May 2009 Ethanol Producer Magazine by BBI International

INSIDE: MAPPING SORGHUM’S GENOME OPENS UP MANY OPPORTUNITIES MAY 2009

FEW Celebrates

25 Years

2009 Marks the 25th Anniversary of the World’s Largest and Longest Running Ethanol Event

WWW.ETHANOLPRODUCER.COM

Need refueling? Build it better with Burns & McDonnell.

Ethanol? Gas-to-Liquid? Biodiesel? Finding the right alternative energy source can be challenging. It takes more than a one-size-ﬁts-all, Band-Aid approach. Burns & McDonnell — with more than 30 years of biofuels experience — will engineer the right energy-efﬁcient, sustainable solution for your facility with the follow-through and support you need. Comprehensive Services Project Development • Environmental Studies and Permitting • Engineering and Construction Front-End Planning • Engineering Design-Build (EPC) • Unit Operations

For more information: Warren Kennedy 816-822-3384 biofuels@burnsmcd.com

Enhancing biofuel design since 1977. E n g i n e e r i n g ,

A r c h i t e c t u r e ,

C o n s t r u c t i o n ,

E n v i r o n m e n t a l

a n d

C o n s u l t i n g

S o l u t i o n s

Atlanta • Chicago • Denver • Houston • Kansas City, Mo. • Miami • Phoenix • San Diego • St. Louis

ETHANOL PRODUCER MAGAZINE

Chattanooga, Tenn. • Cincinnati • Dallas-Fort Worth • Minneapolis-St. Paul • New York • O’Fallon, Ill. • San Francisco • Wallingford, Conn. • Washington, D.C. • Wichita, Kan.

May 2009

ETHANOL PRODUCER MAGAZINE

May 2009

ETHANOL PRODUCER MAGAZINE

May 2009

contents

vol. 15 no. 5

features 52 FEW FEW: 25 Years and Counting The International Fuel Ethanol Workshop & Expo is one constant in the ever-changing ethanol industry. For a quarter of a century the event has provided a venue for people to come together and share ideas and innovations. –By Kris Bevill 60 EVENT Tempering the Ethanol Industry The National Ethanol Conference was a celebration of the progress ethanol producers have made despite volatile commodity prices and a sluggish economy, growing by 34 percent and producing a record 9 billion gallons of renewable fuel. –By Susanne Retka Schill 68 PROJECT DEVELOPMENT Fuel for the Economy The ethanol industry added $65.6 billion to the U.S. gross domestic product in 2008, and supported more than 494,000 jobs generated by production, construction, and research and development, according to the latest study from LECG LLC’s John Urbanchuk. –By Erin Voegele 76 TECHNOLOGY Unraveling the Mysteries in Sorghum’s ‘Simple’ Genome Scientists have mapped the sorghum genome, which will allow them to tailor the crop to the needs of the biofuels industry. –By Ron Kotrba

84 FEEDSTOCK Embracing the Alternatives Although corn is the dominant feedstock for ethanol production, many producers use or plan to use wheat and barley. EPM looks at a wheat variety in Canada that is the variety of choice for ethanol producers, and the use of barley in some U.S. projects. –By Anna Austin

68 ETHANOL PRODUCER MAGAZINE

May 2009

6/-*.*5&% .*-&"(& "SF ZPV SFBEZ GPS DFMMVMPTJD FUIBOPM

8F BSF UPP o BOE JU T DPNJOH TPPOFS UIBO ZPV UIJOL

5IF MPOH XBJU XJMM TPPO CF PWFS /PWP[ZNFT DFMMVMPTJD FUIBOPM FO[ZNFT BSF KVTU XIBU ZPV WF CFFO XBJUJOH GPS o TPMVUJPOT UIBU DBO NBLF ZPVS QMBOU B GSPOUSVOOFS JO UIF SBDF GPS DPNNFSDJBMMZ WJBCMF MJHOPDFMMVMPTJD CJPFUIBOPM 4P MFU T TUBSU DSFBUJOH UIF GVUVSF UPEBZ 5PHFUIFS XF DBO NBLF TFDPOE HFOFSBUJPO CJPFUIBOPM B XJOOJOH TPMVUJPO 'JOE PVU NPSF BU XXX CJPFOFSHZ OPWP[ZNFT DPN

/PWP[ZNFT JT UIF XPSME MFBEFS JO CJPJOOPWBUJPO 5PHFUIFS XJUI DVTUPNFST BDSPTT B CSPBE BSSBZ PG JOEVTUSJFT XF DSFBUF UPNPSSPX T JOEVTUSJBM CJPTPMVUJPOT JNQSPWJOH PVS DVTUPNFST CVTJOFTT BOE UIF VTF PG PVS QMBOFU T SFTPVSDFT

contents contributions

departments 9 Advertiser Index 12 The Way I See It Higher Ethanol Blends: A No-Brainer By Mike Bryan 16 Business & People 20 Commodities 22 View From the Hill Renewable Energy Investment Will Pay Off By Bob Dinneen 23 RFA Update 26 BIObytes 28 Industry News 40 Plant Construction List 48 Drive Advocating for a Higher Blend By Tom Buis 50 eBIO Insider Common Sense Prevails By Robert Vierhout

96 Events Calendar 98 Marketplace

92 DISTILLERS GRAINS Enzyme Technology Boosts DDGS Performance Swine and poultry producers can use enzymes to overcome the nutritional challenges of feeding distillers grains with solubles. â&#x20AC;&#x201C;By Milan Hruby

Ethanol Producer Magazine: (USPS No. 023-974) May 2009, Vol. 15, Issue 5. 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. BPA Worldwide Membership Applied for October 2006 ETHANOL PRODUCER MAGAZINE

May 2009

www.atlanticbioenergy.ca

Hosted at Delta Beauséjour • Moncton, NB September 21-23, 2009

CALL FOR PRESENTATION ABSTRACTS The deadline for submission is May 27, 2009. If you would like to contribute a topic that is related, but not mentioned below, please feel free to submit an abstract.

•Provincial insights to build a future •Woody Biomass •Biomass Feedstock Yields •Anaerobic digesters •Government incentives/analysis of programs available •Waste management •Rising in the East •Environmental Issues •New Innovations •Emerging Technology •Futuristic Outlook The Atlantic BioEnergy Conference program will continue to provide ground breaking workshops and innovative presentations. This is an excellent opportunity to share cutting edge information to an expanding Canadian audience. To submit your presentation abstract online or further inquiries, please email abc@bbiinternational.com For more information about the 2009 Atlantic Bioenergy Conference visit:

www.atlanticbioenergy.ca or call 1-888-501-0224 (519) 576-4500

AdIndex

8 2009 Atlantic Bioenergy Conference

14 & 15 Inbicon

38 2009 International Fuel Ethanol Workshop

55 Indeck Power Equipment Co.

46 2010 National Ethanol Conference

54 Intersystems

87 ADI Systems

64 ITT Goulds

56 Agra Industries Corp.

43 Kennedy & Coe LLC

51 Angel Yeast Co. LTD

10 Lallemand Ethanol Technology

94 & 106 BBI International Engineering & Consulting 57 BetaTec Hop Products Inc. 82 & 95 Biomass Magazine 30 Buckman Laboratories Inc. 2 Burns & McDonnell 89 Cereal Process Technologies 86 Check-All Valve Mfg. Co. 79 Christianson & Associates PLLP 80 Clifton Gunderson LLP

25 MAC Equipment 24 MOR Technology LLC 70 Natwick Associates Appraisal Services 39 New York Blower Co. 31 Nexen Marketing USA Inc. 72 North American Safety Valve 6 Novozymes 47 PhibroChem 108 Poet LLC

58 Crown Iron Works Co. Inc.

32 Primafuel

59 dbc SMARTsoftware Inc.

62 Pursuit Dynamics

83 Delta-T Corp.

74 R&R Contracting Inc.

105 ethanol-jobs.com 44 ETS Laboratories

67 Renewable Fuels Association 34 Resonant BioSciences LLC 107 Robert-James Sales Inc.

3 Fagen Inc. 33 FCStone LLC

65 & 81 Roskamp Champion/CPM

88 Ferm Solutions Inc.

42 Salco Products Inc.

13 Fermentis

49 UOP

63 Gamajet Cleaning Systems Inc.

75 Vaperma Inc. 66 Vecoplan LLC

104 Gavilon 45 GEA Barr-Rosin Inc.

71 Victory Energy Operations LLC

91 Genencor International Inc.

78 Vogelbusch USA Inc.

36 & 37 Hydro-Klean Inc.

35 Watson-Marlow Pumps Group

4 ICM Inc.

ETHANOL PRODUCER MAGAZINE

73 Wabash Power Equipment Co.

May 2009

WE HAVE ETHANOL FERMENTATION

ON THE BRAIN PEOPLE EXPERIENCE

TECHNICAL SERVICE

We think before we act, and use our industry leading technical experience to help make you successful. Our knowledge is your knowledge.

We hire highly technical people who are smart about the facts and figures of fermentation.

TRUSTED FERMENTATION INGREDIENTS When you buy from Lallemand Ethanol Technology, you get the highest quality fermentation products.

EDUCATION Our Alcohol School held annually was the first to bring higher learning to the ethanol industry. Check out “The Alcohol Textbook” we publish at www.ethanoltech.com

PARTNERSHIP CONSULTING We believe adding value to our ingredients by providing customers with continuous in-plant expertise is a no-brainer.

Choose Lallemand Ethanol Technology for your single source solution to intelligent fermentation. Call 1-800-583-6484

for more information.

TM The “e” mark and the “stylized e” are registered service marks of the Ethanol Promotion and Information Council.

HOW TO REACH US

LETTERS TO THE EDITOR We welcome letters to the editor. Send your letter to: Ethanol Producer Magazine Letters, 4650 38th Ave. S. Suite 160, Fargo, ND 58104 or

EDITORIAL

PUBLISHING & SALES

Kris Bevill Editor kbevill@bbiinternational.com

Mike Bryan Publisher & CEO mbryan@bbiinternational.com

Ron Kotrba Senior Staff Writer rkotrba@bbiinternational.com

Kathy Bryan Publisher & President kbryan@bbiinternational.com

e-mail to kbevill@bbiinternational.com. Letters should include the writerâ&#x20AC;&#x2122;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

Susanne Retka Schill Staff Writer sretkaschill@bbiinternational.com

Joe Bryan Vice President of Media & Events jbryan@bbiinternational.com

Erin Voegele Staff Writer evoegele@bbiinternational.com

Tom Bryan Vice President of Content & Communications tbryan@bbiinternational.com

Anna Austin Staff Writer aaustin@bbiinternational.com

Matthew Spoor Sales Director mspoor@bbiinternational.com

Ryan C. Christiansen Staff Writer rchristiansen@bbiinternational.com

Howard Brockhouse Sales Manager, Media & Events hbrockhouse@bbiinternational.com

Bryan Sims Staff Writer & Plant List Manager bsims@bbiinternational.com

Clay Moore Account Manager cmoore@bbiinternational.com

Hope Deutscher Online Editor hdeutscher@bbiinternational.com

Jeremy Hanson Account Manager jhanson@bbiinternational.com

Jan Tellmann Copy Editor jtellmann@bbiinternational.com

Chip Shereck Account Manager cshereck@bbiinternational.com

Megan Skauge E-Media Coordinator mskauge@bbiinternational.com

Marty Steen Account Manager msteen@bbiinternational.com

ART

Bob Brown Account Manager bbrown@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. 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. You can also call (866) 746-8385, or write to: Ethanol Producer Magazine, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203.

BACK ISSUES AND REPRINTS Select back issues are available for $3.95 each, plus shipping. To place an order, contact Subscriptions at (701) 746-8385 or subscriptions@ ethanolproducer.com. Article reprints are also available for a fee. For more information, contact Christie Anderson at (701) 746-8385 or canderson@bbiinternational.com.

ADVERTISING For advertising rates and our editorial calendar,

Jaci Satterlund Art Director jsatterlund@bbiinternational.com

Marla DeFoe Advertising Coordinator mdefoe@bbiinternational.com

Sam Melquist Graphic Designer smelquist@bbiinternational.com

visit www.EthanolProducer.com or call (866) 746-8385.

Jessica Beaudry Subscriptions Manager jbeaudry@bbiinternational.com

Elizabeth Slavens Graphic Designer bslavens@bbiinternational.com

Jason Smith Subscriber Aquisition Manager jsmith@bbiinternational.com

Jack Sitter Graphic Designer jsitter@bbiinternational.com

Christie Anderson Administrative Assistant, Sales canderson@bbiinternational.com

ETHANOL PRODUCER MAGAZINE

May 2009

The Way I See It Higher Ethanol Blends: A No-Brainer Raising the level of ethanol blends continues to be a topic of debate in Washington. Those who oppose such a move cite tales of destruction and catastrophe should such a change be allowed to happen. I am reminded of similar tales in Colorado, Minnesota and California when 10 percent ethanol blends were slated to be introduced. You remember the stories, cars would be stalled along our freeways, causing accidents, performance would be denigrated, deterioration of the automobile fuel delivery components, mileage would be greatly reduced, and on and on. In fact, in every case where ethanol blends have been introduced, it has been a complete “nonevent.” Hot lines were set up to field the stream of calls from angry motorists that were sure to follow. The phones sat silent. Despite all of the dire predictions, and all of the warnings of emissions and mileage denigration and catastrophic small engine failures, going to 15 percent ethanol blends will be a nonevent as well. Frankly it should have happened years ago. More research has been done on raising the level of ethanol blends to 15 percent, than was conducted when 10 percent ethanol was added to gasoline. In a recent study performed by the Energy and Environmental Research Center of North Dakota, it was demonstrated that mileage actually improved on various ethanol blend levels as high as 30 percent to 40 percent, in nonflexible-fueled vehicles. Nitrogen oxide emissions were actually reduced in many cases and there was no deterioration of performance. In some cases nonflexible-fuel vehicles with ethanol blends as high as 65 percent performed exceptionally well.

With the Obama Administration’s 36 billion gallon goal, raising the current blend level to 15 percent is, in my view, a no-brainer. The march towards secondgeneration biofuels and predictions of ever-increasing yields from America’s farmland bodes well for the future of ethanol. As we all know, in Washington you have to do what you have to do to get legislation passed. Frankly, the cap of 15 billion gallons for corn ethanol was done out of panic as a result of a completely fabricated food-versus-fuel issue. Corn and other crops can provide fuel for this country for many years to come at a level far above 15 billion gallons. Bumper crops of wheat, corn, sorghum, sugarcane and other crops easily converted to ethanol will help provide the kind of energy security needed to keep us out of harm’s way. It’s time that such an antiquated rule of 10 percent ethanol be recognized for what it was, a political compromise made in Washington that had little or no connection to reality. Write your congressmen and senators today and urge them to support a 15 percent ethanol blend level as a stepping stone to the future. That’s the way I see it.

Mike Bryan Publisher & CEO mbryan@bbiinternational.com

ETHANOL PRODUCER MAGAZINE

May 2009

Graphic design s Marie RIO

Our fermentation experts offer custom made recommendations to adapt to your process, your needs & your economics. From the selection of the yeast strain to the definition of its format up to onsite training of your staff, Fermentis offers your ethanol plant a global fermentation approach to maximize your efficiency & profitability.

For more information, visit www.fermentis.com or email fermentis@lesaffre.fr ETHANOL PRODUCER MAGAZINE

May 2009

The New Ethanol.™ The power to make the old ethanol work.

@V\»YL SVVRPUN H[ [OL LSLJ[YPJ NYPK H[ [OL +HUPZO WVY[ VM 2HS\UKIVYN /LYL 0UIPJVU PZ PU]LZ[PUN TPSSPVU <:+ [V KLTVUZ[YH[L OV^ JV NLULYH[PVU THRLZ V\Y [LJOUVSVN` [OL WYHJ[PJHS WH[O [V JLSS\SVZPJ JVU]LYZPVU ;OL UL^ 0UIPJVU )PVTHZZ 9LÄULY` ^PSS [HRL Z[LHT MYVT [OL HKQHJLU[ WV^LY WSHU[ [V ZVM[LU [OL IPVTHZZ (Z ^L WYVK\JL ;OL 5L^ ,[OHUVS ^L»SS HSZV WYVK\JL H SPNUPU WV^KLY ^OPJO ^L»SS YL[\YU [V [OL WV^LY WSHU[ MVY NLULYH[PUN NYLLU LSLJ[YPJP[` ;OL ZHTL WYPUJPWSL PZ THRPUN V\Y UL^ 4NW` TVKLS [OL WYHJ[PJHS JOVPJL MVY 5VY[O (TLYPJHU NYHPU L[OHUVS WSHU[Z 0U MHJ[ HKKPUN V\Y JVTTLYJPHS ZJHSL 0UIPJVU )PVTHZZ 9LÄULY` [V H 4NW` L[OHUVS WSHU[ NP]LZ `V\ H O\NL LULYN` WH`IHJR 6\Y JV NLU VWLYH[PVU UV[ VUS` WYVK\JLZ HSS [OL LULYN` ULLKLK

ETHANOL PRODUCER MAGAZINE

May 2009

[V JVU]LY[ IPVTHZZ PU[V ;OL 5L^ ,[OHUVS >L L_WLJ[ [V HSZV WYVK\JL LUV\NO Z[LHT HUK LSLJ[YPJ WV^LY [V VMMZL[ ULHYS` VM [OL OVZ[ WSHU[»Z \[PSP[` JVZ[Z (SS ^P[O aLYV MVZZPS M\LSZ PU [OL WYVJLZZ >L»YL YLHK` UV^ [V OLSW `V\ TLL[ HK]HUJLK IPVM\LS THUKH[LZ ^PU NYHU[Z ZLJ\YL [H_ JYLKP[Z HUK H[[YHJ[ JHWP[HS ;V ÄUK V\[ TVYL HIV\[ OV^ ;OL 5L^ ,[OHUVS PZ THRPUN VSK L[OHUVS UL^ HNHPU [HSR [V 0UIPJVU»Z 5VY[O (TLYPJHU WHY[ULYZ *HSS ;OVTHZ *VYSL H[ VY L THPS PUMV'PUIPJVU JVT

,QELFRQ %LRPDVV 5HÀQHU\ 0DNLQJ HWKDQRO ZRUN IRU WKH ZRUOG

ETHANOL PRODUCER MAGAZINE

May 2009

0UIPJVU 5VY[O (TLYPJH www.inbicon.com 15

Business&People Ethanol Industry Briefs

The Iowa Power Fund Board has approved a $14.75 million contract between Poet LLC and the state of Iowa. The contract finalizes the partnership to develop a commercial-scale cellulosic ethanol plant in Iowa. Project LIBERTY (Launch of an Integrated Biorefinery with Ecosustainable and Renewable Technologies in the Year 2009) will transform an existing corn-based ethanol plant in Emmetsburg, Iowa, into a facility that will have both corn-based and cellulosic ethanol technologies. The cellulosic ethanol production capacity will be 25 MMgy, according to Jim Sturdevant, director of Project LIBERTY. The project is scheduled to begin operation in 2011.

GTL Resources PLC has reopened Illinois River Energy LLC in Rochelle, Ill., which was temporarily shut down due to structural damage in the corn receiving area. The cause of the damage is under investigation. According to GTL, structural supports were temporarily installed to keep the plant operating safely. The plant capacity is 50 MMgy and there are plans to increase that to 100 MMgy, which is its nameplate capacity.

Renewable fuels retailer Propel Fuels recently announced the hiring of Matt Horton as chief executive officer. Previously, he worked with venture funds @Ventures and Garage Technology, where he led early-stage clean technology companies. In addition, Propel Fuels moved its headquarters from Seattle to Sacramento, Calif., where it launched the first Clean Fuel Point pump, which will be part of a statewide network of low-carbon fueling stations.

Growth Energy has announced the additions of former National Farmers Union President Tom Buis as chief executive officer, and national Democratic leader and four-star retired Army General Wesley Clark as co-chairman, joining Poet LLC Chief Executive Officer Jeff Broin at that position. Growth Energy also released results of a study that is positive for midlevel ethanol blends. Conducted by faculty members at North Dakota State University in Fargo, N.D., the study found that increasing the baseline ethanol blend from E10 to E15 could create more than 136,000 new U.S. jobs

while adding $24.4 billion per year into the economy.

Cellulosic ethanol producer and specialty enzyme developer Verenium Corp., in its U.S. Securities and Exchange Commission filing, stated that the company incurred a net loss of approximately $185.5 million in 2008 and that it expects to continue to incur losses in the foreseeable future. However, the company plans to continue moving forward with its 36 MMgy commercial-scale cellulosic ethanol plant in Highlands County, Fla., which is estimated to cost $300 million. Petroleum giant BP Amoco PLC, a collaborator in the project, has committed to providing $22.5 million toward the project.

on the topics, and previously served as the quality assurance and technical services director for Bunge North America’s milling division. He will be replaced by Iowa Corn Processors President and CPT shareholder Robert Giguere.

Aventine Renewable Energy Holdings Inc. announced in March that the company may need to file for Chapter 11 bankruptcy if it can’t obtain sufficient liquidity “in the very near term.” In its annual 10-K form filed with the U.S. Securities and Exchange Commission, the company said it expects to experience negative gross margins through the first quarter of 2009 as a result of fixed-price corn and natural gas contracts that are above current market prices. Aventine realized a net loss of $47.1 million in 2008 and a net income of $33.8 million in 2007. The company’s Chief Financial Officer Ajay Sabherwal resigned in February.

W.J. Will Duensing retired as president and chief executive officer of Cereal Process Technologies LLC in March. He beDuensing came president and chief executive officer in 2007, and led the completion of CPT’s technology installation at Renew Energy LLC, a 130 MMgy ethanol plant in Jefferson, Wis. As an expert in corn chemistry and milling, he California-based sushas published numerous articles tainable chemical company

ETHANOL PRODUCER MAGAZINE • May 2009

Sponsored by

mentation and antimicrobial issues. He previously worked as a plant manager at VeraSun Energy Corp. in JanesMoline ville, Minn. Jill Moline has been hired as senior fermentation specialist, joining PhibroChem from positions with VeraSun at Fort Dodge, Iowa, and in the VeraSun corporate office.

Larry Peckous has joined California-based biotechnology company EdeniQ as vice president of sales. He is a 28-year veteran of the starch processing and biofuels industries. He previously held senior management posiPeckous tions focused on improving biorefining plant efficiencies and marketing, and implementing enzyme and fermentation technologies. Most recently, he was a principal scientist for enzyme developer Novozymes AS in China.

Brazilian energy company Petrobras SA released a

business plan in March that calls for the company to earmark $2.8 billion for biofuels over a fouryear period. Approximately $1.92 billion will go toward ethanol in particular. The company’s goal is to produce 1.9 billion liters (500 million gallons) for the foreign market and 1.8 billion liters (480 million gallons) for the domestic market by 2013. Petrobras also expects to partner with a foreign company this year to build four ethanol plants. The company may acquire other ethanol plants to expand its capacity and is looking at a plant in Colombia. The company also has plans to develop second-generation technologies based on residual biomass feedstocks.

California-based BlueFire Ethanol Inc. announced a collaboration with William Farone, an original co-founder of the Arkenol process, to continue the advancement of the technology, which uses a concentrated acid hydrolysis pathway to convert cellulosic waste materials into ethanol. The Arkenol process was first patented in 1997, and BlueFire holds the North American license. According to the agreement, BlueFire will conduct development work at

ETHANOL PRODUCER MAGAZINE • May 2009

Applied Power Concepts Inc., a company owned by Farone in Anaheim, Calif. BlueFire will utilize the Arkenol process at its 3.7 MMgy cellulosic ethanol plant being constructed near Lancaster, Calif. In early March, BlueFire said it had secured 28 individual air permits from the Antelope Valley Air Quality Management District, which it needs to proceed with construction.

Range Fuels Inc. has selected Emerson Process Management to be the main automation contractor for its cellulosic ethanol plant under construction in Soperton, Ga. Emerson is also the automation contractor for Range Fuels’ pilot plant in Denver, which has been operating since early 2008. Emerson will assess risks and define protocol, engineering and automation standards to lower risks, reduce downtime and efficiently meet production goals. In other news, Emerson held an Alternative Fuels/BioRefinery Summit March 19 in Denver and in April in Atlanta. It plans to host another summit in May in Houston.

Cellulosic ethanol developer KL Energy Corp. recently appointed a new chief executive

officer, received $4 million in investments and announced plans for a new project in Canada. Steve Corcoran, previously KL Energy’s vice president of operations, is now chief executive officer. According to Corcoran, the $4 million from Niton Capital, The Green Fund, Warcoing Sucre SA and Pierre de Boeck will allow the company to complete the final implementation of its technology. KL Energy operates Western Biomass Energy, a cellulosic ethanol pilot plant in Upton, Wyo. It will also provide its technology to Prairie Green Renewable Energy Inc., a 5 MMgy to 10 MMgy cellulosic ethanol plant near Hudson Bay in northeastern Saskatchewan. “It will convert woody biomass to cellulose, and Prairie Green Renewable Energy is working with the Canadian government for funding to advance that project,” Corcoran said. The project is slated to begin construction in the third or fourth quarter of 2009. EP SHARE YOUR INDUSTRY BRIEFS To be included in Business & People, send information (including photos or illustrations if available) to: Industry Briefs, Ethanol Producer Magazine, 4650 38th Ave. S. Suite 160, Fargo, ND 58104. You may also fax information to (701) 373-0638, or e-mail it to kbevill@bbiinternational.com. Please include your name and telephone number in all correspondence.

COMMODITIES REPORT Natural Gas Report By Art Smith, U.S. Energy Services Inc.

High volatility continues; ‘still’ ratio below recent averages March 31—Natural gas prices continue to fall. April NYMEX last day settlement (NLDS) was $3.631, down $0.42 from the March NLDS. Inventory levels as of March 20, stood at 1,654 billion cubic feet (Bcf), 372 Bcf (29 percent) above a year ago and 280 Bcf (20.4 percent) above the five-year average. Demand destruction in the industrial sector for both natural gas and power tied with continued robust production have been the major price drivers. The technical picture continues to also be bearish. There is a high probability that inventory will be at record levels by the end of October unless there is extreme heat in the major population areas this summer, and/or major hurricane activity causes major production disruptions in the Gulf of Mexico. Liquid natural gas (LNG) imports are slated to make a dramatic rebound during the second and third quarters. Factors affecting LNG imports will be natural gas price levels in Europe and the strength of the U.S. dollar. Though natural gas drilling rig numbers have declined by almost 50 percent since last fall, unconventional, high-production drilling (shale) will keep North American production from falling off. The adjacent chart is the weekly “still.” The still is the ratio of natural gas prices to ethanol (NG/ZE); an exchange rate of the number of gallons of ethanol required to buy one dekatherm of natural gas. The lower the value the better the margin attributed to natural gas. NYMEX natural gas futures and Chicago Board of Trade etha-

nol futures are used in the still calculation. Looking at the weekly continuous natural gas and ethanol prices, the still has, since 2007, been trading on average at 3.75. Presently the May still is at 2.356 and the forward curve for the still is under 3.000 out to November. Since fall, the best strategy for hedging natural gas prices has been to float to the daily market; take Gas Daily prices. At some point the natural gas market will change. EP

Corn Report By Jason Sagebiel, FCStone

Corn demand slows March 26—The entire commodity market had been on a downward spiral last fall along with other markets such as equities, the housing market and financial markets. A casualty of that was corn, along with ethanol, as demand for both slowed. Not only were corn values devalued but the cost of inputs such as fertilizers and chemicals increased significantly. Despite USDA projecting a 1.740 billion bushel carryout, the corn supply and demand table can get tight again in 2009-‘10. By the time this article is in print the first planting intentions will be known and the market will then focus on weather. It is interesting to note that if the U.S. corn crop is 70 percent planted by the second week of May the acreage planted to corn increases. However, this was not the case in 1997 and 2001 inferring that the first two weeks of planting progress in May is important to alterations in plantings from March to June and the final yield. Each of these scenarios has a high correlation to each other. Global corn and wheat supplies have continued to increase. The USDA increased world corn carryout from February to March by 7.96 million metric tons. At the same time the USDA projected an increase in wheat carryout by 5.89 million metric tons ultimately reflecting less demand for each commodity. This chart illustrates the differential in corn acres from the 20

March to the June planting intentions report and the correlation to the same change in soybean planted acres within the same report. It is obvious that a reduction in corn should lead to an increase in soybean acres. Weather and markets at planting time will determine the overall outcome. EP ETHANOL PRODUCER MAGAZINE • May 2009

COMMODITIES REPORT DDGS Report By Sean Broderick, CHS Inc.

Tight conditions heading into summer March 27—As April begins (a little on the chilly side), the DDG market is still a little tight. Plants have been focused on keeping inventories low, as this is the time of year when the weaker summer market seems to catch a lot of people off guard, and no one wants to truly be in the spot market. That being said, though, with margins extremely tight for ethanol producers and feeders, more of them are staying in the week-to-week market than we have ever seen before. This leads to alternating waves of cars on track followed by plants that are short of product. The export market, led by strong container demand, has been pulling a lot of DDGS not only to the Chicago area transloaders, but also to Kansas City and the West Coast. The gulf market has benefitted from lower barge freight, making bulk

DDGS competitive versus gulf corn, and destination container markets that have the infrastructure to choose one or the other. Canadian demand, though, has been well off last years’ pace, with lower feeding margins and cheap alternatives. Domestically, all of the animal feeding sectors are hurting, but things are looking up as we look ahead. Milk futures have rallied significantly, giving the dairyman encouragement for the mid to late summer. Those of us with credit risk are all breathing a sigh of relief. Looking ahead, we still have spring planting and weather to contend with, and the futures gyrations that go along with that. This year we also have the added uncertainty of ethanol plants and their margins, and how much product will move to the market. EP

Regional Ethanol Prices ($/gallon as of March 26)

REGION

SPOT

RACK

West Coast

1.6150

1.7325

Midwest

1.5700

1.6688

East Coast

1.6200

1.7846 SOURCE: DTN

Regional Gasoline Prices ($/gallon as of March 26)

REGION

SPOT

RACK

West Coast

1.3859

1.5264

Midwest

1.4009

1.4511

East Coast

1.3066

1.4274 SOURCE: DTN

DDGS Prices ($/ton) LOCATION

MARCH 2009

FEB. 2008

MARCH 2008

Minnesota

120

130

155

California*

165

173

194

Chicago

125

140

148

Buffalo, N.Y.

140

145

155

Central Florida

155

168

SOURCE: CHS Inc.

Corn Futures Prices DATE

(May corn, $/bushel)

HIGH

LOW

3.98

3.93 1/2

3.96 1/2

Feb. 20, 2008

3.63 1/2

3.50 1/2

3.59

March 20, 2008

5.26 1/2

5.07 1/4

5.07 1/2

March 20, 2009

Ethanol Report

182

*Central Valley

SOURCE: FCStone

By Rick Kment, DTN Biofuels Analyst

Riding the roller coaster March 20—Choppiness in the energy markets through the first three months of 2009 have resembled the stock market roller coaster. In many ways, the stock market and the commodity markets are much more alike in this economy than they have been in the past. The lack of investment money in the market has left the market relatively flat through the last quarter of 2008. Each time it seems that the worst is over, buyers step back into the market with newfound money. But this doesn’t last long until once again selling pressure overpowers the market. Energy markets are struggling between two factors. Gasoline demand typically increases from now until the first week in June. But the current economic situation has placed a dark cloud over many people’s travel plans and decisions to spend their discre-

tional income on gasoline. The March Federal Reserve meeting, however, seemed to change the short-term situation in the commodity markets, when the announcement was made to buy up $300 billion in long-term debt. This drew a significant amount of money into the market. The big question is if this will be enough to sustain the market, or if after the flash has burnt off this action, markets will move back to the lackluster movements seen earlier in the month. Gasoline and ethanol markets continue to gain light support, although the spread between the two markets has narrowed significantly in the past couple of weeks. This is likely to increase the demand for ethanol as more blenders are expected to ramp up blending rates through the late spring and early summer. EP

ETHANOL PRODUCER MAGAZINE • May 2009

Cash Sorghum Prices ($/bushel) MAR. 31, 2009 FEB. 13, 2009 MAR. 20, 2008 Superior, Neb. Beatrice, Neb. Sublette, Kan. Salina, Kan. Triangle, Texas Gulf, Texas

3.40 3.37 3.21 3.59 3.17 4.15

2.86 2.79 2.81 3.02 2.74 3.69

4.48 4.58 4.54 4.60 4.67 5.25 SOURCE: Sorghum Synergies

Natural Gas Prices

($/MMBtu)

MARCH 2009

FEB. 2009

MARCH 2008

NYMEX

3.630

4.476

8.930

N. Ventura

3.405

4.860

9.040

Calif. Border

3.030

3.640

8.450

SOURCE: U.S. Energy Services Inc.

U.S. Ethanol Production Output November 2008

686,000*

October 2008

647,000

November 2007

479,000

*all-time monthly high

(barrels/day)

SOURCE: U.S. Energy Information Administration

VIEW FROM THE HILL

Dinneen

Renewable Energy Investment Will Pay Off Recently, a chorus has been growing in Washington questioning whether the nation can afford the broad economic recovery strategy the Obama Administration is pursuing. Is it prudent to try to address both the collapse in the banking industry and our nation’s dependence on fossil fuels at the same time? Should we be investing in new technologies when millions of Americans are losing their jobs? The unequivocal answer to these questions is yes. Our economic woes are directly linked to our dependence on imported oil and the hemorrhaging of U.S. dollars to OPEC. Unless and until we gain control of our energy destiny, we will never have control of our economic future. President Barack Obama and members of Congress were absolutely right in focusing on the establishment of a green economy for immediate, intermediate and long-term economic opportunity. The investment in developing and deploying renewable energy technologies will create jobs immediately through the construction of new facilities while providing the long-term job growth that only evolving technologies can offer. Take ethanol as the example. Just since the establishment of the nation’s first renewable fuels

standard in 2005, American ethanol production has helped support or create nearly 350,000 additional jobs throughout the entire economy. The anticipated job growth that will result from the implementation and success of the expanded RFS in 2007 will be on the order of 1 million jobs. Some will argue that investing in renewable fuels and other renewable energy technologies is just a distraction from the real problem posed by the potential insolvency of many of the nation’s largest banks. I would agree that fixing the banking system and unfreezing the credit markets are critical to the success of the economy and the nation’s renewable fuels industry. However, those banks will need projects in which to invest, and providing federal support of the research, development, and deployment of next generation technologies is a critical step that must be taken. The problems facing the country are too many and too great to take a rifle shot approach. We must be able to multitask as a nation if we want to revive the economy, reduce our dependence on foreign oil, and address the challenges of climate change. Investing in renewable fuel and energy projects today will provide dividends in the weeks, months and years to come.

Bob Dinneen President and CEO Renewable Fuels Association

ETHANOL PRODUCER MAGAZINE • May 2009

RFA UPDATE

w w w. e t h a n o l R FA . o r g

Virginia Naval Air Station opens E85 pump The U.S. Navy is doing its part to help provide greater energy stability and security for the country, well beyond its primary role of keeping this country safe. Recently, at the Navy Exchange Command (NEXCOM) at the Oceania Naval Air Station in Virginia Beach, Va., the nation got its newest E85 (85 percent ethanol/15 percent gasoline) fueling station. The location will serve the hundreds of flexible-fuel vehicles (FFV) capable of using higher level ethanol blends such as E85 operated by the Navy. The fuel pump will also be available to the thousands of civilians in the Virginia Beach area who drive FFVs. The increasing use of domestically produced ethanol is reducing America’s need for imported oil. In 2008, the use of 9 billion gallons of ethanol displaced more than 321 million barrels of imported oil valued at more the $32 billion. “Just as the U.S. Navy is vital to the security of this nation, so too is ethanol in helping this nation become more energy secure,” said Renewable Fuels Association President Bob Dinneen. “America’s ethanol industry is pleased to partner with the U.S. Navy to help reduce the demand for imported oil and increase our reliance on homegrown sources of renewable energy. Opening this facility sends a powerful signal that the U.S. Navy is committed to reducing oil dependence by leading by example.” Critical to the expansion of ethanol use is the deployment of infrastructure capable of utilizing and dispensing higher level blends of ethanol. Continuing to work with automakers to produce FFVs and gasoline suppliers to install E85 pumps is necessary to lessen our dependence on foreign oil, both by our nation’s armed forces and ordinary consumers alike. “Protec is proud to have worked with Larry Boone and NEXCOM to create an E85 program and to be supplying fuel to the new Oceana Naval Air Station E85 site,” said Todd Garner, managing partner of Protec Fuel Management. “This station will be an important component of the Navy’s efforts to reduce its petroleum consumption. Furthermore, this E85 station will be open to military families and the general public so that everyone will be able to participate in our nation’s efforts toward energy security.” The installation of this facility is a result of a solicitation by NEXCOM and the subsequent awarding of the contract to Protec. The U.S. Navy is required to utilize FFVs but often lacks E85 refueling infrastructure near its military installations. This is part of a larger effort to expand E85 refueling infrastructure to Naval facilities and other military locations across the country.

ETHANOL PRODUCER MAGAZINE • May 2009

2008 production exceeds 9 billion gallons According to the Energy Information Administration, American ethanol facilities produced more than 9.2 billion gallons of ethanol in 2008, up from some 6.5 billion gallons in 2007. On average, the U.S. ethanol industry produced 601,000 barrels per day (b/d). EIA data for December showed an average of 656,000 b/d of ethanol production, down slightly from November 2008 but up dramatically from the 489,000 b/d production rate from one year ago. Ethanol demand, as calculated by the Renewable Fuels Association, also grew in 2008. According to RFA data, demand for ethanol averaged 630,000 b/d in 2008 or more than 9.5 billion gallons. By comparison, ethanol demand in 2007 averaged 446,000 b/d. According to International Trade Commission data, imports of ethanol exceeded 500 million gallons in 2008, an increase of more than 100 million gallons from 2007. In December, ethanol imports totaled 20 million gallons. “Despite the economic challenges facing this country and this industry in 2008, America’s ethanol producers still managed to meet the goals put before them and build the necessary foundation for a strong and robust future for renewable fuels,” said RFA hat President Bob Dinneen. “While challenges will still persist through 2009, this industry is poised to help lead this nation out of its economic downturn and provide the kind of economic, energy, and environmental stability that is desperately needed.”

Our medium-pressure dust filters are good for your plant and the planet. What’s more, because they run on medium-pressure air, our filters take less horsepower and can save 50% or more in operating costs. And with fewer moving parts and tough construction, they last longer, can handle temps of up to 500 degrees and are virtually immune to freeze-ups. To find out more, call MAC at 1-800-821-2476 or email us at Sales@MacEquipment.com.

BIObytes Ethanol News Briefs

PHOTO: INSTITUTE FOR SUSTAINABLE AND RENEWABLE RESOURCES

Praj pilot plant meets goals The cellulosic ethanol pilot plant at Praj Matrix-The Innovation Center in Pune, India, has achieved its goal of producing ethanol from corncobs and sugarcane bagasse under varying operating conditions. Over the past year, Praj Industries Ltd. has expanded its scientific team to 75 people at Praj Matrix, the company’s latest research and development center. The company has begun discussions with several distill-

eries, where it hopes to add a demonstration-scale cellulosic module using its patent-pending process. In earlier reports, Praj executives said the company’s cellulosic ethanol process involved a novel pretreatment followed by fermentation with a specific microorganism. Praj Chairman Pramod Chaudhari said “the breakthrough puts us right on top of the league with advanced nations.”

M. Javed Iqbal at the Institute for Sustainable and Renewable Resources in Danville, Va., is studying using the Jerusalem artichoke, a perennial native sunflower species, as a feedstock for producing ethanol.

Jerusalem artichoke studied as feedstock The Institute for Sustainable and Renewable Resources in Danville, Va., is studying the Jerusalem artichoke (Helianthus tuberosis), a perennial native sunflower species, as a feedstock for producing ethanol. The plant produces inulin, a fructose polymer, and stores it in its stem until it flowers. The inulin is then translocated to the tuber.

To improve the plant’s potential as a feedstock for ethanol, the institute is identifying the genes that regulate flowering and the translocation of sugars, according to M. Javed Iqbal, the lead researcher. Iqbal said they plan to modify the genes to prolong the growing season, increase sugar production and delay the translocation of sugars.

Jamaica dehydration plant expands JB Ethanol Ltd., a 60 MMgy ethanol dehydration plant in Port Esquivel, Jamaica, recently completed an expansion project doubling its size to 120 MMgy. According to Thomas Rahn, a JB Ethanol director, the newly expanded dehydration plant was commissioned in March. Rahn said the hydrous ethanol JB Ethanol currently receives is shipped from Brazil with about 5 percent water. “We’re not married to Brazil,” Rahn said, but it is what works for the

company right now. The moisture is removed in the Port Esquivel plant, in the parish of St. Catherine, to make fuel-grade ethanol bound for the U.S. market. “There are no ethanol production plants in the Caribbean, just dehydration plants,” Rahn added. JB Ethanol’s original 60 MMgy dehydration plant was commissioned in 2007. Dedini S/A Indústrias de Base supplied the plant equipment and dehydration technology.

California-grown sugarcane ethanol will reduce GHG emissions 95.2 percent compared with gasoline, according to California Ethanol & Power.

Sugarcane-based ethanol emits fewer GHGs Brawley, Calif.-based California Ethanol & Power LLC, which plans to build a 60 MMgy sugarcane-to-ethanol plant in California’s Imperial Valley, released the results of a life-cycle analysis conducted by Life Cycle Associate LLC. The findings showed that California Ethanol & Power’s fuel, including electricity as a coproduct, would release 95.2 percent fewer greenhouse gas emissions (GHG)

than petroleum gasoline and 77 percent to 83 percent fewer GHG emissions than the Brazilian ethanol consumed in California. The GREET model (Greenhouse gases, Regulated Emissions, and Energy use in Transportation) developed by the Argonne National Laboratory was modified specifically for California and used in the analysis.

ETHANOL PRODUCER MAGAZINE • May 2009

US distillers grains exports nearly double in 2008

Mexico was once again the top importer of U.S. distillers grains in 2008.

In 2008, U.S. distillers grains exports nearly doubled compared with the previous year, rising 91 percent from 2.36 million metric tons (mmt) in 2007 to 4.51 mmt in 2008, according to the Foreign Agricultural Service. Total U.S. distillers grains production in 2008 was approximately 22 mmt, so exports accounted for approximately 20 percent of total domestic production. For the third consecutive year, Mexico is the top importer

USDA releases long-term agriculture projections The USDA has released its report of long-term projections to 2018, which is now available at www.usda.gov/oce. The projections were developed by interagency committees in USDA, along with the Economic Research Service. Projections cover agricultural commodities, agricultural trade, and aggregate indicators of the sector, such as farm income and food prices. The projections are based on specific assumptions regarding macroeconomic conditions, policy, weather and international developments. According to the report, while expansion in the ethanol industry continues, smaller gains for corn-based ethanol

are projected, largely reflecting moderate growth in overall gasoline consumption in the U.S. By the end of the projection period, ethanol production will account for about 35 percent of corn use and corn-based ethanol production exceeds 9 percent of annual gasoline consumption, the report finds. The continued presence of ethanol demand in the corn sector, in combination with other longterm factors, holds prices for corn and many other crops well above their historical levels, although season-average annual prices are not projected to reach the record highs seen in the first half of 2008.

ETHANOL PRODUCER MAGAZINE • May 2009

of U.S. distillers grains, and in 2008 U.S.’s southern neighbor imported nearly 1.2 mmt, accounting for 26 percent of total U.S. exports. Mexico imported 68 percent more distillers grains in 2008 than in 2007. Canada ranked second, importing close to 772,000 metric tons. Turkey ranked third, importing more than 465,000 metric tons in 2008, tripling the amount of U.S. distillers grains shipped there compared with the previous year.

California tech fund invests in ethanol Biofuel development company Principle Energy Ltd. received a $10 million investment from Craton Equity Partners to be used for the company’s first project in Dombe, Mozambique. The 60 MMgy sugarcane-based ethanol plant is scheduled to begin production in 2010. The total cost of the project is estimated at $350 million. Craton, a technology fund focused on sustainable biofuels projects, expects to continue to invest in projects throughout Africa.

States address ethanol legislation Three U.S. states moved ethanol legislation recently. South Dakota Gov. Mike Rounds signed into law Senate Bill 21, which contained ethanol tax legislation. The bill is aimed at streamlining the way ethanol and ethanol-blended fuels are taxed within the state. Under prior regulations, standard gasoline, midlevel blends containing between 10 percent and 75 percent ethanol, and E85 containing more than 75 percent ethanol were taxed at the respective rates of 22, 20 and 10 cents per gallon. Under this system of taxation, applicable taxes may have been collected at both the wholesale and retail levels. SB 21 simplifies the taxation procedure for fuel stations selling midlevel blends by ensuring all taxes are paid on the wholesale level. The new law requires that standard gasoline be taxed at the same 22 cents per gallon, while denatured ethanol

is now taxed at 8 cents per gallon. The two fuels can then be blended at any level without incurring additional tax. Lawmakers in Idaho’s House of Representatives passed a bill that would eliminate the current 10 percent (2.5-cent-per-gallon) tax exemption on ethanol- and biodiesel-blended fuels. The legislation was part of Idaho Gov. C. L. “Butch” Otter’s measures aimed at boosting funding for roadwork. In Minnesota, lawmakers are considering two bills aimed at repealing the state’s ethanol producer payment program, also known as the ethanol subsidy program, and the state’s minimum ethanol content requirement, more commonly known as the state’s renewable fuels standard. A third bill pending in the Minnesota legislature would repeal only the ethanol producer payment program.

California works to reduce GHG emissions California is proceeding with plans to implement a low-carbon fuel standard (LCFS) that would seek to reduce greenhouse gas (GHG) emissions from the state’s transportation fuels by 10 percent by 2020. In March, the California Air Resources Board released its proposed regulation to implement the LCFS, which would diversify the variety of fuels available within the state, boost markets for alternative fuels. The regulation also requires fuel providers, refiners, importers and blenders to ensure the fuel that they provide for the California market meets an average declining standard of carbon intensity, determined by examining the fuel pathway—the sum of GHG emissions associated with the production, transportation and consumption of the fuel. Accord-

ing to CARB, some fuel pathways also result in the release of additional GHG emissions through the conversion of forestlands and other carbon-containing habitats, known as indirect land-use changes (ILUC). CARB’s inclusion of ILUC to determine the carbon-intensity of fuel is challenged by many scientists and some biofuels industry leaders. In March, 111 scientists from Sandia National Laboratories, Lawrence Berkeley National Laboratory and a wide variety of universities submitted a letter to California Gov. Arnold Schwarzenegger stating that enforcement of ILUC is highly premature, that the science is far too limited and uncertain for regulatory enforcement, and that indirect effects are often misunderstood and should not be enforced selectively. A public hearing

on CARB’s LCFS proposal was scheduled for April 23-24. The state is also seeking to set standards to control GHG emissions from motor vehicles. Before this policy can be implemented, U.S. EPA must approve a waiver request. The waiver, originally submitted in December 2005, was denied in March 2008 by then EPA Administrator Stephen Johnson. In January, California asked current EPA Administrator Lisa Jackson to reconsider, and President Barack Obama requested the EPA reconsider the denial. An EPA spokeswoman told EPM that the agency has no estimate of when a final decision on the waiver will be issued. —Erin Voegele

Adjusted Carbon Intensity Values for Gasoline Fuels and Fuels that Substitute for Gasoline Carbon Intensity Values (gCO2e/MJ)

Fuel

Pathway Description

CARBOB - based on the average crude oil delivered to California Gasoline refineries and average California refinery efficiencies CaRFG-CARBOB and a blend of 100% average Midwestern corn ethanol to meet a 3.5% oxygen content by weight (approximately 10% ethanol) CaRFG-CARBOB and a blend of an 80% Midwestern corn ethanol and 20% California corn ethanol to meet a 3.5% oxygen content by weight blend (approximately 10% ethanol) Ethanol from Sugarcane CaRFG-CARBOB and a blend of an 80% Midwestern corn ethanol and 20% California corn ethanol to meet a 3.5% oxygen content by weight blend (approximately 10% ethanol) California; Dry Mill; Wet DGS; NG California average; 80% Midwest Average; 20% California; Dry Mill; Wet DGS; NG Midwest; Dry Mill; Dry DGS Midwest; Wet Mill Midwest; Dry Mill; Wet DGS California; Dry Mill; Dry DGS, NG Midwest; Dry Mill; Dry DGS; 80% NG; 20% Biomass Midwest; Dry Mill; Wet DGS; 80% NG; 20% Biomass California; Dry Mill; Dry DGS; 80% NG; 20% Biomass California; Dry Mill; Wet DGS; 80% NG; 20% Biomass Brazilian sugarcane using average production processes Electricity California average electricity mix California marginal electricity mix of natural gas and renewable energy Compressed H2 from central reforming of NG Hydrogen Liquid H2 from central reforming of NG Compressed H2 from on-site reforming of NG SB 1505 Scenario; Compressed H2 from on-site reforming with renewable feedstocks

Direct Emissions

Land Use or Other Effect

Total

95.86

96.09

96.01 (1)

95.85

95.85 (1)

69.4

99.4

50.7 65.66

30 30

80.7 95.66

68.4 75.1 60.1 58.9 63.6 56.8 54.2 47.44 27.4 124.1 104.7 142.2 133 98.3

30 30 30 30 30 30 30 30 46 0 0 0 0 0 0

98.4 105.1 90.1 88.9 93.6 86.8 84.2 77.4 73.4 41.37 (2) 34.90 (2) 61.63 (3) 57.83 (3) 42.74 (3) 33.09 (3)

76.1

(1) Calculated value; land use part of the value; (2) Adjusted by an EER factor of 3.0 to account for power train efficiency improvements over gasoline engines; (3) Adjusted by an EER factor of 2.3 to account for power train efficiency improvements over gasoline engines SOURCE: PAGE ES-20 OF CALIFORNIA ENVIRONMENTAL PROTECTION AGENCY AIR RESOURCES BOARD PROPOSED REGULATION TO IMPLEMENT THE LOW CARBON FUEL STANDARD, VOLUME 1, ,STAFF REPORT: INITIAL STATEMENT OF REASONS

ETHANOL PRODUCER MAGAZINE • May 2009

Stimulus act, federal budget include renewable energy funding The $787 billion American Recovery and Reinvestment Act that President Barack Obama signed into law Feb. 17 includes $43 billion to support energy development, according to the White House. The Clean Energy Finance Authority program included in the recovery plan intends to revive the renewable energy industry and to double the amount of energy produced from renewable sources over the next three years. Collectively, this funding is expected to leverage nearly $100 billion in clean energy projects. For producers, the legislation provides $6 billion for the Innovative Technology Loan Guarantee program to provide support for more than $60 billion in loans for renewable technologies. The legislation also provides $150 million to support $3 billion in rural business loans and grants. In addition, the recovery plan creates a new 30 percent tax credit for investment in property used to re-equip, expand or establish a manufacturing facility designed to produce energy from renewable resources and to support the transmission of intermittent sources of renewable energy. The tax credit will also be used for property for carbon capture or sequestration, property designed to refine or blend fuels or produce energy conservation technologies, or other advanced energy property designed to reduce greenhouse gases (GHG). For retailers, the recovery plan also temporarily increases the business credit for alternative refueling property from 30 percent to 50 percent of the cost of qualifying property and increases the cap on the credit for depreciable property from

encouraged the EPA to take ag$30,000 to $50,000. It also ingressive action on increasing the creases the cap on the credit for blending rate to 12 or 13 percent non-depreciable property from for ethanol. “The role that USDA $1,000 to $2,000, and aphas is to make sure that regulators plies to property placed appreciate the stress that the bioin service during tax fuels industry is under, generally,” years 2009 and 2010. Vilsack said. “Increasing that For researchers, Chu blend rate quickly would provide the legislation proincreased market opportunities vides $16.8 billion for and increased stability.” the Energy Efficiency and Estimated allocations for the Renewable Energy Program, inUSDA increased slightly from cluding $2.5 billion for applied $24.6 billion in 2009 to $26 billion research, development, demonin 2010. Included in the funding stration and deployment activiis $250 million in loans and grants ties to include $800 million for for renewable fuels projects. In projects related to biomass. This March, Vilsack said the USDA particular area of funding also will work with distressed ethanol includes $300 million for the AlVilsack producers to restructure loans usternative Fueled Vehicles Pilot Grant Program, which will provide grants ing USDA loan guarantee programs. Under the proposed budget, the U.S. to public or nonprofit entities for the purchase of alternative fueled vehicles and the DOE is allocated a total budget of $26.3 installation or acquisition of infrastructure billion. Among its expected duties is continued support for research, development, necessary to support the vehicles. In addition to the recovery act, as of demonstration and commercialization of March, the proposed federal budget for biofuels and renewable energy through fiscal year 2010 put forth by Obama con- loan guarantees. Specific monetary totals tained billions of dollars in new spending were not supplied for the loan guarantee for renewable fuels-related projects. The program. In March, DOE Secretary Steven Chu budget included $10.5 billion for the U.S. EPA, a 34 percent increase from 2009. The said the DOE intends to continue the reEPA budget included spending to develop search necessary to commercialize genera cap-and-trade program, which would re- ating gasoline and diesel-like biofuels from quire a reduction of GHG emissions to 14 lumber waste, crop wastes, solid waste and percent below 2005 levels by 2020. Reve- nonfood crops. nue from the program is expected to begin accruing in fiscal year 2012 and is project—Ryan C. Christiansen ed to total $150 billion over 10 years. During a press conference in March, USDA Secretary Tom Vilsack said he has

ETHANOL PRODUCER MAGAZINE • May 2009

EPA unveils Moderated Tracking System for RINs The U.S. EPA held a Webinar on Feb. 25 to explain the development of its Moderated Tracking System, which will be used to accurately and securely track renewable identification number (RIN) credits. The program is intended to help accurately enforce the mandates under RFS2. Renewable fuels registry RINSTAR has been working with EPA to help develop a federal register through which all RIN transactions would flow to ensure accuracy and honesty in reporting. On March 5, the Webinar was rebroadcast by RINSTAR, which conducted live polling during the event, as one of EPA’s original missions in holding the Webinar was to collect industry stakeholder feedback from it. The need for EPA to moderate RIN transactions is apparent in the large number of invalid RINs that have entered the marketplace. In 15 months, there were 27,000 rejected, invalid RINs, according to Clayton McMartin, president of Clean Fuels Clearinghouse and RINSTAR. “During that time, we have safeguarded our membership from hundreds of millions of invalid Gal-RINs,” McMartin said. Through MTS, the EPA will not play “matchmaker” in the market

with RINs but instead will act as an accounting mechanism to bring integrity to the market. “MTS is a terrific program because there was a major flaw with the original RIN program in that it is very cumbersome in terms of settlement and verification of whether the RINs were actually valid or not,” said John Gelbard, chief executive officer of RINXchange, an exchange where the sale and purchase of RINs can be conducted. “You have this 38-digit number and it is very complex to keep track of transactions. Every single transaction, which normally is at least a few hundred thousand RINs, involves a whole bunch of separate RIN numbers and every time one of those were transferred or broken up into separate items, there was the possibility for human error in transposing them.” He said it was very hard for parties to know when they bought RINs if they were getting valid RINs; or if there was an error, that it could be corrected. “It’s not that there is fraud going on, but just a lot of back office clerical work,” Gelbard told EPM. Currently, RIN reporting to EPA is quarterly, which means by the time EPA goes through them all it could take six months before

When it comes to treating your water problems ... we don’t kid around. When you need experience, you need Buckman. For over 60 years, we have been solving water-related problems for our customers. We are committed to delivering solutions that are uniquely designed to help you increase productivity, improve quality, and give you a return on your investment. Other suppliers have chemicals.... only Buckman adds experience and knowledge for a total system approach. BECAUSE IT’S NOT JUST CHEMICALS YOU WANT – IT’S RESULTS.

Buckman will excel in providing measurable, cost-effective improvements in output and quality for our customers by delivering customer-specific services and products, and the creative application of knowledge. International Headquarters at 1256 North McLean Blvd., Memphis, TN 38108 U.S.A. ©2009, Buckman Laboratories International, Inc. (901) 278-0330 /Fax (901) 276-5343 or call 1 800 BUCKMAN in the U.S.A. www.buckman.com / knetix@buckman.com

ETHANOL PRODUCER MAGAZINE • May 2009

Does EPA’s decision to no longer accept spreadsheets impact your business process? Yes No

68% 32%

Increased confidence in RIN transactions is necessary for an efficient and successful market Strongly Agree Agree Disagree Strongly Disagree

50% 46% 2% 2%

Our company is concerned about fraudulent or invalid RINs in the marketplace Strongly Agree Agree No Opinion Disagree Strongly Disagree

33% 42% 21% 4% 0%

a party learns of invalid RINs. Through MTS, EPA will become a RIN bank for participants, and will keep a running tally on everyone’s positions. The MTS is not expected to go into effect until the final ruling for RFS2 is released, anticipated in 2010. MTS will allow EPA to debit a RIN seller’s balance and credit the buyer’s account in virtual real time, or within three days. As a result, EPA will no longer accept spreadsheets as a means to report RIN transactions once MTS is enacted. Another major change starting next year under RFS2 will be the introduction of RINs specific to the type of renewable fuel, such as corn ethanol, advanced biofuels, cellulosic ethanol and biodiesel. So instead of having one generic RIN, regardless of the renewable fuel source, there will be RINs that identify what specific type of renewable fuel it represents. “That’s a major change,” Gelbard said of RFS2. “If they didn’t have the bookkeeping correction (MTS) at the same time as this change goes into effect, it would have been a nightmare scenario because you would have had not only potential problems with RIN numbers but potential problems with the source of the RINs.” The Webinar, and polling data gathered by RINSTAR, can be viewed at www.cleanfuelsclearinghouse.com/2009/03/ epa-mts-webinar-3-5-09/. —Ron Kotrba

SOURCE: RINSTAR

The Ethanol Industry’s Leading Supplier of Denaturant.

MARKETING We recognize the value of reliable supply and ensure that your plant will never run out of denaturant. Our logistics professionals manage every aspect of the transportation – from the pipeline movements to the cargo ships to the trucks and railcars. We Deliver!

Mike Corbus

620.245.0005

USA Supply

Simon Di Marzo

403.215.7455

Canadian Supply

www.nexeninc.com ETHANOL PRODUCER MAGAZINE • May 2009

Federal E15 mandate closer to reality Ethanol lobby groups officially filed a petition with the U.S. EPA on March 6 requesting that the amount of ethanol blended into gasoline be increased from 10 percent to 15 percent. The EPA must now review the submittal and hold public commentary hearings before completing its final ruling. Industry lobby group Growth Energy held a press conference immediately following the filing to discuss the waiver. Co-chairman Gen. Wesley Clark pointed out that the request calls for an increase of ethanol up to 15 percent and that station owners wouldn’t be required to offer E15. He was hesitant to offer any sort of timeline as to the EPA’s approval of the waiver but mentioned the possibility of a more immediate approval for the use of E12 or E13. “Ideally, we’d like to see E12/E13 happen immediately,” Clark said. “CerThese dispensers could soon be pumping a higher blend of ethanol if the EPA rules in favor of the ethanol industry.

ETHANOL PRODUCER MAGAZINE • May 2009

tainly this year—maybe before summer.” He asked ethanol producers to contact their legislative representatives and submit comments to the EPA in support of the waiver. Renewable Fuels Association President Bob Dinneen said the association looks forward to working with the EPA and other government agencies in the coming weeks “to ensure the full potential of a robust domestic ethanol industry is realized.” He added that while E15 is a necessary step in that direction, an immediate move to E12 would give the industry some needed breathing room to ensure economic viability. In a letter to EPA Administrator Lisa Jackson, the American Coalition for Ethanol mentioned recent meetings with members of Congress who expressed strong support for the increase of ethanol blended gasoline to limits above 10 percent. ACE commended Jackson’s commitment to make a decision based on science rather than politics, and offered to provide scientific data to justify the use of higher ethanol blends and to work to implement scientific methodologies to calculate life-cycle greenhouse gas emissions for biofuels. A coalition of cellulosic ethanol producers also sent a letter to Jackson in support of the waiver and stated “removing the regula-

ETHANOL PRODUCER MAGAZINE • May 2009

tory cap will ensure the product market necessary to encourage continued investment in the commercialization of advanced biofuels.” One of the issues surrounding the use of midlevel ethanol blends is their functionality in legacy pumps. Recent progress was made in that arena when Underwriters Laboratories Inc. announced its support for the use of fuel blended with 15 percent ethanol in existing fuel dispensers. “UL determined that there is no significant incremental risk of damage between E10 and fuels with a maximum of 15 percent ethanol,” said John Drengenberg, consumer affairs manager for UL. However, he added, E10 has been known to consist of up to 13 percent ethanol. Therefore, the organization’s support of fuel containing 15 percent ethanol should not be misinterpreted to mean they approve E15 as that blend could consist of higher percentages of ethanol. Still, Drengenberg said their new approval rating “could help in the long run,” and that UL researchers are committed to advanced technology and continued research of higher percentages of ethanol. —Kris Bevill

Mascoma cellulosic ethanol pilot plant on line Boston, Mass.-based cellulosic ethanol developer Mascoma Corp. has commenced operations at its demonstration facility in Rome, N.Y., and is now producing cellulosic ethanol at the site. The company reached the milestone just four years after being founded. Plans to construct the pilot plant were first made public in 2006, construction began in early 2008, and completion of the facility was achieved the following December. On behalf of the state, the New York State Energy Research and Development Authority and the New York Power Authority provided partial funding for the facility, an agreement that was made in December 2006. Research partners at the pilot facility include State University of New York-College of Environmental Science and Forestry, Cornell University and Clarkson University. The newly completed Rome facility has the flexibility to operate An exterior view of Mascomaâ&#x20AC;&#x2122;s pilot plant in Rome, N.Y. PHOTO: MASCOMA CORP.

ETHANOL PRODUCER MAGAZINE â&#x20AC;˘ May 2009

on a variety of feedstocks, as Mascoma’s Consolidated Bio-Processing technology is able to convert multiple nonfood biomass feedstocks into cellulosic ethanol through the use of its process, which eliminates the need for costly enzymes or additives. The company also has research and development labs in Lebanon, N.H., and Woburn, Mass. Mascoma spokeswoman Kate Casolaro said that over the years, the company will use a combination of feedstocks while exploring different possibilities for its commercial facility five to 10 years down the line. “As we are focusing on wood chips for our first commercial facility in Michigan, in New York we’ll initially be testing wood chips, but we will be using switchgrass, corn stover and sugarcane bagasse at various points in our process testing,” she said. In early October, Mascoma received a $23.5 million grant from the state of Michigan to build a 40 MMgy commercial-scale cellulosic ethanol facility in Kinross Township, Mich., which is expected to be completed between 2011 and 2012. Mascoma has partnered with local businesses to obtain feedstock supplies for the pilot-scale New York plant, and is currently purchasing wood chips from a local saw mill. Having actually begun producing ethanol at the end of February, Casolaro says the facility is still running smoothly. Although the

capacity of the facility is 200,000 gallons, its output will fluctuate, according to Casolaro. “The fuel produced will be used for testing, and we will send some over to General Motors [Corp.] to test it in their engines,” she said. “We will hold some small events at which we will showcase GM cars running on the fuel.” In May, GM announced it had provided an undisclosed monetary investment to Mascoma and completed an agreement with the company to evaluate materials and other fuels produced by Mascoma for engine applications. The two companies also announced they would collaborate on expanding Mascoma’s commercialization projects on a global level. In a December 2008 interview with EPM, Mascoma Chief Executive Officer Bruce Jamerson said GM’s current financial crisis is not having an effect on Mascoma, and that they will continue to be investors no matter what happens in the future. “At some point, if we end up producing a lot of ethanol [at the pilot plant], we may blend and sell it,” Casolaro said. “But primarily, it will be used for testing and demonstration to ensure that we can continue to improve our technology by refining the numerous variables that will make this the most efficient, low-cost, low-carbon process possible.” —Anna Austin

The pump of choice for biofuels! Improve production and reduce costs with our sealless, valveless pumps. • Low shear, accurate metering for enzyme and pH control • Pump abrasive lime slurry with ease • No seals or valves to corrode or replace NEW

• 5 year warranty PROFIBUS enabled for plant wide integration

www.watson-marlow.com support@wmbpumps.com

1-800-282-8823

ETHANOL PRODUCER MAGAZINE • May 2009

Valero acquires VeraSun plants In March, Valero Renewable Fuels, a subsidiary of Valero Energy Corp., emerged as the winning bidder, purchasing seven ethanol plants from VeraSun Energy Corp. for $477 million. A Delaware bankruptcy court approved the auction sale. The deal was expected to close April 1. Collectively, Valero has acquired annual production capacity of 780 MMgy. The aggregate purchase price of $477 million represents approximately 30 percent of the plantsâ&#x20AC;&#x2122; replacement costs. The purchase price also excluded approximately $75 million in working capital. Credit Suisse advised Valero on the transaction. Valero Renewable Fuels submitted a bid at a base price of $350 million for five plants in Aurora, S.D.; Charles City, Iowa; Fort Dodge, Iowa; Hartley, Iowa; Welcome, Minn.; and a development site in Reynolds, Ind. Valero also successfully bid on an ethanol plant in Albert City, Iowa, for $72 million, formerly owned by U.S. BioEnergy Corp. and acquired by VeraSun, and a plant in Albion, Neb., for $55 million that VeraSun VeraSun Charles City LLC, a 110 MMgy plant in Charles City, Iowa, was one of seven ethanol plants acquired by Valero Energy Corp. in March. PHOTO: BRYAN SIMS, BBI INTERNATIONAL

LEADERSHIP, Hydroblasting Services

Dependable Service 24/7

ETHANOL PRODUCER MAGAZINE â&#x20AC;˘ May 2009

Tank Cleaning & Inspection

acquired from ASAlliance Biofuels. Valero plans to operate all of the plants through its subsidiaries and to keep VeraSun management staff at each plant location. Dougherty Funding LLC submitted a credit bid of $93 million for VeraSun’s 110 MMgy plant in Marion, S.D. A group of lenders led by AgStar Financial Services submitted a credit bid of $324 million for the remaining “US BioEnergy Group,” which included ethanol facilities in Central City and Ord, Neb.; Dyersville, Iowa; Hankinson, N.D.; Janesville, Minn.; and Woodbury, Mich. A group of lenders led by West LB AG submitted a credit bid of $99 million for the remaining “ASA Group” facilities, which consisted of ethanol plants in Bloomingburg, Ohio, and Linden, Ind. AgStar Financial Services said the six plants it bought “will remain in idle mode for an estimated 60 days while buyers are secured for these assets.” However, AgStar said it has already received interest in the plants from potential buyers, although the company didn’t disclose specific parties. Archer Daniels Midland Co. and Cargill Inc. also participated in the bidding with Valero for the plants. The transaction solidifies Valero’s initial entry into the ethanol marketplace as a leading buyer of ethanol for blending in its gasoline, and its purchase of the plants is expected to give Valero a dedicated supply of ethanol.

Valero’s interest in acquiring the plants hasn’t been seen as a positive move by some ethanol advocates. One of those is The International Institute for Ecological Agriculture, a promoter of permaculture and alternative fuels. According to David Blume, IIEA executive director, Valero’s offer to participate in the ethanol market demonstrates the “end-game” strategy for last year’s aggressive foodversus-fuel propaganda and price war manipulation campaign implemented by the international oil cartel. “This is really the first time that somebody from the petroleum complex has made a significant investment in the ethanol industry,” said Todd Alexander, a partner with law firm Chadbourne & Parke LLP. “There have been other oil majors such as Marathon Oil Corp. that have made investments in the industry by way of joint ventures and partnerships, but none of this magnitude.” “It definitely raises very interesting questions as to whether an industry that has been agriculturally based will just become one additional segment of the overall petroleum complex,” he said. “Although I think it’s too early to say that.” Other ethanol companies such as Poet LLC, ADM and Cargill may be in a position to acquire financially distressed ethanol assets in the future if they fit their business models, Alexander said. —Bryan Sims

AT YOUR SERVICE! Fan Blasting

Wet /Dry Industrial Vacuum Services Waste Collection, Transport & Disposal

ETHANOL PRODUCER MAGAZINE • May 2009

Horizontal Tube Cleaning

Emergency Response

Phone (515) 283-0500 37 www.hydro-klean.com

REGISTRATION IS NOW OPEN www.fuelethanolworkshop.com

June 15 - 18, 2009

Denver Convention Center | Denver, Colorado, USA

WHERE E T HANOLâ&#x20AC;&#x2122;S NE W ERA BEGINS

No longer is the world of ethanol confined to grain. C ellulosic ethanol and advanced biofuels are the future, and that future star ts now. For a quar ter centur y, the International Fuel Ethanol Workshop & Expo has delivered not only the largest ethanol event in the world, but the finest. Join the industry this summer for the FE W â&#x20AC;&#x2122;s 25th Anniversar y in Denver. I t â&#x20AC;&#x2122;s where the ethanol industr y â&#x20AC;&#x2122;s new era begins.

ETHANOL PRODUCER MAGAZINE â&#x20AC;˘ May 2009

Get maximum performance from your fans and blowers. When it’s time to choose the best possible air-movement solution for your project, trust the industry leader. At The New York Blower Company, we have the experience, knowledge and technology to produce what engineers and machine designers agree to be the most durable and efficient industrial fans and blowers. That’s why New York Blower is the brand of choice in the air-movement industry.

Leading the industry forward since 1889

RADIAL

TUBULAR CENTRIFUGAL

BACKWARD INCLINED

PLUG FANS

PRESSURE BLOWERS

800.208.7918 | www.nyb.com

Representing 1.54 Billion Gallons Annually

Ethanol Plant Construction New Project

Project Complete

Project Expansion

Expansion Complete

Production to pick up in ‘09 thanol production in the U.S. totaled 9.2 billion gallons in 2008; 2 million gallons more than the minimum requirement (9 billion gallons) mandated by the Energy Independence & Security Act of 2007, according to the Energy Information Administration. In 2009, the industry is expected to produce 2.1 billion gallons more, for a total of 11.2 billion gallons with 6 MMgy expected to come from advanced biofuel production. As uncertainty looms amid a credit crisis and volatile commodity prices, will the industry be able to achieve this goal in 2009? Included in this issue is EPM’s annual spring ethanol map, which provides a visual snapshot of the state of the industry as of March 12. According to statistics from the map, approximately 10.43 billion gallons of capacity were produced from 169 operating plants in the U.S.; 36 plants were idle, representing 2.17 billion gallons of capacity, and 14 were under construction with a combined capacity of 1.4 billion gallons. Approximately 92 percent of plants (under construction/producing) are using corn as feedstock. Predictably, Iowa was the leading ethanol producing state with a combined 3 billion gallons of production capacity. Approximately 375 MMgy of capacity was under construction. Homeland Energy Solutions LLC, a 100 MMgy corn-based ethanol plant in Lawler, Iowa, completed construction in late March in preparation for its corn grind and start-up in the first week of April, according to a company spokeswoman. The company hired 36 employees for its opening. Nebraska came in second with a combined capacity of 1.2 billion gallons while Illinois was third with 976 MMgy. In Kansas, Abengoa Bioenergy Corp. is undergoing an expansion project that will add an additional 88 MMgy of capacity to its existing 25 MMgy Abengoa Bioenergy of Kansas LLC facility in Colwich, Kan. Foundation work is progressing on-site, according to

Craig Kramer, project manager. Kramer declined to comment on a target start-up date for the plant, but told EPM that “the project is progressing slowly” and that the company is “constantly evaluating market conditions”. In the Southeast, Range Fuels Inc. is on schedule with the construction of its 10 MMgy cellulosic ethanol plant in Soperton, Ga. Once operational, the plant will use wood waste as feedstock and eventually ramp up to 100 MMgy in the second phase of its twophase construction plan. According to Bill Schafer, senior vice president of business development for Range Fuels, the company intends to have the plant mechanically complete and in commercial production by early 2010. Warehouses and offices are erected. Most of the pipe work is complete, while installation of underground utilities was in progress. Foundation work will begin in April, he said. “We’re about a year behind where we originally thought we’d be,” Schafer said. “We hoped to have construction complete by now, but we’re glad we held off because we’ll have a better chance of being successful.” In Canada, 15 plants were producing a combined capacity of 1.4 billion liters (370 MMgy). Two plants under construction will add a combined 105 MMly (27.7 MMgy) of capacity. One of those plants under construction is Northwest Bio-Energy Ltd., a 25 MMly (6.6 MMgy) plant in Unity, Saskatchewan. The company pushed back its target start-up date from April to June, according to General Manager Bill Fraser. “We’re getting closer, but not as fast as we’d like,” he said. —Bryan Sims

To provide updates to this list, contact Bryan Sims at (701) 738-4950 or bsims@bbiinternational.com.

ETHANOL PRODUCER MAGAZINE • May 2009

Abengoa Bioenergy of Indiana LLC

Appomattox Bio Energy

Location General contractor Process technology Capacity Feedstock Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date

Posey County, Ind. Abener Energía SA Vogelbusch USA Inc. 88 MMgy corn Abengoa Bioenergy Trading Abengoa Bioenergy Trading undeclared March 2008 fourth quarter 2009

Synopsis of progress Construction progress was 33 percent complete at the end of February. Construction on all roads, rail, equipment and building erection, piping, instrumentation, electrical, paint and insulation is ongoing.

Hopewell, Va. Agra Industries Inc. Katzen International Inc. 65 MMgy barley Osage Bio Energy LLC N/A N/A October 2008 second quarter 2010

Synopsis of progress N/A

Abengoa Bioenergy of Illinois LLC Madison, Ill. Abener Energía SA Vogelbusch USA Inc. 88 MMgy corn Abengoa Bioenergy Trading Abengoa Bioenergy Trading undeclared March 2008 fourth quarter 2009

Abengoa Bioenergy of Kansas LLC Location General contractor Process technology Capacity Feedstock Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date

Project Expansion

Colwich, Kan. Abener Energía SA Vogelbusch USA Inc. from 25 MMgy to 88 MMgy corn/milo Abengoa Bioenergy Trading Abengoa Bioenergy Trading undeclared October 2008 undeclared

Synopsis of progress Foundation work is ongoing. This 88 MMgy expansion project will be co-located with Abengoa Bioenergy Corp.’s existing 25 MMgy plant.

ETHANOL PRODUCER MAGAZINE • May 2009

PHOTO: ABENGOA BIOENERGY OF ILLINOIS

Location General contractor Process technology Capacity Feedstock Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date

Abengoa Bioenergy of Illinois LLC

Archer Daniels Midland Co. Location General contractor Process technology Capacity Feedstock Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date

Cedar Rapids, Iowa undeclared undeclared 275 MMgy corn Archer Daniels Midland Co. undeclared undeclared June 2007 first quarter 2010

Synopsis of progress Construction continues. No further information was available at press time.

Archer Daniels Midland Co. Location General contractor Process technology Capacity Feedstock Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date

Bionol Clearfield LLC Columbus, Neb. undeclared undeclared 275 MMgy corn Archer Daniels Midland Co. undeclared undeclared July 2007 third quarter 2009

Location Design/builder Process technology Capacity Feedstock Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date

Synopsis of progress Construction continues. No further information was available at press time.

Synopsis of progress N/A

Big River Resources Galva LLC

Clean Burn Fuels LLC

Location Design/builder Process technology Capacity Feedstock Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date

Location General contractor Process technology Capacity Feedstock Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date

Galva, Ill. Fagen Inc. ICM Inc. 100 MMgy corn Provista Hawkeye Gold LLC N/A September 2007 May 2009

Synopsis of progress Construction on water plant is complete. Electrical work is complete. The water plant will be fired up for trial runs before commissioning begins.

Clearfield, Pa. Fagen Inc. ICM Inc. 110 MMgy corn Bionol Clearfield LLC Land Oâ&#x20AC;&#x2122;Lakes N/A February 2008 January 2010

Raeford, N.C. Biofuels Design/Clean Burn Fuels LLC

Katzen International Inc. 60 MMgy corn undeclared Harris Crane Inc. Airgas Inc. May 2008 September 2009

Synopsis of progress Boilers are installed. Grain silos are erected. Product storage tanks are complete. Distillation structure, including heat pumps and boilers are installed. Regenerative thermal oxidizer and dryer foundation work has started.

ETHANOL PRODUCER MAGAZINE â&#x20AC;˘ May 2009

Highwater Ethanol LLC Location Design/builder Process technology Capacity Feedstock Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date

Homeland Energy Solutions LLC Lamberton, Minn. Fagen Inc. ICM Inc. 55 MMgy corn

Location Design/builder Process technology Capacity Feedstock Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date

Renewable Products Marketing Group

CHS Inc. N/A November 2007 May 2009

Synopsis of progress N/A

Project Complete

Lawler, Iowa Fagen Inc. ICM Inc. 100 MMgy corn Green Plains Renewable Energy Inc.

CHS Inc. N/A May 2007 April 2009

Synopsis of progress Construction is complete. The plant took in corn for first grind in preparation for start-up in early April. Congratulations Homeland Energy Solutions LLC!

PHOTO: HIGHWATER ETHANOL LLC

Kawartha Ethanol Inc. Location General contractor Process technology Capacity Feedstock Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date

Havelock, Ontario Profab International Ltd. Delta-T Corp. 80 MMly (21 MMgy) corn undeclared Thompson’s Ltd. undeclared October 2007 May 2009

Synopsis of progress Installation and procurement of equipment is ongoing. No further information was available at press time.

Highwater Ethanol LLC

THE ROAD TO SUCCESS IS FILLED WITH TWISTS AND TURNS. FORTUNATELY, WE ALREADY KNOW THE WAY.

The biofuels industry’s accounting, tax and various consulting needs can be nearly as complicated as the refining process itself. Which is why Kennedy and Coe’s knowledge and experience in the industry can help you identify and capitalize on many opportunities that can significantly impact your organization’s cash flow. Our expertise can help you navigate even the most confusing paths, so you can make the most of your operation’s potential.

Call Jesse McCurry at 800-303-3241 or visit us at www.kcoe.com.

Not your average accountants.SM ETHANOL PRODUCER MAGAZINE • May 2009 KAC.10862_EPM_Wnd_7.5x3.375.indd 1

43 3/19/09 11:26:14 AM

Louisiana Green Fuels LLC Lacassine, La. Casey Industrial Inc. Louisiana Green Fuels LLC/Praj Industries Ltd.

25 MMgy sugarcane/sweet sorghum undeclared N/A undeclared April 2008 fourth quarter 2009

PHOTO: LOUISIANA GREEN FUELS LLC

Location General contractor Process technology Capacity Feedstock Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date Synopsis of progress N/A

Louisiana Green Fuels LLC

Northwest Bio-Energy Ltd. Location General contractor Process technology Capacity Feedstock Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date

Northwest Renewable LLC Unity, Saskatchewan Northwest Terminal Ltd. Katzen International Inc. 25 MMly (6.6 MMgy) wheat undeclared undeclared undeclared September 2007 April 2009

Location General contractor Process technology Capacity Feedstock Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date

Synopsis of progress Some electrical work remains before the commissioning phase begins.

Longview, Wash. Makad Construction Corp. Lurgi Inc. 55 MMgy corn U.S. Ethanol LLC Lansing Trade Group undeclared November 2006 second quarter 2009

Synopsis of progress N/A

ETS

ETS Scorpions™ Diagnostic Kits ? rapid genetic detection of

Lactobacillus ? Pediococcus ? Acetobacter ? Brettanomyces ? 44

LABORATORIES

contaminant organisms ? specific identification and quantification ? results in 4 hours ? timely and informed decisions on antimicrobial Dx choices

ETS Laboratories 899 Adams St. Suite A St. Helena CA 94574 707•963•4806 info@etslabs.com www.etslabs.com

Delivering Pharmacogenomics

ETHANOL PRODUCER MAGAZINE • May 2009

One Earth Energy LLC

Range Fuels Inc. Gibson City, Ill. Fagen Inc. ICM Inc. 100 MMgy corn Eco-Energy Inc. Ag Motion Inc. N/A October 2007 June 2009

Synopsis of progress Hiring process for staff has begun. Construction on the water treatment plant remains, along with some electrical work. Concrete work for hard surface roads is ongoing.

Poet Biorefining-Laddonia Location Design/builder Process technology Capacity Feedstock Ethanol marketer Distillers grains marketer Carbon dioxide marketer Start date Target completion date

Location General contractor Process technology Capacity Feedstock Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date

Soperton, Ga. undeclared undeclared 10 MMgy woody biomass undeclared N/A N/A November 2007 second quarter 2010

Synopsis of progress Warehouses and offices are built. Most pipe work is complete. Installation of underground utilities and foundation work is ongoing.

Project Expansion Laddonia, Mo. Poet Design & Construction Poet Design & Construction from 52 MMgy to 57 MMgy corn Poet Ethanol Products Poet Nutrition undeclared December 2008 April 2009

PHOTO: POET BIOREFINING-LADDONIA

Location Design/builder Process technology Capacity Feedstock Ethanol marketer Distillers grains marketer Carbon dioxide marketer Broke ground Target start-up date

Synopsis of progress Construction continues on schedule. No further information was available at press time. Poet Biorefining-Laddonia

Don’t let your market dry up Our commitment to product quality, energy eﬃciency and reduced emissions has made GEA Barr-Rosin the partner of choice for thermal drying technology.

GEA Barr-Rosin 92 Boulevard Prevost Boisbriand, Quebec J7G 2S2 Canada Tel 450-437-5252 Fax 450-437-6740 255 38th Avenue, Suite G St. Charles, IL 60174 USA Tel 630-659-3980 Fax 630-584-4406 E-mail sales.barr-rosin.ca@geagroup.com Website www.barr-rosin.com

ETHANOL PRODUCER MAGAZINE • May 2009

Add value to your Ethanol Co-Products •Ring Dryers •Superheated Steam Dryers •Site Surveys and Audits •Biomass Combustion •Rotary Dryers •Energy Integration •Retro-Fits •Fractionated Co-Products

If you’re not using it today, you’re going to need it tomorrow.

Sooner or later, you’ll have to to deal de al with wit ith h bacterial bact ba cter eria iall contamination cont co ntam amin inat atio ion n can wait wait – suffer suf uffe ferr the the lost lost production pro rodu duct ctio ion n in your fermentation tanks. You can u ca can n si simp mply ly h elp el p pr prev even entt it it, to toda dayy. – and treat the problem. Or you simply help prevent today. oll uti t i on ffor or opti optimum timum yi yields i eld lds Either way, LACTROL® is the proven ssolution and higher productivity. eria most damaging to your alcohol LACTROL controls the bacteria ntimicrobial that has an FDA letter production. And it’s the only antimicrobial cts,, when used as recommended. of “no objection” for co-products, prev pr even entt most mo st contamination c on onta tami mina nati tion on from f ro rom m A little LACTROL today will prevent and d di disc scov over er w hy L hy ACTR AC TROL TR OL is is also allso ever happening. Try it. Or wait – an discover why LACTROL oice oi ce is i s your yo ur s. s . For F or d etai et ails ls, ca call ll the leading re me dy. T he choice details, cttr ol.com. l 800-223-0434, or visit www.lactrol.com.

DRIVE Buis

Advocating for a Higher Blend By Tom Buis ith all the recent news headlines, it can be tough to adopt a positive outlook. I am optimistic, however, because last month we took an important step in the right direction for America. Growth Energy and more than 50 other companies submitted a Green Jobs Waiver to the U.S. EPA asking to lift the decades-old arbitrary cap that limits ethanol to 10 percent in a gallon of gas. Shortly afterward, many voices endorsed the move to a higher blend, including Speaker of the House Nancy Pelosi, D-Calif. Secretary of Agriculture Tom Vilsack, several members of Congress and representatives from diverse organizations. These leaders understand that lifting the cap on ethanol to up to 15 percent will create green-collar jobs, reduce our dependence on foreign oil and lower greenhouse gas (GHG) emissions. The benefits of ethanol use to our economic prosperity are indisputable and are poised to become one of America’s greatest job creating engines. In 2008, the industry created or supported half a million jobs. According to a study conducted by North Dakota State University researchers, expanding the amount of ethanol in our gasoline to 15 percent could create more than 130,000 new jobs—without using stimulus dollars and without a government bailout. In my years working in rural America, I’ve seen the benefits to communities when a new ethanol plant comes to town; it can bring hope and breathe new life into some of our hardest hit communities. In addition to the job creation and direct dollar impact on our economy, moving to a 15 percent blend will ensure a market for second-generation biofuels, which will be critical to grow this new economy. While cellulosic ethanol and other green fuels have the promise to create tens of thousands of new U.S. jobs and cut GHG emissions by up to 86 percent compared with gasoline, we will never realize the full potential of these fuels with this cap. Currently, more than 300 million gallons of planned cellulosic ethanol is waiting to come on line, but is stalled because of the lack of an available market. That’s why leaders from cellulosic companies wrote to EPA Administrator Lisa Jackson urging her to take swift action to lift the cap. If we don’t increase the blend of ethanol in our gasoline supply, many cellulosic ethanol projects will be cancelled or postponed—and with it all of those related jobs. The benefits don’t end there. By using E10, the U.S. has

reduced its dependence on foreign oil. Based on 2007 U.S. gasoline consumption, increasing that level from E10 to E15 will avoid the importation of another 7 billion gallons of gasoline annually. In addition to our Green Jobs Waiver, another option before our government is the possibility of a quick move to E12 or E13. USDA and EPA could do this by increasing the blend of ethanol in our gas through a substantially similar waiver for E12 or E13. Unfortunately, some people oppose a higher blend, even with all of the economic benefits, because they don’t know about the advancements in efficiency, farming and production we’ve made recently. Modern ethanol plants are higher-tech and greener than ever. Today’s producers have increased ethanol production per bushel of corn, while reducing the energy consumed in ethanol production by more than 20 percent and water use by more than 25 percent. Research published in Yale University’s Journal of Industrial Ecology shows that today’s plants produce 59 percent fewer GHG emissions than gasoline. Moving from our current E10 blend to E15 means a reduction of an additional 20 million metric tons of GHG emissions per year, which is the equivalent of removing 10.5 million vehicles from the road. We need to discuss this with our friends, neighbors and legislators. Ethanol is the only viable, available substitute for gasoline that is clean and green, high-tech and homegrown. We should lift the outdated 10 percent cap and enable America’s farmers and ethanol producers to deliver on ethanol’s full potential. Doing so will create jobs, protect our environment and boost our national security. We just need the government to allow us to follow the law as it is laid out in the Energy Independence & Security Act of 2007. Lifting the cap is a common sense solution to our current economic crisis and I urge you to get involved by joining the discussion or contacting your members of Congress. More information on how to get involved can be found at GoE15.com. Tom Buis is the chief executive officer of Growth Energy. Reach him at TBuis@GrowthEnergy.org or (402) 932-0567.

ETHANOL PRODUCER MAGAZINE • May 2009

no worries

The new UOP MOLSIV™ 3A-AGS bead adsorbent keeps things running smoothly. While dehydration sieves may not be top-of-mind when it comes to the production of ethanol, UOP knows molecular sieve adsorbents better than anybody, and we understand just how crucial they are. With decades of experience behind us, UOP has developed the 3A-AGS molecular sieve adsorbent with high water capacity, low reactivity and the product consistency UOP is famous for. Our new bead even demonstrates superior stability following unit upsets allowing for faster recovery to on-spec production. It’s this kind of innovation that lets UOP deliver peace of mind.

eBIO INSIDER Vierhout

Common Sense Prevails lmost six years after the first EU biofuels law came into force, the second law is now in place. It was a rather bumpy delivery but after almost two years of discussion the EU has adopted a legislative package to address growing climate and energy concerns. The EU countries can now prepare for 2020 when at least 10 percent (in energy terms) of fossil fuel for road transport needs to be replaced by renewable resources. The big difference between the first law and the new law is that biofuels use is mandatory. Countries, or for that matter oil companies, can no longer escape their responsibilities. It is interesting to note how things have changed over the past six years. In 2003, the European Commission proposed a bill mandating the use of biofuels. The European Parliament supported that approach but several large countries such as Germany, France and the UK opposed such “Brussels” interfering in their national energy policy. In the end, the biofuel mandate changed into a voluntary measure. Not surprisingly, this voluntary measure didn’t deliver the expected result in most EU states. Thus the logical conclusion of the law’s review in 2006 was that the use of biofuels had to become binding to successfully introduce biofuels into the market. This time there was no opposition from the EU states but from the European Parliament. It was not the same Parliament as the one that favored the 2003 mandate but, nevertheless, the same Parliament that had expressed support for increased use of biofuels (including a 10 percent mandate) in several resolutions adopted before the second bill was tabled. Unfortunately for the European biofuel industry, the member of the European Parliament (MEP), who had to guide the bill through Parliament, positioned himself from the start as a biofuels opponent. As member of the Green party he was influenced by green nongovernmental organizations (NGO) such as Friends of the Earth and Greenpeace. As a former secretary of Friends of the Earth the MEP knew precisely who his friends were. Both organizations played a pivotal role in the group of NGOs who campaigned for abolition of the 10 percent biofuel. They also argued in favor of including the impossible-to-measure indirect land-use change (ILUC) effect and were against using any land that could be used for food production. If their wishes had come true, no biofuels would have been produced nor used in the EU—a view supported by the honorable MEP.

The NGOs went to great length to demonstrate how rotten the biofuel sector was. For example, a few years ago a number of them, including Friends of the Earth, created the Worst EU Lobbying Award. The award is given to the company or organization that in their opinion misinformed regulators or used suspicious lobbying techniques. It was no surprise that in 2008 the biofuel sector was nominated for its “misleading campaigns to promote agrofuels as green.” On Dec. 9, it was announced that the Worst EU Lobbying Award 2008 was won convincingly by the “agrofuel lobbyists of the Malaysian Palm Oil Council, Brazilian sugar barons UNICA (Brazilian Sugarcane Industry Association) and energy company Abengoa Bioenergy.” Of course we won: first they make fighting agrofuels their main campaign, then they nominate us and so their supporters (who else would caste a vote) vote for us. The award was simply the well-orchestrated climax of their anti-biofuel campaign; a week before the European Parliament adopted the new law. In the nearly 20 years that I have worked in the EU decision-making environment, I have seldom seen the kind of large-scale, aggressive and persistent campaigning against a relatively small economic sector. The intensity, frequency and professionalism of campaigning convinced me that some bigger powers are behind these green groups—an unholy alliance with big oil and big food? Even though their campaign has been annoying and caused a lot of damage to the image and economics of the biofuel sector it did not deliver the result they aimed for—what a pity for them. In the end, common sense prevailed. The Council of EU Member States prevented a lot of detrimental parliamentary amendments to become law. Even though the green MEP stated that the biofuels target was seriously undermined, the 10 percent objective was basically kept unaltered, ILUC effects were not incorporated nor was the interdiction to use land that could be used for food production. There are indeed devils in the details but the future of the biofuels industry has been safeguarded. The few noisy operating members of the European Parliament finally had to bite the dust. Robert Vierhout is the secretary-general of eBIO, the European Bioethanol Fuel Association. Reach him at vierhout@ebio.org.

ETHANOL PRODUCER MAGAZINE • May 2009

FEW

The longest running and most popular ethanol industry event in the world is celebrating its 25th anniversary this year. EPM previews this yearâ&#x20AC;&#x2122;s FEW and flashes back to how the conference and the industry have evolved in the past quarter century. By Kris Bevill

ETHANOL PRODUCER MAGAZINE

May 2009

FEW

ETHANOL PRODUCER MAGAZINE

May 2009

FEW

PHOTO: BBI INTERNATIONAL

o say that the ethanol industry is not the same now as it was 25 years ago would be an understatement. To say that the industry is almost unrecognizable from what it was 25 years ago might be more accurate. In a quarter of a century the industry has inched its way from being “stills in the hills” to an annual production capacity of more than 9 billion gallons. During that time, ethanol has contributed to the nation’s energy independence, revived rural communities and become a powerful force to be reckoned with among D.C. lobbyists. The ethanol industry has continued to grow and evolve to meet the changing demands of the world it serves despite many challenges. Stability in a volatile industry can be hard to find, but there is one single event that for 25 years has held an annual spot on industry members’ calendars. BBI International will celebrate the 25th anniversary of the International Fuel Ethanol Workshop & Expo. The FEW will be held June 15-18 in Denver. In 1995, Mike and Kathy Bryan founded BBI In-

At the 24th annual FEW, Bryan, right, chief executive officer of BBI International, presented RFA President Bob Dinneen with a plaque recognizing his 20 years of service to the renewable fuels industry.

ternational and hosted their first FEW. As Mike Bryan noted in his opening remarks to attendees at the 2007 FEW, “You know, the first Fuel Ethanol Workshop was held here

in St. Louis in 1984, and I think there were between 38 and 40 people at the first Fuel Ethanol Workshop, and no exhibitors.” In 1995, event drew 188 attendees and 13 ex-

ETHANOL PRODUCER MAGAZINE

May 2009

hibitors, and has since grown into the largest and longest-running ethanol conference in the world. More than 4,000 people and 500 exhibitors from around the world attended the 2008 FEW in Nashville, Tenn., and this year’s conference is being heralded by organizers as a “landmark event,” to celebrate 25 years of ethanol industry advancements. Thousands of attendees and at least 500 exhibitors are expected to flock to the Colorado Convention Center in Denver to participate in the three-day event. It’s important to note that two colocated events will be added to this year’s FEW agenda—the 4th annual International Distiller’s Grains Conference and the 2nd annual Advanced Biofuels Workshop. The IDGC is the largest distiller’s grains event in the world and provides a bridge for buyers and sellers to connect and conduct business. Last year’s event was held in September in Indianapolis and attracted more than 600 attendees and 140 distillers grains buyers from more than 30 countries. This year’s conference will open with an evening reception June 14 and continue through the

PHOTO: ARTEAGA PHOTOS LTD.

FEW

BBI International’s Kathy Bryan, right, presented the High Octane Award to Dave Kelsall, cofounder of the Alcohol School, at the 2007 FEW.

following day with a trade show and various breakout sessions. The ABW was organized last year to address the need for more discussion about

advanced biofuels as identified by the renewable fuels standard (RFS). Approximately 350 people attended the one-day event in Minneapolis. Attendees heard from

PHOTO: BBI INTERNATIONAL

FEW

As always, the expo floor was abuzz with activity at the 24th annual FEW.

experts on policy-related issues concerning advanced biofuels and the RFS, and learned more about the types of fuel that qualify for placement into the “advanced biofuels” category. Tom Bryan, vice president of content and communications for BBI International, says advanced biofuels is even more relevant this year because it’s the first year that advanced biofuels must contribute to the total amount of renewable fuels consumed in the United States. The RFS calls for 600 million gallons of advanced biofuels to be blended into gasoline in 2009. Bryan expects hundreds of investors, project developers, engineering companies, technology providers, feedstock suppliers and policymakers to come together June 15 for the workshop.

BBI International decided to hold the FEW, IDGC and ABW under the same roof so attendees on a budget could participate in multiple events during one trip, Bryan says. The IDGC and the ABW will conclude on Monday, just in time for participants of those events to attend the FEW tradeshow opening that evening. While the tradeshow provides an excellent forum for networking and business dealings, it is the sessions that spur much of the conversation on the tradeshow floor. In some ways, a look at the FEW agenda is a peek at the upcoming year’s projects and changes for the industry. “It’s our job to make sure that the FEW is continually relevant to the industry,” Bryan says. Each year, the company

ETHANOL PRODUCER MAGAZINE

May 2009

FEW

organizes a steering committee of industry stakeholders who create the conference agenda based on their firsthand knowledge of issues of importance to the industry. The committee is composed of plant general managers, researchers, media personnel and industry lobbyists. Larry Russo, senior deployment manager for the U.S. DOE’s Energy Efficiency and Renewable Energy Biomass Program, participated in the FEW steering committee this year and last year. Each year, FEW topics mirror what’s happening in the industry at the time, he says. “This year we’re looking at enhancing profitability versus a year ago when we were looking at expansion ideas,” he says. “Money was available last year so producers were looking for more ways to improve or expand their plants. This year that money is not available so it will be more about maintaining status quo until things get better.” The availability of funding, or the lack thereof, could be an underlying theme of this year’s event. Production costs, value-added profitability, financing and technology economics dictate much of the conference’s agenda. The possibility for an E15 mandate, blend wall considerations, indirect land-use change, cellulosic ethanol and alternative fuels round out the list of topics predicted to be of great interest to attendees at the event. The ability to maintain a pertinent agenda is important, but what really sets the FEW apart from other renewable fuel conferences is its focus on ethanol producers, according to Bryan. “They are really the lifeblood of the FEW,” he says. “The show was developed for ethanol producers and we really want to keep that spirit alive. Without the producers the show would really be weakened.” To acknowledge their vital role at the conference and as a way to commemorate the FEW’s 25th anniversary, BBI is giving two free full-access passes to every ethanol plant currently operating or under construction in North America. “We’re doing this not only because it’s the 25th anniversary but also because we know producers are financially strapped at this

ETHANOL PRODUCER MAGAZINE

time and have tighter travel budgets,” Bryan says. He expects 800 producers to attend the conference. Russo believes the FEW is important for producers because it allows them to take the pulse of the industry. The opportunity for members of the industry to gather in one place to share ideas is important, he says. “Everybody’s kind of in the same boat. You know, there’s a lot of creative thinking going on and the more we can share that the more we can help the industry survive a downturn.”

May 2009

The ethanol industry has changed radically in the past 25 years and Bryan credits the conference itself for facilitating some of that change. “The FEW allows people in the industry to come together for a few days each year to share ideas and innovations,” he says. EP Kris Bevill is the editor of Ethanol Producer Magazine. Reach her at kbevill@ bbiinternational.com or (701) 373-8044.

Pump more profit per bushel…naturally With IsoStabTM naturally derived antimicrobial IsoStabTM is derived from natural acids found in hops. It’s the natural way to effectively control gram-positive bacteria in fermentation. Eliminate antibiotics and harsh chemicals. Forget problems with resistant bacteria. Add value to your co-products with antibiotic-free DDGS. Plus, many have experienced yield increases using this natural, thermally stable, pH tolerant antibiotic alternative. Drive your plant to higher productivity with IsoStabTM. You’ll find your map to increased profits at: www.bthp.info

5185 MacArthur Blvd., Suite 300 Washington, DC 20016-3341 202-777-4827 Fax: 202-777-4893 57

Crown Fractionation, Extraction and Oil Refining. The Crown Fractionation system was designed to

Crown's Extraction and Oil Refining technologies

give the ethanol industry means to improve plant

convert the germ into premium products, animal

efficiency and provide more profitable co-products.

feed and edible oil.

Adding Value to

your Ethanol Process.

FRACTIONATION • EXTRACTION • OIL PROCESSING • BIODIESEL • CO2 EXTRACTION • PILOT PLANT

CROWN IRON WORKS COMPANY 2500 West County Road C • Roseville, MN 55113 • USA Call today at 1.651.639.8900 or visit us online at www.crowniron.com Additional offices in Argentina, Brazil, China, England, Honduras, India, Malaysia, Mexico, Russia and Ukraine.

EVENT

Tempering the Ethanol Industry The finest steel is made with the hottest fire, Renewable Fuels Associationâ&#x20AC;&#x2122;s Bob Dinneen told ethanol industry representatives at the 14th annual National Ethanol Conference, in describing the challenges the industry has faced. Story and Photos By Susanne Retka Schill

ETHANOL PRODUCER MAGAZINE

May 2009

EVENT

ETHANOL PRODUCER MAGAZINE

May 2009

EVENT

New Dawn in Plant Economics The path to 3 gallons per bushel is PDX ®

PDX your future!

PURSUIT DYNAMICS INC R

www.pursuitdynamics.com email: renewables@pursuitdynamics.com Tel: Rick Eastman +1 760 728 7238

he National Ethanol Conference held in late February in San Antonio struck an optimistic tone in spite of the volatile market conditions of 2008 and the current economic uncertainties. Renewable Fuels Association President and Chief Executive Officer Bob Dinneen praised and encouraged the ethanol industry in his opening remarks at the organization’s 14th annual conference. “We all know that the finest steel is made with the hottest fire,” he said. “And while we have been and continue to be tested, the ethanol industry will come through this a stronger, more competitive and more sustainable industry.” To prove his point, Dinneen referred to last year’s production. In spite of a flagging economy and unprecedented commodity price volatility, the U.S. ethanol industry produced and sold a record 9 billion gallons, growing by 34 percent even as the nation’s economy was slowing. “The U.S. ethanol industry last year added an additional 240,000 jobs, bringing the employment attributable to ethanol to almost a half million, at a time when jobs across the rest of the economy were hemorrhaging,” he said. “Even with recently announced plant closures, the U.S. ethanol industry is still operating at about 85 percent of capacity, while the manufacturing sector as a whole has slowed to about 70 percent of capacity.” He also praised the ethanol industry for improvements in energy and water efficiency and the advancements that have been made to commercialize cellulosic ethanol production. “I see ethanol blended gasoline now representing approximately 70 percent of the U.S. motor fuel market and I am thrilled by that,” Dinneen said. “And while I know we are also careening toward a blend wall as the RFS (renewable fuels standard) mandated volume of renewable fuel continues to expand, I know we are far better off today than if the 2007 Energy Bill had not passed and we did not have such a robust foundation from which to grow further.” With encouragement from Dinneen, the approximately 1,200 attendees heard speakers from within and outside the ethanol industry as they addressed issues touching on the conference theme: Growing Innovation—America’s Energy Future Starts at Home. From the American Petroleum Institute, Jim Ford, vice president of government affairs, talked about the petroleum industry’s support for ethanol and renewable energy while presenting the oil and natural gas industry’s point of view on a number of issues. “Our industries are the largest consumers of ethanol, and a number of companies are directly engaged in the business—BP, Chevron, ConocoPhillips, Shell,” he said. “We continue to increase the volume of renewables in the nation’s transportation fuels mix and last year used 8.7 billion gallons of ethanol through November.” He reminded the group that fossil fuels and the oil and natural gas industry will continue to be the major source of energy for decades to come, with a growing contribution from the renewable energy sector. The oil and natural gas industry has been deeply involved in that growth, Ford said, providing 65

Tel: Claire Isaacs +44 (0) 1480 422050 62

ETHANOL PRODUCER MAGAZINE

May 2009

EVENT

Ford

percent of the investment in innovations in energy technologies in the country, totaling $121.3 billion between 2000 and 2007. Ford also reminded the ethanol industry of its reliance on natural gas for powering ethanol plants, providing nitrogen for corn production, and the manufacturing of many of the components used in building renewable energy facilities. He urged the ethanol industry to join the API in asking Congress to allow for the continued development of offshore natural gas reserves. Ford also asked the ethanol industry to oppose the patchwork of state mandates and attempts in some states to change distribution regulations. A couple of states are currently considering legislation to require suppliers to offer unblended gasoline to jobbers. “If ethanol were more expensive than gasoline, some jobbers may decide to sell only straight gasoline and not handle ethanol blends at all, making compliance with the national RFS more difficult or even impossible if jobbers were allowed discretionary blending,” Ford said. “We need to join together to oppose this type of state legislation.” The U.S. oil and natural gas industry is committed to working with the ethanol industry, Ford told the conference attendees. “It is essential for all stakeholders to work together in moving forward and respect each others needs if we are to achieve regulatory compliance and consumer acceptance of these new motor fuel formulations.” The global economic crisis underscores the need to take effective action now to ensure an efficient and productive expansion of the use of ethanol and other biofuels, he said. ”If we get it right, we can get our country on the road to economic recovery and insure we have the energy supplies we need in the decades ahead.”

Doing Midlevel Blends Right During a panel discussing midlevel blends, Kris Kiser, executive vice president of the Outdoor Power Equipment Institute, brought an outsider’s view to the ethanol group. The institute

ETHANOL PRODUCER MAGAZINE

May 2009

EVENT

Industry News From the NEC Inbicon, a subsidiary of Denmark’s Dong Energy, announced its collaboration with U.S. marketing company G-team is nearing completion of an engineering and business model for a bolt-on cellulosic ethanol module that will allow North American ethanol producers to add 20 MMgy of cellulosic capacity to existing grain ethanol plants. Inbicon has operated a pilot-scale plant in Denmark for nearly six years, and has a $50 million, 1.4 MMgy demonstration project under construction scheduled to start up in the fall of 2009 in Kalundborg, Denmark.

A pump is about to fail. Want a heads-up?

EdeniQ Inc. announced its Corn3 Yield Enhancement Program is now available for licensing. When fully adopted, the Corn3 technology can increase the yield in corn ethanol production from an industry average of 2.69 undenatured gallons per bushel of corn to more than 3 gallons per bushel. The technology can be adopted in three phases, each of which provides approximately one-third of the 10 percent productivity gain that the entire package offers. The first phase is a biological process that can be implemented without additional capital outlays. The second and third phases require infrastructure investments. ZeaChem Inc. has selected CH2M Hill as the engineering, procurement and construction contractor for its 1.5 MMgy cellulosic ethanol plant in Boardman, Ore., scheduled to break ground later this year. ZeaChem is partnering with Portland, Ore.–based GreenWood Resources, the owner and operator of a 17,000 acre tree farm near Boardman. The company has developed a hybrid thermochemical/biochemical process using an acetogen found in termites.

Think about ITT.

Introducing the Goulds 3196 -FRAME .

Genencor, a division of Danisco AS, launched Accellerase 1500 at the NEC in San Antonio. The new line of cellulosic ethanol enzymes replaces Accellerase 1000, achieving more than 75 percent glucan conversion a day earlier than the first-generation enzymes. Enzyme dosing and cost will vary greatly depending on the substrate feedstock and pretreatment option.

Every Goulds 3196 now features onboard intelligence that monitors vibration and temperature, and ﬂashing lights alert you to problems. Further enhancements in bearing technology, oil sump design, and bearing isolators provide years of worry-free operation. Now standard truly is deluxe. To download a product brochure, visit gouldspumps.com, or call 1-800-734-7867.

Novozymes AS unveiled its second generation of cellulosic ethanol enzymes. The new Cellic CTec enzyme works on cellulose while Cellic Htec works on hemicellulose. The company says the enzymes now require one-third the dose of its first-generation enzyme, Celluclast, to achieve 80 percent conversion, working with a wide range of feedstocks and pretreatments.

represents a range of motorcycle, marine, snowmobile and small engine appliances, which consume about 3 billion gallons of fuel annually. Kiser told the group that it wouldn’t be difficult to design small engines for a specific ethanol blend. “We can design for E10 or E20, but it’s hard to design for a wide range of blends,” he said. The challenge, he added, is that his group represents more than 900 engine families and a wide range of equipment from lawn mowers to snowmobiles. In addition, the industry is now required to

meet tighter U.S. EPA emissions targets. Kiser spoke frankly about the problems the marine industry encountered when ethanol was cheaper than gasoline and a few batches of E85 were fraudulently or mistakenly sold as E10. The boat failures caused by incompatible components prompted a rash of lawsuits and a cautionary approach to ethanol blends among many in the industry. Kiser said he is also concerned about the 200 to 300 million legacy pieces—older equipment that is not compatible with ethanol

ETHANOL PRODUCER MAGAZINE

May 2009

EVENT

blends. He said both industries need to support an educational effort as higher blends are introduced so consumers can understand the issues and become familiar with distinctive nozzles or labeling so they can choose the right fuels. “We want to get it right,” he said. Kiser explained the small engine industry’s concerns after hearing the preliminary results of small engine testing from the panel’s first speaker, Valri Lightner, acting biomass program manager at the U.S. DOE. The testing of midlevel blends being conducted on a range of small engines has raised some issues including clutch failure. An idling chain saw, for example, would be hazardous if it accidentally engaged due to clutch failure, he said. The small engine group joined with several others in cautioning the EPA to go slowly with introducing midlevel blends. “We need to do the studies and understand and prepare for the issues shown in the studies,” he said, pointing to the fact that only 28 engines have been tested to date out of the 900 engine families in the industry. “We’re not antiethanol, although we’re often portrayed as anti-ethanol,” he added. “We want to partner with you.” Another midlevel blends panelist, Mike Maher, executive director powertrain/vehicle integration for General Motors Corp., echoed Kiser’s concerns about higher ethanol blends. “Many of our challenges are the same as for small engines,” Mayer said. “There’s interest for an EPA waiver for E12, E15 or E20. Some vehicles would work OK with these and some will not,” he said. “We’re concerned about the pressure to implement a waiver without full study.” Maher also listed several other issues where he sees the auto industry working with the ethanol industry, such as policies encouraging flexible-fuel capability for all original engine manufacturers (OEMs), developing protections for OEMs from certain legal actions involving midlevel blends, and planning a consumer education effort for proper use of blender pumps.

ETHANOL PRODUCER MAGAZINE

ARE YOU STOCKED? When you need to perform maintenance, time wasted is money lost. Reduce downtime—make your spare parts inventory THE prime directive of your maintenance department. We will handle all of your hammermill spare parts needs. Call our parts sales department today for the professional service and expert advice you have come to expect from Roskamp Champion. Preserve the integrity of your mills. Use original replacement parts. Petrowski

Buy genuine Roskamp Champion parts.

Energy Security Priority A second oil industry representative gave voice to the free market’s role in charting the nation’s energy future during the keynote address on the second day of the conference. “We need assistance from the government mandates,” said Joe Petrowski, chief executive officer of Gulf Oil LP. “But I don’t want the U.S. government deciding on the minutia. Tax credits, mandates, yes, but let the market allocate resources.” He doesn’t favor the oil industry being told where they can or cannot drill, nor which feedstocks are required in the renewable fuels standard. “It’s not government’s role to say which acre of land in Iowa should produce corn, ethanol, cattle or poultry. “Let the markets decide the allocation.” Petrowski argued that the nation’s policy goals should include low-cost energy as a driver of economic activity, as well as avoidance of price spikes, and a focus on energy security. “Biofuels—ethanol and biodiesel—make a huge contribution to energy security,” he said, pointing to the transportation sector’s 96 percent dependence on petroleum and its contribution to price inelasticity in the transporta-

May 2009

Carriages Hammers

Screens Rotors

Bearings Regrind Chambers

800-232-8444 | WATERLOO, IOWA WWW.CPMROSKAMP.COM/ROSKAMP/PARTS2 65

EVENT

tion fuels market. “Biofuels are the quickest, most economic and environmentally friendly way to break the back of that dependency. Diversification of resources is important.” Ethanol is already making a substantial contribution to reducing that stranglehold, he added. “If we weren’t producing 9 billion gallons of ethanol last year, I don’t know where we would have gone in prices.” Petrowski also told the audience not to be shy about subsidies. “Ethanol had $5 billion in subsidies,” he said. “But wait, we’ve to date spent $600 billion in Iraq alone.” Those types of indirect and direct subsidies are not unusual, he said. “Subsidies to certain industries that serve the public interest are as old as the republic itself,” he said. Petrowski listed other policies to encourage the expansion of alternative fuels: Develop the flexible-fuel infrastructure and help the roughly 16,000 stations being renovated each year out of the nation’s 165,000 fuel stations to add E85. Gulf Oil

owns 1,100 stations and each requires an investment of nearly $250,000 to install E85 capability. Increase the motor fuel tax to encourage people to buy more fuel efficient cars, and simultaneously encourage alternative fuels through tax exemptions. Mandate fleet conversion. Reduce import tariffs, which Petrowski admitted would not be popular in the ethanol audience. “I don’t fear Brazilian ethanol like I do Venezuelan petroleum,” he said. Continue to support more infrastructure for cellulosic ethanol.

Global Alliance The two-day conference covering policy and marketing issues closed with a session where Dinneen, posed questions to his three international counterparts. Gordon Quaiattini, president of the Canadian Renewable Fuels Association, Robert Vier-

AIR Examines Land-Use Issue Tom Darlington, a consultant with Air Improvement Resources Inc., released his report, “Land Use Effects of U.S. Corn-Based Ethanol,” at the NEC. “If we use Informa’s [Economics Inc.] overall analysis of land needs, coupled with the recent Argonne National Laboratory analysis of the impact of DDGs (distillers dried grains) on livestock feed rations, no new pasture or forest land should be converted in the U.S. or outside the U.S. to meet 15 billion gallons per year of corn ethanol in 2015,” Darlington said. “The landuse change emissions, therefore, are likely to be zero.”

hout, secretary general of the European Bioethanol Fuel Association (EBio) and Joel Velasco, chief North America representative for the Brazilian Sugar Cane Industry Association, each described the expanded mandates and movement towards greenhouse gas reductions. During the conference, the RFA, CRFA and EBio announced the formation of the Global Renewable Fuels Alliance (www.globalrfa.org) to promote and support biofuels-friendly policies internationally. In its announcement, the GRFA pointed to the potential for biofuels production to create green jobs and break the global addiction to oil, benefiting in particular 38 of the world’s 47 poorest countries that depend on oil imports. The group cited a recent World Bank study showing the biofuels industries require about 100 times more workers per unit of energy produced than the fossil fuel industry. The newly formed alliance called on the World Bank to make investments in developing countries’ biofuels infrastructure a top priority. EP Susanne Retka Schill is an Ethanol Producer Magazine staff writer. Reach her at sretkaschill@bbiinternational.com or (701) 738-4922.

ETHANOL PRODUCER MAGAZINE

May 2009

ECONOMIC DEVELOPMENT

Fuel for the ECONOMY

As the U.S. employment rate continues to rise and policymakers work to repair the economy and create jobs, leaders in the ethanol industry are working to underscore the industryâ&#x20AC;&#x2122;s potential to create jobs and reinvigorate rural areas. By Erin Voegele

ETHANOL PRODUCER MAGAZINE

May 2009

ECONOMIC DEVELOPMENT

ETHANOL PRODUCER MAGAZINE

May 2009

ECONOMIC DEVELOPMENT

The Specialist in Biofuels Plant Appraisals • • • •

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

Call us for a free, no-obligation consulation today.

1-800-279-4757 Natwick Associates Appraisal Services 1205 4th Ave. S., Fargo, ND 58103 www.natwickappraisal.com natwick@integra.net

any people who live in rural areas have seen firsthand the impact of an ethanol plant on their local economy. These new plants create well-paying jobs for area citizens, support and expand local businesses and create new enterprises. “The growth of the biofuels industry—particularly ethanol—has been one of the most significant rural economic development initiatives … in the past 50 years,” says John Urbanchuk, an analyst with LECG LLC who tracks the biofuels industry. “The establishment of these plants—largely in rural areas—has revitalized rural communities.” For the past several years, Urbanchuk has been working on annual economic impact studies for the Renewable Fuels Association. His latest study, titled “Contribution of the Ethanol Industry to the Economy of the United States,” found that the ethanol industry added $65.6 billion to our nation’s gross domestic product in 2008. The dollar amount represents the full impact of spending for annual operations, the transportation of ethanol, capital spending for new construction, and research and development. According to the study, the increased economic activity generated through ongoing production, construction of new capacity, and research and development supported more than 494,000 jobs in all sectors of the economy. “Quite clearly, I think it’s been very positive for rural America,” Urbanchuk says. The impact of these ethanol plants can really be felt in two distinct ways, through new construction and through continued operation. These effects are felt by local, regional and national economies, he says. An operating ethanol plant spends money to keep production going. In addition to buying corn feedstock, plants also purchase electricity and natural gas from utilities, and supplies from a wide variety of businesses. They pay wages to workers and provide business for transportation companies. “All those dollars circulate throughout the economy,” Urbanchuk says. “The ongoing, recurring manufacturing of ethanol leads to economic impact.” The construction activity that accompanies the building of new plants and the expansion of existing plants also provides

opportunities. “Every dollar of construction activity … also has an economic impact,” he continues. On a national level, there is also research and development ongoing in both the public and private sectors to develop new feedstocks and technologies. “All those sorts of things have an economic impact as well,” Urbanchuk says. While a typical 50 MMgy corn ethanol plant directly employs 40 to 50 workers, Urbanchuk’s research found that a plant of that size can support approximately 1,500 jobs. “The money [those plants] pump into the economy also enables other people to add jobs,” he says. “That is not inconsequential.” As would be expected, an idled plant has an equally negative effect on the local economy. “There have been plants that have been idled,” Urbanchuk says. “When that happens there is a cost to the community. If you close a 50 MMgy plant, you are putting about 1,500 jobs in the entire economy at risk.”

A Local Perspective While these statistics are impressive, it’s important to remember that these 40, 50, 1,500 or 494,000 jobs aren’t just jobs. These numbers represent real people like Colleen Osborne, who is a quality manager at Poet Biorefining’s Jewell, Iowa, ethanol plant. She’s been working at the ethanol plant since it opened three years ago. Before seeking employment with Poet LLC, Osborne worked as a medical technologist. Tired of working late nights, weekends and holidays, Osborne says she was ready for a change. In her position at Poet, Osborne works to ensure the plant’s products meet quality specifications. Although Osborne says the area she lives in offers comparable employment opportunities, it is likely she would be forced to commute long distances to find a good job if the ethanol plant didn’t exist. Poet Biorefining’s Jewell plant employs about 45 people, however, the impact is greater than simple job creation, Osborne says. The plant’s employees have purchased homes, support local schools and patronize hometown businesses. “During the construction phase, the impact was especially strong,” she says. Many of the construction workers, who built the plant, utilized local motels, restaurants and stores. Since the plant has begun operating, the town has been fur Continued on page 72

ETHANOL PRODUCER MAGAZINE

May 2009

ECONOMIC DEVELOPMENT

Generating Jobs The following is a list of studies that have been conducted to ascertain ethanol’s contributions to economic development. “Contribution of the Ethanol Industry to the Economy of the United States” According to the study, the increase in economic activity resulting from ongoing ethanol production, construction of new capacity, and research and development supported more than 494,000 jobs in all sectors of the economy during 2008. By John Urbanchuk, director of LECG LLC—February 2009 Prepared for the Renewable Fuels Association “Contribution of the Biofuels Industry to the Economy of Iowa” According to the study, the increase in aggregate economic activity generated by ongoing ethanol production supports nearly 58,000 permanent jobs in all sectors of Iowa’s economy. In addition, economic activity generated through construction supports an additional 18,500 non-permanent jobs in the state. This means that Iowa’s ethanol industry supports 3.8 percent of the more than 1.5 billion private not-farm jobs in Iowa. By John Urbanchuk, director of LECG LLC—January 2009 Prepared for the Iowa Renewable Fuels Association “Economic Impact of the Corn and Ethanol Industry in Minnesota” This study found that based on the value of ethanol production and byproducts in 2007, Minnesota’s ethanol industry directly created 1,445 jobs. The indirect impact was 913 jobs, while the induced and total impacts were 1,948 and 4,305 jobs respectively. By Su Ye, Minnesota Department of Agriculture’s Agricultural Marketing Services Division—2008 “Economic Impacts of Increasing the Blend Limit” The study found that increasing the ethanol blend limit to 15 percent would result in increased ethanol production and production capacity resulting in the direct onetime impact of 12,000 construction jobs. The level of economic activity generated through construction would support more than 260,000 secondary jobs. Ongoing plant operations would lead to the creation of 4,320 direct jobs and support more than 136,000 secondary jobs. By Nancy Hodur, Windmill group consultant; F. Larry Leistritz, Windmill Group senior consultant; Donald Senechal, Windmill Group founding principal and chairman—March 2009 Prepared for Growth Energy “Estimating the Future Economic Impact of Corn Ethanol Production in the U.S.” The research assesses the potential economic impact value of ethanol production by comparing 2007 estimates with future levels of production for 2016 and a long-run equilibrium level for 2025. The scenario assumes a situation in which U.S. ethanol producers convert 5.05 billion bushels of corn into 14.468 billion gallons of ethanol in 2016. The research found it would take approximately 8,972 jobs to produce ethanol at that scale. By 2025 it would require 14,971 jobs to convert 10.38 billion bushels of corn into 29.1 billion gallons of ethanol. By David Swenson, Iowa State University—December 2007 “U.S. Economic Impact of Advanced Biofuels Production: Perspectives to 2030” The report found that direct job creation from advanced biofuels production could reach 29,000 by 2012; 94,000 by 2016; and 190,000 by 2022. Total job creation, accounting for economic multiplier effects, could reach 123,000 in 2012; 383,000 in 2016; and 807,000 by 2022. By Bio Economic Research Associates—February 2009

ETHANOL PRODUCER MAGAZINE

May 2009

ECONOMIC DEVELOPMENT Continued from page 70

ther supported by those who visit the plant, including other Poet employees, vendors and repairmen, she says. According to Gary Pruismann, an operator at Poet’s Jewell plant, two new restaurants have opened in the community since construction began on the plant. The plant has also benefitted local farmers, he says. “When diesel was $5 [a gallon], the difference between moving that grain 15 miles and 180 miles was huge,” Pruismann adds. The plant also raised the price of grain for local farmers. “With the restaurants and stuff, the money is being spread out amongst us, and I think it’s been a big impact,” he says. With the current state of the economy, Pruismann says people often ask him if the plant is still running. “Yeah, we’re still running,” he tells them. “I think we’re in good shape.” At Poet Biorefining’s plant in Corning, Iowa, Christy Green works as a grain merchandiser. She says the community has been very supportive of the plant since the beginning. In her position, Green builds relationships and works with local corn producers, and manages inventory. Before finding a job with Poet, Green worked at a grain elevator. She says that although she enjoyed that job, it offered no potential for growth. The ethanol plant has allowed her to take the next step in her career. “If the ethanol plant wasn’t here, I definitely would not have the job opportunity that I have right now in the community,” she says. “I’m really excited to be here. I never dreamed that when I made the change it would work out this well—but it has.” The community of Fairmont, Minn., has also experienced positive gains brought about by the ethanol industry. The southcentral Minnesota town is home to an ethanol plant owned by Biofuel Energy Corp. VeraSun Energy Corp. constructed a plant four miles away but, because of the economic situation, that plant has not begun operations. Mike Humpal, Fairmont’s assistant city administrator in charge of community and economic development, says the [Biofuel Energy] plant has truly benefitted the local economy. “I think it’s been very positive from a few aspects,” he says. “It’s created 50 well-paying jobs. It’s increased the tax base significantly, and it adds value to a raw product that we can continue to produce.”

ECONOMIC DEVELOPMENT

Grooming the Ethanol Work Force Iowa is considered to be the center of our nation’s ethanol industry because it is home to nearly three dozen operating plants. Now, faculty members at Iowa State University are stepping up efforts to ensure college students have the opportunity to train for careers in the field of biorenewables. “Iowa State is uniquely positioned to be a leader in biorenewables, and we are going to do it—we are doing it,” says Tom Brumm, associate professor in the department of agriculture and biosystems engineering. According to Brumm, student interest in biorenewables has increased in recent years. “I think when I started in 2000, it was kind of a curiosity,” he says. “Students were interested, but it was kind of a side topic for them. Now students, particularly freshmen, are specifically looking for majors that will allow them to get jobs in those fields.” In recent years, the university has added a degree in biorenewable resources technology (BRT). The degree is available at the masters and PhD levels, Brumm says. “It focuses directly on biorenewables, and that includes ethanol,” he says. To date, many students have utilized the degree as part of a co-major, he says. “They have their traditional field of study, and they also use the BRT at the same time,” he says. “It’s an awesome way for students to leverage their education into the field of biorenewables.” Brumm’s department is also working to develop an undergraduate certificate for students interested in the field of biorenewables. “It’s like a ‘super minor’ that focuses on biorenewables,” he says. While the university currently has no plans to develop a major specific to biorenewables in the immediate future, Brumm says more options are being developed for students interested in the field. In addition to offering more courses based in biorenewable technologies, next fall the college will begin offering a new degree called biological systems engineering. “It’s a traditional engineering degree with an option to focus specifically on biorenewables,” he says. Students enrolled in the university’s agricultural business program are also expressing interest in the ethanol industry. According to Ron Deiter, professor of agricultural economics, the college has recently begun to offer a new biorenewables economics class that is taught interdepartmentally. Students graduating from an agricultural business program are likely to find work managing an ethanol plant, working in feedstock procurement or marketing distillers grains. There are also abundant opportunities to find work in industries that service the ethanol industry, such as banking and insurance. Deiter says some of his graduating ISU ag business students have found work within the ethanol industry. “I think a lot of times students become interested in an industry, in a program or in a company if they see job opportunities there,” he says. “In economics, we call that demand pull.” While student interest in these programs is likely to increase in the future, Mike Gaul, director of agriculture and life sciences career services, says he hasn’t yet been seeing substantial recruiting efforts by ethanol companies. “Finding top-notch ag students is competitive,” Gaul says. “These companies need to sit down and really start to identify recruitment strategies.” Building relationships among schools, career services offices, professors, and nurturing those relationships is important, he says. “All we read out there is the doom and gloom of the job market, but agriculture is still pretty strong for our students,” he says.

The construction phase was particularly beneficial, Humpal says. The construction workers created a lot of economic activity. Some of those workers moved on once construction was complete, while others stayed in the community. “I believe it had a fairly positive impact on attracting some new folks to the area,” he says. ETHANOL PRODUCER MAGAZINE

Bob Wallace, president of Fairmont’s Chamber of Commerce, agrees. In addition to jobs provided directly by the plant, the community has seen a number of spin-off jobs develop. Wallace says trucking and rail industries in particular have been positively impacted. The service companies and fuel suppliers that serve those transportation in-

May 2009

• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •

• • • • • • SELL • RENT• LEASE • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 10HP TO 250,000#/hr • • 250,000#/hr Nebraska 750 psig 750OTTF • • 150,000#/hr Nebraska 1025 psig 900OTTF •• 150,000#/hr Nebraska 750 psig 750OTTF •• • 150,000#/hr Nebraska 350 psig • • • 115,000#/hr Nebraska 350 psig • • 80,000#/hr Nebraska 750 psig • 80,000#/hr Erie City 2000 psig 800OTTF •• • 75,000#/hr Nebraska 350 psig • • 70,000#/hr Nebraska 750 psig 750OTTF • • • 60,000#/hr Nebraska 350 psig • • 40,000#/hr Nebraska 350 psig • • 20,000#/hr Erie City 200 psig • • 10-1000HP Firetube 15-600 psig • • • ALL PRESSURE AND TEMPERATURE • • COMBINATIONS SUPERHEATED • • AND SATURATED • • • • RENTAL FLEET OF MOBILE • • TRAILER-MOUNTED BOILERS • • 75,000#/hr. Nebraska 350 psig • • 75,000#/hr. Optimus 750 psig 750°TTF • • 60,000#/hr. Nebraska 350 psig • • • 50,000#/hr. Nebraska 500 psig • • 40,000#/hr. Nebraska 350 psig • • 30,000#/hr. Nebraska 350 psig • • 75-300HP Firetube 15-600 psig • • • ALL BOILERS ARE COMBINATION GAS/OIL • • • ENGINEERING • START-UP • • FULL LINE OF BOILER AUXILIARY • • SUPPORT EQUIPMENT. • Electric Generators:• 50KW-30,000KW • • • • • WEB SITE: www.wabashpower.com • 847-541-5600 • FAX: 847-541-1279 •• E-mail: info@wabashpower.com • • • • POWER • EQUIPMENT CO. • • 444 Carpenter Avenue, Wheeling, IL 60090 • • 73

BOILERS

24 / 7 EMERGENCY SERVICE

IMMEDIATE DELIVERY

CALL: 800-704-2002

wabash

ECONOMIC DEVELOPMENT

dustries have also benefited. The plant has also increased the tax base and allowed farmers to earn better prices for their corn, he says. “The huge impact for us was the construction of these two facilities,” Wallace says, echoing the sentiments of others in communities where ethanol plants have been built. In the approximately 18 months it took to build the plants, the community’s hospitality industry, restaurants, housing and automobile industries were positively impacted, he says. In addition, local electrical and parts suppliers experienced a large increase in business. “It had a huge eco-

nomic impact here,” he says. “The amount of money that was spent and generated and left in the community … was significant.” Roger Moore, chairman of the Minnesota Corn Growers Association board, lives in the Fairmont area and agrees that the economic impact of ethanol plants trickles down to local businesses. “It all filters down a bit, you know,” he says. “The whole community benefits from the ethanol plant. No doubt about that.” He stresses the plant’s impact on farmers who received a better price for their corn. Farmers benefit even more when they have ownership

in the plant. “From a corn farmer’s perspective, it’s great to have an ethanol plant in the county,” he says. “It’s even greater if it’s locally owned.” While the local economy has been positively impacted by the construction and operation of Biofuel Energy’s ethanol plant, the community has also experienced the negative impact of VeraSun’s idle facility. “These plants that idled—or that did not start up—the local areas feel that,” Wallace says. When plants idle, he says, that puts about 1,500 jobs in the entire economy at risk. “The closure of these facilities has a really devastating impact,” he says.

A Bright Future Even though the economy is in a difficult place right now, Urbanchuk says he expects to see continued growth in the ethanol industry. “I think, personally, that the outlook in terms of economic contribution is very bright, but we have to get through this little rough patch that we’re in now,” he says As the industry strives to meet the requirements established by the renewable fuels standard, the economic contributions of the ethanol industry are expected to grow, Urbanchuk says. That’s because of the role that capital investment in construction plays in creating economic activity, he says. “The indications that we have from the cellulosic industry is that the capital expenditures associated with building a cellulosic plant may be as much as three times more than that for a traditional dry-mill corn ethanol plant,” Urbanchuk adds. This means there will be larger expenditures for the components that go into building the plants, which will provide further support for the industries that supply materials for the ethanol industry. “I think the rate of growth will likely be a bit faster, and that’s good,” he says. “It’s good for the industries that are supplying those materials into new plants, and for the people who produce the raw materials that go into those parts.” EP Erin Voegele is an Ethanol Producer Magazine staff writer. Reach her at evoegele@bbiinternational.com or (701) 373-8040.

ETHANOL PRODUCER MAGAZINE

May 2009

TECHNOLOGY

Unraveling the Mysteries in Sorghum’s ‘Simple’ Genome Grain sorghum’s genome is about a fourth the size of man’s, and much less complex than other related grasses. Now that its genetic blueprint has been published, EPM asks scientists and sorghum experts what this means for science, agriculture and advanced ethanol production. By Ron Kotrba

The diversity of sorghum species is displayed in the wonderful variety shown here. Scientists say the sequencing of various types of sorghums is the next step to unlocking the mysteries in sorghum’s simple genome. PHOTO: ROY KALTSCHMIDT, LAWRENCE BERKELY NATIONAL LABORATORY

ETHANOL PRODUCER MAGAZINE

May 2009

TECHNOLOGY

ETHANOL PRODUCER MAGAZINE

May 2009

TECHNOLOGY

ice was the first grass to have its genome sequenced and published, which wouldn’t have been possible without the government and private industry’s massive efforts to decode the human genome. The sequencing and analysis of genes, human or sorghum, revealing the arrangements of hundreds of millions of DNA bases, is a great scientific accomplishment, but researchers say this is just the beginning. What follows is the mapping of genomes from many more varieties. After that, a tremendous amount of work still remains in figuring out what it all means.

‘The beauty behind having this kind of information available is that we’ll be able to tailor plants to the particular needs of a biorefinery, just based on the information provided by those plants and our knowledge of how these genes are working in sorghum.’ Jeff Dahlberg, research director for theUnited Sorghum Checkoff Program

All humans have largely the same set of genes, but look around and vast disparities in people’s physical features can be observed. Many of mankind’s physical differences are traced back to the geographic origin of a population, but what are the genetic mechanisms at play behind these mysteries of variation? To answer this question, scientists are working to profile an array of human genomes from the most geographically diverse regions on the planet in hopes of better understanding how particular variations in genes cause specific physical qualities in humans. The purported big payout for humanity is

better disease treatment and prevention. To better understand the drought-tolerant sorghum plant, research is moving forward in much the same way. However, whereas knowledge in human genetics is expected to stay within ethical boundaries by helping prevent disease and increase the quality of life, plant and crop breeders seek the identification and exploitation of sorghum’s beneficial characteristics to enhance yields and reduce input requirements for future commercial crops, including dedicated varieties for advanced ethanol production. “The beauty behind having this kind of information available is that we’ll be able to tailor plants to the particular needs of a biorefinery, just based on the information provided by those plants and our knowledge of how these genes are working in sorghum,” says Jeff Dahlberg, research director for the Lubbock, Texas-based United Sorghum Checkoff Program. The newly established checkoff will pay for sorghum information, education and research campaigns. “One of the unique things about sorghum is that it’s a crop that fits all the different models for renewable fuels right now,” Dahlberg says. “We produce grain sorghum, and we’re already in the grain-to-ethanol market. About 18 [percent] to 20 percent of our domestic sorghum production is going into the grain-to-ethanol market.” Sorghum is the No. 2 crop used for grain-based ethanol production in the U.S., and grain sorghum ethanol counts as an advanced biofuel under the new renewable fuels standard or RFS2. According to Tim Lust, executive director for the National Sorghum Producers, 2009 will be the first year ethanol has taken first place in terms of domestic markets for grain sorghum. “Domestically, the hog and beef cattle industries have historically held that role, but ethanol will surpass that this year,” Lust says. In 2008, producers planted close to 8.3 million acres of grain sorghum.

VOGELBUSCH The Bioprocess Company

Designing state-of-the-art ethanol plants in the U.S. for over 30 years

We Make Biotechnology Work Vogelbusch USA, Inc. • 1810 Snake River Road • Katy, TX 77449 • (713) 461-7374 • office@vbusa.com www.vogelbusch.com 78

ETHANOL PRODUCER MAGAZINE

May 2009

TECHNOLOGY

PHOTO: THOMAS HASH, INTERNATIONAL CROPS RESEARCH INSTITUTE FOR THE SEMI-ARID TROPICS (ICRISAT)

There is also a forage variety of sorghum, which Lust says accounted for about 5 million acres planted in 2008. “And then we have sweet sorghums, which are unique types of sorghums,” Dahlberg says. “They not only produce grains, but also stem juices which are high in sugars—almost as high as sugarcane.” Sorghum and sugarcane are very closely related, along with Miscanthus and one of the world’s most hated weeds, Johnsongrass. Dahlberg says a high grain, high sweet-stemmed biomass sorghum would be an ideal biocrop.

The Methodology of Sequencing Mapping out a genetic blueprint involves determining several short sections that would make up a gene, and sequencing those in bulk. Then, scientists take all of those pieces and put them together like a puzzle—a difficult puzzle, according to Dan Rokhsar, the computational biology leader at the U.S. DOE Joint Genome Institute in Walnut Creek, Calif. “There are parts of the genome that are very complicated to assemble,” Rokhsar says. “Think of them as large stretches of blue sky in a puzzle, with wispy clouds throughout. So, you have to use that cloud information to put together those regions of the genome.” As the puzzle starts to take shape, he says the reconstruction of entire genes and eventually whole chromosomes takes place. Rokhsar says the JGI employs an almost factory-like setting to gene sequencing, using 50 sequencing instruments into which material is fed day and night. “It’s a big assembly line,” he says. The sequencing process itself took about four months, Rokhsar says. That data is then made available in digital form and worked on by researchers such as John Bowers of the University of Georgia; Jeremy Schmutz of the DOE JGI Hudson Alpha Institute for Biotechnology; and Andrew Paterson, director of the plant genome mapping laboratory

ETHANOL PRODUCER MAGAZINE

May 2009

Rice, shown in the foreground, was the first grass to have its genome sequenced, with its close relative sorghum shown in the background.

TECHNOLOGY

WE CAN HELP YOUR BUSINESS GROW

Agribusiness Services Clifton Gunderson was founded in the heart of the Midwest and many of our partners and professional staff were raised in rural communities. Even though we have grown to become one of the largest CPA firms in the country, we continue to have a natural interest in and understanding of agribusiness. In fact, many of our specialized tax consulting services benefit the ethanol industry by providing immediate cash flow benefits. Our fixed asset and cost segregation studies alone have uncovered additional current year tax deductions for numerous ethanol facilities of over $100 million. In addition, we can provide solutions in the areas of – • • • • • • •

Audit & Accounting Services RINs Attestation Engagements RINs Consulting Tax Consulting & Compliance Estate Planning State & Local Tax Technology Applications

When you count on Clifton Gunderson to help yield the best results from your agribusiness, you can count on insight. Contact Mark Colvin at 309-495-8754 for a no-charge assessment of your ethanol or biodiesel plants tax savings potential.

301 SW Adams, Suite 900 • Peoria, Illinois 61602 www.cliftoncpa.com 80

at the University of Georgia. Rokhsar tells EPM that those researchers, along with others, are doing a “relatively customized assembly process.” Paterson says the University of Georgia definitely took advantage of the rice sequence to refine sorghum’s. “We knew from genetic maps that rice and sorghum had pretty similar genomes,” Paterson says. “There weren’t large numbers of chromosomal rearrangements, so as the assembly of the sequence was built, it was natural for us to kind of compare sorghum to rice. And where we found something different we scrutinized it. We couldn’t assume the differences were wrong, but we certainly could add an additional level of skepticism to inspecting them.” Paterson says he believes this scrutiny has led to what appears to be a very high-quality sequence for sorghum. A chromosomal sequence consists of a string of four nucleic acid bases—A (adenine), C (cytosine), G (guanine) and T (thymine)—arranged in various orders making up DNA. Figuring out which parts of the DNA represent genes, however, is no small task. At least half of the sorghum genome is made up of sequences that are not really related to genes. These sequences were once called “junk DNA,” but the more neutral term favored today is “repetitive elements”—sequences of DNA repeated hundreds of thousands of times in the genome but aren’t thought to contribute to cell functioning as do genes. “These sequences have the ability to copy themselves and then reinsert elsewhere in the genome,” Rokhsar says. He likens them to viruses confined within a sorghum cell, not infectious but capable of replicating in much the same way viruses do. “They spread themselves throughout the genome in sort of a selfish way to help shape the structure of the genome,” he explains. “In the rest of the sequence are the genes, and, at least naively speaking, we think those are what’s performing the functions of the cells that make up the plant.”

There are many tantalizing clues sorghum genetic researchers have to work with now that the first genome of its type has been mapped out. The corn genome blueprint is now being mapped out. Corn is a very close relative to sorghum evolutionarily speaking, separated by 10 million to 15 million years according to Paterson. He says sorghum will help to align and assemble the maize genome. What makes decoding corn’s genome more difficult than sorghum’s is the extra repetitive DNA found in it, and that it has experienced a duplication of its entire gene set since separating from sorghum. The repetitive “viral-like” elements in sorghum outnumber bona fide genes by around 10 to 1, Rokhsar says. But ETHANOL PRODUCER MAGAZINE

May 2009

PHOTO: PETER FREY, UNIVERSITY OF GEORGIA

TECHNOLOGY

Paterson is a geneticist with University of Georgia and director of the Plant Genome Mapping Laboratory.

finding actual genes within the genome is like finding a needle in a haystack. Even once genes are isolated and identified, they alone cannot tell researchers why, for instance, sorghum needs less water to thrive than other crops. The vast majority of genes in grasses like sorghum and rice are going to be put in correspondence with each other, Rokhsar says. “If sorghum has a gene it’s very likely rice has a version of that same gene,” he explains. “For sorghum, it’s not the particular gene accounting for drought tolerance, but the gene variation that is going to be helping.”

Applications of New Knowledge Two of the most desired traits sorghum possesses are its ability to grow with relatively little moisture, and to produce good crop yields with fewer nutrient inputs such as nitrogen, which ETHANOL PRODUCER MAGAZINE

is not a trait it shares with its cousin corn. Paterson says a sorghum crop will use about half the amount of water a similar-sized corn crop would need. Like any crop, sorghum will respond to more water by producing higher yields, but according to Lust, it’s not just sorghum’s ability to provide good yields with less moisture that breeders admire. “From a timing standpoint it can wait two to three weeks for that moisture but for some of the other crops, the timing of that moisture is critical,” Lust tells EPM. “Also, sorghum is extremely good in nitrogen use efficiency and we will get more yield with additional nitrogen, or we can utilize less nitrogen to do the same.” Sorghum’s efficiency at using nitrogen and tolerance to dry weather are the result of a millennia of evolution and its domestication history in northeast Africa on marginal lands. “I think these qualities arose from the

May 2009

FROM PROBLEMS TO PELLETS TO PROFITS If you’re transporting DDG as meal, you’re losing profits every day. Put that money back in your pocket with a CPM pellet mill. Get increased energy savings, flowability and dust control with less cleanup from the only pellet mill with a gear drive train. Durable, energy efficient and trouble-free with parts made and warehoused in the USA to serve you faster. Call for your FREE cost analysis today.

800-428-0846 | 765-362-2600 WWW.CPMROSKAMP.COM

CRAWFORDSVILLE, INDIANA 81

TECHNOLOGY

selection pressures by farmers in Africa where this crop grew up,” Dahlberg says. “Are there genes associated with those qualities? There probably are, but if it was a big major gene we’d probably have already found it through classical breeding methods. It’s pretty easy to find a major gene fairly quickly, but when you start talking about nitrogen use efficiency and drought tolerance, it’s a lot more difficult to see that in the field—to see that incremental increase. It’s going to take a lot more work to figure out those kinds of things.” Another important agricultural area where the sorghum genome might help is in weed control, according to Paterson. “Sorghum is a very close relative of Johnsongrass,” he says. “Sorghum’s analysis is shedding light on the nature of weediness and how we might better control it.” The sequencing of the sorghum genome is highly anticipated to have positive effects on development of modified bioenergy crops, but unless there is a surprise discovery made of a major gene

that is responsible for sorghum’s desirable traits, the biorefining world will still have to wait years before tangible results are employed in biomass-to-ethanol conversion. “It’s more of a tool that accelerates things rather than one that gives answers right away,” Rokhsar says. What may take even longer for sorghum’s traits to benefit bioenergy applications, according to Dahlberg, is the lack of consensus on exactly what characteristics are most preferred in a bioenergy crop. “We really don’t know quite yet what we need to be looking for in these crops,” he says. “You get a whole bunch of different answers—‘I want high lignin,’ or ‘I want low lignin,’ or ‘I want this particular compositional makeup.’ There are just a lot of different answers to that question right now and that makes it a bit more complicated. Can we work on lower lignin sorghum? Sure, we already have forage sorghums with lower lignin content. But does that translate into more efficient ethanol production? I think that’s a question that still has to be answered. But the beauty behind having

this kind of information available is that we’ll be able to tailor plants to meet particular biorefinery needs.” Rokhsar says there are many tantalizing clues sorghum genetic researchers have to work with now that the first genome of its type has been mapped out. Gene variations that give way to improved water and nitrogen efficiency and drought stress resistance, like those scientists hope to soon identify in sorghum, are surely resident in other plant genomes. “But what is magic about the sorghum versions of those genes is something I don’t think we know yet,” Rokhsar says. “To understand this, we really need to know how these genes function in detail. We know it’s there and we can work with it in sorghum now, but the devil is really in those variations—and that’s the next step.” EP Ron Kotrba is an Ethanol Producer Magazine senior writer. Reach him at rkotrba@ bbiinternational.com or (701) 738-4942.

ETHANOL PRODUCER MAGAZINE

May 2009

FEEDSTOCK

ETHANOL PRODUCER MAGAZINE

May 2009

FEEDSTOCK

Embracing the

Alternatives In some areas of the world, feed grains are more viable for ethanol production than corn. EPM evaluates feedstock options, including a Canadian wheat variety called AC Andrew and barley, and some projects where feed grains are being used make fuel and feed products. By Anna Austin

ETHANOL PRODUCER MAGAZINE

May 2009

FEEDSTOCK

PHOTO: CANADIAN GRAIN COMMISSION

heat is the ethanol feedstock of choice in Western Canada as it performs better in the field than corn. According to the Canadian Renewable Fuels Association, nine of the 21 ethanol plants in the country—currently operating or under construction—use or plan to use wheat. These plants are located in the provinces of Alberta and Saskatchewan. Among these ethanol producers, AC Andrew soft white spring (SWS) wheat is the variety of choice. In the U.S., barley isn’t just for beer brewing and livestock feed. Several companies, including Virginia-based Osage Bio Energy, have revealed barley-to-ethanol projects within the past year. Osage is currently constructing a 55 MMgy facility, which will use regionally grown barley to produce ethanol and feed products. The company plans to have its first facility on line by the spring of 2010, and expects to build three additional plants. In Montana, Montana Microbial Products LLC, in cooperation with the

AC Andrew is the highest-yielding SWS wheat variety presently registered in Western Canada.

SPEC IT AND FORGET IT. Check-All Valve is your one-stop supplier for the check valves you need in the materials you require. Better yet, every valve includes the experience, engineering, and application know-how you need for “spec-it-and-forget-it” reliability. After all, you have better things to do, and check valves are all we do. Call us at 515-224-2301 or e-mail us at sales@checkall.com.

www.checkall.com 86

Since 1958 West Des Moines, Iowa USA ETHANOL PRODUCER MAGAZINE

May 2009

FEEDSTOCK

U.S. Department of Agriculture, has developed a process to make ethanol and barley protein concentrate, which could replace fishmeal in aquaculture diets. The company operates a pilot plant in Butte, Mont., and is in the process of commercializing that facility. In some areas, making ethanol from corn just isn’t possible. So what is it about AC Andrew and barley that makes them attractive as ethanol feedstocks?

‘Over the past four or five years, we’ve been working to develop a plant-based protein that could be used. We looked at soy and had some technical success, but the fish wouldn’t eat the soy meal, which led us to barley.’ Bob Kearns, a partner in Montana Microbial Products

Analyzing AC Andrew AC Andrew is the highest-yielding SWS wheat variety presently registered in Western Canada and is the most commonly grown variety of Canadian Western SWS wheat, according to SeCan, the largest supplier of certified seed to Canadian farmers. The variety typically yields 15 percent to 19 percent higher than regular low-protein SWS wheat, which is perhaps its most attractive quality. It is also known for its high yields ranging from 60 to 75 bushels per acre. AC Andrew’s high starch content,

compared with other wheat varieties, also appeals to producers. The SWS wheat class in general is the lowest protein wheat class, at about 2 percent to 3 percent lower grain protein than the more popular Canada Western red spring wheat, which accounted for 70 percent of all Western Canadian wheat production in 2007. Lower protein content generally leads to higher yields and increased

starch levels in wheat kernels. AC Andrew has higher starch levels and higher yields and an ideal protein content of about 12 percent, making it a desirable variety for many ethanol producers. Because AC Andrew is—like other SWS wheat varieties—bred for irrigated regions of southern Alberta and Saskatchewan there are some growing risks. For example, cooler than normal temperatures or an early fall frost can delay crop

FEEDSTOCK

PHOTO: JACK DYKINGA, USDA ARS

maturity, and drought stress can reduce yields and increase grain protein content. In addition, pre-harvest sprouting can occur under wet harvest conditions. Last fall, Terra Grain Fuels, a Saskatchewan ethanol producer, completed construction of the largest wheat ethanol plant in North Americaâ&#x20AC;&#x201D;a 150 MMly (39.6 MMgy) ethanol plant last fall near Belle Plaine. In addition to ethanol, the plant produces 163,800 tons of distillers dried grains annually. TGF is an advocate of AC Andrew and says it is the variety of choice because of its ethanol friendly characteristics. The company will, however, contract for all Canadian Prairie spring red and white wheat varieties and certain winter wheat varieties. Upon reaching its full capacity, TGF will purchase and consume approximately 15 million bushels of locally grown wheat annually.

MMP hopes its process to make ethanol and barley protein concentrate will renew interest in growing barley.

Fishing for New Markets As prices have dipped, many farmers have shied away from barley and focused on wheat. However, a unique market has emerged and Bob Kearns, a partner in Montana Microbial Products, is confident that it may rejuvenate enthusiasm in barley. MMP, in a joint venture with the USDA Agricultural Research Service,

ETHANOL PRODUCER MAGAZINE

May 2009

FEEDSTOCK

has developed a process to make ethanol and barley protein concentrate, which can replace fishmeal in aquaculture diets. “Aquaculture is the fastestgrowing part of the agricultural market,” Kearns says. On an annual basis the world uses 5 million metric tons of fish meal. “Over the past four or five years, we’ve been working to develop a plant-based protein that could be used,” he says. “We looked at soy and had some technical success, but the fish wouldn’t eat the soy meal, which led us to barley.” The fractionation process that MMP and ARS developed creates two streams. “A sugar stream which we ferment to ethanol, and a protein stream that runs at about 60 percent protein,” Kearns says. “In fish feeding studies, we found that it is a 100 percent replacement for fish meal, and it tastes the same. If you substituted one-third barley protein concentrate for onethird of the fish meal, there is a big improvement in the feed conversion ratios. If you substitute two-thirds barley protein concentrate, it is even bigger.” When comparing the barley protein concentrate with corn-based distillers grains, which sells for about $125 per ton, the barley protein concentrate fish meal will sell for $700 to $1,200 per ton, according to Kearns. “So in this situation, the value is really high for the protein. Regarding the food-versus-fuel debate, this is probably the most efficient way we can think of to get protein into the human diet,” he says. “We are taking dryland barley, normally used for feed barley, and turning it into a product that has a high conversion rate into human food, and at the same time making ethanol from it. The big markets for the barley protein is for salmon and shrimp feed. The U.S. produces about 24,000 tons of trout and about 10,000 tons of salmon per year. If you can get

ETHANOL PRODUCER MAGAZINE

Ethanol Yields (per bushel) Crop

Weight

Gallons

Corn

56 lbs

2.65

Barley

48 lbs

2.04

Wheat

60 lbs

2.71

Source: Agricultural Utilization Research Institute

into that market, the numbers are huge,” Kearns says Feed conversion ratios for trout run about 1.1 pound of feed to a pound of

May 2009

trout. When compared with feeding distillers grains to cattle, five or six pounds of feed converts to about one pound of beef, according to Kearns.

FEEDSTOCK

‘From our perspective, fish growers get a lower priced product and there are fewer environmental issues associated with it; growers have an alternative crop; and we are making ethanol as a transportation fuel. We don’t see any downsides. It’s value-added economics at a basic level.’ Bob Kearns, a partner in Montana Microbial Products

Bottom-Line Boost Ethanol for this project is the coproduct and the main product is the barley protein. “We think it is a different twist, and it lets you make a very nice return when ethanol is selling like it is today,” Kearns says. “It adds to our bottom line, and the real value is driven by the barley protein.” MMP and ARS intend to build the initial plant in Montana, the largest barley producing state in the U.S. “Out of the two types of barley—malt barley is relatively expensive, and people are doing well raising it primarily on irrigated acres,” Kearns points out. “Feed barley has been in a significant decline in the past five or six years because there isn’t

much of a market for it and the growers don’t make money.” Many farmers have switched to wheat to take advantage of the higher prices, and are not rotating every other year with barley. Kearns says that has created some problems because wheat on wheat requires the use of more herbicides. “Wheat growers know that if they can do a barley rotation, they can increase soil fertility, but they just don’t have a market for the barley,” he says. Kearns says they would be prepared to pay 50 percent more for the feed barley, thus providing the farmers with a viable alternative to wheat. Kearns says the engineering for the 2 MMgy feed barley-based project is

complete. “Capital is still being raised, but talks are ongoing with the USDA regarding a guaranteed loan to build the facility,” he says. “Our intent is to break ground in Montana this year, and be producing ethanol next year. [The plant] will be relatively small, targeted to replace one-third of the fish meal used in trout diets in the Western U.S—about 9,000 tons of barley protein concentrate and about 2 million gallons of ethanol.” Kearns says in the future, they will build a much bigger plant to serve the U.S. and Canadian markets. “This scenario might give growers an opportunity where the price is competitive with wheat, and requires less fertilizer, yields higher, and breaks insect and disease cycles while improving the productivity of the wheat,” he says. “From our perspective, fish growers get a lower priced product and there are fewer environmental issues associated with it; growers have an alternative crop; and we are making ethanol as a transportation fuel. We don’t see any downsides. It’s valueadded economics at a basic level.” EP Anna Austin is an Ethanol Producer Magazine staff writer. Reach her at aaustin@ bbiinternational.com or (701) 738-4968.

WE KNOW CELLULOSE TO ETHANOL

With over 40 years of combined “hands-on” experience in conversion of lignocellulosic biomass to ethanol at the National Renewable Energy Laboratory, BBI is your best resource for cellulosic project evaluation and development. Our experts understand the critical technical and economic issues related to feedstock collection and storage, biological and thermo-chemical conversion technologies and downstream processing. Our direct experience includes the design and engineering of concentrated acid hydrolysis, dilute acid pretreatment, enzymatic hydrolysis, and fermentation processes for converting a broad range of feedstocks to ethanol. Whether it’s a feasibility study, feedstock assessment, due diligence, process design or complete project development, BBI is the definitive source of answers for your cellulose-to-ethanol questions. BBI International Engineering & Consulting 300 Union Blvd., Suite 325 Lakewood, CO 80228 Phone: 303-526-5655 www.bbinternational.com

ETHANOL PRODUCER MAGAZINE

May 2009

Together we can build a low-carbon economy where business and future generations thrive.

Genencor® and you— a partnership of possibilities At Genencor®, we help our customers explore the limitless potential of industrial biotechnology. We apply our expertise in enzyme technology and systems biology to the challenges of the diverse industries we serve. Our ability to deliver innovative and sustainable customer solutions creates value while minimizing environmental impact. Join us in building a better future. www.genencor.com © 2008 Danisco US Inc. Genencor® is a registered trademark of Danisco US Inc. or its affiliates in the United States and/or other countries.

EPM MARKETPLACE Ag Products & Services

Lallemand Ethanol Technology 800-583-6484 www.ethanoltech.com

Grain Origination Services Agnetic, LLC 317-696-2824

Cleaning blog.agnetic.com

Hybrid Corn

Hydro-Klean, Inc. 515-283-0500

Pioneer Hi-Bred International, Inc. 800-247-6803 www.pioneer.com

Associations/Organizations Trade API Credit Exchange 202-682-8192

Dryer Systems

Seneca Companies 800-369-5500

www.hydro-klean.com www.senecaco.com

Ductwork Hydro-Klean, Inc. 515-283-0500

www.hydro-klean.com

www.api.org/ace

Emergency Spill Response

Chemicals PhibroChem 800-223-0434

Hydro-Klean, Inc. 515-283-0500 www.lactrol.com

Anti-Microbial Ferm Solutions 859-402-8707

Hydro-Klean, Inc. 515-283-0500

www.hydro-klean.com

Fans www.lactrol.com

Resonant BioSciences, LLC. 866-933-0408 www.puremash.com

Enzymes

Hydro-Klean, Inc. 515-283-0500

www.genencor.com

Novozymes 919-494-3101

www.novozymes.com

Water Treatment

Hydro-Klean, Inc. 515-283-0500

Yeast

www.hydro-klean.com

www.hydro-klean.com www.senecaco.com

www.hydro-klean.com

Railcars Hydro-Klean, Inc. 515-283-0500

www.hydro-klean.com

Scrubbers www.hydro-klean.com

Hydro-Klean, Inc. 515-283-0500

www.hydro-klean.com

www.ferm-solutions.com

Smoke Stack

Fermentis-Division of SI Lesaffre 800-558-7279 www.fermentis.com

Hydro-Klean, Inc. 515-283-0500

Reach your customers Your Solution. Advertise Today.

EPM MARKETPLACE Stabilized Liquid Yeast, Thermosacc,® Superstart™

www.hydro-klean.com

Railcar Spill Response Hydro-Klean, Inc. 515-283-0500

Hydro-Blasting Hydro-Klean, Inc. 515-283-0500

Plate-Frame Hydro-Klean, Inc. 515-283-0500

Heat Exchanger

Seneca Companies 800-369-5500

Buckman Laboratories, Inc. 901-278-0330 www.buckman.com

www.hydro-klean.com

Filter Media Hydro-Klean, Inc. 515-283-0500

Genencor 585-256-5249

Ferm Solutions 859-402-8707

www.senecaco.com

Evaporators www.ferm-solutions.com

Lallemand Ethanol Technology 800-583-6484 www.ethanoltech.com PhibroChem 800-223-0434

Seneca Companies 800-369-5500

www.hydro-klean.com

Tank Cleaning Equipment Spraying Systems Co. 630-665-5000

www.spray.com

Tank Cleaning Services Hydro-Klean, Inc. 515-283-0500

www.hydro-klean.com

ETHANOL PRODUCER MAGAZINE

May 2009

EPM MARKETPLACE Professional Environmental Cleaning Services 402-212-0949 www.professionalECS.com Seneca Companies 800-369-5500

Reimer Welding Inc. 218-773-0886

Insulation

www.reimerwelding.com

Railroad Tracks

www.senecaco.com

R & R Contracting, Inc. 800-872-5975

Construction

www.rrcontracting.net

Railworks 913-888-4091

Buildings-Modular

www.railworks.com

Tanks ATEC Steel 620-856-3488

www.atecsteel.com

Agra Industries, Inc. 715-536-9584 Caldwell Tanks 502-964-3361

www.agraind.com www.caldwelltanks.com

WINBCO Tank Company 641-683-1855 Miller Insulation Co, Inc. 701-258-4323 www.millerinsulation.com Petrochem Insulation 707-644-7455

www.petrocheminc.com

Management Marcus Construction Company 800-367-3424 www.marcusconstruction.com

www.winbco.com

Consulting Environmental Air Resource Specialists,Inc. 970-484-7941 www.air-resource.com ICM, Inc. 877-456-8588

www.icminc.com

Natural Resource Group, LLC. 612-347-6789 www.nrg-llc.com

Mechanical Pinnacle Engineering Inc. 507-280-5966 Seneca Companies 800-369-5500

www.pineng.com www.senecaco.com

Weaver Boos Consultants 888-645-5240 www.weaverboos.com

Fabrication Agra Industries, Inc. 715-536-9584

Feasibility Studies Harris Group Inc. 206-494-9422

www.agraind.com

Reach your customers

Mid-States Mechanical Services, Inc. 800-950-0279www.mid-statesmechanical.com

Reach your customers

Plant Construction Your Solution. Advertise Today.

Agra Industries, Inc. 715-536-9584

EPM MARKETPLACE

Your Ad HERE

Your Solution. Advertise Today. www.agraind.com

EPM MARKETPLACE

Your Ad HERE

Your Solution. Advertise Today.

EPM MARKETPLACE ETHANOL PRODUCER MAGAZINE

www.harrisgroup.com

EPM MARKETPLACE May 2009

EPM MARKETPLACE Management Services

dbc SMARTsoftware, Inc. 770-427-7633 www.dbcsmartsoftware.com

Engineering Design/Build

Control Systems

Agra Industries, Inc. 715-536-9584

www.agraind.com

Process Design

www.feedforward.com

ICM, Inc. 877-456-8588

www.icminc.com

Process Engineering Associates, LLC 865-220-8722 www.processengr.com Vogelbusch USA, Inc. 713-461-7374

FeedForward, Inc. 770-426-4422

www.icminc.com

Revere Control Systems 800-536-2525 www.reverecontrol.com SoftPLC Corporation 512-264-8390

www.softplc.com

www.vogelbusch.com

Control Systems-Distributed

Equipment & Services Agitation Equipment ProQuip, Inc. 330-468-1850

www.proquipinc.com

Air Pollution/Odor Control Ceco Abatement Systems, Inc. 630-493-0624 www.cecoenviro.com/Abatement

Analytical Instruments

Conveyorsâ&#x20AC;&#x201C;Mechanical

Gusmer Enterprises, Inc. 847-277-9785 www.gusmerbiorefining.com

U.S. Tsubaki 847-459-9500

Greenway Consulting,LLC 320-589-3085 www.greenwayconsulting.net

Perten Instruments, Inc. 801-936-8165

Cooling Towers

Plant Optimization

Blowers & Fans

Delta Cooling Towers, Inc. 800-BUY-DELTA www.deltacooling.com

Granatus Consulting, Inc. 218-773-0005 www.granatusinc.com

Robinson Industries, Inc. 724-452-6121 www.robinsonfans.com

Corn Oil Recovery

Harris Group Inc. 206-494-9422

Boiler Systems

ICM, Inc. 877-456-8588

Hurst Boiler & Welding Co., Inc. 800-666-6414 www.hurstboiler.com

Distillation Equipment

Boilers-Reboilers

SRS Engineering Corporation 800-497-5841 www.srsbiodiesel.com

Wabash Power Equipment CO. 847-541-5600 www.wabashpower.com

Dryers-Fluid Bed

Combustion Equipment

Aeroglide Corporation 919-851-2000

Eclipse.Inc. 815-637-7213

Littleford Day, Inc. 859-525-7600

ICM, Inc. 877-456-8588

www.harrisgroup.com www.icminc.com

Project Development Harris Group Inc. 206-494-9422

www.harrisgroup.com

Education Iowa Lakes Community College 800-242-5108 www.iowalakes.edu

www.perten.com

www.eclipsenet.com

Compressors

Employment

FlaktWoods 716-845-0900

Recruiting

www.flaktwoods.com

Barr-Rosin,Inc 630-659-3980

Computer Software

Dryers-Rotary Drum

The Richmond Group USA - BioEnergy Search Division

Encore Business Solutions 204-989-4330 www.encorebusiness.com

Barr-Rosin,Inc. 630-659-3980

www.trgbioenergy.com

www.icminc.com

www.aeroglide.com www.littleford.com

Dryers-Ring

SearchPath of Chicago 815-261-4403 www.searchpath.com/chicago 804-285-2071

www.ustsubaki.com

www.barr-rosin.com

John Deere Agri Services 800-518-0472 www.johndeereagriservices.com 100

ETHANOL PRODUCER MAGAZINE

May 2009

EPM MARKETPLACE ICM, Inc. 877-456-8588

Heat Exchangers

Maintenance Software

Custom Metalcraft Inc. 417-862-0707 www.custom-metalcraft.com

ICM, Inc. 877-456-8588

Munters - Des Champs Products 540-291-1111 www.deschamps.com

Mapcon Technologies, Inc. 800-922-4336

Instrumentation

Mills-Hammer

www.icminc.com

Ronning Engineering Company, Inc. 913-239-8118 www.ronningengineering.com

Dryers-Rotary Steam Tube ICM, Inc. 877-456-8588

Endress+Hauser 317-535-2174

MonitorTech Corp. 866-682-6771

Perten Instruments, Inc. 801-936-8165

www.monitortechgrp.com

www.us.endress.com www.perten.com

WIKA Instrument Corporation 888-945-2872, x5127 Continuous Emissions Monitoring Systems Easiest installation, operation and maintenance Meet or exceeds EPA requirements NOx, O2, CO, SO2 and others Turnkey systems for under $100,000.00 P.O. Box 9271, Columbus, Oh 43209 866-682-6771 sales@monitortechcorp.us

Fermentation Monitoring

www.wika.com

www.etslabs.com

Fermentors

Industrial Construction & Engineering 636-970-1650 www.ic-e.cc

www.atecsteel.com

WINBCO Tank Company 641-683-1855

www.winbco.com

Filtration Equipment www.fluideng.com

Fractionation-Corn www.buhlergroup.com/us

Cereal Process Technologies 217-779-2595 www.cerealprocess.com

Perten Instruments, Inc. 801-936-8165

www.perten.com

Molecular Sieves

www.vaperma.com

Phenomenex 310-212-0555

Zeochem, LLC 502-634-7600

www.zeochem.com

www.phenomenex.com

Laboratory-Testing Services

Motors

Midwest Laboratories, Inc. 402-829-9877 www.midwestlabs.com

Trico TCWind, Incorporated 320-693-6200 www.tricotcwind.com

Romer Labs, Inc. 636-583-8600

Paint & Protective Coatings

www.romerlabs.com

Trilogy Analytical Laboratory 636-239-1521 www.trilogylab.com

SafeRack 866-761-7225

Mongan / Bockman 260-748-7655 www.monganbockman.com

Parts & Services

Loading Equipment

Hemco Industries, Inc. 877-347-7106

www.carbis.net

ICM, Inc. 877-456-8588

www.icminc.com

Pipe www.hemcocpm.com www.saferack.com

MOR Technology, LLC 618-522-8324 www.mortechnology.com

Maintenance Services

Grain Handling & Storage

Jouleâ&#x20AC;&#x2122; Industrial Contractors bbosher@jouleinc.com www.jouleinc.com

May 2009

Perten Instruments, Inc. 801-936-8165

Vaperma, Inc. 418-839-6989

www.fwsgroup.com

ETHANOL PRODUCER MAGAZINE

www.kinematica-inc.com

877-246-2428 customerservice@chatasolutions.com

CHATA Biosystems

FWS Technologies 204-487-2500

www.agraind.com

KINEMATICA, INC. 631-750-6653

www.icminc.com

Carbis, Inc. 800-845-2387

Agra Industries, Inc. 715-536-9584

www.agraind.com

ICM, Inc. 877-456-8588

www.crowniron.com

www.icminc.com

Agra Industries, Inc. 715-536-9584

Sartorius Mechatronies-Omnimark 800-835-3211 www.sartorius-omnimark.com

SGS North America Inc. 281-479-7170 www.sgs.com/alternativefuels

Crown Iron Works 651-639-8900

ICM, Inc. 877-456-8588

Millwright

Moisture Analyzers

Laboratory-Equipment

Laboratory-Supplies

ATEC Steel 620-856-3488

CPM/Roskamp Champion 800-366-2563 www.cpmroskamp.com

Mixers

Insulator

Laboratory-Outsourcing

ETS Laboratories 707-963-4806

Buhler Inc. 763-847-9900

www.mapcon.com

www.icminc.com

Emission Monitoring Systems

Fluid Engineering 814-453-5014

www.icminc.com

ISCO Industries 800-345-4726 Robert-James Sales, Inc. 800-666-0088

www.isco-pipe.com www.rjsales.com

Pipe-Fittings Robert-James Sales, Inc. 800-666-0088

www.rjsales.com 101

EPM MARKETPLACE Pipe-Flanges

Structural Fabrication

Robert-James Sales, Inc. 800-666-0088

www.rjsales.com

Pressure & Temperature

www.agraind.com

Tanks

WIKA Instrument Corporation 888-945-2872, x5127

www.wika.com

ATEC Steel 620-856-3488

www.atecsteel.com

Agra Industries, Inc. 715-536-9584

Pressure Vessels WINBCO Tank Company 641-683-1855

www.winbco.com

Process Control Harris Group Inc. 206-494-9422

Agra Industries, Inc. 715-536-9584

Used Equipment

Brown Tank LLC 651-747-0100

www.agraind.com www.browntank-mn.com

CMC Letco Industries 417-831-1528 www.harrisgroup.com

VFTechnical Services, LLC 423-794-6747 www.vftechserv.com

Pumps ITT Industries Goulds Pumps 315-568-2811 www.gouldspumps.com Valley Equipment Co. Inc. 423-753-3541 www.valleyequipment.com

www.cmc-letco.com

Federal Equipment Company 800-652-2466 www.fedequip.com Paragon Trailer Sales 800-471-8769

www.paragontrailer.com

WINBCO Tank Company 641-683-1855

www.winbco.com

Thermal Oxidizers

Watson-Marlow Bredel Pumps 800-282-8823 www.watson-marlow.com

QA Test Products Perten Instruments, Inc. 801-936-8165

www.perten.com

Resource Recovery Eco-Tec, Inc. 905-427-0077

www.eco-tec.com

Seals Aesseal Inc. 865-531-0192 Utex Industries, Inc. 432-333-4151/800-873-0946

PROVEN RELIABILITY for VOC, CO & PM ABATEMENT EISENMANN Corporation Crystal Lake, Illinois

www.aesseal.com

815.455.4100 es.info@eisenmann.com

www.utexind.com

www.nasvi.com

Wastewater Treatment Services Biothane Corporation 856-541-3500x501

www.biothane.com www.hydro-klean.com www.icminc.com

www.fluideng.com

Water Treatment Aquatech International Corporation 724-746-5300 www.aquatech.com

Size Reduction-Shredders

Fluid Engineering 814-453-5014

DuraTech Industries / Haybuster 701-252-4601 www.haybuster.com Pro-Environmental, Inc. 909-989-3010

Storage-DDGS

102

www.checkall.com

North American Safety Valve 800-800-8882

ICM, Inc. 877-456-8588

Puritan Magnetics, Inc. 248-628-3808 www.puritanmagnetics.com

Laidig Systems, Inc. 574-256-0204

Check-All Valve Mfg. Co. 515-224-2301

Hydro-Klean, Inc. 515-283-0500

Separation Equipment Fluid Engineering 814-453-5014

Valves

www.fluideng.com

Reach your customers www.pro-env.com Your Solution. Advertise Today.

www.laidig.com

EPM MARKETPLACE ETHANOL PRODUCER MAGAZINE

May 2009

EPM MARKETPLACE Ethanol Production

Fuel Ethanol

Existing Producers

Atlas Renewable Energy, LLC 800-884-8290 www.atlasenergyllc.com

Louis Dreyfus Commodities 402-844-2680 LDCommodities.com POET LLC 605-965-2200

www.poetenergy.com

Gavilon 402-595-5678

www.gavilon.com

Miscellaneous Nelson Ink Promotional Products 218-222-3831 www.nelsonink.com

Finance Accounting Christianson & Associates PLLP 320-235-5937 www.christiansoncpa.com Eide Bailly LLC 605-977-2703

www.eidebailly.com

Kennedy and Coe, LLC 800-303-3241

www.kcoe.com

Transportation Marine Evolution Markets, Inc. 914-323-0259

Railcar Moving

Appraisals

Shuttlewagon, Inc. 816-767-0300

Natwick Associates Appraisal Services 800-279-4757 www.natwick.com

Railcar Parts

Due Diligence

Salco Products, Inc. 630-783-2570

Harris Group Inc. 206-494-9422

www.harrisgroup.com

ERS Rail Transload 205-322-8312

Kent Group, Inc. 715-358-7528

Utilities

www.salcoproducts.com

www.BiomassMagazine.com www.ersrail.net

Utility

Risk Management First Capitol Risk Management 800-884-8290 www.firstcapitolrm.com R.J. Oâ&#x20AC;&#x2122;Brien 800-621-0757

www.shuttlewagon.com

Terminals & DSP

Mergers & Acquisitions www.kentgroupinc.com

www.evomarkets.com

Biomass Magazine is a trade journal serving companies that use and/or produce power, fuels and chemical feedstocks derived from biomass. Collectively, these biomass utilization industries are positioned to replace nearly every product made from fossil fuels with those derived from plant or waste material. The publication covers a wide array of issues on the leading edge of biomass utilization technologies, from biorefining, dedicated energy crops and cellulosic ethanol to decentralized power, anaerobic digestion and gasification. Itâ&#x20AC;&#x2122;s all here.

www.rjobrien.com

Integrys Energy Services 608-235-2547 www.integrysenergy.com

EPM MARKETPLACE

Software-Accounting Encore Business Solutions 204-989-4330 www.encorebusiness.com

With all contact information placed in one convenient location, Ethanol

Legal Services

Producer Magazine not only con-

Attorneys

tains top editorial content but also

BrownWinick Law Firm 515-242-2400 www.biofuellawyers.com

a useful directory in each publica-

Faegre & Benson, LLP 612-766-6930 Stoel Rives LLP 612-373-8800

tion. Whether a first-time adverwww.faegre.com www.stoel.com/biofuels

of your business or a frequent dis-

For additional information please contact us at (701) 746-8385 or at advertising@biomassmagazine.com.

play advertiser looking for added

Marketing

exposure, EPM Marketplace is the

Distillers Grains CGB Feed Ingredients 985-867-3554

tiser wanting to raise awareness

perfect solution. www.cgb.com

ETHANOL PRODUCER MAGAZINE

May 2009

103

We pay close attention to an impor tant area in this industr y…

your bottom line.

MARKETING RISK MANAGEMENT PROCUREMENT LOGISTICAL MANAGEMENT T R A N S P O R TAT I O N & S T O R A G E

w w w. G a v i l o n . c o m

402.889.4069

Concept

Construction Why hire a project coordinator when you can hire a team of experts to develop your ethanol or biodiesel project? Let BBI guide you down the project development path: Feasibility study

Develop feedstock and risk management plans

Organize your business

Develop a project financing strategy

Develop the business plan

Develop prospectus and offering documents

Select the right design/builder for your project

Conduct an equity drive

Select the best site

Secure project debt financing

Negotiate utility and product offtake agreements

Financial close and begin construction!

BBI International Engineering & Consulting 300 Union Blvd, Suite 325 Lakewood, CO 80228, (303) 526-5655 30 Duke St.W., Suite 701, Kitchener, Ontario N2H 3W5 CANADA, (519) 576-4500

Robert-James Sales is your #1 source

for stainless PIPE, FITTINGS and FLANGES up to 36" in Sch 5, 10 and 40. We also carry 2205 duplex through 24".

www.rjsales.com Buffalo, NY Cleveland, OH Cincinnati, OH Chicago, IL Cranbury, NJ

800-666-0088 800-777-0820 800-777-2260 800-777-2008 800-777-1858

Indianapolis, IN Minneapolis, MN Raleigh, NC Tavernier, FL

800-777-0510 800-777-1355 866-493-8834 305-852-1694

Free Product CD Contact the Robert-James Sales location nearest you and ask for a free copy of our comprehensive, up-to-date CD. It outlines our stainless product line including reference charts, graphs and tables to help you calculate what your processing plant needs.

poet.com

DISTILLERS GRAINS. BY MILAN HRUBY Contribution

Enzyme Technology Boosts DDGS Performance Enzymes can be used to overcome the nutritional challenges of distillers dried grains with solubles for use in swine and poultry diets.

he use of distillers dried grains with solubles (DDGS) in animal feed has increased with the growth of the bioethanol industry. Corn DDGS are a potential good source of protein, vitamins and minerals as they contain about three times more nonstarch nutrients than corn. Swine and poultry producers looking to reduce feed costs can consider using feed ingredients, such as DDGS, to stay ahead of tightening economic pressures. Howev-

Broiler producers looking for lower feed costs with DDGS supplemented with enzymes can save about $12 per metric ton, without risking bird performance.

er, whilst DDGS is potentially a cost effective and valuable feed ingredient, there are certain antinutritional factors which limit its use in swine and poultry feed.

The Nutritional Challenge While corn DDGS are a potential good source of protein, vitamins and minerals, they are also highly fibrous (see table 1 on page 93). Insoluble fibers

contained in DDGS hold water creating more bulk in the animalâ&#x20AC;&#x2122;s gut, which can reduce feed Milan Hruby, intake and regional technical subsequent services manager, g r o w t h . Danisco Animal These fibers Nutrition also bind water-soluble nutrients and enclose them, so they are less available for digestion.

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).

ETHANOL PRODUCER MAGAZINE

May 2009

Table 1: Typical Nutrient Composition of Corn and Corn DDGS Content (%, dry matter) Dry matter

Corn DDGS1

Corn Grain 88.0

90.8

Crude protein

9.7

31.2

Starch + sugar

70.9

< 10.0

Fat

4.4

11.7

Crude fiber

2.4

7.6

Neutral Detergent Fiber-NDF

9.0

Acid Detergent Fiber-ADF

3.4

Total Non-starch Polysaccharides-tNSP

8.5

21.5

Total Arabinoxylan

5.3

Arabinoxylan/tNSP (%)

Ash

1.7

6.3

Based on samples from the Danisco Animal Nutrition database n.b. 95 percent of NSP and arabinoxylans are insoluble in corn DDGS.

Table 2: Enzyme Technology Significantly Improves DDGS Digestibility Standard diet

Standard diet + Phytase & xylanase

% Improvement

Digestible energy (kcal/kg)

3102a

3277b

5.6

Dry matter digestibility (%)

79.8a

83.8b

5.0

Phosphorus digestibility (%)

21.6a

50.7b

134

Ileal protein digestibility (%)

67.9

73.5b

8.2

Lysine digestibility (%)

73.4

77.4

5.4

Methionine digestibility (%)

80.8a

83.8b

3.7

Threonine digestibility (%)

63.3a

68.3b

7.9

Arabinose digestibility (%)1

55.0a

62.9b

14.4

Xylose digestibility (%)1

28.2a

41.6b

47.5

P<0.05; 1 Faecal digestibility Reference: University of Illinois

ETHANOL PRODUCER MAGAZINE

May 2009

DDGS typically contain 0.38 percent to 1.53 percent phytate. Phytate is the principal storage form of phosphorus in many feed ingredients of plant origin. Most of the phosphorus contained within phytate is in a form which cannot be readily digested by swine and poultry. In addition, phytate binds nutrients such as calcium, energy and amino acids. These bound nutrients are resistant to digestion and unavailable to the animal. Consistency can also be a big problem as the nutrient composition of DDGS can vary from batch to batch and plant to plant. Flowability of the product can also be a challenge during storage in the feedmill. The Enzyme Solution Enzymes are widely used in swine and poultry feed today. However, their use in overcoming the nutritional challenges associated with feeding DDGS is relatively new. Broiler producers looking for lower feed costs with DDGS supplemented with enzymes can save about $12 per metric ton, without risking bird performance, according to the latest research from Danisco Animal Nutrition. Two trials conducted by Auburn University and Purdue University showed that adding both a new-generation phytase (Phyzyme XP) together with xylanase, amylase and protease enzymes (Avizyme 1502) to corn soy broiler diets containing 10 percent corn DDGS, improved bodyweight gain and feed efficiency. Bodyweight gain was improved by 5 percent to 8 percent and feed conversion improved by up to 11 points (6 percent). In the trial conducted by

WE KNOW CELLULOSE TO ETHANOL

With over 40 years of combined “handson” experience in conversion of lignocellulosic biomass to ethanol at the National Renewable Energy Laboratory, BBI is your best resource for cellulosic project evaluation and development. Our experts understand the critical technical and economic issues related to feedstock collection and storage, biological and thermo-chemical conversion technologies and downstream processing. Our direct experience includes the design and engineering of concentrated acid hydrolysis, dilute acid pretreatment, enzymatic hydrolysis, and fermentation processes for converting a broad range of feedstocks to ethanol. Whether it’s a feasibility study, feedstock assessment, due diligence, process design or complete project development, BBI is the definitive source of answers for your cellulose-to-ethanol questions.

BBI International Engineering & Consulting

DISTILLERS GRAINS.

Figure 1: Enzyme Technology Boosts Performance of Diets Containing Corn and Corn DDGS The DDGS challenge

The enzyme solution

Animal production industry benefit

A highly fibrous feed ingredient. Fiber binds and encloses nutrients.

Not all starch contained in corn/DDGS-based feed is digested by the bird

The quality of protein in corn/DDGS-based feed is highly variable

Corn/DDGS-based feed contains phytate- bound phosphorus, calcium, energy and protein

Nutrient availability is highly variable.

Xylanase breaks down fiber

Amylase improves starch digestibility

Protease improves dietary protein digestibility

Phytase is highly effective at breaking down phytate

Xylanase, amylase, protease & phytase reduce ingredient varability

Auburn University, the enzyme combination was also added to a lower-cost diet reduced in energy by 80 kilocalories per kilogram (kcals/kg) feed and containing 0.1 percent lower available phosphorus and lower calcium. At 56 days of age, broiler live-weight gain was significantly better (8 percent) and feed conversion numerically improved (4 points) compared with broilers fed a standard corn soy diet containing 10 percent corn DDGS. A trial conducted by the University of Illinois showed that adding both the newgeneration phytase together with a highly effective xylanase (Porzyme 9300) to a corn-soy swine diet containing 20 percent corn DDGS, significantly improved digestible energy by 5.6 percent (175 kcal/kg), ileal amino acid digestibility by about 4.5 percent and increased phosphorus digestibility from 22 percent to 51 percent (see table 2 on page 93).

Improved feed efficiency from increased nutrient digestibility

Improved feed efficiency from increased energy digestibility

Improved feed efficiency from improved protein digestibility

Improved feed efficiency from increased nutrient digestibility and savings in inorganic phosphorus

More uniform bird growth and feed efficiency

The enzyme combinations help breakdown some of the anti-nutrients in diets containing corn and corn DDGS (see figure 1 above). With feed prices so high, now, more than ever, swine and poultry producers need to exploit technologies available to them to maximize margins. Using enzyme technology, swine and poultry producers have the opportunity to reformulate diets with lower energy, phosphorus and calcium levels and to include some DDGS in their formulations to further reduce feed costs. For example, in the trial conducted at Auburn University, gross feed cost savings of more than $12 per metric ton were achieved. EP Milan Hruby, who has an MSc and Ph.D. from the University of Minnesota, is Danisco Animal Nutrition’s regional technical services manager for Canada and the U.S.

300 Union Blvd., Suite 325 Lakewood, CO 80228 Phone: 303-526-5655 www.bbiinternational.com

ETHANOL PRODUCER MAGAZINE

May 2009

EVENTS CALENDAR The Second Annual Biofuels Summit May 25-27, 2009 Marina Mandarin Singapore This summit will showcase policies and successful strategies used by organizations to make profitable investment decisions in the biofuels sector. Topics will include worldwide trends and developments, second-generation biofuels, financing, troubleshooting and more. +65 6297 8545 www.biofuelssummit.com

Waste-to-Fuels Conference & Trade Show May 17-19, 2009

World Biofuels 2009 May 27-29, 2009

Hyatt Regency Mission Bay San Diego This event will inform the public and private sectors of the economic and environmental benefits of converting waste materials to alternative fuels such as ethanol. Agenda topics will address the conversion of biomass, municipal solid waste and agricultural waste to fuel. Attendees will also have a chance to preview the newest advances in alternative fuel production, products and services.

Focus-Abengoa Foundation Seville, Spain This eighth annual event, hosted by F.O. Licht, will analyze the global ethanol and biodiesel industries. Attendees will be able to network with leaders from the worldâ&#x20AC;&#x2122;s main markets and assess the future of the biofuels industry. Reports will address the restructuring of the U.S. ethanol market, the balance between sugar and ethanol production in Brazil, and ethanol supply and demand in Europe.

(800) 441-7949 www.waste-to-fuels.org

+44 (0)207 017 7499 www.agra-net.com

Colorado Convention Center Denver Registration is open for this 25th annual event, which will also include the Advanced Biofuels Workshop and International Distillers Grains Conference & Trade Show. As a whole, the conference will once again offer business development and networking opportunities, one of the largest industry expos and an industry-leading educational forum. (701) 746-8385 www.2009few.com

June

May

Biofuels International Expo & Conference May 27-28, 2009

R-energy: International Expo for Renewable Energy June 10-12, 2009

Beurs van Berlage Amsterdam, Netherlands This eventâ&#x20AC;&#x2122;s aim is to bring together biofuels producers, investors, regulators, project owners and service providers to advance the European market. Topics will include changing regulations, future growth and outlook trends, emerging feedstocks, second-generation technology and production methods, and more.

Golden Center Buenos Aires, Argentina This event will address various renewable energy sectors, including wind, hydro, solar, geothermal and biomass power. The first day will focus mostly on wind and solar as it pertains to Argentina, legislation, grants, market needs and investments. The next two days will be the fourth annual Sustainable Biofuel Summit. This portion of the event will expand the exploration of biofuels throughout South America, including investment opportunities, capital and funding, first- and second-generation biofuels and various technologies. The overall event will also feature an exhibit space.

+44 (0)20 8648 7078 www.biofuelsinternationalexpo.com

International Fuel Ethanol Workshop & Expo June 15-18, 2009

Biofuels Financial Conference June 24-25, 2009 Minneapolis Registration is open for this fifth annual conference, which will address commodity risk management, leadership best practices, business analyses, and technical and industry updates. Speakers will take a look at events that occurred over the past year to project what the future holds for ethanol. In particular, the correlation between corn, ethanol and petroleum throughout 2008 will be discussed to determine how plants can manage the correlation to their advantage. Other topics will cover financial models for plants and how leadership roles should be defined within a plant. (888) 852-5937 www.christiansoncpa.com/biofuelsconference.cfm

+49 521 96533-90 http://argentina.r-energy.info/en/index.html

ETHANOL PRODUCER MAGAZINE

May 2009

Biofuels Markets Asia & Jatropha Executive Briefing June 29-July 1, 2009 Millennium Hotel Jakarta, Indonesia This GreenPower conference will provide a platform for learning about the latest trends, as well as regional and international developments, in the biofuels market. Key players in the biofuels industry will speak about ethanol, biodiesel, next-generation biofuels and jatropha. Ethanol sessions will address the production and distribution of conventional and cellulosic ethanol. Topics will include policies, refining and blending, and downstream logistics and the transport sector.

Ethanol Conference & Trade Show Aug. 11-13, 2009 Milwaukee The American Coalition for Ethanol’s 22nd annual conference will highlight public policy, technology and education in regard to the ethanol industry, among many other topics. A more detailed agenda will be available as the event approaches. (605) 334-3381 www.ethanol.org

+44 (0)207 099 0600 www.greenpowerconferences.com/ biofuelsmarkets/biofuelsmarkets_asia09.html

July

Aug

World Congress on Industrial Biotechnology & Bioprocessing July 19-22, 2009 Palais des Congrès de Montréal Montreal This sixth annual event will bring together individuals with diverse experience to share their knowledge to speed the development and growth of a sector that is vital for value creation and sustainable industrial development. It will foster the exchange of ideas, provide “real world” scenarios, present an overview of the latest technological developments and offer unparalleled networking opportunities. The meeting will focus on relevant topics in the field of industrial biotechnology, including advanced biofuels, feedstock collection, ethanol and cellulosic ethanol.

Sept

2009 Farm to Fuel Summit July 29-31, 2009

The Alcohol School Sept. 13-18, 2009

Rosen Shingle Creek Orlando, Fla. This event will be a place for stakeholders to assemble to advance the development of Florida’s bioenergy industry. It promotes the production, distribution and use of renewable fuels, particularly ethanol. This year, international, national and state speakers will address the research, production, and distribution of biofuels and bioenergy.

Montreal, Quebec This week-long course will educate fuel-ethanol and distilled beverage producers in the science of alcohol production. The program will cover the ethanol production process from milling and mash preparation through fermentation and distillation. Enzyme usage, yeast biology, and bacterial contamination and control will also be discussed, along with other issues currently affecting both industries. Registration is limited, with preference given to fuel-ethanol and distilled beverage producers.

(850)488-0646 www.floridafarmtofuel.com/summit_2009.htm

(800) 583-6484 www.ethanoltech.com

(202) 962-6630 www.bio.org/worldcongress

ETHANOL PRODUCER MAGAZINE

May 2009