a new technology, there were frequent challenges and, of course, moments of anxiety, but the commissioning was largely smooth, and I believe we’ll look back on this project as a huge success—and the first of many D3MAX installations.”
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Because D3MAX uses wet cake as a feedstock—with no mixing of starch or sugars between the main plant and the new wing—it’s considered “separate processing,” which eliminates the need for mandatory third-party verifications. According to Yancey, the D3MAX process is the only corn kernel fiberto-ethanol process on the market that will not require an independent engineer to validate the cellulosic ethanol production every 500,000 gallons of cellulosic ethanol produced. With the D3MAX process, cellulosic ethanol gallons can be measured directly, avoiding the cost of recertification required by EPA for co-processing, or in-situ, corn kernel fiber processes. Currently, all other corn kernel fiber technologies available require that intermittent re-certification. Key players in the project, in addition to Ace, D3MAX and Fagen, included AdvanceBio, Fluid Quip Process Technologies, DSM, Lallemand and Whitefox Technologies, which installed a membrane-based ethanol recovery technology at the plant, resulting in significant energy savings for the integrated facility. “We pulled together a great team for this project, and the end result is a working cellulosic ethanol project—a benchmark achievement for our industry—and a facility that is positioned to be one of the most efficient, highest-yielding ethanol plants in the world,” Yancey says.
Awards Ethanol Producer Awards
TRENTON AGRI PRODUCTS LLC Nominated By: Jacqueline Pohlman, Renewable Fuels Association
Planting with Purpose A five-acre parcel of underutilized farmland across the highway from Trenton Agri Products will soon become a model pollinator habitat in Nebraska. By Tom Bryan A year ago, Charlie Wilson didn’t know a great deal about pollinator habitats. He was aware that bee and butterfly numbers were down, of course—and he realized that was a big problem—but it didn’t seem like there was much one person, or even one company, could do about it. That changed when Betsy Hickman spoke at a Renewable Fuels Association board meeting last summer. The Field to Market representative told RFA board members about the urgent need for new pollinator habitat, and she encouraged them to be part of the solution. “It sounded great, and it sounded possible,” says Wilson, president of Trenton Agri Products, a 48 MMgy ethanol plant in southwest Nebraska. “I thought, ‘If we can do this, why wouldn’t we? Why wouldn’t we create habitat that’s favorable to bees and butterflies?’ I told Betsy and Jessica Bennett (RFA vice president of government and external affairs) that this was something we wanted to do, and that got the ball rolling.” Over the winter, Wilson says, TAP collaborated with RFA, Renewable Fuels Nebraska, Nebraska Corn and Pheasants Forever, along with the team from Field to Market, to move the habitat concept forward. “We were all-in,” Wilson says, adding that, with Bennett and RFN Executive Director Troy Breden32 | ETHANOL PRODUCER MAGAZINE | JULY 2020
kamp spearheading the project, area biologist Mike Winkler was brought in early to help the group identify suitable plants for the habitat and the local ecosystem. “With all of those people working together, we kicked things off this spring.” The land TAP dedicated to the habitat, a five-acre plot, will serve as a demonstration site, with the aim of becoming a model for other Nebraska ethanol plants to imitate. “It’s a nice way to send a message that the renewable fuels industry is devoted to protecting pollinators, which are critical to the sustainability of agriculture,” Wilson says. Tony Leiding, TAP director of operations, says project participants were given a set of criteria from Pheasants Forever prior to the project’s launch. “They made it clear that they were looking for five to 10 dedicated acres,” he says, “and they wanted those acres to be easily visible to people coming in and out of the plant and driving by.” As it were, TAP had an ideal parcel of land north of the facility and adjacent to the area’s main corridor, U.S. Highway 34. “The piece of land we chose was ideal, for a couple of reasons,” Leiding says. “It’s visible, so growers delivering grain to the plant will be able to see the habitat and the signage. And the land itself was a rather awkward knob, and now that it’s
LOADING UP: Trenton Agri Products LLC's Lance Frazier (left) and Travis Cook load native plant seed into a drill seeder, officially commencing the ethanol plant’s model pollinator habitat in early June. PHOTO: TRENTON AGRI PRODUCTS
ducer Magazine in early June. While the employees at TAP are usually too busy for side projects, they found time for the pollinator habitat. “Everyone jumped in and really took ownership of it,” Leiding says. “A lot of our employees are farm guys. They just know what to do.” The seeding project was a break from day-to-day tasks, and a valuable morale boost for the team during the pandemic. “Over the past few months, there hasn’t been much to get excited about in the ethanol industry, so this was a fun project for everyone, and for all the right reasons,” Leiding says. “I think it also demonstrates that ethanol companies care about the environment and habitat, and it’s a way for us to actually walk the talk.” Now, with the initial seeding done, TAP will maintain the habitat—mostly just by weeding—and reseed each spring over the next few years. Leiding says it’s likely that biologists will analyze the habitat once or twice a year, and offer ongoing guidance to TAP. Wilson says the ethanol plant is obligated to maintain the habitat for three to five years, but intends to keep it permanently. “Once it’s established, why not let it just exist in perpetuity?” he says. Ultimately, the goal for the project is to get 1,000 acres of pollinator habitat planted across Nebraska, starting with sample plots at nine other ethanol plants in the state. Wehrman says Pheasants Forever is excited about the possibility of farmers enhancing small areas of their land to benefit pollinators. She says doing so will also benefit grassland songbirds, pheasants, quail and other wildlife. Wilson believes it will happen. “I think growers will see these habitats at ethanol plants and be inspired to dedicate some of their land to the same purpose,” he says. “I can’t think of a better way for our industry to show that it prioritizes biodiversity alongside our commitment to clean, green renewable fuels.”
broken off, the remaining farmland can be utilized more efficiently with straight, continuous rows without that oddly shaped offshoot being part of it.” Leiding and Wilson credit Pheasants Forever for sending out biologists Winkler and Nebraska State Coordinator Kelsi Wehrman to verify the suitability of the site as a pollinator habitat. After that checked out, the team at TAP began a multi-week process of planning, prepping the land, and ultimately drill-seeding the site. “Our maintenance manager, Joe Lockard, and our production manager, Lance Frazier, headed up the planting with help from the team,” Leiding says. According to Wehrman, the pollinator mixture—which will take a couple of seasons to mature—includes 45 wildflowers scheduled to bloom throughout the pollinating season from April to October. She says planting a variety of flower colors, plant structures, and bloom dates is important to attract the insect diversity needed across the landscape. The mixture includes milkweeds critical for the monarch lifecycle, asters, coneflowers, and prairie clovers, among other native plants. Once established, the field will change seasonally, showing purple, red, yellow, white and pink blooms buffered by a variety of grasses. TAP personnel finished seeding the plot just a week be- BLUE CREW: With the Trenton Agri Products ethanol plant in the background, TAP personnel Benton Daniels (left), Lance Frazier (on tractor) and Justin Samuelson get underway with seeding. fore speaking with Ethanol Pro- PHOTO: TRENTON AGRI PRODUCTS
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ICM INC. / THE ANDERSONS Nominated By: Doug Rivers, Sunflwr Inc
Ethanol’s Dynamic Duo A year after bringing their showcase ethanol plant online, the partnership between ICM Inc. and The Andersons remains poised to bear fruit. By Tom Bryan A stone’s throw from ICM’s headquarters in ColIn terms of operational strategy, VanderGriend says, wich, Kansas, a still-new ethanol plant lies ready to fulfill the idea is that the collective know-how of both companies its destiny as a biofuels game-changer when market con- will result in an ultra-high-yielding ethanol plant that brings ditions improve. The state-of-the-art to bear the technology and production 70 MMgy facility, just a year running, intelligence ICM has amassed over 'The purpose of is a vision made manifest by ICM two decades. “The purpose of EleElement is rooted in Inc. CEO Dave VanderGriend, who ment is rooted in what we’ve learned says Element LLC will be the most what we’ve learned over the past 10 to 20 years, and how efficient, lowest-cost ethanol plant in over the past 10 to we can apply that to demonstrate what the world once its impressive suite of true next-generation ethanol plant 20 years, and how alooks technology hums in unison. like,” he says. “That’s what this we can apply that is all about.” VanderGriend isn’t alone in this to demonstrate vision. His company partnered with The facility is almost a working The Andersons Inc. on Element, and what a true next- showroom of proven and novel techthe companies own and operate the generation ethanol nologies developed by ICM, includpromising biorefinery jointly. The ing its hopeful grain fiber-to-ethanol plant looks like.' power collaboration, which turned platform, Generation 1.5—which, Dave VanderGriend heads in the biofuels space when it VanderGriend says, has been “up and ICM Inc. was announced a few years ago, was down” over the past several months designed to leverage the specialties of in a sagacious commissioning. “I just each enterprise: ICM for its technology, The Andersons keep telling everyone, ‘We’ll get there. We’ll get there. Be for its competencies in merchandising and logistics. patient.’” 34 | ETHANOL PRODUCER MAGAZINE | JULY 2020
UNDER ONE TENT: Representatives of The Andersons, which runs four other U.S. ethanol plants, and ICM Inc., which designed more than half of the ethanol plants in the U.S., stand together at the Element LLC groundbreaking. PHOTO: ICM INC.
DIGGING IN: ICM Inc. CEO Dave VanderGriend (center), and executives from The Andersons and ICM pose shoulder-to-shoulder with ceremonial shovels at the groundbreaking for Element LLC. PHOTO: ICM INC.
VanderGriend has always taken a measured, long view approach to technology development. Entering the ethanol industry in 1978, he says, his company didn’t actually design an ethanol plant, in whole, until 2001. “It took 23 years, working for High Plains Corp., remodeling plants and helping plants,” he says. “We took everything we learned prior to 2001 and incorporated it into that first ethanol plant. And you know what, that model was reproduced 115 times over the next 15 years. But what have we learned since? What should ethanol production look like now?” In part, the answers to those questions are being dictated by the allure of California’s Low Carbon Fuel Standard, which favors biofuels made with less energy. “We wanted to minimize natural gas and electricity to whatever extent we could,” VanderGriend says. “So, we installed our Advanced Gasification Technology at Element (utilizing wood waste) with a let-down turbine, so we could make our own gas and our own electricity.”
The combined heat and power generator at Element is expected to offset more than 70% of the plant’s natural gas requirements, and as much as 80% of its electrical demand. VanderGriend says Element’s gasification system was still being commissioned when the COVID-19 downturn put a hold on things. The irony of the facility’s temporary shutdown is, of course, its latent efficiency. But VanderGriend says the novelty of some of the plant’s technologies, and the protracted nature of commissioning it all, made it practical for the team at Element to “step back” and recharge during the pandemic. “It’s like anything else,” VanderGriend says. “When we built Russell [now PureField Ingredients], it took us about a year to work through all the nuances of that plant, but we ended up with a very good facility that was reproducible. The same thing will happen with Element over time—once demand returns.” VanderGriend admits that Colwich, Kansas, is not the best location for an ethanol plant. It appeared to make sense to build Element there for two reasons: It was next door to ICM’s headquarters, and there was a lot of existing ethanol plant infrastructure on site, the remnants of a former Abengoa facility. The latter justification turned out to be of minimal benefit, however, as most of the old plant proved unusable. “All that remained were the fermenter tanks, so we paid an awful lot for dirt,” VanderGriend quips. Element’s marquee features, aside from its corn fiber-to-ethanol orientation, is ICM’s Selective Milling Technology V2 and Fiber Separation Technology Next Gen. The milling technology is a grind
PAIRED PERSPECTIVE: A drone photo of the 70 MMgy Element LLC ethanol plant, which leveraged some existing ethanol plant infrastructure but was essentially built from the ground up. PHOTO: ICM INC.
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Awards &2//$%25$7,21 2) 7+( <($5
LEGACY VISION: The late Dennis VanderGriend looks on at the groundbreaking ceremony for Element LLC. While Dennis passed before the plant was brought online, he was intrigued by the vision of building a plant that showcased ICM’s collection of production technologies. PHOTO: ICM Inc.
system designed to maximize ethanol and distillers corn oil production, while the fiber separation platform supports that effort by separating the fiber from the process. “It’s all there,” VanderGriend says, explaining how the technologies are interconnected. “You can’t go directly to Gen 1.5 without clean fiber.” Ultimately, the Gen 1.5 cellulosic process should produce more than 5 MMgy of cellulosic ethanol at Element, along with a unique high-value animal feed. VanderGriend says managing such an ambitious project has been a matter of prioritizing technology development. “We took a break from gasification to focus on Gen 1.5, and now we’ve decelerated on Gen. 1.5 to give gasification more attention again,” he says. “It’s the only way you can effectively manage this kind of innovation. Element really is different from other plants, from its use of roller mills upfront instead of hammer mills—to keep your fiber larger for separation—to doing a high-protein feed right after fermentation, directly off the centrifuges. It’s all very unique.”
Combining an array of separate but related technologies in one plant was a necessary challenge for VanderGriend. “We didn’t have it all in any one place,” he says, adding that it was a lofty vision that, for the most part, came together the way his engineers drew it up. “Nothing is ever as perfect as you plan it,” he says. “There are always some things you would do differently based on what you discover later. But Element is very functional. Its bones are good, and we’re optimistic that it will end up being the model plant we intend it to be.” As for the partnership with The Andersons, VanderGriend says it has been successful, despite having to mesh two strong corporate cultures together on an ambitious first-of-itskind project. “These collaborations are never without challenges, but The Andersons is a great company full of good people. They saw an opportunity to take that next step and develop Element with us, and we’re all determined to see it work out.”
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Visit us at www.solarturbines.com, call +1-619-544-5352 or email infocorp@solarturbines.com for more information. ETHANOLPRODUCER.COM | 37
Coproducts
Masters of the Market High-protein technologies are transforming the ethanol industryâ&#x20AC;&#x2122;s feed coproduct stream. Success will require more involvement in markets and closer relationships with end users. By Lisa Gibson
38 | ETHANOL PRODUCER MAGAZINE | JULY 2020
The only way ethanol producers will get the optimal value—and return on investment—from high-protein feed is to commit to immersion in the feed industry, says Mallorie Wilken, technical consultant with ICM Inc. “This is very much a
mind and industry shift in the ethanol industry to become part of the feed industry, if and when they install these technologies,” she says. “You’re committing to both of these industries.” Interest in producing high-protein feed is growing in the ethanol industry, as Fluid Quip Technologies is already engineering its ninth installation of its Maximum Stillage Coproduct system, according to Keith Jakel, sales and marketing manager for FQT. ICM’s Fiber Separation Technology also is installed at about 10 plants. While DDGS have a place in the market as a commodity, high-protein, functional feed represents not only entirely new products, but new sales strategies and markets, as well. The value and revenue potential is enormous, but producers looking to make an investment and enter those markets should be prepared, Jakel and other experts agree. “It’s a different product mix for the ethanol producers,” Jakel says. “Selling a high-protein feed ingredient isn’t as simple as hiring a marketer and just going out to a
FIBERFUL: ICM Inc.’s Fiber Separation Technology washes out fiber before fermentation. The higher protein and improved digestible amino acid profile is targeted at monogastric animals such as pigs, chickens and aquaculture, where higher-fiber DDGS has been limited. PHOTO: ICM INC.
ETHANOLPRODUCER.COM | 39
Coproducts
HIGH AND DRY: Ring dryers are a crucial part of Fluid Quip Technologiesâ&#x20AC;&#x2122; Maximum Stillage Coproducts system, pictured here at Flint Hills Resources in Fairmont, Nebraska. PHOTO: FLUID QUIP TECHNOLOGIES
local farmer and saying, â&#x20AC;&#x2DC;Hey, weâ&#x20AC;&#x2122;ve got a high-protein feed.â&#x20AC;&#x2122; Itâ&#x20AC;&#x2122;s a much more technical sale in the marketplace.â&#x20AC;?
Market Immersion
Instead of basing feed price on corn prices, high-protein feed producers become â&#x20AC;&#x153;price givers,â&#x20AC;? Jakel says. A much higher value
and price can be placed on these novel feed products, he adds, if the producer understands their components and markets them appropriately. Many ethanol producers Wilken has spoken with about highprotein feed in her two years with ICM have been unaware of the components in their current DDGS, she says. â&#x20AC;&#x153;In the large sense, most people just thought of it as a commodity instead of a feed source. They didnâ&#x20AC;&#x2122;t understand how great it was for cattle in fat and fiber, or how it can be a challenge for hogs in fat and fiber. It was very much a commodity mindset. Weâ&#x20AC;&#x2122;ve really tried to teach ethanol plants about those changes.â&#x20AC;? Animal feeders did their own research on DDGS to figure out how to make the best use of it, Wilken says. But with high-protein feed, the ethanol industry needs to commit to that research and bring it to the animal feeders. â&#x20AC;&#x153;Now, when we start specifying these products, we have to bring the research first,â&#x20AC;? she says. â&#x20AC;&#x153;So instead of having a market pull, weâ&#x20AC;&#x2122;re really pushing this into the market and showing value at the beginning to encourage the shift and the change, and bringing more value.â&#x20AC;? As part of its market development for its Fiber Separation Technology, ICM has researched species-specific diet plans. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re trying to do that original cohort in having that info available for producers to give to their animal feeders,â&#x20AC;? Wilken says, adding that it can lead to more product consistency between plants, allowing for marketing on a national scale. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re trying to commit to that research so we can educate where to use it, how to use it, and what kind of performance those animal producers can expect.â&#x20AC;? Todd Becker, president and CEO of Green Plains Inc., says Green Plains has assembled a team with significant experience in
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40 | ETHANOL PRODUCER MAGAZINE | JULY 2020
marketing to companion animal companies, pet food companies and aquaculture companies. Green Plains has added MSC at its Shenandoah, Iowa, plant and is selling into the pet food market. “You can’t just start producing this product and expect that you’re going to have a home for it,” Becker says. “It takes a lot of work and a lot of skill, and it takes time to develop a market.” Green Plains will likely spend $3 million to $4 million per year on the marketing team, for full immersion in and commitment to its new market, Becker says. “This is working with the customer while they’re developing products around your product, and they have to understand that you’re going to be consistent with your quality, have quality control, quality assurance.” It can take 12 to 18 months to get into some specialty high-protein markets, Becker says, adding that some end users have a two-year vetting period. Pet feed markets, for example, have intensely rigid specifications, and changing a pet food bag to reflect new ingredients is a massive undertaking, he says. In addition, those end users want to know a high-protein ration will be consistent and redundant. If the plant goes down, the buyer needs to be able to get that exact high-protein product elsewhere. Quality control and assurance come into play in a pet feed or aquaculture market, as well, Becker adds. Trucks pulling loads need to be cleaned properly after the previous load, for example. Historically, the ethanol industry hasn’t had to spend time on these details with its DDGS coproduct. “You have to come in with a deep understanding of how this product will be marketed and who this product will be marketed to, otherwise you’ll never realize your return on investment,” Becker says. continued on page 44
PROTEIN PRODUCERS: High-protein coproduct production is increasing in popularity within the ethanol industry. Success in the marketplace will require a more hands-on approach than producers have used with their distillers grains. PHOTO: ICM INC.
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Coproducts continued from page 41
Communication with animal feeders is crucial, Wilken says, as is avoiding the issues feeders experienced when ethanol producers started separating corn oil, thereby affecting feed content and weight gain. â&#x20AC;&#x153;We donâ&#x20AC;&#x2122;t want to repeat that,â&#x20AC;? she says. â&#x20AC;&#x153;We very much want to be engaged and the education source for those producers so they can trust what weâ&#x20AC;&#x2122;re going to be producing and have confidence in that.â&#x20AC;? Ethanol producers tend to be disconnected from the end users, Wilken says. That will need to change in the new high-protein feed market. Working with specifications of both industries, ICMâ&#x20AC;&#x2122;s goal is to improve the efficiency of the plant, and the quality of the feed, Wilken says. â&#x20AC;&#x153;If youâ&#x20AC;&#x2122;re not committing to both of those, thereâ&#x20AC;&#x2122;s no point.â&#x20AC;?
Yeast Research and Role
COMPONENT CLOSEUP: An illustration of Saccharomyces cerevisiae cells. This yeast is common in ethanol production. Yeast developers are following industry evolution and looking for ways to complement highprotein technologies.
High-protein feed systems are separating out and concentrating more protein than ever before, but theyâ&#x20AC;&#x2122;re also pulling out the yeast portion more effectively. Many producers arenâ&#x20AC;&#x2122;t aware of the importance of yeast in feed, Wilken says. â&#x20AC;&#x153;The yeast isnâ&#x20AC;&#x2122;t vital to the protein portion,â&#x20AC;? she says. â&#x20AC;&#x153;But it has the cell wall components that really help in animal digestion and animal health.â&#x20AC;? Re-introducing that yeast portion opens specialized markets such as nursery pigs, to boost immunity, she says. â&#x20AC;&#x153;It provides a very low fiber, low fat thatâ&#x20AC;&#x2122;s going to help really set them up for great performance.â&#x20AC;? About three years ago, DuPont formed a focused program on developing enzymes and yeast that complement high-protein technologies, says Jaclyn DeMartini, scientist with DuPont Nutrition and Biosciences. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s been a reaction to the market saying thereâ&#x20AC;&#x2122;s been interest growing and we see that continuing to grow going forward, especially with uncertainties
PHOTO: DUPONT NUTRITION AND BIOSCIENCES
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going on in ethanol right now,” she says. “We think that high-protein coproducts, in general, is a direction that can add some stability and add some more value to the ethanol market.” Enzymes and engineered yeast can be developed to complement high-protein feed technologies, allowing for increased protein content, improved amino acid composition, and expression of different compounds that are beneficial to the animal, DeMartini says. “You can really think of a large range of things that yeast has the potential to do, and since it’s such a large component of the protein coproduct, there’s quite a bit of potential there.” DuPont has worked with nutrient and feed experts to better understand what the end user wants to see, and tailor its designs in enzymes and yeast. The work also could change the perception of feed products coming out of the ethanol industry. “It’s really important to educate that these high-protein coproducts are on a completely different level than what has been produced previously,” DeMartini says. “DDGS have plenty of advantages and are a great feedstuff, but we don’t want to put this in the same bucket. Producers will have to educate end users on what they’re selling. “This stuff will be lumped at a much lower price point, if they’re not able to distinguish this from DDGS and conventional coproducts.” Still, livestock producers will want samples and trial time to experience the benefits for themselves, DeMartini adds. “There needs to be sufficient quantity produced to do that. Until we have hundreds upon hundreds of metric tons, it’s hard for them to take stock in what we’re telling them.” DeMartini adds that oversupply
won’t be a concern. Becker agrees, citing the 320 million-metric ton demand for high protein, growing 12 million metric tons per year. That’s equivalent to every ethanol plant in the U.S. producing about four pounds per bushel of high-protein feed, Jakel says.
Investment and Involvement
Jakel says MSC is a game-changing technology for the ethanol industry, with a ripe market and product price point about three times that of DDGS. MSC brings $20 million in added annual revenue to a 100 MMgy plant, he says. That number is increasing, he adds, as a result of FQT’s marketing work and partners. With an investment of $30 million to $50 million, it’s not a project to take lightly, Becker cautions. “Not everyone is going to focus on this because it’s not just turning it on and selling it.” For Green Plains, high-protein coproducts aren’t just about diversification, but the future of the company, Becker says. “Were making the investment now because we plan to roll this out to the rest of our plants. “It’s exciting,” Becker adds. “It’s transformational. Some people don’t believe in it. I think when they see it at all of our plants and they see the results, they’ll start to believe in it.” Wilken says, “This installation of any of these technologies is a commitment to the future of the ethanol industry and the feed industry.” Author: Lisa Gibson Editor, Ethanol Producer Magazine 701.738.4920 lgibson@bbiinternational.com
ETHANOLPRODUCER.COM | 45
Innovation
Doubling for
46 | ETHANOL PRODUCER MAGAZINE | JULY 2020
Diesel A novel engine technology could make it possible for ethanol to be used in compression-ignition engines, opening up a potential multi-billion-gallon market. By Matt Thompson
It sounds almost too good to be true, but a new technology has surfaced that might enable heavy-duty diesel engines to run on ethanol, opening up a whole new market for the biofuel. Gasoline and ethanol use fell off a cliff when COVID-19 struck America, while the diesel fuel used for freight was relatively unaffected. Trucking carried on while Americans stayed apart and stayed home. Now, a technology from ClearFlame Engines may provide an avenue for ethanol to diversify its market by becoming a substitute for diesel in compression-ignition engines. According to BJ Johnson, ClearFlame’s CEO, the technology works by changing the way heat is managed within an engine by using insulation and managing exhaust flow. “These changes raise combustion temperatures just enough to allow less reactive fuels like ethanol to combust quickly and very efficiently with low emissions, all with no loss of performance,” he says. He adds that the technology can be added to any compression engine that runs on diesel, which is a significant market. “Globally, hundreds of billions of dollars’ worth of diesel engines are produced each year, and hundreds of millions of these engines are currently in use,” he says. “The United States alone uses 40 billion gallons of diesel fuel each year, and this is expected to grow. Substituting for 20 percent of this total would double demand for U.S. ethanol.” Engines that operate with ClearFlame’s technology can use any ethanol blend that doesn’t produce a significant amount of soot when burned, Johnson says, which includes E98 blendstock and E85 with an ethanol content of at least 70 percent. Johnson says the advantages of using ethanol in diesel engines include lower emissions and lower carbon intensity for any operation that currently uses diesel fuel. And because decarbonizing heavy-duty applications is difficult, ClearFlame’s technology has “tremendous value in sectors where there are few other alternatives, like freight transportation, agriculture and construction.”
Moving Forward
While ClearFlame’s potential benefit to ethanol producers sounds promising, commercial use of the technology won’t be immediate. Johnson says ClearFlame has proven the technology’s concept and is working to integrate it into commercial engines. ETHANOLPRODUCER.COM | 47
Innovation “We are doing this now on a 15-liter Cummins engine with results expected by Q3 2020,” he says. “After that, in late 2020 and into 2021, we would like to begin preparing for several pilot demonstrations using realworld applications like power generation to prove the power, efficiency and emissions in the field.” Johnson presented ClearFlame’s technology at the 2020 National Ethanol Conference in February, and he was encouraged by the interest that ensued. “We received very enthusiastic feedback from those who understood the huge creation of ethanol demand that is enabled by our technology,” he says. “There was also significant interest in testing the technology. ClearFlame is hoping to convert this enthusiasm to more tangible support,” he says, explaining that the company is securing additional test fuel and capital.
Full Circle
Walt Wendland, CEO of Ringneck Energy, an 80 MMgy plant in Onida, South Dakota, says he was impressed with Johnson’s presentation, particularly ClearFlame’s potential to increase domestic ethanol demand. “What I liked about it the most was that farmers that bring their corn in would have a great opportunity to buy the ethanol back to fuel their tractors,” Wendland says. “Basically, it’s closing the loop. It’s something that I think would be pretty neat where we’re located.” Johnson says part of the appeal of ClearFlame’s technology is to protect against poor market conditions and decreased demand for etha-
TECH CHECK: ClearFlame Engines CEO BJ Johnson, right, and Julie Blumreiter, chief technical officer, work on ClearFlame’s technology. The company says its technology allows diesel engines to run on ethanol blends of 70 percent or more without suffering a loss of performance. PHOTO: CLEARFLAME ENGINES
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Innovation
HIGH-POWERED TEAM : BJ Johnson, CEO of ClearFlame Engines (left) and Julie Blumreiter, chief technical officer, say using ethanol in diesel engines would enable automakers to more easily meet emissions standards with simple after-treatment systems. PHOTO: CLEARFLAME ENGINES
nol. “I look at ClearFlame as a hedge,” he says. “If we can be using ethanol both as a gasoline substitute and a diesel substitute, we can be much better insulated from any shock that’s going to affect one market or another. Global
recessions are never going to be good, but the more you can hedge and insulate, the better it’s going to be.” The concept benefits not just ethanol producers, but corn growers as well, Wendland
ETHANOL DEHYDRATION • MOLECULAR SIEVE
Consistent. Responsive. Innovative.
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says. “It’s a cliché, but it’s a huge win-win for farmers to lower their costs, and farmers want to support [ag-based fuels],” he says. Kelly Nieuwenhuis, director of the Iowa Corn Promotion Board and a member of Siouxland Energy Cooperative’s board of directors, is also optimistic about potential new markets ClearFlame may open for ethanol. “When [Johnson] told me the thought process of ClearFlame Engines was to look at locomotive engines and large tractors—industries that don’t go to retail fuel stations for their fuel, that have their own terminal—I thought, ‘Wow, that’s the way to go,’ because we can ship E98 right from an ethanol plant,” Nieuwenhuis says. “Now, what we need to do is sit down and visit with the ag manufacturers—all of them—and get them looking into this new engine design, and working with ClearFlame Engines to try [introduce them into] their large tractors,” he says. Nieuwenhuis also agrees that the potential to reduce the carbon intensity of farming itself is an exciting prospect. “Because that’s a new thing that’s kind of just getting off the ground—carbon sequestration and carbon credits aimed at the farmer—and we need to be involved in that conversation, too,” he says. Nieuwenhuis says he’s fully on board with the potential ClearFlame offers, and has spoken about the engines with other farmers who have been supportive. “Diesel fuel is not going away in a short time, but I think the combination of ClearFlame engines and renewable diesel, and biodiesel, will be a very positive thing for agriculture,” Nieuwenhuis says. Engine manufacturers also appreciate ClearFlame’s ability to simplify a typical aftertreatment system for diesel engines. Those systems, Johnson says, “are expensive and complex, and they struggle to scale more and more to increasingly stringent emissions regulations.” ClearFlame’s technology uses a catalytic converter similar to those used on gasoline cars rather than urea-based after-treatment systems, he says. “One of the things that gets OEMs [original equipment manufacturers] very excited, especially in geographies like the U.S. that are very sensitive to smog, is being able to meet not just current, but next-generation smog standards at decreased cost, and with much simpler after-treatment, but while still re-
maining in a diesel-style engine configuration,” Johnson says.
ClearFlame’s Difference
ClearFlame, Johnson says, is different than some of the other technologies that allow ethanol use in diesel engines. Those technologies, he says, use some other ignition source besides ethanol, such as fumigation, which he compares to running a spark-ignition ethanol engine with a diesel spark plug. “Those solutions work in some applications,” Johnson says. “The reason why they really haven’t found a lot of widespread success is, they’re using two fuels at once, and that’s always an additional level of complication that people don’t want to deal with,” he says, adding that those engines also require the use of the urea-based after-treatment systems. ClearFlame’s technology simplifies aftertreatment but keeps all the other benefits of the diesel engine design, Johnson says. “At ClearFlame, we’re talking about everything you associate with the way a diesel engine works,” he says. “The fuel goes in, it ignites relatively quickly, the combustion proceeds, and you continue to inject the fuel. That allows you to keep all those torque and efficiency benefits you associate with diesel, while also having easy control over ignition.” Those urea-based after-treatment systems, which are designed to reduce emissions and particulate matter, aren’t needed, as the ClearFlame system takes advantage of ethanol’s clean-burning properties. Johnson says ethanol also offers about a 40 percent reduction in CO2 compared to diesel. “Globally, heavy-duty diesel engines produce about five gigatons of CO2 a year, so a 40 percent savings on that is two gigatons that you’re reducing,” Johnson says. “Of course, you have to have the ethanol capacity to meet that, but that’s something that [shows] we can get the biofuels production up.” The company announced in April it has secured financing, which will allow it “to accelerate demonstrations of its breakthrough technology,” according to a press release from Clean Energy Ventures. The $3 million initial financing will also be used to pursue further partnerships and commercialization. Johnson says the ClearFlame technol-
ogy was developed with co-founder Dr. Julie Blumreiter as part of his graduate research. ClearFlame then worked with Argonne National Lab and proved the technology on a Caterpillar research engine. “Using this $3 million, we can take our results out of Argonne and into our own independent R&D facility, so we can begin the effort of more rapid prototyping.” That prototyping will start with a Cummins X15 engine, he says, but the company has hopes of quickly testing on more engines and different applications and “prove that this technology really does work anywhere a diesel engine can be used across makers and applications,” Johnson says. Johnson says, in addition to decarbonizing heavy-duty transport, his goal is to remove some of the stigma around combustion. He says combustion as a transportation technology isn’t inherently worse than other technologies, like fuel cells. “When people compare
ClearFlame to something like a fuel cell, I think the narrative out there is that, ‘A fuel cell must be better than what ClearFlame is doing, because fuel cells are better than combustion,’ but that’s simply not true,” Johnson says. “I think that’s an important part of being able to expand the impact of decarbonization: We need to make it more about the fuels that we’re using and less about how we’re using them.” And Nieuwenhuis says that’s something the ethanol and agriculture industries can get behind. “We need to be on this like flies on honey, because it’s a positive and we’re looking for positives,” he says. “I’ve stressed this so much for several years, that farmers want markets, not subsidies, and this would be a market opportunity. Agriculture, I’m pretty confident, will be supportive.” Author: Matt Thompson Associate Editor, Ethanol Produce Magazine 701.738.4922 mthompson@bbiinternational.com
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Business
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RISK
Reoriented
As the ethanol industry seeks normalcy after the shockwave of COVID-19, new notions about capital investment and risk are surfacing. By Luke Geiver
Ethanol boards considering capital deployments, tech investments or growth initiatives in this pandemicinjured economy face extraordinary unknowns. For
months, COVID-19 has changed the way we live and move—travel, work, school, worship, it all changed— bringing gasoline use to a low not seen in decades. When demand collapsed this spring, the ethanol industry pulled back, heavy, taking an astonishing amount of production offline as the pandemic ran its course. As states began to reopen in late May and early June, driving returned, and the ethanol industry was trekking toward normalcy, but still far from it. Now, as U.S. ethanol producers seek renewed clarity to make financial decisions in a changed world, Ethanol Producer Magazine taps the knowledge of investment and risk management professionals for answers. Slated to
present at the 2020 International Fuel Ethanol Workshop & Expo, August 24-26 in Omaha, Nebraska, these experts share unique perspectives about what the industry might learn from the crisis, and how capital deployments can and should still commingle with sound risk management strategies.
Road to Recovery
April was a cruel month. The COVID-19 lockdown’s impact on transportation fuels was so intense that it lacked any historic context. Chip Whalen, vice president of education and research for Commodity & Ingredient Hedging, says the market is now recovering—fuel demand is up—but the industry suffered a blow that will have lasting effects. “At one point, margins were deeply negative,” Whalen says. Margins, which were mostly acceptable pre-pandemic, fell apart between late February and early April, he says. In some cases, plants were losing as much as 28 cents per ETHANOLPRODUCER.COM | 55
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THE LONGVIEW: Most producers will remain in conservative risk management positions while rebounding from this springâ&#x20AC;&#x2122;s low- to negative-margin environment. The recovery is expected to take months. PHOTO: LUKE GEIVER/ETHANOL PRODUCER MAGAZINE
gallon. â&#x20AC;&#x153;Historically, [a positive margin of] 30 cents to 40 cents per gallon was a good profit margin,â&#x20AC;? he explains. Margins in that range were considered among the 80th to 90th percentile of all plants. â&#x20AC;&#x153;Now, the 80th to 90th percentile range is for plants recording margins of roughly 15 cents per gallon.â&#x20AC;? Currently, Whalen says margins are back to breakeven for most plants. Many producers are working to protect cash flow and nearly all are placing a greater emphasis on risk management as they fight to find the slightest gain in margin, or in some cases, to mitigate loses linked to production during the height of the pandemic. â&#x20AC;&#x153;Before all of this happened, there was a sense that there was no need to manage forward risk,â&#x20AC;? Whalen says. â&#x20AC;&#x153;Now that is all changing.â&#x20AC;? Many producers remain engaged in the exchange-based derivatives and futures market, and some are implement-
ing monetary moves for flexibility as they wait for margins to improve, Whalen says. And as producers draw back into conservative risk management fortifications, many are also revisingâ&#x20AC;&#x201D;but not abandoningâ&#x20AC;&#x201D;their plans for near-term technology investment. Neal Jakel, an ethanol industry veteran and partner at Fluid Quip Technologies, noticed a change happening across the industry even before the pandemic. He says ethanol plant management teams, and their boards, have been placing a heightened scrutiny on capital investments, and that will only intensify in the post-pandemic era. He says, already, plant boards are demanding greater due diligence on plant investments that can be impacted by extreme events. Itâ&#x20AC;&#x2122;s no longer good enough to consider technology upgrades based on the merits of testing and analysis in the absence of risk, he says. Tech today must be tested, or mod-
The Specialist in Biofuels Plant Appraisals • Valuation for financing • Establishing an asking price • Partial interest valuation
INVESTMENT LOAD: Evaluating complex capital projects will be more challenging in the postCOVID-19 era. Financial modeling can give producers a truer understanding or the viability of investing in a new technology, upgrade or expansion. PHOTO: LUKE GEIVER/ETHANOL PRODUCER MAGAZINE
eled, for the most extreme possibilities, pandemics included. Today, Jakel and many board members are running risk charts to adjust the effectiveness, or feasibility, of new technologies based on multiple scenarios (roughly eight). “This is about asking ‘what ifs’ about all the important assumptions that go into a new technology,” he says. “We have to look at the sensitives of the main components. That is how venture capitalists do it, and that’s how we should as well.” At the 2020 FEW, Jakel will expound on the industry’s altered understanding of technology risk assessment. “Evaluating complex capital projects is more than just a simple spreadsheet of numbers,” he says. “In today’s world of multiple choices of potential projects to implement at an ethanol facility, utilizing financial and project evaluation tools is even more important to correctly assess a project’s true
financial potential.” Jakel and his team frequently share their own financial modeling tools with clients while encouraging them to engage third-party experts like Christianson PLLP to help better verify the true feasibility of a new technology. “Competing for capital and capital allocation is always top of mind for ethanol boards, especially in the challenging market our industry is currently experiencing,” he says. Understanding risk, whether linked to the fallout of the pandemic or not, requires a high-level view of the industry. Joining Whalen on an FEW panel titled, “A Comprehensive Look at Risk Management for Ethanol Producers in the Context of an Increasingly Turbulent Marketplace and Policy Environment,” is Connie Lindstrom, senior biofuels analyst at Christianson PLLP. Lindstrom has been tracking the ethanol industry for the past eight years
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HISTORICALLY HOMOGENOUS: The 2020 downturn has underscored the need for continued product diversification within the ethanol industry. Standardized coproducts, like conventional DDGS, may become somewhat less ubiquitous as producers seek competitive differentiation. PHOTO: LUKE GEIVER/ETHANOL PRODUCER MAGAZINE
and is now embarking on an ambitious industrywide benchmarking program. In the past, Lindstrom has performed plant specific risk assessments and SWOT (strengths, weaknesses, opportunities and threats) analyses. “I think there is a real value for benchmarking the industry, as a whole,” she says. “We can find what the threats to success are for the entire industry, what we need to watch out for, and what we need to plan for.” Lindstrom stresses that an ag-focused industry is always going to have innate risks because of weather and economic events that impact commodity prices. “Generally speaking, one of the advantages of doing strategic planning is that it helps you mitigate that risk, specifically catastrophic risk,” she says. In Omaha, Lindstrom intends to explain how she has performed industry workshops related
to benchmarking, and what the process might look like should a broader swath of ethanol plants participate. “What would this add to our understanding of our own plants?” she asks.
Connected Capital
Both Whalen and Jakel believe new realities will change the way ethanol producers operate in the next three to five years, with acceptable margins being redefined. “What historically looked like a mediocre margin is now a good margin going forward,” Whalen says, adding that proper risk mitigation can reduce producer exposure and give them greater control over their financial outcomes. Although the pandemic was unlike any past crisis ethanol producers have faced, the industry’s discipline in March, April and May demonstrated its maturity.
Whalen believes the industry displayed greater resilience and flexibility than it did in previous downturns. Now, the resumption of ethanol’s long-term market expansion (i.e., E15) and exports should give the industry a boost in the months ahead, even as margins remain tight into 2021. Whalen expects most producers to stay committed to conservative risk management practices until the pandemic subsides, and beyond. Jakel believes ethanol plants will focus on efficiency over volume throughout 2020, and diversification will remain important. “The industry is realizing they have to do something that isn’t just related to increased production. It has to be about new products, or tapping into the low-carbon world,” he says. Reflecting on his experience from this downturn and previous periods of overproduction or price collapse, Jakel says producers tend to invest in new technology in both good and bad times. When margins are high, they tend to reinvest profits in the plant; and when margins are low, they’re often compelled to look at investments that yield new efficiencies or diversification. “To grow, you have to invest capital,” he says. For the past several years, the industry has had more technology and project options available than capital, Lindstrom says. In the past two years, the focus has been on understanding carbon scores and what options are available to achieve lower numbers. While that focus will remain for many plants, the entire sector has shown it can pivot to alternatives quickly. “We have been so impressed with the facilities that have made the determination to go all-in making hand sanitizer to keep employees at work and for community involvement,” she says. They were also more flexible in their work with livestock producers during the COVID-19 crisis. Most importantly, Lindstrom believes the industry has shown—and can learn from—how connected it is to so many things. “A good example is now the CO2
shortage for food and beverage facilities,” she says. “Some CO2 plants had to shut down because of ethanol plants producing less. People had no idea.” That is a major strength of the industry, the interconnectedness, even if it is less known than it should be, Lindstrom says. “We, as an industry, haven’t done a good job in letting the world know how connected it is to ethanol,” she says. “That could be the
silver lining in all of this and something we need to continue to push for or invest in. We need to let the world know how connected the ethanol industry is to everything else.” Author: Luke Geiver Associate Editor, Ethanol Producer Magazine 701.738.4944 lgeiver@bbiinternational.com
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QUALITY UNCONCERN
Ethanol plants have sustained adequate production yields in 2020, despite low-quality corn from last yearâ&#x20AC;&#x2122;s harvest. By Susanne Retka Schill
One piece of good news in the midst of the pandemic and oil collapse was that the 2020 corn crop was off to a better start than last year, albeit still problematic in some areas. The USDA crop progress report at the end of May was showing planting and emergence of the 2020 crop far ahead of last year, on average, and better than the five-year average. The 2019 growing season presented a wide array of weather-related setbacks for the corn crop from planting to harvestâ&#x20AC;&#x201D;with some growers harvesting the corn rows they could
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reach in spite of snow and mud in winter and spring. For ethanol producers, the low test weights, high moisture and high damage counts raised concerns that ethanol yields would take a hit. “Quality was lower,” says Randy Doyal, CEO of Al-Corn Clean Fuel, in Claremont, Minnesota. “The biggest problem we have seen is with the weakness of the kernel. Damaged, broken corn produces higher fines, resulting in problems with flowability in corn bins and plugging of feed hoppers. [Ethanol] yield is down a touch, probably about par with the amount of material removed during multiple bin cleanings.” Further west, Ryan Carter, general manager of Tharaldson Ethanol in Casselton, North Dakota, is seeing a wide range of corn quality coming into the plant. “It did not affect the yield like you would have thought. We have processed corn that has been harvested throughout winter and still being harvested in May. Some of that corn improved on moisture. We haven’t seen issues with ethanol yield.” “There was a lot of trepidation about what could happen,” says Stephanie Gleason, senior manager of technical service at Phibro Ethanol Performance Group. “Michigan, Indiana, Ohio and further east were struggling with low test weights and high moisture. Harvest wasn’t delayed, but quality was very low in that region. The Dakotas and Minnesota were struggling to get corn, because farmers couldn’t take it off the field. They were looking at alternative feedstocks, although, for the most part, they made it through without.” The U.S. Grains Council’s annual survey found the average quality of the 2019 corn harvest to be lower than the previous year, as well as the five-year average: lower test weight, higher broken kernels, higher total damage and higher moisture. Protein levels were lower, starch content slightly lower and oil content higher. Still, the average aggregate quality, according to the USGC report, “was better than the grade factor requirements for U.S. No. 1 grade corn, indicating an abundant amount of good quality corn is entering the marketing channel from the 2019 U.S. crop.” The prospect of dealing with low-quality corn prompted numerous questions for the industry’s technical advisers. “There’s no guarantee low quality means lower yields, but it increases the potential,” Gleason says. Lower test weight in itself is not a problem, but is an indicator that other issues may be present. Highmoisture corn and high levels of damaged and broken corn create more issues, not only in storage, but in the ethanol process due to the greater susceptibility for contamination by molds and bacteria. “The microbes aren’t necessarily going to survive into the fermentation process,” Gleason says. “But the byproducts made by the molds can influence fermentation negatively. With bacterial contamination, organic acids are typically the problem.” “If you have contamination on your corn, you want to reduce the overall stress on your yeast,” she advises. “If yeast health is 64 | ETHANOL PRODUCER MAGAZINE | JULY 2020
taking a hit, it could cause further contamination.” Strategies include adopting a robust microbial control program, using a supplement to mitigate nutrient variation and boost yeast health, and, if possible, blending better-quality corn with the damaged feedstock. Producers considering blending in sorghum or wheat to extend feedstock supplies should remember different nutrient packages and enzyme blends are recommended, she adds.
margins has been to cut costs by switching to lower-cost options in yeast and enzymes, Ashworth adds. “But starch is by far the biggest cost. You may spend $600 or $800 per fermenter on glucoamylase for one batch, but the amount of corn is 45,000 to 80,000 bushels, depending on the size of the fermenter. You can only minimize costs so much before you need to think about what you’re doing to fermentation and how much ethanol you’re getting per pound of starch.” Evaluating Input Costs Starch content in the 2019 corn was only Chris Ashworth, technical services mandown slightly, according to the USGC report, ager at Lallemand Biofuels & Distilled Spirits, but Ashworth points out that measurement is Vijay Singh attributes the better-than-expected ethanol done on a dry basis, while plants generally use University of Illinois, yields from questionable corn quality to plants corn as-is. “Plants run into problems with highUrbana-Champaign getting better at their processes. “They’ve got er moisture corn because they’re grinding the their front ends dialed in,” he says. “Plus, the enzymes on the mar- same amount of bushels volume-wise. But they are losing starch ket now, and the yeast offerings that we and our competitors have as they gain water.” Added variation due to corn quality on top of out there, are better in yield than they used to be. All of that has that can increase inconsistency in fermentation. Even though the translated into not losing as much yield as we thought we would.” solids haven’t changed, the amount of starch in fermentation may The temptation during the protracted period of tight ethanol be fluctuating.
'Right after harvest, you don’t get very good ethanol yields. About three months later after storing the corn, you start to see peak ethanol yields, then it starts to go down before coming back up later in the year.'
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Feedstock
The Case for a Starch Standard
The standard grade used by the U.S. ethanol industry—U.S. No. 2 yellow dent corn—bears little resemblance to what ethanol producers actually need, says Robert Piggot, global technical manager, Lallemand Biofuels & Distilled Spirits. The standard for No. 2 sets a minimum test weight of 54 pounds per bushel, a maximum of 5 percent total damaged kernels, and a maximum of 3 percent broken corn and foreign material (BCFM). Moisture isn’t even a part of the official specification, Piggot points out, and differences of 1 to 2 percent moisture make a big difference. “Increased moisture takes more mill amps to grind it, you can’t store it as long, and you get less starch,” he says. “If you’ve got 1 percent more by weight of water, that is roughly 0.68 percent starch you don’t have.” Test weight and BCFM aren’t as important to an ethanol plant as starch, he says. “What we should be specifying in our purchasing is starch content.” The test isn’t difficult, he says. NIR (near infrared) testing equipment can give moisture, protein and starch levels in one analysis in less than a minute. Piggot knows of two seed companies that have developed high-starch corn varieties. “There are hybrids with 3 percent more starch,” Piggot adds, “but they cost a bit more so farmers aren’t going to grow them unless they get paid more.” The plant would gain enough benefit to share with the farmer, Piggot says. Corn containing 3 percent more starch could produce 228 more gallons of ethanol per truckload of corn. At the prices he last used to figure the value ($1.60 ethanol less the reduced DDGS at $137 per ton), a 100 MMgy plant could gain more than $4 million a year.
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Small fluctuations translate into big numbers at the volumes processed in plants today. Just a 1 percent starch drop can change ethanol yield by .0125 gallons per bushel of ethanol. When a big plant runs 110,000 bushels a day, that starch drop can result in 1,375 gallons of ethanol lost per day, Ashworth says. The added water content also can create inefficiencies in distillation. Plants see corn quality variability every year, he adds. Some comes from storage issues, particularly from corn piled outside. “Some piles don’t get tarped in time and get wet, so the quality of that corn may not be as good, even though when it was stored it was fine,” he says.
Cyclical Quality
Plants also see yield losses every year when they switch to new crop corn, Ashworth says. “Corn coming straight out of the field doesn’t produce as well as corn that has been stored a month or two. This fall was very similar. Then the yields came back as they normally would.” Illinois researchers have investigated the cyclical variation in corn quality. “Irrespective of genetic differences in corn hybrids, there are factors that are affecting corn quality throughout the
year,” says Vijay Singh, director of the Integrated Bioprocessing Research Laboratory at the University of Illinois, Urbana-Champaign. “Right after harvest, you don’t get very good ethanol yields. About three months later after storing the corn, you start to see peak ethanol yields, then it starts to go down before coming back up later in the year.” The Illinois study involved running tests on commodity corn sampled every two weeks from a cooperating 100 MMgy plant, using a pure hybrid stored at 4 degrees Celsius as a control. All samples, including the known control hybrid, showed the same cyclical pattern. Further investigation found changes happening in four types of proteins found in the corn kernel during storage that were affecting ethanol yields, Singh says. Looking for ways to mitigate the variability, the researchers tried using older and newer enzymes in trial runs. “We found there is some effect, but not a significant one in reducing this variability.” Author: Susanne Retka Schill Freelance journalist retkaschill@yahoo.com
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PHOTO: SUKUP MANUFACTURING
Sukup: Steel, Bolts and Relentless Innovation For Sukup Manufacturing Co., a builder of grain bins and grain handling equipment based in Sheffield, Iowa, ethanol is a vital part of their business, according to commercial accounts manager Brent Hansen. He says that as corn yields increased for growers, and the ethanol industry also grew, the need for on-farm storage rose dramatically. “We believe in the ethanol industry—the benefits it has for us both environmentally and for rural America,” Hansen says. “It helps us all in many ways.” Sukup was started in 1963 by Eugene Sukup and continues to be family run. “It’s the largest family-owned and operated grain bin manufacturer in the world,” Hansen says. “We have a close, personal relationship Hansen with most of our dealers and customers.” Sukup’s original product was an in-bin stirring machine. And, as farming operations have evolved, so too has Sukup’s products. “We’ve just continued to evolve and be innovative,” Hansen says. “Eighty-five percent of the products we make today, we didn’t make 15 or 20 years ago, so we’re constantly being innovative and changing with the times.” An example of that innovation is Sukup’s quest to eliminate moisture from large bins. Large bins tend to take on moisture, and it was formerly considered an inevitable drawback of sizing up. “That wasn’t a good enough answer for us,” Hanson says, “so we conducted research, and took bins apart, to see where it was coming from.” That resulted in Sukup’s patent on a double-ended stud bolt, which addresses the moisture issue. “Innovative engineering like that has kept us on the leading edge,” Hansen says. Sukup was also the first company to use bolts with a better coating to prevent rust in older bins. “We went to a lot of old grain bins and noticed that the first thing to start rusting was the bolts,” Hansen says. “So we went to a higher coating on the bolts, and since then, other companies have followed.” And Sukup’s no stranger to the large bins used by modern ethanol plants. Hansen says Sukup manufactured bins for Elite Octane LLC 70 | ETHANOL PRODUCER MAGAZINE | JULY 2020
in Atlantic, Iowa, which hold nearly 2 million bushels each, and at the time they were installed, were the largest bins of their kind, Hansen says. In addition to innovation, Hansen says Sukup focuses on safety. “We always put safety first, and often make safety-related upgrades before they are required,” he says. Features like pulleys inside the bins, and large decks around the peaks, make Sukup’s bins safer. Sukup performed work on one of the ethanol industry’s newest plants: Ringneck Energy LLC in Onida, South Dakota. Hansen says Sukup manufactured all the plant’s elevators, grain bins, buildings and conveyers, along with the support structures. “It was a big project for us,” he says. For ethanol producers, Hansen says the return on investment for grain bins can be very quick. “A lot of our customers have come back and told us that the return on a grain bin was one of the fastest returns,” he says. “Commodity prices are lower in the fall when harvest is going on, so they’re able to buy at a lower cost, which can save a tremendous amount of money.” Hansen says for plants considering upgrading or adding storage, the quality of the product is an important consideration, as is working with the company to find optimal solutions. “I would say don’t always look for the cheapest thing,” he says. “We like to spend time with our customers and really hone in on their specific needs. Sukup’s goal is to set the standard for the best customer service in the industry.” Hansen says Sukup offers a line of products specifically for agriculture applications, but also offers an industrial and commercial line as well, which was designed for manufacturing facilities like ethanol plants that operate on a continuous basis. “We established a more industrial design for processing facilities and ethanol plants,” Hansen says. Sukup’s customers aren’t limited to the United States. Hansen says the company has a global reach. “We do business in about 85 different countries, so we’re a global manufacturer,” he says, adding that the company uses U.S. steel, and their products are made in the U.S. “We take particular pride in that,” he says.
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ETHANOLPRODUCER.COM | 71
Spotlight BY MATT THOMPSON
Piping Pros, Shutdown Specialists Last year, Midwest Ironworks completed the largest job in its history, and the scale of the achievement has inspired the companyâ&#x20AC;&#x2122;s founder to keep thinking big. The Horace, North Dakota-based crew installed all the process piping for Red River Biorefinery in Grand Forks, North Dakota, which began operations in early 2020, producing cellulosic ethanol from sugar beet tailings. â&#x20AC;&#x153;For Haugo about a year and a half, we had an average of about 40 to 45 guys there,â&#x20AC;? says Midwest Ironworks President Ryan Haugo, adding that their work on the plant began in 2018. Haugoâ&#x20AC;&#x2122;s company was launched more than a decade ago after he returned from an overseas job and took a position with Wanzek Construction while the company was building Tharaldson Ethanol in Casselton, North Dakota. Not long after, Haugo struck out on his own. Today, Midwest Ironworks has a strong working relationship with Tharaldson and many other companies in the ethanol sector. In addition to industrial piping, Midwest Ironworks performs ethanol plant shutdown services, and has worked with other plants in North Dakota. Haugo says Midwest Ironworks is involved with all of Tharaldsonâ&#x20AC;&#x2122;s seasonal shutdowns. For Haugoâ&#x20AC;&#x2122;s crew, that includes piping and mill-
wright work and regenerative thermal oxidizer maintenance, which not all shutdown teams are qualified to do. Despite the companyâ&#x20AC;&#x2122;s name and reputation for industrial PHOTO: MIDWEST IRONWORKS piping, shutdown services have become an important segment of Midwest Ironworksâ&#x20AC;&#x2122; business, Haugo says. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s a huge part of what we do, and I feel like we have one of the best crews out there for doing it,â&#x20AC;? he says. While most of his companyâ&#x20AC;&#x2122;s ethanol plant work has been limited to North Dakota, Haugoâ&#x20AC;&#x2122;s team has also done work outside of the state, thanks in part to relationships with companies like ICM Inc. â&#x20AC;&#x153;There are opportunities that come alongside ICM on some of their projects,â&#x20AC;? he says. â&#x20AC;&#x153;Thatâ&#x20AC;&#x2122;s a good relationship to have.â&#x20AC;? And while finding and accepting jobs outside the region has unique challenges, Haugo says heâ&#x20AC;&#x2122;s ready and able to mobilize his personnel quickly. â&#x20AC;&#x153;We would definitely entertain doing shutdowns anywhere in the U.S.,â&#x20AC;? he says. â&#x20AC;&#x153;Our goal is to serve as many ethanol plants as we can.â&#x20AC;?
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72 | ETHANOL PRODUCER MAGAZINE | JULY 2020
ETHANOLPRODUCER.COM | 73
74 | ETHANOL PRODUCER MAGAZINE | JULY 2020
ETHANOLPRODUCER.COM | 75
Technology
SUPPLY SHORTAGE: The volume of merchant CO2 sourced from ethanol plants and oil refineries has decreased dramatically during the COVID-19 pandemic. PHOTO: ADVANCED CRYOGENICS LTD.
ELECTROSTATIC EVOLUTION: Long used to add value to fly ash from coal power, electrostatics can be a useful way to produce a higher-value DDGS in the ethanol industry. Pictured is a fly ash separator, ready to accept feed. PHOTO: ST EQUIPMENT &TECHNOLOGY
Tried and True, But New Electrostatics, used for decades in other industries, show promise in high-protein feed production at ethanol plants. By Kyle Flynn As margins on ethanol products tighten or disappear, many ethanol producers choose to focus on value creation from coproducts. Dried distillers grains with solubles (DDGS) has long been an undervalued coproduct. But at 28 to 32 percent protein, it contains too much protein to realize its full value as ruminant feed, while at the same time being too low in protein to be utilized in high substitution ratios for monogastric feeds like aquaculture, swine and poultry. This is a common challenge across the animal feed industry and represents a huge opportunity in the field of precision animal nutrition, defined as providing an animal with feed that precisely meets its nutritional requirements. Other opportunities, such as the rapid growth of aquaculture and the high cost and limited availability of fish meal, reinforce this market trend.
Dry, Wet and Electrostatics
Recently, multiple technologies have entered the market to address the need to generate a high-protein coproduct. Broadly speaking, these technologies can be classified into two segments: those that are integrated with the ethanol production process and operate on wet process streams; and those that occur after the ethanol production process and operate on dry process streams. The wet technologies often utilize a combination of separation methods that rely on particle size modification such as grinding, particle size segregation such as filtration or screening, and density separation such as cyclone separation to separate yeast from plant fiber. These systems may either be before or after the fermentation stage, but in all cases the separation of protein from fiber occurs before the distillers grains is dried. These wet systems
CONTRIBUTION: The claims and statements made in this article belong exclusively to the author(s) and do not necessarily reflect the views of Ethanol Producer Magazine or its advertisers. All questions pertaining to this article should be directed to the author(s).
76 | ETHANOL PRODUCER MAGAZINE | JULY 2020
OFF THE WALL: ST Equipment & Technology uses electrostatics to produce value-added feed coproducts from the ethanol industry. Pictured is a collection of samples separated using electrostatics. PHOTO: ST EQUIPMENT &TECHNOLOGY
are integrated into the ethanol process and therefore operate simultaneously with the ethanol plant. By contrast, dry processing methods are independent of the ethanol production process, and instead operate on the DDGS stream directly. Such systems often utilize grinding, air classification or dry sieving. One novel approach uses electrostatic separation to generate high-protein DDGS by removing fiber in an entirely water-free, back-end process that is independent of the ethanol production process. Electrostatics is a phenomenon that nearly everyone has experienced first-hand in daily life, but few have encountered in an industrial setting. Perhaps the most relatable example of electrostatics is the effect of rubbing a balloon on a personâ&#x20AC;&#x2122;s hair. As the rubber balloon comes in contact with human hair, it removes electrons from the hair. This is because rubber and most polymers have a high electronegativity (affinity for electrons). The balloon is left with a net negative charge, having accumulated the extra electrons, and the subjectâ&#x20AC;&#x2122;s hair has a positive charge. Of course, like electrical charges repel each other, so the subjectâ&#x20AC;&#x2122;s hair stands up on end in an effort to maximize the distance between other positively charged strands of hair. In the case of DDGS, protein and fiber acquire opposite
electrical charge upon contact with each other, allowing them to be separated from each other in a high-strength electric field.
Growing Attention
Electrostatics is not a new phenomenon of course, and has a large number of real-world and industrial applications. Electrostatic separation has been used by selected industries for many years. In minerals processing and recycling applications, electrostatic separation has been in commercial use for at least 50 years. Electrostatic separation of plant-based materials has been investigated for over 140 years, with the first patent for electrostatic separation of wheat flour middlings filed as early as 1880. Recently, electrostatic processing has received a great deal of attention as a method to concentrate plant proteins. This development has accelerated in the past 10 to 20 years, with many research universities in Europe and the U.S. applying electrostatic separation techniques to a wide variety of materials including DDGS, oilseed meals, and pea and pulse proteins. From this research, it is evident that electrostatic methods have the potential to generate new, higher-value plant protein ingredients and products, and offer an alternative to wet processing methods. Methods of electrostatic separation offer advantages over
ETHANOLPRODUCER.COM | 77
Technology
wet separation methods, including cost and operational flexibility from the ethanol production process. Electrostatic separation methods also offer the advantage of requiring no chemicals or water, which makes cleaning easier since the rate of bacterial growth is reduced in dry products. And electrostatic separation is mild, in that it does not change the functionality of the native protein.
Ash and Feed
ST Equipment & Technology has been using electrostatic separation in industrial applications since 1995 to process fly ash from coal power plants. Over 20 million tons of product fly ash have been processed by the STET separators installed in the U.S. alone. Although to some, repurposing a tech-
PRODUCT POUR: The ethanol industry is increasingly turning its attention to high-protein coproducts to diversify and expand margins. PHOTO: ST EQUIPMENT &TECHNOLOGY
nology to process fly ash (a glassy aluminosilicate mineral left over from burning coal for power) to concentrate plant protein from DDGS may seem strange, in truth, the DDGS market and the fly ash market share a surprising amount of similarities. For starters, both products are generated in large volumes in the U.S., with an estimated 36 million metric tons of distillers grains produced by the U.S. ethanol industry in 2019. By comparison, the U.S. coal-power industry generated around 35 million metric tons of fly ash in 2017. Both products are sold at low margins, and their value is highly dependent on processing and transporting large volumes at low costs. And both DDGS and fly ash ultimately derive their value from displacing other higher-cost materials. Fly ash substitutes for cement, the most expensive component in ready mix concrete. DDGS com-
78 | ETHANOL PRODUCER MAGAZINE | JULY 2020
These technologies will need to demonstrate consistent performance, high reliability, low operating cost and rapid return of capital to end users, at a time when the ethanol industry faces unprecedented challenges and needs new sources of revenue. Author: Kyle Flynn Director of Business Development ST Equipment & Technology 781.972.2324 kflynn@titanamerica.com
TRUST, EXPERIENCE & DEDICATION petes with other protein sources such as soy, canola and sunflower meal, among others. And both DDGS and fly ash have had to make the journey from low-value waste stream to value-added coproduct. Fly ash was long considered a waste product to be landfilled, until low-cost technologies enabled it to be recycled as a value-added component in ready mix concrete. DDGS has made a similar evolution, from being considered a low-value feed material nearly given away, to becoming a consistent manufactured feed ingredient that’s globally exported, and increasingly sold under trademarked names with an emphasis on quality and consistency. Ultimately, it looks likely that the longterm trend of maximizing the value of ethanol coproducts, including distillers grains, will continue. Processing technologies will continue to be critical to maximizing the technical performance of protein coproducts, and ultimately shaping their value creation potential for the ethanol industry.
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