June EPM 2012 by BBI International

INSIDE: WOMEN BREAK GROUND IN NEXT-GEN PROJECTS JUNE 2012

Hungary for Ethanol

An American-Style, Corn-Ethanol Plant Comes Online in Hungary Page 42

ALSO

Industry Makes Seaweed Shows Progress on E15 Promise as High-Yield Implementation Ethanol Feedstock Page 70

Page 76

Freedom Ethanol plants prime Documentary candidates for carbon Illustrates Power of sequestration Information Page 84 Page 62 www.ethanolproducer.com

AMERICA, START YOUR ENGINES. American Ethanol is proud to power NASCAR . When No. 3 American Ethanol ®

Chevy driver Austin Dillon takes the wheel, he is racing for America’s energy independence. American Ethanol’s partnership with NASCAR tells our industry’s story to millions of Americans. Find out how you can get involved at AmericanEthanolRacing.com. AMERICAN GROWN. AMERICAN MADE. POWERING NASCAR.

The NASCAR American Ethanol™ logo and word mark are used under license by the National Association for Stock Car Auto Racing, Inc. and Growth Energy. Austin Dillon and Austin Dillon’s autograph are trademarks of Austin Dillon. All trademarks and the likeness of the No. 3 race car are used under license from their owners. NASCAR® is a registered trademark of the National Association of Stock Car Auto Racing, Inc.

contents

features 42

JUNE issue 2012 VOL. 18 ISSUE 6

42 INTERNATIONAL

Hungary for Ethanol

An American-style corn ethanol plant comes online in Europe By Holly Jessen

52 WOMEN

Groundbreakers: Women in Biofuels

Next-generation projects offer opportunities for women By Holly Jessen

62 ENVIRONMENTALISM

Information is Freedom

Film maker has change of heart about ethanol By Holly Jessen

70 MARKETS

Whatâ&#x20AC;&#x2122;s Left?

E15 ready to roll in some states, work continues By KRIS BEVILL

76 FEEDSTOCK

Offshore Ethanol

Seaweed examined for feedstock potential By KRIS BEVILL

84 CARBON

Prime Candidates

Ethanol produces quality CO2 for sequestration By KRIS BEVILL

4 | Ethanol Producer Magazine | June 2012

contents

JUNE issue 2012 VOL. 18 ISSUE 6

CONTRIBUTIONS

DEPARTMENTS

100

Editor’s Note

The Reward of Big Issues By Susanne Retka Schill

Ad Index

12 The Way I See It

Thanks to Minnesota’s 3 Amigos By MIKE BRYAN

13 Events Calendar

Upcoming Conferences & Trade Shows

16 View From the Hill All Eyes on EPA By bob dinneen

18 Drive

92 BRAZIL

Spotlight on Brazil

Insights on Brazil ethanol prospects from London event By Daniel Coelho Barbosa

100 TRAINING

Ethanol Emergencies: New York Meets the Challenge

State initiates training program on ethanol fires By Dan Baker

Ethanol Fuels NASCAR,

Helps the Environment By RICHARD CHILDRESS

20 Grassroots Voice

Delivering the Message

on Capitol Hill By Brian Jennings

22 Europe Calling

Getting the Label Right By Rob Vierhout

104 CONTAMINANTS

Fusel Oil Recycle—A Silent, Odorous Killer

Case study sniffs out contaminant problem By Dennis Bayrock

112 COMMUNITY RELATIONS

How to Fight the ‘Not in My Back Yard’ Syndrome

Building a database of supporters a key component By Al Maiorino

108 CENTRIFUGES

Matrix Converter Creates New Opportunities for Centrifuge Retrofit

Delving into the details of power regeneration in motor controller By Brenden R. Fritz

116 STOVER

Developing Corn Stover as the Next Agricultural Commodity

Groundwork laid in Iowa to sustainably harvest stover By Andy Heggenstaller

24 Business Matters

How Well Do You Know

Your D&O? By RICHARD K. UPDEGRAFF

26 Business Briefs 30 Commodities Report 34 Distilled 122 Marketplace INSIDE: WOMEN BREAK GROUND IN NEXT-GEN PROJECTS JUNE 2012

Hungary for Ethanol

An American-Style, Corn-Ethanol Plant Comes Online in Hungary Page 42

ALSO

Industry Makes Seaweed Shows Progress on E15 Promise as High-Yield Implementation Ethanol Feedstock Page 70

Page 76

Freedom Ethanol plants prime Documentary candidates for carbon Illustrates Power of sequestration Information Page 84 Page 62 www.ethanolproducer.com

Ethanol Producer Magazine: (USPS No. 023-974) June 2012, Vol. 18, 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.

6 | Ethanol Producer Magazine | June 2012

ON THE COVER

Pannonia Ethanol, located on the Danube River south of Budapest, Hungary, began producing this spring. PHOTO: Zoltan Schafer

editor’s note

THE REWARD OF BIG ISSUES

World’s Largest and Longest Running Ethanol Conference & Expo

SAVE THE DATE: June 10-13, 2013 America’s Center St. Louis, Missouri

Network with Ethanol Producers

Susanne Retka Schill, Editor sretkaschill@bbiinternational.com

While it’s a challenge to produce a large issue such as this June EPM, the reward comes in being able to offer many great stories. Ever since hearing about Fagen Inc.’s first Euro-

pean ethanol project, we’ve looked forward to learning more. In our cover story, Associate Editor Holly Jessen writes about Pannonia Ethanol, an American-style corn ethanol plant on the Danube River in Hungary. Jessen’s other contributions this month take a look at women in biofuels and the impact of a documentary on ethanol education. Associate Editor Kris Bevill updates us on the campaign to implement E15 and describes efforts to demonstrate ethanol’s carbon sequestration potential. Bevill also examines the ethanol industry’s answer to the buzz about algae in the biodiesel industry—seaweed. Yes, seaweed for ethanol production shows great promise, but presents challenges as well. As this issue, and editorial staff, goes to the International Fuel Ethanol Workshop in Minneapolis, we’ll have more opportunities to learn about the latest innovation and look for more great stories.

LETTERS Dear Editor: My wife recently needed a new car, so we looked into many options and found the Toyota Prius computer is capable of using E85 with no problems. My wife asked the dealer if she could run E85 and he said it would void the warranty. Even though the dealership has no way of telling what fuel is used, she refuses to even put one gallon of ethanol in her new car, even though I have a 2000 Saturn SW that has run 60,000 miles on 50/50 ethanol/petrol. I believe the real problem for ethanol usage is that the oil companies have done too good a job of disinformation. If I were living in Sutherland, Neb.—the town where a small ethanol plant temporarily idled in February—I would convert my Saturn to be optimized to run on ethanol with NO gasoline for use in and around the Sutherland. Local usage should be encouraged and highly promoted by the community. The other car would be set up to run on gasoline for travel to areas not as ethanol-friendly. It is time to encourage local consumption to support your local community. Harold Sanders Northlake, Ill.

CLARIFICATION In the “Steel in the Ground” feature article in the May issue, a couple of numbers need clarification on the Beta Renewables project. The Crescentino, Italy, plant will being producing 40,000 tons of cellulosic ethanol, growing to 60,000 tons (20 MMgy). The project is on track to produce ethanol with a cash cost of about $1.50 per gallon, and a capital cost of $5 per gallon, which is expected to go down with subsequent projects.

Produced by:

For industry news. 8 | Ethanol Producer Magazine | June 2012

AdIndex

EDITORIAL EDITOR

Susanne Retka Schill sretkaschill@bbiinternational.com

ASSOCIATE EDITORS

125

Holly Jessen hjessen@bbiinternational.com Kris Bevill kbevill@bbiinternational.com

50-51

COPY EDITOR Jan Tellmann jtellmann@bbiinternational.com

2013 International Biomass Conference & Expo

PUBLISHING CHAIRMAN

118

Mike Bryan mbryan@bbiinternational.com

CEO

54 & 90

Joe Bryan jbryan@bbiinternational.com

110

VICE PRESIDENT Tom Bryan tbryan@bbiinternational.com

SALES VICE PRESIDENT, SALES & MARKETING Matthew Spoor mspoor@bbiinternational.com

EXECUTIVE ACCOUNT MANAGER Howard Brockhouse hbrockhouse@bbiinternational.com Jeremy Hanson jhanson@bbiinternational.com

ACCOUNT MANAGERS Marty Steen msteen@bbiinternational.com Bob Brown bbrown@bbiinternational.com Andrea Anderson aanderson@bbiinternational.com Dave Austin daustin@bbiinternational.com

CIRCULATION MANAGER ADVERTISING COORDINATOR

Lallemand Ethanol Technology Liquid Controls

Angel Yeast Co., LTD

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Ashland Hercules Water Technologies

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Butamax Advanced Biofuels, LLC Cellencor Inc. Cereal Process Technologies Cloud/Sellers Cleaning Systems CPM Roskamp Champion Crown Iron Works Company Dedert Corporation

EDITORIAL BOARD

DuPont FermaSure

Natwick Associates Appraisal North American Bioproducts Corp.

117

Perten Instruments, Inc.

Phibro Ethanol Group

Pioneer Hi-Bred International, Inc.

POET-DSM Advanced Biofuels

Premium Plant Services, Inc.

ProQuip, Inc.

Protectoseal Company

R3 Fusion

107

DuPont Industrial Biosciences

Nalco

127

Renewable Fuels Association

Roeslein & Associates, Inc.

RPMG, Inc.

Sud-Chemie AG Sukup Manufacturing Co.

Eco-Energy Inc.

Eide Bailly, LLP

115

Sulzer Process Pumps (US) Inc.

Ethanol Producer Magazine

Syngenta: Enogen

ETS Laboratories

Tranter Phe

Fagen Inc.

U.S. Grains Council

Ferm Solutions

U.S. Water Services

Fermentis - Divison of S.I. Lesaffre

Vecoplan LLC

Flottweg Separation Technology

Verenium - Ethanol

Freez-it-Cleen

Vogelbusch USA, Inc.

GEA Westfalia Separator

Wabash Power Equip. Co.

126 88 7

Please recycle this magazine and remove inserts or samples before recycling

114

Buckman

111

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 any country outside the United States, Canada and Mexico. 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 sretkashill@bbiinternational.com. Please include your name, address and phone number. Letters may be edited for clarity and/ or space.

INTL FCStone Inc.

3, 17, 59, 128

Interra Global Corporation

Agra Industries

John Nelson jnelson@bbiinternational.com

Mike Jerke, Chippewa Valley Ethanol Co. LLLP Jeremy Wilhelm, Cilion Inc. Mick Henderson, Commonwealth Agri-Energy LLC Keith Kor, Pinal Energy LLC Walter Wendland, Golden Grain Energy LLC Neal Jakel Illinois River Energy LLC Bert Farrish Lifeline Foods LLC Eric Mosebey Lincolnland Agri-Energy LLC Steve Roe Little Sioux Corn Processors LP

INEOS Bio

Kelso Technologies, Inc.

BrownWinick Law Firm

106

Senior Marketing Manager

Indeck Power Equipment Co.

Marla DeFoe mdefoe@bbiinternational.com

103

Inbicon

Aggreko

BetaTec Hop Products

Jessica Beaudry jbeaudry@bbiinternational.com

ICM, Inc.

113

10-11

121

ACE American Coalition For Ethanol

BBI Consulting Services

5 45

2013 International Fuel Ethanol Workshop & Expo

SENIOR ACCOUNT MANAGER

Hydro-Klean LLC

61 8

Lindsey Noble lnoble@bbiinternational.com

HPD

2012 National Advanced Biofuels Conference & Expo

Jaci Satterlund jsatterlund@bbiinternational.com

GRAPHIC DESIGNER

2012 International Fuel Ethanol Workshop & Expo

ART ART DIRECTOR

2012 Algae Biomass Summit

101 98 119 48

Gorge Analytical

120

West Salem

Growth Energy

WCR Incorporated

Hammertek

WINBCO

Himark bioGas

Hitachi Zoen U.S.A. Ltd.

102

Zoechem LLC

JUNE 2012 | Ethanol Producer Magazine | 9

Power P ow your old There’s more to ethanol plant etha The New Ethanol with with New Ethanol than ethanol. production. prod

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the way i see it

Thanks to Minnesota’s 3 Amigos By Mike Bryan

It seems incredible that this is the 28th International Fuel Ethanol Workshop & Expo, and what a fitting place to have it. Minnesota was a key state in passing legislation to mandate the use of ethanol statewide, a leader in education and promotion and it boasted some of the most important pioneers in the industry. Larry Johnson, Kathy Bryan, Ralph Groshen— the Three Minnesota Amigos, who helped carve a path to the future of this industry. Larry Johnson, The Ethanol Answer Man, did more to educate Minnesotans and folks in other states than perhaps anyone. He drove the Ethanol Answer Van covering thousands of miles speaking at farmer meetings and any event he could to spread the ethanol story. Larry has a wealth of knowledge and is still consulting in the ethanol industry and probably will continue to do so, even if someday it means using an ethanol powered walker. Kathy Bryan helped build the very

12 | Ethanol Producer Magazine | June 2012

first Fuel Ethanol Workshop. She was a leader not only in Minnesota but nationally. She walked the halls of the Minnesota State Legislature with Ralph and Larry, lobbying legislators on ethanol. On the national scene, she made many trips to Washington, D.C., often teaming up with farmers from around the country to lobby Congress. She was the co-founder of BBI International. Kathy passed away in 2009 and is deeply missed. Ralph Groshen, well, we simply can’t say enough about Ralph. He was instrumental in convincing the Minnesota state legislature to mandate the use of ethanol. Ralph was one who simply never accepted that something could not be done for ethanol. What he accomplished while at the Minnesota Department of Agriculture for the advancement of ethanol, is difficult to put into words. Ralph retired last year, finally hanging up his ethanol spurs. One of his claim-to-fame moments was the writing of the song, “It’s a Grand Old Fuel.” He does sing it on special request, with payment for his singing usually made in beer. It was a time in the history of the industry where we had to take the gloves off and fight fire with fire. Promotions at self-serve gas stations, where farmers filled up the tanks of customers and gave them a nickel for every gallon of ethanolblended fuel they put in the tank along with a brochure on ethanol. Thousands of business cards in florescent orange were handed out to stations that had “no ethanol in our gas” signs, saying “Shame

on you…for not selling ethanol.” Green cards were given to stations selling ethanol that said “Thanks for selling ethanol blends.” I know, it sounds corny, but it worked against the oil industry which was hell-bent on destroying ethanol. So, coming back to Minnesota this year holds a special place in the hearts of many. Most of those in the Minnesota ethanol industry, and even more on the national level, either personally know, or know of, the Three Amigos. They are just three Minnesotan pioneers, among many pioneers in the industry for whom we are forever grateful. So, welcome to Minnesota and the 28th Fuel Ethanol Workshop, a state and a workshop that helped pioneer ethanol in America. That’s the way I see it.

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

EVENTS CALENDAR

Algae Biomass Summit September 24-27, 2012 Sheraton Denver Downtown Hotel Denver, Colorado

Domestic production of advanced biofuels and biobased chemicals will be the focus of the 2012 National Advanced Biofuels Conference & Expo to be held at the Hilton Americas—Houston, in November. Produced by BBI International, the conference and expo will unite existing and future advanced biofuels producers with strategic petrochemical and agribusiness partners, government officials, investors and project finance professionals, technology and biomass supply-chain service companies. The event was successfully launched in 2011 as the International Biorefining Conference & Trade Show. In consultation with sponsors and supporting organizations, BBI changed the name of the event to highlight its critical role in helping the U.S. bioenergy and refining industries meet America’s explicit advanced biofuels quest. “RFS2 requires 21 billion gallons of advanced biofuels to be blended into the U.S. transportation fuel supply by 2022,” says Joe Bryan, CEO of BBI International. “We have now aligned the conference and expo with that national mission.” The National Advanced Biofuels Conference & Expo will continue to focus on the scale-up, commercialization and market development of both advanced biofuels and biobased chemicals. Presentations will focus predominantly on domestic production, research and development, and project development. International industry issues, such as exports and imports, foreign biofuels production and policy, and feedstock issues, will be covered from a domestic viewpoint. The two-day agenda will answer critical questions facing the industry and will offer conference attendees an unparalleled opportunity to gain a broad understanding of where the U.S. advanced biofuels industry is, what challenges it faces, and where it is headed. “This event will bring the entire industry together under one canopy,” says Matt Spoor, vice president of sales and marketing at BBI International. “The name change exemplifies the new direction of the program. It also speaks to the ‘all-of-the-above’ strategy that’s needed to meet our national advanced biofuels targets. Drop-in biofuels, advanced and cellulosic ethanol, biobased chemicals—we’re bringing it all together in Houston.”

Advancing Technologies and Markets Derived from Algae Organized by the Algal Biomass Organization and coproduced by BBI International, this event brings current and future producers of biobased products and energy together with algae crop growers, municipal leaders, technology providers, equipment manufacturers, project developers, investors and policy makers. Register today for the world’s premier educational and networking junction for the algae industry. (866)746-8385 | www.algaebiomasssummit.org

National Advanced Biofuels Conference & Expo November 27-29, 2012 Hilton Americas - Houston Houston, Texas Next Generation Fuels and Chemicals Make plans to attend the 2012 National Advanced Biofuels Conference & Expo in Houston, Texas. Understand the latest techniques being developed in the industry and continue building relationships that last. Contact a knowledgeable account representative to reserve booth space now. (866)746-8385 | www.advancedbiofuelsconference.com

International Biomass Conference & Expo April 8-10, 2013 Minneapolis Convention Center Minneapolis, Minnesota

Building on Innovation Organized by BBI International and produced by Biomass Power & Thermal, the International Biomass Conference & Expo program will include 30-plus panels and more than 100 speakers, including 90 technical presentations on topics ranging from anaerobic digestion and gasification to pyrolysis and combined heat and power. This dynamic event unites industry professionals from all sectors of the world’s interconnected biomass utilization industries—biobased power, thermal energy, fuels and chemicals. (866)746-8385 | www.biomassconference.com

International Fuel Ethanol Workshop & Expo June 10-13, 2013 America’s Center St. Louis, Missouri

Now in its 29th year, the FEW provides the global ethanol industry with cutting-edge content and unparalleled networking opportunities in a dynamic business-to-business environment. The FEW is the largest, longest running ethanol conference in the world—and the only event powered by Ethanol Producer Magazine. (866)746-8385 | www.fuelethanolworkshop.com

JUNE 2012 | Ethanol Producer Magazine | 13

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view from the hill

All Eyes on EPA By Bob Dinneen

Capitol Hill has become an increasingly frustrating place for many who wish to see thoughtful, forward-looking legislation put into law. In that context, many have come to think of Washington as a place where nothing of consequence can happen, particularly in even-numbered election years. For America’s ethanol industry, that is not necessarily the case. Since the beginning of 2012, Washington has been a very busy place for biofuels. It is true that little is happening in Congress with respect to biofuels. But elsewhere inside the Beltway, biofuels are garnering a great deal of attention. Nowhere is this truer than the offices of the Ariel Rios Building—home to the mobile source division of the U.S. EPA. Without a close second, EPA’s forward march with respect to E15 will have the greatest impact on ethanol producers. With the finalization of the E15 partial waiver in January, the adoption of the health effects testing and misfueling mitigation plan, and registrations from ethanol producers and fuel supplies being accepted, EPA has been ground zero for

16 | Ethanol Producer Magazine | June 2012

the expansion of domestic ethanol use and the fight for more fuel choice at the pump. It is no secret that a move to E15 in America’s fuel supply will have profound impacts on our domestic ethanol industry, fuel consumers, and our nation as a whole. It will increase demand for a domestically produced renewable fuel, reduce the amount of petroleum needed to fuel our vehicles and lower the price for all driving Americans. The importance of E15 is why the RFA has spent considerable time and resources in assuring a smooth transition to E15 from the federal level on down. With all federal requirements now met, E15 marches on to the states and, hopefully, to corner gas stations near you. Expanding ethanol markets isn’t the only influence EPA is having on our industry. The continued implementation of the renewable fuel standard, including the current lawsuit surrounding the 2012 volumes, is creating numerous opportunities for EPA to have an impact on existing ethanol producers and new technology developers alike. Likewise, greenhouse gas regulations such as those included in what is known as EPA’s Tailoring rule could put new and unnecessary regulatory burdens on ethanol producers. The changes being contemplated by EPA could force existing ethanol producers to install costly new technologies simply to come into compliance with arbitrary greenhouse gas limits set by EPA. The list doesn’t stop there. New fuel standards and vehicle emission regulations may seem to be the province of automakers, but if constituted

correctly, could present opportunities for ethanol and biofuels by creating demand for clean octane to power America’s automotive fleet. Even though Congress seems unable to pass much in the way of legislation, it doesn’t mean all is clear for ethanol. Our industry must remain engaged at the regulatory level to inform regulators about the realities of the industry on the ground and the very real world impacts their proposed regulations will have. I encourage all of you to remain abreast of these issues and use the RFA website, www.ethanolrfa.org, as a resource. All of the activities being contemplated at EPA and other federal agencies have the potential to impact our industry. We must remain vigilant and ensure these regulations are crafted to encourage the maximum amount of domestic ethanol use as possible. Author: Bob Dinneen President and CEO of the Renewable Fuels Association (202) 289-3835

DRIVE

Ethanol Fuels NASCAR, Helps the Environment By Richard Childress

Some may question how the owner of a NASCAR racing team can promote air quality with a straight face. After all, for years, my business has been burning rubber and racing fuel in front of massive crowds that leave a lot of litter behind. But times are changing. And the sport of NASCAR, including my team, Richard Childress Racing, has changed with them. Today, we’re deeply involved in efforts to make our sport more environmentally friendly—from recycling motor fluids, to reducing carbon emissions from our racing fuel, to using alternative power sources— all under the NASCAR green umbrella. I do all this because I’m a conservationist who wants to see his grandkids grow up with clean air, clean water and green spaces. And one of the efforts that I’m most proud of is the introduction of American ethanol to racing as a means of cutting our emissions with a clean, renewable alternative fuel. Today’s ethanol industry probably doesn’t look anything like most people imagine. It’s not a guy in a seed cap with a pot-still in the machine shed. Those days are long gone. Instead, today’s ethanol producers are investing hundreds

18 | Ethanol Producer Magazine | June 2012

of millions of dollars in cutting edge technology, biosciences, precision farming and smarter engineering. Today’s ethanol is made in a plant that has cut water use and its reliance on fossil fuels by capturing heat in the plant, or using power from wind, methane and other renewable sources. Between better farming practices and advances at the plant, today’s ethanol producers are able to reduce emissions compared to gasoline by nearly 60 percent. Producing ethanol also adds jobs right here in the U.S. In NASCAR, we are using Sunoco Green E15, a blend of 15 percent ethanol and 85 percent gasoline. Last year, the U.S. EPA approved E15 for all vehicles built in the past decade, which is more than 80 percent of the cars and trucks on the roads today. I like to think that if E15 is good enough for my racing team, it’s certainly good enough for everyday street cars. In fact, NASCAR has accumulated more than 2 million miles of driving—in practice, qualifying and racing laps—on E15, without a hitch, in what can only be described as a seamless transition. Plus, we’ve also seen enhanced performance. Many of the teams have reported an increase in horsepower. In my mind, this proves that E15 is a viable alternative to regular gasoline. One of the things that many people don’t know about ethanol is that it is 113 octane, and has been in our fuel mix since Henry Ford built the first Model T. So ethanol not only offers us a

clean, renewable alternative to gasoline from foreign oil, it also offers us more horsepower, and better efficiency in today’s high-compression engines with clean octane. By pumping E15, we are reducing not only carbon emissions, but we are also reducing lots of other toxins that would otherwise be pumped out the exhaust. Those toxins don’t only degrade our health, but also the streams, lakes and forests where my family and I like to fish and hunt. Next time you see a NASCAR race on TV, I hope you see a sport that is not only competitive and fun, but also upholding American values. Among those values, I include conservation of our soil, air and water, for our health today and for the health of our kids and grandkids in the future. Author: Richard Childress President, CEO, Richard Childress Racing Board Member, Growth Energy (336) 731-3334 hart@rcrracing.com

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GRASSROOTS vOICE

Delivering the Message on Capitol Hill

By Brian Jennings

The American Coalition for Ethanol recently organized a grassroots advocacy effort in the nation’s Capitol. ACE sponsors an annual DC fly-in because no one is better qualified to promote the benefits of ethanol than our members—grassroots advocates. Over the course of two days, 60 members of ACE, the National Corn Growers Association and others from 14 different states met with nearly 200 members of Congress and staff representing 47 states. Thanks to ACEmember Absolute Energy LLC, we distributed packets of No. 2 yellow corn and distillers grains to Congress, showing them that ethanol results in food and fuel. Timing is everything, and on the same day the U.S. Senate was debating the future of oil tax subsidies, our members were able to walk into congressional offices and explain how, unlike oil, ethanol isn’t subsidized and still trades for about $1 dollar less than gasoline on a wholesale level. By all reports, ethanol’s ability to save consumers money at the pump, and to do so without help from Uncle Sam (again, unlike oil), was a very convincing talking point that impressed even members of Congress who aren’t strong supporters of ethanol.

20 | Ethanol Producer Magazine | June 2012

Our fly-in isn’t geared toward preaching to the choir, indeed we met with several lawmakers who don’t appreciate or support ethanol. Many of our meetings were with lawmakers who voted against allowing the U.S. EPA to proceed with implementation of E15, allowing USDA to help assist with blender pump installation or the Volumetric Ethanol Excise Tax Credit. With gas prices at their highest level ever for the presummer driving season, Congress is looking for ways to provide some relief at the pump. Our members were able to describe how consumers using E10 are saving on average at least 9.5 cents per gallon compared to regular unleaded, saving around $1 billion dollars per month nationwide and nearly $12 billion dollars a year. We also educated Congress on the benefits of E15 as a safe and affordable new fuel choice. At today’s prices, consumers choosing E15 could save about 15 cents per gallon compared to regular unleaded. ACE members helped elected officials understand that E15 has undergone more technical scrutiny than any other fuel on the market today, and is an option, not a requirement. Most importantly, ACE members made it clear that the renewable fuels standard (RFS) is effectively doing its job at moderating gasoline prices, reducing oil imports and making the U.S. more energy secure. As part of the effort to educate Congress about the RFS, ACE created an ‘infographic’ entitled “It’s Working” providing a vivid depiction of how the RFS

and ethanol are reducing oil imports and saving Americans money at the pump. In order to demonstrate broad support for keeping the RFS intact, ACE also wrote and hand delivered to Congress a letter that was cosigned by the Advanced Ethanol Council, National Corn Growers Association, Renewable Fuels Association, Growth Energy, Biotechnology Industry Organization, 25x’25 Alliance, and Energy Future Coalition. The RFS has played an instrumental role in the build-out of more than 200 U.S. ethanol facilities capable of producing nearly 15 billion gallons of clean, highoctane renewable fuel. The RFS is also an essential catalyst for commercialization of cellulosic and advanced biofuel. Congress should reject attempts to alter, amend or waive it. Thanks to all the ethanol producers and others who took the time to participate in our fly-in. Thanks to you, we are able to educate members of Congress, build relationships in Capitol Hill, and begin reshaping ethanol policy to ensure longterm success for our members. We are grateful for so many committed grassroots voices in support of the ethanol industry. Author: Brian Jennings Executive Vice President, American Coalition for Ethanol (605) 334-3381 bjennings@ethanol.org

Europe Calling

Getting the Label Right By Robert Vierhout

Just over one year ago I wrote about the E10 hysteria in Germany. I mentioned how the oil and car industries were rather successful in causing serious problems around the introduction of 10 percent ethanol in gasoline, whereas in France the process went smoothly and without any public outcry. Fourteen months later, the German E10 market is still like a stuttering engine, with only 13 percent share of the biggest gasoline market in all of Europe (there are three gasoline grades in Germany). In France, however, it is already at 20 percent. I am certain, though, that the share will increase especially now that gasoline prices are at record heights. The consumer tends to forget quickly all his concerns about (the never proven) food, sustainability and engine damage once the gasoline price is €1.70 per liter ($8.40 per gallon!) as it is now. The European energy commissioner, German national Günther Oettinger, received many letters from concerned fellow countrymen a year ago (mainly NGOs members) on the E10 problems mainly related to environment and food. Plus, being a former president of the state, where the German car industry is seated he is taking the issue of potential engine damage seriously. Recently he launched an initiative to get the discussion going on

22 | Ethanol Producer Magazine | June 2012

(bio)fuel labelling by organizing what is nowadays very common in Brussels’ regulatory circles—a stakeholder meeting. The commission more or less justifies the initiative by stating that for consumers the fuel market has an even worse reputation than the secondhand car market, which is already quite bad. Well, for sure that is one way of getting all interested parties around the table. Certainly, one can make jokes about this, but the commissioner is absolutely right that some action is needed for several reasons. First, fossil fuel can be traded freely throughout the EU; that should also apply to fossil fuel with a bio component. Second, it can be beneficial for the biofuel industry’s marketing efforts if a label clearly states that there is a sustainable biofuel in the fossil fuel. Third, by having identical fuel labels everywhere in the EU, consumers feel more secure that the fuel is safe to be used (even if they cannot read Polish or Hungarian). There are some difficult questions to be resolved before we will have a uniform labelling system in the EU, starting with what type of actions are necessary, possible and by when. Once that is agreed upon, the next big step is to get agreement among all stakeholders whether action should be taken at the EU level via a law or at the member state level through coordination among countries, or at the fuel/biofuel/car industry level through voluntary measures. I think that answering the first questions will not be too difficult. Getting

agreement on the type of label and the information is after all not rocket science. In France, the ethanol industry has already done some detailed work that could be easily considered a ready-tocopy best practice. Good work has also been done in the U.S. by the Renewable Fuels Association. Its E15 Retailer Handbook could certainly be used to showcase how detailed and professional information can be provided to retailers once they have to handle midlevel blends. The level at which action should be undertaken will be more controversial. Most likely the oil industry will opt for voluntary actions and measures, assuring that they can become the master of the game. For the rather small biofuels industry, a harmonized regulatory initiative in the EU would be much better to guarantee a balance of power among market operators. The price to pay for that, however, is that the process will take more time before the stickers can be glued to the pump. For the ethanol industry, it is critical that this whole process should not take too long. As more countries move towards E10, a certain urgency is needed. Having the customers’ confidence that an E10 fuel is a good and reliable fuel is crucial in building, maintaining and even going beyond this market. We better get the label right, and soon. Author: Robert Vierhout Secretary-general, ePURE Vierhout@epure.org

business matters

How Well Do You Know Your D&O? By Richard K. Updegraff

Directors and officers (D&O) insurance is a form of liability protection available to persons who agree to serve as directors, officers and even employees of business entities to guard them from liability and costs of defense that may arise from claims made by persons who feel aggrieved by their actions while doing business. There are several important points for boards to consider as they evaluate different D&O insurance policies. D&O insurance helps protect the personal net worth of those individuals who are involved in the management of the company. It is important to recall that the liability imposed upon directors and officers is personal. In many states it can be joint and several, that is, all defendants are equally liable and, therefore, each bears the entire risk, not simply a proportionate share. This insurance also protects the company from certain claims made against the directors and officers that the company has agreed to indemnify. Most D&O policies are claims-made contracts. A frequent misconception is that companies that are not publicly traded do not benefit from D&O insurance, while, in fact, many cases have arisen from disputes involving private companies. Directors and officers of private companies face the same liability as those on public boards, usually with fewer alternatives available to disgruntled plaintiffs. In addition, private companies generally have less capability to indemnify and protect members of their boards. Some of the largest claims that have occurred in the past several years 24 | Ethanol Producer Magazine | June 2012

have been within the context of privately owned companies with few shareholders. In addition, some persons believe they are protected by what is known as the “business judgment rule.” While this court-created doctrine protects directors and officers from liability for misjudgments made in good faith, it is not an all-inclusive immunity. Directors and officers must first show they acted in good faith and not in their own self-interest. When dealing with smaller companies, with few owners, it becomes very difficult to distinguish the line between the company’s interest and the individual investor/board member’s interest. For these reasons, the protection of directors and officers liability insurance is just as vital for smaller private companies as for larger publicly traded ones. One of many differences in policies relates to an indemnity policy versus a reimbursement policy. Under an indemnity policy, the carrier is obligated to pay loss and to advance defense costs. Under a reimbursement policy, the carrier is obligated to reimburse the insured as the claim proceeds. The indemnity policy is much more favorable to the insured. One of the most widely divergent insuring clauses relates to claims based upon the offer and sale of securities of the company. For companies just beginning to raise capital and get organized, the coverage with respect to the sale of securities is paramount. Once companies have been operating for some time, the risk shifts from securities liability to operational liabilities. There are some insurance policies that provide coverage for all securities offerings. These policies are few in number and are the most expensive.

Another type of policy provides coverage for securities offerings that are exempt under the Securities Act of 1933 that is acceptable for companies considering only such securities. If, however, the company intends to participate in the sale of nonexempt securities, then the policy needs to provide appropriate coverage to protect against claims related to registered offerings. Some policies obligate the carrier to give a quote for coverage of other securities claims; other policies are strictly limited to those exempt under the 1933 Act. Some policies exclude coverage for any securities claims. Those polices should be avoided. Other variations include: • Coverage for punitive damage claims. • Exclusions if there has been a “final adjudication” of deliberate misrepresentation. • Limitations on refusal to accept settlements. Because each carrier writes its own D&O coverage with no uniformity among policies, it is vital to consult an attorney to determine whether the coverage is adequate. Directors and officers protection is not something that should be overlooked simply because of the belief that nothing will ever go wrong. Author: Richard Updegraff Attorney, BrownWinick Law Firm (515) 242-2413 updegraff@brownwinick.com

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business briefs People, Partnerships & Deals

Recovery From Ethanol Production.” David Winsness, chief technology officer added in the announcement, “GreenShift has pledged to protect the competitive advantage of its licensees and the additional protection is extremely important to our licensees and shareholders.”

Lincoln Energy Solutions is expanding its storage capacity at Belton, S.C. The newly constructed tanks will provide storage for 1.5 million gallons of ethanol and 400,000 gallons for biodiesel. Additionally, a 225,000 gallon water tank is being built as part of a foam fire suppression system. Expected to be completed June 1, the facility improvements will expedite the off-loading process of 80-car unit trains for quicker and more efficient turns, completing off-loads in only 48 hours and cutting the previous time required by nearly half. Lincoln Energy Solutions receives its ethanol supply through a strategic business relationship with Archer Daniels Midlands Co.

Jeff Lautt was named CEO of Poet LLC, stepping up from the position as president that he was named to last year. He succeeds Jeff Broin who steps down after 25 years. Broin will continue leading the company’s board as executive chairman and guide the activities of his newly created foundation, “Teach a Man to Fish.” Jerry Taylor, CEO of MFA Oil, a farmer-owned energy cooperative in Columbia, Mo., was recognized by the White House for being a Champion of Change. MFA Oil entered the renewable fuels markets in the 1960s when it purchased an ethanol plant to make gasohol, and currently invests in oil refining and biodiesel production, as well as distributing ethanol and biodiesel blends. MFA Oil Biomass, a partnership with Aloterra Energy, was started in 2011 to capitalize on the unique qualities of miscanthus as an energy crop. Taylor is on the board of National Cooperative Refinery Association and Mid-America Biofuels. American Coalition for Ethanol Vice President Ron Lamberty noted that Taylor and MFA have distributed tens of thousands of the brochure, “Why is Ethanol Good for my Car,” in the last decade. MFA Oil was recognized by ACE in 2006 for its efforts in marketing ethanol. Telvent GIT SA has launched DTN Fuel Admin, a unique dashboard solution to improve bill-to-cash cycle for fuel market26 | Ethanol Producer Magazine | June 2012

ers. Complex bill of ladings (BOLs), delivered from varying sources and on varying schedules, create administrative hassles for fuel marketers and impede the bill-to-cash cycle. Using Fuel Admin, users now have the capacity to receive streamlined, accurate electronic bills of lading and can rely on delivery within minutes of load completion. In addition, the new solution improves efficiency and profitability for marketers by providing standardized, easy to read eBOLs. Arisdyne Systems Inc. received patent approval for the apparatus and method of increasing alcohol yield from grain using controlled flow cavitation. “We have worked diligently, with the help of our engineering and scientific teams, to develop sound intellectual property around our hydrodynamic controlled flow cavitation technology,” said Oleg Kozyuk, chief technology officer and founder of Arisdyne. “The patent, issued by the [U.S. Patent and Trademark Office], validates the unique nature of our company and the approaches we are taking to improve ethanol yield through simple, small-footprint, energy-efficient, retrofit solutions. We will continue to expand patent portfolio coverage as we develop more inventions.” GreenShift Corp. received a fifth patent covering its corn oil extraction processes. U.S. Patent number 8,168,037 is titled “Method and Systems for Enhancing Oil

Feedpail is a new website launched to connect feed manufacturers and livestock producers. Southern Minnesotan Ryan Cooney wanted to create a quicker, easier and more enjoyable way to buy and sell feed ingredients. The free service offers a list of about 40 ingredients, including distillers dried grains options. Users can search by feed ingredient and geography to find prices and availability. Once a quantity and price are agreed to, the contact information of the buyer and seller is shared so they can complete the transaction. All sales are kept confidential and are subject to each party’s terms, conditions and policies. Visit www. feedpail.com. ExperTune Inc., a process control software provider, has added interactive on-line training including hands-on practice using ExperTune’s virtual classroom and coaching from a live instructor. Control technicians and engineers can select courses on basic control loop tuning theory and practice, dealing with valve problems such as hysteresis and stiction, as well as classes specific to the company’s PlantTriage software. Students log in via the Internet to the ExperTune Virtual Classroom. There, they have access to course materials, a dedicated simulator and all the software needed. Verenium Corp. announced the repurchase of all its outstanding convertible senior notes, totaling $34.9 million. “This is an important milestone for Verenium,” said Jeff Black, chief financial officer. “By eliminating the debt overhang on the company, we now have a more flexible capital structure that will allow us to invest in areas critical to grow our business and create future shareholder value.”

BUSINESS BRIEFS Sponsored by

Chicago-based Gold Eagle Co., a producer and distributor of aftermarket fluids and additives, recently created a userfriendly tool to help educate consumers on ethanol-blended fuels. The ABCs and E of Ethanol, available at www.goldeagle.com/engine_care/411onethanol, shares background history about ethanol and the pros and cons of the biofuel. “We recognized that many of our consumers were confused about ethanol, and we wanted to create a resource to help provide some clarity,” said Tom Bingham, director of marketing.

sistance Program to support construction of its anaerobic digester to power the 50 MMgy Nebraska-based plant in Oakley, Kan. Rayeman Elements Inc. is producing 100 percent distillers grains supplemental products for forage animals, compressing the DGs into cubes with minimal fines. Tennessee-based ethanol marketing firm Eco-Energy Holdings Inc. is developing

•

an ethanol unit train and storage facility to serve the Atlanta, Ga., area, similar to one just completed in Denton, N.C. Share your industry briefs To be included in Business Briefs, send information (including photos and logos if available) to: Business Briefs, Ethanol Producer Magazine, 308 Second Ave. N., Suite 304, Grand Forks ND 58203. You may also fax information to (701) 7468385, or email it to sretkaschill@bbiinternational.com. Please include your name and telephone number in all correspondence.

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Sellers 360

Fluid Quip Process Technologies LLC announced the sale of four Selective Grind Technology systems. The two systems purchased by Greenfield Ethanol Inc. will improve ethanol yield at its Johnstown, Ontario, and Varennes, Quebec, facilities. Center Ethanol Co. LLC, Sauget, Ill., has also purchased a system. The fourth sale, to an undisclosed facility, will be the first 100 MMgy SGT installation. The technology improves ethanol yield by grinding grit starch while also improving oil yield by grinding germ. In a roundup of news headlines from the past month: Pacific Ethanol Columbia LLC has signed on to use Mascoma Grain Technology yeast product at its 40 MMgy corn ethanol plant in Boardman, Ore. Montana Advanced Biofuels recently received the air permit for its proposed 115 MMgy plant in Great Falls, Mont.; the project awaits U.S. DOE loan guarantee. Kinder Morgan Energy Partners LP put its 16inch dedicated ethanol pipeline into service between its Linden, N.J., unit train facility and its largest New York Harbor terminal. Western Plains Energy LLC received $5 million from the USDA Repowering As-

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commodities Natural Gas Report

Natural gas grows as a transportation fuel April 24—The market dynamics of natural gas as a transportation fuel are so compelling that it’s important to discuss, even in a magazine focused on a competing fuel. The accompanying chart tells the story. The value of natural gas is less than 10 percent of the value of diesel fuel or gasoline on a gasoline gallon equivalent (GGE) basis. In addition, natural gas is a North American fuel with fewer security concerns and its use improves the U.S.’ balance of payments with other countries. It’s a compelling story both economically and politically. Unfortunately, switching to natural gas as a transportation fuel is costly and complicated. That said, the economics are so dramatic that we are seeing a mad rush to convert fleets. Each year, engine manufacturers are developing and producing more engine options for heavy trucks, the largest unit consumers

of liquid fuels. Vehicle manufacturers are rolling out new products such as the Chevy Silverado “BiFuel” pickup that will run on both CNG and liquid fuel. On the infrastructure side, Chesapeake Energy has committed $150 million to build natural gas fueling facilities at interstate highway truck stops. With roughly $3 per gallon fuel savings, public and private fleets can justify spending capital dollars on fueling facilities to capture the operational cost savings. Natural gas for transportation fuel use is growing at a more rapid pace than any other industry segment—averaging 9 percent an-

By Casey Whelan

nually over the past three years. We expect that to continue and that transportation use will be an increasingly important component of overall natural gas usage.

Corn Report

Choppy corn market reacts to projections, liquidation April 24—The corn market experienced choppiness as liquidation occurred in midApril, testing $6 on the nearby, as the market absorbed ideas of a bigger new crop, rapid planting and concerns of a world economic slowdown, particularly in China. Old crop should be supported at $6, when considering tight domestic cash corn as reflected by improving basis, and an inversion in the nearby corn spreads. In addition, corn buying by China supports the market as it rebuilds inventories. Argentina production continued to decrease with the USDA projecting 21.5 mmt of production versus 23.6 mmt last year and many analysts expecting further deterioration. Not only is corn production projected lower, soybeans are much lower in all of South America, supporting corn and wheat markets in general. The U.S. is expected to fulfill the 30 | Ethanol Producer Magazine | June 2012

global void until harvest in the southern hemisphere. The March 30 planting intentions report indicates farmers expect to seed 95.9 million acres of corn. The new crop corn-soy spread improved in favor of soybeans, which will entice more soybean acres. The question becomes “was the March 30 corn planting number the highest we will see?” The next planting intentions report is due June 30. The accompanying chart illustrates the nearby corn futures contract that averaged close to $5 over the past five years. Corn values had a setback in March/April, though support

BY JASON SAGEBIEL

around the $6 mark is illustrated. Any weather issues ahead that could impact corn yield will toggle future supply and demand scenarios.

report

Regional Ethanol Prices Front Month Futures (AC) $2.148 REGION

SPOT

RACK

West Coast

$2.305

$2.560

Midwest

$2.140

$2.400

East Coast

$2.260

$2.550 SOURCE: DTN

Regional Gasoline Prices

DDGS Report

DDGS price pressure expected BY SEAN BRODERICK

April 23—DDGS prices were firm through April as plants scheduled spring maintenance. Local trucks were at a premium, and the predominance of hand-tomouth buying kept prices above normal springtime levels. The Chicago container market demand was steady, and bid that way for most of the summer. The barge market was very tight for last-half April, and first-half May, as boats sold in February and March loaded. In the gulf, the price of DDGS was on the high side of the normal range versus corn. In the Midwest, pork and cattle profitability dropped. Most of the DDGS that moved east headed to container ports, and not to the poultry or hog markets, both of which are using imported feed wheat. In the South-

west, DDGS competes with low-priced corn gluten feed, and will probably soon compete with what looks to be a pretty good wheat crop. Milk profitability has dropped to below break even, so dairymen are feeding just to maintain, and not for maximum production—bad news for DDGS sales in Texas, New Mexico and California. We generally feel price pressure in May and June. The uncertainty of the Chinese antidumping case, along with the tight old crop corn supplies, should make this summer different than most, in that there is plenty to keep the buyer and seller waiting to execute their needs. The planting season got off to a good start and attention shifts to moisture supplies.

Front Month Futures Price (RBOB) $3.143 REGION

SPOT

RACK

West Coast

$3.152

$3.298

Midwest

$3.058

$3.302

East Coast

$3.078

$2.978 SOURCE: DTN

DDGS Prices ($/ton) JUN 2012

MAY 2012

Minnesota

location

210

203

MAY 2011 195

Chicago

226

222

203

Buffalo, N.Y.

229

225

220

Central Calif.

258

244

Central Fla.

236

232

240 SOURCE: CHS Inc.

Corn Futures Prices Date

(July Futures, $/bushel)

High

Low

Apr. 24, 2012

6.21 3/4

6.05

6.08

Mar. 23, 2012

6.50 1/4

6.40 1/4

6.44 1/2

Apr. 25, 2011

7.71 1/4

7.53 1/4

7.68 1/2 SOURCE: FCStone

Cash Sorghum Prices ($/bushel) LOCATION

Ethanol Report

Summer is approaching, will gasoline/ ethanol demand flop? BY RICK KMENT April 23—The direction of the gasoline and ethanol markets over the past weeks has been interesting to watch, but increasingly hard to understand. At a time when RBOB gasoline prices typically move higher in anticipation of strong late spring and summer demand, the gasoline market has fallen over 20 cents per gallon in a month. This is due to uncertainty of future consumer demand for gasoline through the traditional driving season. With retail gasoline hovering around the $4 per gallon level, there are increasing questions about whether summer plans will still materialize if the gas market holds its previous pattern. In addition, not only has there been significant pressure in commercial buying activity, but investment traders are start-

ing to back away from the energy market, which has been their refuge, given economic uncertainty. With additional support in the stock market and other financial sectors of the economy, traders are slowly liquidating commodity contracts in energy and moving toward more financial-based markets. Ethanol futures fell significantly over the past several weeks, based solely on the wide price shifts in corn prices and expected tight corn supply over the summer months. Rack ethanol prices—ethanol prices most closely associated with retail markets—moved little in the past month, creating additional support and potential stability for the ethanol market through the early summer months.

APR 20, 2012

MAR 23, 2012

APR 27, 2011

Superior, Neb.

5.48

6.14

6.77

Beatrice, Neb.

5.69

6.09

6.72

Sublette, Kan.

5.88

6.22

6.62

Salina, Kan.

5.48

5.91

6.60

Triangle, Texas

6.01

6.47

6.97

Gulf, Texas

6.96

6.84

7.30

SOURCE: Sorghum Synergies

Natural Gas Prices

($/MMBtu)

LOCATION

APR 13, 2012

APR 1, 2012

MAY 1, 2011

NYMEX

1.98

2.19

4.38

NNG Ventura

1.85

1.87

4.85

CA Citygate

2.37

2.75

4.47

SOURCE: U.S. Energy Services Inc.

U.S. Ethanol Production

(1,000 barrels)

Per day

Month

End stocks

Feb. 2012

919

26,653

22,572

Jan. 2012

938

29,063

21,753

Feb. 2011

907

25,400

20,809

SOURCE: U.S. Energy Information Administration

JUNE 2012 | Ethanol Producer Magazine | 31

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Ethanol News & Trends

Revving Up for Production

34 | Ethanol Producer Magazine | June 2012

Commissioning Under Way Vivergo Fuels, one of the largest ethanol production facilities in Europe, is a joint venture of BP, DuPont and ABSugar.

PHOTO: VIVERGO FUELS

A 420 MMly (110 MMgy) wheat-to-ethanol plant in Hull, England, is expected to provide one third of the U.K.’s forecasted biofuel demand once fully operational. Construction on the Vivergo Fuels Ltd. ethanol plant was in the final stages and commissioning had begun in early April. “The Vivergo biorefinery, which will be one of the largest in Europe, will start production in late spring 2012,” the company says. The $458 million project is a joint venture between three companies, including BP and Dupont—both of which have been involved in the biofuels sector. The third, ABSugar, is a sugar and ethanol producer. The company’s first ethanol facility started up in 2007 in Wissington, U.K., producing up to 70 MMly next to a sugar factory. ABSugar is also a seed technology supplier and sells renewable electricity to the grid from its combined heat and power generation systems at its beet and sugar cane plants. The Vivergo ethanol plant will take in 1.1 million tons of local feed-grade wheat, meaning the company will become the U.K.’s largest single wheat tipping point. The first loads of wheat were delivered to the facility in late March. The company’s sole wheat supplier is Frontier Agriculture, which runs the Humber Gold club made up of area wheat farmers, according to Anja Hazebroek, communications manager for Vivergo Fuels. “This represents a landmark milestone for farmers,” the company says. Humber Gold “adds up to a great opportunity for farmers,” according to the Frontier Ag website. Club members can take advantage of a 17 percent maximum moisture content requirement. In addition, the company’s iTrac service offers farmers the ability to view details of their load weight and analysis online or by text message within 30 minutes of delivery. The ethanol plant is also expected to be the largest single source supplier of animal feed in the U.K., producing about 500,000 metric tons of distillers grains yearly. The coproducts produced, including dry pelleted and

PHOTO: VIVERGO FUELS

Vivergo Fuels U.K. plant in commissioning stage

Wheat Tipping Vivergo will become England’s single largest wheat tipping point.

moist meal distillers grains as well as liquid solubles, will provide the protein requirements for more than 340,000 dairy cows daily, about 18 percent of the national dairy herd. Marketing and distribution of the company’s coproducts will be handled by AB Agri.

The plant creates about 80 permanent, full-time jobs. Another more than 1,000 jobs will be supported throughout the company’s supply chain. The ethanol produced will save more than 50 percent greenhouse gas emissions, compared to gasoline. —Holly Jessen

Preparing for Partnership

Obama, Rousseff participate in Brazilâ&#x20AC;&#x201C;US forum While exports of Brazilian ethanol are expected to stay down in the short term, a March report predicts the country will increase its ethanol market share in the U.S. in the coming decades. And, if recent high-level talks are any indication, the two countries are preparing for that possibility. A forum, â&#x20AC;&#x153;Brazil-U.S.: Partnership for the 21st Century,â&#x20AC;? was held April 9 in Washington, D.C. President Barack Obama and Brazil President Dilma Rousseff met to discuss the countryâ&#x20AC;&#x2122;s ongoing relationship. During the event, they noted the adoption of a BrazilU.S. Action Plan on Science and Technology Cooperation, which addressed several areas, including advanced biofuels. They also pointed to the launch of the Strategic Energy Dialogue, which calls for increased cooperation on oil and gas, biofuels, renewable energy and other categories. During another portion of the event, Petrobrasâ&#x20AC;&#x2122; CEO Maria das Gracas Silva Foster was a speaker on the Partnership in Energy panel. She talked about the companyâ&#x20AC;&#x2122;s projected growth in Brazil in oil as well as the ethanol and biofuels markets. â&#x20AC;&#x153;Oil prices may open new opportunities for alternative fuels,â&#x20AC;? she said. â&#x20AC;&#x153;I believe we will lead ethanol production in Brazil in five years.â&#x20AC;? Just a few days before, Sen. Barbara Boxer, D-Calif., visited the Brazilian headquarters of UNICA, the countryâ&#x20AC;&#x2122;s sugarcane industry association. â&#x20AC;&#x153;Brazil has played, and continues to play, an important role in favor of the global progress of the ethanol industry as well as in the creation of better conditions to structure this market on a global level,â&#x20AC;? Boxer said. Adhemar Altieri, UNICAâ&#x20AC;&#x2122;s corporate communications director, pointed to Boxerâ&#x20AC;&#x2122;s support of free trade. â&#x20AC;&#x153;Sen. Boxer is part of a now significant share of U.S. legislators who are well-equipped to better evaluate essential questions, such as energy, in a more pragmatic manner, without bowing to specific interests,â&#x20AC;? he said. At the same time, the administration has remained supportive of the U.S. biofuels industry. On April 18, Heather Zichal, deputy assistant to the president for energy and climate change, spoke at the Renewable Fuels

Associationâ&#x20AC;&#x2122;s Washington Legislative Forum in Washington, D.C. â&#x20AC;&#x153;One of those most promising [clean energy] industries has been American biofuels,â&#x20AC;? she said, adding that thereâ&#x20AC;&#x2122;s a need to continue supporting the expansion of the U.S. biofuels industry. She also talked about the Obama Trust Building Brazilian President Dilma Rousseff speaks to administrationâ&#x20AC;&#x2122;s commitment to infrastruc- President Barack Obama in March 2011, when the president and his family visited Brazil. A year later, the two presidents met in the ture for biofuels. U.S. to discuss their countriesâ&#x20AC;&#x2122; many partnerships. In mid-April, UNICA issued its projection for the 2012-â&#x20AC;&#x2122;13 sugarcane harvest outlook. It highlighted the end of the import in south-central Brazil with a 3.19 percent in- tariff and renewable fuels standard as creating crease. While sugar exports are expected to rise, a favorable scenario for the commercialization ethanol exports are projected to drop. UNICA of sugarcane ethanol in the U.S. in the middle estimates Brazil will need to double sugarcane and long term. In the short term, the counproduction to 1.2 billion tons by 2020 to main- try will continue to focus on ethanol productain market share and meet demand. tion for use domesticallyâ&#x20AC;&#x201D;a situation that has Earlier, the Rabobank report â&#x20AC;&#x153;The Fu- opened the Brazilian market for U.S. ethanol in ture of Ethanol,â&#x20AC;? reinforced the sugarcane recent years. â&#x20AC;&#x201D;Holly Jessen

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JUNE 2012 | Ethanol Producer Magazine | 35

PHOTO: OFFICIAL WHITE HOUSE PHOTO BY PETE SOUZA

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Here Today, Gone Tomorrow Wyoming takes back promised tax credit

had been returning to the legislature, asking for a more long-term extension to the five-year tax credit. In 2006, the company asked for an extension to 2022 in exchange for a commitment to spend $15 million to double the size of the plant. An extension was granted and the company shelled out $17 million bringing the plantâ&#x20AC;&#x2122;s nameplate capacity up to 10 MMgy. â&#x20AC;&#x153;And then they decided that the company didnâ&#x20AC;&#x2122;t need [the tax credit] anymore, this last session,â&#x20AC;? Oldfield says. Although lawmakerâ&#x20AC;&#x2122;s decision to let it sunset is disappointing, Renova Energy is relieved itâ&#x20AC;&#x2122;s going to happen in 2015 instead of 2013. Oldfield had told the Wyoming Legislature that if the tax credit were cut off in 2013 he didnâ&#x20AC;&#x2122;t see how the ethanol plant could keep operating. But, with a little more time on the clock, the company is going to give it their best shot. â&#x20AC;&#x153;We certainly havenâ&#x20AC;&#x2122;t given up,â&#x20AC;? he tells EPM. â&#x20AC;&#x153;We plan on keeping the plant going.â&#x20AC;? A requirement that the company purchase

a minimum of 25 percent local corn will also lapse with the tax credit. Depending on market conditions at the time, that may mean the ethanol plant will start shipping in corn from other areas, since it currently pays a premium for local corn. â&#x20AC;&#x153;If you talk to the agricultural people in Goshen County, Wyoming, theyâ&#x20AC;&#x2122;ll acknowledge that a bushel of corn, after the plant started operating, appreciated by about 30 to 40 cents a bushel,â&#x20AC;? he says. â&#x20AC;&#x201D;Holly Jessen

PHOTO: RENOVA ENERGY

During the 2012 budget session, the Wyoming Legislature voted to let a 40-cent-per-gallon tax credit for ethanol lapse on July 1, 2015. The bad news isâ&#x20AC;&#x201D;legislators originally said the tax credit would remain in place until 2020, but the good news is, that talk of cutting the tax credit at the end of 2013 didnâ&#x20AC;&#x2122;t materialize. â&#x20AC;&#x153;It gives us a little bit of time to formulate some plans and implement some actions to survive,â&#x20AC;? says Terry Oldfield, CEO of Renova Energy, which operates Wyoming Ethanol, a 10 MMgy corn-ethanol plant in Torrington, Wyo. Wyoming Ethanol and the tax credit both came into existence in 1995. â&#x20AC;&#x153;Thatâ&#x20AC;&#x2122;s what brought the plant to fruition,â&#x20AC;? Oldfield says of the tax credit. Although there is a 0.5 MMgy sugarcane bagasse ethanol plant in Upton, Wyo., Wyoming Ethanol is the stateâ&#x20AC;&#x2122;s only full-scale commercial facility and its only corn-based ethanol plant. It started out as a 2 MMgy ethanol plant and was later expanded to 5 MMgy. In the meantime, the company

Western Producer The Wyoming Ethanol plant in Torrington, Wyo., started operating in 1995 as a 2 MMgy plant.

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Ready to Roll

After spending the past three years developing a licensing package and process guarantee, Inbicon A/S, cellulosic ethanol technology developer and subsidiary of Denmark’s DONG Energy A/S, is now actively marketing its technology in North America through newly formed Leifmark LLC. Named for Scandinavian explorer Leif Ericson (the first European to land in North America) and the Danish word for field—mark—Leifmark had nine Inbicon projects in various stages of development by mid-April, two of which are co-location projects with existing ethanol producers, according to founding partner Tom Corle. He and fellow Leifmark partner Paul Kamp will spend the rest of 2012 advancing those projects and focusing on integrating Inbicon’s cellulosic ethanol/power generation technology at more ethanol plants and power companies in the U.S. and Canada. Inbicon’s technology utilizes agricultural residues like wheat straw and corn stover or

energy crops to produce cellulosic ethanol, C5 molasses and lignin. A typical project would convert approximately Working Example Inbicon’s operating demonstration-scale cellulosic ethanol facility 1,320 metric tons of in Kalundborg, Denmark, employs some of the same technology that is now being biomass per day into marketed throughout North America by newly formed Leifmark LLC. 20 MMgy of ethanol. Corle says Leifmark projects. Tight financing situations have made has identified 80 of the existing 209 U.S. corn it difficult to expand over the past few years, ethanol plants as being the best candidates to but Corle says he believes that environment is integrate Inbicon’s technology, based on the beginning to loosen up, allowing more ethaproximity of available biomass to the ethanol nol producers to explore cellulosic ethanol plant. production. Inbicon is also able to obtain loan Inbicon has operated a 4 metric ton-per- guarantees through a Denmark export fund hour demonstration-scale facility in Denmark for equipment imported to the host country since 2009 and has more than a decade of ex- for its projects, he says. perience in biomass logistics there, Corle says. Leifmark is also currently seeking to exHe’s been working with Inbicon for years and pand its team to broaden its project develophelped put together the commercial licens- ment. “We have a product and now we need ing and process guarantee package, which, to make sure we have the marketing team to he says, will help position major commercial accelerate the projects,” he says. —Kris Bevill

PHOTO: INBICON

Inbicon kicks up licensing plans

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Anticipating Asia

Asian biofuels consumption expected to grow substantially Conditions are ripe for biofuels demand and production to boom in Asia over the next few years, as steady growth in countries such as China, India and Japan will prompt an “astronomical” rise in fuel demand, says Tammy Klein, assistant vice president of global consulting firm Hart Energy. Ethanol and biodiesel demand in Asia for 2011 totaled 1.6 billion gallons, but by 2015, Hart Energy analysts expect that number to increase to nearly 2.6 billion gallons. Ethanol demand alone is expected to increase by 500 million gallons during that time frame. For U.S. technology developers, the region offers an abundance of feedstocks such as agricultural wastes and sugarcane, but those seeking to prove their technologies will also need to confront a host of issues that could complicate the process. Many countries in Asia are still developing, and governments change hands every few years, so long-term regulatory support is hard to come by, according to Huiming Li, Asia director at Hart Energy, who also points out that there are no policies yet that compare to the U.S. renewable fuel standard. Policies that are in place are often created to benefit local producers, so U.S. companies would be well-served to form joint ventures with companies in targeted countries. Lack of infrastructure is another major issue that needs to be taken into consid-

eration. “It is a major, major issue that I do not think anybody in this space has paid due attention to, whether they be developing nextgeneration biofuels projects or first-generation biofuels projects,” Klein says. Unlike the U.S., where consumer access to fuels is the largest infrastructure issue, developers looking to Asia may also have to factor in such basic issues as adequate roads and electricity availability at the plant site. Still, the benefits of developing a project in Asia could outweigh the disadvantages if the economics of the overall project are solid, Li says. Like other regions of the world, countries in Asia are eager to advance next-generation biofuels production. China and Japan have the largest gasoline consumption in the region and are leading the push for cellulosic ethanol, but companies there are facing the same technological issues with scale-up as elsewhere and are looking to the U.S. for any available guidance, Li says. Because China is one of the largest agricultural countries in the world, agricultural wastes are particularly attractive potential feedstocks. “They are already using biomass for other applications like biogas combustion purposes, but they are also hoping to make use of the resources to produce cellulosic ethanol,”

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she says. Li expects China, India and Southeast Asia to be the main investment areas in the region because of the availability of agricultural waste and other energy crops. Hart Energy plans to release updated biofuels demand numbers for Asia in July. For now, ethanol development in that region is anybody’s game, Li says. Klein agrees and says that despite its challenges, Asia offers a lot of potential for expansion. “Conditions are ripe to do projects there,” she says. —Kris Bevill

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INTERNATIONAL

42 | Ethanol Producer Magazine | June 2012

INTERNATIONAL

Hungary for Ethanol U.S. contractor Fagen Inc. was key to building a corn-ethanol plant in Hungary By Holly Jessen

Dunafoldvar, Hungary, reminds John Handel of certain areas in the Midwest. “There are expanses of really nice agricultural

Shipping by Barge Located adjacent to the Danube River, Pannonia Ethanol in Dunafoldvar, Hungary, can load ethanol and distillers grains directly onto barges. The river flows southeast from Germany though four central and eastern European capitals before emptying into the Black Sea. Photo: ZOLTAN SCHAFER

land,” the project manager of Fagen Europe LLC tells EPM. “It is pretty well suited for corn production.” Besides that, like many other areas of the United States and the world, Hungary needs jobs and economic activity. Enter Pannonia Ethanol, a corn-to-ethanol plant, which began production this spring, that will produce up to 240 MMly (63.4 MMgy.) The facility was built by Ethanol Europe Renewables Ltd., a joint venture of the Fagen and Turley families, says Eric Sievers, CEO of Ethanol Europe. “Our plan is to develop, own and operate Fagan ethanol plants in Europe,” he adds. Fagen builds ICM Inc.-designed ethanol plants. The development company has already announced its intention to build a second ethanol plant in Mohacs, Hungary, about an hour away from the first plant. Construction at Mohacs, which will be the same size as the first, is expected to begin this summer. From there, the company has identified about a half dozen additional sites, located both in Hungary and in neighboring countries. “Hopefully, by the end of the summer we will be ready to announce our third [location], which is not in Hungary,” Sievers says. Mark Turley, the catalyst behind the development company, started out selling cars in Dublin and had built a successful international real estate business before exiting prior to the market crash. According to Seivers, Turley determined his next step would be investing in renewable energy. He took a year to study everything from solar energy, wind power and biofuels before ultimately setting his investment sights on ethanol. JUNE 2012 | Ethanol Producer Magazine | 43

INTERNATIONAL

HUNGARY Mohacs

Dunafoldvar

Landlocked Hungary is bordered by Slovakia and Ukraine to the north, Romania to the east, Serbia to the south and Slovenia and Austria to the west. Budapest is the capital and largest city of Hungary.

In searching for a partner, Turley had only one man in mind. “There was a decision made early on, that if we could get Ron Fagen to agree to build a plant in Europe, we would go ahead and create Ethanol Europe,” Sievers said. “And if he wouldn’t agree to that, there was no need to even form the company and no need to do a project. So, step No. 1 in our entire business was to figure out a way to get Fagen over to Europe.” Ethanol Europe is one of only a few investors working on building greenfield ethanol plants in Europe, confirms Rob Vierhout, sec-

retary general of ePURE, the European Producers Union of Renewable Ethanol. In the United Kingdom, Vivergo Fuels, a 420 MMly feed wheat-to-ethanol production facility, began commissioning in April. More progress is needed, however. The EU’s ethanol industry has production capacity for only about half the 14 billion liters needed to fulfill the Renewable Energy Directive. Passed in 2009, it sets what the European Commission describes as ambitious targets for all EU member states—aiming for 20 percent renewable energy, which includes 10 percent specifically in the transportation market, by 2020. The results, so far, have been lackluster, Sievers says. “It was supposed to lead to the type of investment boom that you saw in the U.S. in 2005 and it just didn’t happen,” he says. What’s the hold up? Vierhout lists four reasons, the first of which is the economic crisis. “There is simply less capital around,” he says. Second, the biofuels sector is completely under political control, which makes its future unknown. Finally, he points to the unsolved indirect land use change issue and the risk of imports from ethanolproducing countries. Sievers, on the other hand, identifies ethanol price versus cost of production as the main thing holding prospective investors from diving into ethanol. “The prevailing ethanol prices in Europe are not attractive to European producers, whereas, with a Fagen ethanol plant, the prices look attractive,” he says.

Down to the Last Detail

Site work began on the Dunafoldvar ethanol plant in summer 2010, with Fagen Europe employees mobilizing in the third quarter, Handel says. The plant is a typical 50 MMgy ICM/Fagen ethanol plant. In all, 16 Fagen employees each spent about a year in Hungary. A few, like Handel, brought families with them but the majority did not. While the Fagen employees brought experience building etha-

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nol plants, they also worked hand-in-hand with around 10 Hungarian nationals who made key contributions as well. These workers helped the Fagen employees navigate factors such as the language barrier and meeting European safety and electrical standards, for example. Some changes had to be made to the design to make it fit those standards. “Some of them are significant, some of them aren’t that noticeable,” he says. ICM worked with Fagen on the project in the same capacity it has in U.S. plants, providing process design and equipment, says Mark McCorkle, ICM project manager for the Dunafoldvar plant. Typically, an ICM employee comes to the site before it starts up. With the project in Hungary, the company sent an employee to the site to answer questions and provide guidance beginning in late January. A second employee later took his place and remained in Hungary until mid-May. Two other employees took trips to Hungary to help oversee the installation of the dryer system. In addition, about 15 Pannonia employees traveled to Lamberton, Minn., for ICM-led classroom and hands-on training in January. “This is our very first European project, and it has provided many challenges as well as opportunities, McCorkle says, adding that the team members did a tremendous job of learning how to work within EU requirements. That knowledge will come in handy for the Mohacs project, he adds. The ethanol plant is already poised to double capacity, with substantial groundwork in place, Sievers says, estimating that a quarter to

PHOTO: DYNATEK LOADING SYSTEMS

INTERNATIONAL

Cold and Snowy The Pannonia Ethanol plant is surrounded by a fence and is guarded 24 hours a day, seven days a week.

a third of the investment to expand has been made already. “We fully anticipate expanding the plant in the next year or two,” he says. The plant is powered with natural gas using a combined heat and power (CHP) system that will generate about one third of the plant’s electricity needs. Although CHP isn’t commonly implemented in U.S.

PHOTO: Fagen

INTERNATIONAL

PHOTO: Fagen

June An evaporator is installed at the Pannonia Ethanol plant. Construction of the plant is now complete.

PHOTO: FageN

September Workers prepare to pour concrete on the deck of an energy centrifuge.

October A sulfuric tank is put in place at the Hungarian ethanol plant.

INTERNATIONAL

PHOTO: DYNATEK LOADING SYSTEMS

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U.S. Installers A Dynatek DDGS loader is installed at the Pannonia Ethanol plant in Hungary.

ethanol plants, Europe’s power prices are about five times more expensive than in the U.S. “Here it’s just overwhelmingly compelling from an investment standpoint,” he says. To accomplish this, a small steam turbine was installed, Handel says. Steam from the plant’s boiler will pass through the turbine to turn a generator to create electricity. “It takes a little bit of the energy out of the steam and uses it to generate electricity,” he says. There are more projects the company can or will do to make the project even more environmentally friendly. First, CO2 capture will be implemented at a later date, Sievers says. While the company is not yet ready to announce a name, it’s in talks with a “strong commercial partner” it has worked with in the past and anticipates an offtake deal will be announced later in the year. Finally, although the company has discussed the possibility of building a biomass power plant at the facility, a final decision has not yet been made. “There’s nothing eminent,” Sievers says. A total of 75 direct jobs have been created at the plant. That’s more than twice the amount of people who work at a typical 50 MMgy plant in the U.S., he says. More employees are required because the facility will buy all its own corn and market all its own ethanol and distillers grains in-house. In ad-

dition, the facility has to be fenced in with 24-hour security. The reason for this is that, due to customs and excise requirements in Hungary, the company must ensure that none of the ethanol is leaving the facility for use as a beverage alcohol, which would require paying an additional tax. “As long as we use this as fuel ethanol, that tax is never paid,” he says.

With Open Arms

Ethanol Europe expects the ethanol produced at the Pannonia ethanol plant in Hungary will be exported to meet demand outside Hungary. In fact, the country has two existing Hungarian ethanol plants: one a sugar factory with ethanol production added on in recent years and the second an older distillery that mostly produces industrial ethanol, both of which export the majority of the ethanol produced. “We didn’t build our plant here in Hungary with any sort of concern at all for the Hungarian fuel market, the same way that someone building a plant in Iowa isn’t building the plant with any sort of eye to how much ethanol is used in Iowa,” Sievers explains. “Our market is not Hungary—our market is the European Union.” For one thing, although Hungary currently utilizes E6 and that percentage is

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JUNE 2012 | Ethanol Producer Magazine | 47

PHOTO: LASZLO TOTH, DONAFOLDVAR

PHOTO: JOZSEF NAGY, DONAFOLDVAR

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Donafoldvar The community of about 10,000 sent a delegation to Minnesota to see and smell what a U.S.-style ethanol plant would be like in their town.

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48 | Ethanol Producer Magazine | June 2012

rising, the market for ethanol is relatively small. Half of the vehicles in Europe run on diesel, Sievers points out. “One decent sized ethanol plant can supply all of Hungary’s needs.” So what is it that drew Ethanol Europe to build in Hungary? The feedstock supply is at the top of the list. About 8 million tons of corn is produced yearly in Hungary and, typically, half of that is exported. “Hungary has more corn surplus than any other country in Europe,” Sievers says, adding that there’s plenty of room for expansion through increased productivity. “The yields here are about 50 percent lower than U.S. yields and the past 20 years have been a very difficult period for the Hungarian farmer. The past two, three years of high corn prices and suddenly an ethanol plant like ours coming online mean that we anticipate Hungarian farmers are going to invest more in the land and invest more into equipment and fertilizer, so we anticipate that the yields will go up.” Sievers also credited the local community, its politicians and residents, for their support. That happened because the company worked hard to bring the people of Dunafoldvar on board, as they will continue to do within all communities where they de-

PHOTO: ADAM MAGYARI, DONAFOLDVAR

PHOTO: AGNES FORGACS, DONAFOLDVAR

INTERNATIONAL

Quiet town The newly completed Pannonia Ethanol plant in Donafoldvar will create about 75 jobs and a new market for corn.

velop projects. “Our development philosophy is only to do projects in communities that unequivocally want us to be there,” he says. Hungarian residents do have reason to be skeptical—their experience with ethanol production is a plant that Zoltan Reng, CEO of Pannonia Ethanol, calls “smelly and ugly.” So, the company took a group from Dunafoldvar and, later, Mohacs, to visit Highwater Ethanol LLC, a 55 MMgy Fagen/ICM plant in Lamberton, Minn. It gave the Hungarians a chance to see for themselves and ask questions. Those on the trips included mayors and other members of local government, famers, local businesspeople and even a school teacher. “These people had to see to believe and to have no doubts in their mind about the positive affects to the community,” Reng says. “Both delegations left the U.S. satisfied and said now they can tell their communities that there is nothing to worry about, there will be no smell or noise, and the plant will look extremely impressive.” Author: Holly Jessen Associate Editor, Ethanol Producer Magazine (701) 738-4946 hjessen@bbiinternational.com

JUNE 2012 | Ethanol Producer Magazine | 49

WOMEN

Groundbreakers: Women in

Biofuels

Five women working on the development of next-generation biofuels tell their stories By Holly Jessen

They are the CEOs and managers of multimillion dollar corporations. Some are scientists, safety experts and chemical engineers. While each has had widely different experiences, one thing they have in common is that they are women, working in careers where most of their colleagues are men. Ethanol Producer Magazine talked to five women who have achieved notable success in their fields. They handle the reality of working in a male-dominated world in different ways and provide insight into work involved in developing second-generation alternative fuels. Kef Kasdin, CEO of start-up company Proterro, has worked in male-dominated careers from day one and has gotten so used to it she barely notices it anymore. “I’ve never been in a majority situation and it doesn’t faze me necessarily,” she says. Recently, she spoke at a conference and was in the unusual situation of being one of three female speakers on a panel. Only the fourth speaker and the moderator were male. Despite signs of progress such as that, she can’t deny that the good old boys network exists—but it has never stopped her. “In some respects you get a little more visibility when you are the only woman in a room— sometimes that’s good, sometimes that’s bad,” she says with a laugh. When asked if she has encountered any discrimination working as a woman in a male-dominated field, scientist Susan Leschine’s answer is a definite yes. “There really is a glass ceiling,” she says, pointing to statistics that show female faculty members at universities generally have lower salaries than males with equivalent experience and the fact that there are very few women working in leadership or 52 | Ethanol Producer Magazine | June 2012

WOMEN

Breaking it Down Susan Leschine, a professor and researcher at the University of Massachusetts Amherstâ&#x20AC;&#x2122;s department of Microbiology, has worked to identify microbial catalysts that could be used to convert biomass to alternative fuels. PHOTO: JIM GIPE

JUNE 2012 | Ethanol Producer Magazine | 53

administrative positions. â&#x20AC;&#x153;Women scientists often face numerous prejudices that are often very, very subtle,â&#x20AC;? she says. Stillâ&#x20AC;&#x201D;not wanting to generalizeâ&#x20AC;&#x201D;she points out that there are men in her field who donâ&#x20AC;&#x2122;t discriminate based on gender and even cases of women who do. â&#x20AC;&#x153;I have male colleagues who are incredibly supportive and encouraging and get it all the way, and who will go out of their way to promote me and other women scientists,â&#x20AC;? she says. BP Biofuel is an example of a company that is working to â&#x20AC;&#x153;ensure a balanced and diverse workforceâ&#x20AC;? while still hiring the most capable employees for the job, according to a statement on the companyâ&#x20AC;&#x2122;s recruitment strategy. At the Global Technology Center, the companyâ&#x20AC;&#x2122;s research and development center in San Diego, about 33 percent of current staff are women and, in 2011, 58 percent of all new full-time hires were women. The company provided EPM with biographical information about seven women working in biofuel-related jobs, including Katrina Landis, CEO of BP Alternative Energy, and Sue Ellerbusch, president of BP Biofuels North America, women working at the top level of the companyâ&#x20AC;&#x2122;s biofuels business. Other women working for BP Biofuels include Kirsty Salmon, head of research, Ruth Scotti, market development manager, Tami Myers,

agricultural land specialist, Nicole Coffee, operations manager, and Tabitha Laser, agricultural operations health, safety, security and environmental manager, the last two of whom EPM interviewed for this story. Coffee told EPM the companyâ&#x20AC;&#x2122;s efforts to hire women are apparent. Although she has, in a few rare cases, worked with other female engineers, her current job is her first as manager. And, sheâ&#x20AC;&#x2122;s never before worked for a company has had women serving in positions above her, she says, pointing out that two of the five people above her in the chain of command are women. Coffee particularly admires Ellerbusch and Landis for their work in the biofuels arena. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s amazing what those two have been able to do,â&#x20AC;? she says. Jennifer Holmgren, CEO of LanzaTech, says sheâ&#x20AC;&#x2122;s seeing more women entering the clean technology space than ever before, though the majority still are men. â&#x20AC;&#x153;This is a trend that I see continuing in the coming years as the industry grows and creates additional opportunities for both men and women to apply their skills and training to solve big problems,â&#x20AC;? Holmgren tells EPM. The U.S. DOE sees the importance of harnessing the talents of women in the clean energy sector. In late April, the DOE and the MIT Energy Initiative announced a plan to implement the Clean Energy Education and

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54 | Ethanol Producer Magazine | June 2012

Game Changer Kef Kasdin, CEO of Proterro, began her career working in the communications technology industry.

Empowerment initiative. Known as C3E, the program aims to attract more women to clean energy careers and support their advancement into leadership positions. â&#x20AC;&#x153;We are excited to join with MIT to ensure we are leveraging the skills and experiences of women nationwide to help solve important national and international energy challenges,â&#x20AC;?

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says Energy Secretary Steven Chu. C3E was launched at the first Clean Energy Ministerial in July 2010. The stories of these five women show the many paths that lead to clean energy careers.

Microbe Love

Leschine discovered Clostridium phytofermentans, dubbed the Q Microbe, the proprietary microbe Qteros designed its consolidated bioprocessing technology around. One of the authors on the patent, Leschine continues teaching and researching at the University of Massachusetts Amherst’s department of microbiology, where she did her postdoctoral work, and isn’t active in Qteros. When she was growing up, there weren’t many role models for women that didn’t follow the accepted path of getting married and raising children. The idea of becoming a scientist wasn’t even on her radar until her senior year in college. “I was told that girls don’t like science and if they do that means they want to be, oh—I don’t know—maybe a nurse,” she says. A fascination with the then-emerging field of molecular biology led her to earn a doctorate in biophysics and microbiology from the University of Pittsburg in 1975. A course in marine biology, which covered the

topic of microbial diversity, sealed the deal. “I fell in love with microbes,” she says. Ever since then, Leschine has focused her attention on microbes. She’s interested in the fundamental question of the role microbes play in the global carbon cycle, breaking down plant fiber into CO2 and methane, and how those microbes convert plant biomass into products that are useful to society. In 1996, that quest led her and a lab assistant to take a soil sample from an intermittent stream that flows into Quabbin Reservoir, not far from the university. Although they had soil samples from all over the world, it was that one—collected in their backyard— which launched Qteros. “It was the only one that we got that was very different and it was the only one with these amazing special properties that suggested it would be a good catalyst for cellulosic ethanol production,” she says. At the time, Leschine was disappointed with the lack of diversity they found in that microbe study. Today, she knows better. It’s not that the Q Microbe is rare, she explains, it’s just very difficult to separate from soil samples. Overall, microbes are extremely diverse. “We know less than one-tenth of one percent of the microbes that are out there,” she says. In the meantime, her fascination with

microbes has not waned—she’s still isolating new microbes. Currently, she’s working on a project to identify microbial catalysts to convert municipal solid waste into biofuels and various other products. “I don’t know yet how that will fall out in terms of the products, but I would make a guess that ethanol will be the main product,” she says. And, she’s still working on Q Microberelated research. As it turns out, that microbe is part of a large family of microbes that are an important part of the human gut, aiding in the digestion of plants. “Remember, eat your vegetables?” she asks with a laugh. “These microbes that we’ve discovered—not only are they useful for making ethanol—but it turns out that they are part of a group of microbes that may be important for our health.”

Breaking Barriers

Proterro’s Kasdin didn’t start out her career with any idea she would be working in alternative energy. She earned an undergraduate degree in operations research, part of the engineering department at Princeton University. “It gave me a broad understanding of how to solve large systemic problems and I think that’s what the energy system is all about,” she says. After working for a few years in management consulting, she went back and earned her masters of business ad-

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PHOTO: LANZATECH

WOMEN

Making it Work LanzaTech acquired the failed Range Fuels plant in early January and plans to restart the facility as Freedom Pines Biorefinery. The facility will convert waste wood into ethanol and renewable chemicals.

ministration at Stanford University. Her one regret? Not taking more chemistry classes, she says, adding that she’s self-taught and surrounds herself with capable people to make up for it. Kasdin’s background is primarily in communications technologies. As part of that, she spent nine years working for 3Com Corp., where she was general manager of a $1 billion division. Then, nine years ago she helped form Princeton, N.J.-based Battelle Ventures, a $220 million early-stage venture capital fund, of which she is a general partner. Battelle Ventures helps launch new companies developed in university, industrial or government laboratories. One fertile ground for that is through Battelle Ventures’ sole limited partner, Battelle Memorial Institute, which manages or co-manages National Renewable Energy Laboratory, Pacific Northwest National Laboratory and Oak Ridge National Laboratory for the U.S. DOE. That’s where her career took the alternative energy path. After working to create several companies from early-stage technologies, a conversation with John Aikens led to the 56 | Ethanol Producer Magazine | June 2012

founding of Proterro. Aikens, who is now the chief technical officer of Proterro, introduced the idea of using an organism to produce sugar directly without an agricultural-based process. Four years ago, Kasdin stepped in as the CEO—as she had for Battelle Venturebacked companies in the past—and today the company has a sucrose-producing organism and a working model of its photobioreactor system. “I’ve done this as Proterro CEO for longer than any of the other companies that we created at Battelle Ventures, and it really has become my full time job,” she says, adding that she believes Proterro’s technology is a “game changing idea.”

Focus on the Prize

Another high-profile woman working at the helm of a renewable energy company is Holmgren, of LanzaTech. The company is working to bring online the world’s first waste gas-to-ethanol facility in China, licensed its technology to produce fuels from syngas produced from municipal solid waste in India, and acquired the former Range Fuels wood-to-ethanol facility in Soperton,

Ga., with plans to restart it as Freedom Pines Biorefinery. “I learned early in my career that the key to success is not just having a novel technology with a lot of potential,” she says. “You also need to be serious about deploying it into the global economy. You have to make a business out of it. Transitioning a technology from the lab to a commercial success is harder than most people think.” Holmgren takes “great joy” from working with a team that has taken the LanzaTech technology from the lab to a global renewable energy business that will have benefits far beyond just profit. Harnessing waste gases for renewable fuel or power will help countries democratize energy supplies, reduce reliance on imported fuels and also enable more people to attain better standards of living, she says. Science has always interested Holmgren. Like many other children, she first wanted to be an astronaut after NASA landed a man on the moon when she was nine years old. In high school, she had a chemistry teacher whose enthusiasm was infectious. She earned an undergraduate degree from Harvey Mudd College, a masters of business administration from the University of Chicago and a doctorate from the University of Illinois at Urbana-Champaign. She has coauthored 50 U.S. patents, 20 scientific publications and, in 2003, received an award from the Council for Chemical Research for outstanding contribution to chemistry and chemical engineering. Although there are risks in the business Holmgren works in, she has a natural positive outlook that helps her focus on potential for good outcomes rather than failure. “In the business I am in now, you need to be aware of the risks, but you must continually focus on the prize,” she says. Holmgren has more than 20 years of experience in the energy sector, including working as vice president and general manager of the Renewable Energy and Chemicals business unit at UOP LLC, a Honeywell company. In that job she led the company’s renewable energy business from inception to commercialization of several biofuels technologies. “I was proud to work on the first renewable aviation fuel projects and be part of the team that really made history by revolutionizing

WOMEN

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aviation fuel,â&#x20AC;? she says. â&#x20AC;&#x153;The notion that a renewable aviation fuel could be produced and certified for flight was completely novel and everyone said you couldnâ&#x20AC;&#x2122;t do it when we started the tech program. I like to work on things people say canâ&#x20AC;&#x2122;t be done.â&#x20AC;?

BP Biofuels Backs Women

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PHOTO: LANZATECH

While a lot of people believe cellulosic ethanol will play an important role in the future, BP employee Coffee has the experience to back that statement up. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s not the whole solution, but it is a piece of it,â&#x20AC;? she tells EPM. Coffee is an operations manager at BPâ&#x20AC;&#x2122;s Jennings, La., 1.4 MMgy cellulosic ethanol demonstration plantâ&#x20AC;&#x201D;the largest operational cellulosic ethanol plant in North America. She was working in the chemical industry when she was hired on by Verenium in 2007 and became a BP employee in 2010, when the company purchased its former joint venture partnerâ&#x20AC;&#x2122;s biofuel assets. It was an exciting and intriguing opportunity, she says, to come in on the ground floor of the brand-new industry of cellulosic ethanol. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s still just as challenging as when I came to work here,â&#x20AC;? she says. â&#x20AC;&#x153;Every aspect of it is definitely the most challenging, most exciting career move I could have ever made.â&#x20AC;? Although the demo plant is managed as a 24/7 facility, in reality itâ&#x20AC;&#x2122;s a testing facility that shuts down periodically so the plant can be modified. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s a continuous cycle,â&#x20AC;? Coffee says. The goal is to gain understanding of cellulosic ethanol technology in order to reach commercial-scale production. â&#x20AC;&#x153;We bridge the gap between the research and development thatâ&#x20AC;&#x2122;s being done in San Diego at the Global Technology Center, to the engineering group that is designing the commercial facilities,â&#x20AC;? she says. Her job is to make sure the facility has everything it needs for safe and reliable operation. Coffeeâ&#x20AC;&#x2122;s trajectory to the cellulosic ethanol industry started with a love of math and science. She decided to pursue a degree in chemical engineering, since she enjoyed chemistry more than electrical or mechanical engineering. Still, it wasnâ&#x20AC;&#x2122;t until the summer before she graduated, when she completed an internship at a chemical plant, that she really understood what kind of a job she was

Going Commercial Jennifer Holmgren, CEO of LanzaTech, says 40 percent of the LanzaTech executive team is female.

signing up for. â&#x20AC;&#x153;I came out completely rejuvenated and said, â&#x20AC;&#x2DC;This is definitely what I want to do,â&#x20AC;&#x2122;â&#x20AC;? she says. â&#x20AC;&#x153;It was reaffirming that the decisions I had made were the correct decisions.â&#x20AC;? After graduating from Louisiana Technical University, she worked for 19 years in the petrochemical industry in operations, research and development and technology development. Almost 1,000 miles away from the BP demo plant, the company is working to build a 36 MMgy cellulosic ethanol plant in Lorida, Fla. As part of that effort, planting of energy grasses and energy cane has already begun and construction on the biofuels facility is expected to begin this year. BP employee Laser, a safety expert with 19 years of experience, was hired more than a year ago to make sure that the companyâ&#x20AC;&#x2122;s strong safety culture translated into best practices for agricultural safety. Her job is to work with managers, employees and contractors, yes, but the list includes farmers as well. â&#x20AC;&#x153;We are also trying to communicate best practices across the board in agriculture, so that we can improve processes everywhere,â&#x20AC;? she says. Itâ&#x20AC;&#x2122;s a huge challenge and an opportunity. This is Laserâ&#x20AC;&#x2122;s first time working in the alternative energy field and sheâ&#x20AC;&#x2122;s somewhat new in working in the agricultural arena as well.

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Valuation for financing Establishing an asking price Expert witness testimony Partial interest valuation Few certified appraisers in the United States specialize in ethanol plant and related biofuels properties. The firm of Natwick Associates offers more than 50 years of worldwide experience. Your appraisal will be completed by a certified general appraiser and conform to all state and federal appraisal standards.

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58 | Ethanol Producer Magazine | June 2012

PHOTO: BP

• • • •

PHOTO: BP

The Specialist in Biofuels Plant Appraisals

Safety first Tabitha Laser is an agricultural operations health, safety, security and environmental manager for BP.

Bridging the Gap Nicole Coffee works as an operations manager at BP’s 1.4 MMgy cellulosic ethanol demonstration plant in Louisiana.

The most exciting thing about it, she says, is the chance to start work at the ground level, “before everything is already broke.” She’s also excited about the company’s ultimate goal—producing biofuels from biomass. “You can only utilize resources that are coming from inside the earth for so long, you’re going to need some kind of sustainable energy going forward,” she says. Laser points to a tragic accident she witnessed as the origin of her passion for safety. At three years old, she watched her father attempt to light the barbeque with gasoline after he ran out of lighter fluid. He siphoned gas and threw it from 10 feet. The flames flashed back, setting him on fire, requiring about nine months in burn treatment. The incident left physical scars on her father and psychological scars on the entire family. “I remember like it was yesterday,” she says. “I think, honestly, that’s where it started. As a little girl I wanted to save the world.” When she entered college she went through one semester with a major in criminal psychology. Realizing she wanted to work to help change behaviors before people were committed, Laser worked with the dean of

her school to structure a degree that fit her interests. She went on to earn an undergraduate degree in industrial and behavioral safety engineering, followed by a masters degree in safety management, both from the University of Central Missouri. “You have to actually address the behavior to make a difference,” she says. In the almost two decades before she joined the BP team, Laser managed safety programs for a wide variety of industries. Some of the companies she has worked for include TruGreen, Terminix, General Mills, Charter Communications and 3M. While the companies often already had safety programs in place, her passion is starting from scratch. “A lot of my intent was going into a company that had no safety program whatsoever and trying to help them build a world-class safety program that would help ultimately save lives,” she says. Author: Holly Jessen Associate Editor, Ethanol Producer Magazine (701) 738-4946 hjessen@bbiinternational.com

FROM SEED TO PUMP, WE’RE WITH YOU EVERY STEP OF THE WAY At DuPont, we are committed to developing innovative solutions that enable renewable fuels. That is why we invest in a broad set of solutions and know-how – from improving crop yields, to fermentation processes within production plants. And that is why we are applying our integrated science and energy into making new biofuel technologies a reality.

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Welcome to The Global Collaboratory™ . To find out more, please visit www.dupont.com/biofuels

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Copyright © 2012 DuPont. All rights reserved. The DuPont Oval Logo, DuPont™, Genencor® , the Leaf Globe, and all products denoted with ® or ™ are registered trademarks or trademarks of E. I. du Pont de Nemours and Company or its affiliates.

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ENVIRONMENTALISM

62 | Ethanol Producer Magazine | June 2012

ENVIRONMENTALISM

Information

is Freedom Josh and Rebecca Tickell jauntily wear two hats—environmentalist and ethanol supporter—terms some would claim are at odds By HOLLY JESSEN

Journey of Truth The Freedom Bus ran on E85 for more than 90 percent of the Freedom Tour conducted by documentary producers Rebecca and Josh Tickell.

Looking back a year after a special showing of their documentary, Freedom, at the International Fuel Ethanol Workshop & Expo, Josh and Rebecca Tickell reflect on what they learned as they toured the U.S. showing the film and interacting with audiences.

PHOTO: SNOWDEN BISHOP, AZGREEN MAGAZINE

JUNE 2012 | Ethanol Producer Magazine | 63

ENVIRONMENTALISM

Although the three and a half month tour of 50 cities is now over, work to spread the message is far from over. This year, they have big plans to keep the momentum going through their nonprofit organization, “I’ll Be the One,” formerly known as the Veggie Van Organization. Their first plan of attack is to get educational materials, including student and teacher manuals, to 10,000 schools. Second, the film will be released on television late in the year, with possible showings in select theaters as well as other formats, such as Netflix, iTunes and Pay-Per-View, Josh says. In the meantime, they encourage the ethanol industry to use their movie to reach

64 | Ethanol Producer Magazine | June 2012

others with the truth about ethanol. Besides distributing copies to people they know, Josh suggests looking into booking viewings at local colleges. “If you really want to shift Congress, shift the next generation of American engineers and their scientists and their biologists and their policy makers,” he says. “I think we need to focus more energy there, because we keep trying to deal with the people we have, but some of those people are just not going to change.”

Getting There

In the past, Josh has said negative things about ethanol. Some of those comments

appeared in his film Fuel, which won the documentary audience award at the 2008 Sundance Film Festival. After researching the topic himself for the documentary film Freedom, however, he’s publically taking those words back. Today, Josh believes his prejudices were the result of an “insidious and strategic disinformation campaign” against the renewable fuel. “As somebody who was very indoctrinated from that movement, I had very specific perceptions against ethanol,” he tells Ethanol Producer Magazine. The catalyst for his change of heart was the BP oil spill in the Gulf of Mexico. Josh and his wife began filming and didn’t stop un-

ENVIRONMENTALISM

til they had enough material for two films, The Big Fix, about the oil spill, and Freedom. The process of making these films was a journey to the truth—uncovering the lies about the oil spill as well as about ethanol, Josh says. As the husband and wife team traveled around, visiting ethanol production facilities and speaking to people on both sides of the is-

sue they realized they had been in the wrong about ethanol. “This is really the only option that America has near term to deal with our fossil fuel dependence,” he says, adding later that, “The positives well, and truly, outweigh any negatives.” The Tickells consider Freedom a tool for changing other people’s minds about ethanol.

They watched it happen during the Freedom Tour, which ended with a final showing in Washington, D.C., on Oct. 26. While they mentally prepared for push back—even protests—in some of the locations, that didn’t happen. Instead many attendees accepted their message and got inspired. “It was really amazing,” Rebecca says. “I know that it

JUNE 2012 | Ethanol Producer Magazine | 65

ENVIRONMENTALISM

helped shift the tide.” At almost every one of the 50 scheduled stops, there were former ethanol haters who thanked the Tickells for giving them access to the truth about ethanol. “People got kind of upset that they had got-

66 | Ethanol Producer Magazine | June 2012

ten the wool pulled over their eyes,” she says. “They felt like they had been duped.” San Francisco and Sedona, Ariz., were two locations that stand out in Josh’s mind. He was pleased with a standing ovation in

San Francisco, a left-leaning, highly environmental community. In Sedona, 600 people attended and work is now ongoing to install the city’s first E85 pump. Overall, Josh agrees with his wife that the tour was extremely successful. Still, he realizes that the misinformation campaign about ethanol has a strong grip on many. “Where people were neutral, I feel we moved people to positive,” he says. “Where they were negative, we often moved them to neutral.” The Freedom Bus was another tool the Tickells had in their arsenal. The bus, a 1986 Blue Bird school bus with a General Motors 8.1 liter V8 gasoline engine in it, contained a mobile learning lab. Before starting the Freedom Tour, the Tickells attempted to contact an unresponsive GM about using E85 in a nonflex-fuel engine, Josh says. In the end, they went ahead and installed an Americanmade conversion kit that made it possible to run the bus on up to E100. Although E85 was not available in some locations, the bus ran on E85 for more than 90 percent of the tour. Occasionally switching from E85 to gasoline provided an unexpected learning opportunity. When running on E85, not only were there no noxious odors on the bus, but putting a hand up to the tailpipe of the bus resulted in getting a wet hand, as the bus emitted water vapor. When the bus ran on gas, however, putting a piece of paper up to the tailpipe turned the paper brown. “From a practical standpoint, I think it’s really important to try it and use it,” Josh says of E85.

ENVIRONMENTALISM

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Propaganda Machine

In the film, the Tickells reveal a coordinated campaign to discredit ethanol, which many have fallen for, hook, line and sinker. Yet, when asked, these arm-chair critics often can’t clearly articulate what is so bad about ethanol. Josh calls it the indoctrination of wishful thinking. Rather than using ethanol, a very good solution that already exists, many people would rather wait until the perfect solution comes along. In the meantime, those people continue to get their power from petroleum. The use of oil is so ingrained in our society, Rebecca says, that we fail to look at the total impact. For example, the oil spill in the Gulf of Mexico had a very personal impact on her. Although the Tickells did their filming on the beaches of Louisiana after it was reported in the media that it was safe again, she came into contact with oil and oil dispersant, a toxic combination that resulted in 13 upper respiratory infections and other medical problems long after they left. In fact, she may never be able to have children due to her exposure. “I had no idea that the impact of being down there would continue to affect me after we left the Gulf,” she says. Something needs to shake Americans out of the willingness to go along with the status quo. “We can be green all day long and talk about ethanol until we are blue in the face,

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ENVIRONMENTALISM

but for the most part, almost all Americans are going to get in their car and they’re going to go to a gas station and they are going to fill up on gasoline,” she says. “So there’s overwhelming agreement in our society that even though we have a sense that there’s something not right—it’s just what we’re going to continue to do.” It’s a big battle, she acknowledges, especially for a small nonprofit organization. Still, it’s not something she’s willing to give up on. “We’re going to continue to fight it despite the complacency in our society,” she says. “Eventually we’ll prevail, there’s no doubt about it. Eventually people will understand.”

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

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Whatâ&#x20AC;&#x2122;s Left? The industry inches E15 closer to the marketplace By KRIS BEVILL

Earlier this year, the entrance of E15 into the marketplace seemed as elusive to the ethanol industry, even to believers, as the pot of gold at the end of the rainbowâ&#x20AC;&#x201D;and no one would openly predict a time frame for it. But the ethanol industry does not give up or back away from hard work, and in early March, the perseverance of those who spent nearly three years wading through the mire of fuels regulations began to pay off. With a series of approvals from the U.S. EPA related to the sale of E15, by late April, it appeared that consumers in at least a few states would soon, finally have the ability to fill their 2001 and newer vehicles with the fuel blend.

70 | Ethanol Producer Magazine | June 2012

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JUNE 2012 | Ethanol Producer Magazine | 71

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Lengthy List

Although the EPA issued the second of its two-part E15 waiver decision in 2009, the approval brought forth a lengthy checklist of items that had to be accomplished before the fuel could be legally sold. Technical experts at the Renewable Fuels Association, led by Kristy Moore, vice president of technical services, took those challenges in stride and began working to resolve them even before the EPA issued its final E15 approval.

Labels

The first item on the list to be cleared was the creation of the dispenser label, which the EPA finalized a year ago. Opponents, who filed a lawsuit challenging the ruling in September, claim the label is insufficient but at a recent House Energy and Commerce subcommittee hearing, a representative from the National Association of Convenience Stores admitted that the E15 label is about an inch larger than any other fuel label and will be difficult to miss on a pump. The labels play a key role in the EPA’s plan to mitigate consumer misfueling and are required to be displayed on every E15 pump.

Misfueling Mitigation Plan

The next big victory came this March, when the agency approved a model Misfueling Mitigation Plan for E15 submitted by the RFA that companies can use to demonstrate compliance of E15 regulations, including labeling of dispensers, documenting fuel transfer and completing compliance surveys.

Fuel Surveys

Companies must pay for samples of E15 and other surrounding fuels to be tested for ethanol content and Reid vapor pressure (RVP) every year and verify the correct placement of required E15 labels. The RFA, in conjunction with the Reformulated Gasoline Survey Association and other obligated parties, developed a sample survey that was submitted and approved shortly after the model MMP. On April 23, the RFA announced that 99 ethanol producers, representing 60 percent of the total U.S. ethanol capacity, had ponied up the money to fund the fuel survey, even though retail stations

will be the actual participants. “The ethanol industry wasn’t required to pay for [the fuel survey], but if it was to get done so that E15 could be offered, it fell upon the ethanol industry to pay for it,” says Matt Hartwig, RFA communications director. The funding will pay for more than 7,500 fuel samples to be collected from retailers nationwide and tested by the Reformulated Gasoline Survey Association for ethanol content. If E15 is detected in the samples, the association will verify that those retailers are displaying the appropriate labels.

Fuel Registration

The Clean Air Act requires all fuel manufacturers and fuel additive manufacturers to register their products with the EPA before making them commercially available, and E15 is no exception. On April 2, the EPA approved registrations submitted by 20 ethanol companies. Poet Biorefining – Caro, a 53 MMgy facility in Michigan, was the first of the ethanol giant’s 27 facilities to register. The registration process was “pretty straight forward” and the company fully supports E15 implementation. “It’s one of Poet’s top priorities to be ready to provide the fuel when the market is ready,” a Poet representative says. All of Poet’s plants have signed up to support the retail fuel survey and will submit the MMP as required by the EPA in order to help ensure safe distribution of the new fuel, he adds. Other companies to register their fuel for use in E15 during April were Archer Daniels Midland Co., Abengoa Bioenergy Holding U.S. Inc., White Energy Inc., Cargill Inc., Tate & Lyle Ingredients Americas LLC, Biofuel Energy Corp., Absolute Energy LLC, Amaizing Energy LLC, Golden Grain Energy LLC, Little Sioux Corn Processors LLLP, Adkins Energy LLC, New Energy Corp., Nesika Energy LLC, Western Plains Energy LLC, Commonwealth AgriEnergy LLC, Chippewa Valley Ethanol Co., Standard Ethanol LLC, Glacial Lakes Corn Processors and Ace Ethanol LLC.

State Specs

While the EPA’s requirements may have been met, producers and retailers must also comply with state specifications. Kansas is

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Kansas retailer ready for E15 Scott Zaremba was one of the first retailers in the nation to install a blender pump and expects to be one of the first to offer E15 to customers driving 2001 and newer vehicles. The owner of Zarco 66 Inc. operates eight stations in four counties outside the Kansas City metro area, all of which currently have blender pumps. In late April, Zaremba said he planned to switch the side E15 is offered on his blender pumps as soon as all of the federally required components were in place, possibly as early as May 1. Issues raised by opponents of E15 are not a big concern for Zaremba, who says he is confident the mitigation plan for E15 will provide him with necessary liability protection. “The Misfueling Mitigation Plan that’s in place should solve any of those problems that

expected to be one of the first states to make E15 available, thanks largely to the work of the RFA and the state’s department of agriculture, according to Sue Schulte, director of communications at the Kansas Corn Growers Association. The RFA has worked closely with the KCGA and the state’s weights and measures division on implementation efforts in Kansas, she says, and she gives much credit to the agriculture department for taking a common sense approach to ethanol in general. “Over the years, our Department of Agriculture has been a leader in things like that,” she says, pointing out that Kansas was also the first state to launch a pilot program for blender pumps. There are no statutes that need to be changed in Kansas before E15 can be sold and Schulte anticipates the first retailers could be ready to offer it to their customers in May. The Iowa Department of Agriculture and Land Stewardship sent a memo to the Iowa Renewable Fuels Association and the Petroleum Marketers and Convenience Stores of Iowa in March, outlining the steps that the department’s Weights and Measures Bureau require retailers to take before selling E15. The list was basic and included fuel registration with the EPA and proper identification of the fuels through required labels. It is expected that Iowa retailers will also soon begin offering E15 for 2001 and newer vehicles.

might happen for a retailer, so we feel very comfortable with being able to dispense to the motoring public a local, American-made fuel,” he says. Claims that E15 will completely displace E10 are also unfounded. “I think it’s going to be an evolution over time as we move to E15,” he says. “We still have to have products available for year 2000 and older vehicles. We’re at the starting point for where we need to be able to incorporate more American-made fuels instead of importing crude oil. This is our next progressive step.” As for consumer demand for E15, Zaremba says he’ll find out when he makes it available. “As soon as we educate the consumer on what it is, we believe there will be a good demand for it,” he says. “In renewable fuels, it’s all about educating the consumer.”

RVP

A major complexity that remains is the issue of RVP. The EPA allows fuel blends containing 9 to 10 percent ethanol to exceed the 9.0 psi RVP requirement by 1 pound from June 1 to Sept. 15 but did not grant the same exception for E15, which means refiners blending for E15 will need to use a different blendstock for half the year. This requirement makes it difficult and expensive for blenders to offer E15 in those areas of the country requiring reformulated gasoline in the summer months and may essentially shut E15 out of those markets during those times. The ethanol and petroleum industries fought the EPA’s decision regarding RVP requirements for E15, pointing to evidence that suggests the vapor pressure in ethanol blends tops out at 10 percent ethanol, and the RFA is continuing the effort to convince the agency that it should grant an RVP waiver for E15 as well as E10. For now, however, the issue remains unsolved.

Retailer Liability

The decision to offer E15 to approved consumers ultimately falls on the retailer and many have expressed serious concern with potential liability. Several groups have suggested that it will be nearly impossible to prevent consumer misfueling and said the threat of lawsuits outweighs any potential benefits. Additionally, current federal regulations make

it difficult for retailers to certify some existing infrastructure for use with higher ethanol blends, which means that they would have to pay a hefty price to install new equipment. A bill introduced in both houses of Congress in late March addresses both of those issues. The Domestic Fuels Protection Act of 2012 streamlines the EPA’s approval process to allow existing underground storage tanks and fuel dispensers to be used for a range of fuels, including E15. It also exempts retailers from any damages that could occur as a result of misfueling by consumers, as long as the retailer complied with the EPA’s misfueling regulations. Bill sponsor Sen. John Hoeven, R-N.D., stressed the importance of the bill for consumers during remarks delivered April 18 at the RFA’s Washington Legislative Forum. “We need to make all fuels available to American consumers and businesses, and we need to do so by using market-based measures that increase competition and remove bureaucratic obstacles to producing and marketing renewable fuels,” he said. “This is really about giving customers more choice and better prices at the pump by empowering retailers to market multiple fuels using the same equipment. That’s good for the customer, good for business and good for the nation.” Author: Kris Bevill Associate Editor, Ethanol Producer Magazine (701) 540-6846 kbevill@bbiinternational.com

JUNE 2012 | Ethanol Producer Magazine | 73

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How to Choose? There are several companies worldwide working to develop seaweed-to-biofuels technology, but Sea6 Energy and Novozymes are the first to focus on red seaweed, which is a variety that prefers tropical waters. PHOTO: NOVOZYMES

76 | Ethanol Producer Magazine | June 2012

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Offshore Ethanol Sea6 Energy sees seaweedto-ethanol possibilities beyond the horizon By KRIS BEVILL

Imagine an offshore oil rig surrounded by large fields of red seaweed floating just below the surface. About six times each year, the rig is partially converted to a seaweed processing facility—the seaweed is harvested, liquefied and processed into ethanol, oil or natural gas, and then transported to the shore for distribution. Or perhaps some oil rigs are retired from fossil fuel service completely and retrofitted for servicing seaweed and other renewable, sustainable energy sources instead. Fantasy, or reality? At the present time, neither option is possible, but the founders of India-based Sea6 Energy envision that within the next decade, symbiotic relationships between seaweed farms and offshore oil rigs are entirely feasible, and they want to be the first to do it.

Forming a Plan

In 2010, a small group of alumni from the Indian Institute of Technology Madras created Sea6 Energy with the specific goal of creating a solution to meet growing fuel demand in India by utilizing algae to produce biofuels in the most sustainable fashion possible. Seaweed was not the first choice, however. Before the group zeroed in on seaweed, and red seaweed specifically, they explored the option of using microalgae as a feedstock. That approach was discounted after they determined that large scale production of microalgae-to-biofuels in a sustainable fashion would require the input of more energy than it would produce. Wastewater-based energy generation could be a viable area for microalgae, but because it’s a niche market for development, that option lacked the potential to provide the massive amounts of fuel required to displace a portion of India’s fuel demand. The researchers concluded that algae just wasn’t the answer for their problem. They found this especially disappointing because India doesn’t have a land base comparable to the U.S. and Brazil available for ethanol production, and they believed aquatic-based biofuel production would be the fix. After exhausting the microalJUNE 2012 | Ethanol Producer Magazine | 77

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gae options, the group nearly called off the operation. “Then, one afternoon over a cup of coffee, we said, ‘Hey, nature has already solved this problem. It’s called seaweed,’” says Shrikumar Suryanarayan, chairman of Sea6 Energy. “They sit in the sea, they grab nutrients from the water that are passing by, they grow to be large, so harvesting is not a problem. The only thing we discovered is that, as much as we wanted to, we couldn’t find a seaweed that was doing what microalgae do—produce oil.” Seaweed does, however, produce carbohydrates, similar to land plants. The galactose polymer produced in seaweed is a six-carbon sugar (hence the company name Sea6, for marine six-carbon sugars) and therefore offered the potential for biofuel conversion. The researchers set out to explore cultivation processes and the biochemistry that would convert it to fuel. They determined that not only would it be possible to use seaweed for ethanol but the process could be carried out

in such a way that food versus fuel debates and fresh water usage concerns would be nonissues. “That’s what made us all so excited about this whole project,” Suryanarayan says.

Technical, Logistical Aspects

Once seaweed became the feedstock of choice, Sea6 officials narrowed down the selection even further to focus on red seaweed, which grows very well in tropical waters and has been cultivated and processed for use as a food additive for many years. Other companies, such as Bio Architecture Lab Inc., are focusing their operations on seaweed types that flourish in temperate climates, but Sea6 opted for a tropical strain because it better suits India’s climate, and because the growth area can be extended to encompass a huge area. Suryanarayan estimates that red seaweed could be grown anywhere plus or minus 20 degrees from the equator with the right cultivation technology. While red seaweed has been farmed for

many years, the technology used to cultivate the plant has restricted its growth potential to areas of calm, shallow waters, of which there are few. Therefore, Sea6 Energy set out to develop new technology that would enable the seaweed to be cultivated in rougher, deeper waters, enabling large-scale farms to provide feedstock for substantial biofuel production. The team developed proprietary structures that could be used to establish seaweed farms on the ocean surface “over the horizon” in deep, rough waters, such as the waters surrounding oil rigs, and also nearer to the shore. The cultivation technology developed by Sea6 Energy is also expected to improve the productivity of seaweed farmers by making it possible for them to harvest much more product in the same amount of time and by opening up the opportunity to establish farms in areas that would otherwise be inaccessible. According to Sea6 Energy CEO Sayass Kumar, improving the cultivation process means that India’s current seaweed farming labor

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force of about 1,000 people could be greatly expanded. “What we are envisioning is that if we can take the seaweed and make biofuel out of it, we could create potential employment in all the coastal communities of India,” he says. “That’s close to one million people.”

Novozymes’ Partners

Developing technology to establish adequate supplies of feedstock is an all-important step, but how do you break it down and convert it to ethanol? Further, how do you accomplish this in a seawater environment so as not to require unnecessary use of fresh water? Converting the seaweed’s galactose polymers to galactose for future fermentation would require specialized enzymes. And that is precisely why the company approached global enzyme engineering firm Novozymes for assistance. Novozymes is one of the world’s largest suppliers of enzymes for ethanol production and has taken an active role in

the development of second-generation ethanol production. According to GS Krishnan, regional president-India, Novozymes South Asia, the company viewed the collaboration with Sea6 Energy as an opportunity to contribute technical expertise and further the international effort to scale second-generation production. In February, Novozymes announced a one-year exploratory research agreement with Sea6 Energy to develop the conversion process. “We see great synergies among our companies and through our collective efforts and technical know-how, we are hopeful of developing a viable technology to make biofuels from seaweed,” Krishnan says. Seaweed offers many attractive qualities as a feedstock, including its potential for high yields. Suryanarayan says that while 50 tons per hectare is a typical yield for land plants, red seaweed has been proven to produce twice that amount. Also, seaweed has no lignin, which has been the bane of researchers worldwide who have dedicated years to

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breaking it down in order to access the fermentable sugars in land-based plants. But that doesn’t mean that converting seaweed to fermentable sugars is easier, unfortunately. Instead of lignin, seaweed offers researchers another challenge—carrageenan, which is also the substance extracted from seaweed for food additive applications. “Compared to land-based carbohydrate polymers, which mostly consist of glucose and xylose, the carrageenan is a highly sulfated galactose polymer which might/might not cause difficulties in processing,” Krishnan says. Bakers yeast offers one possible solution, he says, but the conversion time is slow. Sea6 Energy’s noble decision to embrace the salt water environment presents another set of challenges, because the enzymes must be able to convert the seaweed to sugar in salt water. It’s a difficult task, but as Suryanarayan points out, “Seaweed is already full of sea water, so what’s the point of washing it off?” While Sea6 Energy continues to develop

2012

PHOTO: SEA6 ENERGY

FEEDSTOCK

Grow it Better Seaweed is traditionally cultivated only in shallow, calm waters and is a labor intensive process. Sea6 Energy says it has developed technology that will enable seaweed farms to be located in deep, rough ocean waters and will allow farmers to produce more seaweed using less effort.

its cultivation technology, Novozymes will also tackle the economics of scaling up the technology developed between the two companies. Specifically, Krishnan says his company will focus on developing a low-cost hydrolysis method that can simultaneously extract sugars from seaweed and free them from the polymers for fermentation. A flexible bioprocessing method has a clear advantage over

other methods, he says, because it will allow for each step of the conversion process to be individually optimized. “The process conditions will be highly flexible, taking advantage of the optimal conditions for the degradation of the carrageenan to galactose, optimizing pH, temperature and enzyme performance,” he says. The fermentation step could possibly be conducted separately as well, which would

allow the producer to optimize fermentation conditions. “This provides much more freedom to optimize and develop the next generation of enzymes as the process matures,” he says.

Farms of the Future

While biofuel production tends to require substantial amounts of feedstock, be-

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FEEDSTOCK

cause seaweed is high-yielding, Sea6 Energy and Novozymes expect that only a nominal portion of the sea will be used to sustain seaweed farms. “It’s not like we’re going to have to cover up the entire sea,” Suryanarayan says. In early trials, Sea6 Energy has produced 250 liters (about 66 gallons) of ethanol per ton of seaweed. Considering that red seaweed has been proven to yield 100 tons per hectare and can be harvested up to six times each year, the company believes it will most definitely be possible to grow and harvest the amount of feedstock necessary to produce ethanol at a commercial scale. Additionally, Suryanarayan says Novozymes wasted no time in performing a life-cycle analysis for large-scale seaweed farming operations and, while there is still work to be done to quantify the data, the initial results are promising. He likens the potential for large, offshore seaweed farms to a desert oasis—creating a haven for wildlife, for example, where there wasn’t one before. Once they are ready to expand the farming operations, the build-out could be achieved quite rapidly. Kumar suggests that seaweed farming operations could multiply by 1,000fold in just one year. The research partnership between Novozymes and Sea6 Energy will expire early next year, but both parties are optimistic that tremendous progress can be made during the next several months and that the agreement may be extended past one year. Krishnan stresses that the research and development is still in the early stages and says a pilot plant will not be built until the conversion process is fully developed. Sea6 Energy hopes that by the end of the first year, Novozymes will have guided the way toward enzymes that can be used for the final product, or identified versions that will lead to that. Sea6 Energy tentatively expects to establish a demonstration-scale facility in three to four years. “At the moment, we are sufficiently encouraged by the results we see [and] feel that we are on the right track,” Kumar says. “Probably we will extend the partnership at the end of the year, but that final decision remains to be seen. On the ground, it’s as good as it gets so far.” Author: Kris Bevill Associate Editor, Ethanol Producer Magazine (701) 540-6846 kbevill@bbiinternational.com

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84 | Ethanol Producer Magazine | June 2012

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Candidates Ethanol plants offer opportunities to expand carbon storage and utilization By KRIS BEVILL

Last November, CO2 from the Archer Daniels Midland Co. ethanol plant in Decatur, Ill., began being captured, transported via pipeline and injected for permanent storage into a nearby geologic formation known as the Mount Simon Sandstone. The

Illinois Basin-Decatur Project, which began being developed in 2007, is an effort being led by the Illinois State Geological Survey, the U.S. DOE, Schlumberger Carbon Services, and ADM and is the first of two carbon capture and storage (CCS) projects to be carried out at the site. The goal of the program, according to project leaders, is to prove that large amounts of CO2 from industrial sources can be compressed and injected into deep geological formations for storage, thus reducing greenhouse gas (GHG) emissions and lessening their effects on the environment. By mid-April, more than 100,000 metric tons of CO2 had already been injected at the site and operations JUNE 2012 | Ethanol Producer Magazine | 85

photo: ARCHER DANIELS MIDLAND CO.

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Injection Preparation Wet CO2 captured from ADMâ&#x20AC;&#x2122;s Decatur, Ill., ethanol plant is piped to a dehydration/compression facility, where a series of blowers and compressors are used to compress the CO2 and boost the pressure from 15 pounds per square inch absolute (psia) to about 1,500 psia in preparation for sequestration.

86 | Ethanol Producer Magazine | June 2012

CARBON

were running smoothly. Injection will continue at a rate of 1,000 metric tons per day until the project concludes in the fall of 2014, by which time 1 million metric tons of CO2 is expected to have been injected into the deep reservoir for permanent storage. In late 2013, a $208 million project, the Illinois Industrial Carbon Capture and Storage project, led by ADM, will begin operation. This second CCS project will adapt approaches of the IBDP and triple the site’s CO2 injection rate, representing the sequestration capacity necessary for commercial power generating facilities. Operating simultaneously, the projects will also provide researchers the opportunity to study the CO2 plumes and pressure fronts emanating from two injection wells. When the IBDP concludes in 2014, the second project will increase the injection rate up to 3,000 metric tons per day, amounting to 1 million metric tons annually, or approximately 95 percent of the CO2 that would otherwise be emitted from the ethanol plant’s fermentation process. By the end of 2015, when the ICCS project is scheduled to conclude, a total of 3.5 million metric tons of CO2 will have been geologically stored by the projects.

plants, the CO2 produced through ethanol fermentation is extremely pure and doesn’t require expensive scrubbing techniques to prepare the gas for geologic storage. “With our project, we’re showing that ethanol plants produce a very pure CO2 which only has to be dehydrated—the actual processing is very cost effective,” says Scott McDonald, biofuels development director at ADM. “The real cost for capturing CO2 from an ethanol plant

is the compression. We believe this project will demonstrate that CO2 can be effectively captured from an ethanol plant and stored or used beneficially for other applications like enhanced oil recovery (EOR) while reducing the facility’s overall GHG emissions.” The process of converting an ethanol plant’s CO2 from a gas destined for the earth’s atmosphere to a supercritical fluid that can be safely stored underground is a

Location and Quality

The federal government has invested heavily in both CCS projects, providing funding for the first project through the Midwest Geological Sequestration Consortium under the DOE’s Regional Carbon Sequestration Partnerships and providing $141 million for the second project via the American Recovery and Reinvestment Act of 2009. The DOE is interested in CCS because it believes the process offers a way to reduce GHG emissions and mitigate climate change. But in order to advance the use of this technology, the economics of the operations first need to be proven. The two ADM projects will hopefully help achieve that goal. “One of the main reasons for DOE to fund these projects is to reduce the risks for the industry to demonstrate these first-of-a-kind technologies,” says Sai Gollakota, project manager at the DOE’s National Energy Technology Laboratory. Ethanol plants are ideal suppliers for CCS activities because, unlike flue gas from power JUNE 2012 | Ethanol Producer Magazine | 87

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process that can be broken down into a few basic steps: capture, compression, dehydration and transportation. First, the wet CO2 gas is collected at the ethanol plant by a large centrifugal blower to boost the initial pressure before it is further compressed and dehydrated. Next, it is sent to an integrated compression and dehydration facility where the gas is dehydrated and compressed into a fluid state. Dehydration is necessary to prevent corrosion of the transportation pipeline, says McDonald. “Wet CO2 can convert over to carbonic acid, so we have to dry it to reduce the corrosive nature of the CO2,” he says. The compression and dehydration systems being used at the ADM site are both readily available pieces of technology that are commonly used in the oil and gas industries, says McDonald. “There really are no technical hurdles for what we’re doing.” After the CO2 is dehydrated and compressed, it is piped a short distance to the injection site for storage. Because ADM’s Decatur plant happens to be located over Mt. Simon, the pipeline to transport CO2 from the facilities to the injection site is only about a mile long. Once there, the CO2 is sent to its final resting place via a 7,000-foot deep injection well drilled by Schlumberger Car-

bon Services. The CO2 becomes soluble with the reservoir’s brine (a concentrated solution that has a salt content five times greater than seawater) and is locked within the pores of the reservoir. Eventually, over hundreds of years, it will mineralize. “So when we inject the CO2 into the formation it eventually becomes permanently geologically stored,” McDonald says. While the economics may need some proving, Gollakota assures the injection practice has already been deemed very safe, noting that the Mt. Simon formation has already been used for natural gas storage for more than half a century and the depth at which the CO2 is being injected—approximately 7,000 feet below the surface—assures that drinking water will not be affected.

Enhanced Oil Recovery

Mt. Simon is anticipated to have room for perhaps billions of tons of CO2, but without carbon reduction mandates or some other regulatory initiative, there is no monetary incentive for ethanol producers to invest in CCS simply to store the gas. “If you have an EOR application where you can sell your CO2 to an oil producer, then you get revenue generation from the capture of the CO2 , which would help pay for that particu-

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lar process,” says Gary Sigle, director of major projects division at the National Energy Technology Lab. CO2-EOR is a process in which CO2 is injected into aging oil fields to acquire oil reserves that wouldn’t otherwise be accessible. Several of these older fields lie within the range of many Midwestern ethanol plants. For example, southern Illinois has been a mature oil producing region of the state and could be a target CO2-EOR. Oil producers require large volumes of CO2 for EOR, but pipelines need to be built to economically meet this demand. Because of the cost to construct a regional pipeline to deliver CO2 to the southern part of the state, ethanol and oil would likely need a partner, or receive some other form of support, to facilitate construction. With that in mind, the National Enhanced Oil Recovery Initiative provided Congress with a set of recommendations earlier this year aimed at encouraging greater use of CO2-EOR by offering incentives to companies that provide the gas for those activities. Included in those recommendations was a suggestion for Congress to modify an existing CO2 sequestration tax credit to make it more workable for applicants, a request to implement a 10-year tax credit provision for industrial sources and a recommendation that states should create policies to further incentivize the process. According to Brad Crabtree, policy director for the Great Plains Institute, one of the NEORI’s organizing groups, ethanol producers and other suppliers could use the incentives to alleviate the cost of building necessary pipelines. NEORI believes ethanol producers will be important early adopters for EOR expansion because of the low cost of carbon capture at those facilities and their proximity to applicable oil fields. He notes that while many ethanol producers currently sell CO2 for food and beverage applications, the market for EOR is significantly larger and also offers producers the opportunity to lower their carbon footprint. The federal tax credit proposed by NEORI would pay for itself in 10 years through increased federal revenues generated by additional oil production, according to the group, with an estimated net return of $100 billion over 40 years. A small bipartisan group of congressional members immediately signed on to support NEORI’s suggestions, including Sen. Kent Conrad, D-N.D., who said the incentives would help reduce the nation’s “dangerous” dependency on foreign oil. ADM is also a participant in NEORI, along with several environmental groups and power providers. “ADM is one of the largest ethanol producers, and our plants are typically larger, so we concentrate a large amount of CO2 at any one of our locations,” McDonald says. “It makes sense to be part of that initiative because we feel that ethanol plants can be an economically attractive first step to supply CO2 for these applications. Our nation will continue to rely on fossil fuels and to make a significant contribution to the reduction of GHG emissions, CCS is going to be one of the low-carbon technologies needed in your portfolio.”

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BRAZIL

CONTRIBUTION

Spotlight on Brazil

Biofuels in the South American powerhouse waver between glory and neglect By Daniel Coelho Barbosa

Brazil was the center of attention March 29 in London where the Financial Times sponsored “Spotlight on Brazil,” an event organized to present this South American agribusiness giant from its best side. Representatives of Brazil’s orange juice, edible oils and meat sectors, as well as government agencies and others, exposed their arguments in front of an exclusive, by-invitation-

only audience of investors and executives. Ethanol was represented by Marcos Jank, at the time president and CEO of UNICA, the Brazilian sugarcane industry association. The opening speech came from Mendes Ribeiro, Minister of Agriculture in Brazil, followed by sessions with high-level officials. John Clarke, director of international affairs and agriculture with the EU Commission, caught everybody’s attention as he declared the European Union has plans to establish a

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). 92 | Ethanol Producer Magazine | June 2012

free-trade agreement with Mercosur, a trade center encompassing Argentina, Brazil, Chile, Uruguay and Paraguay. As Clarke was asked about European import barriers for sustainable ethanol, the EU official sounded as if he wasn’t paying mere lip service to the subject, but this trade agreement is something I have to see to believe.

The Biofuels Crossroads

Even with peak oil and painful crude prices since January 2011, countries like Germany, the biggest biofuels producer in Europe, or Brazil, one of the biggest biofuels producers globally, still have not implemented efficient

BRAZIL

UNICA CEO Marcos Jank

measures to consolidate biofuels in their internal markets. It is astonishing that with gasoline (E5) reaching record prices in Germany at $8.60 per gallon, that E10, usually some 20 cents per gallon cheaper, remains second choice and E85 almost fully rejected. In the meantime, over 5 percent of the mills in Brazil—26 confirmed out of 460 mills— are so seriously in trouble that they were forced to announce they will stop activities during harvest 2012’13. How can all this be? UNICA’s Jank really touched the center of the question when he mentioned that ethanol is still subject to restrictions and import taxes—a rough contradiction in comparison to oil—while stable policies for biofuels are missing. Jank also reminded everyone that 46 percent of Brazil’s energy comes from clean sources compared to only 8 percent in the Organization for Economic Cooperation and Development countries, which include 34 mostly well-developed countries in Europe, North America and Asia. He further mentioned the potential of bioelectricity and the boost cellulosic ethanol will cause. After being in charge for six years, Jank recently resigned from his position as CEO of

UNICA, one of the biggest renewable fuels associations. Regardless of who could be Jank’s successor, major questions remain unanswered. With 30,000 jobs already at risk, Brasilia should very soon find applicable solutions if they don’t want to see the ethanol industry layoffs worsening or a once-booming sector sliding towards the edge of collapse. One thing is sure: the current moment is a turning point for renewable fuels both in Europe and Brazil. The markets will react depending on how public policies are set up for these solutions. Many biomassbased technologies, from cellulosic ethanol to waste fuel, are still in their early stages and proper encouragement will result in invigorating economic rewards.

The Glory: Cane Ethanol, BP’s Biofuel of Choice

Philipp New, CEO of BP Biofuels, was last to deliver his presentation before lunch on Duke Street in London. The interaction of BP with the world of sugarcane can already be felt at London’s Heathrow airport where, for the first time, I saw huge ads of athletes running through cane plantations. But still, on the streets not a single taxi driver could tell me of a gas station selling biofuels. BP is firmly investing in Brazil. According to New, each BP ethanol mill in Brazil represents a source

of 9 million barrels compared with crude, but with an important difference: Ethanol plants have practically inexhaustible resources compared to oil wells drilled. The CEO of BP Biofuels is enthusiastic, since he knows the advantages of sugarcane in relation to other renewable sources and can’t wait to see cane double its potential as soon as cellulosic ethanol production is a reality. New was so passionate in his speech that one could think he is not bothered at all by the discrepancy between the government and the ethanol industry in Brazil. Economically vulnerable mills could definitely fit in any expansion plans.

Challenges in Sustainability

When speaking about Brazil and agribusiness, discussions inevitably end up talking about sustainability and the Amazon. Many were surprised when Pat Venditti, Greenpeace’s forest network director, said he was very pleased about the progress achieved in Brazil in terms of environmental protection. Daniel Nepstadt, Amazon Environmental Research Institute director, noted that Brazil is a world champion in environmental conservation, reducing deforestation by 68 percent. Nepstadt stressed the country has REDD-policies (Reducing Emissions from

EU Commission Director John Clarke JUNE 2012 | Ethanol Producer Magazine | 93

BRAZIL

Deforestation and Degradation) fully assimilated in its laws, but still gets nothing in return for being a role model for the international community. He also remembered that Norway has pledged one billion dollars in the form of incentives for preservation but not a penny of it has been spent so far in Pará or Mato Grosso, regions that have delivered sensible results in ecological contexts. Discussions heated up when Bryan Weech, director of commodities at WWF, expressed criticism of the new forest code approved in Brazil. Osmar Fernandes Dias, agribusiness vice president at the national bank Banco do Brasil, asked Weech to specify which articles of the code had flaws so that he could personally intervene by ensuring they are corrected. The WWF official was forced to publicly admit he did not know the forest code in detail, thus revealing that his accusations were just empty words. Not surprisingly, Weech’s arguments ended right there. Sen. Kátia Abreu, president of the National Agricultural Confederation, closed the meeting by inviting the EU Commission and government officials of the member states, nongovernmental organizations and investors to take a closer look at Brazil, to research, learn and discover the opBrazil Agriculture Minister Mendes Ribeiro

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BRAZIL

portunities by themselves, rather than take for granted all the studies offered by different interest groups. In a nutshell, agribusiness must mobilize, do good and let people see it firsthand. This was the main assignment addressed during the Financial Times conference.

The Neglect: Ethanol Struggles in Brazil, Europe

Nothing justifies indifference towards clean and renewable alternatives to expensive, limited and pollutant sources. Many in the U.S. may think sugarcane receives lots of subsidies in Brazil, but as a matter of fact, it is gasoline that is artificially kept at a low price. With a new president and an economic crisis plaguing the world, the federal government has left the ethanol mills to their own fate, while gasoline prices were kept stable to hinder inflation. As a result, increased gasoline sales have inhibited ethanol consumption and PetrobrĂĄs, at the limit of its refining capacity, was forced to import gasoline. Interestingly, incongruities like these are not a geographical exclusivity. European governments also try to lower fuel prices, while local ethanol is left aside and higher blends in diesel or gasoline are consequently disregarded. All these circumstances ignore products Brazil Sen. Katia Abreu

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that save between 35 and 90 percent on greenhouse gas emissions, and even the green parties on both continents—reputedly so committed to climate goals—are silent about it. Back to Brazil: What we have is a “predicted crisis.” During the past years, we saw international investors purchasing weakened mills using financial resources originally intended for new developments. New projects decreased to three new mills per year at a time when Brazil would need at least 120 new mills by 2020 just to supply domestic demand. Now add bad weather conditions, higher costs, capital scarcity and loss of competitiveness versus fossil fuels to missing federal policies and you will have ideal conditions for an ethanol breakdown. Brazil President Dilma Roussef ’s political karma, following after Luiz Inacio Lula

Insider Perspective A native of Brazil, Daniel Coelho Barbosa now writes about bioenergy and agriculture from Germany.

da Silva’s Golden Age of Biofuels, is continued economic growth. Some specialists suggest Brazil should stop E100 (hydrous ethanol) and introduce E40 at the pumps (producing just dehydrated ethanol for blending) or cut the value-added tax to curb the business. One way or the other, time is running out and Roussef must take action to

avoid a bigger defeat. An ethanol fiasco would be hard to explain in the nation hosting the Rio+20 climate convention. It all sounds quite irrational in

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1-3S Producer 127x130,175 Magazine E CP.indd 1 | June 2012 | Ethanol 96SCCL-Az

15.01.12 12:39

the land of sugarcane, where biofuels have become more and more popular in the past 40 years, but it is pure reality. I wonder if a famous Brazilian saying could be right again, “In the end, everything will be fine. If things are not fine now, it’s also not the end.”

Where Two Quarrel, the Third Profits

We all still remember well how an American renewables association would regularly publish warnings about the “Brazilian threat”. Back in 2010, during World of Ethanol in Geneva, I was convinced this message would soon prove to be wrong. Actually Brazil and the U.S. should rather join forces and show the world how viable biofuels are. At that time we were already foreseeing bottlenecks in domestic supply, observing Brazil would only wake up the day the first ship with ethanol from the U.S. arrived. Even if most people refused to believe it, that is exactly what happened a few months later. Last year, the U.S. exported over 242 million gallons of ethanol to Brazil. December was a record month with 61.6 million gallons and between this January and February, Brazil exported something like 170,000 cubic meters (37.4 million gallons) and imported another 277,000 cubic meters. Free markets can be a good idea, Brazil will stay a good customer for the years to come. If nothing changes dramatically, conservative forecasts expect Brazil to import almost 1 billion gallons from the United States within the next three years. To regain its old pace, cane fields in Brazil must be renewed and expanded, mills need financial aid, new projects must at least triple and, above all, new public policies must be approved. The necessary changes won’t happen overnight. On the other hand, Brazil continues to offer resources from which many American companies, big or small, already profit. The point remains, how many still believe the tale of Brazil being a potential threat? The time is right to invest and expand internationally if anybody has those plans. And if you’re in doubt, just ask BP, but it would be best if you came to see for yourself. Brazil harvests around 600 million tons of sugarcane.

BRAZIL

2QH 3URYLGHU ,QWHJUDWHG 2IIHULQJV 3URYHQ 5HVXOWV One Key Point of Contact. Turn Key Solutions. The Key To Success Is At Your Fingertips.

Sticker Shock Fueling stations in Germany prominently display fuel prices in Euros per liter. At this Shell station, prices (converted to dollars) are: diesel for $7.752 per gallon, E10 for $8.437 per gallon, super for $8.637, and racing for $9.432.

Something else that must be kept in mind is that a liter of very clean CO2 from fermentation is also produced for each liter of ethanol that is distilled from cane. This CO2 can be recaptured and used for beverages, foods, cryogenic cleaning or in other applications such as supercritical fluid. Furthermore, every 1,000 kilograms of sugarcane processed results in 250 kilograms of bagasse as a leftover and every 1,000 kilograms of bagasse brings about 300 kilowatts in a cogeneration plant. According to recent studies from Marcos Fava Neves, professor, University of São Paulo, the state of São Paulo alone can provide enough bagasse to generate 15 megawatts— more than the full capacity of the planned Belo Monte power plant, the world’s thirdlargest hydroelectric dam currently under construction on the Xingu River in the state of Pará. Author: Daniel Coelho Barbosa Germany-based Agribusiness Analyst +49 163 81 69 221 daniel@biosocial.net

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Setting A New Industry Standard.

JUNE 2012 | Ethanol Producer Magazine | 97

Training

CONTRIBUTION

Ethanol Emergencies: New York Meets the Challenge Firefighters learn proper techniques for handling ethanol By Dan Baker

The amount of ethanol transported in New York state has increased dramatically in the past five years with the introduction of two production facilities and extensive rail and highway transportation networks. Unit trains of de-

natured alcohol are a common sight on major rail corridors, and truck transportation has brought an increased exposure to risk to virtually every community statewide. Incidents, although infrequent, have severely tested local fire and first response skills and resources. New York state is meeting the need for

education in best practices for ethanol-related emergencies with the implementation of a first-of-its-kind training program. The “Emergency Response to Ethanol Incidents” course provides practical training for mitigating spills and fires involving fuel-grade ethanol. Course topics include an overview of ethanol as a fuel, the use of class B foam (with an emphasis on alcohol-resistant foam concentrates), foam nozzles and proportioning equipment, and determination of foam needs for various incidents. Hands-on activities involve vapor suppression with finished foam, confining spills and live-fire extinguishment using foam hand lines on a leaking and burning tank truck.

“Our office has always strived to meet the needs of firefighters in New York” said Ronald Dunn, chief of the Special Operations Branch of the Office of Fire Prevention and Control. “This training provides a unique opportunity for first responders to enhance their preparedness for ethanol emergencies under the direction of our highly trained staff of fire protection specialists. In the past, providing hands-on “live fire” training for liquid emergencies was too costly and environmentally unfriendly to be successful. Recent advances in fire training technology, however, have overcome pollution concerns, and a recent partnership with the New York State Energy Research and Development Authority has helped out with the cost. With grant funding available from the U.S. DOE (recovery and reinvestment funds),

Training

NYSERDA worked with the Office of Fire Prevention and Control to determine what resources would be necessary to develop a training course for firefighters that would prepare them for ethanol fires. Fire protection specialists proposed live-fire training using a prop that would simulate liquid emergencies and allow firefighters to apply class B foam under controlled conditions. Coupled with classroom sessions regarding polar solvent fuels, such as ethanol and other alcohols and ethers, and their unique challenges, it was determined that this would better prepare responders for these types of emergencies. In August, OFPC purchased a KiddeFire O-100 Live Fire Training Trailer with funding support from NYSERDA. A modified MC307 tank trailer, the device simulates liquid spill fires using a combination of water and propane gas. Firefighters can practice leak mitigation, spill firefighting and extinguishment of three-dimensional liquid fires, all under controlled live-fire conditions. In addition to

being extremely realistic, the prop is portable, which means that the curriculum can be provided to the fire service anywhere in the state. Instructors can move the trainer with a Class 8 tractor (also purchased with NYSERDA funds). Additional funding provides foam and propane for the training exercises, requiring no financial burden on the participating agencies. Because the course is offered at no cost to municipalities, training can be conducted in communities that are exposed to risk, but might not have the ability to participate under current budget constraints. Response to the program has been overwhelming. There are few other places in the state where firefighters can hone their skills with Class B foam under live-fire conditions. “Training for hazmat emergencies and, in particular, ethanol emergencies, is like training soldiers in peacetime,” said Ed Fletcher, fire protection specialist and a lead instructor for the Ethanol Emergencies Program in New York. “It’s information that we hope firefight-

ers never have to use. However, a small measure of preparedness can pay big dividends down the road in the unlikely event of an ethanol fire.”

Course Specifics

Training begins with a four-hour classroom session that serves as a refresher on Class B firefighting topics. Students are briefed on the destructive effects of ethanol on firefighting foam and the importance of foam selection. Calculations for determining amounts of foam required for a given incident are discussed, along with the use of proportioning and delivery equipment. Consideration is given to tactics-appropriate methods for application of B foam to ethanol fires and safety and security post-fire. Next, students are provided with a safety briefing on industrial firefighting methodology, and then are moved outside to face the first of five training exercises. Throughout the training, local firefighters perform all key

JUNE 2012 | Ethanol Producer Magazine | 101

Training

ď&#x20AC;¸ on the web For more information about this program, please contact the New York State Office of Fire Prevention and Control at (518) 474-6746 or visit http://www.dhses.ny.gov/ofpc

functions and are faced with progressively more complicated scenarios. During the final phases of the training, firefighters mitigate a simulated emergency where they must control a valve, extinguish a three-dimensional fire, and extinguish ground fires with a combination of water fog (protective lines) and Class B foam. New classes began in April and the program has been scheduled for delivery in many counties. OFPCâ&#x20AC;&#x2122;s goal is to reach as many first responders as possible over the next few years. Six certified instructors are required for each course offering, and fire protection specialists from the Hazardous Materials (hazmat) branch of OFPC staff these positions, in addition to fulfilling an already robust schedule of other hazmat courses. OFPCâ&#x20AC;&#x2122;s instructors are ready and willing to meet this challenge, knowing that the information imparted during this training might someday be utilized in a community to stabilize an emergency and protect the public.

About OFPC

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102 | Ethanol Producer Magazine | June 2012

The New York State Office of Fire Prevention and Control delivers a wide breadth of services to firefighters, emergency responders, state and local government agencies, public and private colleges, and the citizens of the state for more than three decades. A leader in fire services, OFPC provides state-of-the-art training, response and technical assistance in all of New York stateâ&#x20AC;&#x2122;s 62 counties. Approximately 50,000 career and volunteer firefighters and other emergency responders are trained annually at the NYS Academy of Fire Science and in satellite locations statewide. OFPCâ&#x20AC;&#x2122;s hazardous materials training program has always included curriculum for flammable and combustible liquid emergencies. The demand for programs specifically designed for polar solvent emergencies resulted in the development of the â&#x20AC;&#x153;Emergency Response to Ethanol Incidents.â&#x20AC;? Author: Daniel J. Baker Fire Protection Specialist NYS Office of Fire Prevention and Control Hazardous Materials Bureau (518) 474-6746 dbaker@dhses.ny.gov

CONTAMINANTS

PHOTO: ICM INC.

CONTRIBUTION

Rectifier Comparison In normal rectifier operation, the temperature, flow and pressure are balanced to allow the fusels to be physically drawn off from the side of the rectifier column. Without proper draw, the fusels concentrate and sink to the bottom of the rectifier and get recycled in the process. SOURCE: PHIBRO

Fusel Oil Recycle—A Silent, Odorous Killer

A normal part of fermentation, fusel oil concentration must be avoided By Dennis Bayrock

There’s a silent killer lurking in your ethanol plant. You won’t see

or hear it coming—you’ll have to sniff it out. Fusel compounds are oily, odorous byproducts of the ethanol production process that slow fermentation and kill yeast. If allowed to recycle unchecked, fusel compounds can even render a fermenter completely sterile, halting production altogether. Fusel compounds are also found in emissions in CO2 scrubbers,

dryers and thermal oxidizers (areas under increased scrutiny by the U.S. EPA). Fusel oil production is a natural and normal part of fermentation by Saccharomyces cerevisiae. A 100 MMgy ethanol plant produces nearly 40,000 gallons of fusel oil a year, so dealing with it properly is critical. Technically, fusel oil is not a single substance, but rather a mixture of volatile organic acids, higher alcohols, aldehydes, ketones, fatty acids and esters. When concentrated, this mixture has an

oily consistency and potent odor. The fusel compounds of primary interest to an ethanol producer include amyl alcohols (isomers of C5H12O such as isoamyl alcohol), 1- and 2-propanols, butanols (such as n butanol, isobutanol) and other volatile compounds. Fusel compounds pose a significant risk to ethanol yield. If not properly managed, they can become part of the process water and recycle to the front end of the plant. Both ethanol and fusel compounds are toxic to yeast growth and fermentation, but fusel compounds are 10 to 15 times more toxic to yeast than ethanol. Removing fusel compounds properly is accomplished using a rectifier dis-

CONTAMINANTS

tillation column, which adds capital, energy and operating cost. By adjusting the pressure, flow and operating temperature in the rectifier column, the fusel compounds are removed from the ethanol via draw points on the side of the column and a fusel draw pump. Why do yeasts make fusel compounds at all? The answer lies deep in their metabolism. As yeasts ferment glucose into ethanol, another metabolic intermediate is produced— a cofactor molecule called NAD. As ethanol production increases, so does the NAD concentration. This creates a serious problem for the yeast cell, as it needs to regenerate the NAD back to its NADH form so that it can be used again. One way it can regenerate the

NAD is with the production of glycerol. This regeneration route explains why yeasts must produce glycerol in addition to ethanol, and why production levels of glycerol increase with increasing ethanol production. Yeast cells can also regenerate the NAD with a series of metabolic reactions included in the Ehrlich pathway. The Ehrlich pathway regenerates the NAD for the yeast by breaking down individual amino acids inside the yeast cell. This is responsible for the majority of fusel compounds produced by yeast. When more than one fusel compound is present, the inhibitory effects on yeast are synergistic. For example, ethanol at a 5 percent weight/volume concentration begins to

Yeast Metabolism and the Ehrlich Pathway Glycolysis and TCA Pathways The Ehrlich Pathway 1. Transamination

keto acid

amino acids

2. Decarboxylation 2 oxoglutarate

CO2

glutamate

'fusel aldehyde' NADH,

H+

NAD+

Reduction

Oxidation NAD+

'fusel acid'

NADH, H+

'fusel alcohol'

ATP Export

Diffusion

ATP

'fusel acid'

'fusel alcohol'

Cofactor Molecule The Ehrlich pathway regenerates the NAD for the yeast by breaking down individual amino acids inside the yeast cell and is responsible for the majority of fusel compounds produced by yeast. SOURCE: PHIBRO

slow the metabolism of most yeast. With fusel compounds, a 0.5 percent weight/volume concentration can have the same effect. This danger has not only been confirmed in literature, but within the last two years, a growing number of fermenters at ethanol plants in North America have been rendered sterile. How does one determine if fusels are a problem? Let’s walk through what happened during an emergency forensic audit at one ethanol plant earlier this year.

Fusel Oil Case Study

For the plant, the first sign of the emergency was the 1 percent weight/volume drop in absolute ethanol yield in the fermenters from baseline levels. Additional symptoms were discovered on-site: • All the fermenters stalled at 40 hours, regardless of any interventions tried by the plant prior to the audit. • The plant was inconsistently passing 2 to 4 percent weight/volume total sugars from the beerwell to the beer column. • The lactic and acetic acid deltas across all fermentations were at a maximum of 0.1 percent weight/volume, indicating that the problem was not due to a bacterial contamination. • The alpha amylase and glucoamylase conversion rates were still proceeding from DP4 to DP1 at the plant at baseline levels. This eliminated the possibility of incorrect enzyme dosing or process conditions affecting the enzymes. • The glycerol concentration decreased below 1.7 percent weight/volume (plant baseline). This, together with the lower ethanol and acetic acid levels, indicated that the yeasts were either metabolically inhibited (assuming correct crop of yeast entering the fermenters), or not enough yeast was entering the fer menters. • The yeast crop leaving the propagators to the fermenters was below 200 million cells per milliliter (ranging from 100 to 150). Out of all the possible diagnoses these symptoms could indicate, experience and intiJUNE 2012 | Ethanol Producer Magazine | 105

CONTAMINANTS

mate knowledge of yeast narrowed it down to three possibilities. First, the growth and ethanol production rate of the yeast could be chemically inhibited, caused by fusels or any number of process chemicals. Second, the yeast perhaps was nutritionally limited. Or, third, insufficient yeast may have been leaving the propagator for the fermenters, causing a slowdown in overall fermentation rate. To isolate the problem, we pulled multiple samples for microbiological analysis. No significant level of bacterial infection was found, which was consistent with current plant data on lactic and acetic acid levels. We also immediately had samples analyzed for mycotoxin, sodium and minerals. The results indicated that these chemicals were at normal levels and could not be the source of the yeast inhibition. Next, we focused on learning the actual layout and operation of the plant, including any changes made since construction. An examination of the plant’s fermenter/propagator fill sequence indicated that no changes were made when the emergency started. Similarly, the cleaning in place (CIP) system and sequence were free of any changes or problems. The breakthrough came when we again pulled mash samples at various locations and gave them the sniff test. The slurry sample had a strong varnish-like smell. We suspected a fusel oil problem, as higher temperatures during slurry would tend to flash off any ammonia, CO2, ethanol, hydrogen sulfide, chlorine and sulfites. (Many fusels boil only

at temperatures greater than 100 Celsius.) The samples were left overnight and reexamined the following day. The smell remained, pointing again to fusel oils. We examined (and smelled) all of the lines leading to the slurry tank. The source of the smell came from the side-stripper and rectifier columns. Further examination of the plumbing around the rectifier revealed that the fusel draw pump had broken down and needed to be replaced. By this time, all of the liquid from the slurry to the distillation was contaminated with fusels. There are no known methods to remove fusels other than distillation, so we had to be patient. Once the new fusel oil pump was in place, it took approximately one week to purge the fusels and return to normal operation. It’s a good idea to “smell your slurry” on a daily basis. Fusel compounds can often be detected by smell when present in as little as 20 parts per million (about 0.002 percent weight/volume). If detected, pay immediate attention to the rectifier column and surrounding plumbing. For a 100 MMgy ethanol plant, a 1 percent yield decrease, as seen in this case study, results in an approximate loss of $179,167 per month at $2.15 per gallon of ethanol. Author: Dennis Bayrock,PhD Global Director, Fermentation Research Lactrol Phibro Ethanol Performance Group (651) 641-2826 Dennis.Bayrock@pahc.com

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CENTRIFUGES

CONTRIBUTION

Matrix Converter Creates New Opportunities for Centrifuge Retrofit

Motor controller handles frequent power regeneration, harsh environment By Brenden R. Fritz

Chief Ethanol Fuels Inc. was 1985 in Hastings. The plant currently Nebraskaâ&#x20AC;&#x2122;s first dry-mill ethanol produces approximately 62 million gallons of plant, beginning production in ethanol and more than 500,000 tons of feed annually. Throughout the years, Chief Etha-

nol has remained committed to implementing new technologies to keep pace with evolving industry innovations. For a recent project, Chief wanted to update the back drive system on one of its Sharples Horizontal Centrifuges. The centrifuge was originally supplied with a 150-horsepower main drive motor and an eddy

CENTRIFUGES

current back drive. The eddy current drive unit had failed and Chief wanted to upgrade the unit to an electric motor control. Several years earlier, Chief Ethanol had implemented a retrofit with three out of four of its centrifuges, consisting of a closed loop vector variable frequency drive (VFD) and separate regeneration converter to handle the frequent regeneration that occurs on backdrive systems. Due to the complexity and frequent issues with the VFD/regen retrofit, Chief approached Automated Drive Systems LLC (formerly Northwest Electric’s advanced controls group) for recommendations on a simpler, more robust solution. The project goals included: • Provide a motor controller with ability to handle frequent power regeneration. • Eliminate frequent encoder feedback issues due to harsh environment. • Supply a package capable of withstanding the harsh environment including ambient temperatures of up to 120 degrees Fahrenheit during summer months. • Keep harmonics to within IEEE 5191992 recommendations without filtering or isolation transformers. • Keep programming and troubleshooting familiar for plant personnel.

driven faster than the operating speed the motor is turned into an induction generator and the motor will generate power back through the motor leads. This is typically referred to as regeneration. With the project goals established, Automated Drive Systems looked at other common methods of controlling the back drive in centrifuge applications and found two common methods. The first method is using a hydraulic or eddy current braking mechanism similar to that found on the centrifuge when supplied by the manufacturer. These types of systems use hydraulics or an electric braking mechanism to control the speed of the back drive scroll. These systems are usually quite simple although they miss an opportunity to increase the overall efficiency since the braking power is dissipated as heat. The other common method is to use an electric motor and variable-speed drive to control the speed of the back drive. A major drawback with this option is that variable frequency drives do not handle regeneration without additional equipment working in one of two ways. The first method, which can be used when the main drive is also controlled by a variable speed drive, is to connect the two drives through the internal DC circuits. With

Centrifuge Operation, Power Regeneration

A centrifuge operates by using centrifugal force to separate solids from liquids in a continuous process. Centrifuges consist of a bowl or main drive and a continuous scroll conveyor or back-drive system. The rotation of the material causes the denser solid particles to be pressed outward against plates while the less dense liquid forms an inner layer, sometimes referred to as a pond. The solid particles are continuously removed by a scroll conveyor, which operates at a slower speed than the bowl. The operator adjusts the speed of the back drive in order to adjust variation of the solids. Due to the forces of the main bowl drive operating at a higher speed, the back drive typically needs to be held back, versus being driven, in order to reach the desired speed. In an electric motor, when the output is

Powerful Retrofit With a goal of greater reliability and efficiency, a matrix converter was retrofitted on a centrifuge motor controller at Chief Ethanol.

this method, when the back drive motor regenerates power, the power is transferred to the main drive VFD and consumed. This method is very expensive, as the main drive motors are typically three to five times the size of the back drive. The other common method is to place a regeneration unit in front of the back drive VFD that allows the regeneration power to flow back to the power grid in the plant. These systems are generally large and add another potential failure point.

A New Opportunity

For this project, an AC motor was recommended to capture the regenerated power and increase the overall efficiency of the centrifuge, using a new technology, the Yaskawa AC7 Matrix Converter. The AC7 is the first low-voltage drive control to use matrix technology. A standard VFD consists of three major power sections: a set of diodes that convert AC power to a fixed DC voltage, a DC bus section which has capacitors that smooth the DC power and, finally, a transistor output section that powers the motor. In contrast, the matrix converter uses nine bidirectional transistor switches that create variable voltage and frequency directly from a 3-phase AC power supply. This design allows for power to flow both directions through the unit, eliminating the need for separate regeneration converter units or connection to another VFD. The Yaskawa AC7 Matrix converter is capable of both sensorless and closed-loop vector control using an encoder. For this application, it was determined that the sensorless vector control scheme would be used to avoid encoder feedback from the harsh environment. The environmental conditions also posed another design challenge, with ambient temperatures in the area exceeding 120 F at times during the summer. In addition to providing a single package for motoring and regeneration, the AC7 Matrix is highly efficient. With a heat loss of approximately 58 percent versus an installation with a standard VFD, regeneration converter and harmonic filtering, the Matrix converter allowed for selection of a smaller cabinet air conditioner, reducing project cost by nearly $850. With the unique design of the matrix converter, the unit easily satisfies harmonic JUNE 2012 | Ethanol Producer Magazine | 109

CENTRIFUGES

guidelines that are important for maintaining a reliable power system. Harmonics are electrical noise phenomena created by digital power devices like VFDs or lighting ballasts. These devices draw power in quick bursts versus in a sine wave pattern like an electric motor. If not corrected, this electrical noise can cause issues with transformers, sensors and other power distribution equipment in a variety of ways. With the matrix converter, each output

phase is sourced from three input phases and the current wave form is sinusoidal, unlike the typical double crest waveform for dioderectified VFDs. This design results in an input current distortion of only 5 to 7 percent THD. This low harmonic distortion eliminates the need for input filtering or isolation, further reducing project costs. The final project goal of programming and troubleshooting familiarity was easy to

satisfy. The AC7 features the same operator display unit as other 7-series Yaskawa products installed at the plant. With the familiar menu structure and many common parameters, the Matrix converter provided a solution requiring minimal operator and technician training. As part of project commissioning, Chief Ethanol chose Automated Drive Systems to perform an authorized service provider com-

Harmonic Waves Low harmonic distortion from the Matrix converter eliminates the need for input filtering or isolation. The waveform shows the input voltage and current for the B phase measured at the input terminals during system commissioning.

missioning service, which doubled the Yaskawa Factory warranty. â&#x20AC;&#x153;Using the Yaskawa AC7 Matrix Converter, we were able purchase a package that met all of our requirements in a single unit. This resulted in a system with fewer components, higher efficiency and familiar programming, all at a cost several thousand dollars less than competitive line regeneration VFDs or VFD/Regen packages,â&#x20AC;? says Jerry Dick, maintenance technician at Chief Ethanol. Using a Yaskawa AC7 Matrix Converter provides a new opportunity for users of centrifuges to control the speed of the back drive units. This technology successfully provides control, simplicity and reliability in a single, robust solution while maintaining the highest efficiency possible.

110 | Ethanol Producer Magazine | June 2012

Author: Brenden R. Fritz President, Automated Drive Systems LLC (402) 858-5560 bfritz@automateddrives.com

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COMMUNITY RELATIONS

CONTRIBUTION

How to Fight the ‘Not in My Back Yard’ Syndrome Steps to mitigate opposition, build community support By Al Maiorino

You have plans to build a biorefinery. Jobs, tax revenue, and much

more are the benefits that will resonate with the community. At the first public hearing, however, opposition arises due to fears of having such an industry in the community. The entitling agency takes notice, and now you must

build support, long after you have announced your plans and opposition has solidified. Why? Residents near the proposed site have created an opposition group to fight the project. Despite the fact that the new plant would generate renewable energy for many communities and improve the local economy,

the community doesn’t seem to understand these benefits. The residents say the new facility would be too close to their homes and may potentially be hazardous to their health. They say it would create too much noise, pollution, and traffic, and would obstruct their views. You realize the opposition is a roadblock that may halt or even destroy the project. Now what do you do? This problem is not so uncommon. This practice of communal opposition to develop-

COMMUNITY RELATIONS

mentâ&#x20AC;&#x201D; the â&#x20AC;&#x153;not in my backyardâ&#x20AC;? syndrome, or NIMBYismâ&#x20AC;&#x201D; blossomed in the 1980s. During that time, community concerns were often reasonable and justified. While those days are gone, the sentiment of opposition remains, and the â&#x20AC;&#x153;backyardâ&#x20AC;? has grown so vastly that NIMBYism affects companies all over the world. With modern technology and strict government regulations, however, the inconvenience caused by any sort of development is usually reduced to a minimum.

Get the Message Out

Very often, the opposition stems from misinformation and poor communication between project representatives and the community. In this case, it is Corporate Campaigner better to play on the ofAl Maiorino started fensive. Instead of waitPublic Strategy ing for the opposition to Group in 1995 and has developed and grow, present it with the managed multiple facts. corporate public affairs campaigns in It is necessary to a variety of industries look for local support such as auto racing, power plant/wind farm and build allies to form projects, gaming and a supporter coalition. more. First and foremost, identify and create a database of local residents who are in favor of, against, or undecided about the project. A good way to begin is by carrying out a poll or a phone bank, asking local residents about their view of the renewable energy industry in general and your development plan in particular. The survey results may be published to showcase the positive attitude in the community toward the venture. Once the database is created, it should be maintained and updated frequently for the campaign management to be aware of changes in local opinion. One way to do this is through a targeted direct mail and/or advertising campaign. A strong social media campaign is modern and necessary to spread your message, reach out to the community, and provide supporters with a communication outlet. Organization of a database is crucial to the success of a campaign. Whether the iden-

tification process is achieved through direct mail, radio, phone calls or email, having an unorganized list of supporters and undecided residents doesnâ&#x20AC;&#x2122;t do your campaign any good. By inputting your supporters into a database, you can then separate them by town, county and legislative district for effective grassroots lobbying. Now that you have distinguished sup-

porters from opposition, the next step is to reach out to third-party groups that support the development. These groups could be anything from small businesses to a local decision maker. Companies or groups with whom you have had a positive relationship or who will benefit from your project should be encouraged to participate in the campaign. Do not focus only on third-party groups for support:

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JUNE 2012 | Ethanol Producer Magazine | 113

COMMUNITY RELATIONS

Third-party groups are critical for your efforts, but often a few dozen “regular citizens” showing up to hearings and meetings can benefit your project tremendously. Residents should express their support through writing letters to their elected officials or newspapers. Those who are looking to support further can attend public hearings, where they can speak about the benefits of the proj-

ect. Most likely, an independent pro-group will have emerged by now and will actively participate in all aspects of the campaign. Grassroots campaigns create a support group of members from the local community that can assist in your efforts. The support group can actively promote your project through social networking. Proactive support groups are also a great source of volunteers

and as they volunteer, they’ll feel more committed and supportive of your project. Campaigns should be designed based on several factors including the size of the population you are targeting, the level of opposition, and the length of the entitlement process. Many of these campaigns should research their territory, identify supporters, code them into a database, not rely solely on email, not focus only on third-party support and always be transparent. Regardless of the industry or location, NIMBYism always presents itself in an attempt to curb a proposal. It can attack any project no matter how big or small. Employing proper campaign tactics and developing the right grassroots campaign can counter NIMBY opposition to your energy projects.

Be Proactive

Companies frequently wait until opposition arises to hire a public affairs firm. By then residents have solidified their positions on a project, making it all the more difficult for them to change their minds in your favor. While some may feel the “added cost” of a public affairs firm is not worth it to the project budget, think about how much it costs a project to be delayed weeks, months or years, or to be outright denied approval. You may choose to fight NIMBYism on your own. Experience shows, however, that hiring a specialized firm will provide you with the necessary tools and tactics to ensure a victory for your development. Trained professionals from a grassroots firm will make sure that the correct message from your company is being distributed to the community and that the silent majority is heard. The way you approach the situation will make all the difference. You can choose to ignore the NIMBY fight, avoid communicating with the local community, and take the situation to an unnecessary level of tension. Or, you and/or a specialized team can develop a strategy, engage in conversation with the community, and encourage project proponents to voice their support. Author: Al Maiorino President, Public Strategy Group (617) 859-3006 al@publicstrategygroup.com

114 | Ethanol Producer Magazine | June 2012

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STOVER

Developing Corn Stover as the Next Agricultural Commodity DuPont creates a new feedstock supply chain for cellulosic ethanol through a project in Iowa By Andy Heggenstaller

“The process for converting biomass to ethanol is far from trivial. At DuPont, we’ve solved the technology issues,” explains Jim Collins, president of DuPont Industrial Biosciences. DuPont has been investing for over a decade to develop cellulosic technologies that will bring about the next-generation of biofuels, and it’s our intention to demonstrate our commitment to these technologies, he says, by breaking ground on a first-of-its-kind cellulosic ethanol biorefinery, near Nevada, Iowa, later this year. DuPont’s initial plant will have a capacity of 28 MMgy, requiring 350,000 tons of bio-

mass feedstock. The real challenge then, as the cellulosic ethanol industry scales up for commercial production, isn’t so much conversion technology, but rather securing a reliable, costefficient and sustainable supply of biomass. Because it’s plentiful, doesn’t displace food crops and isn’t widely used for other commercial purposes, DuPont and other companies have selected corn stover as the logical feedstock of choice for the first cellulosic biorefineries. Despite its obvious advantages, corn stover, like any other cellulosic feedstock, lacks one very important characteristic—it’s not yet

a commodity. Processors can’t simply order it through a conventional supply chain. At present, feedstocks must be sourced directly by the processor using equipment and systems that, for the most part, have been developed for other purposes. Moreover, in the case of corn stover, the vast majority of annual feedstock supply has to be sourced during a narrow window each year at the time of or immediately following grain harvest. Recognizing the challenges and risks associated with feedstock supply, DuPont initiated a comprehensive development and scale-up Corn Stover Harvest and Collection Project in 2010 around the site of its planned Iowa biorefinery. This project, which is providing key knowledge on the sustainable harvest, collection, transport and storage of corn stover,

PHOTO: DuPont Cellulosic Ethanol

CONTRIBUTION

STOVER

is now entering its third year. According to Kyle Althoff, DuPont Cellulosic Ethanol LLC supply chain manager, â&#x20AC;&#x153;The goal of our Iowa project, from the outset, has been to develop corn stover into a local commodity, and this necessarily involves identifying and creating value for all supply chain participants.â&#x20AC;?

Building a Sustainable Value Chain

In 2010, DuPont began its corn stover project by partnering with six leading Iowa corn growers and conducting a pilot-scale stover harvest on 2,500 acres. The 2010 pilot program helped the company establish a presence with local growers and to begin assessing equipment options and configurations for stover harvest, collection and transportation. Following the pilot program, DuPont initiated a custom, third-party harvest model, which it is further developing for commercialization and is one of several harvest options currently being considered for corn stover supply. Different approaches are currently being tested by the industry, but custom stover harvest offers several important advantages, including the ability for the processor to better control moisture and ash content through the use of standardized equipment and harvest techniques. Equally important is that custom harvest allows corn growers to keep their attention focused on grain harvest and fall field operations. â&#x20AC;&#x153;For corn stover to work as a feedstock there needs to be a value proposition for corn growers, but it is equally important that stover harvest itself not interfere with growersâ&#x20AC;&#x2122; primary business of producing grain,â&#x20AC;? explains Denny Penland, DuPont Cellulosic Ethanol business development manager. The most important outcome of DuPontâ&#x20AC;&#x2122;s 2010 pilot harvest was that it demonstrated that Iowa corn growers see value in participating in a commodity chain around stover. Because of strong grower interest, we were able to expand our project in 2011 to include 50 growers and harvest 7,500 acres, with all six growers who partnered with us in 2010 choosing to continue their involvement with the program. The 2011 harvest represented an increase in scale over the previous year, but also provided an opportunity to conduct critical research and development to advance

equipment productivity, improve feedstock quality and evaluate cost-effective approaches for minimizing feedstock losses during storage. Iowa State University has been, and continues to be, an indispensable partner with DuPont on supply chain research and development efforts. In 2011, DuPont also engaged research talent from its Pioneer Hi-Bred business to better define the agronomic dimension of corn stover harvest by establishing a network of long-term field trials with partnering growers. These field trials, which represent the first commercial-scale investigation of the impacts of corn stover harvest on crop performance and soil quality, will guide DuPont and Iowaâ&#x20AC;&#x2122;s corn growers as stover is developed as a sustainable feedstock. Although the agronomy field trials were established just last year, a significant finding from the overall project in

2011 was that most participating corn growers see agronomic value in having a portion of the stover removed from their fields. As corn grain yields continue to increase, so too does the amount of residue left in the field after grain harvest. Therefore, many corn growers, especially those achieving high yields, indicate that residue management is one of the greatest challenges they face when producing corn following corn or when implementing minimum or no-till practices. Corn stover from the previous yearsâ&#x20AC;&#x2122; crop interferes with planting and delays stand establishment. Corn residue also ties-up nitrogen as it breaks down in the soil and often harbors damaging insect pests and pathogens. All of these factors can reduce crop growth and ultimately grain yield. According to John Pieper, Pioneer HiBred director of cellulosic ethanol, â&#x20AC;&#x153;Last year, following stover harvest, we conducted a sur-

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3/22/2012 12:37:42 PM | 117 JUNE 2012 | Ethanol Producer Magazine

STOVER

vey with the growers who participated in our program. In the survey, we asked growers what they felt was the greatest value of stover harvest in their farming operation. Many growers responded that agronomic advantages of stover harvest, most importantly residue management, were more valuable to them than the direct income they received as payment for stover.â&#x20AC;? Itâ&#x20AC;&#x2122;s important that the corn stover supply chain provide added

value for corn growers and that stover harvest be implemented in a sustainable manner that doesnâ&#x20AC;&#x2122;t jeopardize long-term productivity. In this regard, DuPont has worked closely with USDA, Iowa State University and other organizations to identify and implement the critical components of a sustainable stover harvest system. Mitigation of soil erosion, maintenance of soil organic matter and replacement of nutrients removed from the field with stover are three key sustainability factors that are taken into consideration in the harvest program. In practice, DuPont achieves sustainable stover harvest by targeting highyielding fields where excess stover is available and leaving a portion of stover behind in the field, and by altering harvest frequency based on field and management conditions. â&#x20AC;&#x153;On certain fields, stover should not be removed at all. On fields that are suited for removal, we donâ&#x20AC;&#x2122;t harvest every year and we donâ&#x20AC;&#x2122;t remove all of the stover when we do harvest,â&#x20AC;? explains Steven Mirshak, DuPont business director for cellulosic ethanol. â&#x20AC;&#x153;Environmental stewardship is one of DuPontâ&#x20AC;&#x2122;s core values, and this project offers us an immense opportunity to demonstrate how we act on this core value in creating a sustainable business around corn stover.â&#x20AC;?

Commercialization through Collaboration

Stover Survey The majority of corn growers who participated in Dupontâ&#x20AC;&#x2122;s 2011 Corn Stover Harvest and Collection Project reported that agronomic advantages were the greatest value they derived from stover harvest.

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118 | Ethanol Producer Magazine | June 2012

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DuPont is continuing to expand the Iowa Corn Stover Harvest and Collection Project in 2012. This year, more than 100 corn growers and approximately

STOVER

Author: Andy Heggenstaller, PhD Agronomy Research Manager, Pioneer Hi-Bred (800) 247-6803 andy.heggenstaller@pioneer.com

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engineering for a better world

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25,000 acres of stover will be contracted, representing about one-seventh of DuPont’s first biorefinery’s annual commercial feedstock requirement. While the 2011 corn stover program had a focus on research and development, the primary objectives of the 2012 program are to conduct a commercially representative harvest operation and to prove out the business model developed for corn stover supply. DuPont plans to begin construction of the Nevada biorefinery in the second half of 2012, with plant start-up expected to follow in late 2013 or early 2014. DuPont’s first cellulosic ethanol biorefinery site will be strategically located next to Lincolnway Energy, a corn grain ethanol processor in Nevada, Iowa. “The stover value chain doesn’t end at the biorefinery gate,” explains DuPont plant manager, Keith Gibson. “Coproducts will be important for cellulosic ethanol, just as they are for starch-based ethanol. Lignin will be our primary coproduct and this material is targeted to be recycled onsite to provide low-cost, sustainable process energy for our biorefinery as well as for the neighboring corn grain ethanol plant. The two plants will also look to leverage synergies such as utilities and logistics.” Collaborations have proved critically important for DuPont’s efforts so far in developing the corn stover commodity supply chain. At DuPont, we believe that partnering in this way is how we will arrive at more sustainable energy solutions for a world that increasingly demands them. “Corn stover is clearly not the only cellulosic feedstock out there,” explains Althoff, “just the first one.” As DuPont looks ahead at commercializing cellulosic ethanol in other parts of the country, it will also be exploring other feedstocks and working with new partners to create sustainable supply chains that capture value for fuel processors as well as feedstock producers.

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