INSIDE: DDGS EXPORTS TO CHINA BRING PROMISE, CHALLENGES MARCH 2010
Sorghum Surges
One-Third Goes to Ethanol, And Room for Growth
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ETHANOL PRODUCER MAGAZINE
March 2010
contents
vol. 16 no. 3
features 40 USE E15: Beyond the Waiver EPA’s expected approval of E15 is only the beginning. Issues surrounding implementation are emerging. –By Erin Voegele 48 ALTERNATIVES Biobutanol: Friend or Foe? Two developers make the case that biobutanol can exist alongside corn ethanol and help the biofuels industry grow. –By Erin Voegele 56 SORGHUM Sorghum Surges Ethanol producers in the Southwest choose sorghum not just because it’s priced lower than corn. Some feeders prefer the distillers grains, too. –By Holly Jessen
64 MARKETS China Trade Explodes DDGS shipments to China took off in the third quarter, demonstrating the promise of the new market. It won’t be an easy market to master, however. –By Susanne Retka Schill
72 FEEDSTOCK ‘Beeting’ a Path to Advanced Biofuels A North Dakota partnership is developing a sugar beet-to-ethanol model including a new technology to recycle waste for a combined heat and power system. –By Anna Austin 78 CORN Pork and Ethanol Face Off Pork producers consider ethanol a competitor for finite corn supplies. The ethanol industry offers a different view.
78
–By Craig A. Johnson
ON THE COVER Western Plains Energy, Oakley, Kan. PHOTO: DEBBIE McNINCH
ETHANOL PRODUCER MAGAZINE
March 2010
5
TOGETHER WE HOLD THE WINNING HAND AND WE’RE PLAYING FOR THE FUTURE Do you want to be a frontrunner in the cellulosic bioethanol industry?
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contents departments
contributions 84 FERMENTATION Efficient Ethanol Production Honing in on the optimal fermentation tank design will ensure hygienic conditions for optimal yeast growth. –By Karsten Deuringer and Sven Fleischer
8 Advertiser Index 10 The Way I See It Fix the Fence, Tackle the Core Problem By Mike Bryan 14 Business & People 18 Commodities
84
20 View From the Hill The Ethanol Decade Redux By Bob Dinneen 21 RFA Update 90 COMPLIANCE Ethanol Producers Face Current, Future GHG Emissions Reporting Concerns The new mandatory GHG reporting regulations are outlined. –By Wade Watson
90
94 EQUIPMENT Sidestream Filtration of Cooling Systems There are a number of things to consider when evaluating the need for adding a filtration system to a plant’s cooling tower system.
22 BIObytes 24 Industry News 34 Drive Green Jobs Waiver is Necessary for Market Expansion By Tom Buis 36 Finance Farmers Should Enter Farm Program Gate with Eyes Wide Open By Todd Jennison 38 eBio Sustainability Certification: Welcome to the Maze By Robert Vierhout 98 Events Calendar 99 Marketplace
–By Dan Lingen
94 Ethanol Producer Magazine: (USPS No. 023-974) March 2010, Vol. 16, Issue 3. Ethanol Producer Magazine is published monthly. Principal Office: 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. Periodicals Postage Paid at Grand Forks, North Dakota and additional mailing offices. POSTMASTER: Send address changes to Ethanol Producer Magazine/ Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, North Dakota 58203.
ETHANOL PRODUCER MAGAZINE
March 2010
7
AdIndex 69 & 93 2010 International BIOMASS Conference & Expo 62 2010 International Fuel Ethanol Workshop & Expo 54 2010 Northeast BIOMASS Conference & Expo
32 & 33 Hydro-Klean Inc. 4 ICM Inc. 12 & 13 Inbicon 26 Indeck Power Equipment Co.
74 2010 Southeast BIOMASS Conference & Expo
28 Intersystems
88 2011 National Ethanol Conference
76 Kennedy and Coe LLC
80 Advanced Trailer Industries
16 Lallemand Ethanol Technology
50 Agra Industries Inc.
30 Lindquist & Vennum PLLP
91 ATEC Steel
53 Louis Dreyfus
61 BetaTec Hop Products
75 Martrex Inc.
44 Brock Grain Systems
71 Mettler Toledo
89 Biomass Magazine
86 Nalco Co.
29 BrownWinick Law Firm
42 Natwick Associates Appraisal Services
68 Buckman Laboratories Inc. 70 Buhler Aeroglide 2 Burns & McDonnell 103 Cereal Process Technologies
6 Novozymes 55 Phibro Ethanol Performance Group 37 Pioneer Hi-Bred International Inc. 104 POET LLC
45 Cloud/Sellers Cleaning Systems
96 Premium Plant Services Inc.
43 CPM Roskamp Champion
81 Pro-Environmental Inc.
83 Crown Iron Works Co.
92 Resonant BioSciences
59 Dillion Transport
85 Rev Tech LC
17 Eco-Energy Inc.
47 Renewable Fuels Association
51 EISEMANN Corp.
60 RSM McGladrey Inc.
82 Encore Business Solutions
95 SGS North America Inc.
97 ethanol-jobs.com
39 Tranter Phe
35 Fagen Inc.
63 Veolia Water Solutions & Technologies-HPD
31 FCStone, LLC
87 Victory Energy Operations LLC
3 Fermentis - Division of S.I. Lesaffre 77 Freez-it-Cleen 66 & 67 Gavilon
8
11 & 46 Genencor速 - A Danisco Division
58 Vogelbusch USA Inc. 52 Wabash Power Equipment Co. 27 WINBCO
ETHANOL PRODUCER MAGAZINE
March 2010
HOW TO REACH US
LETTERS TO THE EDITOR We welcome letters to the editor. Send your letter to: Ethanol Producer Magazine Letters, 308 Second Avv. N., Suite 304, Grand Forks, ND 58203 or
EDITORIAL
PUBLISHING & SALES
Susanne Retka Schill Editor sretkaschill@bbiinternational.com
Mike Bryan Chairman mbryan@bbiinternational.com
Holly Jessen Associate Editor hjessen@bbiinternational.com
Joe Bryan CEO jbryan@bbiinternational.com
e-mail to sretkaschill@bbiinternational.com. Letters should include the writer’s full name, address and telephone number, and may be edited for purposes of clarity and space.
SUBSCRIPTIONS Ethanol Producer Magazine is now free of charge
Luke Geiver Associate Editor lgeiver@bbiinternational.com
Tom Bryan Vice President, Content tbryan@bbiinternational.com
Jan Tellmann Copy Editor jtellmann@bbiinternational.com
Matthew Spoor Vice President, Sales & Marketing mspoor@bbiinternational.com
ART
Marla DeFoe Advertising Coordinator mdefoe@bbiinternational.com
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.
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You can also fax a subscription form to (701) 746-5367.
CUSTOMER SERVICE AND CHANGE OF ADDRESS For service, please use our Web site at www.EthanolProducer.com.
Jeremy Hanson Senior Account Manager jhanson@bbiinternational.com
You can also call (866) 746-8385, or write to: Ethanol Producer Magazine, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203.
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Select back issues are available for $3.95 each, plus shipping. To place an order, contact Subscriptions at (701) 746-8385 or service@ bbiinternational.com. Article reprints are also available for a fee.
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ADVERTISING Jason Smith Subscriber Aquisition Manager jsmith@bbiinternational.com
For advertising rates and our editorial calendar, visit www.EthanolProducer.com or call (866) 746-8385.
COPYRIGHT Š 2010 by BBI International
ETHANOL PRODUCER MAGAZINE
March 2010
9
The Way I See It
Fix the Fence, Tackle the Core Problem Working our way through the maze of carbon credits, cap-and-trade greenhouse gas (GHG) emission reduction requirements is complicated, to say the least. If the goals of the Obama administration are achieved, reaching 1990 emission levels by 2020 and an 80 percent reduction in GHG emissions from 1990 levels by 2050, it will be a marvelous achievement indeed. There will be significant ancillary economic benefits, such as emissions trading programs, emission monitoring systems, emission reduction strategies and studies, and emission reduction technology providers, to name just a few. In short, GHG reduction requirements will be big business. Many companies have already recognized the opportunities and are positioning themselves for profit. A simple scan of the Internet will demonstrate that point. Buying carbon credits, while it may be in compliance with the developing regulations of many countries, has always seemed like avoidance of compliance rather than actually doing something positive to reduce emissions. If the U.S. actually achieves the kind of reductions targeted, we will have created a multi-billion dollar pollution to profit industry. While that may not be a bad thing for America, does it truly help the world’s environment? Multinational U.S. companies operate in some of the poorest countries in the world, buying/trading credits from themselves in the United States in order to achieve compliance in a particular country. Heavily polluting domestic companies in various countries will buy carbon credits from U.S. companies based in their country to avoid having to achieve physical compliance themselves. Sweet … except, perhaps, for the environment!
In large part, the carbon that we are trying to reduce is coming from petroleum. It seems as though there should be a much greater emphasis on replacing the pollution causing element along with other GHG reduction strategies. We didn’t seem to hear a lot about alternative fuels at the Climate Change Conference in Copenhagen in December. Rather, the strategy focused on forcing industry, already burdened with high costs and shrinking profits, to make the changes to compensate for petroleum. If the world is serious about GHG reductions then we should attack the problem—petroleum—at its core. Instead, we seem to be focused on the cows in the corn, rather than fixing the fence. Alternative fuels are not a panacea for global warming, but they should be an integral part of the strategy for every major country in the world that is serious about GHG reductions. The world should be focused on the environment and reducing the base source of GHG emissions. If avoidance through credit trading is the strategy then we have truly missed a once-in-a lifetime opportunity. That’s the Way I See It!
Mike Bryan Chairman mbryan@bbiinternational.com
10
ETHANOL PRODUCER MAGAZINE
March 2010
Open house at the new home for The New Ethanol™.
In November we opened the first Inbicon Biomass Refinery. Customers came to Kalundborg from Europe, Japan, and the United States. More international visitors stopped by during the climate summit in Copenhagen. “It doesn’t look like any ethanol plant we’ve ever seen,” they said. It doesn’t because it isn’t. Here we’re spinning 30,000 metric tons of wheat straw a year into 1.4 million gallons of The New Ethanol. Our process also produces a lignin so clean it can be used by power generation plants without further treatment to replace coal and produce greener electricity. In return, the power plant supplies waste steam to cook the refinery’s straw. This energy exchange
creates a dramatic boost in the efficiency of both plants. The Danish modern design also houses the new Inbicon Biomass Technology Campus. It’s home to R&D as well as our client and partner center. Here we’ll foster worldwide collaboration with scientists, owners, financiers, and construction executives on everything from quality control to revenue enhancement to staff training. Join us in the knowledge exchange that keeps us continuously improving our process. By spring, we’ll have the plant in full operation, continuing to optimize it. So if you didn’t come for the opening, come for the open house we’ll arrange just for you. Call Thomas Corle at 01.717.626.0557 or e-mail info@inbicon.com.
Inbicon Biomass Refinery. Making ethanol work for the world.™
© 2009 Inbicon, Kraftværksvej 53-Skærbæk, 7000 Fredericia, Tel +45 76 22 20 00 The New Ethanol™ and Inbicon Biomass Refinery™ are trademarks of Inbicon A/S and DONG Energy A/S.
www.inbicon.com
Business&People Ethanol Industry Briefs
Hawkeye Renewables LLC filed for Chapter 11 bankruptcy at the end of 2009. The company, a subsidiary of Hawkeye Energy Holdings LLC, owns and operates two Iowa-based ethanol plants: a 100 MMgy facility in Iowa Falls, Iowa, and a 115 MMgy facility in Fairbank, Iowa. Normal operations are continuing at both ethanol plants. Hawkeye Energy’s other subsidiaries, Hawkeye Growth and Hawkeye Gold, are not a part of the reorganization and are unaffected by the filing. Hawkeye Growth owns and operates two other Iowa ethanol plants in Menlo and Shell Rock. Hawkeye Gold is responsible for marketing the ethanol and distillers grains produced at all four plants.
Bion Environmental Technologies Inc. is developing a large-scale integrated beef cattle finishing plant and closedloop ethanol project that has received the unanimous support of the Schroeppel, N.Y., town board. The first phase will include finishing facilities for 72,000 beef cattle, ethanol production and an associated beef processing plant. The company will use a patented, proprietary, waste treatment system. Bion expects that as much as 25,000 acres of previously abandoned, or under-utilized farm land will 14
be needed to provide inputs for the project. The preconstruction phase is expected to take as long as two years.
Pinal Energy LLC, a 55 MMgy ethanol plant in Maricopa, Ariz., has plans to market E85 under the trademarks Arizona E85 and AZE85. The company is adding storage for the higher grade gasoline needed for blending E85 along with metering equipment for inline blending. Pinal Energy’s sister company, Pinal Jet, will sell the branded E85 in the regional market. The company plans to offer its trademarked E85 to local government, taxi and rental car fleets, and retailers. “Our main selling point is that it’s a cleaner burning fuel,” said General Manager John Skelly. “And it’s a U.S. produced product.”
GreenShift Corp. has granted Global Ethanol LLC, a 100 MMgy ethanol plant in Lakota, Iowa, the right to use a its patented corn oil extraction technology. The system “drills” into the back-end of first-generation corn ethanol plants, tapping into the existing reserve of inedible
crude corn oil. Global Ethanol will finance, build, own and operate a facility based on GreenShift’s technology in exchange for an ongoing royalty payment of roughly 20 percent of the market price of the extracted corn oil at the time of shipment.
Blackmer, an operating company within Dover Corp.’s Pump Solutions Group, has created a brochure specifically for the liquid terminals market. The brochure describes how the incorporation of Blackmer’s rotary sliding vane and centrifugal pumping technologies can help liquid-terminal operators improve the efficiencies and reliability of their transfer, blending/ mixing and transportation applications. The brochure includes an application matrix and schematic drawing that depict where specific Blackmer pump types fit into traditional liquid-terminal operations.
Zeeland Farm Servic-
es, a Michigan-based agricultural and transportation company, has purchased its first ethanol facility. It formed a subsidiary, Nebraska Corn Processing LLC, to purchase the 44 MMgy Mid America Agri Products/Horizon LLC in Cambridge, Neb., for $30.1 million during a Dec. 17 bankruptcy auction. The facility, which began producing ethanol in 2007, has been idle since January 2009. MAAP/H filed for bankruptcy June 3 and laid off all employees. The sale to Nebraska Corn Processing was expected to be final by early February.
Praj Industries Ltd. and Novozymes AS, which have collaborated within conventional biofuels for several years, have announced a plan to work together on advanced biofuels to optimize the enzymatic hydrolysis processes and the use of enzymes in the production of advanced biofuel. Praj is completing pilot trials of its cellulose-toethanol technology in India. The company has used a variety of
ETHANOL PRODUCER MAGAZINE • March 2010
Sponsored by
feedstocks, including sugarcane bagasse, corn cobs, straw, wood chips and grasses, according to Pramod Chaudhari, chairman of Praj.
switchgrass and algae to biofuels, polymers and specialty chemicals. “As the external advisory board develops and corporate partners emerge, we hope to expand the breadth and depth of our programs,” said John Russin, AgCenter associate vice chancellor and institute director.
The Energy & Environmental Research Center Foundation and Whole Energy Fuels Corp. are poised to commercialize cellulosic biofuel technology developed at the EERC. Whole Energy is receiving global, exclusive licensing rights to EERC’s technology, which converts biomass and other recycled material into liquid biofuels. EERC is located at the University of North Dakota and Whole Energy Foods is headquartered in Bellingham, Wash.
Codexis Inc. has filed a registration statement with the U.S. Securities and Exchange Commission in preparation for an initial public offering of shares of its common stock. Californiabased Codexis has developed a proprietary technology platform that enables the creation of optimized biocatalysts that make existing industrial processes faster, cleaner and more efficient than current methods, according to the company’s registration statement. The technology platform will enable the development of biocatalysts that can be used to produce commercially viable, cellulose-derived biofuels, according to the company.
The Louisiana State University Agricultural Center is working to establish the Louisiana Institute for Biofuels and Bioprocessing (LIBBi), a research, education and outreach initiative within the AgCenter. The Board of Regents initially approved the project to create a “virtual center” for one year. Initially, the LIBBi will encompass all ongoing research projects within the AgCenter, including those involving the conversion of bagasse, sweet sorghum,
Fred Zeidman has joined XRoads Solutions Group as a principal, focused on growing the firm’s global energy practice and spearheading other growth initiatives. Zeidman was CEO, president and chairman of Seitel Inc., most recently served as chief restructuring officer of Transme-
ETHANOL PRODUCER MAGAZINE • March 2010
ridian Exploration Inc. and was Weaver, an independent interim president of Nova Bio- certified public accounting (CPA) source Fuels Inc. Also, notably, firm, has launched “The Weaver President George Renewable and Clean W. Bush appointed Energy Source” energy him as chairman of blog which can be found the United States at www.weaverllp.com/ Holocaust Memorial energyblog. William Council in 2002. “As Newman, CPA and partone of the country’s ner, and Wade Watson, leading energy turnCPA, CFE and partner, Zeidman around experts and post articles on gasoline a proven thought and transportation fuel leader in the industry, his exper- regulations and how they relate to tise will be a valuable addition to the energy industry as well as the the firm’s capabilities,” said Den- E15 ruling and RFS2. “Offering nis Simon, managing principal. this energy blog gives our current and potential clients additional information as it Two ADF becomes available,” said Engineering Inc. John J. Mackel III, CPA, employees passed director of energy serthe Ohio Profesvices and partner for assional Engineer surance services. EP exam in Chemical Engineering. Matt Williamson SHARE YOUR INDUSTRY Williamson is a BRIEFS To be included in Busiprocess departness & People, send information (including photos and logos ment manager if available) to: Industry Briefs, and has been with Ethanol Producer Magazine, 308 ADF Engineering Second Ave. N., Suite 304, Grand Forks ND 58203. You may also since May 2008. fax information to (701) 746-8385, Beth Hery is a seor e-mail it to sretkaschill@bbiinnior process engiternational.com. Please include Hery your name and telephone number neer and has been in all correspondence. with the company since 2005. ADF Engineering has corporate headquarters in Miamisburg, Ohio. The company is an engineering and consulting firm serving the food-feed-fuel and bioscience industries in the United States and Canada. 15
Toulouse Mercure Toulouse Atria
April 26–30, 2010 A Tradition of Industry Education For 29 years, The Alcohol School has been educating fuel ethanol and distilled beverage producers in the science of alcohol production. The weeklong programme in Toulouse, France, is designed for lab, plant, and management personnel and is organized around a series of lectures and laboratory demonstrations presented by a faculty of academic, industry and Ethanol Technology Institute experts. The programme will cover the process of ethanol and beverage alcohol production from milling and mash preparation through fermentation and distillation. Enzyme usage, yeast biology, bacterial contamination and control will also be discussed along with other issues currently affecting both industries.
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COMMODITIES REPORT
Natural Gas Report By Brad Smith, U.S. Energy Services Inc.
Exxon deal heralds new era Jan. 15—Exxon announced it will purchase XTO Energy for $30.2 billion in stock and $10.2 billion in assumed debt, paying a 25 percent premium to current stock prices to obtain the wide-ranging, unconventional leasehold positions of XTO. Currently the largest natural gas producer at 4 percent of supply, XTO is heavily focused in shale producing regions, including Barnett, Fayetteville, Woodford, Haynesville, Bakken and Marcellus.The deal validates new technologies accessing low-cost shale and could be the tipping point for a new era with long-term investment horizons for natural gas production. For end-users it means that as multinationals obtain shale reserves, gas supply (and prices) will likely stabilize in the long term as multinationals are much less price responsive, entering 10- or 20- year deals and ignoring cyclical volatility. Until now, the natural gas industry has been dominated by exploration and production (E&P) companies and private producers who invest and drill based on year-to-year price expectations. Exxon is more focused on long-term expectations that natural gas demand will grow at almost double the level of oil. The purchase places a value on E&Ps that have invested in the development of shale reserves despite high debt loads and spending
beyond current year cash flows. E&Ps have been rewarded in share price largely based on market share, cash flows and reserves. As some E&Ps get hitched to enormous balance sheets and stable financing structures, those left behind will struggle. XTO was a prime candidate for acquisition because of its broad-based reserves and relatively low price to earnings. Based on proven reserves and comparable multiples, I would not be surprised to see Devon or EOG be the next domino to fall. Though less attractive, Encana also seems to be positioning itself for acquisition. The Exxon deal was a bit of a surprise because Exxon has invested billions in Qatar LNG projects that have the potential to increase U.S. supply and further suppress prices, possibly changing future LNG flows. The other interesting part of the Exxon deal is the mention that it may relocate XTO personnel to focus on international shale opportunities (Poland has been mentioned as a possibility). This could dampen U.S. production growth versus current expectations. EP Brad Smith, price risk manager, can be contacted at bsmith@ usenergyservices.com.
Corn Report By Jason Sagebiel, FCStone
Bigger yields, more corn despite slow harvest Jan. 15—Bigger yields and more corn were harvested this year despite one of the slowest harvests on record, according to the USDA. U.S. corn production shattered records in the January supply/ demand with a yield projected at 165.2 bushels per acre, surpassing the 2004 yield of 160.4. In addition, the USDA increased harvested acres from 79.3 to 79.6 million acres which actually surprised traders as corn continued to sit idle in fields still this winter. The combination of increased yields and harvested acres placed production at 13.15 billion bushels. The demand side of the corn table observed an increase of 150 million bushels for corn in feed demand. This could indicate that livestock production has plateaued and is expected to increase slightly. The USDA has left corn demand for ethanol production at 4.2 billion bushels, which accounts for 32 percent of the total demand in 2009-’10. One thing to keep in mind is that distillers grains has to be added back in to a feedstuff supply/demand table as exported or used domestically as livestock fodder. Nonetheless, the USDA is projecting a 1.76 billion bushel carry-out or 13.5 percent carry-out to use ratio. Due to an increase in usage, stocks to use ratio is actually lower this year than in the previous year. On a global scale, world corn carry-out continues to increase with today’s figure at 136.19 million metric tons. Ultimately with a bigger crop observed here in the U.S. and a larger crop expected in Argentina, total production increased. The market will continue to 18
watch South American soy and corn production as well as China soy demand. Weather will be an issue into the spring, with corn yet to harvest and then follow up with field work and planting. This may offer some volatility. With the latest corn production figures, the market may not rely on outside influences as solidly. However, the USDA is planning to resurvey corn and soybean producers in certain states where fall harvest had been delayed. This data will be released in the March USDA report. EP ETHANOL PRODUCER MAGAZINE • March 2010
COMMODITIES REPORT
DDGS Report
($/gallon as of Jan. 15) - Front Month Futures Price (AC) $1.78
RACK
REGION
SPOT
West Coast
1.910
2.30
Midwest
1.795
2.15
East Coast
1.905
2.13
By Sean Broderick, CHS Inc.
DDGS feeling the pinch of logistics Jan. 15—West of the Mississippi, car availability is directly determining monthly netback averages at ethanol plants, commanding a $20 plus premium above local truck markets. In midJanuary, some plants were just loading cars expected three weeks earlier, keeping the delivered rail market tighter than expected given the January drop in corn. Trucks prices were feeling the effects of the rail shortage, cheaper corn and a local market near saturation. The Chicago container market for exports was a focal point for trucks, netting back $10 more than most local markets. While the barge market is trading down as more trucks find their way to the river, West Coast Asian bulk demand is increasing due to distillers grains’ good value in international markets. West Coast delivered prices are about
Regional Ethanol Prices
$10 per ton cheaper than barges in New Orleans, but the vessel freight spread is still about $40/ton cheaper out of the Seattle/Tacoma area compared to the Gulf. Three bulk ships for February/ March traded in the past two weeks. Domestically, DDG prices have not given up as much as corn has, but are much lower as a percentage of corn than normal for this time of year. Profitability is improving in all animal feeding sectors, a positive for feed demand. Feed yard demand for DDGS may be affected by plentiful feed wheat from SW Kansas. The South American crop looks big, and likely will affect CBOT prices as it progresses. Toxin issues have been quiet and we are hopeful the challenges are being managed properly to avoid any impact on exports. EP
SOURCE: DTN
Regional Gasoline Prices ($/gallon as of Jan. 15) - Front Month Futures Price (RBOB) $2.0454
REGION
SPOT
West Coast
1.9447
2.1900
Midwest
2.0230
2.1338
East Coast
2.0502
2.1623 SOURCE: DTN
DDGS Prices ($/ton) LOCATION
JAN. 2010
DEC. 2009
JAN. 2009
Minnesota
95
105
135
Chicago
105
133
120
Buffalo, N.Y.
120
135
135
Central Calif.
161
171
175
Central Florida
146
152
157 SOURCE: CHS Inc.
Corn Futures Prices DATE
(Dec. corn, $/bushel)
HIGH
LOW
CLOSE
Jan. 15, 2010
3.79 3/4
3.69 1/2
3.71 1/2
Dec. 15, 2009
4.10
4.05
4.07 1/2
3.68 1/2
3.60
Jan. 1, 2009
Ethanol Report
RACK
3.65 1/4 SOURCE: FCStone
By Rick Kment, DTN Biofuels Analyst
Ethanol’s pull on gasoline weakens Jan. 15—The beginning of January has been brutal in the Midwest with unusually high snowfall amounts and bitterly cold temps significantly slowing supply movement from the heart of ethanol-producing country to the coasts. Most ethanol is moved by train, but due to many Midwest regions having been blanketed with 10 to 30 inches of snow and blizzard-like conditions over the holidays, travel has been ugly. But ethanol is being produced nonetheless, and at this writing, most of the major markets are back in business. The logistical challenge created significant volatility in ethanol prices throughout the country, but was short lived. The weakness in the corn market following the January USDA report sent ethanol prices into another tail spin for several days.
Support has been moderate to strong in the energy complex over the holidays and well into the month of January, but traders remain cautious of future upward moves due to the seemingly sluggish economic news reported at the end of January. The price spread between gasoline and ethanol markets has continued to widen with ethanol losing ground very quickly. Even though there is a potential for more demand due to the cost effectiveness of ethanol, blenders may also be just using less product at this point which could hinder overall ethanol demand in the coming weeks. Additional weakness in the stock market during the first couple weeks of February could continue to put pressure on ethanol markets and widen the gap between gasoline and ethanol. EP
ETHANOL PRODUCER MAGAZINE • March 2010
Cash Sorghum Prices ($/bushel) JAN. 15, 2010 DEC. 18, 2009 JAN. 16, 2009 Superior, Neb. Beatrice, Neb. Sublette, Kan. Salina, Kan. Triangle, Texas Gulf, Texas
$3.17 $3.09 $2.84 $3.21 $3.12 $3.96
$3.43 $3.33 $3.06 $3.48 $3.40 $4.18
$3.04 $2.96 $3.07 $3.18 $2.98 $3.91 SOURCE: Sorghum Synergies
Natural Gas Prices
($/MMBtu)
JAN. 2010
DEC. 2009
JAN. 2009
NYMEX
5.814
4.486
6.136
N. Ventura
6.190
4.920
6.170
Calif. Border
6.020
4.790
5.290
SOURCE: U.S. Energy Services Inc.
U.S. Ethanol Production Output October 2009
741,000
September 2009
725,000
October 2008
647,000
(barrels/day)
SOURCE: U.S. Energy Information Administration
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VIEW FROM THE HILL
The Ethanol Decade Redux This moment in time is unlike any in our industry’s history. After a decade that saw unprecedented growth and expansion of America’s ethanol industry, we are just now beginning to scratch the surface of our potential. Right now, ethanol is approaching 10 percent of the nation’s gasoline supply. In the years to come, ethanol will comprise 15, 20, and even 25 percent of the fuel America requires. Most excitingly, the tens of billions of gallons of ethanol that will be required will come from an increasingly diverse menu of feedstocks. Existing ethanol biorefineries are already developing and adopting new technologies that are increasing ethanol yields, improving the quality of livestock feed produced, and creating new bio-based coproducts that increase profits and decrease the need for other fossil fuel-based products. Likewise, entrepreneurs and visionaries are fine-tuning the next generation of ethanol production processes that will utilize agricultural residues, wood wastes, grasses and even garbage to dramatically increase ethanol production and replace petroleum-based fuels. At the same time, the industry is actively expanding infrastructure to provide Americans with more choice at the fuel pump. Campaigns such as the Renewable Fuel Association’s and American Coalition for Ethanol’s Blend Your Own Ethanol are working with brave, forward-looking gasoline retailers to install blender pumps and other infrastructure to offer drivers of ethanol blends, depending upon their preference and the price.
The progress that will come to define this new decade is not limited to the marketplace. On Capitol Hill and in state assemblies around the country, sound public policies are being discussed and advanced that, if done correctly, will ensure America finally moves away from the oil status quo. Extending the tax incentives for ethanol blending, increasing the blend wall, implementing and defending the renewable fuels standard, and formulating a fair national low carbon fuels policy are all necessary for the industry to succeed. With your help, the RFA will lead the industry in these battles and help expand upon the strong public policy underpinnings we have all fought hard to achieve. Without a doubt, challenges will be made as to the necessity of ethanol, its true environmental benefits, its impact on the economy, and its role in the nation’s energy future. Armed with the facts, these challenges will be met head on and turned into opportunities to expand awareness and knowledge about America’s leading biofuel. As more people realize that futuristic fuels such as hydrogen are a distant dream, ethanol’s importance to the nation’s fuel supply will continue to grow. I have said before that the Aughts, Naughts, or whatever you call them, were the Ethanol Decade. But there is no reason that the new decade can’t be ethanol’s as well. Or this century, for that matter. We stand at the precipice of opportunity that many industries dream of, but few ever reach. This year, this decade, and this opportunity will be what we make of it.
Bob Dinneen President and CEO Renewable Fuels Association 20
ETHANOL PRODUCER MAGAZINE • March 2010
RFA UPDATE
w w w. e t h a n o l R FA . o r g
RFA critical of latest anti-ethanol report from Rice University A recent policy paper from Houston-based Rice University and sponsored by Chevron seeks to continue the orchestrated campaign to limit, and ultimately eliminate, the use of biofuels to displace foreign oil. In its commentary, researchers from Rice rely upon out-of-date information and questionable assumptions to denigrate Congress, farmers and ethanol producers for their support of domestically based renewable fuels. “Not surprisingly, this oil industry-sponsored analysis relies on myths, generalities, half-truths to dismiss ethanol while providing no comparison to our increasingly dangerous and costly addiction to oil,” said Renewable Fuels Association Director of Public Affairs Matt Hartwig. “A debate about the appropriate role of biofuels is valid and should occur, but not without proper context and not based upon last century’s assumptions.” Hartwig offered a critique of a number of misleading statements and assumptions made in the Rice paper, including: The paper assumes 44 percent of the 2007 corn crop will be needed to meet the 15 billion gallons of ethanol called for in the renewable fuels standard (RFS). It does not account for the third of each bushel that is returned to the feed market in the form of distillers grains, nor does it give credence to increased yields. Despite difficult planting and harvesting conditions, American farmers achieved record yields in 2009. The paper states, “The preponderance of evidence shows that existing biofuels offer no improvement over gasoline … when it comes to carbon emissions.” Every credible life-cycle analysis directly comparing ethanol to gasoline shows a carbon benefit to ethanol use, including the U.S.
ETHANOL PRODUCER MAGAZINE • March 2010
EPA’s assessment of a 61 percent benefit. Only when the unproven and controversial notion of international indirect land use change is applied to ethanol and not to gasoline do the carbon benefits of ethanol suffer. The paper assumes additional land, including marginal acres, will be needed to fulfill the RFS mandates. This is not necessarily true. Based upon yield trends, corn production on roughly the same number of acres being cultivated will be sufficient to meet the corn-based ethanol demands of the RFS. New feedstocks, such as crop residues, wood waste, and grasses, will also be used and will require no additional acres. The paper criticizes the secondary tariff on imports of ethanol, but provides no context. The secondary tariff exists to offset the tax credit available to imports of ethanol. The tariff does not restrict trade, as evidenced by the import of ethanol when needed, but rather protects American taxpayers. Moreover, no discussion is given to the 25 percent tariff Brazil places on imported ethanol. Given the poor sugar crop in Brazil, it is likely U.S. ethanol could be exported and face the 25 percent tariff. The paper generalizes that irrigated corn used for ethanol production will be in the same proportion as all irrigated corn (about 18 percent of the total crop). Analysis from the National Renewable Energy Laboratory indicates that 96 percent of all corn used in ethanol production is non-irrigated.
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BIObytes Ethanol News Briefs
Brazilian companies sign MOU Petrobras, its subsidiary Petrobras Biocombustível S.A. (PBio), and Petrochina International Co. Ltd. recently signed a six-month memorandum of understanding. Through joint studies, the companies will assess the economic and technical feasibility of new ethanol
production in Brazil and the exportation of ethanol to China, according to Petrobas. China intends to pursue ethanol production on home soil as well as to invest in Brazilian production of ethanol, because it is unable to supply its own market solely with local production.
Annual biofuels production tops 26 billion gallons globally
This year’s sugar cane yields in Brazil’s center south were down due to heavy rains.
Annual world biofuels production has surpassed 100 billion liters (26 billion gallons), displacing 1.15 million barrels of crude oil per day that create 215 million tons of greenhouse gas (GHG) emissions annually, according to a study commissioned by the Global Renewable Fuels Alliance released before the Climate Change Conference in Copenhagen. The study documented biofuels production in major producing coun-
tries along with estimates of GHG emissions. Those were compared to the amount of emissions avoided from displaced petroleum. GRFA did not include indirect emissions, explaining there are no credible assessments for indirect effects of petroleum, and available data for indirect effects of biofuels cannot be independently analyzed or verified. The report is available at www.globalrfa.org.
Brazil lowers ethanol blend
N.M. aims for biofuels leadership
In response to 8.3 percent reduced ethanol production in Brazil’s Center South, the government reduced its ethanol blend mandate from 25 percent to 20 percent. The three-month reduction will last through April. Ethanol production dropped due to heavy rains plus increased demand for sugar exported to India, according to Joel Velasco, UNICA’s chief representative for North America. The Brazil sugar cane industry isn’t concerned by the reduction and will simply produce less anhydrous ethanol, which is mixed with gasoline, and more hydrous ethanol, which has 4 percent water and is used unblended in Brazilian vehicles, Velasco said.
New Mexico Gov. Bill Richardson and the state’s congressional delegation launched an initiative in December to make New Mexico a leader in the biofuels industry. Approximately 50 experts representing industry, science, education, agriculture, nonprofit and government attended the first meeting entitled, “Toward a New Mexico State Plan for Biofuels Leadership.” The goal of the
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meeting was to create a roadmap that capitalizes on New Mexico’s human and natural resources. By focusing on the state’s unique combination of climate and natural resources, scientific expertise, business infrastructure and economic policies, Richardson said, “we are perfectly positioned to lead the country in the development and distribution of third generation biofuels.”
ETHANOL PRODUCER MAGAZINE • March 2010
Bunge purchases mills in Brazil Bunge Ltd. entered into an agreement to purchase a Brazilian-based holding company, Usina Moema Participacoes S.A. (Moema Par), which has one wholly owned sugarcane mill and ownership interest in five additional mills. The six mills have a combined
crushing capacity of 15.4 million metric tons, according to Bunge. When finalized, Bunge will own a 60 percent share of Moema Par’s total capacity. The mills produce both raw and crystallized sugar as well as hydrous and anhydrous ethanol.
Full-scale production began in January at the EU’s newest, largest wheat ethanol plant.
Ensus opens wheat ethanol plant DOE engineers new enzyme Scientists at the U.S. DOE’s Brookhaven National Laboratory have engineered an enzyme to aid in the conversion of plant material into cellulosic ethanol. The enzyme breaks down lignin in a plant’s cell walls. Biochemist Chang-Jun Liu, whose work has focused on lignin alteration, said the ultimate goal is to apply the enzyme to feedstocks, making the plants more easily
digested and fermentable. Liu’s team compared the genetic code of the new enzyme with information from enzymes involved in lignin synthesis to build the new model. Liu said Brookhaven’s engineered enzyme is “totally changed,” adding that the team still needs time to determine how the enzyme will affect lignin biosynthesis.
Europe’s largest wheat-based ethanol plant began full scale production in January at Wilton, Teesside, U.K. Owned by Ensus Ltd., the facility’s annual production capacity will reach 106 MMgy of ethanol and 386,000 tons of distillers grains. According to Ensus CEO Alwyn Hughes, more than 300,000 tons of carbon dioxide produced at the plant will be captured for use in the food and beverage industries in an effort to improve the plant’s carbon footprint.
India promotes nontraditional feedstocks The government of India recently approved a national biofuels policy that, it says, aims to make biofuels a major component of the country’s energy and transportation sectors, while contributing to energy security, climate change mitigation and job creation. The policy emphasizes the use of next-generation technologies that utilize non-traditional,
indigenous biomass feedstocks for the production of biofuels. As part of the policy, appropriate financial and fiscal mea-
ETHANOL PRODUCER MAGAZINE • March 2010
sures in the form of subsidies and grants will be considered to support the development of biofuels. India expects 20 per-
cent of its fuel be comprised of biodiesel and ethanol by 2017.
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PHOTO: MATT GRISWOLD
The Collins, Miss., blending terminal has 21 car spots for ethanol and biodiesel that can be unloaded simultaneously.
Terminals open in midst of pending legislation Blending terminals continue to open as ethanol demand increases. In December, Blendstar LLC, a Houston-based developer and operator of biofuels terminals, opened a facility in Collins, Miss., and U.S. Development Group LLC opened an ethanol terminal in Rialto, Calif., to meet an anticipated increase of in-state ethanol demand. The new blending stations arrive amid pending rail legislation. Sen. John Thune, R-S.D., along with Sen. Byron Dorgan, D-N.D. announced their support of the Surface Transportation Board Reauthorization Act of 2008, S.2889. According to Thune, the legislation would offer assistance to small shippers by streamlining the complaint process. A new arbitration system would be created for small rate complaints, an aspect Thune says would be valuable to grain elevators and farmer-owned ethanol plants that lack the time or expertise to challenge a railroad rate under the existing rate case procedures. In addition, the legislation would require a better policy balance between the interests of the railroads and their shippers, reinstate the STB’s ability to initiate investigations on its own initiative, and undertake a study of rail practices, including switching, demurrage, and other accessorial charges, including fuel surcharges. “For too long, the policies of the Surface Transportation Board, which was created to protect rail customers, have made it hard for captive shippers to get fair rail rates,” Dorgan said. “This bill isn’t perfect, but it will at long last make strides toward increasing rail competition.” Nearly 70 percent of all ethanol will travel via rail during the path to the marketplace according to a 2009 Renewable Fuel Association report.
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With the legislation pending, Blendstar’s plant in Miss., keeps moving forward with operations. “We began loading ethanol and biodiesel at the facility on Dec. 29,” Matt Griswold, president of Blendstar noted. “We have some minor construction (paint and landscaping) remaining but the facility is fully functional.” Green Plains Renewable Energy Inc., majority owner of Blendstar, hopes to continue expansion at the Collins terminal. GPRE President and CEO Todd Becker said, “Blendstar is focused on providing solutions for underserved markets that want an efficient way to blend and distribute biofuels into the nation’s fuel supply.” Distribution and location represent important aspects of the new terminal. “This terminal is ideally located to meet our customers’ needs,” Griswold said. “As the federal regulatory requirements for biofuels increase and pipeline operators add biofuels to their product lines, we believe locations like Collins will provide the most cost-effective channels for both local and regional distribution.” Although the proposed STB Act of 2008 is still pending, Griswold said they would support any legislation that results in more reliable and affordable rail shipments because, as the country relies more heavily on biofuel for its fuel supply, it is critical that all business related to the transportation of biofuels have the ability to effectively and efficiently ship and receive their products. For the positives of the rail legislation, he added, “I am hopeful that this legislation will help us move closer to this goal.” —Luke Geiver
ETHANOL PRODUCER MAGAZINE • March 2010
Industry moves forward with LCFS lawsuit Just a few weeks after Growth Energy and the Renewable Fuels Association filed a lawsuit in federal court over California’s low carbon fuel standard (LCFS), the California Air Resources Board moved ahead anyway. On Jan. 12, the state’s Office of Administrative Law gave final approval for phasing in LCFS, beginning in 2011. LCFS was first adopted by CARB in 2009 with a goal of reducing greenhouse gas (GHG) emissions by 10 percent by reducing the carbon intensity of transportation fuels used in California. For industry organizations such as the RFA and Growth Energy, the approval of California’s LCFS was disappointing news. “At a minimum, OAL should have sent the flawed regulation back to CARB, with direction they start over,” said Growth Energy CEO Tom Buis, in a prepared statement. “As written, CARB is depriving Californians of the one low-carbon, sustainable fuel available right now as an alternative to oil— and that is ethanol.” RFA President Bob Dinneen said that California’s LCFS “runs counter” to California Gov. Arnold Schwarzenegger’s goal to decrease carbon emissions. “As crafted, the LCFS would virtually eliminate domestic ethanol, the only viable lowcarbon alternative to gasoline, from the California marketplace in favor of imported ethanol and futuristic fuel technologies such as hydrogen and the electric car,” he said.
‘One state cannot dictate policy for all the others, yet that is precisely what California has aimed to do through a poorly conceived and, frankly, unconstitutional LCFS.’ Joint statement, Growth Energy and Renewable Fuels Association
RFA and Growth Energy filed the lawsuit to block “flawed regulation” on Dec. 24. A LCFS needs to be based on sound scientific principles and be consistent with federal laws, the two organizations said in a joint press release. “Were California
ETHANOL PRODUCER MAGAZINE • March 2010
to succeed in discriminating against corn-based ethanol as the LCFS is currently structured to do,” the press release said, “it would empower other states to defy the intent of Congress and establish a patchwork of fuel regulations that would greatly complicate the nation’s fuel infrastructure and potentially limit the trade of fuel and fuel components between states.” The 2007 Energy Independence Security Act identified domestic ethanol as a fuel important for the United States’ economy, energy security and environment. California’s LCFS contradicts that sound judgment, the industry organizations argued. “One state cannot dictate policy for all the others, yet that is precisely what California has aimed to do through a poorly conceived and, frankly, unconstitutional LCFS,” the organizations said. The way Todd J. Guerrero, an attorney within the energy group at Fredrikson & Byron P.A., explained it, due to the Supremacy Clause of the Constitution, state laws that interfere with or are contrary to federal laws are invalidated. In their lawsuit, RFA and Growth Energy allege that California’s LCFS “stands as an obstacle” to Congress’ intent in adopting EISA. The organizations cited the Commerce Clause as granting the federal government authority to regulate commerce between states. “(It) has also long been understood to limit the power of the states to discriminate against or unduly burden interstate commerce,” Guerrero said. Growth Energy and the RFA consider the LCFS to be imposing “excessive burdens on the entire domestic ethanol industry”. Furthermore, they don’t feel it will provide any benefits to residents of that state. “In fact, in disadvantaging low-carbon, domestic ethanol, the LCFS denies the people of California a genuine opportunity to clean their air, create jobs, and strengthen their economic and national security,” the joint press release said. The case will be closely watched as it unfolds by federal and state government, other industries and environmental organizations, Guerrero said. California’s LCFS, if it goes through or fails, has implications for other state greenhouse gas initiatives. The next step in the process is for California to file a response to the lawsuit. —Holly Jessen
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Eleven states commit to working on LCFS
These 11 Northeast and Mid-Atlantic states signed a memorandum of understanding Dec. 30, committing to developing a framework for a LCFS program by 2011.
26
After nearly two years of work on the issue, 11 Northeast and MidAtlantic states have committed to developing a framework for a regional low carbon fuel standard (LCFS) by 2011. The project started in July 2008, when Massachusetts Gov. Deval Patrick invited other area governors to evaluate the possibility of implementing a LCFS. That step led to 11 governors on Dec. 30 signing a memorandum of understanding (MOU) to do just that. The MOU has been signed by Massachusetts, New York, New Jersey, Vermont, New Hampshire, Maine, Connecticut, Rhode Island, Pennsylvania, Delaware and Maryland. The states include the 10 members of the Regional Greenhouse Gas Initiative, plus Pennsylvania. RGGI is a regional emissions reduction program that limits emissions from power plants. The governor of Massachusetts contacted fellow governors after Massachusetts established an advanced biofuels taskforce, said Robert Keough, spokesman for Massachusetts’ executive office of Energy and Environmental Affairs. The final report had numerous recommendations, one of which was to establish a regional LCFS. During the sum-
ETHANOL PRODUCER MAGAZINE • March 2010
mer of 2008, Massachusetts legislators passed the Clean Energy Biofuels Act, which required a LCFS. “Those were the two driving elements in Massachusetts taking the lead on this initiative,” Keough said. The goal is to reduce carbon emissions from vehicles and, possibly, home heating fuels. To achieve this goal, the states signing the MOU will evaluate and develop a framework for the program as well as a model law and key program elements that could be adopted by state rulemaking procedures or legislation. The regional group doesn’t want to target a specific fuel or technology. “We want to open up the playing field for the market to find the most cost-effective means of meeting that goal,” Keough said. One way to reduce green house gas (GHG) emissions could be electrification of vehicles. Cellulosic ethanol is also high on the list. “We think that’s going to be an important piece of the puzzle,” Keough said. Under the MOU, signatory states have committed to provide data for an economic analysis that will assess existing and potential fuels that could be used to achieve the LCFS goals. The states also have committed to determining the carbon intensity of fuels based on the best available science, including emissions resulting from land use changes attributable to fuel production.
According to information released by Connecticut Gov. Jodi Rell, the joint effort to establish a LCFS will promote the use of fuels that reduce GHG emissions, reduce exposure to gasoline price spikes, foster energy independence and create new jobs through clean energy technologies. GHG represents approximately 30 percent of emissions in the Northeast and Mid-Atlantic states, according to Rell. Studies have shown a regional LCFS could significantly reduce transportation-related GHG emissions. “This agreement puts the participating Northeastern and Mid-Atlantic states on the low-carbon road to the future,” Rell said. “These 11 states will create a larger market for cleaner fuels, which could help drive down prices when compared to the costs of ‘boutique’ markets created when states act independently. It will also reduce emissions associated with climate change.” Delaware Gov. Jack Markell echoed his colleagues, saying that a regional LCFS is expected to spur economic growth related to the development of advanced technologies and green energy jobs, while facilitating the long-term transition from petroleum-based fuels in the transportation sector. —Holly Jessen
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Valero adds to ethanol portfolio Already the third largest ethanol producer in the U.S., Valero Renewable Fuels Co. LLC, a subsidiary of oil refining giant Valero Energy Corp., continues to expand its ethanol holdings. In December the company purchased two 110 MMgy facilities from ASA Ethanol Holdings LLC. The plants, located in Linden, Ind., and Bloomingburg, Ohio, were initially acquired by ASA after VeraSun Energy Corp.’s bankruptcy in early 2009. In addition, Valero purchased a 110 MMgy Renew Energy LLC production plant in Jefferson, Wis., following a bankruptcy auction held Dec. 11. Valero first entered the ethanol production business in 2009 with the purchase of seven other plants from VeraSun’s bankruptcy auction. Bill Day, executive director of media relations said on the company’s entrance into the industry, “It made sense for our company to get into the business. Since its beginnings in 1980, Valero has grown by buying assets at a fraction of their replacement
28
cost, which is what we were able to do with the ethanol plants.” According to Valero, the three plants were acquired for roughly 41 percent of their estimated replacement cost. While still a bargain, the price paid per plant for the three facilities is significantly higher than the amount Valero paid for the seven bankrupt VeraSun plants it purchased earlier. Valero acquired all seven of those facilities, with a total production capacity of 760 MMgy, for $477 million. The recent plant purchases by Valero are expected to close in early 2010, giving Valero 10 ethanol plants with a combined capacity of 1.1 billion gallons per year. “All of the ethanol plants that we bought earlier this year are running at full capacity and doing very well for us,” Day said. “We are very pleased with the reception Valero has received in the communities where we purchased ethanol plants.” Renew CEO Jeff White says Valero has purchased a gem.
ETHANOL PRODUCER MAGAZINE • March 2010
He notes, “Together, with our cutting edge technology, this plant is one of the most efficient in the nation. Our founding owners deserve a lot of credit for building their dream of the most competitive ethanol plant in the world, but unfortunately, they hit the perfect storm of a crashing credit market, soft ethanol pricing, and a construction overhang resulting from the use of that very technology. They simply didn’t have the capital to weather the storm.” Valero’s purchase of the Renew plant was challenged in bankruptcy court, but reports indicated the judge ruled in favor of Valero in mid-January. All Fuels & Energy announced Dec. 22 that its subsidiary, All Fuels-Jefferson LLC, filed a motion for the court to reconsider the proposed sale order in the Renew Chapter 11 bankruptcy proceeding. All Fuels-Jefferson LLC was one of four qualified bidders at the Dec. 11 auction of the Renew ethanol plant held in Madison, Wis., which was managed by William Blair & Co. and Bankers’ Bank, the lead secured creditor in the bankruptcy proceeding. All Fuels-Jefferson LLC said important
information regarding the auction and determination of the winning bid by Blair and Bankers Bank was not brought to the bankruptcy court’s attention at the Dec. 14 sale confirmation hearing, including the fact that All Fuels-Jefferson LLC’s bid, announced as a bid of $72.1 million, was in fact a bid of $77 million to which a discount was applied by Blair and Bankers Bank. Valero Renewables will continue to be in the biofuels news as the new ethanol powerhouse also plans to invest in companies working on emerging biofuel technology, according to Day. Recently, Valero financed Georgia-based American Process Inc. through a subsidiary, Diamond Alternative Energy, to help develop a demonstration-scale cellulosic ethanol plant. “The investment with API on the cellulosic demonstration plant in Georgia, is one in a series of investments,” Day said. Valero has entered into agreements on the biodiesel side as well. —Luke Geiver
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Growth Energy: Delay or suspend proposed rule
Growth Energy strongly encouraged the U.S. EPA to delay or suspend implementation of a proposed rule to regulate greenhouse gas emissions. The rule would affect ethanol plants such as this one.
In comments submitted to the U.S. EPA on behalf of its ethanol producer members, Tom Buis, CEO of Growth Energy, strongly encouraged the EPA to either suspend or delay implementation of the proposed rule to regulate greenhouse gas (GHS) emissions. The proposed tailoring rule is separate from the GHG reporting requirement that became mandatory for large GHG emitters on Jan. 1. “The ethanol industry GHG emissions are significantly smaller than utilities (and actually more a cycling of the CO2 due to our feedstocks’ ability to absorb CO2 from the atmosphere) and other stationary sources that basically are fossil fuel processors,” Buis said in the comment. “Therefore, we encourage EPA to consider addressing other industries initially with this rule while working with the ethanol industry to develop best GHG control practices,” On Dec. 28, just a few days after Growth Energy submitted its comment, the EPA closed its 60-day comment period. Approximately 7,000 comments were received by the agency and must now be reviewed before the final rule is issued.
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www.lindquist.com/biofuels ETHANOL PRODUCER MAGAZINE • March 2010
The Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule would require all U.S. facilities emitting more than 25,000 tons of GHGs annually to obtain permits that demonstrate the facility is using best practices and technologies to reduce emissions. New thresholds for emissions would be established, resulting in a greater number of Title V permit program participants and the need for more facilities to acquire Prevention of Significant Deterioration permits. First, Growth Energy told the EPA it should suspend implementation if there are any legal challenges to the agency’s Endangerment Findings for Greenhouse Gases under the Clean Air Act. Second, Growth Energy encouraged the EPA to delay implementation of the proposed rule until more programmatic systems are developed. Failing that, the organization asked the EPA to create an agency or industry advisory group to help implement the rule in a realistic and cost-effective way. Among a number of concerns identified by the comment were the frequency of permit renewals a facility would be required to submit, cost, the lack of a coordination plan with state implementation plans and no guidance on state fee schedules. Buis wrote in the comment that using one control strategy may be economical, but it could create a “significant financial burden” if applied at smaller facilities with fewer regulated emissions. “While the ethanol industry is growing in size, regulatory ap-
ETHANOL PRODUCER MAGAZINE • March 2010
plicability and experience, our facilities should not be compared to larger emitting utilities that can afford to employ most costly control technologies,” Buis said. “We see the Title V rule as kind of a ‘one size fits all’ approach and the costs of getting an environmental consultant to help meet the annual permitting process is going to be an onerous cost for a lot of the single-plant operators in the ethanol business,” Growth Energy communications director Christopher Thorne told EPM. The comment from Growth Energy went on to say that the nation’s ethanol industry contributes significantly to the environment in matters of pollution reduction. In addition, modern ethanol plants are already regulated on both the federal and state level. “The industry continues to implement environmentally friendly technologies to lessen carbon impacts while enhancing air and water quality,” he said. Growth Energy’s highest priority, according to the comment, is to limit ethanol industry participation in the proposed GHG regulation program to only those facilities that exceed the emission threshold for non-GHG pollutants. “We’d like to work with the EPA to create an oversight program that’s specific to the ethanol industry,” Thorne said. —Holly Jessen
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October ethanol production breaks record Ethanol production hit a record high in October. The latest figures from the U.S. Energy Information Administration show levels reached 741,000 barrels per day, up 94,000 barrels from October 2008. Demand for ethanol also achieved an all-time high in October, totaling 767,000 barrels per day, an increase of 75,000 barrels over last year. On top of the record ethanol production numbers, the Renewable Fuels Association points out that the USDA’s January Crop Production report shows the 2009 corn harvest exceeds previous ones in yield per acre and total production. The USDA estimates farmers averaged 165.2 bushels of corn per acre, up from the previous record of 160.4 in 2004. Production totaled 13.2 billion bushels, the largest ever. In response to the USDA report, RFA President Bob Dinneen said, “The unparalleled productivity of America’s farmers con-
tinues to amaze even the most skeptical of critics. There can be no question that American farmers have both the capability and the can-do attitude to feed the world while simultaneously helping reduce our nation’s reliance on imported oil.” While the record month for ethanol production and demand indicates the continued growth of U.S. biofuel consumption, the goal for the renewable fuels standard in 2022 is not expected to be met, the EIA said in its Annual Energy Outlook 2010, released in December. The RFS targets for 2035 however, are projected to be exceeded. “Our projections show that existing policies that stress energy efficiency and alternative fuels, together with higher energy prices, curb energy consumption and growth and shift the energy mix toward renewable fuels,” EIA Administrator Richard Newell said.
“However, assuming no new policies, fossil fuels would still provide about 78 percent of all the energy used in 2035.” The consumption of liquid fuel energy will see a growth from 19 million barrels per day in 2008 to 22 million barrels per day in 2035, but the EIA anticipates biofuels to account for all the growth in liquid fuels, with consumption of petroleumbased liquid fuel remaining flat. As a result, dependence on imported oil should decline significantly over the next 25 years. Although ethanol production and demand has reached new records, and future growth in the industry remains probable, cellulosic ethanol numbers appear to have dropped off, according to the energy outlook. The EIA 2022 outlook published in 2009 showed cellulosic consumption at 4.92 billion gallons while the 2010 numbers show cellulosic consumption for 2022 at 2.10 bil-
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ETHANOL PRODUCER MAGAZINE • March 2010
Tank Cleaning & Inspection
Thousand Barrels per Day
Monthly U.S. Oxygenate Plant Production of Fuel Ethanol 800 600 400 200 0
1985
1990
1995
2000
2005
2010
According to the Oxygenate production report, fuel ethanol reached a new record for the month of October. SOURCE: U.S. ENERGY INFORMATION ADMINISTRATION
lion gallons, a decrease of over half from last year’s projections. According to EIA analyst Peter Gross, the reduced projections for cellulosic ethanol production and consumption in 2022 relate to the state of the industry. Many of the facilities intended for production of cellulosic biofuels are still in development, or not operating at full capacity. In forming the projections for its annual outlook, the EIA evaluated variables such as the current existence of cellulosic etha-
nol facilities, the technical maturity of those facilities, commercial viability and access to capital. “Things are not looking as positive as we thought last year for the industry,” Gross said. “Basically, what has happened is we are pushing out the development of this industry a few years, which is why you will see that gap in 2022. In short, we have re-assessed our assessment of the cellulosic ethanol industry [taking into account] the current eco-
nomic climate and the current status of the plants that are now in operation.” EIA’s projections exclude potential future policies that have not become law and the resulting effects of those policies. Technologies commercially available or those that can be reasonably expected to become commercially available over the next decade are, however, included in the projections. —Luke Geiver
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DRIVE Buis
New Jobs, Economic Growth Can Come From the Ground Up, With Ethanol By Tom Buis CEO of Growth Energy
W
hether it will be in the halls of Congress or state capitols, lawmakers around the country will be zeroing in on one objective this year: creating jobs here in the United States. And for good reason, as the nation’s unemployment rate remains stuck at more than 10 percent. The nation’s domestic ethanol industry presents the opportunity to create many new jobs right away—from construction jobs to science and engineering jobs that could keep our young people at home in rural communities—simply by opening up domestic demand for ethanol. For example, the Growth Energy Green Jobs Waiver to allow 15 percent ethanol blended into gasoline would create 136,000 new jobs, according to an independent study by The Windmill Group. The jobs created would range from construction jobs to engineering and science jobs at ethanol plants— the kind of jobs that would encourage our educated young people to stay at home in their rural communities. All we need is regulatory approval by the U.S. EPA, which has told Growth Energy that engine testing supports the move to E15. The construction of a 1,800-mile pipeline to carry ethanol from South Dakota to New Jersey—and the huge fuel market of the Eastern Seaboard—would create more than 80,000 jobs. The private companies behind that proposal aren’t asking for Congress to appropriate funds—only to approve loan guarantees from the DOE. More jobs could be created with a robust program to encourage fuel retailers to install blender pumps, to give consumers a choice between gas refined from foreign oil and ethanol made in the United States. A federal tax credit to help cover the costs of installation would go a long way towards creating jobs to manufacture those blender pumps and jobs to install them.
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Regulatory approval by EPA, loan guarantees and tax credits—all moves that would not require massive moves by Congress—should not be held up by any partisan rancor. Growth Energy is engaged heavily in Congress to make these simple measures a reality. Just as important as creating the new jobs we need is preserving the jobs we have. And that means maintaining those provisions—including the blender’s tax credit and the 54-cent tariff on Brazilian ethanol—that keep domestic ethanol competitive. The tax credit and Brazilian tariff do more than protect the U.S. ethanol industry: they mean thousands of jobs and the development of cellulosic ethanol. Another independent study of the ethanol industry examined what would happen if the federal government lifted its tariff and allowed ethanol made from Brazilian-subsidized sugarcane to flood the domestic market. Not only would that continue our dependence on foreign sources of oil, but it would mean the loss of investment in cellulosic ethanol in this country, and the loss of as many as 161,000 jobs in 2012 alone. Can our country afford to lose those jobs right now? We have many objectives this year at Growth Energy— approval of E15, opposing international indirect land use change penalties on ethanol, maintaining the blender’s tax credit and the tariff on Brazilian ethanol. But in truth, our main objective at Growth Energy is to encourage our nation’s economy, and create more jobs here in the United States. Tom Buis is the CEO of Growth Energy. Reach him at TBuis@GrowthEnergy.org or (402) 932-0567.
ETHANOL PRODUCER MAGAZINE • March 2010
FINANCE Jennison
Farmers Should Enter Farm Program Gate with Eyes Wide Open By Todd Jennison his spring, farmers are not only watching their crops grow but may also be watching the mailbox for information about their farm program status. The most recent national Food, Conservation and Energy Act has changed the way farmers apply for and receive farm program support from the federal government. Several programs have been modified to offer payments based on a more true-to-life equation of farm yields as well as liberalized how some payments are attributed. Average Crop Revenue Election is a revenue-based countercyclical option that guarantees payments based on more recent historical prices and yields. In contrast, the traditional safety net program is based on commodity prices and a constant target price and loan rate. An ACRE payment would occur if the actual revenue for a certain crop statewide is lower than a state’s acre-revenue guarantee. This program offers a state-level and a producer-level guarantee. Each guarantee must be triggered before a producer will receive an ACRE payment. A commitment through the 2012 crop year is required for the ACRE program and a formula is used to calculate payments for each crop year. The price component is a simple two-year average of the national average market price, as determined by the National Ag Statistics Service. The yield portion is determined by a five-year Olympic average yield, which means FSA reviews the previous five-year history of the crop and eliminates the low and high numbers. By doing so, the formula boils down extremes and ultimately gives a more representative average yield history. The advantage of using current history is that commodity prices recently have been higher than the former target price range. The ACRE program does not make sense for every operation but it is beneficial for farmers from a risk-management standpoint. Typically, the floor is higher under ACRE than with the traditional counter-cyclical program. Farmers should be consulting with an adviser to compare their government payments under both sce-
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narios and consider if they are willing to give up a small portion of their direct payment in order to raise downside risk protection. Once enrolled, ACRE is a nonrevocable program. The deadline for signup is June 1, which is also the deadline for submitting direct and counter-cyclical program contracts. Farmer’s will also see changes to the way payments are attributed. What used to be the three-entity rule now attributes all payments down to individuals. Current legislation has also changed how active a spouse needs to be in the family farming operation. Strict proof is no longer needed to make sure a spouse is involved, as long as farmers are meeting the requirements themselves and both spouses are members of the same operation. There are also new limits on the amount of non-farm adjusted gross income (AGI) an applicant can receive. Any income earned off the farm— salary, interest or dividends— cannot exceed $500,000 for a three-year period. In addition, if a person has more than $750,000 of farm AGI, they are ineligible for the direct payment program and an AGI of more than $1 million makes a person ineligible for conservation programs, unless two-thirds of that income is attributable to farming. Finally, the cash-rent tenant rule is a lesser-known rule that has actually been included in farm program regulations for years. USDA has placed more requirements on operators that cash rent farm land versus operators who share rent. These regulations are more stringent on how a cash-rent tenant provides inputs to the operation. There are many changes to the farm bill that can impact a producer’s application process this spring. It would be wise to research your best options just as you would consider how and when to plant spring crops. Todd Jennison is a farm program services consultant with Kennedy and Coe, LLC. Reach him at (800) 303-3241.
ETHANOL PRODUCER MAGAZINE • March 2010
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Sustainability Certification: Welcome to the Maze
A
fter a long struggle to get the European law on renewable energy in place, the biofuels industry is now approaching the second hurdle: implementation. European laws are called directives because they do not regulate in great detail and are clarifed through implementation rules called decisions. Thus, the Renewable Energy Directive leaves many details open for development. One issue that will cause headaches and uncertainty for the industry will be delivering proof that biofuels comply with sustainability criteria no matter where on the globe the crops are cultivated or the biofuel is produced. How does it work in theory? There are three ways to demonstrate that a biofuel is sustainable. The first possibility is to provide data to national authorities in line with a national scheme. The second option is to deliver proof the data are in line with an international agreement between the EU and a third country, for example Brazil or Malaysia. The third option is to be certified in accordance with a voluntary scheme. The EU law sets minimum requirements, such as GHG emission savings and avoidance of certain land use, but schemes may exceed the minimums, for example, by including social standards. However, European member states cannot set higher standards than are written into the EU Renewable Energy Directive, according to common market rules. Can you still follow? Regardless, whether the sustainability scheme is national or voluntary, it can only be used if approved by the European Commission. The EC will keep a special eye on national schemes, knowing from experience that member states often include elements in their national law that violate European legislation. This seems all rather straightforward, but my expectation is that we will see a relatively long period of uncertainty and chaos before the dust is settled and sustainability certification becomes an easy thing to do. The chaos is not yet there but the uncertainties are. The first uncertainty is that no producer knows precisely when the renewable energy law is applicable. All 27 countries need to have national legislation ready by the end of the year but so far only Germany has the job done. The guidance document for member state officials is still not ready.
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The second uncertainty is that important parts of the directive need clarification. It is not clear what “highly biodiverse grasslands� are, how land carbon stocks need to be calculated or how the sustainability criteria will be measured. Also it is unclear what information oil companies need to submit to their national authorities. In fact as long as these vital elements are missing, it is not possible to develop national or voluntary schemes or conclude international agreements. The third uncertainty is that the European regulator still has to determine the rules and process for approving sustainability schemes. The only thing certain is the approval process likely will take at least six months. Notwithstanding all these blind spots, developing sustainability schemes seems to be a booming business. There is a race among several international bodies to deliver sustainability schemes for biofuels and bioenergy in general. The most recent corridor in the sustainability maze has been added by the International Standards Organization, which has announced formation of a committee to develop a new standard. Other bodies developing standards/schemes include the European Committee on Norms, the Global Bioenergy Partnership, the Roundtable on Sustainable Biofuels, the Better Sugarcane Initiative and the Roundtable on Sustainable Palm Oil, not to mention several voluntary schemes under development by consultancies, oil companies and biofuel producers. All schemes will need to receive authorization from the European Commission if the biofuels are to be used on European soil. No authorization, no go. This is actually one of the few certainties in this whole sustainability maze. If a biofuel producer uses a certificate issued by a European Commission-approved scheme, the biofuel can be sold everywhere in Europe as meeting sustainability criteria. The sustainability issue will be on the agenda of the European regulators for still some time as clarification and guidance is needed to become operational. Furthermore, a recently leaked European Commission document argued in favor of dropping mandatory sustainability criteria for other forms of bioenergy with the exception of biofuels. We are going from maze to amazement it seems. Robert Vierhout is the secretary-general of eBIO, the European Bioethanol Fuel Association. Reach him at vierhout@ebio.org.
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E15: Beyond the Waiver The expected EPA approval of E15 later this year will be only the beginning. In order to bring E15 to market, the ethanol industry needs to support petroleum marketers in addressing the issues that impact their willingness and ability to sell higher ethanol blends. By Erin Voegele
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lthough many in the ethanol industry are confident that the U.S. EPA will ultimately issue an approval of the E15 fuel wavier later this year, it is important to note that EPA approval of E15 is only one step in the lengthy process of bringing this new fuel to market. There are a variety of liability, equipment certification and logistical issues that need to be addressed before E15 becomes a significant part of the transportation fuel market. Early in December the EPA announced it would delay decision making on the E15 fuel waiver until later this year to allow the U.S. DOE to complete its vehicle testing and ensure the agency has the science it needs to make the right decision. In a letter addressed to the leaders of Growth Energy, the EPA said that preliminary tests indicate the robust fuel, engine and emission control systems of newer vehicles will accommodate higher ethanol blends such as E15. According to the EPA, as long as continued testing remains supportive and provides the necessary evidence, the agency will likely be in a position to approve E15 for 2001 and newer vehicles by mid-2010.
Model Year Limitations The possible restriction of E15 to 2001 and newer vehicles is raising industry concern. “There are a number of gasoline marketers who have indicated to us that they will have a real problem moving forward with high Bob Dinneen level blends if they president and are only available to CEO, Renewable Fuels a portion of their Association consumer base,” says Bob Dinneen, president and CEO of the Renewable Fuels Association. According to Dinneen, the RFA’s frustration with this restriction stems from the lack of data
cited by the EPA suggesting problems in using E15 with older vehicles. Brian Jennings, executive vice president of the American Coalition for Ethanol, agrees and says that ACE has asked EPA to clarify its rationale for indicating this model year restriction on E15 use. However, he also notes that approving E15 for some vehicles is better than denying the waiver request all together. “If EPA comes out and approves E15 for 2001 and newer cars, it is certainly a step in the right direction,” says Jennings. “It’s better than the status quo.” From a pracBrian Jennings tical standpoint, executive vice splitting approval president, Coalition for E15 by model American for Ethanol year is a logistical nightmare for a retailer, says John Eichberger, vice president of government relations at the National Association of Convenience Stores. In addition to the fact that it’s nearly impossible to accurately determine the model year of a vehicle by sight, he says that many convenience stores have up to 25 fuel pumps. This makes it impossible for station owners to police their customers to ensure they are using the correct fuel blend for their car. Without proper liability protection in place, Eichberger says station owners could be held liable for Clean Air Act violations in the event a customer fills their tank with the wrong fuel. “[Model year restrictions] are a scary notion for retailers,” says Dan Gilligan, president of the Petroleum Marketers Association of America. “What I think might happen, when the infrastructure is available and it’s considered safe to sell E15, is that retailers will just convert the whole station,” he says. “They’ll just say it’s an E15 station and older cars are not welcome anymore.”
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ACE Vice President of Market Development Ron Lamberty says, one challenge the ethanol industry has to meet is convincing fuel marketers that they can offer E15 through their existing equipment. Although Underwriters Laboratories tests equipment using 15 percent ethanol, the equipment is only certified for E10.
Liability Although model year restrictions could negatively impact a petroleum marketer’s decision to offer E15, concerns over a lack of liability protection are expected to be the primary impediment to a marketer’s willingness to offer the fuel. According to Ron Lamberty, ACE’s vice president of market development, one of the biggest hurdles the ethanol industry is going to have is convincing fuel marketers they can use E15 in their existing equipment. This is largely because existing pumps are only Dan Gilligan certifi ed by Unpresident, Petroleum derwriters LaboraMarketers tories to dispense Association of fuels containing up America to 10 percent ethanol. “I don’t think that any [fuel marketers] really believe there will be any problems—and frankly that’s what EPA and DOE are test-
ing for,” Lamberty says. “The concern of marketers is that testing won’t stop someone from saying there is a problem and dragging them into court. The way our legal system works, there are going to be people who try to turn myth and folklore into a bunch of dollars.” “We have member companies that would start selling E15 tomorrow if it was approved,” said Gilligan. “We don’t have a lot of them, but we do have some. The reason that most of them won’t do it right away is because of the inherent risk involved.” He says the risks associated with selling E15 will be similar to the risks currently faced by petroleum marketers selling E85. “Their equipment has only been approved for E10, and they are taking the gamble that if things go wrong—which we don’t think they will, but if they do—they could be held liable,” he continues. For example, Gilligan says that if a retailer selling E15 without properly certified equipment has a fire and someone is injured, that injured party could sue and the trial lawyer would argue that the marketer was not selling their products through
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CRAWFORDSVILLE, INDIANA ETHANOL PRODUCER MAGAZINE
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certified or legally allowable dispensers. “That’s a risk E85 retailers are taking today, and I suspect that it’s a risk that some retailers will be willing to take with E15 when it’s approved,” Gilligan says. “But I’m guessing that the overwhelming majority of retailers would rather wait and see if some sort of liability protection can be pursued through Congress that essentially says that if you are selling E15 through E10 infrastructure, you can’t be sued for negligence.” According to NACS's Eichberger,
even if the EPA approves E15, retailers who sell the fuel through existing equipment may be in violation of several regulations, policies and agreements that make them vulnerable to litigation. For example, he says that a fuel marketer’s tank insurance requires the use of approved equipment, lending agencies require compliance with all applicable regulations, and the U.S. Occupational Safety and Health Administration stipulates retailers use only listed equipment. “Most importantly, you could be sued for gross negligent
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violation of selling a product through an unapproved system,” Eichberger continues. “If you have a leak and get sued and it’s found that you are selling a product not approved for that dispenser, you can be nailed for punitive damages, which can put a retailer out of business pretty quickly. “There are a lot of equipment compatibility issues that have to be resolved before many retailers will be comfortable going forward with anything above E10,” Eichberger says. It has nothing to do with safety expectations for the equipment, he says. “We think E15 is safe for equipment, and I do not expect there to be any problems with E15 in the equipment, but that’s irrelevant,” he continues. “As long as the potential to be sued is in existence, there is going to be a lot of resistance to starting to increase the blend level.” In February 2009, Underwriters Laboratories announced its support for other authorities with jurisdiction to allow the use of existing UL-listed fuel dispensers with E15, but Eichberger says that gaining approval from the local fire marshal or weights and measure department may give fuel marketers a false sense of confidence. According to Eichberger, when those authorities permit fuel marketers to sell higher ethanol blends through equipment certified for E10, what they are really saying is that they will not fine a retailer for using non-compatible equipment. He says this approval does nothing to negate the potential legal liability issues associated with OSHA requirements, tank insurance or gross negligence. “If there is a problem, you can be sued for willful violation of the law, and that is huge,” Eichberger says. Having the approval of your local fire marshal may be helpful in the event of a lawsuit, he says, but their decision to exercise enforcement discretion does not change existing law.
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ETHANOL PRODUCER MAGAZINE
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Beyond the Waiver Due to these liability issues, Eichberger and Gilligan stress the need to establish liability protection for petroleum marketers who choose to sell E15 through E10 certified equipment, as well as the establishment of labeling requirements that will protect petroleum marketers from accidental or intentional misfueling by customers. Both PMAA and NACS, with the support of ACE, propose legislation that would protect petroleum marketers from these liabilities. Successfully enacting liability protection will help overcome the primary impediment in moving E15 to market. As E10 was introduced to market, some customers tried to blame any of their vehicle problems on ethanol. “We would be foolish if we thought the same thing won’t happen with E15,” adds Lamberty. “We are going to see stuff blamed on E15 that has little or nothing to do with ethanol.” From a petroleum marketer’s standpoint, it is necessary to ensure protection in the event a customer misuses the fuel. Dinneen notes that there are various regulatory steps that need to be completed beyond EPA’s approval of the 211(f) fuel waiver. “I would hope that the marketplace will respond fairly quickly, but there are a lot of ‘ifs’ that need to happen in addition to granting the 211(f) waiver,” he says. “EPA also has to act on a 211(b) health effects filing, marketers are going to need to have an ASTM standard in place, and are likely going to want to see the 1 pound waiver in place. Some jurisdictions are also going to have to be looking at their legacy pumps, so there are other things that will fall into play.” Although the ethanol industry is currently focusing a lot of attention on E15, Jennings says it’s important not to lose sight of long-term goals. “We tend to have this short-term fixation with numbers like E15, and we need to have the vision to think longer term
because we don’t want to lurch from the E10 blend wall to the E15 blend wall,” he says. “We need a more intelligent, sustainable vision for how we are going to gain market access in the future. While we are putting a lot of effort into supporting E15—and will continue to do so—we are also focusing a lot of time and attention on the next steps, the steps beyond E15.” These include working toward legislation that would establish incentives specifically for blender pumps and require the production of more flex-fuel vehicles. “If
we have enough flexible fuel vehicles on the road, and more widespread availability of blender pumps, we don’t have to keep asking the EPA to approve E12, or E15 or E17. We can take those fueling choices out of the hands of the government bureaucrats and oil companies, and put that power in the hands of the motorist.” EP Erin Voegele is an associate editor with BBI International. Reach her at (701) 850-2551 or evoegele@bbiinternational.com.
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ALTERNATIVES
Biobutanol: Friend or Foe? Given the immense challenges faced by the ethanol industry over the past 18 months, it isn’t surprising that some may be inclined to view biobutanol as competition. However, future biobutanol producers adamantly describe themselves as allies of ethanol production. By Erin Voegele
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ALTERNATIVES
T
hose working to develop What is Biobutanol? U.S. biobutanol producLike ethanol, biobutanol is an tion stress that they should alcohol-based biofuel. Both products not be seen as competitors are manufactured through fermentato the existing ethanol industry any tion and can be used as a fuel additive. more than cellulosic ethanol should While both ethanol and biobutanol be seen as a competitor to corn etha- share favorable environmental charnol. Rather, they note that producers acteristics relative to gasoline, butanol of all biofuels share the same goals, can be blended into gasoline without and will be valuable allies in meeting increasing the vapor pressure and is the second stage of the renewable fuel more resistant to water absorption. standard (RFS2) requirements, limit- The production processes to make ing U.S. dependence on foreign oil, each fuel are also similar and use the and furthering the political initiatives same feedstocks. Although slight difof the renewable fuels industry. 'We are all working The RFS2 requires 36 billion gallons of re- towards meeting the goal newable fuel be blend- of 36 billion gallons by ed into the transportation fuel supply by 2022, and we should be 2022. The U.S. Energy working hand in hand to Information Administration estimates that educate, influence and slightly more than 9 bil- guide policies that enable lion gallons of ethanol were produced in the those goals to be met.' U.S. during 2008. This Tim Potter, CEO of Butamax means that in order to meet the targets of the RFS2, the U.S. biofuels industry will ferences are employed in the fermenessentially need to quadruple produc- tation and distillation processes, these tion capacity in a little more than a de- differences are small enough to allow cade. In addition to setting these high butanol technology to be retrofitted blending goals, the RFS2 stipulates in existing ethanol plants. that the vast majority of this growth While current U.S. regulations alin the biofuels industry will need to low transportation fuel to contain a stem from advanced production tech- maximum of 10 percent ethanol, siminologies that drastically reduce green- lar regulations currently allow biobuhouse gas (GHG) emissions. In other tanol to comprise approximately 16 words, the RFS2 has created a huge percent of a fuel blend. Since it is posmarket opportunity for renewable fu- sible to blend both ethanol and biobuels that comply with the regulation’s tanol into the same batch of gasoline, definition of advanced biofuel, cellu- biobutanol could be part of the solulosic biofuel, and biomass-based die- tion in overcoming the blend wall and sel. This includes not only advanced allowing more renewable content in ethanol technologies, but other alco- transportation fuel. hol-based fuels as well. Although biobutanol is not currently produced on a commercial
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stocks and similar processing, and they are both entering the transportation fuel network as a biofuel. Biobutanol is a molecule that enables higher levels of renewables to be blended into gasoline within existing specifications, and as Tim Potter such, it is valuable to help bioCEO, Butamax fuel producers increase their contribution to transportation fuels. We are all working towards meeting the goal of 36 billion gallons by 2022, and we should be working hand in hand to educate, influence and guide policies that enable those goals to be met.” Potter also notes that Chris Ryan executive vice biobutanol possesses some president of unique characteristics that business are complementary to blenddevelopment, Gevo ing with ethanol. “One of the challenges we have with ethanol is that the vapor pressure increase limits the blend volume,” he says. “You Competition Versus can think about butanol in an ethanol/ Collaboration “To meet the 36 billion gallon gasoline blend as reducing that vapor renewable fuel standard, I think all pressure, so butanol can help get more renewable fuel producers need to renewables into the gallon of fuel.” In work together— and there is certainly other words, when all three fuels are enough volume opportunity for all of blended together, biobutanol can sigus,” says Jack Huttner, Gevo’s execu- nificantly increase the renewable portive vice president of commercial and tion of the existing fuel. This could offer one path in overpublic affairs. “Really, I don’t see any competition between the two biofuels. coming the blend wall currently faced We want the ethanol industry to look by the biofuels industry. “Really, what favorably on the biobutanol industry. biobutanol is going to do for us is inWe are not a competitor. We are part crease the amount of biofuels that can of the biofuels industry, and we are be blended within the transportation fuel supply,” Potter says. “And act as not looking to replace ethanol.” Butamax CEO Tim Potter agrees an enabler in overcoming the existthat it is important that ethanol pro- ing blend wall.” Even though the U.S. ducers and biobutanol producers EPA is currently expected to approve work together. “They are in the same a fuel waiver request allowing E15 to industry, likely with the same produc- be used in standard vehicles, moving ers,” he says. “They are two different to an E15 blend would only delay the molecules that are accomplishing the blend wall for a few years. In order to same goal. They use the same feed- meet the RFS2 requirements, transporscale in the U.S., at least two companies are working to swiftly bring the fuel to market. Butamax Advanced Biofuels LLC, which is a joint venture between parent companies BP plc and DuPont, is currently building a demonstration scale facility in the United Kingdom and is expected to establish a commercialscale facility by late 2012 or early 2013. Colorado-based Gevo Inc. is also working to commercialize biobutanol production. Gevo began to produce biobutanol on a demonstration-scale in the second half of 2009, and is expected to complete its first retrofit of an existing ethanol plant to biobutanol production by 2011.
ETHANOL PRODUCER MAGAZINE
March 2010
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'I see them as one industry. There are not separate industries. We’re in the biofuels industry to increase the amount of biofuel within the transportation fuel supply, reduce our demand on imported oil and sustain agriculture—and both molecules help us to do that.'
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tation fuel is going to have to contain a much higher portion of renewable fuel. Under current regulations, Potter says that it is possible to blend 16 percent biobutanol into gasoline, which would nearly double the renewable energy content of the gasoline. Combinations of E10 and 16 percent biobutanol are also permissible under current regulations and offer opportunities for economic synergies, he continues. Potter adds that Butamax’s research indicates biobutanol could be blended into gasoline at higher percentages than the current 16 percent limit and be technically effective. However, the higher blend would need EPA evaluation and approval similar to the current process underway to get an E15 waiver approved. Chris Ryan, Gevo’s executive vice president of business development, points out that butanol offers the potential to increase the renewable portion of transportation fuel in another way. In addition to being used as a blendstock for gasoline, Ryan says biobutanol can be converted into hydrocarbons in existing refineries. This means that rather than being employed as a biofuel additive, the product can essentially be transformed into a renewable gasoline product, which negates the issue of allowable blend percentages. “If you look at what you can do with butanol and
ethanol together, not only are you outlining the options to blend the two as a gasoline blendstock, but there are various ways to combine these two products to serve the gasoline market needs, the refinery needs, and address some chemical market opportunities as well.”
Parallel Goals, Parallel Processes According to Potter, ethanol producers and biobutanol producers share many of the same goals. “I see them as one industry,” he says. “There are not separate industries. We’re in the biofuels industry to increase the amount of biofuel within the transportation fuel supply, reduce our demand on imported oil and sustain agriculture—and both molecules help us to do that.” Potter also says that biobutanol can play an important role in the continued buildup of the biofuels industry. “We saw a complete collapse of the industry as far as being able to get funding and being able to continue the build out, but this new molecule can be retrofitted to existing ethanol facilities, giving producers access to a range of added value fuel properties. It will allow us to think about how we start to grow the biofuels industry again,” he says. Although both biofuel products are manufactured from the same feed-
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ETHANOL PRODUCER MAGAZINE
March 2010
ALTERNATIVES
stocks, Potter notes that it is important to understand that rather than competing for existing feedstock, producers of both biofuels can build on the research of the other when it comes to developing advanced feedstocks, such as cellulosics. Ryan emphasizes that Gevo’s ultimate goal is to move to cellulosic feedstocks. “Our intention is to have the fermentation technology that will enable us to use mixed sugars from cellulosic feedstocks to make butanol, while continuing to evaluate ways to reduce the carbon footprint of our process,” he says.
Growing the Industry One primary challenge facing biobutanol is a lack of public familiarity with the product, which can lead to misinformation. Potter says there are several specific misconceptions his company is currently working to address. “The first thing is [the belief] that biobutanol is a threat to the existing ethanol industry,” he says. “We know that is not true—biobutanol is a value-adder for the existing industry and existing producers. It’s really about advancing biofuels in transportation fuel. We are both sustainable and sustaining agriculture, and we are both looking to accomplish more biofuels in the transportation fuel network.” He says other misconceptions have to do with concerns about scale up and commercial competitiveness. “This product has to be competitive to succeed in the market,” Potter says. “We believe that we have the right skills and expertise to understand, develop, market and distribute biobutanol.” As future biobutanol producers work to address these issues, Huttner and Potter agree that the future outlook for the biofuels industry is good. Potter expects to see rapid growth in biobutanol production over the next decade, particularly in areas of the world where government mandates have been established. “I think both ethanol and butanol will be growing rapidly as we start to see all the different feedstocks that are capable of making biofuel— both will be enabled, both will be working in that area and I believe we will see a global expansion,” he continues. “I think that we will be able to step in and contribute a significant portion of the RFS mandates,” Huttner says. “[Over the] next decade, I think we will be there to participate with our ethanol friends, our algae friends, and others.” EP
Erin Voegele is a BBI International associate editor. Reach her at (701) 850-2551or evoegele@bbiinternational.com.
ETHANOL PRODUCER MAGAZINE
March 2010
4C3: B63 4CBC@3 Biofuels Operations
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53
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SORGHUM
Sorghum Surges Nearly one-third of U.S. sorghum production is going into ethanol—and there’s room for growth. By Holly Jessen
Western Plains Energy in Oakley, Kan., is one of 14 plants in Kansas and Texas using sorghum. PHOTO: DEBBIE McNINCH
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SORGHUM
S
orghum has been the one and only feedstock of Levelland/ Hockley County Ethanol LLC since it started producing ethanol in March 2008. The way Sam Sacco, general manager of the Texas plant, sees it, sorghum is readily available there, priced right and produces good ethanol yields. On top of that, the resulting distillers grains have found an eager marketplace among dairy operations. “Right now I have more demand for my distillers than I am producing,” he says, adding that some area dairies have actually gotten upset that the plant can’t sell them more distillers grains.
Making the Case There’s no doubt the United Sorghum Checkoff Program sees the possibilities in sorghum as an ethanol feedstock, too. To back up the hunch that sorghum is increasingly being utilized by the biofuels industry, and with the aim of growing that in the future, USCP charged Agri-Energy Solutions Inc. with conducting a study on the subject. USCP has a goal of increasing the amount of sorghum used in ethanol by 50 percent by 2011. The results of the survey tell a positive story. What jumps off the page for Florentino Lopez, marketing director for USCP, is the fact that roughly 29 percent of the sorghum
produced in the United Price isn’t necessarily the No. 1 States is being utilized for reason ethanol producers go for ethanol production. “That was really an eye catcher,” sorghum. Only four of the 14 plants he says. report that price is the primary From a survey mailed consideration for purchasing to ethanol plants located in areas with large-scale pro- sorghum as an ethanol feedstock. duction of sorghum, AES determined that Kansas and Texas are the states where the most four of the 14 plants report that price is sorghum goes into ethanol production and the primary consideration for purchasing designated them tier one states. Follow- sorghum as an ethanol feedstock. Anup interviews were conducted with each other four report that sorghum is at the of the 14 ethanol plants in these states, top of their list due to availability. The says Tim Snyder, president of AES. The remaining six plants say they purchased study designated ethanol plants in Colo- sorghum because of price and availability rado, Missouri and Arizona plants as tier combined. “This is significantly different two plants with lower levels of use, and than the responses we expected to hear,” the AES report says. all other areas in the U.S. as tier three. The study concludes while the amount Forty-three percent of the sorghum produced in Kansas and 23 percent of of sorghum being used to make ethanol is the sorghum produced in Texas is used to positive, there is room for growth. Unlike make ethanol. All of the plants in Kan- corn, sorghum just hasn’t kept up with the sas and Texas planned to use some per- demand in the ethanol industry. “Serious centage of sorghum in producing ethanol efforts need to be made to publicly conand some of those plants use 100 percent nect grain sorghum back into this growth sorghum. On average, the plants used 48 market,” the study says. Sorghum as an ethanol feedstock is percent corn and 52 percent sorghum, a new and growing market, Snyder says. Snyder says. One notable finding in the survey is Producers of both ethanol and sorghum that price isn’t necessarily the No. 1 reason need to better understand the tremendous ethanol producers go for sorghum. Only opportunity in using more sorghum as an
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ETHANOL PRODUCER MAGAZINE
March 2010
SORGHUM
PHOTO: UNITED SORGHUM CHECKOFF PROGRAM
ethanol feedstock. “It’s a market that is here to stay,” he says. “It’s sustainable. It’s a market that will benefit both the buyers and the sellers.” Other examples of ethanol plants that use high percentages of sorghum as a feedstock are Kansas Ethanol in Lyons, Kan., and Abengoa Bioenergy plants in Colwich, Kan., and Portales, N.M. “It makes good sense,” says Mike Chisam, general manager of Kansas Ethanol. “The economics and the available supply are probably the main drivers as to why we grind quite a bit of sorghum.” At Kansas Ethanol, the two grains are typically mixed at 80 percent sorghum/20 percent corn although that ratio varies from 60 to 80 percent sorghum, Chisam adds.
Moving Distillers Grains
Sorghum is harvested is Claude, Texas. Ethanol plants in Kansas and Texas reported using 119 million bushels of corn and 128 million bushels of sorghum to produce 643 million gallons of ethanol.
While most plants have been able to sell their sorghum distillers grains, it has been a bit of a struggle, Lopez says. The survey finds plant managers and marketers are hearing concerns from feedlot buyers and some dairies about color and the feed value of the product. All plants have received discounted bids for distillers grains with sorghum, partly because of the lesser feed value for sorghum grain and partly just because buyers were aware that sorghum costs the ethanol plant less and therefore wanted in on the savings.
Chisam at Kansas Ethanol, however, hasn’t experienced these issues and selling sorghum distillers grains at market price hasn’t been a problem. Most of his customers around Lyons are familiar with sorghum and sorghum distillers grains and have had good results feeding it, he says. The key moving forward, Lopez says, is to
ETHANOL PRODUCER MAGAZINE
March 2010
help producers and customers understand how to best utilize the product. Sorghum distillers grains do have nutritional differences from corn distillers grains, and, because sorghum is a different color going into the ethanol plant, the end product is a different color. Research has found sorghum distillers grains is
59
SORGHUM
weight on corn distillers grain than sorghum distillers grain. “I think that is consistent with other [studies],” Klopfenstein says. [Corn and sorghum distillers grains] might not be greatly different, but likely there is a difference.” He adds the results of this study shouldn’t be applied across the board to all sorghum varieties. Michael Galyean, Texas Tech University’s Thornton chair in beef cattle nutrition and management, has also studied feeding beef cattle corn and sorghum distillers grains. He and his fellow re-
PHOTO: UNITED SORGHUM CHECKOFF PROGRAM
comparable to corn distillers grains. Terry Klopfenstein, an animal science professor at the University of Nebraska, conducted a trial with beef cattle, feeding 30 percent distillers grains, with one group of cattle receiving corn distillers grains and the other sorghum distillers grains. At the end of the study, there was no statistical difference between the corn and sorghum results. The numbers, however, did show corn distillers having a slight advantage in the beef ration. When considering feed efficiency, the beef cattle gained more
Of the 14 ethanol plants in Kansas and Texas, eight reported using 50 percent or less sorghum as an ethanol feedstock and four plants reported using 70 percent or more.
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searchers anticipate their paper will be published soon in the Journal of Animal Science. Their study finds corn distillers grain has an average of 34 percent of protein on a dry matter basis while sorghum distillers grain has 42 percent protein, Galyean reports. Fat content is 12 percent in corn distillers grain and slightly lower at 11 percent in sorghum distillers grain. Acid detergent fiber content is 16 percent for corn and 26 percent for sorghum. Thanks to that higher protein level, there are those in the dairy industry that prefer sorghum distillers grains over corn distillers grains— something that Sacco, the general manager at Levelland, attests to anecdotally. He tells of dairies that are located right next to a corn-based etha-
ETHANOL PRODUCER MAGAZINE
March 2010
SORGHUM
nol plant 126 miles away that travel to the Levelland plant just to get sorghum distillers grains. In general, the second study finds that when fed at 15 percent of the ration either corn or sorghum distillers grains can be a “very useful component” of beef cattle diet. “There’s no doubt that we can get along with it quite well,” Galyean says. Digestibility and feed efficiency is about the same for both distillers grains containing rations as the control diet of steamed-flake corn. However, the study consistently shows that when the inclusion rate of distillers grains reaches 30 percent, feed efficiency starts dropping off. “That’s true when you compare corn or sorghum,” he says. Researchers find the average daily weight gain is higher with the control diet steamed-flake corn due to a higher feed intake with corn. That’s not necessarily true all the time, Galyean adds, he’s seen other studies where feed intake of distillers grains is the same as a corn diet. In addition, the study finds that straight corn and distillers grains from corn or sorghum have similar calculated energy values. Sorghum’s higher fiber content does cause the energy value to drop slightly when including straight sorghum distillers grains, rather than a 50/50 percent mix, Galyean adds. The bottom line is, including sorghum distillers grains is a change in the fat, fiber and protein in the diet. However, having the nutritional data will help producers make financial decisions. If distillers grains can be purchased at the right price it won’t matter if the animal is gaining slightly less weight, Galyean says. “Differences in performance don’t necessarily equate to a difference in the ultimate profit or loss, because that depends on what the particular distillers grains is going to cost.”
creasing the use of sorghum by the ethanol industry, USCP is developing educational and promotional projects. Lopez says they are planning a series of ethanol producer meetings to both promote the use of sorghum as an ethanol feedstock and to learn what factors are limiting its use. The checkoff program is also creating technical documents on feeding sorghum to poultry, dairy, beef and swine that will include sorghum distillers grains as well as grain sorghum and forage. More research on feeding all forms of sorghum
To the Future In order to meet their goal of in-
ETHANOL PRODUCER MAGAZINE
March 2010
is likely to come with time, Lopez adds. “We’re very encouraged by sorghum being utilized in the ethanol industry and we welcome that as a continuing outlet for sorghum,” he says. EP Holly Jessen is associate editor of Ethanol Producer Magazine. Reach her at (701) 7384946 or hjessen@bbiinternational.com.
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China Trade
Explodes China promises a tantalizingly big market for U.S. DDGS, but numerous issues may prevent it from ever being fully realized. By Susanne Retka Schill
64
ETHANOL PRODUCER MAGAZINE
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MARKETS
ETHANOL PRODUCER MAGAZINE
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65
MARKETS
T
he growth in distillers grains exports to China is nothing short of breathtaking—nearly 6,000 percent higher for the first three quarters of 2009 compared with the same period the year before. After conferences, trade missions and tests with container lots, this past summer the Chinese began importing bulk distillers dried grains with solubles (DDGS) in vessels. China is on course to import 400,000 metric tons (MT) of DDGS when 2009 shipments are totaled, compared to just 8,505 MT the year before. It is an impressive win for the U.S. Grains Council, which began promoting DDGS in China in 2006 when there were basically no imports of U.S. DDGS and only small amounts of exports from Chinese ethanol plants to the Southeast Asia region. “Since that time, we have had one buyer mission per year come to the U.S. to visit ethanol plants to see the product is different and better than Chinese DDGS,” said Dan Keefe, USGC manager of international operations for DDGS. This past summer, a 13-member trade team from China that included major DDGS buyers and end users visited U.S. ethanol plants, U.S. DDGS suppliers as well as farmers who raise corn and feed DDGS. U.S. exports shot up in the third quarter partly as a result of that visit, and partly because U.S. DDGS are competitively priced with other feed ingredients available to southern China’s swine and poultry feeders.
It is not easy to sell to China. For one thing, trade developments involve diplomats and sometimes delicate trade policy negotiations. Then, not only do the U.S. suppliers have to develop relationships with their Chinese customers, but U.S. ethanol plants supplying the DDGS have to register with the Chinese Minister of Agriculture. In order to break into the market, U.S. DDGS suppliers have had to demonstrate consistent quality, with no mycotoxin contamination. Most of the markets in Southeast Asia are skittish about mycotoxins in DDGS, partly as a result of last year’s feed contamination scandal when some Chinese feed suppliers adulterated feeds to boost protein levels. China’s own ethanol industry has also created perception problems for DDGS. Chinese ethanol producers focus more on ethanol production and are known for inconsistent DDGS due to the use of multiple feedstocks such as wheat, barley and other small grains, and virtually no corn, which increases the variability of feed performance. China’s ethanol industry also has not monitored itself for mycotoxin concentrations in DDGS, creating skittish feed buyers throughout Southeast Asia. Besides hosting buyer visits, the USGC has organized two major conferences in China that were attended by importers and major feed millers from southern China who learned about U.S. DDGS characteristics and requirements for successful imports. Troy Skelton, export trader for CHS Inc., one of the
LOGISTICS MARKETING MARGIN MANAGEMENT
©2010 The Gavilon Group, LLC
MARKETS
DDGS Top Ten Importing Nations Jan. - Dec. Yearly Totals in Metric Tons
Jan. - Oct. Comparisons
2004
2005
2006
2007
2008
2008
2009
% Change
Mexico
66,894
128,271
367,389
708,216
1,188,766
993,714
1,195,145
20.27
Canada
83,984
105,929
123,022
318,864
793,947
670,554
603,280
-10.03
Turkey
0
216
416
136.519
465,212
465,212
347,593
-25.28
China
54
0
0
1,150
8,505
5,583
336,379
5925.06
Korea, South 625
4,843
24,587
102,529
184,723
172,589
261,182
51.33
Isreal
6,366
47,935
17,668
62,315
195,045
169,293
109,589
-35.27
Japan
0
2,824
45,248
83,586
198,014
169,007
186,839
10.55
Thailand
10
12,802
38,140
59,346
183,611
156,910
261,489
66.65
Taiwan
7,431
42,249
92,824
134,404
189,451
156,123
160,555
2.84
Vietnam
633
19,869
17,979
58,260
117,248
102,698
199,668
94.42
65 Nation
787,706
1,069,211
1,253,653
2,358,248
4,532,352
3,886,727
4,560,653
17.34
SOURCE: DEPARTMENT OF COMMERCE, U.S. CENSUS BUREAU, FOREIGN TRADE STATISTICS
speakers at those conferences, explained the details in DDGS contracts. Unlike grain commodities such as corn or soybeans, there are no USDA quality specifications for DDGS, Skelton
explains. Instead, the contract must specify quality parameters. The trade standard calls for a combined 36 percent protein and fat content where protein may range between 26 percent
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USGC representatives observe the unloading of the second bulk shipment of DDGS in China. This series of photos from the USGC shows the bagging of DDGS at the Shenghen Chiwan Port in southern China.
and 28 percent, and fat may range between 9 percent and 10 percent. If the shipment doesn’t meet those specifications, the contract specifies the discounts that will apply. Moisture content is less of an issue for bulk shipments, he adds, since any variation in moisture tends to equalize when barges are transloaded into the holds of vessels. Each 40-foot container, on the other hand, must meet the moisture specification. Consistency of DDGS has been an issue in the past, Skelton adds, “But as the U.S. industry has matured and the 200-some managers have become comfortable with their equipment, it’s gone
away.” With fewer new plants coming on line, he explains, there are fewer plants ironing out their drier operations. “We have had fewer quality issues in the past year,” he says. Quality is one of the reasons U.S. DDGS has made inroads into the Chinese market. “They are even willing to pay a premium for U.S. distillers grains compared to domestic distillers— $10 to $12 per metric ton higher,” Skelton says. Most of the DDGS have been traded into southern China, he adds, which is analogous to the poultry and swine production areas in the southeastern U.S. “Corn and ethanol is produced and
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ETHANOL PRODUCER MAGAZINE
March 2010
MARKETS
consumed in northern China, and it is too expensive to ship to southern China.” Skelton adds that in January, it appeared as though the market growth had topped out, with a DDGS price at just under $250 per metric ton delivered to southern China appearing to be the maximum competitive price.
International Strategies The experience of introducing DDGS to the Chinese market illustrates the approach the USGC has taken in a number of markets. “Seven years ago you could count the number of
markets on one hand, with the biggest being the EU,” says Chris Cory, USGC senior director of international operations. “The other markets had only used it once, and some had bad experiences.” One of the reasons for that was the U.S. ethanol industry was young, and geared to producing ethanol. With new drier technologies and the saturation of some local markets with wet distillers grains, the industry began turning to exports, learning the requirements for that market. A number of firms specialize in DDGS export sales, and the USGC helps both those exporters and individual ethanol plants work
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MARKETS
U.S. DDGS were transloaded onto barges will be delivered to feedmills along the Pearl River in southern China.
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The solution behind the solution.
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through each country’s paperwork requirements. The USGC follows a development timeline when introducing DDGS to a new market: first, educational sessions on nutrition, handling and buying specifications; second, sample containers provided for testing, sometimes purchased by the potential buyers and sometimes supplied by the USGC. The USGC also contracts with nutritionists to consult with new users on how to best incorporate DDGS in a properly balanced feed ration. The first two steps may take a couple of years before the first commercial shipments are tendered, after which the USGC monitors the new customers’ experiences to help insure the feed ingredient is being handled and used successfully. “New users typically limit the inclusion rate,” Cory explains. “We help them fine-tune their use to become economically efficient.” While the introduction process works the same for every market, each country presents its own challenges. Five years ago, the Egyptian government did not allow DDGS imports, for example, and the USGC met with the ministry of agriculture to request a formal evaluation of DDGS. In Chile, the USGC was faced with reintroducing DDGS after an earlier bad experience had soured the Chilean livestock industry. "We worked with the largest dairy cooperative and ran 28 feeding trials,” Cory says. Half were run in the summer, half during the winter to evaluate performance and economics.
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The USGC brought in U.S. nutritionists to work with the cooperative’s nutritionists to set up the protocols for the trials and explain the proper use of DDGS. All trials showed improved performance and all but one of the 28 trials showed improved economics. “It was a big hit,” Cory says. The 2008 feed trials were followed by a series of seminars with dairy cooperatives, feed millers and importers. Now Jordan is one of the latest development projects, with the first sample containers due to arrive in port when this issue of EPM is published. “Many of these aren’t going to be big markets like China,” Cory admits. But he points out that a large number of smaller markets will be needed to build the demand required to utilize the DDGS produced when corn ethanol reaches its 15 billion gallon a year peak. Multiple markets are also desirable to help offset policy shifts in any one market. The big leap in shipments to China, for example, could not have been timed better, offsetting a potential market disruption when Turkey briefly banned DDGS imports last summer. The Turkish feed industry, the third largest customer for U.S. DDGS last year, was quite alarmed when a government official banned DDGS imports due to concerns about the use of genetically modified corn. Like many countries, Turkey is feed deficient and a disruption in expected imports can create a serious feed shortage in a few short weeks. The problem was resolved when it was determined in court that the official did not have the authority to make that decision. While the USGC continues to push into new markets in the Middle East, Southeast Asia and elsewhere, it also continues to work in existing markets. Mexico has been the biggest buyer of DDGS in recent years, importing over 1 million tons. “There’s room for growth in Mexico,” Cory says. “The larger feeders are using DDGS, but the medium and smaller users are still not using any.” The USGC continues to sponsor seminars in Canada, the second largest market for U.S. DDGS,
ETHANOL PRODUCER MAGAZINE
and monitors other situations around the world. China, however, may soon eclipse Turkey’s slot in third place and potentially become the top DDGS export market. The USGC, however, is projecting a relatively modest 1 million-ton-per-year market for China, although there actually is potential for four times that. Given the government’s involvement in setting corn prices and regulating trade, traders are conservative in their projections for what the Chinese will buy since it is not
March 2010
easy to project market share for a market that is not freely traded. Some traders are also hesitant to jump on the Chinese freight train—DDGS are not yet an officially registered feed ingredient. As with all things regarding Chinese trade, there is great potential for huge new markets, and great care is needed to develop long-term, stable trade relationships. EP Susanne Retka Schill is editor of Ethanol Producer Magazine. Reach her at (701) 738-4922 or sretkaschill@bbiinternational. com.
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FEEDSTOCK
‘BaEETING ’ Path to Advanced Biofuels A three-way partnership in North Dakota aims to utilize one of the state’s top crops for the development of sugar beet-to-biofuel plants in five regions. By Anna Austin
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T
he brisk air that seeps into North Dakota in the fall is a precursor to what is usually a long, snowy winter. For many it also indicates time to begin an event comparable to a modern-day gold rush—sugar beet harvest. In roughly one month’s time, North Dakota growers harvest close to 5 million tons of sugar beets. North Dakota and Minnesota combined produce about 55 percent of the nation’s sugar beets every year. With the exception of a few northern counties, beets are grown throughout the Red River Valley and along the Minnesota River in west central Minnesota. Researchers at North Dakota State University in Fargo are aiming to change that as part of a much larger project—one that they hope will result in a statewide sugar beet-to-biofuel industry. NDSU has teamed up with Green Vision Group Inc., a Fargo-based company that has been studying sugar-based fuel production in North Dakota since 2008, and Muscatine, Iowa-based Heartland Renewable Energy LLC, which has developed a process to recycle waste materials from eth-
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anol production to produce heat and power at the plant site. Having spent 2009 doing initial economic feasibility studies and laboratory testing, lead researcher Cole Gustafson, a biofuels economist at NDSU, says the long-term goal of the project is to build ethanol plants across North Dakota, facilitating sugar beet production in new areas and helping to meet the advanced biofuel portion of the second stage of the renewable fuel standard (RFS2).
Sweet Ambition “Our long-term goal is to have five differing ethanol production regions in the state, each of which would host a 20 MMgy plant,” Gustafson says. “We would develop sugar beet production in those areas, as many of the regions we’re looking at don’t have sugar beets being produced right now.” Counties identified as suitable plant locations include Williams, McHenry, Kidder, Ransom and Grand Forks—counties that span the state. Initially, a higher proportion of molas-
ses purchased from existing beet processing plants and railed in would be used to make ethanol at the new plants, until an adequate and steady supply of locally grown sugar beets is secured. “As farmers begin to increase production of beets, we’d be able to focus on local sources for the plant,” Gustafson says. The project organizers are still working out the details, but are optimistic about garnering farmer interest in growing beets. Production will be contracted using a more flexible structure than the one most of the region’s beet processors currently use, according to Gustafson. The groups are looking at existing process technologies. “There are significant sugar beet-to-biofuel industries in Europe as well as in Brazil,” Gustafson points out. “We’re looking at the Brazilian technologies as most adaptable to this region, but we’d certainly augment it for this patented process of Heartland Renewable Energy’s to utilize spray-dried yeast. With this, we feel there’s a technology edge that we’d have in the marketplace, using sugar beets.” Heartland Renewable Energy has in-
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vented a process to utilize waste stillage for heat and power in an ethanol plant. The stillage is first spray dried to increase its Btu output when combusted in a biomass boiler. The flue gas is then used to generate high pressure steam after which the cooled gas is recycled to the spray dryer as its heat source. The high-pressure steam powers a turbine producing electricity and lower pressure steam, both of which are used in the ethanol process. Ash remaining after combustion may be used as a fertilizer. The developers estimate the stillage recycling process will provide 75 percent of each plant’s thermal energy needs, drastically reducing the amount of fossil fuel used compared to a typical ethanol plant.
Green Vision NDSU is also working in partnership with Green Vision Group, which was organized in 2008 by four partners who had worked together in developing a french fry plant at Jamestown, N.D. Green Vision’s President Maynard Helgaas says all partners have extensive backgrounds in manage-
ETHANOL PRODUCER MAGAZINE
Developers propose expanding North Dakota's beet production into non-traditional areas and supplementing the local production with molasses from traditional plants to produce ethanol.
ment, marketing, finance and development. “I called the group together after reading ‘Energy Victory’ by Robert Zubrin,” Hel-
March 2010
gaas tells EPM. “He was well-versed in Europe's efforts in becoming energy independent, and believed sugar crops, cane
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FEEDSTOCK Proposed Sugar Beet-to-Ethanol Locations
Proposed counties for siting of new plants, sugar beet production Counties currently processing sugar beets with plans for additional plants Counties currently processing sugar beets Current sugar beet processing facilities in the Red River Valley
and beets, were the most adaptable crops as feedstocks and butanol was the future advanced biofuel.” Helgaas says the group decided to study alternative transportation fuels and agreed there is a great future for sugar-based fuel
processing in North Dakota. “We became aware of Heartland Renewable Energy, which was working on a sugar beet-toethanol project, and held a joint meeting at which we agreed to work as partners with the intent to form a new company once we
had completed successful feasibility studies by BBI International and NDSU.” Helgaas says the groups want to complete commercial-scale tests on a processing concept and in early December were in the process of securing funding to conduct
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the tests. “Once we have completed that, and the concept works on a commercial scale, we will begin promoting the project to growers, communities and investors,” he says. The advantages to using sugar beets are abundant, Helgaas points out. Transportation, storage and processing costs of sugar beets in the region will be low, due to close proximity to the resource, the cool climate and pre-existing sugar beet processing infrastructure. Sugar beets possess very high sugar content, and can therefore double ethanol production per acre compared to corn. They’re also low in nitrogen, a large contributor to greenhouse gases, he adds. “Probably the most important reason we’re looking at sugar beets as a feedstock is that under EISA 2007 (the Energy Independence and Security Act), they define three different classes of biofuels, and a lot of people are focusing on traditional corn ethanol and cellulosic fuels using switchgrass, tree pulp and other things. Not many are looking at the advanced biofuel category,” Gustafson adds. The RFS requires 15 billion gallons per year of advanced biofuels by 2022. “What we’re seeing is, the only type of feedstocks that fit in that category are sugar-based feedstocks such as sugar beets and sugarcane,” he says. “We haven’t looked at sweet sorghum because we don’t grow that up here, but that’s a possibility, too.”
accounting for about 75 percent of total operating expenses. Average annual ethanol sales could generate about $28 million, but a small amount of increase or decrease in the price of ethanol could have a large positive or negative impact on profitability; plant profitability would be mildly sensitive to feedstock price changes. Even with North Dakota being one of the states least affected by the current economic recession, money for new project is not readily available. “There are two wrinkles holding us up,” Gustafson admits. “Everyone is struggling to find investment capital (for projects), and we’re in that boat as well. We want to further test the spraydried yeast process. We’ve had great success in the laboratory, but now we’re looking for commercial-scale demonstration.” Helgaas says once testing is completed, the groups will begin promoting the project to growers, communities and investors. A
project timeline has slated 2011 for the construction of a demonstration-scale plant, and 2012 for the first commercial plant. After the group has established plants in North Dakota, it would like to expand to Iowa. “Sugar beets for sugar are extensively grown in North Dakota and a number of years ago, Iowa also grew significant acres of sugar beets,” Helgaas says. “With the plant breeding, farming practices and new energy processing possibilities available today, we’re very excited about the success of utilizing energy beets as a feedstock for biofuels.” EP Anna Austin is an associate editor at BBI International. Reach her at (701) 738-4968 or aaustin@bbiinternational.com.
Feasibility and the Future An ethanol plant feasibility study performed by BBI International indicated a 20 MMgy sugar beet-to-ethanol plant in North Dakota would require about 1,511 tons of sugar beets and 220 tons of beet molasses on a daily basis for approximately 333 days, based on the assumption that 70 percent of ethanol is produced from sugar beets and 30 percent from beet molasses. Total investment costs of each plant from engineering to start-up would top out at about $43 million, with feedstock
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PORKandETHANOL
Face Off A longstanding “beef” with pork producers is the competition for corn with ethanol. The causes of the pork producers' painful losses are myriad. Are biofuels really to blame? By Craig A. Johnson
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C
hances are if you hear a news report about the H1N1 virus, the first thing you think is “swine flu.” That’s just one of the many problems the U.S. pork industry is facing, according to the National Pork Producers Council. When an industry is connected by name to a worldwide epidemic, public perceptions are difficult enough to deal with, but for pork producers this was an exclamation point at the end of a litany of difficulties in recent years. The U.S. pork industry represents a huge chunk of the nation’s agricultural output. The NPPC estimates that the pork industry accounts for as many as 550,000 jobs, jobs predominantly located in rural areas. In 2008, the U.S. pork industry produced more than 116 million hogs, providing total gross receipts of $16 billion. Overall, an estimated $21 billion of personal income, from sales of more than $97 billion of gross national product, are supported by the U.S. hog industry. In 2008 alone, the U.S. pork industry provided about 20 billion pounds of protein to consumers. The economic engine for the rural economy hasn’t resulted in profits in pork producers’ pockets. In the past two years, U.S. pork producers have lost an average of $23 on each hog marketed. According to the NPPC, “Since September 2007, the industry has lost more than $5.3 billion or more than 66 percent of its equity as of Oct. 14, 2009. Oct. 13 closing Chicago Mercantile Exchange futures prices for lean hogs, corn and soybean meal suggest that producer losses will exceed $30 per head for pigs sold for the remainder of [2009] and will be nearly $40 per head in November [2009]. Based on lower lean hogs futures prices,
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'Sixty to 70 percent of the cost of raising a pig is feed grain corn and soy meal. If you use more corn for ethanol then you’ve just increased our cost for production.' Dave Warner, National Pork Producers Council
cash hog prices will be below the cost of production in all but four months through the end of 2010.” A longstanding “beef ” with pork producers has been the level of competition for corn, as a feedstock for ethanol and as feed for the swine industry. Ethanol advocates point out that the cost increase to everyday food items, such as corn flakes, is only a few pennies per box, a cost that consumers and producers can easily afford. However, pork producers don’t see the argument so simply. According to Dave Warner, director of communications for the NPPC, “The ethanol industry would argue that [increased corn prices] are just a small percentage of the cost of manufacturing food, related to corn. They don’t feel that the rise in ethanol production added that much to food production. However, for pork producers, you can see [the increase in price] directly. Because we feed our pigs corn and soybean meal we can see directly how that cost has gone up.” Whereas retail food companies may be capable of adjusting their prices to offset the effects of price variability in the corn market, hog producers face different, longerterm dilemmas. “Sixty to 70 percent of the cost of raising
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CORN
'The pork industry is a major user of corn, so in that way they are competing with other end users for access to corn. The flip side of that is the corn industry is producing significantly larger amounts of corn annually and that allows all demands, including the relatively new demands from ethanol, to be satisfied.' Geoff Cooper, RFA vice president of research and analysis
a pig is feed grain corn and soy meal,” Warner says. “If you use more corn for ethanol then you’ve just increased our cost for production.” To outsiders, a basic economic question would be: why can’t pork producers simply raise prices to accommodate the increased cost of production? Warner says while it looks easy, to think the industry could change its prices is a gross oversimplification. “Passing these costs along to the consumer … you can’t do it if there’s not a high demand with a low supply. If supply and demand are in balance then the prices are not going to go up [and] they’re not going to go down much either. In fact, producers have received, over
the past three years now, pretty much the same price almost the entire time. They’ve been getting around $125 to $130 a pig, but three years ago it was costing about $100 to raise the hog. Now it’s costing $140 and higher to raise that same hog.” The reality for pork producers is that demand for pork products has essentially remained unchanged while costs have increased. Ethanol is not the only factor affecting the cost increases, but it is one that pork producers tend to single out.
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Two-Minute Warning? Re-evaluating ethanol production at this stage in the game is not so much a solution as it is a desperate attempt to stop the clock. In December, the U.S. EPA delayed its decision on a final determination of the E15 fuel waiver until mid-2010. For those opposed to the increase—and pork producers certainly fall into this category—this served as the two-minute warning, a brief respite before an all-out offensive to change the outcome of the game.
The Renewable Fuel Association’s position has been that, while pork producers and ethanol producers are using a shared resource, the two products of their industries need not be mutually exclusive. “Ethanol should be the least of the pork industries worries,” says Geoff Cooper, RFA vice president of research and analysis. “[Pork producers] have some significant demand problems related to the swine flu outbreak and the global economic recession. I know things are improving with the lifting of
Expanding corn acres and yield promise to meet growing demand from all sectors.
the import ban in China, and we think that’s what they should be focused on. If they’re concerned about prices and demand, they should be focused on building demand through exports and here domestically.” As Cooper went on to say, “The pork industry is a major user of corn, so in that way they are competing with other end users for access to corn. The flip side of that is the corn industry is producing significantly larger amounts of corn annually and that allows all demands, including the relatively new demands from ethanol, to be satisfied.” Pork producers have a different take. They see both industries competing for a finite resource and are therefore direct competitors. “If they increase ethanol production then they use more corn,” Warner says. “If they use more corn that means somebody’s got to use less. We either won’t export as much or it’s going to be cut from livestock, which right now is the biggest user. There’s a small percentage that goes into other uses, whether it's industrial uses or for manu-
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facturing, so if you have an increase in markets. “In 2008 we had a tremendous demand with an unknown supply that’s year for exports,” Warner says. “Demand outside of the U.S. was up significantly, going to drive up the price.” and that probably kept a lot of producers in business. In 2008 producers were Everything But the Blame Pork producers like to say that they averaging around the high thirties persqueeze every bit of potential profit out head loss. Exports added about $48 to of the process, using everything, includ- the price they received, so if they hadn’t ing the “squeal.” Correspondingly, etha- had the exports they probably would nol producers like to say they use every have been losing significantly more than part of the kernel, including the “pop.” $30.” While increases in exports may All clichés aside, there are areas where these two enormous agricultural inter- buoy the industry and keep some pork ests may have more to gain from one another than they do by enmity. For the RFA, fighting against the E15 waiver is an example of pork producers taking their eye off the ball. According to Cooper, “We agree the economic impacts of moving to E15 should be analyzed and considered. The fact of the matter is there have been several studies conducted looking at the impact of moving to an E15 blend. All the analyses that have been done suggest that the impact to livestock producers would be negligible.” Cooper points out that a crude comparison of the interests of the two industries, creating “us versus them” paradigms is a misreading of the facts. “If you go back to the spike in commodity prices that we saw in 2008 when corn rose to $7.50 to near $8 a bushel, folks like the NPPC immediately jumped on the bandwagon of ‘well, it’s got to be because of ethanol that we’re seeing these record high corn prices.’ The corn and ethanol industries have been vindicated when you look at the fact that we’re producing more ethanol than we were a year ago … and we’re looking at prices for corn that are not out of line with historical norms. Prices today are lower than they were a year ago and we’re producing 15 percent more ethanol than a year ago.” In fact, as the economy slowly imFRACTIONATION • EXTRACTION • proves, pork producers have begun to see a bit of a silver lining in their export
producers afloat, many are struggling through the market correction punishing almost everyone in every industry. The large 2010 corn crop may settle the debate for now as corn prices have dropped benefiting both pork and ethanol producers. EP Craig A. Johnson is the contributions editor of Ethanol Producer Magazine. Reach him at cjohnson@bbiinternational.com or (701) 7384946.
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FERMENTATION. BY KARSTEN DEURINGER AND SVEN FLEISCHER
PHOTO: ZIEMANN
Contribution
The cleaning and hygiene of fermentation tanks is directly related to the characteristics of the tankâ&#x20AC;&#x2122;s inner surface. Grinding and polishing as mechanical methods of working the surface help to remove the passive layer and to reconstruct it with atmospheric oxygen.
Efficient Ethanol Production The two most important factors affecting ethanol production are conditioning of the yeast and plant hygiene. Ziemann Group emphasizes easy operation and maintenance in the design of effective fermenters.
Ethanol production is a very old and rather simple process. You just add yeast to a sugar solution and the process begins. But is it really so simple? Much research to define the correct sugar concentration has been carried out lately. A lot of subsidies have been allocated and a lot of engineering capacity has been employed worldwide to attain the latest and most upto-date information. There has also been much discussion recently on the splitting of the base material and the preparation of sugar solutions. The fermen-
tation process and yeast handling is accepted as a given, but is, in fact, the heart of ethanol production. Efficient ethanol production is crucial for industrial companies if they wish to facilitate a minimum of production costs and at the same time enable a maximum ethanol yield. This is particularly important when ethanol is produced for fuel purposes.
Yeast Conditions Fermentation is based on yeast, a living fungi. This crucial factor distinguishes ethanol distilleries from oth-
er chemical industries. When working with a living organism and relying upon its productivity, it is essential that plant operators ensure a hygienic environment to allow the fungi to thrive. An important aspect of ethanol production is ensuring byproducts such as glycerol are kept at a minimum. The yeast variety used for ethanol production is the most productive of the yeast family. The ethanol process requires yeast to adapt rapidly from an aerobic to an anaerobic environment and back. Yeast uses glucose to produce a high yield of etha-
nol, provided the environment is ideal. To avoid the yeast being exposed to extreme concentrations of sugar, glucose levels must be kept at an optimal level. Proper nutrition such as an optimal free amino nitrogen level helps to maintain the essential vitality and necessary conditions for optimal ethanol production in a fermenter tank. As with every living organism, yeast fungi can be affected by external factors. High organic acid and sodium levels, bacteria pollution of the culture medium or pollution with wild yeast
The claims and statements made in this article belong exclusively to the author(s) and do not necessarily reflect the views of Ethanol Producer Magazine or its advertisers. All questions pertaining to this article should be directed to the author(s).
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tenance as well as efficient cooling equipment are therefore essential for successful ethanol production.
Critical Production Factors Critical processing issues are slow fermentation and high residual starches that contribute to a low yield. There are several potential sources of error and sources of hygienic problems that have to be considered. For example, it is necessary to distinguish between problems caused by the characteristics of the sugar solution and yeast, physical production conditions and plant maintenance. The filling of a fermenter must commence at a specific time. A monitored filling cycle and any noted corrections during the cycle help to define mistakes and the time at which they occurred in one charge. Production problems can be caused by solutions having a higher organic acid peak (lactic, acetic or
ETHANOL PRODUCER MAGAZINE
March 2010
PHOTO: ZIEMANN
varieties impair the yeast. If a solution is polluted for any reason, external stressors start competing for glucose and can cause a reduction in the ethanol yield. Processing parameters such as pH, temperature and the degradation rate of available sugar need to be monitored to maintain an optimal substrate for fermentation. For example, a too-high or too-low pH will force the yeast to use valuable energy to balance its own internal pH while not maximizing productivity. High operating temperatures will cause the yeast to die. Low temperatures restrain the yeast and can make it inert. Hence, without active yeast, sugars will not be converted into ethanol and the potential for contamination grows as the sugar is available for other organisms. Proper design of the fermentation process, permanent monitoring and meticulous plant hygiene, careful yeast handling and main-
Ziemann has turned to narrow tanks with dimple jacket shell cooling to avoid the use of mechanical agitators and cooling systems that can harbor and introduce bacterial contaminants.
succinic) than others in the same plant (see yeast conditions above). Furthermore, the design of the plant, especially the fermentation unit, is decisive for preventing infections. For example, foam in the fermenting matter can
enter by way of the CO 2 exhaust pipes and generate a perfect habitat for all kinds of germs, which could then re-infect the next filling of the fermenter. Plant hygiene is vital to avoid contamination by wild yeasts and bacte-
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FERMENTATION. BY KARSTEN DEURINGER AND SVEN FLEISCHER ria. As suggested earlier, infected pipes or vessels allow pathogenic germs to vie with the yeast for sugar. To illustrate the impact of microbial contamination, consider a distillery processing 1.8 million litres (475,000 gallons) of beer mash annually. An increase in ethanol concentration in the beer mash from 10 percent to 11 percent as a result of less contamination is likely to increase the ethanol production by 20
million liters (table 1). At current ethanol prices, this amounts to a potential win of some €10 million ($14.15 million) (FO Licht’s World Ethanol Price Report (2010) January 11, 5 (37): 1).
Logical and Systematic Problem Reduction Proper documentation of operating conditions is essential for troubleshooting. Without precisely documented log
Count on this...
sheets and records, it is unlikely that the cause of any problems will be found. Installing reliable measuring equipment in essential places helps avoid and detect errors. Although the first step is a thorough design and adequate yeast management and fermentation, an exceedingly high level of plant hygiene is absolutely necessary. Even today you can still find blind pipes where cleaning is impossible. Additionally, all surfaces need to be smooth and free of any dents and scratches. One of the undesirables for yeast is lactobacillus bacteria. These bacteria are 0.9 x 2 microns in size. By manufacturing a surface smoothness of less than 1.0 micron variation, possible pockets for bacteria are avoided. Additionally, cleaning is much more efficient and interrupted production cycles are reduced to a minimum.
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Ziemann has been working in the brewing industry for more than 150 years and has gained a wealth of experience in beer fermentation. As a leading manufacturer of approximately 400 fermenters a year, Ziemann continually incorporates this knowledge into the design of fermenter tanks. The company uses cold rolled stainless steel at its production sites. It is handled with maximum care and worked to highest standards. Steel sheets are covered with a protective plastic foil before and after grinding and for all transportation. Lifting devices are equipped with suction cups to prevent any scratching and denting. Welding and grinding procedures have been perfected over the years. Ziemann workshops grind with grid 80 to 120 to achieve flawless surfaces employing machinery with adaptable grinding shape and pressure.
ETHANOL PRODUCER MAGAZINE
March 2010
Table 1: Impact of microbial contamination on ethanol production Mio L/a: million liters per annum
Beer mash (approx. Mio L/a)
% ethanol in beer mash
Ethanol yield (Mio L/a)
1.8
10
180
1.8
11
200
difference
+1%
+ 20
High Level of Plant Hygiene
Avoiding Agitators
At present, numerous ethanol plants still utilize simple flat tanks with critical surface conditions and rough welds. Settling of pathogenic germs can hardly be avoided inside these tanks. Furthermore, serious hazards emerge from external loops to the heat exchanger for dissipating surplus heat produced by the fermentation process. Two challenges have to be faced: keeping hygiene at a maximum, especially in plate heat exchangers and pumps, and at the same time, maintaining an optimal overall beer mash temperature to ensure maximum production. Integrating the latest knowledge and scientific results into modern design of ethanol production can keep potential sources of infection at a minimum. At the same time, subtle shapes facilitate easy cleaning of the equipment. A good example is the cooling system of the tank. Over the past century, the brewing industry has considerably improved cooling systems. Today, Ziemann not only implements this valuable knowledge in the brewing sector but also applies it to other tank systems. The Ziemann Group builds tanks with direct cooling systems inside the tank walls. Additionally, dimpled jackets and segment pipes are used for various cooling media such as water, glycol or ammonia. An ammonia cooling system has proven to be the most efficient system. Inside the tankâ&#x20AC;&#x2122;s shell ammonia evaporates and thus constantly absorbs heat.
Using agitators to circulate the beer mash is common practice in ethanol production. These types of agitators include centered agitators with counter baffles, two agitators installed at the bottom of the tanks and positioned in an upward angle, agitators without baffles and small stirrers positioned on the wall of the tanks. Ziemann completely avoids using agitators by taking advantage of the physical effect of hot and cold zones in the tank. In a narrow tank with shell cooling it is possible to achieve a natural circulation of the beer mash with the convection center of 33 degrees Celsius rising in the middle of the tank and flowing along the tank walls at a lower temperatureâ&#x20AC;&#x201D;an intelligent design that not only avoids mechanical installations inside the tank but also reduces energy consumption and keeps hygienic hazards to a minimum. To achieve maximum ethanol yield, it is essential to provide optimal conditions for yeast combined with impeccable plant hygiene. A smart layout and clever plant design meet these requirements, especially in the design of fermenter tanks and the implementation of monitoring equipment in all essential areas. EP
ETHANOL PRODUCER MAGAZINE
Karsten Deuringer is in sales, ethanol project planning, and Sven Fleischer is a process engineer at Ziemann Energy Gmbh. Reach them at energy@ziemann.com.
March 2010
87
Phoenix, Arizona JW Marriott Desert Ridge
February 20-22, 2011
Mark Your Calendar! JW Marriott Desert Ridge
Power, Fuels and Chemicals. Biomass Magazine is a trade journal serving companies that use or produce power, fuels and chemical feedstocks derived from biomass. Collectively, these biomass utilization industries are positioned to replace nearly every product made from fossil fuels with those derived from plant or waste material. The publication covers a wide array of issues on the leading edge of biomass utilization technologies including: • biorefining • dedicated energy crops • cellulosic ethanol • decentralized power • anaerobic digestion and gasification The magazine's online counterpart, BiomassMagazine.com, holds the world's most extensive archive of news and feature articles about biomass-derived power, fuels and chemicals. Whether you're looking for today's latest news or last year's biggest story, BiomassMagazine.com is your one-stop shop for biomass industry insight and market intelligence. For additional information please contact us at (701) 746-8385 or at service@bbiinternational.com
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COMPLIANCE. BY WADE WATSON
ILLUSTRATION: WEAVER
Contribution
Ethanol Producers Face Current, Future GHG Emissions Reporting Concerns Thoroughly understanding the EPA’s greenhouse gas reporting rules will be critical for ethanol producers in 2010 and beyond.
The U.S. EPA passed its final rule Sept. 22, for mandatory reporting of greenhouse gases (GHG) emissions. Affected companies were required to begin collecting data Jan. 1, with the first GHG emission reports due March 31, 2011. Ethanol was not named as a source category in the final rule, however, the EPA will be reviewing the final rule in 2010 and ethanol may be added as a source category. For now, ethanol producers must meet GHG reporting
requirements if they emit 25,000 metric tons or more of carbon dioxide equivalent (CO2e) per year through stationary fuel combustion. The requirement is specified in the final rule’s Subpart C: General Stationary Fuel Combustion Sources. If a producer supplies carbon dioxide (CO2), it must adhere to the final rule’s Subpart PP: Suppliers of Carbon Dioxide. Other final rule subparts may be applicable on a case-by-case basis.
Being aware of the final rule’s background, general provisions, reporting and record keeping requirements, available implementation resources, and relevant subparts is crucial for ethanol producers in 2010 and beyond. Background, Final Rule General Provisions The proposed rule for mandatory reporting was issued March 10, 2009. Following consideration of comments, the EPA
issued its final rule in September and published it in the Federal Register on Oct. 30. The EPA wants to identify sources and volumes of GHG emissions. That information will provide direction in devising future measures to reduce GHG emissions. Eleven source categories (including ethanol) named in the proposed rule were omitted, leaving 31 source categories cited in the final rule. The EPA set 25,000 metric tons or more of CO2e per year as the threshold for GHG
The claims and statements made in this article belong exclusively to the author(s) and do not necessarily reflect the views of Ethanol Producer Magazine or its advertisers. All questions pertaining to this article should be directed to the author(s).
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ETHANOL PRODUCER MAGAZINE
March 2010
emissions reporting. GHG emissions include CO2, methane (CH4), nitrous oxide (N2O), and fluorinated GHGs (hydrofluorocarbons, perfluorocarbons, sulfur hexafluoride, and other fluorinated gases). According to EPA projections, total national annualized costs will be approximately $132 million for first-year reporting, and $89 million in subsequent years. Of these costs, 87 percent will fall upon the private sector. Reporting is based on a facility, and a facility may have multiple source categories. Source category totals are aggregated to meet the 25,000 ton threshold. Approximately 10,000 U.S. facilities will meet or exceed that emissions threshold. Stationary combustion sites, landfills, natural gas suppliers, and electricity generators comprise more than 80 percent of the facilities the
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EPA expects to meet the reporting threshold. Facilities self-report emissions to the EPA via a Web-based system. No third-party audits or verification are required. There will be an electronic verification system and targeted audits. For the first quarter of this year, reporters can use the best available monitoring methods if it was not feasible to obtain, install and operate a required piece of monitoring equipment by Jan. 1. Reporters can request extensions for use of best monitoring methods. The deadline for applying for an extension was the end of January. The final rule allows a facility or supplier to exit the reporting requirements by: Reporting annual CO2e emissions below 25,000 metric tons for five consecutive years. Reporting annual CO2e emis-
sions below 15,000 metric tons for three consecutive years. Shutting down GHG-emitting processes or operations.
Compliance and Educational Resources The EPA established an online tool to help companies determine whether they must report, and also launched a variety of educational resources. The online applicability tool features a detailed questionnaire at www.epa.gov/climatechange/ emissions/GHG-calculator/index.html, as well as information sheets on mobile source, suppliers of natural gas, carbon dioxide, coal-based liquid fuels and industrial greenhouse gases. Online educational resources include information sheets/ checklists, frequently asked questions, technical support docu-
ments, a general fact sheet, and a PowerPoint presentation for the final rule, which can be accessed at www.epa.gov/climatechange/ emissions/resources-tools.html. The EPA is also offering online and regional training resources at www.epa.gov/climatechange/ emissions/training.html. Various webinars address final rule general provisions, more detailed requirements and use of the online applicability tool. Regional training sessions are slated for Atlanta, Chicago, Dallas and San Francisco.
Record Keeping Requirements Ethanol producers must meet 2010 record keeping and reporting requirements if they emit 25,000 metric tons or more of CO2e annually. The following records must be kept in elec-
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COMPLIANCE. BY WADE WATSON tronic or hard copy formats for at least three years: A listing of units, operations, processes and activities for which GHG emissions are calculated and reported GHG emissions calculation data by unit, operation, process, activity, categorized by fuel or material type Annual GHG reports Missing data computations Identified causes for malfunctioning equipment, as well as actions taken to restore equipment, and to prevent or minimize future occurrences Certification and quality assurance test results for GHG monitoring systems used to provide report data Maintenance records for monitoring instrumentation Any other data specified
in any applicable subject of the final rule Reporters must also develop monitoring plans that include: Job title/position of responsibility of those collecting GHG data Explanation of processes and methodology used for GHG data collection and emissions calculations Descriptions of quality assurance, maintenance and monitoring system repair activities as they relate to GHG report data compilation.
Annual GHG Emissions Report Requirements All GHG annual emissions reports must include: Facility name, address, and year and months included in the report Annual CO2e facility emis-
sions for facilities that directly emit GHGs; total emissions may be aggregated for all source categories (CO2 from biomass combustion is reported separately) Additional information, such as unit- or process-level emission, activity data or quality control, as specified in an applicable subpart Data elements and total hours in the year if missing data procedures were used A signed and dated certification statement GHG supplier reports must contain aggregated sums for all applicable supplier categories, expressed in CO2e metric tons.
Stationary Fuel Combustion Facilities Reporting Requirements
report the following additional information: Annual mass emissions for each GHG for each combustion unit All measured inputs used in the emissions calculations All certification tests and major quality assurance tests for units using continuous emissions monitoring systems (CEMS). Emissions may be reported as aggregated mass among multiple units under any of the following conditions: 1) groups of units, if each unit has a maximum rated heat input capacity of 250mm/ Btu/hr or less; 2) units that share a common stack and use CEMS; 3) oil-fired or gas-fired units that combust the same fuel, if the fuel is fed through a metered common pipe.
The final rule requires stationary combustion facilities to
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Subpart C-Stationary Fuel Combustion Sources The final rule defines stationary combustion sources as devices that combust solid, liquid or gaseous fuels to produce energy, electricity, steam, useful heat or reduce waste volumes. For each fuel combustion unit, ethanol producers must annually report: Carbon dioxide (CO2). Methane (CH4). Nitrous oxide (N20). Those emissions must be reported separately for each fuel combustion type, including biomass. The EPA established a fourtier system for determining CO2 emissions from stationary combustion sources. Those tiers use the following formulas for determining the emission factor: For tier 1 multiply annual fuel
use and a default heating value; for tier 2 multiply annual fuel use and a measured heating value; for tier 3 multiply annual fuel use and measured carbon content; for tier 4 use a CEM. Calculations for CH4 and N2O emissions are needed only for units required to report CO2 under Subpart C requirements, and only for fuels for which default emission factors are provided.
Subpart PPâ&#x20AC;&#x201C;Suppliers of Carbon Dioxide Subpart PP addresses facilities that capture CO2 to supply it for commercial applications. Facilities that supply CO2 must report all GHG emissions associated with CO2 capture, regardless of CO2 capture volume. The EPA recognizes that CO2 concentrations in
streams vary throughout the year. In response, the following reporting provisions incorporate numerous quarterly requirements starting with annual CO2 mass (metric tons) for all flow meters. For each billing or flow meter the following must be recorded: Quarterly mass (metric tons) or volumetric flow (standard cubic meters) of CO2 Equipment used to measure CO2 stream flow Standard used for operating and calibrating measurement equipment Quarterly CO2 concentration (weight percentage CO2) Standard used to measure the CO2 concentration Quarterly CO2 stream density (metric tons per standard cubic meter) for volumetric flow meters only
Method used to measure the stream density for volumetric flow meters only Number of days when substitute data procedures were used to measure quantity, concentration and density. Percentage of the CO2 stream that is biomass-based Annual CO2 quantities transferred to each end-use application. The Mandatory Reporting of Greenhouse Gases rule requires immediate attention from ethanol producers. As the EPA reviews the final rule, ethanol producers may find themselves facing additional compliance requirements as well. EP Wade Watson, CPA, CFE, is an audit partner in Weaverâ&#x20AC;&#x2122;s Houston office. Reach him at Wade.Watson@ WeaverLLP.com.
March 15th Visit www.biomassconference.com and: View interactive exhibitor map See conference sponsors and review sponsor benefits Register to attend Explore conference agenda And much more!
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EQUIPMENT. BY DAN LINGEN
PHOTO: U.S. WATER SERVICES
Contribution
US Water Services engineered the zero liquid discharge plant at Madera, Calif.
Sidestream Filtration of Cooling Systems Problems with corrosion, fouling, and poor heat transfer can be helped with properly designed filtration.
Cooling towers scrub large volumes of air and effectively remove solids consisting of dust, microbiological organisms and airborne debris resulting in suspended solids in the form of corrosion products, microbiological growths and wood fibers from the tower. If allowed to settle out, these solids can strain even the best treatment program. Under these circumstances, sidestream filters might bring significant improvements, benefiting the cooling system through reduced corrosion rates, increased equipment life, better system efficiency, reduced maintenance costs and better chemical control.
When to Consider Sidestream Filters The installation of a sidestream filter is a capital expense which may be hard to justify in most plants. Consider the following as indications that a plant should consider installing a filter: The primary makeup is from an unclarified water source (river, sewage treatment, etc.) that is high in suspended solids and/or iron. The system is having a difficult biological problem even though a good biocide program is in effect. Heat exchangers are opening dirty even though a good anti-foulant program is being used.
Excessive corrosion rates can be traced to fouling. Loss of heat transfer is attributed to deposition rather than corrosion. High levels of solids are building up in the sump. Heat exchangers require frequent mechanical cleanings. By identifying potential threats to plant systems and solutions to those threats, one can determine the paybacks of installing a sidestream filtration system. Often the payback time is less than one would think and will vary widely from system to system. The final decision will always rest with plant
management, and will always be decided on economic grounds.
Benefits of Using Sidestream Filters Not all potential benefits from sidestream filters apply to all systems, and good judgment must be applied before making any claims. Expected benefits from sidestream filtration include: Since solids are removed from the system, the corrosion inhibitor will lay down its protective film on clean rather than dirty surfaces, thereby reducing corrosion rates and increasing equipment life. When used with good
The claims and statements made in this article belong exclusively to the author(s) and do not necessarily reflect the views of Ethanol Producer Magazine or its advertisers. All questions pertaining to this article should be directed to the author(s).
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ETHANOL PRODUCER MAGAZINE
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chemical treatment, the filter will keep the system much cleaner, and, as a result, the need for mechanical cleaning of exchangers and sumps is reduced. A cleaner system means better heat-transfer rates for longer periods of time. In some cases, the removal of suspended solids from the circulating water allows higher cycle. Large biological growths and dead organisms are removed with a sidestream filter. This reduces chlorine demand and makes nonoxidizing biocides more effective.
Filter Design It is strongly recommended that a particle analysis be done on the representative stream that is to be treated when planning a sidestream treatment for a particular plant. For most sidestream filtration systems, a centrifugal-style filter is optimal, removing major problems and requiring little maintenance or repair. However, a number of filter de-
signs are available, each with advantages and limitations. Centrifugal filters typically remove a minimum particle size of 80 micron, but only when the particles are all 1.2 times the density of water or higher. These types of filters are more likely used in a mixed stream where 200-micron particles are anticipated. Auto-backwashable screen systems can be customized to the desired particle size because the screen size is relatively absolute. Screens as small as 10-milicron are available. (A 10-milicron screen is also available but is not durable for most tower applications). If the particle size goes too low it can create a problem because the amount of water needed to backwash the screen can be excessive. Also, debris can stick to the screen, requiring manual cleaning. Bag filters require labor in changing out the bags when full. However, bag filters offer the flexibility of adjusting the micron filtration provided when needed (for instance in spring cottonwood-seed time).
Cartridge filters are comparable to other filters in initial expense, however, the ongoing expense is much higher. Cartridge filters offer flexibility like bag filters, but with little or no bypass. Sand filters are the most expensive of all the filters listed here but they also are proven effective and reliable. When set up to backwash on pressure differential, they can handle load variations with manpower.
Filter Media The size of the filter medium is important, since it must stop suspended solids from passing through, hold solids loosely for easy removal during backwashing and be capable of holding a given quantity of solids without clogging. A medium-size filter media is defined by two figures: Effective size: Particle size above which 90 percent of the medium is larger Uniformity coefficient: Effective size divided into the particle size above which 90 percent of the medium is larger.
In most cases, sand or anthracite is the filter medium used, and sometimes the two will be used together (mixed media). The filter beds contain different-size layers of the media. Fine sand or anthracite will be on top, with larger and coarser grades underneath. These will be supported on graded gravel or heavy anthracite. Most filters operate at a filtration rate of 2 gallons to 3 gallons per minute per square foot of filter surface. Backwash rate is enough to expand the filter bed by 50 percent, usually 10 gallons to 20 gallons per minute per square foot for sand and 5 gallons to 10 gallons per minute per square foot for anthracite. Filter media will usually be selected to remove those particles will usually be those with the greatest tendency to settle, be the least expensive option for a given water throughput and match the minimum required backwash rate.
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• Ethanol lab testing & certification to ASTM specifications (34 ISO labs in U.S.) • Field inspections for custody transfer • In-plant labor - railcar loading, switching, material handling, grading & weighing • Tank/pipeline inspection and calibration, flow monitoring & measurement consulting • Corrosion inhibitors/additives & cargo treatment services • On-site laboratory management • QA/QC program development & consulting • Sustainability/ISO/OHASA audits, training & certifications • Quality analysis of in-process components, DDGS & water • Industrial mechanical integrity management systems • Environmental analytical services & data management systems • Wood chip & pellet quality composition analysis & quantity verification
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March 2010
95
EQUIPMENT. BY DAN LINGEN Filter Sizing
Equation 1.
Historically, filters were designed to handle approximately 2 percent of the circulating rate. This rule of thumb has proved inadequate for the design of sidestream filters in modern industrial plants, and a more sound engineering approach is now being used. If the suspended solids entering the system are constant, and known, and the solids desired are also known, and these two conditions are in equilibrium states (little variation of either), the filter size can be determined with Equation 1. Again, this requires the existence of a steady-state condition. When the contamination entering a system is erratic because of varying solids entering the system with the makeup (for instance, after a heavy rain), or with the air (for instance, wind shifts changing the dust level in the air), this equation cannot be used.
F
=
Where
100 100 - % Reduction
1B
F
=
Filtration rate in gpm
B
=
Blowdown rate in gpm
% Reduction =
Solids Removed (ppm) Initial Solids (ppm)
x 100
Equation 2.
F
=
Where
2.3V T
Log( 100 ) ( 100 - % Reduction)
F
=
Filtration rate in gpm
V
=
Total system volume in gallons
B
=
Blowdown rate in gallons per minute
% Reduction =
B
x 100
The second formula for the calculation of filter size assumes that the varying solids loading must be removed from the system in a period of time that is practical, yet short enough so that serious deposits will not form. In practice, a 95 percent reduction of a sudden solids load in one to three days will prevent excessive fouling and allow a filter size that is not prohibitively expensive. The formula used is shown in Equation 2. The information on filter design and sizing is provided only as a guide. The specifics are better left to manufacturers of the filtration equipment. Sidestream filtration is an effective tool for the control of deposition and fouling in a cooling water system, yet because of the capital investment required, its use should be carefully considered. It should not be recommended or used as a substitute for good engineering practices, good control or good programs, nor should it be used to overcome basic design flaws in the system. EP
3 O W H E N I T C OM E S T O C L E A N I NG W E GE T I N W E GE T OU T A N D E V E RYON E `S S A F E
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-
W W W PREMIUMP L ANT S ER V ICE S COM
Dan Lingen is product development manager at US Water Services. Reach him at dlingen@uswaterservices.com or 763553-0379. ETHANOL PRODUCER MAGAZINE
March 2010
EVENTS CALENDAR
Advanced Biofuels Workshop June 14, 2010
Amsterdam, Netherlands Topics will include algae fuels, energy crops, policy, indirect land use change and biobased products. An introductory course in transport biofuels will also be available.
Oregon Convention Center Portland, Oregon The conference will focus on project developers, service and equipment providers, energy end users, utilities, government and others involved in building the new energy economy.
Americaâ&#x20AC;&#x2122;s Center St. Louis, Missouri In its third year, this BBI International one-day workshop focusing on advanced biofuels will be co-located with the Fuel Ethanol Workshop & Expo to be held June 14 to 17 in St. Louis. The full range of advanced biofuels from biomass-based diesels to cellulosic ethanol will be addressed in workshops that will cover research, project development, feedstock development, environmental performance and more.
www.worldbiofuelsmarkets.com/index.html
www.futureenergyconference.com
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World Biofuels Markets March 15-17, 2010
Mar
New Energy Finance Summit March 17-19, 2010 InterContinental London Park Lane Hotel London Sessions will focus on clean energy, carbon markets and innovation in the areas of advanced transportation, bioenergy, wind and solar. www.newenergyfinancesummit.com
Future Energy Conference: The Business of Renewable Energy & Efficiency April 21-22, 2010
Apr
May
June
International Biomass Conference & Expo May 4-6, 2010
International Fuel Ethanol Workshop & Expo June 14-17, 2010
Minneapolis Convention Center Minneapolis, Minnesota
Americaâ&#x20AC;&#x2122;s Center St. Louis, Missouri The conference and expo will include tracks on production/operations, management/business, cellulosic ethanol, distillers grains/coproducts, and energy/carbon/environment.
The conference tracks will focus on crop residues, dedicated energy crops, forest and wood processing residues, livestock and poultry wastes, MSW, urban wastes and landfill gas, and food processing residues.
www.fuelethanolworkshop.com
www.biomassconference.com
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Perten Instruments, Inc. 801-936-8165
Distillation Equipment
Loading Equipment
SRS Engineering Corpration 951-526-2239 www.srsbiodiesel.com
Carbis, Inc. 800-845-2387
Dryers-Rotary Drum
Determan Brownie, Inc. 800-835-6074
Buhler Aeroglide 919-851-2000
www.aeroglide.com
Hurst Boiler & Welding Co., Inc. 800-666-6414 www.hurstboiler.com
ICM, Inc. 877-456-8588
www.icminc.com
Revere Control Systems 800-536-2525 www.reverecontrol.com
Conveyors–Drag www.intersystems.net
Superior Industries 320-589-2406 www.superior-ind.com U.S. Tsubaki 847-459-9500
Dust Control Systems
Molecular Sieves
MAC Equipment, Inc. 816-891-9300 www.macequipment.com
ICM, Inc. 877-456-8588
Fermentors
Parts & Services
WINBCO Tank Company 641-683-1855
www.winbco.com
www.icminc.com
Fluid Engineering 814-453-5014
Buhler Inc. 763-847-9900
www.perten.com
www.icminc.com
ICM, Inc. 877-456-8588
www.icminc.com
Process Control www.fluideng.com
Harris Group Inc. 206-494-9422
www.harrisgroup.com
VFTechnical Services, LLC 423-794-6747 www.vftechserv.com www.buhlergroup.com/us
Pumps
Cereal Process Technologies 217-779-2595 www.cerealprocess.com
PeopleFlo Manufacturing 847-929-4774 www.peopleflo.com
Crown Iron Works 651-639-8900
Valley Equipment Co. Inc. 423-753-3541 www.valleyequipment.com
www.crowniron.com
ICM, Inc. 877-456-8588
www.icminc.com
McC, Inc.
ETHANOL PRODUCER MAGAZINE
ICM, Inc. 877-456-8588
Perten Instruments, Inc. 801-936-8165
Grain Handling & Storage
www.ustsubaki.com
Maintenance Software
ICM, Inc. 877-456-8588
MOR Technology, LLC 618-522-8324 www.mortechnology.com
Conveyors–Mechanical
www.determan.com
Moisture Analyzers
www.icminc.com
www.perten.com
www.carbis.net
Dryers-Rotary Steam Tube
Fractionation-Corn
Control Systems
Intersystems 800-228-1483
www.icminc.com
Filtration Equipment
Boiler Systems
Miller Insulation Co., INC 701-297-8813 www.millerinsulation.com
DDGS Diesel
ICM, Inc. 877-456-8588
Zac Cudney Zac.Cudney@IISGLLC.com 313-841-5800 24-Hour Service: 800-992-9118
www.perten.com
763-477-4774
March 2010
www.mccormickconstruction.com
QA Test Products Perten Instruments, Inc. 801-936-8165
www.perten.com
Scales-Truck Weigh-Tec Inc. 1-800-461-4153
www.truck-scales.com
101
EPM MARKETPLACE Tanks
Market Data
Finance
ATEC Steel 620-856-3488
www.atecsteel.com
Spokane Industries Inc. 509-921-8868 www.spokanemetalproducts.com
Appraisals Natwick Associates Appraisal Services 800-279-4757 www.natwick.com
Due Diligence
Thermal Oxidizers
Harris Group Inc. 206-494-9422
www.harrisgroup.com
Insurance ERI Solutions, Inc. 316-927-4294
PROVEN RELIABILITY for VOC, CO & PM ABATEMENT EISENMANN Corporation Crystal Lake, Illinois 815.455.4100 es.info@eisenmann.com
Specialty line cleaning
erisolutions.com
Mergers & Acquisitions Moglia Advisors 847-884-8282
Industrial Safety Done Right
www.mogliaadvisors.com
Waste Transporation Ultra-High Pressure Hydro-Blasting (40,000 psi) Custom Designed Waste Reduction Programs
Legal Services Attorneys BrownWinick Law Firm 515-242-2400 www.biofuellawyers.com WOHLSIFER & ASSOCIATES, P.A. 850-219-8888 www.wohlsifer.com
Marketing
Zac Cudney Zac.Cudney@IISGLLC.com 313-841-5800 24-Hour Service: 800-992-9118
Fuel Ethanol
www.iisgllc.com
CHS Renewable Fuels 651-355-6271
www.chsinc.com
Miscellaneous Maas Companies 507-424-2640
EPM MARKETPLACE Pro-Environmental, Inc. 909-989-3010
www.pro-env.com
Valves Check-All Valve Mfg. Co. 515-224-2301
www.checkall.com
Wastewater Treatment Services www.adisystemsinc.com
Hydro-Klean, Inc. 515-283-0500
www.hydro-klean.com
ICM, Inc. 877-456-8588
Research & Development
in one convenient location, Ethanol
Dynamometer Testing
Producer Magazine not only con-
Roush Industries 734-779-7736
UEM, Inc. 561-385-7515
www.uemgroup.com
www.roush.com
tains top editorial content but also
tion. Whether a first-time advertiser wanting to raise awareness of your business or a frequent dis-
www.icminc.com
Nelson Ink Promotional Products 218-222-3831 www.nelsonink.com
With all contact information placed
a useful directory in each publica-
ADI Systems Inc. 1-506-452-7307
www.maascompanies.com
play advertiser looking for added
Transportation Marine Odin Marine, Inc. 203-969-3400
www.odingroup.com
Rail
exposure, EPM Marketplace is the
Ameritrack RailRoad Contractors, Inc. 765-659-2111 www.ameritrackrailroad.com
perfect solution.
Railcar Parts
Yield Enhancement EdneiQ, Inc. 310-592-4158 102
Salco Products, Inc. 630-783-2570 www.salcoproducts.com www.EdeniQ.com ETHANOL PRODUCER MAGAZINE
March 2010
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