INSIDE: UAS TAKES ETHANOL INDUSTRY TO NEW HEIGHTS JUNE 2016
WOMEN WHO LEAD Profiles of 3 Top Ethanol Plant Managers
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Innovations in Yeast, Enzymes Page 36
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CONTENTS
JUNE 2016 VOLUME 22
DEPARTMENTS 6
EDITOR'S NOTE
7
AD INDEX
8
THE WAY I SEE IT
9
EVENTS CALENDAR
10
VIEW FROM THE HILL
12
DRIVE
The Passing of a Pioneer By Mike Bryan
Getting the RFS ‘Back on Track’ By Bob Dinneen
16
GLOBAL SCENE
You’re Not the Boss of Me By Ron Lamberty World Leaders Must Get on Biofuels Page By Bliss Baker
18
BUSINESS BRIEFS
20
COMMODITIES
22
DISTILLED
84
TALKING POINT
90
30
YIELD
36
INNOVATION
Up On Output
Advancing the Brewing Process
44
52
Yield-boosting technologies gain traction in ethanol industry By Holly Jessen
Enzyme, yeast executives put customers' needs first in R&D, commercial trials By Susanne Retka Schill
Thanking Tom Buis—A Strong Voice for the Ethanol Industry By Jeff Broin
GRASSROOTS VOICE
88
FEATURES
Pursuit of Higher Yield, Efficiency Drives FEW Participation Up By Tom Bryan
14
86
ISSUE 6
MANAGEMENT
Women at the Top Profiles of 3 who lead By Janna Farley
Iowa Aims to Repeat Ethanol’s Success with Biorenewable Chemicals By Joe Leo
MARKETPLACE
ON THE COVER
Starting as CFO, Barb Bontrager is now general manager and CEO of United Wisconsin Grain Producers. PHOTO: BILL KEEFREY
Ethanol Producer Magazine: (USPS No. 023-974) June 2016, Vol. 22, Issue 6. Ethanol Producer Magazine is published monthly by BBI International. Principal Office: 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. Periodicals Postage Paid at Grand Forks, North Dakota and additional mailing offices. POSTMASTER: Send address changes to Ethanol Producer Magazine/Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, North Dakota 58203.
4 | Ethanol Producer Magazine | JUNE 2016
Introducing DDGS-based lick tubs to Australian feed market By Kassidi Andres
Flying High
Ethanol producers and their feedstock suppliers find many uses for unmanned aerial systems By Ann Bailey
CLEARING THE AIR BUSINESS MATTERS
From Up North to Down Under
UAS
Nebraska Ethanol Producers Poised for Next Level By Mark Palmer Connecting the Dots By Dave VanderGriend
COPRODUCTS
58 CONTRIBUTIONS
66 CONTAMINANTS
74 TRIALS
Strategies for reducing toxicity as fusels are purged By Dennis Bayrock
Approach outlined for yeast trial at Badger State Ethanol By Craig Pilgrim
Overcoming Fusel Poisoning Requires Patience, Diligence
70 WATER TREATMENT
Cooling Towers Can Harbor Legionella
Steps to be sure the bacteria don’t get established By Randy McDaniel
Testing Research Innovation in Real-Time Plant Environments
78 INTERNATIONAL Corn Ethanol Catches Up Quickly in Argentina
Ethanol blend rate raised to 12 percent this year By Jorge Antonio Hilbert
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EDITOR'S NOTE
Pursuit of Higher Yield, Efficiency Drives FEW Participation Up In early May, I was informed that registrations for the 2016 International Fuel Ethanol Workshop & Expo were on pace to match our seven-year high mark. If the trend continues, FEW attendance in Milwaukee will
Tom Bryan
President & Editor in Chief tbryan@bbiinternational.com
surpass every show after 2008. Six weeks out from the world’s largest ethanol conference, our registration tally was 25 percent above last year’s mark at the same time. Pleased but perplexed by the numbers, we huddled in the BBI board room to identify the cause of this fortuitous registrations spike. Ethanol production margins didn’t explain it. Could the proximity of Milwaukee to Chicago—the metro area’s population density—be driving registrations? Could it be our marketing? Our agenda? Our plant tour (thank you United Ethanol)? We weren’t sure. More people than usual were signing up for the FEW, but we didn’t know exactly why. Then I read this issue of EPM, and I was reminded that there is not one, but many things that excite our industry and sustain our beloved 32-year-old conference. It dawned on me that FEW registrations are up, not because market conditions are perfect, but because they are imperfect. Slimmer margins require producers to focus on higher yields and improved efficiencies, and that’s what the FEW is all about. Today’s margins are rather unexceptional, but many U.S. ethanol producers remain cash healthy and strongly interested in new technologies that improve yield and position them for nextgeneration products. In “Up On Output,” on page 30, freelance writer Holly Jessen describes the commercial successes of Fluid Quip Process Technologies and Ediniq Inc., which both have technologies that enable ethanol plants to convert more starch into ethanol and create secondgeneration biofuels or biochemical pathways. Several plants have already adopted each platform, and many more are interested. My theory about tighter margins spurring producer investment in efficiencies and yieldenhancing technologies finds more support in our page-36 feature by EPM Managing Editor Susanne Retka Schill. In “Advancing the Brewing Process,” Schill interviews yeast and enzyme companies—DuPont, Novozymes, DSM and Lallemand—posing questions about pivotal developments, drivers and challenges in their space. Our cover story, “Women at the Top,” on page 44, introduces our readers to three exceptional women in ethanol plant leadership roles. Our own company, BBI International, was co-founded by the late Kathy Bryan—the FEW’s matriarch—and highlighting women in positions of leadership and management is near and dear to the owners and editors of this publication. Speaking of family, my father, Mike Bryan, is featured on page 52. Mike has been living in Australia for several years (although he’ll be in Minnesota for the summer). Our story, “From Up North to Down Under,” written by EPM editorial intern Kassidi Andres, is a catch-up on Mike and his budding feed import business. He’s introducing Australia to a distillers grains-based feed supplement made by SweetPro here in the U.S. Coincidentally, Mike and SweetPro owner Bob Thornberg managed neighboring ethanol plants in North Dakota about 30 years ago. Finally, check out the feature on page 58 about the use of unmanned aerial systems in the ethanol industry. In “Flying High,” EPM Associate Editor Ann Bailey outlines some practical uses for UAS around ethanol plants. Bailey reports that UAS can be used to produce aerial spectral imagery, volumetric calculations, videos and more. As the UAS industry takes shape, it will be interesting to see how the biofuels industry benefits from it.
FOR INDUSTRY NEWS: WWW.ETHANOLPRODUCER.COM OR FOLLOW US: 6 | Ethanol Producer Magazine | JUNE 2016
TWITTER.COM/ETHANOLMAGAZINE
ADVERTISER INDEX VOLUME 22 ISSUE 6
EDITORIAL President & Editor in Chief Tom Bryan tbryan@bbiinternational.com Vice President of Content & Executive Editor Tim Portz tportz@bbiinternational.com Managing Editor Susanne Retka Schill sretkaschill@bbiinternational.com Associate Editor Ann Bailey abailey@bbiinternational.com News Editor Erin Voegele evoegele@bbiinternational.com Copy Editor Jan Tellmann jtellmann@bbiinternational.com
ART Art Director Jaci Satterlund jsatterlund@bbiinternational.com Graphic Designer Raquel Boushee rboushee@bbiinternational.com
PUBLISHING Chairman Mike Bryan mbryan@bbiinternational.com CEO Joe Bryan jbryan@bbiinternational.com
SALES Vice President of Operations Matthew Spoor mspoor@bbiinternational.com Sales & Marketing Director John Nelson jnelson@bbiinternational.com Business Development Director Howard Brockhouse hbrockhouse@bbiinternational.com Senior Account Manager/Bioenergy Team Leader Chip Shereck cshereck@bbiinternational.com Account Manager Jeff Hogan jhogan@bbiinternational.com Circulation Manager Jessica Tiller jtiller@bbiinternational.com Marketing & Advertising Manager Marla DeFoe mdefoe@bbiinternational.com
EDITORIAL BOARD Ringneck Energy Walter Wendland Little Sioux Corn Processors Steve Roe Commonwealth Agri-Energy Mick Henderson Guardian Energy Mike Jerke Pinal Energy Keith Kor Aemetis Advanced Fuels Eric McAfee Poet Scott Teigen Western Plains Energy Derek Paine
2016 Fuel Ethanol Workshop & Expo 2016 National Advanced Biofuels Conference & Expo American Coalition for Ethanol Apache Stailess Equipment Corporation BetaTec Hop Products Buckman CHS Renewable Fuels Cloud/Sellers Cleaning Systems CPM Roskamp Champion CTE Global, Inc. D3Max Direct Automation DuPont Industrial Biosciences Ernst & Young Fagen Inc. Fluid Quip Process Technologies, LLC Gamajet Growth Energy Hengye Inc. Hydro-Klean LLC ICM, Inc. Interra Global Corporation J.C. Ramsdell Enviro Services, Inc. Jatrodiesel, Inc. Lallemand Biofuels & Distilled Spirits Leaf - Lesaffre Advanced Fermentations McC Inc. Minnesota Bio-Fuels Association Mist Chemical & Supply Company MonitorTech Corporation MPW Industrial Services Nalco Water Natwick Associates Appraisal Services North American Industrial Services Novozymes Phibro Ehtanol Perfomance Group PITSolutions POET LLC Premium Plant Services, Inc. ProQuip, Inc. Richmond Chemical Fuels, LLC RPMG, Inc. Salco Products, Inc. Solenis LLC Sulzer Pumps Solutions, Inc. Summit Syngenta: Enogen The Weitz Company Thermal Refractory Tower Performance, Inc. Tramco, Inc. U.S. Grains Council U.S. Water Services United Sorghum Checkoff Program Valicor Separation Technologies Victory Energy Operations, LLC WestAgro Executive Brands Westmor Industries WINBCO Zeochem LLC
42 82 15 18 11 61 13 80 81 34 87 63 91 67 17 92 40 2 19 89 41 54 24 72 83 38 23 22 62 55 60 75 33 68 65 43 73 85 57 35 9 79 28-29 3 69 46 50-51 25 47 32 77 26 5 71 76 48-49 39 64 27 56
Customer Service Please call 1-866-746-8385 or email us at service@bbiinternational.com. Subscriptions to Ethanol Producer Magazine are free of charge to everyone with the exception of a shipping and handling charge of $49.95 for anyone outside the United States. To subscribe, visit www.EthanolProducer.com or you can send your mailing address and payment (checks made out to BBI International) to: Ethanol Producer Magazine Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. You can also fax a subscription form to 701-746-5367. Back Issues, Reprints and Permissions Select back issues are available for $3.95 each, plus shipping. Article reprints are also available for a fee. For more information, contact us at 866-746-8385 or service@bbiinternational.com. Advertising Ethanol Producer Magazine provides a specific topic delivered to a highly targeted audience. We are committed to editorial excellence and high-quality print production. To find out more about Ethanol Producer Magazine advertising opportunities, please contact us at 866-746-8385 or service@bbiinternational.com. Letters to the Editor We welcome letters to the editor. Send to Ethanol Producer Magazine Letters to the Editor, 308 2nd Ave. N., Suite 304, Grand Forks, ND 58203 or email to sretkaschill@bbiinternational.com. Please include your name, address and phone number. Letters may be edited for clarity and/or space.
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JUNE 2016 | Ethanol Producer Magazine | 7
THE WAY I SEE IT
The Passing of a Pioneer By Mike Bryan
I received the news of the passing of Martin Andreas, former senior vice president of Archer Daniels Midland (ADM). By the time this is published,
I’m sure there will be many tributes paid to Marty, but I would like to pay a personal tribute. He was a friend not only to me, but to Kathy Bryan, who has also passed, and importantly a friend to the ethanol industry. In the early '90s ADM was the big gorilla in the room as far as ethanol production in the U.S. was concerned and was the target of an onslaught of negative press. At one time, ADM controlled more than 50 percent of the ethanol production in America. Few people, however, know the story of how, at the behest of President Jimmy Carter, ADM entered into the production of ethanol. A phone call from the president on a Friday, with an answer expected by Monday, ADM acquiesced and the rest is history. Marty Andreas was a great spokesperson for ethanol in Washington, and in the heartland. He did it with grace and style. He never touted the fact that he was vice president of one of the largest agricultural companies in the world, but was soft spoken, and represented the ethanol industry with authority. There has been much written about ADM and the role it played in the development of ethanol, some stories are kind, others not so kind. Anyone who has been involved in the industry for a time knows that without ADM and without the
8 | Ethanol Producer Magazine | JUNE 2016
tireless efforts of people like Marty Andreas we would almost certainly not be where we are today. He served on the Renewable Fuels Association board for more than 20 years and dedicated thousands of hours to promoting ethanol in Washington and just about anyplace else he was called to do so. Marty was true to himself, he never tried to be anything he wasn’t. Not a technical person nor a political wheeler dealer, he was just a guy who worked for a company that was a pioneer in the production of ethanol in America. He was a guy who people would turn to when they needed help and he rarely turned them down. He was a guy who would fly to a meeting on a private jet and the next day have you over for a beer, a boat ride and a barbeque at his house. Marty was a pioneer, who went through the struggles of a burgeoning industry that had some of the biggest money in the world fighting it tooth and nail. With ADM at his back, he stood toe-to-toe with them and won. I liked Marty, we were friends and I’ll miss him.
Author: Mike Bryan Chairman, BBI International mbryan@bbiinternational.com
EVENTS CALENDAR
2016 International Fuel Ethanol Workshop & Expo June 20-23, 2016 Wisconsin Center Milwaukee, Wisconsin
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Now in its 32nd year, the FEW provides the ethanol industry with cutting-edge content and unparalleled networking opportunities in a dynamic business-tobusiness environment. As the largest, longest-running ethanol conference in the world, the FEW is renowned for its superb programming—powered by Ethanol Producer Magazine —that maintains a strong focus on commercial-scale ethanol production, new technology, and near-term research and development. The 2015 event drew about 2,000 people from 45 states, four Canadian provinces and 25 countries. 866-746-8385 | www.fuelethanolworkshop.com
National Advanced Biofuels Conference & Expo June 20-23, 2016 Wisconsin Center Milwaukee, Wisconsin The 6th annual National Advanced Biofuels Conference & Expo will take place June 20-23, 2016, at the Wisconsin Center in Milwaukee, Wisconsin. Produced by BBI International, this national event will feature the world of advanced biofuels and biobased chemicals— technology scale-up, project finance, policy, national markets and more—with a core focus on the industrial, petroleum and agribusiness alliances defining the national advanced biofuels industry.
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ACE Annual Conference August 8-10, 2016 Loews Hotel Minneapolis, Minnesota ACE’s annual conference is unique in the world of renewable fuels because it is specifically tailored to the interests and needs of the people of ethanol—the folks in the trenches. It’s a gathering of ACE’s commitment to connect ethanol producers with farmers, researchers, retailers, and support businesses to continue what all of them started a long time ago. It’s also an excellent place to learn and share ideas. And it has all the fun of a family reunion. Join us August 8-10, 2016, at the Loews Hotel in downtown Minneapolis, Minnesota. 605-334-3381 | www.ethanol.org/conference
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VIEW FROM THE HILL
Getting the RFS ‘Back on Track’ By Bob Dinneen
Since publishing the 2014-’16 renewable volume obligations (RVO) with reduced volumes last year, U.S. EPA officials repeatedly have said they want to get the renewable fuel standard (RFS) “back on track.” But what does that mean?
At several congressional hearings during the past few months, EPA has made it clear the agency believes it means meeting its annual deadlines. EPA statutorily is required to finalize the following year’s RVOs by Nov. 30 of the preceding year. The agency has not met that deadline since 2011. EPA has stated quite plainly it plans to finalize the 2017 RVOs by the statutory deadline this year. All stakeholders would appreciate that, but only time will tell if the agency actually will meet the deadline. The phrase “back on track” means something completely different to biofuel producers. For us, it means returning to congressional intent with respect to both volume and waiver authority. The RFS always was meant to be forward-looking. It was meant to drive marketplace change—investments in infrastructure and new technologies. It was intended to break Big Oil’s stranglehold on the transportation sector. We were disappointed that EPA adopted Big Oil’s narrative in its final 2014-’16 RFS RVOs. The agency cited concern for the ethanol blend wall as justification for slashing volumes well under the statutory targets and used a twisted interpretation of its waiver authority. However, EPA’s revisionist RFS policy would result in biofuels cannibalizing biofuels, fighting for a stagnant market without the tools Congress intended to eat away at oil’s monopoly.
10 | Ethanol Producer Magazine | JUNE 2016
RFA and other biofuel groups have taken EPA to court to challenge the agency’s interpretation of its waiver authority. As I said in remarks to the National Ethanol Conference earlier this year, “to implement their vision of the marketplace, EPA grossly misread the general waiver provisions of the law, conflating supply and demand, and deliberately ignoring 1.8 billion surplus RIN [renewable identification number] credits that represent an incredibly important component of available supply.” EPA erroneously concluded that there was inadequate supply of renewable fuel to justify a waiver of the statutory requirements. RFA is confident we will prevail in court. But in the meantime, we are hopeful getting the RFS “back on track” means returning to what Congress had always intended—a strong, robust program that incentivizes growth in both first- and-second generation biofuels. At the very least, that means issuing annual RVOs that match, if not exceed, the statutory targets. It also means EPA adhering to the law and only using its general waiver authority if there is inadequate domestic renewable fuel supply or if implementation of the requirement would severely harm the economy or environment of a state, region or the U.S. As we wait for EPA to issue its draft 2017 RVOs, we indeed share EPA’s goal of getting “back on track.” We just hope EPA and RFA are speaking the same language. Author: Bob Dinneen President and CEO, Renewable Fuels Association 202-289-3835
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DRIVE
Thanking Tom Buis— A Strong Voice for the Ethanol Industry By Jeff Broin
There are a number of hardworking people in this world who push to be the very best in their field. These are valuable individuals who strive for excellence, and
they can accomplish many things. But these people generally are not the game-changers. Game changers must demonstrate more than a commitment to excellence to truly make a difference. They need commitment to the cause. Tom Buis is in that latter group, a man who has spent his life improving the lives of people around the world through staunch advocacy for renewable fuels and agriculture. As you probably know, Tom is stepping aside as CEO of Growth Energy and moving into a role as co-chair for the organization. Anyone who has spent any time with him, knows his love for this industry is unquestionable. Tom is first and foremost a farmer and a citizen of America. He possesses a passion for using the boundless potential of agriculture to make our world better, and it is a passion that could only come from working the land himself as a Midwestern farmer. I and many others can attest to late-night phone calls from Tom to discuss late-breaking information on one issue or another. As he often put it, defending ethanol is “like playing Whack-A-Mole at the county fair.” Morning, noon or night, Tom Buis has never been off the clock in fighting for this industry. That passion and energy has translated to very real benefits. From its first day, Tom helped start and expand Growth Energy. Under his careful watch, Growth Energy accumulated a long list of accomplishments for the ethanol industry. They include: - Submission and approval of the Green Jobs Waiver to allow E15 into 21st century engines. - Growth Energy involvement in Prime the Pump and work with the USDA Biofuels Infrastructure Program to bring thousands of blender pumps into the marketplace. - A NASCAR contract and racing sponsorship to promote E15 to millions of consumers each week.
- Foreign market development initiatives including partnerships with the U.S. Grains Council for marketing and trade missions. - America’s Renewable Future and the campaign that succeeded in making ethanol the top topic for presidential candidates in Iowa and increased the number of people caucusing for pro-RFS candidates in 2016 over 2012. - Submitting tens of thousands of comments to the U.S. EPA for the 2014-’16 rule on renewable volume obligations that eventually broke the blend wall for the first time. - Major partnerships with retailers such as Sheetz, Minnoco, Murphy USA, Kum & Go and Thortons for E15 development. - And much, much more. On top of all that is the fact that during Tom’s time as CEO of Growth Energy, there were no legislative changes to the renewable fuel standard (RFS), despite the fact that this was the top priority for the American Petroleum Institute and other special interests, with challenges that included hostile congressional hearings and a severe drought. Tom worked with the administration and members of Congress from both sides of the aisle to build friendships and support to ensure legislation would not pass, if introduced. None of these things could have been accomplished alone, and Tom’s ability to foster collaboration and teamwork within the ethanol industry was invaluable in making each of these items a reality. Tom quite simply is a smart, kind and personable man who draws others to him, and that quality should not be underestimated. For these reasons and more, I’m glad that Tom will serve with me as co-chair of Growth Energy. He has set the stage well for continued excellence as we welcome our new CEO, Emily Skor, on board. Tom Buis deserves a break after all he’s done for this industry and agriculture. But if you know him as well as I do, you know he’ll never take one. Even though his role has changed, Tom will remain one of the strongest champions for ethanol. Author: Jeff Broin Chairman and CEO, Poet LLC Co-chair, Growth Energy Board of Directors 605-965-2200
12 | Ethanol Producer Magazine | JUNE 2016
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GRASSROOTS VOICE
You’re Not the Boss of Me By Ron Lamberty
If you were paging through Ethanol Producer Magazine to avoid reading about the 2016 election season, I apologize. I don’t normally write about politics,
unless it’s something that affects our ability to sell more ethanol to consumers, but I think there are important lessons we can learn from the long, strange trip the 2016 election already has been. Even if you don’t start with Iowa. Instead, you can start with Donald Trump, who in early May became the presumptive presidential nominee of the Republican Party. Pundits predicted his demise several times early in the primary season after he made politically incorrect or ill-informed statements and then refused to back down from those remarks. News channels played and analyzed clips as though they would never get a chance to talk about him again after shocked viewers rushed to the polls to vote for anyone but Trump. Record numbers of voters did rush to the polls, but they apparently went there to vote for Trump. When he attacked his opponents, Trump gained support. When opponents attacked Trump, they disappeared. Conservative PACs spent big money attacking Trump and promoting other candidates, the TV talking heads railed against him, and other candidates worked the rule book to gain delegates and even explored ways to join forces to defeat him. Early on, election analysts boldly predicted Trump’s “ceiling,” but they kept having to come back to raise it. And Trump kept getting more votes. Puzzled politicos have asked “Why are people voting for Donald Trump?,” and they’ve answered their own questions with Trump haters citing some variation of rage against fellow humans, and supporters talking about toughness, and being an “outsider” who can shake up Washington. Those answers all contain some truth. Bernie Sanders’ rise in the Democratic primaries supports the outsider and shake ‘em up analysis. But while a lot of people were voting for Trump, I think a lot more of them were voting against all the “experts” and “leaders” who are trying to tell voters what to
14 | Ethanol Producer Magazine | JUNE 2016
do, what they should think on the “issues,” and why they should feel shame voting for a particular candidate. Some call this the year of the outsider, but I’m calling it the “You’re-not-the-boss-of-me” election. But it’s not a loud crusade against political correctness and predetermination (like a Trump rally), as much as it is a kind of anonymous resistance. That’s a lot about an election and only a couple paragraphs left to explain what any of it has to do with ethanol. To oversimplify, ethanol’s opponents have gained support by defining ethanol as a fuel people are being forced to use. It is not coincidental that big oil and its politicians to use the words “mandate” and “government policy” when talking about the renewable fuel standard—antiethanol rhetoric always includes some element of the fuel being forced on the public. In reality, oil companies are the “party establishment” in the fuel world, and government and bureaucracies create rules to limit drivers’ ability to choose our fuel. Ethanol gains support when we remind people of those realities. We want an “open convention” at the pump. Always mention big oil contract restrictions, and government regulations limiting fuel choice. FlexFuelForward. com tells retailers about other retailers who have been successful selling higher ethanol blends. It’s no coincidence successful ethanol retailers have a “rebel” attitude and approach to selling E15 and flex fuels. People may not rally for ethanol, and it may not seem like we're winning, but wherever we give people the chance to vote with their tanks, we keep getting more votes.
Author: Ron Lamberty Senior Vice President American Coalition for Ethanol 605-334-3381 rlamberty@ethanol.org
GLOBAL SCENE
World Leaders Must Get on Biofuels Page By Bliss Baker
Representatives from 130 countries, including some 60 world leaders, were at the United Nations headquarters in New York City on Earth Day, April 22, to formally sign the climate accord, the next step toward implementing the agreement reached at COP 21 in Paris. The governments of
these countries have one year to ratify the agreement. Assuming that the accord successfully is ratified by national governments, the Paris agreement will take effect 30 days after the date on which at least 55 parties to the convention, accounting for at least an estimated 55 percent of total global greenhouse gas (GHG) emissions, have finalized their adoption of the accord. In an encouraging move, on March 31, U.S. President Barack Obama and Chinese President Xi Jinping pre-empted the ceremony with a historical agreement to reduce GHG emissions. Obama pledged that the U.S. would cut its emissions by 26 percent by 2025 compared with 2005 levels. In turn, Xi Jinping promised that China’s emissions would peak by 2030 and fall after that, the first time China has agreed to any emission reduction targets. These targets represent steps in the right direction and will serve as a signal to the rest of the world that the largest global emitters are getting serious about fighting climate change. But it is one thing to set targets, and another to implement the steps necessary to achieve them. It is estimated that the transportation sector produces 25 to 30 percent of the world’s GHG emissions, making it a key focus for policies aimed at reducing global emissions. If serious action is to be taken to reduce these emissions, world leaders will need to recognize that low-carbon transport fuel alternatives to crude oil, such as ethanol, are the only cost-effective and commercially available options for policy makers to consider. Studies have shown that compared with fossil fuels, the reduction in harmful GHGs resulting from the use of biofuels, including ethanol, range from 40 to 90 percent. In 2014, the total global GHG emission reductions forecast from the use of biofuels is 168.9 million metric tons. While these reductions are substantial, there still is room for significant growth in the sector.
16 | Ethanol Producer Magazine | JUNE 2016
According to projections prepared by (S&T)2 Consultants Inc., even with conservative annual production growth rates of 2.8 percent, the potential GHG emission reductions from biofuel use is 263.9 million metric tons per year by 2030. This represents a 56 percent increase in the GHG emission reductions compared with 2014. What is needed to achieve these potential savings globally is the political will by signatories of the Paris Agreement to introduce biofuelfriendly policies that maximize the advantages of biofuel technologies that are effective, affordable and immediately available. Already, 37 countries have signaled their intentions to take advantage of these benefits by including biofuels as part of their Intended Nationally Determined Contributions plans. As governments move to ratify the Paris agreement and develop clear policy steps toward their emission reduction targets, it is crucial that these plans include provisions to increase global production, innovation and consumption of biofuels. In recognition of this reality, the GRFA recently sent letters to key policymakers around the world highlighting the effectiveness of biofuels in reducing GHG emissions and encouraging the support of biofuels-friendly policies. The GRFA represents biofuels producers in 45 countries. This global perspective gives us a thorough understanding of the biofuels industry and its issues from an international and regional perspective. As countries take policy steps to reduce GHG emissions in their transport sectors, the GRFA will continue to provide technical support for the adoption and enhancement of biofuel-supportive policies to maximize the advantages of biofuel technologies. There has never been a better time to bring biofuels to the top of the sustainability, economic and climate change agenda.
Author: Bliss Baker President, Global Renewable Fuels Alliance 647-309-0058 info@globalrfa.org
BUSINESS BRIEFS People, Partnerships & Deals
Braden
Wilson
Pathogen control specialist Anitox has expanded its fermentation division with the addition of Nick Braden and Matt Wilson. Braden has been appointed to the newly created commercial director position and will lead OptimOH operations, heading up the sales, marketing and technical teams. He was previously employed by Monsanto and Archer Daniels Midland Co., where he served in various sales and commercial leadership roles. Wilson is joining Anitox’s fermentation division in the new role of technical services manager. He most recently was employed by Lallemand Biofuels & Distilled Spirits. Norfolk Southern has announced the 2015 winners of its Thoroughbred Chemical Safety Award. The award recognizes customers for their safe handling of chemical shipments. It goes to chemical manufacturers and plants that ship at least 1,000 carloads of hazardous products over the railroad without a single incident for the year. Ethanol companies recognized with a 2015 award include Abengoa Bioenergy, Flint Hill Resources LP, Granite Falls Energy LLC, Green Plains Inc., Louis Dreyfus Commodities, One Earth Energy LLC, Pacific Ethanol Pekin, Poet Ethanol Products, Renewable Products Marketing Group, Siouxland Energy & Livestock Cooperative, Southwest Iowa Renewable Energy LLC and Valero Energy Corp. CSX Corp. has announced the recipients of its 22nd annual Chemical Safety Excellence Award, recognizing 78 customers for their commitment to the safe transportation of hazardous materials by rail. The award recognizes customers who ship more than 600 carloads of hazardous mate18 | Ethanol Producer Magazine | JUNE 2016
rials during the year without a release due to controllable factors, such as not securing valves or closures properly. Ethanol companies recognized include Aventine, Cardinal Energy LLC, Green Plains Renewable Energy, Louis Dreyfus Commodities LLC, Poet Ethanol Products, Cargill and CHS. Comet Biorefining Inc. has appointed Rich Troyer as CEO. Troyer most recently served as chief business officer at Coskata, where he oversaw business development, strategic planning, project development and external relations. He also served as managing director of the Blackstone Group, where he was responsible for investments in biofuel and biochemical companies. Earlier in his career, Troyer was an equity research analysis at AllianceBernstein, Credit Suisse First Boston and Piper Jaffray, where he focused on the clean technology and biotechnology sectors. Andrew Richard, Comet founder, has been appointed chairman of the board and chief technology officer. In addition, Bruce Jamerson has joined the company’s board of directors. He previously served as chairman and CEO of Mascoma Corp. and was president and a board member of VeraSun Energy Corp. Jamerson currently serves as president of Conifer Investments LLC and holds a board position with Ensyn Corp. Green Plains Partners LP has announced Green Plains Inc. appointed Brett C. Riley as an independent member of the board of its general partner, Green Plains Riley Holdings LLC. He will also serve as chairman of the board’s conflicts committee and member of the board’s audit committee. Riley led the strategy and mergers and acquisitions activities for Magellan Midstream Partners L.P. from June 2003 until April 2016. From 2007 to April 2016, Riley served as senior vice president, business development for Magellan GP LLC, the general partner of Magellan Mid-
BUSINESS BRIEFS¦
stream Partners. Prior to joining Magellan GP, Riley served as director of mergers and acquisitions and director of financial planning and analysis for a subsidiary of The Williams Companies Inc.
Greg Hibner, president of J.D. Heiskell & Co.’s Hawkeye Gold division, has been selected to represent the agribusiness sector on the U.S. Grains Council’s board of direcHibner tors. Hibner has nearly 30 years of commodity processing, international trading and ethanol experience. In his current role, he oversees the operations of J.D. Heiskell & Co.’s Hawkeye Gold division, which markets and trades distillers dried grains with solubles (DDGS) domestically and internationally.
The U.S. Grains Council has promoted Ryan LeGrand as to the position of director in Mexico. As director in Mexico, LeGrand will be responsible for identifying and addressing trade, technical and policy-related factors that impact the market for U.S. grains and coproducts in Mexico. He replaces Julio Hernandez, who stepped down from his post on March 31. LeGrand previously held positions with Archer Daniels Midland Co. recently Gavilon and Hawkeye Gold. Approximately a decade ago he also served as manager announced that it has reached an agreement of international operations for distillers to sell its sugarcane ethanol operations in dried grains with solubles at the USGC. Limeira do Oeste, in the Brazilian state of Minas Gerais, to JFLim Participações S.A. Growth Energy has The transaction includes a sugarcane planannounced Emily Skor tation and an ethanol distillery, which is caas its next CEO. She pable of crushing up to 1.5 million tons of succeeds Tom Buis, who sugarcane and producing 37,000 gallons of assumed a new role as ethanol per year. About 650 employees work co-chairman of Growth in the plantation and plant. The sale, which Energy’s board of direcis subject to regulatory review, is expected Skor tors in July 2015. Skor to close in the second quarter of this year. most recently served as The Renewable Fuels Association the vice president for communications of the Consumer Healthcare Products As- and Growth Energy have joined the U.S. sociation and the executive director of Grains Council. The formal addition of the CHPA Educational Foundation. At these two critical stakeholders will benefit CHPA, a member-based trade association council programs in myriad ways as the advocating for consumer healthcare prod- three organizations, the USDA and others ucts and serving as leader on regulatory and in the ethanol industry build a global ethascientific issues for the industry, Skor over- nol export promotion program. Among saw public affairs campaigns, integrating other things, Growth and RFA are adding strategic communications into legislative their extensive expertise to the council’s campaigns and coordinating ally develop- ethanol Advisory Team (A-Team) and conment. Before joining CHPA in February tinuing to participate on a steering com2011, Skor served as senior vice president mittee that charts the course for ethanol at Dezenhall Resources, a nationally rec- exports. ognized crisis communications and issues management firm. For more than a decade, she helped Fortune 500 companies and in- SHARE YOUR INDUSTRY NEWS: To be included in the Busidustry associations manage issues affecting ness Briefs, send information (including photos and logos, if available) to Business Briefs, Ethanol Producer Magazine, brand confidence and corporate reputation 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. You through media, advocacy, coalition build- may also email information to evoegele@bbiinternational. com. Please include your name and telephone number. ing and consumer education campaigns. JUNE 2016 | Ethanol Producer Magazine | 19
COMMODITIES
Prices & Market Analyses
Natural Gas Report
Natural gas market under upside pressure in midspring April 25—The natural gas market was under upside pressure in late April after bottoming out in early March. The rally was mostly driven by emerging evidence of a tighter fundamental balance, which had started to erode the historically large surplus in underground storage. A central piece to the tightening market was the emergence of liquefied natural gas (LNG) exports from the Sabine Pass terminal in Louisiana. That facility had been bringing in natural gas for the purpose of export to the tune of about 0.6 Bcf per day since coming online in the first quarter. This more than offset the small volumes of imported LNG that ended up in the U.S. supply bucket, flipping the country to a net LNG exporter for the first time on record. Export cargoes so far had been shipped to counterparties in South America and Europe. In late April, just one of Sabine Pass’ six planned liquefaction trains was online, but the second is set for completion later this year. When Train 2 begins operations, the facility’s export capacity will jump to just over 1 Bcf per day. While these volumes may seem
by Andy Huenefeld
small on the surface, during the course of a season or a calendar year, this will have a material impact on the supply and demand balance of the natural gas market. Market watchers will be closely monitoring the rate of injection into storage inventories throughout the summer. After a mild winter left storage at record levels coming out of winter heating season, all eyes in April were on the potential for inventories to test demonstrated capacity above 4.3 Tcf in the fall. A test of capacity would likely lead to regional price collapses, because natural gas would have nowhere to flow. To reconcile this situation and rebalance the market, movement is needed on both sides of the supply and demand balance. Domestic production already has shown signs of decline, and power generators are expected to burn up natural gas at full tilt throughout cooling season. The relatively small volume of LNG exports from Sabine Pass could be what tips the balance into bullish territory during the summer months and ends up preventing full storage by the fall.
Corn Report
Corn market rallies in April, global supplies could set record April 25—Mid-April shaped up to be an opportune time for farmers to make sales amid a correction in the marketplace. Corn had a major correction after the March 31 plantings and quarterly stocks report with nearby futures collapsing to below $3.50 per bushel. However, concerns began to surface about some potential corn production and political issues in Brazil. A global shortage of vegetable oil because of lower palm production has led to an exuberant soybean oil market, which has swept soybeans to new highs not seen since last August. Managed money also had been holding a record short in corn and with the potential of volatile planting and growing season upon us, short liquidation started to occur. Multiple questions arose as to whether the soybean rally was trying to buy acres away from corn. The record short positions in wheat were triggering wheat to rally on short covering. Therefore, soybeans and wheat seemed to be guiding corn higher as well. Many of these factors led to a market rally of nearly 50 cents within a three-week time frame for corn. In the April USDA report, corn carryout increased by 25 million bushels to 1.862 billion bushels. The USDA lowered feed demand by 50 million bushels while increasing corn for ethanol demand by 25 million bushels. Global corn carryout increased by 1.94 million metric tons to 208.91million metric tons. If this carryout can sustain this level, it would Comments in this column are market commentary and are not to be construed as market advice.
20 | Ethanol Producer Magazine | JUNE 2016
by Jason Sagebiel
be a record global corn carryout. It compares to last year’s 207.58 million and larger than the previous highest level in 1986 of 204.77 million metric tons. Therefore, any shortcomings that may arise in South America should not have an immediate impact.
Regional Ethanol Prices ($/gallon) Front Month Futures (AC) $1.520
DDGS Report
DDGS prices up and down, volatility likely to continue into summer April 25—We saw quite a roller coaster during April with DDGS prices. We started the month with weakness as soymeal and corn prices dropped, creating more competition for DDGS in animal diets both domestically and abroad. After that, futures prices rallied, making everything more expensive, and DDGS rose along with them. In the U.S., most feeders then had maximum levels of distillers in their rations, if they could, and bulk gulf prices, after dropping about $20 per metric ton in early April, rebounded at the end of the month to just below the March highs. Many plants also did spring maintenance in April, which only tightened the
Region
Spot
Rack
West Coast
1.700
1.800
Midwest
1.520
1.733
East Coast
1.595
1.910 SOURCE: DTN
by Sean Broderick
market more during a period in which futures were rising. Chinese demand stayed in the 200,000 to 300,000 metric ton range for the first quarter, so we had not yet seen Chinese buying slow down. Demand from Mexico also remained robust, as delivered DDGS to the border was a good value versus corn and soymeal. Ocean freight still was cheap, so any abnormalities in values were quickly exported away. With the volatility that was seen in the futures this spring, and the uncertainty that the Chinese antidumping case brings with regard to future exports, summer looks as though it will be anything but normal.
Regional Gasoline Prices ($/gallon)
Front Month Futures Price (RBOB) $1.534 Region
Spot
Rack
West Coast
1.595
1.459
Midwest
1.347
1.532
East Coast
1.210
1.565 SOURCE: DTN
DDGS Prices ($/ton) LOCATION
Jun 2016
May 2016
May 2015
Minnesota
115
120
180
Chicago
135
140
210
Buffalo, N.Y.
140
145
205
Central Calif.
179
187
246
Central Fla.
155
162
226 SOURCE: CHS INC.
Corn Futures Prices (July Futures) Date
close, bu.
close, ton
April 21, 2016
3.898
139.196
March 21, 2016
3.743
133.661
April 21, 2015
4.938
176.339 SOURCE: FCSTONE
Ethanol Report
Cash Sorghum ($/bushel) by Rick Kment
Ethanol prices surge higher on corn interest April 25—Through the third week of April, moderate-to-strong buyer support continued to step into the ethanol market as traders focused on firming energy markets and the recent surge in corn values, which pushed corn futures near $4 per bushel. Moderate pullbacks in corn and ethanol prices were developing in late April, which was putting even more volatility into the market. Despite the recent market pullback, the underlying support toward the end of the month pointed to firm
seasonal prices based on expected strong demand from both gasoline movement and the overall movement of ethanol. It was uncertain if the rally in ethanol prices would start to limit overall product movement in May or if more supportive economic factors would continue to develop and draw both commercial and investment activity in the coming months. Ethanol prices rallied 10 cents during April, while RBOB gasoline futures moved 4 cents per gallon higher during the same time period.
Location
Apr 22, 2016
Mar 18, 2016
Apr 24, 2015
Superior, Neb.
3.12
3.07
4.40
Beatrice, Neb.
2.97
3.11
4.15
Sublette, Kan.
2.92
2.97
4.24
Salina, Kan.
3.02
3.36
4.74
Triangle, Texas
3.02
2.97
3.79
Gulf, Texas
4.19
4.12
5.60
SOURCE: SORGHUM SYNERGIES
Natural Gas Prices ($/MMBtu) LOCATION
Apr 25, 2016
Feb 29, 2016
Apr 27, 2015
NYMEX
2.063
1.711
2.490
NNG Ventura
1.815
1.605
2.480
Calif. Citygate
1.870
1.575
2.465
SOURCE: U.S. ENERGY SERVICES INC.
U.S. Ethanol Production (1,000 barrels) Per Day
Month
End Stocks
Feb 2016
989
28,678
23,004
Jan 2016
978
30,319
23,168
957
26,788
20,979
Feb 2015
SOURCE: U.S. ENERGY INFORMATION ADMINISTRATION
JUNE 2016 | Ethanol Producer Magazine | 21
DISTILLED Ethanol News & Trends
Commerical-scale cellulosic ethanol capacity as of 2015 Company
Capacity (Mmgy)
Operational year [anticipated]
Abengoa
23
2015 (idled in 2015)
Ace Ethanol (Sweetwater Energy Inc.)
3.5
[2017]
Beta Renewables Inc.
20
[2017]
Canergy
25
[2017]
DuPont
30
2015
Enerkem
10
[2020]
Front Range Energy (Sweetwater Energy Inc.)
3.6
[2017]
8
[2016]
Pacific Ethanol (Sweetwater Enregy Inc.)
3.6
[2017]
Poet
25
2015
Quad County Corn
3.8
2014
ZeaChem
22
[2017]
INEOS New Planet Bioenergy LLC*
* INEOS BECAME OPERATIONAL IN 2012, WAS IDLED IN 2015 AND IS EXPECTED TO RESUME OPERATIONS IN 2016 SOURCE: NATIONAL RENEWABLE ENERGY LABORATORY
NREL publishes results of advanced biofuel survey The National Renewable Energy Laboratory has updated its annual survey of U.S. nonstarch ethanol and renewable hydrocarbon biofuel producers. The report, titled “2015 Survey of Non-Starch Ethanol and Renewable Hydrocarbon Biofuel Producers,” provides an inventory of the domestic advanced biofuels industry as of the end of 2015. NREL surveyed 114 companies last year. The questionnaire included topics such as stage of development, facility scale, feedstock and biofuel products. The survey effort resulted in 61 facilities with sufficient data to be included in the report. This includes 27 cellulosic ethanol facilities, two algaederived ethanol facilities and 32 renewable hydrocarbon facilities. According to the report, 11 of the 29 nonstarch ethanol plants were operational last year, with five at commercial scale. In addition, 12 of the 32 renewable hydrocarbon facilities were operational as of the end of 2015.
Aemetis licenses 2 advanced technologies In late March, Aemetis Inc. announced it has licensed technology from two companies, Edeniq Inc. and LanzaTech, which will allow it to produce advanced ethanol from noncorn feedstocks. According to Eric McAfee, chairman and CEO of Aemetis, the technologies will lower feedstock costs while increasing revenues per gallon. Both technologies are slated to be deployed at the company’s 60 MMgy plant in Keyes, California. Edeniq’s Pathway Technology integrates Edeniq’s Cellunator equipment with cellulase enzymes to convert corn kernel fiber to cellulosic ethanol. The Pathway Technology utilizes existing fermentation and distillation equipment to produce up to 2.5 percent cellulosic ethanol and a 7 percent increase in overall ethanol yield. The LanzaTech gas-to-ethanol technology will enable Aemetis to convert biomass waste, such as agricultural waste, forest waste, dairy waste and construction and demolition waste into ethanol.
Life cycle GHG emissions for Green Plains Bluffton (kg/CO2e/mmBtu)
Cellulosic plant under development in North Dakota Pennsylvania-based New Energy Investors is proposing to build a 13.5 MMgy cellulosic ethanol plant in Spiritwood, North Dakota, that would utilize technology developed by Inbicon, a subsidiary of the Danish energy company DONG Energy A/S. The company plans to locate the plant at the Spiritwood Industrial Park. The facility would process corn stover and wheat straw into ethanol and lignin. According to New Energy Investors, the plant would take in approximately 195,000 tons of cellulosic feedstock annually. In addition to 13.5 million gallons of ethanol, the plant would also produce 90,000 tons of lignin per year. Thomas Corle, founding partner of New Energy Investors, and CEO Robert Johnsen met with North Dakota state officials and members of the Jamestown/ Stutsman Development Corp. in April to discuss the $150 million project. The JSDC has approved a $75,000 match to a $225,000 North Dakota Agricultural Products Utilization grant, if approved.
Corn starch ethanol, natural gas fired dry mill, 100% dry DDS, no advanced technologies
Corn starch ethanol Baseline life cycle produced through GHG emissions for the Green Plains gasoline Bluffton process
Upstream emissions
47.6
45.5
*
Process emissions
32.4
29.8
19.2
2.1
2.1
79.0
81.7
77.4
98.2
16.8%
21.2%
--
Downstream emissions Life cycle emissions Percent reduction * EMISSIONS INCLUDED IN PROCESS EMISSIONS STAGE SOURCE: U.S. EPA
EPA approves efficient producer petition for Green Plains Bluffton The U.S. EPA has approved an efficient producer pathway for Green Plains Bluffton LLC. The achievement allows the 120 MMgy facility to generate renewable identification numbers (RINs) for nongrandfathered ethanol volumes under the renewable fuel standard (RFS). Plants that apply to EPA’s efficient producer petition program must show their ethanol achieves a least a 20 percent greenhouse gas reduction when compared to baseline gasoline. In the petitions, plants supply EPA with data on the bushels of corn processed, gallons of ethanol produced and the energy used in the process. Those figures are plugged into an
EPA spreadsheet that calculates the upstream emissions from feedstock production and transportation, the process and downstream emissions from the fuel production and distribution and lifecycle emissions which include indirect land use modeling. The Bluffton plant is the fourth Green Plains facility to earn efficient producer status. Green Plains plants in Atkinson, Nebraska; Ord, Nebraska; and Shenandoah, Iowa, also have been approved under the program. Overall, 53 corn ethanol plants have achieved pathway approvals through the efficient producer program.
JUNE 2016 | Ethanol Producer Magazine | 23
DISTILLED
Energy employment statistics Employment Total electric power generation and fuels
1,606,066
Total electric Power
666,280
Total fuels
938,786 47,250
Corn ethanol Other ethanol/non-woody biomass
14,761
Woody biomass
18,031
SOURCE: U.S. DEPARTMENT OF ENERGY
DOE publishes energy employment report The U.S. Department of Energy has released its first annual energy employment analysis. The report focuses on how changes in America’s energy profile are affecting national employment in the nation’s multiple energy sectors. Regarding biobased renewables, the report indicates that the entire U.S. agriculture and forestry industry employs approximately 700,000 workers, with about 20 percent of those jobs contained within “detailed� energy-related industry subsectors that could include businesses working directly with generation and fuel technologies. “These detailed industries include corn and sugarcane farming, used for etha-
nol and biodiesel production, and logging or other forestry services, which contribute to woody biomass and pellet fuel,� said the DOE in the report. “Of these industries, about 18,000 agriculture and forestry employees work to support electric power generation and fuel production.� Overall, the renewable fuels subsector supports 48,960 jobs in corn ethanol, 20,060 jobs in woody biomass, 23,312 jobs in other ethanol/nonwoody biomass, and 239 jobs in other renewable fuels. In addition the bioenergy/biomass generation subsector supports 19,559 jobs. These figures take into account employment associated with both generation and fuels.
Iowa establishes production tax credit for renewable chemicals On April 7, Iowa Gov. Terry Branstad signed legislation establishing a production tax credit (PTC) for renewable chemicals. Producers of eligible renewable chemicals can claim a 5-cent-per-pound PTC. The credit is capped at $105 million. “This legislation, the first of its kind in the nation, will help build Iowa’s renewable chemicals industry by using biomass as feedstocks for the production of building block chemicals,� said Branstad. “Iowa is the nation’s premier leader in the renewable fuels industry and we will now build on our legacy of leveraging homegrown renewable resources to produce the next generation of building block chemicals.� Eligible renewable chemicals are required to have at least 50 percent biobased content and not be sold or used for the production of food, feed or fuel. Cellulosic ethanol, starch ethanol or other biomassderived ethanol, fatty acid methyl esters and butanol can be eligible to claim the credit, but only to the extent that such molecules are produced and sold for uses other than food, feed or fuel. The definition of renewable chemical also includes building-block chemicals, which can be a food additive as long as it is not primarily consumed as food and is sold for uses other than food. In addition, the definition includes supplements, vitamins, nutraceuticals, and pharmaceuticals, but only to the extent that such molecules do not provide caloric value.
7$1. )$50 /,1(5 ,167$//$7,21 (;3$16,21 5(3$,5
24 | Ethanol Producer Magazine | JUNE 2016
-&5$06'(// &20
DISTILLED EIA begins tracking ethanol rail movements The U.S. Energy Information Administration announced that it has begun to include new data on ethanol and biodiesel transported by railroads in its Petroleum Supply Monthly report. Moving forward, the EIA will report monthly rail movements for crude oil, ethanol and biodiesel. According to the EIA, adding movements of ethanol and biodiesel by rail to existing movements between Petroleum Administration for Defense Districts by pipelines, tankers and barges provides more complete data on inter-PADD movements of biofuels. The administration also noted that incorporating ethanol and biodiesel movements into regional volumetric balances also improves supply estimates for finished motor gasoline and distillate fuel oil. The estimates cover rail movements of ethanol and biodiesel within each PADD (intra-PADD) and between different PADDs (inter-PADD), as well as rail movements to and from Canada. The estimates improve EIA’s regional supply and disposition balances by providing information about both the shipments and receipts of ethanol and biodiesel by rail. The EIA said that only information on imputed net receipts was available previously.
Ethanol's contribution to the economy GDP (milllions)
Jobs supported
Household earnings (millions)
Minnesota
$2,130.40
18,116
$1,602.90
Iowa
$4,640.80
42,651
$2,266.10
SOURCE: ABF ECONOMICS
Reports quantify value of state ethanol industries The Iowa Renewable Fuels Association and Minnesota Biofuels Association recently commissioned respective studies from ABF economics that estimate the economic value of each state’s ethanol industry. The Minnesota study found the ethanol industry contributed $2.13 billion to the state’s gross domestic product last year. Minnesota currently has 21 operating ethanol plants, with an annual capacity of more than 1.2 billion gallons. Output increased 11 percent when compared to 2014, reaching more than 1.2 billion gallons. Collectively, the plants require approximately 423 million bushels of corn, which equates to nearly 30 percent of the state’s 2015 corn crop.
The Iowa study determined the state’s ethanol industry supported approximately 39,592 jobs, nearly $2.07 billion in household earnings, and nearly $4.3 billion in GDP, along with $7.05 billion in purchases. The Iowa ethanol industry currently takes in 1.4 billion bushels of corn, which equates to 57 percent of the state’s corn crop. Ethanol output increased 3.8 percent last year, with the state’s 43 operating ethanol plants producing at an annual rate of slightly more than 4 billion gallons. Overall, Iowa accounted for 27 percent of total U.S. ethanol output.
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JUNE 2016 | Ethanol Producer Magazine | 25
DISTILLED CFTC, EPA to share RFS data
Life cycle GHG emissions from Joule's ethanol pathway (kgCO2e/mmBtu) Joule ethanol (kgCO2e/ mmBtu-ethanol)
2005 gasoline baseline (kgCO2e/mmBtu-diesel)
12.2
--
Fuel production
3.2
19.2
Fuel distribution and use
2.1
--
14.7
98.2
Upstream emissions
Total emissions Change from gasoline baseline
85.1%
SOURCE: U.S. EPA
EPA approves Joule’s fuel pathway The U.S. EPA recently approved a renewable fuel pathway filed by Joule Unlimited Technologies Inc., allowing the company to generate D5 advanced biofuels renewable identification numbers (RINs) for its algaebased ethanol under the renewable fuel standard (RFS). The EPA’s analysis determined that Joule’s ethanol achieves an 85.1 percent lifecycle greenhouse gas reduction when compared to baseline gasoline. Total emissions associated with Joule’s ethanol, including upstream emissions, fuel production, fuel distribution and use and coproduct credit, equaled 14.7
kilograms of carbon dioxide equivalent per million Btu. The gasoline baseline is 98.2 kilograms of carbon dioxide equivalent per million Btu. Joule’s process produces advanced ethanol using photosynthetic cyanobacteria and a proprietary production process called Helioculture Sunflow-E ethanol process. During the process, cyanobacteria act as a catalyst to produce and secrete ethanol, which is then collected and purified. The EPA’s approval letter notes the algal biomass is processed to produce an algal oil product.
The U.S. Commodity Futures Trading Commission and U.S. EPA have entered a memorandum of understanding that allows the agencies to share renewable fuel standard (RFS) data and analysis. Under the agreement, the agencies agree to cooperate and coordinate on topics related to the implementation of the RFS program and the market for renewable identification numbers (RINs). The CFTC and EPA intend to coordinate, cooperate and share information, including proprietary business information, in the possession of EPA with regard to the RIN and renewable fuels markets. The CFTC will use the information to advise EPA on techniques that could be employed to minimize fraud, market abuses or other violations, and to conduct appropriate oversight on RIN and renewable fuel markets to aid EPA in successfully fulfilling its statutory functions under RFS regulations.
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For more information and to register, visit ExportExchange.org. 26 | Ethanol Producer Magazine | JUNE 2016
DISTILLED Corn ethanol plant breaks ground in Brazil In April, Iowa-based Summit Agricultural Group announced it has broken ground on a 60 MMgy corn ethanol plant in Brazil. Summit is building the $115 million plant in Lucas do Rio Verde in Mato Grosso, together with Fiagril. Kansasbased ICM Inc. is designing the plant. Plant construction is expected to be completed in mid-June 2017. The ethanol plant will offset Brazil’s demand for domestic ethanol that sugar cane ethanol production cannot meet, said Bruce Rastetter, Summit CEO. Meanwhile, the new corn ethanol plant will introduce high-fiber coproducts and provide highvalue animal feed to the Brazilian livestock industry, he said. Rastetter called the groundbreaking of the plant, the only dedicated corn ethanol plant in Brazil, a significant day for renewable fuels, for Brazil and for his company. Through Summit’s expertise in sustainable agriculture, investment and renewable energy, the potential of a corn growing region poised to become a global leader of ethanol production will be realized, he added.
SOURCE: U.K. DEPARTMENT OF ENERGY AND CLIMATE CHANGE
Ethanol consumption falls slightly in UK The U.K. Department of Energy and Climate Change has released provisional energy data for 2015, reporting 1.46 billion liters (386.75 million gallons) of liquid biofuels were consumed in transport last year, down 17.1 percent from 2014. Ethanol consumption fell by 2.1 percent, from 812 million liters to 795 million liters. Biodiesel consumption fell by 30 per-
cent, from 955 million liters to 669 million liters. Ethanol contributed 54 percent of the U.K.’s biofuels in 2015. Last year, ethanol accounted for 4.6 percent of U.K. gasoline, with biodiesel at 2.3 percent of diesel. On a combined basis, biofuels accounted for 3.2 percent of transportation fuel, down 0.7 percent from 2014.
JUNE 2016 | Ethanol Producer Magazine | 27
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YIELD
UP ON
OUTPUT When margins matter most, strategies to ratchet up ethanol yield make good business sense. By Holly Jessen
In the ethanol production world, yield is king. Fluid Quip Process Technologies and Edeniq Inc. have technologies that can help producers convert more starch into ethanol. On top of that, the companies provide first-generation
facilities a pathway to produce second-generation biofuels or biochemicals. California-based Edeniqâ&#x20AC;&#x2122;s Cellunator increases first-generation ethanol yield and, paired with its Pathway Technology, allows corn ethanol production facilities to produce second-generation cellulosic ethanol from corn kernel fiber. Since late last year, when it was revealed Pacific Ethanolâ&#x20AC;&#x2122;s Stockton, California, plant had produced cellulosic ethanol utilizing Edeniqâ&#x20AC;&#x2122;s technology, multiple ethanol production facilities have announced licensing agreements. Ohio-based FQPT has two yield-boosting technologies, Selective Grind Technology and Fiber By-Pass System. And, a new technology the company is rolling out commercially allows production of clean sugar for biochemical production, either in addition to existing ethanol production, as a complete retrofit or as a greenfield project.
The Shear Solution
Edeniq, founded in 2008, focused on developing a technology for lowcost conversion of biomass to cellulosic sugars. The company worked with IKA, a global company with expertise in high-shear equipment, to develop the Cellunator, a mechanical pretreatment process, says Peter Kilner, senior vice president of business development. The company completed pilot and demonstration-scale performance testing of the technology at its headquarters in Visalia, California. The fully continuous biomass-to-ethanol pilot plant has the capacity to convert 2 dry tons per day and 50,000 gallons of ethanol per year and was built with the help of grants of $20.6 million from the U.S. DOE and $3.9 million from the California Energy Commission. JUNE 2016 | Ethanol Producer Magazine | 31
2G MILESTONE: At the end of 2015, cellulosic ethanol was produced at Pacific Ethanol’s plant in Stockton, California, using Edeniq technology. The company’s Cellunators installed at that facility are shown here. PHOTO: EDENIQ
Along the way, researchers discovered the technology also worked to release more starch from corn and, with additional enzymes, produces cellulosic ethanol from corn kernel fiber. Although each facility is different, installing Cellunators alone is enough to increase corn ethanol production by about 4 percent, Kilner says. Once an ethanol plant takes the next step, to license Edeniq’s Pathway Technology, which harnesses cellulase enzymes, it can produce up to 2.5 percent cellulosic ethanol along with a 6 to 7 percent increase in overall ethanol yield. The equipment also increases corn oil production by about 20 to 30 percent, though the exact number varies. Edeniq’s Cellunators first were installed in 2010 at E Energy Adams LLC, a 65 MMgy ethanol plant in Adams, Nebraska. Cellunators have a modular design and are installed at the rate of one per 20 MMgy capacity. Today, the company has 29 Cellunators installed at six ethanol production plants. The list is made up of Pacific Ethanol in Stockton, California; Mid American Agri Products-Wheatland LLC in Madrid, Nebraska, and three of the seven Flint Hills Resources ethanol plants. In December, the Pacific Ethanol Stockton plant was the first to use Edeniq’s Pathway technology to produce cellulosic ethanol from corn kernel fiber. Pathway licensing agreements were announced by Flint Hills in February and Aemetis Inc. in March. These major announcements have garnered a lot of positive attention for the company. “There will be many more deals to follow very quickly,” Kilner says. 32 | Ethanol Producer Magazine | JUNE 2016
Of course, there are a number of competing technologies that capture more starch for ethanol production. However, Kilner is confident Edeniq’s is the best, citing low capital cost and a superb return on capital cost, with less than a one-year payback. The technology has improved significantly over time in two key ways, Kilner says. First, Edeniq has doubled the life of the mechanical heads that grind and shear corn fiber, reducing replacement costs. The company took another big step forward in the past year, when it commercialized the Pathway Technology, with a cocktail of enzymes that allows for cost-effective conversion of cellulosic ethanol from fiber. The enzymes are sourced from a major enzyme producer, which Edeniq has not disclosed, Kilner says. Reaching this milestone has been a game change for the company. Pathway Technology now can bring cellulosic ethanol production to existing first-generation ethanol plants. “That’s something that has been a hope and dream for years and we’re doing it now,” he says. The goal is to continue to quickly roll out the technology. Edeniq is aiming for a 20 percent market penetration, or installation at plants with a total capacity of 3 billion gallons. That would add up to about 75 MMgy cellulosic ethanol production, Kilner says. Aemetis, Flint Hills and Pacific Ethanol have announced licensing agreements with Edeniq. Those three companies together produce well over 1 billion gallons of firstgeneration ethanol combined, bringing
The Specialist in Biofuels Plant Appraisals HIGH SHEAR: Edeniq’s Cellunators are shown here in a three-unit installation at an ethanol plant. The technology increases access to starch by right-sizing particles, according to the company. PHOTO: EDENIQ
Edeniq more than one-third of the way to its goal. Additional licensing agreements are expected once the U.S. EPA has approved Pacific Ethanol’s registration for D3 RINs [renewable identification numbers] for cellulosic ethanol production. That application was in to the EPA at the end of January. “We are told it should be a couple months, so we are expecting a response shortly,” Kilner says. Edeniq also assists Pathway customers through the D3 RIN registration process, says Cam Cast, vice president of engineering, operations and sales. The company’s proprietary analytical methods quantify the amount of ethanol produced from starch and fiber conversion. And, although a big focus is on cellulosic ethanol production at corn ethanol plants, Edeniq has not given up on biomass. The company’s second business model, producing low-cost cellulosic sugars, has an expected initial market in the ethanol industry, with opportunities for other biofuels, biochemicals or biobased products down the road. In fact, the company currently is partnering with Usina Vale to build a biomassto-cellulosic ethanol demo plant in Brazil, colocated at Usina Vale’s ethanol and sugar production plant. The hope is that the facility will be completed this year and operational in 2017, Kilner says, qualifying that by noting how slowly things move in Brazil. Initially, the plant will process sugarcane bagasse, however, the process also has been developed to convert corn stover, he says.
It’s All About Grind
FQPT works with sister company Fluid Quip, a designer and manufacturer of custom separation and milling solutions for the wet milling and pulp-and-paper industries, to develop and modify equipment for the dry-grind ethanol industry. FQPT’s Wet Fractionation System for dry-grind ethanol plants includes multiple technologies, including selective grind, front-end corn oil separation, fiber separation and back-end protein recovery that can be implemented together or separately, says Michael Franko, vice president of business development. SGT, a trademarked technology patented in 2015, offers ethanol producers a secondary separation milling step in slurry or liquefaction, releasing more starch for ethanol production. “It’s specifically designed to break starch away from fiber but not create fine fiber,” says Neal Jakel, vice president of strategy and technology for FQPT, adding that fine fiber can cause challenges at the back end of the plant. The first SGT system started up at an ethanol plant in 2010 and a total of 11 systems are in operation today, Franko says. However, thanks to a licensing agreement with ICM Inc., total market penetration is even greater. By the end of April, ICM had 24 trademarked Selective Milling Technology systems in operation, according to ICM. While FQPT’s SGT and ICM’s SMT do have slight differences, Franko says, the two companies have a good relationship and collaborate and cooperate on improvements to the technology.
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YIELD
GET DOWN WITH GRIND: A 52-inch Fluid Quip disc mill, part of FQPT’s Selective Grind Technology, shown here, is installed at a 55 MMgy ethanol plant. PHOTO: FQPT
“We see it as the best technology for the marketplace,” he says. “The more plants that have it, the better.” The technology can help low-yielding facilities jump ethanol production by as much as 4 percent plus, while producers already at the top can see yield increases of up to 1.8 percent. “The bottom line is we
do always see a yield boost,” Jakel says. “It just depends on where they are at in terms relative to that theoretical maximum yield range.” In addition, SGT ramps up corn oil yield an average of 18 percent. Customization is a key feature of FQPT’s grind system. For example, producers can target specific ethanol and corn oil
yields. “We have four different mill sizes and types in operation, with a focus on really fitting the objectives of the plant,” Franko says. The technology has improved over time with continued research and development. One significant example is the mill’s automatic gap adjustor, Franko says, which opens or closes the grinding gap as flow rates change during plant operational changes or as the plates wear. FQPT also worked to develop low-cost plates for the mill, which generally need replacement every three to six months. Unlike other technologies, which have much higher costs for replacement parts, SGT’s low-cost plates encourage producers to replace them regularly to keep the system fully optimized. “I liken it to the tires on your car,” Franko says. “If you are going to drive around and let your tires get bald, you’re not getting the full benefit.” The company’s Fiber-By-Pass technology (also licensed to ICM) removes corn kernel fiber at the front end. Fiber makes up roughly 10 percent of nonfermentable material and separating it prefermentation frees up fermentor capacity, Jakel says. Three
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ethanol plants have FQPT’s fiber separation system installed. Once fiber is separated, it generally is combined with the stillage at the back end, ultimately ending up in the distillers grains, Franko says. However, it could also be a feedstock for cellulosic ethanol. Next up is FQPT’s Clean Sugar Technology, which allows for production of a clean sugar stream for biochemical production. It’s similar to sugars produced at a wet mill but for half or less CapEx and onethird the operating expense. “That’s a big, big price difference for what we can produce that C6 molecule for,” Jakel says. A retrofit project at a former ethanol plant was under way in April with startup of biochemical production expected in a few months, Franko says, adding that FQPT is in talks with other interested parties. “For us, it’s that next big thing,” he says. “We feel like it’s going to have a significant adoption rate into the industry.” Plenty also is happening with the company’s other equipment offerings. In April, a full Wet Fractionation System was in the commissioning phase at a sugarcane and corn ethanol plant in Brazil. Meanwhile, a
SEPARATIONS KNOW-HOW: Fluid Quip screens, used for separating and washing slurry in the Selective Grind Technology and Fiber By-Pass System, are shown here, installed in a 60 MMgy ethanol plant. The technology is patent pending. PHOTO: FQPT
Maximized Stillage Co-Products Protein Recovery System, the third instillation of this technology, is expected to begin operations at United Wisconsin Grain Producers this summer. Several other companies are considering implementing it. “We look at it as the next corn oil,” Jakel says. But that’s not all of the innovations FQPT, which has 10 engineers on staff, is considering. “We are continuing to develop
ACHIEVING THE MOST EFFICIENT STARTS AT THE TOP.
new technologies, new solutions and ongoing improvements for the biochem and biofuels industry,” Jakel says. Author: Holly Jessen
Freelance writer hollyjessenmedia@gmail.com
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JUNE 2016 | Ethanol Producer Magazine | 35
INNOVATION
Advancing the
BREWING PROCESS The pace of innovation in fermentation has picked up. By Susanne Retka Schill
How would you describe what’s For millennia, the recipe for happened in recent years in yeast brewing remained basically the and enzymes? What are the most same: add water and yeast to the important developments? DuPont—Casper Vroemen, research ground grain and wait. The big innovation of the past century was the addition of enzymes to speed up the process. In comparison, the innovations of the past few years have come at a dizzying pace, with more in development. Ethanol Producer Magazine contacted four of the big innovators in yeast and enzymes this month and asked about the state of progress.
PHOTO: DUPONT
36 | Ethanol Producer Magazine | JUNE 2016
leader, North American Biorefineries The ability to modify strains and reconstruct entire metabolic pathways have improved dramatically through genome editing technologies such as CRISPR-CAS and we are now able to target specific traits and activities in yeast and enzymes that can deliver the value that ethanol plants are looking for. Genetically
modified yeasts are here to stay, provided they deliver significant value and are robust with respect to ethanol, temperature and organic acid tolerance. Advances in enzymes continue, in particular as our understanding of process continues to improve. We are excited to be trialing some of these advances right now and look forward to future developments in our pipeline. Edgar Seward, technical service leader, DuPont North American Biorefineries: Today’s ethanol plants are significantly more efficient than ever before and biotech-
INNOVATION
JUNE 2016 | Ethanol Producer Magazine | 37
INNOVATION nology is one of the important drivers. The most efficient producers in today’s challenging market have found ways to lower their input costs, reduce their carbon footprint and thus produce additional RINS [renewable identification numbers used in the renewable fuel standard] for new gallons that go beyond their grandfathered gallons limits. The best-in-class dry grind ethanol plants can run at or below 26,500 Btu per gallon—a previously unthinkable level. Novozymes—Peter Halling, vice president, Biofuel Commercial, Agriculture and Bioenergy New developments have been driven by our customers’ needs for new solutions. We are facing fluctuating market conditions that can impact plants’ profitability. Margins matter, and we need to provide solutions to help customers manage risk and find new revenue streams. We recognize that our customers are facing a difficult market and we are dedicated to developing products to bring them new value and increase their profitability in any market condition. DSM—Atul Thakrar, president, Biobased Products and Services There has been a lot of consolidation in the industry and ethanol producers are pre-
dominantly focused on optimizing the value of their plants. To this end they use different business models and rely on diversification of their output to extract more value and to become less sensitive to the volatility of corn and ethanol prizes. Innovations in crops, enzymes and yeast play a substantial role in enabling that diversification. These consumables are no longer completely separate parts of the value chain either, as we see crops and yeasts capable of expressing enzymes emerge and take market space. Lallemand Biofuels & Distilled Spirits—Craig Pilgrim, vice president, Marketing and Product Development Tight margins have changed priorities for some ethanol producers. Rather than pushing for more throughput, largely through capital investment, there has been increased focus on yields and efficiencies. Yeast and enzyme producers have had to innovate and develop products to increase yield so producers make more alcohol with the same amount of substrate. The enzyme manufacturers have come out with higher and more specific activity enzymes for the process. In yeast, Lallemand has modified a metabolic pathway normally used for glycerol production to produce more ethanol, instead. This has dramatically increased yield and profitability for the producer.
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What about the challenge of introducing new yeasts and enzymes?
Lallemand—Pilgrim One of the challenges of introducing new innovative products is the reticence of some to try new technology. In a time of tight margins, any disruption is not welcome. Consistency is key for ethanol producers. However the benefits outweigh the trepidation of using something new. Most of the people we work with are partners and know a long time before the general release of the product that it is coming. We discuss what it is, what are the benefits, how we should test it and ultimately implement it. The trajectory of the implementation of new products is very sharp. The time frame from conception to implementation is very quick. It’s not unrealistic that every 12 to 18 months a “new” product will be introduced within the market. DuPont—Seward There are two types of trials with fundamentally different objectives: 1. A precommercial trial, in which the new yeast or enzyme is being evaluated for the first time, is needed to ensure that the performance scales from the lab and pilot to full scale. Here our primary objective is to do no harm to the ethanol producer, our secondary
performance
yield
PHOTO: DUPONT
objective is to learn, this means having clear plans for what to do if issues arise and how to mitigate them. This type of trial requires very close collaboration and a significant risk tolerance and so it is certainly not for everyone. 2. A commercial trial is very different. For customers to try something new, they need to improve their operations in a measurable and important way. Preparation is key: establishing the pre-trial baseline, reviewing the operating parameters and expected performance. Only then is our trial team ready to begin the trial and deliver the promised performance. DSM—Thakrar Improvements with yeasts and enzymes to enhance productivity developed at lab and pilot scale need to be demonstrated in the full-scale plants that are becoming increasingly complex to operate due to technologies like corn oil extraction and fiber separation.
Therefore, there is a bigger need for service and support from the technology providers who play an important role in developing new technologies and ensuring these can be adequately applied at a commercial scale. The companies developing and rolling out these new technologies are also the driving force for plants to optimize their processes, maximize value and diversify the portfolio. Novozymes—Halling We’re not just innovating for the sake of innovation. We are doing it to help our customers increase their profitability, whether they are looking for higher ethanol yields, increased throughput or adding sidestreams. We have to have the broadest, highest-performing toolbox and full value package in the industry for all types of plants and market conditions and we will be continuing to add to it in the future.
What lies ahead? Will this pace of innovation continue?
DuPont—Seward We are excited about the prospects for innovation in ethanol production because our customers are relentlessly focused on improvement, and the tools at our disposal are better than ever before. Our innovation is focused on three main areas: increasing ethanol yield, improving the value of DDGS and enhancing operational efficiencies. Our work on enzymes for Gen 1.5 has delivered on the first two categories, not just in the laboratory but also at plant scale at Quad County Corn Processors. Novozymes—Halling Right now, we are competing in a fierce, low-growth market and the winners in this market will be the companies that keep innovating. Novozymes has always invested heavily in R&D; in fact, 14 percent of our spending
Your plant is unique. Your treatment options should be too. WestAgro releases DeLasan CMT TM a patent pending process treatment for corn mash used for fermentationat at fuel and beverage ethanol plants. DeLasan CMT is a leading technology that is best suited for control of organic acids in your fermentation process. The unigue product formulation, low cost, high concentration of actives, and patent pending application make DeLasan CMT unique among other fermentation treatments. Additional benefits of our DeLasan CMT program can include: • Cost reduction in your organic acid control program • Does not contribute inorganic salts • Breaks down easily into food ingredients • Improves your ethanol production • No pre-mixing required • Recognized as safe for grains • Meets the new FSMA requirements • Eliminates your need for anti-biotics
Contact your West Agro representative for more JUNE 2016 | Ethanol Producer Magazine | 39
INNOVATION goes into research. We strive to provide continuous innovation to bring our customers new value. Lallemand—Pilgrim New products currently are necessary as we are up against a limited market. Making more out of the same substrate is key. There is plenty more that biotech organisms can do to provide even greater efficiency improvements
and we have exciting new products in the innovation pipeline. Take the cellulosic market as an example. There have been advances in enzyme technology and functionality and also in ethanologens to convert those sugars into ethanol. The foundation for the cellulosic industry is here, now the production costs have to come down. This is an example of how technology has advanced to make cellulosic
Lallemand Innovation
break down biomass more efficiently at higher temperatures and advanced yeast strain for simultaneous conversion of C6 and C5 sugars and other carbons into ethanol.
In collaboration with Mascoma, TransFerm YieldPlus was the first successful, truly bioengineered yeast introduced into the fuel ethanol market in the past 10 years. The insertion of a gene allows the yeast to produce glucoamylase and a glycerol reduction pathway converts excess glycerol into ethanol, thus increasing yield. Lallemand also worked with Mascoma, which it since has acquired, to introduce C5 Fuel, an engineered yeast that utilizes a bacterial xylose isomerase pathway to convert C5 sugars (xylose) into ethanol. It can utilize multiple substrates from sugarcane bagasse to switchgrass, corn stover and softwoods. A second cellulosic yeast, XyloFerm, was developed in collaboration with Swedish partner, Taurus Energy. This yeast is engineered with a xylose reductase pathway, a different mode of sugar-to-ethanol conversion than used with C5 Fuel. Offering both yeasts provides plants a choice in utilizing which cellulosic yeast works best in a given system.
DSM Innovation
DSM has more than 140 years of experience in biotechnology and a leadership position in conversion technologies for cellulosic biomass to ethanol. DSM’s business model is to demonstrate its technology via strategic investments and partnerships along the value chain, providing conversion technologies and yeast and enzyme products while focusing on green materials with better performance and lower environmental footprint. DSM’s strategy is to license its technology and expertise to bio-entrepreneurs. The company’s combination of biotechnology competences spurs innovation through new robust enzyme mixes able to
40 | Ethanol Producer Magazine | JUNE 2016
Novozymes Innovation
Novozymes recently launched two liquefaction solutions. Liquozyme LpH was released last summer and is especially popular for plants that want to eliminate or reduce ammonia storage and handling. It significantly increases front-end efficiency by enabling high solids loading and increased throughput. Avantec Amp is the newest and most advanced liquefaction product, delivering producers more than 70 percent nitrogen reduction, up to 15 percent more corn oil, and 2 to 3 percent more ethanol yield. A typical 110 MMgy plant may handle, store and use 6,000 sacks of urea per year, used to support yeast health. The new enzyme virtually eliminates that process requirement, which can result in $700,000 savings per year for a 110 MMgy plant.
DuPont
Trehalase is one of the most exciting recent developments, allowing customers using Distillase XP to convert the 12 million pounds of previously unfermentable sugar into nearly $1 million of ethanol at a 100 MMgy plant (at $1.53 per gallon ethanol). The new enzyme is the culmination of collaborative work by DuPont’s global R&D team with the help of the team at DuPont's, Cedar Rapids, Iowa, Applied Innovation Center, who validated performance, and the technical service team, who assisted customers in trialing and adopting the technology.
INNOVATION a reality rather than a dream. This will reward those producers that embrace innovation and are willing to try to products. DSMâ&#x20AC;&#x201D;Thakrar To fit within our planetâ&#x20AC;&#x2122;s limits while simultaneously responding to two of the most pressing global issues, climate change and resource scarcity, we need to transition to a circular economy in which products and systems are designed so they can be returned and the materials recycled, reused or remanufactured. A circular economy naturally encompasses a shift from fossil fuels to the use of renewable energy, the eradication of waste and the role of diversity as a characteristic of resilient and productive systems. In line with these principles, future plants will be integrated biorefineries, rather than ethanol plants. We will need decades to evolve in such a way that these biorefineries extract every ounce of value, much like the value in oil refineries has evolved from crude oil to various transportation fuels and chemicals. Indeed, crops are the future oil. The first steps have been achieved in several arenas. Corn has experienced tremendous innovation to efficiently extract oils and ethanol and animal feed. Corn residue has progressed from aggregating it efficiently and processing it to capture the carbon. Eventually, lignin technologies will evolve beyond just burning it for the caloric value to extracting and separating C5 and C6 components for different value streams and the carbon dioxide byproduct will be captured and converted. The biorefineries of the future will use a range of novel technologies and processes, requiring significant investments in research, development and deployment to reduce costs, improve performance and achieve competitiveness with fossil fuels. Therefore, the role of technology providers becomes increasingly important to establish winning technologies and secure long-term leadership amongst competition. Open innovation is needed to gather all competencies throughout the value chain required for success, to share risks and rewards and speed up and strengthen technology positions. Author: Susanne Retka Schill Managing Editor, Ethanol Producer Magazine 701-738-4922 sretkaschill@bbiinternational.com
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WOMEN at the TOP
Passion, leadership and vision are more important than gender in the work of three top managers. By Janna Farley
Barb Bontrager PHOTO: BILL KEEFREY
44 | Ethanol Producer Magazine | JUNE 2016
MANAGEMENT
JUNE 2016 | Ethanol Producer Magazine | 45
MANAGEMENT
These days, it’s not unusual for women to run corporations, but not many of them are leading ethanol facilities. In fact, there
was promoted to general manager and CEO in 2012. She is responsible for the day-today operations and financial management of the ethanol facility, which employs more than 40 people. UWGP purchases 20 million bushels are only a handful of women in top manof corn from the local region annually and agement in the industry. Ethanol Producer has among the best ethanol per-bushel yield Magazine talked to three about their expe- rates, at 2.86, in the industry. UWGP has riences and how they’re helping to move had an exceptional earnings history. Since the industry forward. the beginning of operations in April 2005, it has recorded $108 million in earnings, Barb Bontrager of which 74 percent were distributed to its General Manager/CEO members. The stats make Bontrager smile. She’s United Wisconsin Grain Producers When Barb Bontrager drives by a corn- a numbers person and her accounting background means she’s comfortable forecastfield, she sees potential. Potential for the environment, for the ing the facility’s financials and positioning them for success. economy, for the United States. But what really gets Bontrager excited Bontrager is the general manager and CEO of United Wisconsin Grain Produc- is thinking about everything that’s possible. “Ethanol is a win for everyone. It’s ers, a community-owned ethanol facility with more than 900 investors in Friesland, better for the environment and produces located about 85 miles northwest of Mil- less greenhouse gas emissions than tradiwaukee. It’s her job to harness that poten- tional oil refiners,” she says. “On top of tial she sees growing in the corn fields she that, we’re able to sell fuel for less than we can bring it in from countries that hate us, passes by. Bontrager has worked for UWGP since and we’re looking at ways to use that fuel November 2004. A certified public accoun- more economically, and working through tant, she came on board as the CFO just those hurdles to get beyond the 10 percent before facilityad_Layout opened in1 April 2005 3:42 and PMblend.” Summitthe May_July 3/16/2016 Page 1
But the ethanol industry can do so much more, Bontrager says. “The ethanol industry is relatively young. There’s a lot of untapped potential here,” she says. “We have a lot to learn about corn and how to get more value out of that kernel of corn.” Working in a male-dominated field never has been an issue for Bontrager. She grew up with three brothers, after all. “It’s just something that’s never been a big deal,” she says. “I just don’t see people as male or female. We’re all just people.” But Bontrager knows she’s somewhat of an anomaly in the ethanol world. If she had to guess, Bontrager says, at industry conferences, only about one in 10 attendees are women. The small number of women in the ethanol industry, however, does not mean that her peers in the industry and her customers don’t respect her. “That hasn’t been my experience at all,” she says. “In fact, I think farmers understand—especially those small mom and pop farms—the importance of women to the success of an operation.” “I really enjoy coming to work every day,” she says. “We’re doing so much good. It’s something I’m proud to be involved in. We have all this potential from just one little ear of corn—and we’ve only just begun. There’s a lot of room for growth.”
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Becky Pitz
General Manager, Poet Biorefining-Mitchell
If there’s one word to describe Becky Pitz, it’s passionate. Whether she’s overseeing operations of Poet’s plant in Mitchell, South Dakota, located 80 miles west of Sioux Falls, advocating for ethanol in Washington, D.C., or just hanging out with her husband and daughter at home, Pitz is always on the go and always giving 100 percent. Days start early. Pitz is usually in the office by 6 a.m. “I like to get there early and look at the plant,” says Pitz. That allows her to chat with the night crew as well as welcome the team coming in for the shift exchange at 7. “It’s nice to start the day with no one in the office, too,” she says. Getting a jump-start on the day is helpful because there’s a lot going on. The Mitchell plant is one of the company’s highest producing facilities. In 2014, the plant bought 25 million bushels of corn from farmers and produced 72 million gallons of ethanol. The long hours can be tiresome, but for Pitz, who started as the plant’s technical manager in 2006 and was named the general manager in 2013, it’s all worth it.
Becky Pitz PHOTO: POET
“I love what Poet stands for. If we can reduce the amount of foreign oil we’re dependent on with something that’s clean, green and renewable, how do you not love that?” And she feels fortunate to be able to do that in South Dakota. Pitz grew up in Ipswich., about two and a half hours north of Mitchell. She never thought she’d be able to find work in her chemical engineering field so close to home. “I feel so lucky that I’ve been able to grow my career in South Dakota,” Pitz says.
“It’s important to stay here, to raise our daughter here.” Pitz acknowledges that balancing a demanding job with family life is challenging, but she makes it work. “I want to be a role model for my daughter, someone she can be proud of.” Demonstrating to her daughter that women can be successful managers, especially in an industry like ethanol which doesn’t have many female managers, is important to her. At Poet, though, her gender is not an issue, Pitz notes.
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MANAGEMENT
It really doesn’t matter, Pitz says, if you’re a man or a woman. “I don’t even think about it,” she says. “With Poet, if you work hard and you’re good at what you do, there are unlimited opportunities.” Besides, she’s used to it. Pitz graduated from the South Dakota School of Mines and Technology, where the student body is made up of five men to every woman. “I’ve always been in a male-dominated world,” she says. “I’m just used to it.” Pitz would rather not worry about gender issues anyway. She’s more concerned about being a strong advocate for ethanol. Many people don’t realize how much rural areas like Mitchell rely on renewable energy for jobs and economic strength, Pitz says. Poet in Mitchell employs more than 40 people and provides farmers throughout the area with an alternative market to sell their crops. Of course, the benefits of ethanol extend beyond Mitchell. That’s why Pitz is also an advocate for the industry in Wash-
ington, D.C. She’s traveled to the nation’s capital with Growth Energy to visit with lawmakers about the benefits of renewable energy and the renewable fuel standard. “I’m proud to do it,” she says. “I love the opportunity to spread the word and help educate people about renewable fuels.” The opportunities for the industry and for Pitz are unlimited.“The sky’s the limit, really,” she says. “It’s a big industry and it’s only going to get bigger. I love that I’m a part of it.”
Nicole Gries
Plant Manager Valero Renewable Fuels-Welcome
Life at Valero Renewable Fuels in Welcome, Minnesota, definitely is a balancing act for Nicole Gries. As the manager for the ethanol plant located about 100 miles southwest of Minneapolis, Gries is responsible for the day-today operations of the plant that processes nearly 43 million bushels of corn into 135
million gallons of denatured ethanol and 400,000 tons of distillers grains coproducts every year. She’s constantly monitoring production quality results, making decisions on run rates and planning for capital projects—all while maintaining industry-leading standards in production, safety, product quality and environmental stewardship. Gries’ organizational skills have stood her in good stead as a plant manager and also as the mother of three young children. As any parent knows, the job duties in that role include being a chef, teacher and chauffeur. The autonomy and career capital that come with executive roles help her get the job done, whether she is at home or at work. “It’s all about making the most of the assets you have,” “Gries says. Gries has a background in chemical engineering and previously worked as a process engineer, first for Cargill and then for Rohm and Haas. After moving back to the
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â&#x20AC;&#x2122;Each facility depends on its workforce and plant culture and to accomplish that, you have to stay on top of it.â&#x20AC;&#x2122;
Midwest, Gries worked for VeraSun Energy before Valero acquired a group of VeraSunâ&#x20AC;&#x2122;s plants. Sheâ&#x20AC;&#x2122;s been the plant manager for the Welcome facility since 2013. Thereâ&#x20AC;&#x2122;s never a typical day at Valeroâ&#x20AC;&#x2122;s Welcome plant. With more than 70 fulltime employees, Gries spends a lot of time on personnel issues. â&#x20AC;&#x153;Each facility depends on its workforce and plant culture and to
accomplish that, you have to stay on top of it,â&#x20AC;? she says. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s a pretty important facet, and itâ&#x20AC;&#x2122;s something I get pretty passionate about, too.â&#x20AC;? During the past year, Gries has focused on inGries creasing plant reliability and reducing the amount of unplanned downtime. That means planning schedules and evaluating preventive maintenance or upgrading equipmentâ&#x20AC;&#x201D;really taking a multifaceted approach to plant managementâ&#x20AC;&#x201D;and then being able to equate that to a financial impact rate. Performance expectations have elevated as the ethanol industry has evolved, Gries says, and she credits the strong lead-
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ership of her core management team in making sure everything gets done right. â&#x20AC;&#x153;The business is maturing, but with margins being tighter, you have to get creative, you have to look at everything to determine where you can optimize,â&#x20AC;? she says. â&#x20AC;&#x153;We do a good job challenging each other to come up with new ideas, to not be satisfied with the status quo, and figuring out how to make our hare-brained ideas actually work,â&#x20AC;? she says. Being a woman is a nonissue. â&#x20AC;&#x153;If Iâ&#x20AC;&#x2122;m doing the best I can, Iâ&#x20AC;&#x2122;m satisfied. I never compare myself side by side to my male counterparts,â&#x20AC;? she says. â&#x20AC;&#x153;I tend to be a little methodical and conservative in my approach to work,â&#x20AC;? Gries says. â&#x20AC;&#x153;I like a challenge, and I like meeting or exceeding my expectations. Author: Janna Farley South Dakota-based freelance writer janna.farley@gmail.com
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VENTURES IN AUSTRALIA: BBI International founder Mike Bryan has set aside his retirement activities to develop a new market Down Under.
52 | Ethanol Producer Magazine | JUNE 2016
COPRODUCTS
From Up North to Down Under Mike Bryan is introducing Australia to a DDGS-based feed product made by a company headquartered in North Dakota, where his ethanol career began. By Kassidi Andres
After 30 years in the ethanol business—plant management in the ’80s, lobbying in the ’90s, and running international consulting, media and events companies during the past two decades—there’s no question that Mike Bryan enjoys the challenge of starting a new business when an opportunity knocks. Today, living on the east
coast of Australia in Brisbane, the 71-year-old founder and chairman of BBI International, publisher of Ethanol Producer Magazine, has found yet another new way to couple his entrepreneurial predilection with his biofuels connections. As his sons run the family business back home in North Dakota, Bryan is staying busy in the Land Down Under, working as an occasional biofuels consultant, traveling, writing and playing golf as often as he can. Lately, however, it’s been more work than play for Bryan, since his animal feed import business is starting to flourish, albeit on a small scale for the moment.
JUNE 2016 | Ethanol Producer Magazine | 53
FEED AND FOOD: SweetPro founder Bob Thornberg checks a sample in the lab at his new food-grade facility in Walhalla, North Dakota, where the ProBiotein supplement first developed for animals will be manufactured for human supplement. PHOTO: BBI INTERNATIONAL, SUSANNE RETKA SCHILL
Bryan formed his new venture, Pacific Distillers Grains Solutions, in early 2015 after recognizing the vast, untapped opportunity for U.S. distillers grains imports in Australia and New Zealand, a part of the world “with more sheep than people,” he says, and large beef cattle numbers. While Bryan worked through the costs and complexities of importing DDGS into the countries, an ancillary opportunity sprang up. “An old friend of mine I’ve known for many years, Bob Thornberg, called me up one day and asked if I would be interested in representing SweetPro products in Australia,” Bryan says. “I gave it some thought, and knew it could easily fall under the umbrella of my new company, PDGS. One thing led to another, and we went ahead and did it.” Bryan and Thornberg go back nearly 30 years. In the late 1980s, both men managed ethanol plants in northeastern North Dakota. While Thornberg was managing the plant in Walhalla, Bryan was managing in nearby Grafton. The two took different career paths, but both ended up owning small businesses with direct ethanol industry ties. Ultimately, a shared professional history made their contemporary business partnership quick and easy to facilitate.
“It’s one of the reasons why I’m so excited about Mike’s involvement,” Thornberg says. “He just really knows what it takes to be in a fledgling industry and how to manage new market development. To connect with somebody who has that breadth of awareness of the industry is just really compelling in my mind.”
Exporting at Last
Founded in 1991, SweetPro and its core products are neither new nor novel. The company’s growing suite of animal feed products are distributed across the United States and Canada via 10 distributors and approximately 150 dealers. Now, after a quarter century of steadily growing domestic sales, SweetPro is expanding globally. The company has finalized agreements in Europe, South America and Mexico. Simultaneously, Bryan is carrying the SweetPro banner in Australia and New Zealand, where antiquated molasses licks are the norm. “There is no other product like [ours] in the entire country,” Thornberg says. SweetPro’s products differ from other feed products because they’re made with a combination of distillers grains, vitamins and minerals, beta-glucan and SweetPro’s
COPRODUCTS
Bryan
‘I didn’t anticipate that I would be doing this, but I’m glad I am, because you know what? It keeps me active. I’m busy at it, I’m meeting people and I’m building something, which is what I love to do.’
trademarked ProBiotein additive, with no molasses. The species-specific blends support animal digestive health and growth. The company is best known for its patented 250-pound, cylindrical lick tub, developed to replace molasses with distillers grains and solubles. While an assortment of bagged and loose meal products also is offered—there are 24 SweetPro products in all—lick blocks still are the company’s top seller in the U.S. Bryan’s early sales in Australia mirror SweetPro’s American trends. Bryan says 85 percent of Pacific Distillers Grains’ sales revenue is coming from lick block sales into the Australian equine market. He anticipates, however, that the sale of cattle lick blocks will capture a larger share of total sales this winter when the pastures dry up and cattle ranchers begin to rely on lick block supplements.
Spreading the Word
Social media has become an important marketing channel for many consumer products, and the animal feed business is no different. Bryan has utilized Facebook and other social media tools to promote SweetPro products within the equestrian community throughout eastern Australia. That’s been effective, particularly when combined with Bryan’s old-fashioned, face-to-face marketing approach. “The world belongs to those who show up,” he says, channeling BBI’s longtime mantra. Since launching the company last fall, Bryan has attended numerous horse shows, handing out brochures and meet-
ing as many horse owners as he can while sporting SweetPro apparel. Recognizing the value of customer endorsements, Bryan has embraced his adopted country’s equestrian community, and even sponsored a rodeo team. With a sales strategy rooted in customer education, Bryan likes to tell prospective customers about the nutritional benefits of SweetPro products relative to competing feed supplements. He touts the fact that SweetPro is the only product in Australia that contains distillers grains, and is the only cattle, sheep and horse feed supplement that uses ProBiotein—a prebiotic supplement made using SweetPro’s patented process of fermenting wheat, barley, flax and oats. Both ProBiotein and distillers grains aid in thorough digestion, reducing forage consumption by 25 percent or more. According to Thornberg, eliminating starch from the diet results in one more consistent with the natural fare of grazing animals. Because their natural diet is grass and hay, grazers are not biologically evolved to consume high amounts of starch or sugar. In addition, products that use molasses as an ingredient do not stay intact in hot weather. SweetPro, on the other hand, holds its shape, rain or shine. Bryan has received numerous testimonials with positive feedback, and the majority of them have come from horse owners. Many said that their horses’ coats and hooves have never looked better, and their performance improved as well.
JUNE 2016 | Ethanol Producer Magazine | 55
LICKING GOOD: Bob Thornberg is developing export markets for the company’s DDGS-based feed supplements. With specific formulations for each species, the lick tubs are popular with ranchers. PHOTO: SWEETPRO
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Like most other feed businesses, SweetPro’s major target markets include horses, beef cattle, dairy cattle, sheep and goats. Hence, the company faces stiff competition. For many horse owners, SweetPro’s advantages outweigh its extra cost. “For the most part, with a few exceptions, people who own horses are more willing to spend a little extra money,” Bryan says. “Their owners take great care of them and do whatever they can to keep them healthy. I’m not suggesting that cattle people don’t want to keep their animals healthy. They do, but [cattle are] a volume business and input costs are monitored down to the penny.” Though cattle ranchers will be a harder sell, Bryan hopes they will base their buying decisions on a balance of factors including cost, nutrition, health and growth performance. “We can talk to the cattle folks about the benefits of SweetPro, which there certainly are, but at the same time, you have to be pretty competitive,” he says. “Don’t forget: they’ve been feeding cattle here for over 200 years without SweetPro, so it’s not like it’s a white knight in shining armor that’s going to come in and rescue the cattle business.”
COPRODUCTS
Furthermore, because the cattle business is very competitive, Bryan doesn’t expect his first SweetPro buyers to willingly share their positive experiences with their competitors. While horse owners are inclined to openly share their feed and supplement buying practices, cattle owners are often not, especially if the product is giving them a competitive advantage.
Import or Build?
While Bryan’s new business is picking up, he’s operating it at near breakeven because of the relative high cost and long duration of shipping SweetPro products to Australia and the current unfavorable exchange rate. The delivery life cycle begins when 40-foot containers of product are shipped by truck from SweetPro’s production plant in Horton, Kansas, to a rail yard in Kansas City. From there, they are railed to a port in Los Angeles and shipped across the Pacific Ocean to the Port of Brisbane. After rigorous inspection, the containers are transported to Bryan’s contracted warehouses along the east coast of Australia where the customer picks up the freight to the final destination. “Remember, Australia is the same size as the United States, geographically, so this is yet another layer of cost that we have to factor in,” Bryan says. With a shipping process that takes nearly seven weeks, inventory management is difficult. That’s why Bryan and others are exploring building a SweetPro product manufacturing plant in Australia. One possibility is establishing a joint venture with a grain sorghum ethanol plant a few hours from Australia’s eastern coast. After early discussions with the plant owners, Bryan believes there may be some interest in placing a SweetPro plant adjacent to the ethanol facility, which would provide a steady supply of affordable, domestic DDGS. A second option would be to locate the plant near the Port of Brisbane, which would allow PDGS to source distillers grains from anywhere. According to Bryan, the $5 million plant would have a relatively small footprint and be modeled after SweetPro’s Kansas
production facility. Thornberg says that while the space required for the production equipment is modest, the operation would require at least 30,000 square feet for storage. With interested investors waiting in the wings, Bryan is evaluating the options while Thornberg stands by with interest. Historically, SweetPro has not had sales connections beyond the U.S. and Canada, and it has not been involved with production plants that it didn’t directly own and operate. That’s all changing. In addition to the PDGS distributorship in Australia, SweetPro has finalized an agreement that would allow a French and South American company to process its products. The company also recently completed a royalty arrangement with an Arizona ethanol plant that is building a SweetPro plant on site. That facility will produce SweetPro tubs mainly destined for the West Coast
and Mexico. In addition, SweetPro recently received approvals to replicate its manufacturing plant in Hungary. Despite the many unknowns associated with project development, Bryan and Thornberg are enthusiastic about SweetPro’s future in Australia, with or without a manufacturing plant. A decade ago, Bryan could not have possibly envisioned himself marketing American feed products in Australia, but he’s willing to put his other hobbies aside to see the opportunity through. Author: Kassidi Andres Editorial Intern: Ethanol Producer Magazine For questions, comments email: sretkaschill@bbiinternational.com
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2:10 PM | 57 JUNE 2016 | Ethanol Producer4/27/15 Magazine
UAS
Flying
HIGH
Ethanol industry is using unmanned aerial systems for a variety of applications. By Ann Bailey
Unmanned aerial systems (UAS) use in the ethanol industry is taking off.
From checking on corn fields, to inspecting ethanol plants, to looking over rail cars before shipment, farmers and ethanol producers increasingly are turning to UAS to improve the efficiencies of their operations. The UAS industry has been growing rapidly for several years as both companies and private individuals use the systems for a variety of tasks, including industrial surveying, crop monitoring and video photography. The Federal Aviation Administration predicts that sales of UAS for commercial purposes will grow from 600,000 this year to 2.7 million by 2020. Olsson Associates, based in Lincoln, Nebraska, successfully has integrated UAS into its engineering firm’s operations, deploying two Dragonflyer UAS to collect images for its engineering clients. Jonathan Harris, UAS program manager, had been watching the Mesa County (Colorado) Sheriff ’s Department operate UAS since 2008, and believed it could provide a valuable service for his own company’s clients. Harris, a hobbyist remote-control aircraft pilot and published photographer, initiated conversations with his company a few years ago and Olsson Associates applied for its 333 exemption in November, 2014, receiving it a year ago.
PHOTO: SENTERA
58 | Ethanol Producer Magazine | JUNE 2016
JUNE 2016 | Ethanol Producer Magazine | 59
UAS
Section 333 exemptions allow certain UAS operations in the national air space while the FAA completes its UAS rule. An exemption is required for any civil UAS operation that isn’t for hobby or recreational purposes. “I definitely saw the writing on the wall that it would be a standard piece of equipment in the quiver,” Harris says. Now, he and his colleague Michael Laird regularly operate UAS for inspections for a variety of industries, including ethanol. With 28 offices in seven U.S. states, “we’re pretty wellpositioned with our office locations,” Harris says. The firm offers design and consulting services, including land development, urban planning and compliance.
Better Images, Safer
One of the UAS services Olsson Associates offers its Midwest ethanol industry clients is performing aerial spectral work with visible spectrum and thermal infrared cameras mounted on Dragonfly UAS. The cameras provide images of structural prob-
lems on vertical structures such as ethanol plant stacks or on pipe racks and the tops of pipelines that are difficult to access with ladders. Using UAS for inspections instead of ladders or scaffolding is safer as well. The images captured by a visible spectrum camera with zoom capabilities can be streamed to the tablets of as many as 10 ethanol employees on the ground, providing real-time views, Harris says. And, because the plant operator and employees are familiar with the layout and structures at the plant, they can help guide the UAS operators by pinpointing areas to fly over. Besides providing ethanol plant clients up-to-the-minute images, UAS provide other advantages. The resolution of the images captured by UAS are much higher than what is achieved from manned aircraft, for example, allowing operators to identify details that may not be clearly visible at lower resolutions. “Our limits for manned aviation is comparable to Google Earth,” Harris says. UAS providers can provide a faster turnaround time, Harris says, noting air-
borne mapping companies often wait until they have multiple projects in one area before they mobilize a plane. “You might have to wait. We can get there fast and provide the service.” Another UAS service Olsson Associates offers ethanol industry customers is providing them with volumetric calculations for aggregate piles such as gravel, distillers grains or open grain bins, Harris says. Besides operating UAS to perform ethanol plant inspections for its clients, Olsson Associates also inspects manhole covers on loaded ethanol train cars. “We can actually fly down a row of train cars to ensure that each manhole cover is locked and tagged properly,” Harris says, noting that the alternative is for employees to climb up and down train car ladders to check the cars or driving the train through a structure that would have overhead cameras and take photos of the tops of the car. Yet another role UAS can play in the ethanol industry is in emergency response, Harris says. “In the event of an ethanol fire,
we could be on site in a short amount of time and take a live video. We could live stream that video down to first responders on the scene. We can get in there close to the event, where you might have safety offsets that don’t allow access.”
Production Agriculture
Upstream in the ethanol industry supply chain, UAS increasingly are being operated by a variety of people involved in production agriculture, including agronomists, crop consultants and farmers, to check on corn crops during the growing season and to determine the optimal harvest time. Sentera LLC, a global precision agriculture software, sensors and UAS company based in Minneapolis, Minnesota, has clients across the Midwest who use the company’s expertise to maximize corn yields while, at the same time, reducing their carbon footprint. The FAA has approved Sentera to operate UAS for commercial applications, including the agriculture industry. Early
VIEWS FROM ON HIGH: Olsson Associates operates a Dragonfly UAS to inspect ethanol plants and other industrial facilities. PHOTO: OLSSON ASSOC.
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JUNE 2016 | Ethanol Producer Magazine | 61
UAS
SELECTIVE VIEWS: Sentera customers can use data from advanced sensors to identify a variety of crop problems. PHOTO: SENERA
detection of crop issues allows farmers to customize fertilizer, pesticide and herbicide applications based on precise data, typically leading to lower inputs and reduced costs, according to Sentera. Sentera customers fly UAS that can be equipped with advanced technologies such as RGB (specialized color imagery), thermal imagery or multispectral cameras over corn fields. They then can analyze the collected images to make data-driven decisions about production challenges, such as drowned-out acres, insect damage and fertilizer shortages. “Our system allows our customers to make a data driven decision in the field,” says Kris Poulson, Sentera vice president of agriculture. “It doesn’t require Internet.” Instead, Sentera’s AgVault software allows the user to pop the data card out of the UAS, and into a computer. The card also is compatible with some mobile devices. Once the card is installed, Sentera customers can look at the data quickly and determine how to improve their crop’s health, he says. Users
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62 | Ethanol Producer Magazine | JUNE 2016
UAS also can share their critical data easily with their team or consultants, thus expanding the circle of impact. Sentera’s goal is to allow farmers to maximize yield potential while minimizing crop inputs, such as fertilizer, herbicide and pesticide, Poulson says. Because the imagery can pinpoint where the crop problem is, farmers can apply the inputs to that specific area, rather than to the entire field. “We view it as a tool that comes out at the appropriate time, like a hammer does, like a crescent wrench does when you need it,” Poulson says. Widespread adoption of UAS captured imagery will come quickly to agriculture he says. “In the near future, it’s going to be very common place in the agricultural industry.”
Ethanol Application
At Little Sioux Corn Processors in Marcus, Iowa, General Manager Steve Roe, hired a Sioux City, Iowa, company to take videos of his plant for its 2015 open house.
The video by Full Effect Productions includes a birds’ eye view of the ethanol plant and the city of Marcus taken by a camera mounted on a UAS. Little Sioux Corn Processors officials were pleased with the promotional video which is featured on its website, so they asked Full Effect Productions to take another video showing an overhead view of the plant and the surrounding area. The video is useful when contractors want to visualize a specific location at which they are going to do a job, Roe says. “We just send them the video and they can look, just zoom right down on it and they can see.” At the Olsson Associates engineering firm, Harris sees the day coming when ethanol companies will have their own UAS. “I think it’s a technology that currently kind of requires a specialist, but it’s going to transition to something where plants have UAS of their own on site,” he says. “There are still going to be opportunities for more complex tasks like mapping
for engineering firms such as Olsson Associates, but for basic inspections, it is going to translate into an in-house application,” Harris says. He looks forward to providing his firms’ services to more clients in the ethanol industry. “Working with ethanol producers has been very rewarding,” he says. “We’re comfortable with those types of facilities.” Author: Ann Bailey Associate Editor, Ethanol Producer Magazine abailey@bbiinternational.com 701-738-4976
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CONTAMINANTS
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Overcoming Fusel Poisoning Requires Patience, Diligence Lessons learned from bringing plants back from the brink of shutdown. By Dennis Bayrock
Fusels are a family of 400 or- Odorous Killer,” provided a basic understandganic acids, higher alcohols, alde- ing of fusels. Here we’ll discuss strategies to hydes and ketones that yeast and detect and combat fusel toxicity emergencies. bacteria produce in small quantities as part of their metabolism. Detection
However, fusel compounds are approximately 15 times more toxic to yeast than ethanol and, if they build up at fuel ethanol plants they can cause real problems. Systemic plant shutdowns have occurred with concentrations of mixed fusels as low as 100 to 500 parts per million (ppm). A June 2012 article in Ethanol Producer Magazine, “Fusel Oil Recycle—A Silent,
The simplest, fastest qualitative way to detect fusels is to use your nose. Fusels have a characteristic varnish-like odor that is different from ammonia, ethanol and denaturant. If fusel odor can be detected at the fusel draw pump on the rectifier, prompt action is needed. By the time one detects fusel odors in the slurry, it already is at 20 ppm—the human detection threshold—and probably increasing.
Severe yeast inhibition can occur at fuel ethanol plants with as few as 500 ppm mixed fusels, although individual fusels can be much higher. One simple fusel test method for samples drawn from the sidestripper or rectifier column involves adding a saturated salt solution to the sample in a 100 milliliter graduated cylinder. Most fusels are insoluble in saturated salt solutions and will separate. Unfortunately, this method cannot resolve yeast inhibition issues caused by fusel compounds at concentrations as low as 30 ppm. The saturated salt test is designed for samples containing concentrations greater
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).
66 | Ethanol Producer Magazine | JUNE 2016
CONTAMINANTS than 50,000 ppm. Using this method to measure lower concentrations can lead to significant errors because a 0.5 ml error in reading the graduated cylinder potentially can translate to a 2,000 ppm, plus or minus, difference. It also will not detect fusel compounds that are completely soluble in saturated salt solutions. Plants have other tools that can help. High performance liquid chromatography (HPLC) and gas chromatograph-mass spectrometry (GC-MS) can detect fusels, along with their primary role in benchmarking fermentation. While specialized columns are made for fusel detection, most fuel ethanol plants utilize one column designed to benchmark fermentation. Many of these existing columns can resolve and quantitate some fusel compounds by increasing the processing time. The accompanying HPLC chromatogram illustrates fusel peaks appearing after ethanol’s. These tests can detect fusels at concentrations near yeast inhibition levels. Plants can determine whether their HPLC can resolve fusel compounds, by starting with at least a 1-to-200 dilution of a sample from the fusel draw pump. If fusels are detected, a diethyl ether extraction on the sample will provide better sensitivity at lower concentrations. Another fusel test that can be outsourced is headspace analysis. Seal a test sample in a vial containing headspace and incubate it overnight at a prescribed temperature, typically 80 decrees Celsius. Inject a portion of the headspace gas into an HPLC or GC-MS. Caution must be exercised in interpreting fusel contamination issues with this method because there are many yeast-inhibiting fusel compounds that will not volatilize at the set temperature of the test and will remain undetected. Five ethanol plants dealing with fusel toxicity confirmed the validity of this technique to detect fusels. These plants turned on their mash hydroheater for a week to flash off fusels before the mash reached the propagators and fermentors. Although volatile fusels indeed were being removed, evidenced by smell, the inhibition continued. Only after steps were taken to prevent yeast overproduction of fusels and the plant was purged of fusels did the yeasts return to their normal vigor. Overproduction of fusels caused by yeast cell stress conditions can take weeks to concentrate to toxic levels and may, at first, appear to be similar to bacterial contamination because fusel compounds behave analogously
Peak Name
RT
Area
% Area
Height
Amount
Units
Dextrin
2.762
529520
5.41
34611
0.971
%
Maltotrios
3.194
184784
1.89
17164
0.247
%
Maltose
3.415
877361
8.97
50583
1.185
%
Glucose
3.902
4052797
41.43
234722
5.609
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Lactic Acid
4.887
142491
1.46
11739
0.331
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Glycerol
5.186
949106
9.70
47616
1.607
%
Acetic
5.794
Ethanol
7.988
2765872
28.27
111171
9.626
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JUNE 2016 | Ethanol Producer Magazine | 67
CONTAMINANTS Diagrammatic Representation of Rectifier temperature Shift and Fusel Partitioning
SOURCE: ADAPTED FROM PIGGAT, 2003
to other inhibitors such as lactic and acetic acid chemicals from bacteria. Once confirmed, field experience teaches us that adding more yeast, nitrogen or anti-
microbials fails to salvage the situation. Any fresh yeast are placed in the same inhibiting conditions as existing yeast and antimicrobials are of little benefit, because fusel compounds
are toxic to bacteria. In most cases where fusel toxicity is confirmed, bacterial viable counts in diagnostic plating are extremely low as well.
Tackling Toxicity
Once a plant detects fusel toxicity, there is no magic wand to quickly eliminate it. In the worst fusel situation to date at a fuel ethanol plant, it took a week of patience and diligence to fully regain the plant. The following recommendations are important, but temporary, strategies to cope until fusels are purged. Increase fusel draw rate: The rectifier is the only place in the plant designed to separate fusels, therefore use every means to remove fusels from this location. Use the previously described salt saturation test to verify that more fusels are being drawn out. If there are none, or the amount is very low, check immediately for a fusel dam beneath the fusel draw point. Fusel dams can enter a system with little warning and cause sudden serious inhibition to the yeast once recycled in the mash. Turn on the liquefaction hydroheater: Although the yeast did not recover from the fusel inhibition with attempts to purge as described earlier, volatile fusels were detected coming off the mash stream. This suggests the technique could reduce fusels enough in
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CONTAMINANTS some situations to benefit the yeast, particularly if the total concentration of fusels is near a threshold. Change rectifier operating conditions: By temporarily increasing the overall temperature of the rectifier and/or increasing the temperature delta from the bottom to the top, the fusels move up the column, allowing any fusel accumulation below the draw point, or a possible dam, to leave the column at the current draw point. Conversely, decreasing the overall temperature and/or decreasing the temperature delta will move the fusels down. Try both, starting with the shift up, using conservative increments of about 1 C to help focus the fusels on the draw point. If multiple fusel draw points are not available, or if focusing the fusels is too difficult to accomplish, the next option is to purge through the top of the rectifier by increasing the temperature and delta. The energy and water balance will be severely affected, but purging through the top is preferable to swallowing the fusels through the bottom to be recycled. Raise the pH in fermentors/propagators: Understanding both fusel chemistry and yeast cell membranes provides a unique way to lessen fusel toxicity. Weak acids, such as lactic acid, partially dissociate in water, re-
leasing some of their protons to make the water acidic while others remain undissociated. There is a point of equilibrium that can be shifted by altering the pH. This principle can be applied as a temporary solution to fusel emergencies. Raising the pH in the fermentor or propagator by a maximum of 0.2 pH will shift a portion of the fusels to the dissociated form. Because charged chemicals typically cannot cross the yeast cell membrane, the dissociated form of fusels remains outside of the yeast cell and does not inhibit the yeast. As long as the bacterial contamination at the plant is under control, the risk of promoting bacterial contamination with a 0.2 pH increase is minimal. This recommendation has worked in nearly all the 10 fuel ethanol plants where fusel toxicity was confirmed. Raising the pH in a filled propagator or fermentor can be done using aqueous ammonia or caustic, both very strong bases. At facilities where fusel toxicity stalled the plant, the plant manually pulsed the CIP [clean in place] valve to the fermentor for about 10 seconds, followed by a manual measurement of the pH change at a sampling port. Additional pulses of caustic were made to shift the entire fermentor up by 0.2 pH. It is a case of choosing
the lesser evilâ&#x20AC;&#x201D;fusel toxicity far outweighs any potential inhibition by sodium from the addition of caustic. Aqueous ammonia would be the preferred choice for this job as it leaves behind no residues to inhibit the yeast and also would provide the yeast with an additional source of nitrogen for nutrition. Urea is not recommended, however, because although it can increase pH, it is a weak base and the amount that is needed to change a 750,000 gallon fermentor would be prohibitiveâ&#x20AC;&#x201D;approximately 10 times the amount of caustic. Fusel toxicity is indeed a silent, though odorous killer of yeast. Vigilant monitoring of distillation rectifier operation and yeast cell stress conditions that lead to overproduction of fusels is extremely important. Author: Dennis Bayrock Global Director Fermentation Research Phibro Ethanol Performance Group 651-641-2826 dennis.bayrock@pahc.com
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JUNE 2016 | Ethanol Producer Magazine | 69
WATER TREATMENT
PHOTO: BBI INTERNATIONAL
Cooling Towers Can Harbor Legionella
Plan to keep Legionella bacteria out of ethanol plants rather than respond to a crisis. By Randy McDaniel
Legionella bacteria have been making a lot of headlines. In August 2015, for example, 12 people died and 120 became seriously ill after Legionella bacteria contaminated a Bronx hotel cooling tower in New York City. Later in the year, a major pharmaceutical company in North Carolina stopped production and furloughed employees for about 72 hours to clean its cooling towers after finding that they contained high levels of Legionella. In
February 2016, a $100 million lawsuit was filed against a Michigan hospital after a Legionellosis outbreak. Ethanol producers need to better understand the Legionella threat and its potential implications to prevent something similar from occurring in their plants. Legionella bacteria are present in water environments. Cooling towers are a known Legionella reservoir that can lead to the amplification of these bacteria. Cooling towers associated with the ethanol manufacturing
typically are operated with ideal growth conditions for Legionella. These include water temperatures of 77 to 108 degrees Fahrenheit, low water velocities and the presence of scale, sediment, iron, biofilms and amoebae. Legionella bacteria can cause Legionnairesâ&#x20AC;&#x2122; disease and Pontiac fever, collectively known as Legionellosis. People must inhale an aerosol of Legionella originating from an environmental reservoir to contract the disease.
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).
70 | Ethanol Producer Magazine | JUNE 2016
WATER TREATMENT Legionnaires’ disease is an especially virulent form of pneumonia with a fatality rate of 15 to 80 percent, generally requiring hospitalization. Patients with Pontiac fever demonstrate flu-like symptoms, but are not at risk of death. Healthcare professionals report cases of Legionellosis to the Centers for Disease Control and Prevention through the National Notifiable Disease Surveillance and Supplemental Legionnaires Disease Surveillance systems. According to the CDC, from 2000-’09, 22,418 cases of Legionellosis were reported, a nearly threefold increase during that period. The development and use of urine antigen tests are the most likely cause for the increased incident reporting. The American Society of Heating, Refrigerating and Air-Conditioning Engineers and American National Standards Institute published Standard 188-2015 last year to establish minimum risk management requirements for building water systems. The standard has no enforcement capability, but sections were adopted in New York City after the outbreak, where all owners with
cooling towers now must comply. Regardless, the standard provides a process to reduce the risk of Legionellosis at ethanol plants.
Hazard Assessment
Disease prevention begins with a site survey to determine if a facility has any specific systems listed in Section 5.1 of the standard that can be reservoirs of Legionella—cooling towers being one of many. Facility mangers also should determine if their sites have any characteristics listed in Section 5.2 that mostly are related to healthcare and could potentially involve potable water. I do not anticipate ethanol plants needing to evaluate their potable water systems. At-risk facilities should form a team and develop a water management program (WMP) following the broad outline shown in the accompanying diagram. Specific elements are detailed in the standard. The team must have authority to make decisions, have knowledge of the water systems and know about Legionella and risk mitigation solutions.
During the hazard assessment, the cooling tower system should be inspected for three principle hazards. First, a hazard exists if any Legionella bacteria are present in a biofilm or dispersed in the water. A second hazard is the presence of favorable Legionella growth conditions such as suspended solids, iron, ideal temperatures or stagnation. A third hazard is Legionella dissemination. For example, if drift eliminators are not working properly, cooling water aerosols could spread Legionella beyond the ethanol plant property. The WMP documents the control strategies for each identified risk. It includes procedures for system startup, shutdown and maintenance. It establishes test frequency for all mitigation procedures and establishes remediation procedures when, or if, the plan does not yield the desired results. Procedures include emergency protocols should a Legionellosis case be reported.
Risk Mitigation Strategy
It is common for cooling system water treatment to include some form of biocide
Making efficiency our first priority to get us to profitability. Discovering better ways to run continuously at full capacity. Seeing the potential of a feedstock that can also produce a high-value livestock feed. That’s what fuels me. Learn how sorghum can fuel your ethanol operation at
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JUNE 2016 | Ethanol Producer Magazine | 71
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WATER TREATMENT
SOURCE: WEAS ENGINEERING
application to control bacteria that affects scaling, corrosion and fouling. Biocides are applied in accordance with their labels and their application is federally regulated by the U.S. EPA. Most labels permit intermittent and continuous feed strategies. A common procedure at ethanol plants is to apply the oxidizing biocide, sodium hypochlorite (bleach), in the cooling tower. Continuous feed strategies maintain a free residual chlorine in the tower water which can be monitored. Intermittent feed strategies shock the system with a brief, high concentration of bleach. Care is taken with both strategies because bleach usage can adversely impact system corrosion. Either feed strategy can be automated using ORP sensors that track oxidation reduction potential. Biocide effectiveness is affected by contact time and concentration, although pH also can affect performance. Plants that discharge water into the environment may not find some commercially available biocides to be an option. If bleach is used, the water must be dechlorinated before discharge to meet the requirements of a plantâ&#x20AC;&#x2122;s National Pollutant Discharge Elimination System permit. Total organic loading also impacts bleach effectiveness. Bleach consumption increases with an increase in outside organic matter such as bird droppings, insects, cottonwood seed or even DDG dust. The cooling tower is an effective air washer. After deciding which biocide strategy to implement, this decision must be documented in the WMP along with a method for verifying the proper dosing of the biocide. This can be as easy as regularly measuring actual chemical consumption against the design consumption. Action plans also are needed describing what steps will be taken if the biocide has not been properly dosed.
Validation
One could argue that if no person has been diagnosed with Legionellosis linked to the cooling tower, the risk mitigation strategies are working. Though this may satisfy a strict interpretation of a plan validation, it is fraught with legal risk and could lead to the potential death of an individual who contracts Legionellosis.
72 | Ethanol Producer Magazine | JUNE 2016
WATER TREATMENT
3 Principle Hazards â&#x20AC;˘ Legionella bacteria present in a biofilm or dispersed in the water. â&#x20AC;˘ Favorable Legionella growth conditions, such as suspended solids, iron, ideal temperatures or stagnation. â&#x20AC;˘ Legionella dissemination from nonfunctioning drift eliminators. Directly testing for Legionella through an accredited lab is an option. While it once was believed that controlling total bacteria levels is sufficient, Legionella is found in water with either high or low levels of total bacteria present and in clean or dirty systems. Direct testing is the only way to confirm the presence or absence of these bacteria. Testing typically is conducted monthly or quarterly.
response protocol, but it can be as easy as increasing the concentration of bleach to a higher level of free residual chlorine for a period of time, which will impact discharge water treatment. Testing should be repeated after any remediation to ensure Legionella are destroyed. If someone is diagnosed with Legionellosis, the CDC procedures call for shutting off the heat source and cooling tower fans. The system is treated to maintain at least 10 ppm of free residual chlorine for at least 24 hours, tested at two-hour intervals. The use of a dispersant also is part of the procedure, then the system is drained and refilled. Local or state authorities should be included in the implementation of this procedure because the disposal of this water could have a problematic effect on the environment. Dechlorinating is required at a minimum. After this procedure, the plant
could be left with several hundred thousand gallons of partially fermented mash to further process and several hundred thousand gallons of cooling tower water that requires proper disposal. Even the most thorough WMP will not guarantee the absence of Legionella, but controlling it is the key to preventing Legionellosis. Understanding the bacteria, the disease and establishing effective risk management can prevent Legionella from adversely impacting ethanol plants. Writing a detailed water management program helps a management team make decisions should an emergency occur. Author: Randy McDaniel Strategic Accounts Manager, Weas Engineering Strategic 317-867-4477 randy.mcdaniel@weasengineering.com
Remediation
Finally, the WMP serves as a playbook for actions to be taken for various concentrations of Legionella, or if someone is diagnosed with Legionellosis. OSHA has provided guidelines for both situations. If direct test results are positive, but below 100 colony forming units per milliliter (cfu/ ml) of Legionella, a review of the program and additional biocide treatment of the system is warranted. If direct test results exceed 100 cfu/ml of Legionella, prompt cleaning or biocide treatment of the system is recommended. If direct test results exceed 1,000 cfu/ml of Legionella, immediate cleaning or biocide treatment is recommended and prompt action must be taken to prevent employee exposure. It may be necessary to turn off the cooling tower fans to help prevent employee exposure. Without the fans, the cooling system temperature will increase and have a negative impact on fermentation temperature control. Each plant develops its own JUNE 2016 | Ethanol Producer Magazine | 73
TRIALS
WISCONSIN PERFORMER: Badger State Ethanol has invested in extra instrumentation to monitor conditions in the product trials it hosts. Having consistent operations makes it easier to confirm changes from new products. PHOTO: LBDS
Testing Research Innovation in Real-Time Plant Environments Solid partnerships between vendor and producer secures critical evaluation and streamlines new technology introduction. By Craig Pilgrim
Staying ahead of the curve requires new and step-changing technology introduction and innovation. Suppliers of fermentation prod-
ucts must ensure these new product offerings are the highest quality and perform as advertised. Thus, we need collaborative partnerships with production facilities to be able to test in real time the innovations that come from our research. For the most part, products that perform well in the laboratory transfer well to the real world. Not every plant runs in exactly the same way, however, so in-plant testing is key to learning how the product is going to perform in an industrial setting.
Lallemand Biofuels & Distilled Spirits has worked closely with Badger State Ethanol the past years to run trials. Badger was a natural choice as a collaborative partner because it is a consistently performing plant. We know that for any variable we change, we will be able to see its effects quickly and not get caught up in the “noise” of the plant. The development of technology is expensive for the supplier and running a trial can be risky. Both sides need to be in agreement and work as closely as possible to ensure that neither side is hurt financially.
State, to share how his team views the challenge of keeping up with technology. He wrote: “While BSE prides itself on trying to keep up with all the latest tools in the tool chest, it is a never-ending and very measured process. Anyone who has been in the ethanol industry long enough realizes that there is always another challenge waiting around each corner. In the competitive and volatile commodities world, plants must continue to maximize the value of outputs while managing the value of the inputs, which doesn’t always mean minimizing input costs. As the adage says, you usually get what you pay for. Three areas serve as the founProducer View We asked Erik Huschitt, vice president dation of our analysis of new technologies: of operations and general manager at Badger choosing partners wisely, developing strong
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).
74 | Ethanol Producer Magazine | JUNE 2016
TRIALS trial protocols, and taking a holistic approach to the evaluation to include intrinsic values. “While it may sound cliché, relationships matter and having a partner that understands your business and is always looking out for your best interests by finding win-win solutions has been a key to BSE’s successes. BSE has been blessed with some of the best partners in the industry who understand that each new technology will have to stand on its own merits. It is not a failure of the relationship when a product doesn’t pass a trial with flying colors but, rather, a testimony to the strength of the partnership in that together we are evaluating and communicating strengths and weaknesses. BSE’s partners also understand that markets change and thus the end goals will need to change along with them. The value of a yield enhancement can be very different in a $1.25 ethanol environment compared to a $1.50 one. BSE’s partners understand the need for flexibility when offering product lines. The focus must be on financial viability. “There are an incredible number of variables that affect every fermenter and a change to any one usually cascades, impacting countless others. It is this dynamic that requires a very strong testing protocol. Understanding normal operations and variability before a single variable is changed is a must when determining the value of a product in a trial. One must be able to account for changes in corn test weights and moistures, backset rates, and ambient temperature and humidity levels. BSE has made significant investments in instrumentation throughout the plant to measure and track countless variables. Establishing baselines and understanding the impacts of any changes, good or bad, lead to the successful evaluation of trails. “BSE has a unique process in the coproduct mix that requires close monitoring for quality assurance which means we can see clearly what a reduction of glycerol means on a protein specification in numerous streams. And while a gain may be realized in ethanol yield, a corresponding decrease in oil and protein also need to be quantified and evaluated in the current market environment. Additionally, the value contributed by any technology changes as the market conditions change so this evaluation must be ongoing. “Understanding intrinsic values can be much more difficult. Some examples would be cleaner streams that provide better separation, products that lead to less fouling and reduce the limp into shutdown or, better yet, lead to significant savings in cleaning costs. While the value associated with the intrinsic dynamics may not be the primary focus of a product evaluation, it
TEST TEAM: The crew at Badger State Ethanol work closely with the team at Lallemand to measure and evaluate results of yeast trials. PHOTO: LBDS
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JUNE 2016 | Ethanol Producer Magazine | 75
TRIALS can have a major impact on the whole value proposition.â&#x20AC;? â&#x20AC;&#x201C;Erik Huschitt
Trial Design
Erik summarizes well the concerns and goals of all producers considering hosting a product trial. Before the team at Lallemand Biofuels & Distilled Spirits launches a trial at any partnering ethanol facility, we meet with plant personnel and explain the technology, how it works, what we did to get the technology in place, its features and benefits, if there are any regulatory issues or concerns, how we produce the technology, and what can they expect from the product. We work together to come up with a game plan on plant trial implementation, which gets signed off by us as supplier and the producer to ensure that both sides are getting what is needed out of the testing. When TransFerm YieldPlus was in the prelaunch stage, we worked with Badger State to evaluate it at commercial scale. The initial discussion and vetting of possible process implications with BSE staff was followed by a dialogue to establish the protocol design, getting as much input as possible on the information required to evaluate plant performance pre- and post-trial. Successful implementation of this trial protocol is the biggest part of any
FIGURE 1: Yield increase over baseline. SOURCE: LBDS
product evaluation. The protocol includes a checklist of parameters to establish the baselines for propagation size, mash-to-water ratio, propagation hours and temperature, among other measurements. During a six-week period, the Lallemand team monitors the trial. The first step is to establish product efficacy followed by process
optimization. Once consistency is achieved, the team continues monitoring during weeks five and six to validate the successful integration in the plant process. Constant monitoring is importantâ&#x20AC;&#x201D;you cannot just say to a customer, â&#x20AC;&#x153;Try this, and let us know how it works.â&#x20AC;? A true partner takes ownership of the trial as well.
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TRIALS an average glycerol reduction of 26 percent compared with the baseline. Implementing technology in one’s ethanol plant can be a scary thing. In order to minimize the risks for both sides, an integrated partnership between producer and supplier is crucial to achieve that success. The more that both sides communicate, the less risk that a bad trial will occur. We need to ensure that technology and innovation continue to occur to move the industry forward. A partnership like that between Lallemand Biofuels & Distilled Spirits and Badger State Ethanol is but one example of how suppliers and production facilities can work together to achieve a successful trial and bring that game-changing innovation to the forefront of the industry.
FIGURE 2: Glycerol reduction over baseline. SOURCE: LBDS
General expectations finalized with the plant management and personnel before the TransFerm YieldPlus yeast trial began at Badger State included: • A reduction in glucoamylase use compared with standard dry or liquid yeast. • A 1.5 to 3 percent increase in ethanol yield over standard dry or liquid yeast.
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• A lowering of glycerol fermentation byproducts at the end of fermentation. The final written report showed the Badger State yeast trial met expectations. The data analysis (summarized in the accompanying figures) showed an increased average daily ethanol yield with TransFermPlus of 2.54 percent when compared to the standard dry yeast and
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INTERNATIONAL
Corn Ethanol Catches Up Quickly in
Argentina Researchers study sustainability, greenhouse gas emissions. By Jorge Antonio Hilbert
Argentinaâ&#x20AC;&#x2122;s corn and sugarcane production for bioethanol is part of a production system that cannot be analyzed in isolation. Political and market factors, both nationally and internationally, played a part in the development and growth of the corn and sugarcane industries. Research on corn-based biofuel is relatively new in Argentina where conventional studies up to now have targeted mostly soybeans and biodiesel production. In Argentina, the evolution of the agricultural system has been characterized by continuous technological improvement. This has changed the entire agricultural system and established a base for meeting societiesâ&#x20AC;&#x2122; grow-
ing demands for environmentally and socially responsible goods. Argentina has developed an important and sophisticated network of research institutions and producer organizations related to agriculture and agribusiness. Awareness of sustainability has grown throughout Argentinaâ&#x20AC;&#x2122;s agricultural system, with a special emphasis on soybean production. Government agencies at all levels and the private sector are adopting new trends in enterprise management such as fair trade, social enterprises, corporate social responsibility and sustainability certification schemes. Concrete advances have been made in developing sustainability criteria and indicators, defining best practices, certifying agricultural systems and managing land use accountability. Two certification schemes target biofuels: Car-
mara Argentina de Biocombustibles (Carbio) and Agricultural Certifiada AC. Technological developments aiding the environment include reduced agrochemical toxicity, improved application technologies, direct seeding, precision agriculture and increased yields that reduce pressure on land conversion. Improved regulations have resulted in better control of land usage development. About 85 percent of farmers have adopted no-till. Argentine corn production is based on no-till farming systems first developed in the late 1980s with the objectives of reducing soil erosion and degradation. Some studies show the advantages of no-till include 96 percent less soil erosion, 66 percent less fuel used, higher soil biological activity, increased fertility, lower costs and lower carbon emissions.
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).
78 | Ethanol Producer Magazine | JUNE 2016
INTERNATIONAL Biofuels Framework
In Argentina, the biofuel regulatory framework is based on a 2006 law that regulates the production and sustainable use of biofuels and establishes a system for their production. The 2006 law mandated a 5 percent blend of biofuels into gasoline and diesel, measured over the total quantity of final product. In 2010, biodiesel quotas were established and, in 2014, the blend rate increased to 10 percent with thermoelectric generation included. This year, the ethanol blend rate increased to 12 percent. Biofuel producers must be authorized to operate by the National Secretariat of Energy. They undergo an environmental impact assessment that includes effluent treatment and waste management. The producers must also meet biofuel quality and sustainability requirements. Bioethanol has a long story in Argentina. Sugarcane was introduced in 1550 to Tucuman, the northwest province that pioneered biofuels in the country. Tucuman began actions to enforce the use of alcohol in gasoline in 1978 and by 1988, alcohol sales had increased by 122 percent. The program established a mandatory mixture of 15 percent alcohol in gasoline, with a tax exemption for the alcohol. Due to the fiscal impact, however, the Argentine government did not update the prices established by the Secretariat of Energy for alcohol, which led to reduced revenue and, ultimately, abandonment of the program. Today, sugarcane bioethanol production is concentrated in northwest Argentina (NWA). During 2015, nearly 25 million tons of sugarcane from a total area of 380,000 hectares (940,000 acres) was processed. Three provinces are responsible for 98.5 percent of the national production of sugar: Tucuman at 62.6 percent, Jujuy at 24.7 percent and Salta, 11.2 percent. There are 23 sugar mills scattered across the country, 20 are in the NWA, and, out of those, 15 are in Tucuman. Moreover, 16 of the 20 sugar mills in NWA are distilleries, and 10 of those manufacture anhydrous ethanol. In 2009, two distilleries manufactured 2.1 million tons of ethanol (700 million gallons), which increased dramatically the next year with the addition of six distilleries. Comparatively, corn ethanol plants have a short history and are unique in Argentina because farmers have had a significant say,
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JUNE 2016 | Ethanol Producer Magazine | 79
INTERNATIONAL Argentine Ethanol Industry Fuel Ethanol Production (million liters) Total no. of refineries Nameplace capacity (million liters) Capacity utilization (percent)
2015
2016
670
800
900
Area harvested (million hectares)
2.95
14
14
14
Production (million metric tons)
23.5
880
950
1,000
76
84
90
Feedstock (1,000 metric tons)
Argentine Corn
Domestic Feed Use (mmt) Domestic Food, Seed, Industrial Use (mmt) Exports (mmt)
Grains Molasses/juice Market penetration--ethanol blend rate percent
2014/15
2014
920
1,040
1,125
1,175
1,475
1,730
8.2
9.7
11
6.1 3.3 14.5
SOURCE: USDA WASDE DECEMBER 2015
SOURCE: USDA FAS GAIN ARGENTINA BIOFUELS ANNUAL 2015
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either as direct investors or via the cooperative system. Located primarily in the provinces of Cordoba and Santa Fe, ethanol product is shipped long distances to the ports. Ethanol production technologies are in alignment with the new concepts linked to energy optimization and environmental care.
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A deep revision is underway of the negative paradigm surrounding first-generation biofuel production from food crops. While second-generation alternatives have been heavily promoted internationally, the agricultural systems supporting first-generation biofuels present several advantages: • They produce significate human and animal food products of high quality. • They have the flexibility to reduce biofuel production and increase food or feed output should climate disorders, crop disease or insect infestations reduce food production, or in the case of commercial rule changes. • They rely on mature technologies undergoing continuous improvements with welldeveloped farm and industrial machinery. • They already have established a robust logistical supply chain that is shared by a variety of products. Due to the strategic importance of corn and ethanol production industries, the rural engineering department of the Institute of Agricultural Engineering (INTA) initiated a series of studies taking a systemic look at biofuels, coproducts, energy efficiencies, emissions, logistics and infrastructure. Our study adopted international protocols and methodologies to understand the complex interactions between Argentine agriculture, the agro-industrial sector, biofuels and bioproducts, with a goal of complying with overseas commercial requirements. The results highlight the variability in agriculture and demonstrates the importance of long-term
CORN TANGO: Researchers studied the GHG emissions for the Acabio ethanol plant in the Argentine province of Cordoba.
research. The complexity within the multiple relationships among products is important to understand. For example, Acabio, a 125 MMly capacity dry-mill, demonstrates the distinctive advantage of zero effluent concept where water output consists of only vapor condensation and rain water. The high-protein animal feed production can reach 140,000 tons. A cogeneration plant provides all the required steam and electricity. The recent addition of a plant for CO2 capture and purification has had an important environmental impact by reducing emissions by approximately 70 percent. A life-cycle analysis included emissions from agricultural production, raw material transport, industrial operations for the production of biofuels and coproducts and transport to local and overseas destinations. Emissions at Acabio for 2014-â&#x20AC;&#x2122;15 totaled 124,150 tons of carbon dioxide. After allocating emissions to each of the products, ethanolâ&#x20AC;&#x2122;s share amounts to 23 grams CO2 equivalent per megajoule. The analysis showed 54 percent of emissions came from the industrial phase of ethanol conversion, 35 percent from corn feedstock production and 11 percent from transportation. A similar life-cycle analysis of greenhouse gas emissions is underway for sugarcane-based ethanol production in Argentina. A much older industry than corn-ethanol, new investments at existing plants are producing improvements in the millsâ&#x20AC;&#x2122; environmental impacts and emissions that should demonstrate better GHG savings than previously estimated.
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Author: Jorge Antonio Hilbert Professional Advisor, International Management and Innovation, Institute of Agricultural Engineering (INTA) Buenos Aires, Argentina jorgeantoniohilbert@gmail.com
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TALKING POINT
Nebraska Ethanol Producers Poised for Next Level By Mark Palmer
After nearly 20 years of policy work on Capitol Hill, at USDA, and in the association world, I moved the family to Lincoln, Nebraska, when I became the executive director of the Association of Nebraska Ethanol Producers. The move from Washington, D.C., to
Lincoln will enable me to apply my biofuels background to running a state-based biofuels association Nebraska is the second largest ethanol state in the U.S., producing more than 2 billion gallons annually. Since its inception in 2008, ANEEP has seen industry growth and, out of this expansion, the organization’s next step includes building an organizational apparatus. For example, ANEEP entered into a service agreement with another Lincoln-based trade association providing ANEEP offices just steps away from the Nebraska state capitol. With this arrangement, it also means ANEEP has its first established accounting and bookkeeping system. Even more in the weeds than establishing a home, ANEEP is in the process of refining its corporate apparatus in recrafting bylaws and developing a corporate governance covenant. While narrow, these issues are meant to establish the identity of the trade association. Before taking these steps, ANEEP put into place its government affairs team. Making sure it has the right advocacy and lobbying team in place for state government relations is critical, not just because of the policies that might impact the ethanol industry in Nebraska, but also because of how the Nebraska legislature functions. The Nebraska state legislature is unique. It is a unicameral legislature (one body), that is term limited and considered nonpartisan. It has a speaker, and a unicameral body of 49 senators. In this climate anything can happen, and I mean, anything. Upon arriving on the scene in Lincoln, ANEEP immediately needed to identify the right team because the legislative session was around the corner. ANEEP also is poised to better engage the Nebraska congressional delegation in Washington. Because Nebraska is a national ethanolproducing powerhouse, we need to do a better job of engaging our three members of the U.S. House of Representatives and two U.S.
84 | Ethanol Producer Magazine | JUNE 2016
senators. The delegation may hear about the benefits of ethanol and the federal policies from a national perspective, but ANEEP’s role will be to apply those federal issues surrounding the renewable fuels standard, tax policy and higher level blends (E15, E85) to the Nebraskabased industry. By giving a better Nebraska face to these national issues, members and staff will all be able to better relate and apply the federal policies to a Nebraska “home” perspective. Furthermore, ANEEP is at the beginning stages of a strategic planning exercise to identify priorities for the short and long term. The long-term issues, such as preparing key legislative issues to move in the unicameral legislature, will expand the existing ethanol industry in Nebraska. In that process, we are asking ourselves: How can we continue developing and expanding the ethanol industry in Nebraska, and make ethanol an even bigger contributor to the state economy, while growing our industry at a steady pace? As part of the strategic planning process, ANEEP also will boost its industry relations through developing stronger collaborative partnerships and coalition development, including membership development and expansion. ANEEP sees potential in diversely growing its membership base in Nebraska to reflect the changing ethanol industry. Going forward, ANEEP also will coordinate its communications among its members, state elected officials and the Nebraska congressional delegation. To achieve our goals, ANEEP soon will begin a rebranding effort, developing a web site, upgrading to modern marketing and promotional materials, and utilizing social media engagement, such as Facebook, Twitter and LinkedIn. ANEEP is in a transformational and transitional phase; a phase where the potential is infinite but then, so too, is the excitement. Author: Mark Palmer Executive Director, Association of Nebraska Ethanol Producers Mark.M.Palmer@gmail.com 202-297-2596
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CLEARING THE AIR
Connecting the Dots By Dave VanderGriend
As you read this, many of you are preparing to head to Milwaukee for the International Fuel Ethanol Workshop. As always, I look forward to seeing many
old friends and colleagues from this industry that we’ve all worked so hard to build. I’m pleased to be involved with efforts to ensure a solid and growing market for our product by understanding how ethanol fits into the world of refiners, automakers, retailers and, ultimately, the consumer. In forming the Urban Air Initiative, we were determined to prove that we can achieve cleaner air through higher blends of ethanol. We’ve learned that we can reduce harmful emissions by replacing toxic compounds in gasoline with clean burning ethanol, which improves air quality and protects public health. We can do so while providing a high-octane fuel for superior engine performance, which increases gas mileage and further reduces emissions. Sounds like a simple path to higher ethanol usage, right? Unfortunately, we also uncovered many little known regulatory roadblocks the U.S. EPA has in place to keep ethanol from a free market. But the good news is that the opportunity is there and a number of public policy objectives, and the programs that govern them, are on a collision course with each other. I think ethanol is just the solution. A panel at the FEW is focusing on many issues important to the Urban Air Initiative. I hope you can attend the 1:30 p.m. panel on Tuesday, June 21, titled “Growing Beyond the RFS: Creating New Demand for Ethanol by Meeting Health, Fuel Economy, GHG, and Performance Standards.” It should connect the dots between several key issues and show how ethanol can help meet the needs of what might seem to be a contrasting collection of stakeholders. The first issue: We have a significant health threat with air toxins. Refiners synthesize the most harmful compounds of petroleum as their source of octane. These are known carcinogens that fall under the category of aromatics. Congress gave EPA the authority to reduce these aromatics as technologies became available. If we could cap or reduce aromatics, midlevel ethanol blends, such as an E30, would provide significant health benefits.
86 | Ethanol Producer Magazine | JUNE 2016
Meanwhile, the auto industry has made it clear that it’s going to be severely challenged to meet future efficiency and greenhouse gas standards. Cars can reduce carbon emissions and improve mileage but the industry will need to design cars requiring high-octane fuels and, with carbon and aromatic caps, the octane should not come from the oil barrel. Again, ethanol can be the answer. High octane with low carbon, a dream date. We also may find ourselves working more closely with the refining and petroleum industries than we ever thought. California, Oregon and Washington are setting the stage for what could be a nationwide adoption of low-carbon standards. Refiners need to be able to sell their gasoline in these states and ethanol reduces the carbon intensity of their fuels. They may actually help us remove some of the regulatory roadblocks to getting higher blends into the market. The FEW panel will be a moderated discussion featuring experts in the health, auto and regulatory fields. It will simplify the complex connections between health benefits, mileage and emission requirements, and include a key former government regulator to help explain a pathway to actually get these fuels into the market. The panel includes an ethanol producer who is working hard in his own community to encourage higher blends and increase the demand for ethanol. At Urban Air, we know it will take multiple pressure points to ultimately allow the consumer the choice of ethanol at the pump, which, in turn, will grow demand beyond the fictitious blend wall. This will need to be achieved through top-down, bottom-up, and tactics from all directions in between. Ethanol from corn can play a major role in meeting carbon and greenhouse gas reductions while helping our friends in the auto industry and, most importantly, protecting public health. I wish you safe travels and hope to see you at the FEW panel on June 21 in Milwaukee. Author: David VanderGriend CEO, ICM Inc., President, Urban Air Initiative DaveV@icminc.com 316-796-0900
BUSINESS MATTERS
Iowa Aims to Repeat Ethanol’s Success With Biorenewable Chemicals By Joe Leo
A friend recently showed me a picture lamenting the passing of $7 corn and $12 soybeans. It was styled as one of those rear car-window stickers
that memorialize the death of a friend or loved one which have become common recently. I laughed at the creativity, but it really brought home the point with which I think many are struggling. The low corn prices appear to be here to stay. Innovations in corn production have continued to push the United States’ ability to produce corn and are starting to spread to the rest of the world. As a result, many are looking for the next wave of innovation that will push the United States agricultural economy further. Ethanol has done amazing things in rural America. The improvement to the rural economy resulted from both the public sector and private investors who had the foresight to support the ethanol industry and expand it into what it is today. Now, many are using the model ethanol created to foster other industries that can repeat ethanol’s success. Iowa’s Gov. Terry Branstad signed Senate File 2300 into law April 6, creating the Iowa Biorenewable Chemical Tax Credit Program, a landmark piece of legislation that is expected to result in significant investment and innovation in Iowa. I expect that Iowa is going to be the first of many states to institute this type of program. This legislation was supported by a diverse coalition of private industry and public sector supporters. The Biorenewable Chemical Tax Credit Program will be administered by the Iowa Economic Development Authority which can allocate up to $105 million in tax credits to Iowa-based renewable chemical producers during the next 10 years. The program is expected to expand on Iowa’s robust renewable fuels industry by adding a tax credit to support the production of chemicals derived from renewable sources. The renewable fuels industry expanded significantly after Iowa enacted a similar tax credit program. In January, Iowa State University published a white
88 | Ethanol Producer Magazine | JUNE 2016
paper examining the potential economic impacts of the tax credit in the state. It found that up to 50,000 new jobs could be created by the tax credit program during the next 10 years. The tax credits issued under the Biorenewable Chemical Tax Credit Program are refundable, meaning eligible producers can receive a cash payment for the amount of tax credits that exceed their state tax liability. To be eligible, an applicant must be the owner of a for-profit business located in Iowa, among other criteria. Each eligible business created within the past five years may receive up to $1 million per year in tax credits for five years. For any eligible business that has been in existence for more than five years, the maximum annual credit is $500,000 for five years. Eligible companies receive a tax credit of 5 cents per pound of qualifying renewable chemicals produced. Eligible renewable chemicals are created from biomass-based feedstock including sugar, crude glycerin, lignin, fat and other plant- and animal-derived feedstocks. There is continued interest in the United States to replace petroleum-based products with products produced from renewable resources. I believe innovation in the biochemical industry will have a direct impact on innovation in the ethanol industry and vice versa. Further, I think investment in biochemical production will be an important source of diversification for companies and investors involved in the ethanol industry. The industry is uniquely positioned to take advantage of its knowledge and experience—it created the blueprint. Now I believe leaders in this industry have the opportunity to replicate that success in the biochemical market. Author: Joe Leo Attorney, BrownWinick Law Firm 515-242-2462 leo@brownwinick.com
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