November 2014 Ethanol Producer Magazine

INSIDE: KNOWLEDGE HELPS AVOID AIR PERMIT MISSTEPS NOVEMBER 2014

Proactive Maintenance Beyond Fix It, Get It Done

Page 28

And

Big Goals at a Small Legacy Plant

Page 34

Regular Cleaning Curbs Unscheduled Shutdowns

Page 40

www.EthanolProducer.com

OUR OWN KIND OF SUPER HEROS. Congratulations to our friends at POET-DSM as they commence operations on their first commercial-scale, cellulosic ethanol plant.

Together we’re making progress towards the next generation of sustainable, renewable fuels.

Learn more at GrowthEnergy.org

services, to continue innovating in the field of first and second generation ethanol and to exceed the industries expectations. Based on our expertise in genetics, scaling up, fermentation, yeast production and through technical support we will be focused on turning science into industrial reality.

www.leaftechnologies.com

Graphic design www.marierio.fr

After a decade of presence within the industry through Fermentis, Lesaffre is proud to launch Leaf Technologies a business unit dedicated to serve the fuel ethanol and bio based chemicals producers. With Leaf Technologies we are starting a new path in our development with the will to offer our partners more specialized products and

CONTENTS

NOVEMBER 2014

VOLUME 20 ISSUE 11

DEPARTMENTS 6

EDITOR'S NOTE

7

AD INDEX

10

THE WAY I SEE IT

FEATURES

Prevention Meets Innovation

By Tom Bryan

Every Family Needs a Farmer

By Mike Bryan

11

EVENTS CALENDAR

28

34

12

VIEW FROM THE HILL

MAINTENANCE

PROFILE

DRIVE

Postponing equipment upkeep is more costly in the long run

By Holly Jessen

New company aims to cut plant’s energy load by one-third and go off-grid

By Susanne Retka Schill

14

16

18

Food vs Fuel: Enough To Make You Scream

By Bob Dinneen Get Out the Vote For Ethanol

By Tom Buis

CONTRIBUTION

More than Btus, Bushels and Facts

By Bryan Jennings

GLOBAL SCENE

Canadian Ethanol, 30 Years Green

By W. Scott Thurlow

BUSINESS BRIEFS

22

COMMODITIES

24

DISTILLED

50

TALKING POINT

54

Reinvention With LESS Innovation

GRASSROOTS VOICE

20

52

3 P’s of Maintenance

Waste Not, Want Not: Turning Crop Residues Into Sustainable Fuel

By Manuel Sánchez Ortegar

40

46

CLEANING

Avoiding Maintenance Migraines Regularly scheduled plant cleaning staves off unplanned shutdowns

By Katie Fletcher ON THE COVER

CONTROLS

Accurate VOC, HAP Measurement Critical For Permit Compliance

Producers need to understand measurement and reporting regulations

By Dan Despen

BUSINESS MATTERS

Is it Time to Establish a Deferred Compensation Plan?

By Joe Leo

MARKETPLACE Ethanol Producer Magazine: (USPS No. 023-974) November2014, Vol. 20, Issue 11. Ethanol Producer Magazine is published monthly by BBI International. Principal Office: 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. Periodicals Postage Paid at Grand Forks, North Dakota and additional mailing offices. POSTMASTER: Send address changes to Ethanol Producer Magazine/Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, North Dakota 58203.

PHOTO: SAIT SERKAN GURBUZ

4 | Ethanol Producer Magazine | NOVEMBER 2014

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EDITOR'S NOTE

Prevention Meets Innovation There are several forms of maintenance, each generally falling into one of two categories: the kind you do before a problem happens and the kind you afterward. We learn in our page-28 feature, “3 P’s

Tom Bryan

President & Editor in Chief tbryan@bbiinternational.com

of Maintenance,” that the latter is preventative maintenance and the former is corrective maintenance. Within the sphere of the first is predictive maintenance, which brings science and data into the profession. Predictive maintenance is all about forecasting future problems, and taking action to prevent or delay those problems from occurring.

This month, Ethanol Producer Magazine Managing Editor Holly Jessen reports that top practitioners of ethanol plant upkeep are creating maintenance cultures built around the belief that equipment failure is predictable and can, therefore, be anticipated and planned for. Another way to look at it is precision maintenance, which aims to achieve maximum plant reliability through best practices like matrix utilization and asset criticality assessments, Jessen reports.

In many ways, ethanol plant maintenance has a self-fulfilling effect. Plants with great maintenance run smoothly and safely. Plants that run smoothly and safely have maintenance teams with more time, money and confidence to do things right. The opposite is probably true of poorly maintained facilities. Maintenance takes discipline, of course, and that’s clear in our page-40 feature “Avoiding Maintenance Migraines,” by EPM Staff Writer Katie Fletcher. The headache producers are trying not to experience, Fletcher reports, is unplanned downtime or emergency shutdowns resulting from deferred plant cleaning. Scheduled plant cleanings are one of the most fundamental forms of preventative maintenance, and these annual or semi-annual scrub downs are marked on service provider calendars up to 10 months out. From hydroblasting and dry-ice blasting to vacuum services and clean-in-place applications, producers book cleaning contractors early and rely on them heavily.

Also, this month, we look at how a relatively small Minnesota ethanol plant may position itself as a showcase of production efficiency after installing a system that cut its energy load by a third. EPM Senior Editor Susanne Retka Schill visited Buffalo Lake Advanced Biofuels LLC in mid-September. She got an up-close look at how the recently refurbished facility is commercially demonstrating an innovative low-energy solids separation technology. As Retka Schill reports in “Reinventing With LESS Innovation,” on page 34, Buffalo Lake is not only separating syrup solids from its thin stillage, but eliminating centrifugation and evaporation—and 13,000 pounds-per-hour of steam and more than 300 horsepower in pumps—in the process. The outcome is an estimated annual savings of $1.8 million per year, which should yield a four-month payback on the modest $600,000 cost of installation. It’s another original, must-read EPM story.

FOR INDUSTRY NEWS: WWW.ETHANOLPRODUCER.COM OR FOLLOW US: 6 | Ethanol Producer Magazine | NOVEMBER 2014

TWITTER.COM/ETHANOLMAGAZINE

VOLUME 20 ISSUE 11

EDITORIAL

PUBLISHING

President & Editor in Chief Tom Bryan tbryan@bbiinternational.com

Chairman Mike Bryan mbryan@bbiinternational.com

Vice President of Content & Executive Editor Tim Portz tportz@bbiinternational.com

CEO Joe Bryan jbryan@bbiinternational.com

Managing Editor Holly Jessen hjessen@bbiinternational.com

SALES Vice President of Operations Matthew Spoor mspoor@bbiinternational.com

Senior Editior Susanne Retka Schill sretkaschill@bbiinternational. com News Editor Erin Voegele evoegele@bbiinternational.com

Business Development Director Howard Brockhouse hbrockhouse@bbiinternational. com

Staff Writer Katie Fletcher ketcher@bbiinternational.com

Senior Account Manager Chip Shereck cshereck@bbiinternational.com

Copy Editor Jan Tellmann jtellmann@bbiinternational.com

Marketing Director John Nelson jnelson@bbiinternational.com

ART

Circulation Manager Jessica Beaudry jbeaudry@bbiinternational.com

Art Director Jaci Satterlund jsatterlund@bbiinternational.com

Traffic & Marketing Coordinator Marla DeFoe mdefoe@bbiinternational.com

Graphic Designer Raquel Boushee rboushee@bbiinternational.com

ADVERTISER INDEX 2015 International Fuel Ethanol Workshop & Expo 2015 National Ethanol Converence BetaTec Hop Products Buckman Cereal Process Technologies Croda, Inc. DuPont Industrial Biosciences Fagen Inc. Ferm Solutions Inc. Fluid Quip Process Technologies, LLC Growth Energy Hydro-Klean LLC ICM, Inc. J.C. Ramsdell Enviro Services, Inc. Kennedy and Coe, LLC Lallemand Biofuels & Distilled Spirits

56 9 17 25 45 53 19 8 30 49 2 24 11 32 38 15

Leaf Technologies Mason Manufacturing, LLC Methes Energies MoleMaster Services Corporation Nalco, an Ecolab Company North American Industrial Services POET-DSM Advanced Biofuels Premium Plant Services, Inc. Renewable Fuels Association Seneca Companies Solenis LLC Syngenta: Enogen Tower Performance, Inc. Vecoplan LLC Vogelbusch USA, Inc

3 42 26 48 44 21 55 33 33 27 5 13 39 20 36

Customer Service Please call 1-866-746-8385 or email us at service@bbiinternational.com. Subscriptions to Ethanol Producer Magazine are free of charge to everyone with the exception of a shipping and handling charge of $49.95 for anyone outside the United States. To subscribe, visit www.EthanolProducer.com or you can send your mailing address and payment (checks made out to BBI International) to: Ethanol Producer Magazine Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. You can also fax a subscription form to 701-746-5367. Back Issues, Reprints and Permissions Select back issues are available for $3.95 each, plus shipping. Article reprints are also available for a fee. For more information, contact us at 866-746-8385 or service@bbiinternational.com. Advertising Ethanol Producer Magazine provides a specific topic delivered to a highly targeted audience. We are committed to editorial excellence and high-quality print production. To find out more about Ethanol Producer Magazine advertising opportunities, please contact us at 866-746-8385 or service@bbiinternational.com. Letters to the Editor We welcome letters to the editor. Send to Ethanol Producer Magazine Letters to the Editor, 308 2nd Ave. N., Suite 304, Grand Forks, ND 58203 or email to hjessen@bbiinternational.com. Please include your name, address and phone number. Letters may be edited for clarity and/or space.

Please recycle this magazine and remove inserts or samples before recycling TM

COPYRIGHT Š 2014 by BBI International

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THE WAY I SEE IT

Every Family Needs a Farmer

By Mike Bryan

Be honest. When you think of agriculture, the images that come to mind for most of us are of small farms dotting the country roads, with red barns, cows grazing in the pasture, the smell of new-mown hay and harvest time. While that image

does repeat itself in many parts of the country, farming goes way beyond red barns and new-mown hay.

Webster defines agriculture as: “The science, art, or practice of cultivating the soil, producing crops, and raising livestock.” But there are many other forms of farming that belong under a broader definition of agriculture. Examples include apiculture, keeping bees to produce honey, aquaculture, cultivating aquatic organisms such as fish and shellfish, viticulture, growing grapes, tree farming, and more. The point here is that what we think of as “agriculture” is just the tip of the iceberg in terms of all the various other forms of food and biomass production that go largely unnoticed.

From an ethanol industry perspective, we think of agriculture as those that provide either starch or biomass for ethanol production.

But there are thousands of other products that come from the farm. Paper, plastics, oils, fuels, electricity, wood, rubber, livestock feed, human food and a host of other products are either produced by farms or derived from the feedstock farms provide. In other words, farms of all types fuel enormous global economic growth.

When it comes to political clout, farmers have that as well.

Politicians in all parts of the world understand the importance of

farms, no matter what the type. Added together, farming generates over $1.4 trillion dollars in America alone, every year. It’s little wonder farmers have the ability to change the political landscape.

My timing for this article is a bit off, since March is National Agriculture Month. But having been involved in agriculture in one way or another for the past 30 years, my admiration for the risk, the work and the ingenuity of farmers of all types in all parts of the world is boundless. It’s an incredible industry that contributes so much to the world and that is taken for granted by most.

In the ethanol industry, we tend to have a pretty narrow view of agriculture, in that it provides us with feedstock. We get frustrated by some segments of agriculture who oppose ethanol, often without really understanding the drivers and economic impact that various externalities have on their particular farming sector. It’s said that “when a butterfly flaps it wings in one part of the world it can cause a hurricane in another part of the world.” The same has to be true in agriculture. When one segment changes its outputs, markets or strategy, the ripple effect it causes can be felt globally.

We need to be mindful of that and try harder to understand the affect, both positive and negative, we are having on other farming sectors. Our goal should be to not only grow our industry, but to support with all our ability farming in general. Because, as the Australian saying goes, every family needs a farmer.

That’s the way I see it!

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

10 | Ethanol Producer Magazine | NOVEMBER 2014

EVENTS CALENDAR National Ethanol Conference February 18-20, 2015 Gaylord Texan Resort & Convention Center Grapevine, Texas The NEC provides attendees with timely information on critical regulatory, marketing and policy issues facing the ethanol industry. Experts will speak to the current market situation, and address how we as an industry can continue to grow through innovation, new technologies and feedstocks, and by developing more diverse and global markets.

202-289-3835 | www.nationalethanolconference.com

International Biomass Conference & Expo April 20-22, 2015 Minneapolis Convention Center, Minneapolis, Minnesota Organized by BBI International and produced by Biomass Magazine, this event brings current and future producers of bioenergy and biobased products together with waste generators, energy crop growers, municipal leaders, utility executives, technology providers, equipment manufacturers, project developers, investors and policy makers. It’s a true one-stop shop—the world’s premier educational and networking junction for all biomass industries.

866-746-8385 | www.biomassconference.com

International Fuel Ethanol Workshop & Expo June 1-4, 2015 Minneapolis Convention Center, Minneapolis, Minnesota The FEW provides the global ethanol industry with cutting-edge content and unparalleled networking opportunities in a dynamic business-to-business environment. The FEW is the largest, longest running ethanol conference in the world—and the only event powered by Ethanol Producer Magazine.

866-746-8385 | www.fuelethanolworkshop.com

National Advanced Biofuels Conference & Expo October 26-28, 2015 Century Link Center Omaha Omaha, Nebraska Produced by BBI International, this national event will feature the world of advanced biofuels and biobased chemicals—technology scale-up, project finance, policy, national markets and more—with a core focus on the industrial, petroleum and agribusiness alliances defining the national advanced biofuels industry.

866-746-8385 | www.advancedbiofuelsconference.com

John M Research & Development St. Joseph, MO

Possibilities

. . . that’s where we put our energy.

Taking an idea from concept to full implementation is not always easy without the proper resources. That’s why John and the rest of our research and development team can help you bring your concept to reality. From our state-of-the-art research and pilot facility, we are able to work with you to build new possibilities. That’s where we put our energy.

VIEW FROM THE HILL

Food vs Fuel: Enough To Make You Scream

By Bob Dinneen

Each fall, the Dinneen family approaches the annual pumpkin carving ritual with much enthusiasm. We don’t do typical jack-o-lanterns—that’s too

ordinary. No, we prefer to make works of art, adding our own personal touch. For the past several years, one of my pumpkins has been a take on the Norwegian artist Edvard Munch’s “The Scream.” It’s oddly therapeutic as I think about the attacks on our industry and the willingness of the media to parrot even the most absurd argument. None more so than the food vs. fuel canard.

Food vs. fuel Malthusians are so quick to grab their megaphones and scream to high heaven that rising corn prices mean rising food prices. They blame any corn price increase on ethanol production.

Of course, this argument is complete and utter malarkey.

So, what happens then when corn prices fall?

The Renewable Fuels Association recently compiled a report that examined the nonexistent relationship between corn prices and retail food prices for dairy, poultry and eggs, pork and beef and found that “fluctuations in corn prices do not significantly affect consumer food prices.” We also concluded that there is “no relationship between corn demand for ethanol and retail food prices.”

The report revealed: • Retail prices for key dairy items like milk and cheese have been largely unresponsive to changes in corn prices. In fact, since January 2011, milk and cheese prices have been negatively correlated to corn prices, meaning retail milk and cheese prices have tended to move in the opposite direction of movements in corn prices.

• Retail prices for other items (like chicken legs, frozen whole turkey, fresh whole chicken) have risen steadily and smoothly since 2007. Wide swings in corn prices did not interrupt or affect the gradual trend toward higher prices for these items.

• Retail prices for pork products have not shown any meaningful relationship to corn prices over the past seven years. It

SOURCE: RFA, BASED ON USDA, BUREAU OF LABOR STATISTICS DATA

is well documented that the recent acceleration in pork and bacon prices has been driven by piglet casualties resulting from porcine epidemic diarrhea virus. These retail price increases have occurred at a time when corn prices have been plunging.

• Retail ground beef prices have steadily and smoothly trended higher over the past seven years, showing no obvious response to wide swings in corn prices.

Now that we have established that there is no correlation between corn prices and retail food prices, what is the major catalyst for food price swings? Petroleum. Nearly every step in the food-production process, including transportation from the farm to the grocery store, requires energy. Therefore, it isn’t a surprise that the United Nations Global Food Price Index and global crude oil prices are tightly linked. In fact, since 2000, the U.N. food index and world crude oil prices have had a near-perfect correlation (0.97 coefficient).

This fall, as you shop for Thanksgiving dinner or sit down with family and friends, tune out the food vs. fuel rhetoric spewing out of the megaphone. It’s enough to make you scream.

Author: Bob Dinneen President and CEO, Renewable Fuels Association 202-289-3835

12 | Ethanol Producer Magazine | NOVEMBER 2014

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1

DRIVE

Get Out the Vote for Ethanol

By Tom Buis

Ethanol supporters far outnumber Big Oil’s handful of advocates and on no day do those numbers matter more than on election day. The power

of grassroots engagement cannot be overstated. Through a large, coordinated effort, our industry can demonstrate to candidates seeking our votes how powerful the renewable fuel industry is and how many lives it impacts. These candidates should clearly see that we will defend our industry; including campaigning for support and actively working to ensure our opponents are defeated.

When was the last time you heard of the grassroots movement to support dirty oil refineries and excessive profits for a select few? I can’t remember one, because there has never been an effective grassroots movement for the narrow, profit-driven interests of Big Oil. Nov. 4 is just around the corner, which means that it is time to mobilize farmers, ethanol producers, investors, vendors, environmentalists and consumers to head to the polls and vote to elect or re-elect ethanol champions. With a strong enough voter turnout, we have the ability to choose leaders and representatives who will support our industry and loosen Big Oil’s stranglehold on the liquid fuels market. More support means more American jobs that will revitalize rural communities, more energy security and more choice and savings at the pump.

While our industry has champions on both sides of the aisle who are running for various positions across the country, we cannot simply rely on them to continue our fight. We must take the steps to educate and inform new candidates seeking office, while simultaneously advocating for our champions seeking reelection to reinforce just how important this issue is to Americans. If you don’t know where a candidate stands, ask them. Let them know that homegrown renewable fuels are a priority for you and your community. Let them know that your support depends on their pledge to protect biofuels and rural America.

Candidates need to understand what really is at stake. Ethanol creates jobs, approximately 400,000 direct and indirect jobs, in fact, and these jobs can’t be outsourced. They are American jobs that help strengthen our rural economy and have a tremendous ripple effect throughout the agribusiness sector.

14 | Ethanol Producer Magazine | NOVEMBER 2014

Furthermore, these candidates need to understand that ethanol is better for our environment. It has significantly fewer harmful emissions than gasoline and it is cleaning up the air we breathe. Not to mention, no beaches have ever been closed due to an ethanol spill!

As an industry, we also need to highlight the important role biofuels play in our national security. We are reducing our dependence on foreign oil and fossil fuels. Currently, we are spending nearly a billion dollars a day to import oil from some of the most unstable regions in the world. On top of that, no energy policy should put all of its eggs in one basket. To have true energy security, we must diversify and reduce our dependence on foreign oil, and ethanol does just that.

Finally, ethanol provides consumers a choice and savings at the pump. It is high time that consumers can choose a fuel that is based on price, performance and their individual needs, instead of Big Oil dictating what consumers can or cannot buy.

So, let’s make sure to get out the vote for biofuels supporters.

Encourage others to vote for our ethanol champions as well. Each vote matters and has very real consequences for your community and our nation. The ethanol industry supports American jobs that will never be outsourced, strengthens our economy, improves our environment, enhances our energy and national security all while providing consumers a choice at the pump. It’s an easy choice for America and it should be for those running for office.

Let’s hold these candidates accountable and make sure they know that your vote depends on their word to protect and defend America’s renewable fuels industry.

But it does not end there. Congress will return in November after the elections and we must be prepared to push back against any harmful legislation that could be offered in a lame-duck session. Therefore, we must continue our efforts to educate and inform all candidates and current officeholders and make them champions for the renewable fuels industry. Ethanol is a win win for America, and anyone in office or seeking office must recognize that.

Author: Tom Buis CEO, Growth Energy 202-545-4000 tbuis@growthenergy.org

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GRASSROOTS VOICE

More Than Btus, Bushels and Facts

By Brian Jennings

In 2014, the American Coalition for Ethanol launched a new and proactive digital campaign based upon the personal stories, authenticity, and persuasiveness of people who use or help make ethanol. Our campaign is simply entitled Power by People, so if

you’re on social media look for the hashtag #PowerByPeople or just click to our website.

Power by People prominently features Bruce Vollan, a fuel marketer who in the fall of 2008 was faced with the challenge to change his business or get out. So, he made the decision to switch over to blender pumps because they provided him an opportunity to offer new and affordable fuel choices to his customers. As Bruce says in one of our campaign videos, “When we will have you give people the choice, it is amazing, and every time they have a choice they prefer higher blends of ethanol. So for us, it resulted in a doubling of our business overnight.” Bruce simply set out to improve his business, but in doing so he did what Big Oil says can’t be done, he made the E10 blend wall irrelevant. Today ethanol comprises more than 20 percent of all his sales. His customers seem to prefer either E30 or E85, but what they really appreciate are the choices he provides.

Rather than first introducing himself to people as a farmer, ACE board president Ron Alverson often says he’s the “manager of a 2,500-acre solar collector which produces carbohydrates, protein, oil, livestock feed and ethanol.” In our campaign, Ron passionately testifies to the efforts of farmers to reduce tillage and improve the sustainability of their operations, which can help result in making premium low-carbon fuels. It is the advocacy and authenticity of farmers like Ron Alverson that will be needed to help us convince the U.S. EPA and Congress to look at corn ethanol in a fresh new way.

Quad County Corn Processors plant engineer Travis Brotherson is also part of our Power by People campaign. Knowing how important cellulosic ethanol is to decision makers in Washington,

we wanted to help Quad County promote the successful start-up of its bolt-on technology to convert corn kernel fiber into cellulosic biofuel. In one of our campaign videos you’ll hear Travis say “taking the job as engineer at Quad County Corn Processors was one of the best decisions of my life because it gave my wife and I an opportunity to stay in our home place.” Travis could have been living in sunny Florida helping NASA build rockets. What Quad County provided Travis and his wife, Kristi, were jobs in their home place and the freedom to innovate, take chances and make cellulosic ethanol history together.

Bruce, Ron and Travis are just some of the people in our campaign, and what they help us do is remind the public and policymakers that ethanol isn’t just about Btus and bushels or facts and figures. Ethanol is also about people, regular people who just so happen to care deeply about clean air, affordable fuel, and our economic well-being.

Soon, we’ll launch the second phase of our campaign.

We’re going to tell the truth about ethanol by shifting our focus from sterile performance characteristics of the molecule to the remarkable, inspiring stories of the people who are responsible for delivering such tremendous benefits to their communities and the entire nation. If you have an inspiring story to share, give us a ring.

As the grassroots voice of ethanol, ACE is uniquely positioned to do this and we feel it is our responsibility. ACE members represent the heart and soul, the sharpest minds of the industry, and come from various walks of life and have experiences that can help us convey that ethanol shouldn’t merely be valued by the barrels of foreign oil and the tons of greenhouse gas emissions it displaces, it should also be measured based on the human good it delivers.

The icing on the cake is that we don’t need to spend as much money as the oil companies. If we’re smarter, and we capitalize on our industry’s best kept secrets—the authenticity and compelling stories of grassroots ethanol advocates—which will gives us the home field advantage that Big Oil’s war chest cannot overcome.

Author: Brian Jennings Executive Vice President American Coalition for Ethanol 605-334-3381 bjennings@ethanol.org

16 | Ethanol Producer Magazine | NOVEMBER 2014

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GLOBAL SCENE

Canadian Ethanol, 30 Years Green

By W. Scott Thurlow

About 30 years ago, a group of determined— and let’s be frank—visionary corn farmers joined together to find a way to create new revenue and mitigate risk for their crops. The Ontario Corn Producers

Association established what is today’s Canadian Renewable Fuels Association, spurring a viable, domestic industry that has created more than $5 billion in economic activity and more than 14,000 jobs since 2007 while reducing greenhouse (GHG) gas emissions by over 4.2 million metric tons (equivalent to removing 1 million cars from the road) every year. Canada’s ethanol companies produce over 1.8 billion liters (475 million gallons) of fuel every year.

As much as our domestic ethanol industry has grown and changed, we are nowhere close to reaching the full potential of Canada’s renewable fuels technology, innovation or products.

For this reason, CRFA recently released a new vision and action plan, aptly titled “Evolution and Growth.” Our plan is designed to create a virtual cycle of investment for Canadian innovation in biofuels and the bioeconomy, and presents policy recommendations focused on three key priorities.

1. Becoming a clean energy superpower by investing in Canadian innovation and the bioeconomy.

Today’s ethanol plants are poised to become true biorefineries capable of using a wide range of feedstocks to create renewable fuels and sustainable products. Advanced biofuel technologies can convert agricultural waste, forestry residue and even municipal solid waste into cellulosic biofuels. This is already happening in Alberta, with the opening of the world’s first industrial scale waste-to-biofuels facility operated by Enerkem and the city of Edmonton. Around the world, strategic policy mechanisms and investment programs are already in place and Canadian policies must keep pace.

2. Growing market access and expanding the use of biofuels.

Canada’s renewable fuel standard requires a blend of 5 percent renewable content into the gasoline pool, but the reality is that we blend at a much higher level due to the octane value and lower price of ethanol. This overcompliance, representing more than 1 billion liters a year, is being driven by imports from the United States. Many of you

already know that Canada is introducing new regulatory requirements for transporting ethanol by rail. What many don’t realize is that these regulations stand to have a greater direct impact on American ethanol imports, making our work in negotiating fair requirements critical for ethanol producers and suppliers on both sides of the border.

There are also market access issues for consumers. Ethanol creates more choices and lower prices directly at the fuel pump, diversifying our fuel mix while delivering the environmental benefits many customers— and governments—are looking for. There are over 3.5 million vehicles on Canada’s roads that can take up to E85 but only five pumps that actually offer E85 to consumers. The unfortunate result is that Canadian consumers simply do not have access to any alternatives to petroleum products. New fuel infrastructure is needed, and in short order, if Canadian consumers are to have access to the lower-cost, cleaner ethanol fuel blends already available in the United States.

3. Incenting real environmental benefits with a fair market value for GHG emissions.

It’s no secret that renewable fuels burn cleaner than fossil fuels.

The Canadian government has committed to reducing our nation’s GHG emissions by 17 percent from 2005 levels by the year 2020. While biofuels are a keystone to reaching this commitment, governments should be looking beyond meeting obligations and focus on solving environmental problems. Putting a price on carbon, and then ensuring that companies have an obligation to reduce their carbon impact has been proven to work in many jurisdictions around the world. Be it a direct tax, a trading system or low-carbon fuel standard, putting a price on carbon and rewarding those who reduce the total amount of carbon emitted is the solution.

Next month, we will be gathering in Toronto, Ontario, for our Annual Canadian Bioeconomy Conference (formerly the Canadian Renewable Fuels Summit). We will be carrying forward our plan and, for the first time, expanding our program to include topics, speakers and information on the emerging bioeconomy.

I hope you can join us as we move from biofuels to bioeconomy.

After all, as those corn farmers proved in 1984, innovation may sometimes seem at the edge of possibility, but it is always at the heart of success.

Author: W. Scott Thurlow President Canadian Renewable Fuels Association 613-594-5528 s.thurlow@greenfuels.org

18 | Ethanol Producer Magazine | NOVEMBER 2014

% w/v in hours Why compromise on yield?

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TOTAL PERFORMANCE SYSTEM Your plant is unique, your enzyme solution should be also.

Find out how you can maximize the performance of your plant with the Total Performance System by contacting your DuPont representative or calling 1-800-847-5311.

Copyright© 2014 DuPont. All rights reserved. Dupont™, Genencor®, and the Leaf Globe are trademarks or registered trademarks of E. I. du Pont de Nemours and company or its affiliates.

BUSINESS BRIEFS Decatur, Illinois-based Mason Manufacturing LLC has appointed Sherman Levin as engineering manager. He brings experience and expertise to the companyâ&#x20AC;&#x2122;s shell-and-tube heat exchanger and ASME pressure vessel business. Prior to joining Mason Manufacturing, Levin held positions with GE Generator Engineering, Jacobs Engineering, BplusKBR and Black & Veatch.

Archer Daniels Midland Co. has appointed Christina Hahn as vice president of investor relations and competitive analysis. She will represent the company to the investHahn ment community and act as an advocate for shareholder value creation.

Hahn previously served as director of corporate strategy and competitive analysis. Prior to joining ADM, she was head of agricultural commodities research at Deutsche Bank and

People, Partnerships & Deals

an equity research analyst in agribusiness and proteins.

Andringa

Andringa

As part of its family succession planning process, Vermeer Corp. has announced that third-generation family member Jason Andringa will become president and CEO, effective Nov. 1, 2015. On Nov. 1 of this year, he will assume the role of president and chief operating officer for one year, before transitioning to president and CEO. Andringa currently serves as president of forage and environmental solutions. Mary Andringa, current president and CEO, will assume the role of CEO &

chair of the board Nov. 1. Mary will transition exclusively to chair of the board Nov. 1, 2015.

Bob Vermeer, current chairman of the board, will assume the role of chair emeritus, effective Nov. 1.

LanzaTech has appointed Gregg Clevenger as chief financial officer.

In his role, Clevenger has overall responsibility for leading all aspects of corporate finance for the comClevenger pany. He most recently served as executive vice president and chief financial officer of GXS Corp. and has more than 25 years of international finance experience.

Vecoplan builds turnkey systems that process biomass to be used in biorefining applications. Our systems can be used to shred and process corn stover, switchgrass, bagasse, or any other type of biomass. They are used in the production of cellulosic ethanol and other second-generation biofuels.

Vecoplan systems provide application specific shredding, stone & metals removal, screening, separation, conveying, loading & unloading, storage, and metered feeding of biomass prior to its conversion to advanced biofuels.

Contact us or visit our website today, to learn more about our biomass prep systems.

YHFRSODQOOF FRP 20 | Ethanol Producer Magazine | NOVEMBER 2014

Laura Wood Peterson has joined Syngenta as manager of federal government relations, based in Washington, D.C. In this role, Peterson will support the companyâ&#x20AC;&#x2122;s strategic fedPeterson eral government relations, including outreach and advocacy. She has experience and relationships in the executive and legislative branches of the U.S. government and extensive experience in agribusiness.

NUVUFuels LLC announced the Denco II ethanol plant is extending its ethanol marketing agreement with Noble Mansfield Commodity Services for a three-year term. NUVUFuels management was placed in charge of operations at the 25 MMgy facility following its 2010 acquisition by local investors.

Aventine Renewable Energy has named J.B. Voss as merchandising manager for the 45 MMgy Nebraska Energy LLC Vogelbusch plant and the 110 MMgy Aventine Aurora Voss West Delta T plant in Aurora, Nebraska. He is primarily responsible for corn procurement and merchandising all wet and dry distillers grain for the two Aurora facilities. Voss will also provide leadership for two additional merchandisers to be located at the Aurora West facility. Voss has 25 years of experience in commodity markets and the ethanol and biofuels industry. He most recently served as a merchandiser at Commodity Specialists Co.

Novak

Tolman

The National Corn Growers Association has announced Chris Novak as the organizationâ&#x20AC;&#x2122;s next CEO, effective Oct. 12. He is taking the place of 14-year veteran Rick Tolman, who announced his intention to retire from the organization in March. Novak previously served as CEO of the National Pork Board and as executive director of the Indiana Corn Marketing Council, the Indiana Corn Growers Association and the Indiana Soybean Alliance.

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COMMODITIES

Prices & Market Analyses

Natural Gas Report

Natural gas hedging strategy prudent this year Sept. 29—The natural gas market is still feeling the effects of last year. It’s mainly in the form of a reduced storage inventory that has staged a solid but incomplete recovery, thanks to record production and static demand. Moving into October, consumers are turning a weather eye to winter temperatures and wondering whether the upcoming winter season will be a repeat of the prior one. Unfortunately, weather forecasters are coming to very different conclusions. In light of the uncertainty and risk, natural gas consumers should take appropriate steps to cover risks, especially in areas where last winter proved that in periods of intense cold, capacity was not adequate to meet market demand and prices spiked.

To understand the degree of uncertainty regarding weather in the upcoming winter, it’s easiest to look at two forecasts from accredited meteorologists. In the first, from the Climate Prediction Center, the forecasters are placing weight on the historical correlation of an El Nino weather pattern with warmer-than-normal temperatures across the northern tier of the country, particularly in the Pacific Northwest. The second forecast from WeatherBell Analytics mirrors other private sector

by Ben Straus

forecasts in calling for another bout of colder-than-normal weather east of the Rocky Mountains. While the private forecasters agree that the Pacific Northwest will be warmer than normal and the southern portion of Texas will be colder, there is very little else upon which the two forecasts concur.

So, how can two institutions come to such disparate winter forecasts? While weather forecasting has made great strides over the past two decades, the efficacy of long-term prediction models remains very low. Because of the low predictive value of these outlooks, it’s much more reasonable as an end-user of natural gas to take the predictions as bookends of the risk faced in the current environment. Given that at least one forecast suggests a return to the doldrums of last winter, it’s probably prudent to put some type of hedging strategy into place to protect against the risks observed the last time around, especially in areas that experienced intense cold and price spikes. Ultimately, we won’t have a good view of the winter until we are in it, and by that time it will be too late to take protective measures.

Corn Report

End users reap benefits of lower corn, soy prices

by Jason Sagebiel

Sept. 29—The corn and soy complex continues its downward spi- to plant. With potential weather woes in South America, well, this may ral as yield and production potential continues to escalate. This year was be the only buoyancy opportunities this winter and early spring. greeted with ideal growing conditions, continued growing acreage and growing world stocks. This may not be positive news for the grain or soy producer, however, all end users are benefiting. Ethanol, cattle, swine, poultry and milk producers are able to take advantage of the lower corn prices and establish profitable margins.

The future government reports could be volatile but only from a sense of what will the ultimate yield and production picture be portrayed as. In the meantime, traders continue to expect much bigger yields to come. Weather issues may not be all out of traders’ minds at this time, frost-potential worry will not be the cause for a market bounce but prolonged wet weather during harvest could be a cause for concern.

That could be supportive to the market if it were to come to fruition.

With a growth in U.S. corn production, world corn carryout was pegged at 187.82 million metric tons versus 173.08 million metric tons a year ago and 138.15 million metric tons in 2012-’13. As American farmers go to the fields for harvest, South American producers head to fields 22 | Ethanol Producer Magazine | NOVEMBER 2014

Regional Ethanol Prices ($/gallon) Front Month Futures (AC) $1.580 Region

Spot

Rack

West Coast

1.720

1.850

Midwest

1.590

1.941

East Coast

1.680

1.829

DDGS Report

SOURCE: DTN

Regional Gasoline Prices ($/gallon)

DDGS value comes down to logistics by Sean Broderick Sept. 29—August’s news continued to depress prices in September. Chinese MIR 162 (Syngenta trait corn) issues are still not resolved, leaving significant amounts of contracted tonnage that needs to move a different direction. River logistics are still an issue with astronomical barge rates. And rail movements are still difficult, which is backing up DDGS at the origins, but still keeping delivered prices firm. There are only a finite number of railcars to go around and those that are railroad-supplied have a significant additional premium. Local truck logistics will be difficult as well, as drivers move from hauling DDGS to harvest grains.

Still, we’ve seen increased usage in domestic hog and poultry diets. DDGS was especially valuable when soymeal was expensive during August and September and feeders used more of it. Soymeal has

dropped significantly in September, causing re-evaluation of the spread between the two.

But we’ve have also seen increased demand in Mexico, a result of the combination of expensive soymeal and the premiums for corn cars. Just to procure railroad cars for corn unit trains costs more than $5,000 per car, above and beyond the freight, which has helped to keep DDGS competitive versus corn in delivered markets.

Looking ahead, we are still going to need to use a lot more DDGS domestically.

Margins are still positive for ethanol plants, so there won’t be a decrease in supply any time soon. With railroad and barge logistics being what they are, truck sales are going to have to stay competitive enough to keep plants empty. Obviously, the grain crop is big, but lately, DDGS value all comes down to logistics.

Front Month Futures Price (RBOB) $2.662 Region

Spot

Rack

West Coast

2.742

2.806

Midwest

2.742

2.627

East Coast

2.719

2.647 SOURCE: DTN

DDGS Prices ($/ton) Location

Nov 2014

Oct 2014

Nov 2013 215

Minnesota

100

120

Chicago

105

130

242

Buffalo, N.Y.

120

115

208

Central Calif.

169

167

268

Central Fla.

143

155

267 SOURCE: CHS Inc.

Corn Futures Prices

(Dec Futures, $/bushel) Date

High

Low

Close

Sept 27, 2014

3.27

3.22 3/4

3.23

Aug 27, 2014

3.65 1/2

3.62

3.65

Sept 27, 2013

4.59

4.53

4.54 SOURCE: FCStone

Cash Sorghum ($/bushel) Location

Ethanol Report

Ethanol futures falling fast Sept. 29—September saw a near freefall in ethanol futures as prices declined 62 cents per gallon and additional price pressure is likely still to come. Front month October ethanol futures fell from $2.20 per gallon at the end of August (before Labor Day weekend) to $1.58 in late September.

The market is focused on many factors, including falling corn prices before an expected record harvest, growing ethanol inventory levels and eroding demand.

Demand softness is not unexpected at this time of year with driving declining seasonally. Lower prices are expected to help ex-

by Rick Kment

port demand long term, but exports are a small piece of the ethanol price pie.

Corn prices lack support ahead of an expected record crop. Transportation delays and challenges, which have plagued the grain industry all year, are likely to make the situation even worse, possibly limiting the value of Corn Belt crops. Concern about another ethanol glut, with inventories well above movable levels, has pushed prices to lows not seen since June 2010. This could further limit buyer interest as prices may continue to weaken in the near future.

Sept 27, 2013

Aug 22, 2014

Sept 26, 2014

Superior, Neb.

4.24

3.34

3.03

Beatrice, Neb.

4.14

3.31

2.72

Sublette, Kan.

4.24

3.51

2.93

Salina, Kan.

4.42

3.51

3.18

Triangle, Texas

4.37

3.56

3.16

Gulf, Texas

5.39

4.79

4.53

SOURCE: Sorghum Synergies

Natural Gas Prices ($/MMBtu) Location

June 30, 2014

Sept 30, 2014

Sept 30, 2013

NYMEX

4.46

4.12

3.56

NNG Ventura

4.34

3.99

3.43

Calif. Citygate

4.67

4.40

3.62

SOURCE: U.S. Energy Services Inc.

U.S. Ethanol Production (1,000 barrels) Per Day

Month

End Stocks

July 2014

949

32,532

22,023

June 2014

959

28,759

18,664

July 2013

868

26,923

17,072

SOURCE: U.S. Energy Information Administration

NOVEMBER 2014 | Ethanol Producer Magazine | 23

DISTILLED

Ethanol News & Trends

Plants resume ethanol production

Impact of Corn Oil One processing Crude corn oil

Several long-idle ethanol facilities resumed production this fall. In late August, Valero Energy Corp. held an event to celebrate the restart of its 110 MMgy facility in Mount Vernon, Indiana. Valero purchased the plant from a subsidiary of Aventine Renewable Energy Holdings Inc. in March. The plant had been idle for approximately two years.

In September, Red River Energy LLCâ&#x20AC;&#x2122;s 25 MMgy ethanol plant in Rosholt, South Dakota, announced it has restarted production and is planning several upgrades, including an increase in nameplate capacity to 40 MMgy. The facility has been idled since January.

Also in September, Buffalo Lake Advanced Biofuels resumed operations. The 18 MMgy facility in Buffalo Lake, Minnesota, was idle from 2009 through 2012, operated briefly in 2012, and later idled again before being purchased out of bankruptcy. Repairs and upgrades have been ongoing since June.

Free fatty acids Waxes

Corn Oil One

15%

<1%

<50 ppm

<10 ppm

SOURCE: CORN OIL ONE

Corn Oil One breaks ground on Iowa plant Corn Oil One has broken ground on its new oil fractionation facility near Council Bluffs, Iowa. The facility will be collocated with Southwest Iowa Renewable Energy LLCâ&#x20AC;&#x2122;s 125 MMgy ethanol plant. Once complete, the facility is expected to be among the first to purify constituents of distillers corn oil using a new patent-pending process. According to Corn Oil One, the process separates out high-value coproducts and yields a cleaner back-end corn oil for industrial uses.

â&#x20AC;&#x153;This purified product improves the efficiency, efficacy and economics of biodiesel and oleo-chemical production by eliminating the need for capital intensive pretreatment steps,â&#x20AC;? said Joe Riley, general manager of Corn Oil One, noting the product is also drawing interest from animal feed manufacturers.

The plant is expected to be operational in 2015. ICM Inc. is the engineering, procurement and construction contractor for the project.

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24 | Ethanol Producer Magazine | NOVEMBER 2014

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DISTILLED

GranBio begins cellulosic production in Brazil

Brazil corn production

In September, GranBio announced the commencement of cellulosic ethanol production at its Bioflex 1 facility in São Miguel dos Campos, Alagoas, Brazil. The 82 MMly (21.66 MMgy) project is the first commercial-scale cellulosic ethanol plant to come online in the Southern Hemisphere.

The plant utilizes Beta Renewable’s Proesa pretreatment technology, along with enzymes from Novozymes and yeast from DSM. Construction was completed in 20 months.

According to GranBio, it invested $190 million in the cellulosic biorefinery. In addition, the company made a $75 million investment along with the Carlos Lyra Group’s Caeté facility to develop an adjacent cogeneration system that produces steam and electricity.

GranBio cellulosic fuel produced at the facility has been assigned a carbon intensity rating of -7.55 grams of CO2 per megajoule by the California Air Resources Board.

The calculation takes into account production factors from harvest through distribution via a California port.

2012/2013

2013/2014

2014/2015

Production

81,500 mmt

76,000 mmt

74,000 mmt

Total consumption

52,500 mmt

55,000 mmt

56,500 mmt

SOURCE: USDA GLOBAL AGRICULURAL INFORMATION NETWORK, BRAZIL GRAIN AND FEED UPDATE, JUNE 2014

Summit Group to construct corn ethanol plant in Brazil Iowa-based Summit Group announced plans to construct a 50 MMgy corn ethanol plant in Brazil.

The $140 million project is planned for development near Lucas do Rio Verde in Mato Grosso, a leading agricultural state in west central Brazil and the country’s largest producer of corn and soybeans.

Bruce Rastetter, Summit Group CEO, said final investments were secured last summer, and groundbreak-

Some chemical companies focus on this

ing is expected in coming months.

The facility is expected to be operational in early 2016, utilizing ICM Inc. technology. Summit Group’s partner in the project is Fiagril, a diversified company whose operations throughout Mato Grosso and adjoining states include grain trading, biodiesel production, crop production inputs and infrastructure development.

or that

.

Buckman takes a wider view.

Some chemical companies focus only on process.

Some focus solely on water treatment. Buckman takes a comprehensive approach and looks at the bigger picture — return on investment and environment.

We look at every aspect of your plant’s operation,

tailoring chemistries to boost production and increase profitability — from evaporator efficiency to corn oil recovery to water treatment issues. To find out more or to schedule a system audit, contact your Buckman representative or email ethanol@buckman.com.

© 2014 Buckman Laboratories International, Inc. All rights reserved.

NOVEMBER 2014 | Ethanol Producer Magazine | 25

DISTILLED

FRA grants aim to improve short line railroad safety The Federal Railroad Administration granted $350, 000 to support the development of a Short Line Safety Institute, which aims to help mitigate risk associated with rail shipment and improve the culture of safety within the short line and regional rail industry.

A $250,000 grant to the American Short Line and Regional Railroad Association supports the pilot phase of safety culture assessments, while $100,000 was awarded to the University of Connecticut for the initial development, testing and validation of safety education and training for managers and employees.

In mid-2014, Sens. Susan Collins, R-Maine, and Patty Murray, D-Wash., introduced legislation to authorize an institute focused on short line rail safety. According to Collins, undermanned short line railroads often transport crude oil and ethanol. She estimated that 550 short line railroads currently operate 50,000 miles of track, comprising nearly one-third of the entire U.S. rail network. Collins and Murray indicated the Senate Transportation Subcommittee Fiscal Year 2015 bill recommends an additional $2 million for the institute.

Energy content, GHG emissions of ethanol blends Carton Intensity (gCO2e/MJ) Ethanol fraction of energy

Lower heating value (Btu/gal)

Corn ethanol

Stover ethanol

E0

0.00%

116,090

98.0

98.0

E5.7

3.85%

114,067

96.4

94.9

E10

6.86%

112,383

95.2

92.4

E15

10.48%

110,424

93.8

89.5

E100

100.00%

76,330

56.8

15.0

SOURCE: CHANGE IN AIR QUALITY IMPACTS ASSOCIATED WITH THE USE OF E15 BLENDS INSTEAD OF E10

Analysis highlights benefits of E15 A recent study by Life Cycle Associates aggregating independent research conducted by the Department of Energy, National Renewable Energy Laboratory, California Air Resources Board and several other institutions finds that the use of E15 displaces cancer-causing emissions from gasoline, resulting in a net decrease in cancer risk of 6.6 percent when compared to regular gas.

To determine how much E15 reduces the risk of cancer, the analysis considered several cancer-causing pollutants found in vehicle exhaust. The risk reduction is attributed to the fact ethanol in E15 displaces carcinogens like benzene and 1,3 butadiene.

According to the study, E15 also lowers the potential for smog formation and reduces greenhouse gas emissions.

DISTILLED

Ineos Bio upgrades Indian River BioEnergy Center Ineos Bio has announced the Indian River BioEnergy Center has completed a major turnaround, including technology upgrades, and was being brought back online in September. The 8 MMgy cellulosic ethanol production center, located near Vero Beach, Florida, also has the capacity to produce 6 MW of electricity.

The facility, a joint venture commercial demonstration project between Ineos Bio and New Planet Energy, originally came online last October. Information released by the Florida Department of Environmental Protection, Division of Air Resources Management, indicated the facility’s ethanol production had suffered due to low levels of hydrogen cyanide (HCN), which is toxic to the bioorganisms in the fermentation process.

The company received preliminary approval from the state to install wet scrubbers to remove HCN to levels of less than 5 parts per million at full gasification rates.

“We will soon finish installation of equipment that will be used to remove impurities from one of our process streams that have been negatively impacting operations,” said Nigel Falcon, site director. “This equipment will be commissioned and brought online over the remainder of the year.”

European ethanol consumption (in tons of oil equivalent) 2012

2013

Germany

805,460

777,730

U.K.

388,220

410,791

France

417,014

393,541

Sweden

199,773

181,276

Spain

201,445

180,274

SOURCE: EUROBSERV’ER BIOFUEL BAROMETE

Ethanol market share rises in Europe The EurObserv’ER recently released its annual Biofuel Barometer report, announcing that overall biofuel consumption in Europe decreased last year. When compared to other biofuels, however, the share of ethanol consumption is actually on the rise. The market share of ethanol in the European biofuels space increased from 19.2 percent in 2012 to 19.9 percent in 2013. According to the report, the yearon-year decline in ethanol consumption was only 3.1 percent, compared to 8.5 percent for biodiesel.

Abengoa Bioenergy is Europe’s top ethanol producer with 1.281 billion liters of capacity. Tereos is second with 1.26 billion liters of capacity. Crop Energies has 1.2 billion liters (340 million gallons) of capacity, followed by Cristanol with 550 MMly, Vivergo with 420 MMly, and Agrana with 400 MMly. Verbio and Agroethanol each have 340 MMly and 210 MMly of capacity, respectively.

Shutdown Turnaround Cleaning

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NOVEMBER 2014 | Ethanol Producer Magazine | 27

MAINTENANCE

TOP NOTCH SHAPE: Jim Swope , left, and Chad Churchill work in the ICM Biofuels ethanol plant in St. Joseph, Missouri.

PHOTO: SAIT SERKAN GURBUZ

28 | Ethanol Producer Magazine | NOVEMBER 2014

3

MAINTENANCE

P's of

Maintenance

Maintenance professionals talk about preventative, predictive and precision maintenance.

By Holly Jessen

If an ethanol production company wants to increase efficiency and profitability, it needs to take a new look at maintenance, asserts Jason Resler, maintenance manager at Denco II, a 24 MMgy Morris, Minnesota, facility. “Maintenance has always been the just fix it and get us going type of mentality,” he says. It’s always been looked at as an expense. But doing the right things, you can change that expense into being an asset. There’s still the cost, you’ve still got to buy the parts, you’ve still got to pay the labor to do the work, but if you are doing the right things you can extend those periods between maintenance and breakdowns so that you are running longer and being more profitable.”

Resler, who started working at Denco last November, has worked to change the plant’s preventative maintenance structure. “We’ve gone from more repair orientated, and pushing off preventative maintenance to making preventative maintenance the priority over the repair, especially the repairs that are not crucial,”

he says. “Obviously, you’ve always got some critical repairs that you have to work on but we try to keep the preventative maintenance up front.”

Chuck Gallop, operations development manager for ICM Inc.’s product development department, agrees the maintenance department is key to profitability. The reality is that, especially in times of tight margins in the ethanol industry, one of the things that gets scaled back is regular plant maintenance. “You find yourself prolonging action, thinking that maybe we can get another week or a month before we tear it apart and rebuild it.” Gallop says.

“Rather than doing it on a scheduled period, we try to make it last just a little bit longer.”

Although it’s common, it does create problems.

“It isn’t sometimes,” he says. “It always costs us more money in the end.”

It’s a different situation now, however, as the ethanol industry is enjoying a time of good margins. “We need to really focus on spending that money and getting the plant back up to its designed capacity or getting all the equipment in a renewed state,” he says.

NOVEMBER 2014 | Ethanol Producer Magazine | 29

MAINTENANCE

'In my opinion thereâ&#x20AC;&#x2122;s actually a difference between doing maintenance and doing precision maintenance, by using best practices techniques and using various equipment reliability techniques.'

Crystal Ball

Resler

As a helicopter mechanic in the Marine Corps, Gallop says he was taught there are three types of maintenance. Preventative maintenance is typically performed on a schedule, usually with input from the manufacturer. Corrective maintenance doesnâ&#x20AC;&#x2122;t happen until something has failed and has the highest cost in terms of equipment damage and unplanned outages.

The third type, predictive maintenance, is performed as needed, based on daily observation and measurement of variables that indicate future problems, he says. This allows the department to anticipate equipment failures before they happen. At a minimum, the goal is to reduce failures. The hope, however, is that they can be eliminated entirely. This keeps the plant running and staff safe, he says.

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Safety is the No. 1 concern, agrees Jim Swope, maintenance manager at ICM Biofuels, a 50 MMgy ethanol production facility leased from Lifeline Foods in St. Joseph, Missouri. Next up on the priority list is conducting repairs in a structured and planned way. â&#x20AC;&#x153;If you can do it in a fashion that is preventative, in the long haul, you eliminate extra costs, whether it be expedited freight or cost for overtime hours for extra help to get here to take care of those problems,â&#x20AC;? he says. â&#x20AC;&#x153;And in some instances, if you can anticipate bearing failure, for example, you replace half as many parts. You may save the shaft but you just replace the bearings.â&#x20AC;?

Although the plant was previously staffed with maintenance employees 24 hours, seven days a week, in case of emergencies, hard work in preventative and predictive maintenance has changed that, Swope says. When things are running more smoothly, the maintenance department can anticipate fewer emergencies. â&#x20AC;&#x153;We now have a good enough hold on our PM program so that they are here seven days a week,â&#x20AC;? he says. â&#x20AC;&#x153;So they work 12 hour shifts, seven days a week, no overnights.â&#x20AC;?

As part of predictive maintenance, at ICM Biofuels, vibration analysis is conducted monthly on all assets, with a quarterly analysis conducted by an outside contractor to verify the companyâ&#x20AC;&#x2122;s internal results. The testing helps pinpoint potential equipment problems before they happen. â&#x20AC;&#x153;Vibration analysis allows us to know if we have vibration issues before they become issues you hear,â&#x20AC;? Swope says. The testing method is also in use at Denco, Resler says, adding that it helped identify an issue with the plantâ&#x20AC;&#x2122;s centrifuge, allowing time to have parts in place for a quick change out if it crashes.

He also agrees that advanced planning is important. The department gets more work done in a day if it sticks to the schedule. Deciding to do something off-the-cuff can lead to delays if

MAINTENANCE

PREVENTATIVE PREDICTIVE PRECISION

p vibration analyses a particular part isn’t on hand. “We’re trying to be as efficient as possible,” he says. “We’re also trying to do the right work at the right time.”

To Be Precise

Resler likes to think of his job in terms of precision maintenance. “In my opinion, there’s actually a difference between doing maintenance and doing precision maintenance, by using best

practices techniques and using various equipment reliability techniques,” he says.

Take the example of grease. Looking at whether the right type of grease is being used for the job, rather than just using one grease to blanket everything, can make a positive impact on operations.

While following manufacturer recommendations is a good practice, it’s not always the best available practice, he says. An important question to ask is where in the process is the piece of equipment

More info about SMRP The Society for Maintenance and Reliability Professionals was formed in 1992 by practitioners from 18 companies. The goal was to promote maintenance leaders and advance the reliability and physical management industry. The first conference was held the next year and by 1997 a certification process was under development. Today, the group has 4,000 members worldwide and has certified the same number of practitioners as either certified maintenance and reliability professionals or certified maintenance and reliability technicians.

SOURCE: SMRP WEBSITE

NOVEMBER 2014 | Ethanol Producer Magazine | 31

CRAFTSMEN: Denco II LLC, a 24 MMgy ethanol plant in Morris, Minnesota, has five employees in its maintenance department and is looking to add a sixth. The personnel breakdown is one manager, one computerized maintenance management system/purchasing agent and four mechanics.

PHOTO: JIM EKENSTEDT, DENCO II

and what variables, such as temperature, will it be subjected to. “All those variables can definitely play a role in the breakdown of an oil, like, say, in a gear box,” he says.

Resler is certified through the Society of Maintenance and Reliability Professionals. He highly recommends the organization’s conference, which he attends yearly, both to maintain the certification and to

32 | Ethanol Producer Magazine | NOVEMBER 2014

network with and learn from other maintenance professionals. One of the most valuable things Resler says he has gained from the conference, as well as his nearly 10-year career in maintenance with Cargill Inc., is how to use new matrixes to make maintenance decisions. “Run time, down time, you name it, there’s pretty much a matrix to measure it,” he says. “Right down to your

warehouse. Are you ordering your spares in the most efficient and cost-efficient manner?”

For example, performing an asset criticality assessment gives each part a numerical ranking that can be used to determine which parts should be kept on hand and which can be ordered when needed. “The old theory of maintenance is, 'I’d like to

MAINTENANCE

have one part for everything in the plant,' but there’s a cost associated with doing that and having those parts sit on your shelf,” he says. “On the other end of that spectrum, you’ve got to have your critical parts so you don’t get caught without them and now your plant is not running.”

Resler also believes strongly in the importance of training for the mechanics, or craftsmen as he calls them, that work under his supervision. That means sending them off site for classroom training and bringing in vendors for on-site training.

Swope agrees that training is important. Training through ICM and various vendors help keep maintenance staff at the St. Joseph plant well-trained. For instance, the plant’s mechanical seal vendor has provided classroom and hands-on training on the proper instillation method. “It’s very easy to make an install like that, without the proper knowledge, and ruin a brand new seal as soon as you install it,” he says.

While there are some situations where it wouldn’t be appropriate to share confidential information and trade secrets, Resler says, another source of knowledge is other ethanol plant maintenance departments. For the most part, ethanol plant maintenance professionals work together well, sharing information about good contractors and even parts, when a neighboring facility is in a bind. “Even though at the plant level, everybody is in competition with one another, as an industry, as a whole, we’re all a team trying to achieve one goal,” he says, “which is to produce ethanol, make money and help ethanol become a bigger part of the pie and get some of that back from Big Oil.”

FSMA Fallout

The Food Safety Modernization Act, which was signed into law Jan. 4, 2011, will impact the way things are done at ethanol plants. For companies that employ more than 500 people, the compliance date is

August 2015—less than a year away. Companies that employ fewer than 500 people have another year to comply. “Some of those regulations will directly impact how we will perform or how we approach predictive or preventive maintenances,” Gallop says.

Ethanol plants will have to identify critical control points where foreign debris, such as greases or lubrications, could end up in the distillers grains or corn oil, both coproducts fed to animals. One such control point would be moving distillers grains with a pay loader. The maintenance department will be responsible for looking at contaminates that could come in contact with the feed, such as diesel or hydraulic leaks, and put a program in place to handle those possibilities. Certain plant cleaning agents

or practices may also have to be changed.

“From a maintenance standpoint, we need to take a look at what equipment we have in place now, what maintenance procedures we [have] and what types of products we are introducing into the process that don’t meet the FSMA guidelines,” he says.

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

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PROFILE

GRAVITY SEPARATION: Mike LoCasio stands by the used gravity table installed at Buffalo Lake Advanced Biofuels where the low-energy solids separation process will be demonstrated at commercial scale.

PHOTO: SUSANNE RETKA SCHILL, BBI INTERNATIONAL

34 | Ethanol Producer Magazine | NOVEMBER 2014

PROFILE

Reinvention With LESS Innovation A legacy ethanol plant showcases a new low-energy solids separation system.

By Susanne Retka Schill

How can a small ethanol plant be relevant in an industry dominated by 75 MMgy-plus plants?

Especially when every producer is striving for maximum efficiency aimed at shaving pennies off the cost of production to compete as a low-cost producer. For the 13-year-old, 18 MMgy facility at Buffalo Lake, Minnesota, the answer is to turn it into a showcase for innovation. The legacy plant, now known as Buffalo Lake Advanced Biofuels LLC, will be watched closely by the industry as it seeks to drive efficiency to new levels by cutting the plant’s energy load by a third, eliminating two troublesome systems and utilizing increased syrup solids to generate the plant’s power needs. In a collaboration with plant owners West Ventures LLC and operations specialists at IR1 Group, a new company in the ethanol space, Yield & Capacity Group LLC, has installed its innovative low energy solids separation (LESS) technology at Buffalo Lake Advanced Biofuels LLC. Like many of the early ethanol plants, the Buffalo Lake operation has struggled in recent years. The Katzen-design ethanol plant, built by Minnesota Energy Cooperative, came online in 1997 at just under 9 MMgy. It had a good run

until the deep downturn of 2009 brought production to a halt and idled the plant. Purified Renewable Energy restarted the plant in June 2012, announcing five months later that that it had purchased the facility. Purified quickly ran into problems, however, and filed for bankruptcy in March 2013.

Colorado-based IR1 Group worked for the bankruptcy court in the sale of the assets, and in the end, one of Purified’s main creditors, West Venture LLC, purchased the plant out of bankruptcy. Terry Kulesa, IR1 president, explains that his group has worked with a number of banks and investor groups trying to figure out what to do with the legacy plants that shut down during the economic downturn. “On the small plants that are old, have old equipment and often didn’t keep up with improvements, we tell them they have to do something different. They can’t compete with the 100 MMgy plants, there’s no economies of scale.” For some of those plants, turning to alternative products such as butanol has been the solution. At Buffalo Lake, IR1 introduced the investor group to Mike LoCascio and Ron Dunbar, who had just formed Yield & Capacity Group to commercialize LESS.

NOVEMBER 2014 | Ethanol Producer Magazine | 35

PROFILE LoCascio is known in the ethanol industry as he worked for U.S. Water Services during the ethanol build-out, helping to develop the water balance in the Fagen/ICM plant design. After several years, he left that position, working briefly on biodiesel processes before going out on his own. In 2011, he did consulting work for Ron Dunbar, then manager at White Energy, cleaning up wastewater discharge.

“Ron said to me, ‘If you can clean this up, can you clean up thin stillage?’” LoCascio recalls. When LoCascio’s experiments showed promise, the pair formed their company last year to commercialize it. “I provide the science background and Ron provides the operations know-how,” he says. Initial LOW ENERGY: As the whole stillage moves across the gravity table, a polymer aids in separating the liquids from the solids. bench-scale experiments were fol- The polymer feed system and gravity table require just 20 horsepower on three pumps. lowed by pilot trials at a cooperat- PHOTO: YIELD & CAPACITY GROUP ing ethanol plant willing to let the pair run their experiments onsite using the plant’s thin stillage. Now, the Buffalo Lake installation is serving as the commercial-scale demonstration.

Gentle Extraction Throughout the summer, as the Buffalo Lake plant was shaken “LESS is not a disruptive technology,” LoCascio says, explaining down for restart, LoCascio and Dunbar shook down LESS. Joe Winck- that it is based on technologies used in waste water treatment. The proler, director of operations for IR1, directed much of the fabrication and cess uses a commercially available, GRAS-approved (generally regarded modification work required as design improvements were made. as safe) polymer that YCG has worked with two manufacturers to pro-

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PROFILE running at steady state, they expect to see positive effects on fermentation, plus an increase in capacity.

Besides improving backset, the LESS system does an impressive job of reducing energy requirements. Instead of removing water through evaporation to concentrate the thin stillage to a syrup, the polymer-delivery system and gravity table at the heart of the LESS process use just 20 horsepower total, replacing 13,000 pounds-perhour of steam and more than 300 horsepower in pumps.

The initial plan for Buffalo Lake was to treat 100 percent of the thin stillage, bringing a significant cost savings with the reduced steam use, lowered electricity requirement and by reducing a third SOLID BALL: The LESS system removes solids from thin stillage, pictured above, removing 85 to 90 percent of total of the cooling load in the evaporasuspended solids and 30 percent of total solids compared to normal thin stillage. tor condenser. Additionally, treatPHOTO: YIELD & CAPACITY GROUP ing all the thin stillage would significantly reduce evaporator fouling duce to its specific requirements. “The real challenge was in finding a and downtime. But, as the team continued to repair the legacy plant, mechanical process to separate liquids and solids in a way that didn’t one of the most expensive projects was to repair or replace the evaporaviolate all the patent claims that had been made by as many as 10 other tors. So, the question was posed, if LESS works so well on thin stillage, groups,” he adds. “We are the only group to have found a robust, simple would it work on whole stillage? process for separating the flocculated solids from the liquid fraction.”

It did, ultimately allowing the plant to bypass the centrifuges and Besides avoiding patent infringements, the main design challenge evaps entirely. The LESS system produces a distillers grains that augers was finding a gentle means of extracting water. “We tried centrifuges, and piles like DDGS, while having moisture levels comparable to wet screw presses, dissolved air flotation, clarifiers—the four main indus- grains. The whole stillage leaves the LESS system at about 23 percent try technologies,” LoCascio reports. The biggest issue was each system solids. When it didn’t auger well up the 45 degree angle at the Buffalo introduced too much energy, dissipating the polymer effect that sepa- Lake plant to be piled on the wet cake pad, a screw press was added to rated the solids. When the fourth set of machinery trials still wasn’t sat- remove more moisture, down to a range between 33 and 43 percent solisfactory, he called a friend at a nearby wastewater treatment facility and ids. LoCascio reports they’ve had the nutritional value tested by a laboasked if he could experiment with one of the gravity tables used for ratory and local feeders who’ve tested it in livestock rations reported it dewatering sludge. “We took two 5-gallon pails of thin stillage over and worked well. “The thing that surprised us early on in our testing was the threw them across the belt. It worked. The next day we went back with quality of the distillers grains versus something that’s been through the 15 pails.” A used gravity table was installed at Buffalo Lake, and more dryer,” LoCascio says. “Our amino acids are higher across the board trials conducted to work through modifications to improve the system and more bioavailable.” Further work is needed to figure out the best and provide enough separated solids and liquids to test the results. use for the unique distillers grains and how it should be valued, as well LoCascio says the tests showed dramatic improvements. The clari- as to test how the distillers grains performs when dried. fied thin stillage is mostly free of fatty acids, total suspended solids are Bypassing the centrifuges and evaporators has a big effect on enreduced to 85 to 90 percent compared to normal thin stillage levels and ergy use, LoCascio reports. “Overall, we reduce the Btu required to total solids are reduced 30 percent. Total solids would contain things like produce a gallon of ethanol by a third. The energy savings annually is glycerol, lactic or acetic acid, LoCasio explains. The spent yeast in the estimated at $1.8 million for this18 MMgy plant.” The $600,000 instalclarified thin stillage could be isolated as a new source of protein feed lation cost is expected to have a four-month payback. or returned to cook as a nutrient. While the syrup solids recovered from the thin stillage can be reintroduced into the distillers grains, they could Off-Grid Goal also be treated to capture additional corn oil. “What we don’t have data LoCascio’s not done there, though. “Once we figured out how on yet is the net effect on fermentation,” he adds. Once Buffalo Lake is to separate the solids from the liquid, we started focusing on what to NOVEMBER 2014 | Ethanol Producer Magazine | 37

PROFILE

OIL FIND: Syrup solids removed from thin stillage have been run through a laboratory centrifuge. More corn oil has been separated from the solids and the clarified fraction of thin stillage is mostly free of fatty acids.

PHOTO: YIELD & CAPACITY GROUP

do with the syrup solids. The oil can be easily recovered, but in a traditional plant the additional syrup represents a problem, since most plants that dry the DDGS don’t have additional dryer capacity to be adding in more syrup,” he explains. “That’s when we looked at biodigestion.” Once Buffalo Lake is running at steady state and they have the LESS system fine-tuned, YCG will partner with the developer of an anaerobic digester system that handles high fatty acid materials. The syrup solids, when properly treated with enzymes, are a dense, balanced feedstock for the digester and would not need additional feedstocks to be brought in to balance the process, LoCascio says. The digester is expected to produce a high-quality biogas with 70 percent of the Btu content of natural gas that

would be usable without cleanup in a boiler or generator. Initial tests and calculations indicate that about 20 percent of the syrup solids will generate enough steam and electricity to power the plant, taking it off the grid.

First, though, LESS needs to be demonstrated in steady-state operation. Since June, the Buffalo Lake Advanced Biofuels plant has been started up several times to test systems and to produce enough stillage for the LESS trials, reports plant manager Kyle Peik.

In September, he was hoping to see the plant operating 24-7 once again. Beyond the LESS installation, other changes in preparation for restarting the long-idled plant were more routine. Upgrades were made to utilize heat load more efficiently, make systems more user friendly and replace aging components such

PROFILE

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NOW OW STOCKING WET LIKE DRY: Whole stillage coming off the LESS system gets about 10 percent more water removed in a screw press. The resulting distillers grains, at 30 percent solids, acts like dried distillers grains. Produced without heat, the amino acids and proteins have higher bioavailability.

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as sticky valves, he explains. Peik has been with the plant since the beginning in 1997 when he started as low man on the totem pole.

During the extended shutdown starting in 2008, he served as property manager. Today, as the plant manager, he’s pleased to be training in a new crew to run the plant. About 35 people have been working to bring the plant back up, he reports, which includes the IR1 and YCG crews, as well as the administrative team at the investor group’s offices in New Jersey.

For Peik and the small, western Minnesota community of 700some people, seeing the steam rise from the plant’s stack once again is a welcome sight above Buffalo Lake.

Author: Susanne Retka Schill Senior Editor, Ethanol Producer Magazine 701-738-4922 sretkaschill@bbiinternational.com

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CLEANING

DOWN AND DIRTY: Eight enclosed evaporators at an ethanol plant are cleaned by Hydro-Klean technicians.

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40 | Ethanol Producer Magazine | NOVEMBER 2014

CLEANING

Avoiding Maintenance Migraines Cleaning, like other preventative maintenance practices, helps avoid the headache of an unscheduled shutdown.

By Katie Fletcher

It’s no simple process to schedule ethanol plant shutdowns for cleaning. Although produc-

ers agree it takes considerable planning and preparation, it can save time, money and unscheduled downtime in the long run. “If a facility does not make scheduled downtimes for these tasks, the plant will take it for them,” says Matt Werzyn, maintenance manager with Louis Dreyfus Commodities, Elkhorn Valley Ethanol LLC. Jeff Larson, plant manager at Siouxland Energy Cooperative, agrees. “Bringing it down and starting it up is a timely process, but in the end it is worth it,” he says.

Werzyn points out that, as equipment gets dirtier, it impacts how the plant runs. “As we get closer to shut down, there is a definite performance decrease and an increase in the required energies needed to run the process,” he says.

Not cleaning an ethanol plant could have much more severe consequences than losing a set of keys in a dirty house. “If duct lines are not cleaned over a long period of time, duct fires can result, which can be very expensive, if not destructive, if they occur,” Werzyn says. “Regular cleaning is like any other preventative maintenance. If you maintain the

equipment, it will perform its designed task longer and more efficiently, which is cheaper in the long run.”

Squeaky Clean Scheduling

Fall and spring seem to be the prime seasons when producers opt for plant cleaning, but it can occur anytime. “We pick an arbitrary month for shutdown,” Larson says. “We know that we have to shut down in August to do the annual boiler inspection, and then we space the other shutdown from that one.”

Tyler Edmundson, plant manager at Mid-Missouri Energy, a 40 MMgy ethanol plant, says shutdowns are typically based on the condition of the plant’s equipment, the availability of contractors and margins.

Edmundson has found that his plant has been able to avoid a second shutdown the past two years. “Over the years, we have been able track the life of certain disposable parts and found that we could run them longer without having to do anything other than routine preventative maintenance.” He adds that a shutdown in the spring must occur for mandatory pressure vessel inspections by the state.

Whether mandatory or just necessary, scheduling can get tricky during peak shutdown seasons with around 200 ethanol plants

NOVEMBER 2014 | Ethanol Producer Magazine | 41

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in the U.S. â&#x20AC;&#x153;A lot of the ethanol plants use the same contractors and their service calendars fill up fast,â&#x20AC;? Werzyn says.

Planning ahead is necessary. â&#x20AC;&#x153;Since contractors have to be scheduled so far in advance, sometimes the scope of work changes leading into the outage,â&#x20AC;? Edmundson says.

Shutdowns are scheduled anywhere from six to 10 months ahead of time for an average of two to five days. If scheduled far enough in advance, Larson says, many, if not all, contractors will

work with them on the dates that are chosen for shutdown. â&#x20AC;&#x153;There are certain areas we cannot control, weather, for one, which may force a nonscheduled shutdown,â&#x20AC;? he says.

Picking a Provider

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who have done a good job in the past,” Edmundson says. “If their dates start to fill up and we have not determined when exactly we will be down, they check in with us, which is helpful.”

Mid-Missouri Energy uses the services of Hydro-Klean LLC, but not all producers always stick with the same contractor. Larson, who currently works with Seneca Companies, has used four different vendors at Siouxland Energy. When shopping around for a service provider, he asks other producers for recommendations.

“There is a lot of networking that happens in this industry, and I think that does help,” he says.

Werzyn at Elkhorn Valley Ethanol also chose a provider based on references from other plants. North American Industrial Services, formally Freez-it-Cleen, has serviced that plant. Other traits producers look for in service providers, besides availability, are safety and training records as well as experience in the ethanol industry, Edmundson adds.

Shutdown Prep and Precautions

Specific tasks to accomplish during the shutdowns are also scheduled. “Any task not completed is carried forward to the next shutdown,” Werzyn says. “The work list is compiled over those six months, plus there are scheduled tasks that are on an automatic schedule.”

Several people are usually involved in the planning process.

“Myself, the maintenance manager and the environmental health and safety coordinator typically work together on scheduling and making sure we have the proper documentation, training records, etc.,” Edmundson says. “Safety is the No. 1 priority—making sure contractors have proper credentials and understand our policies and expectations.”

ElkHorn Valley Ethanol sends a contractor safety packet, which Werzyn says, “contains a letter outlining our general safety rules,” he says. “And we request a copy of their OSHA 300 log and

CLEAN TEAM: Technicians stand after a long day of cleaning in front of a liquid vacuum tanker. Total scope and time frame are big determining factors in how many service members are on the job.

PHOTO: HYDRO-KLEAN LLC

a copy of their employee training records. Once their work crews are onsite, they must attend a contractor orientation before they are released to work.” After each shutdown the Elkhorn staff holds a post-shutdown review meeting to reflect on what went well and what could be improved.

Larson and his team at Siouxland contact utility providers and marketers six weeks before a shutdown and let them know one is scheduled so everyone is informed and can prepare.

Cleaning Method

Over the years, the need for annual to semiannual cleaning hasn’t diminished, but how it’s done has changed. “Initially the cleaning of a system like duct work would take a longer time because it was never done before,” Werzyn says. “Now that many tasks are preventative-maintenance generated, it is done every year or every six months, and the cleaning time required is fairly constant.”

Many plants use in-house, clean-in-place (CIP) systems to help prevent fouling and bacteria contamination, which, in turn, lightens the enormity of the contractor’s clean-up job during shutdown.

NOVEMBER 2014 | Ethanol Producer Magazine | 43

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44 | Ethanol Producer Magazine | NOVEMBER 2014

Edmundson mentions new chemicals, enzymes and in-house caustic and acid CIP procedures as being helpful. “With current margins and how hard the plant is being run, fouling issues would be hard to stay on top of if in-house methods were not part of daily operations,” he says.

When it comes to cleaning methods deployed at the plants, producers use either hydroblasting, dry-ice blasting or a combination of both, as well as chemical circulation processes, vacuum services and others, based on a plant’s needs. “At this facility, we use high pressure water blasting to ‘punch’ tubes in the eight evaporators,” Werzyn says. “Dry ice blasting is used on the fin tube heat exchangers in the heat recovery steam generator and in the three-stack economizer units. Dryer interconnecting duct work gets cleaned with dry ice sponge media.”

Similar to Elkhorn Valley, a combination of dry ice and hydroblasting are used at some plants, Werzyn says. MidMissouri Energy uses hydroblasting on the plant’s evaporators, distillation vessels, product lines, tanks, dryers and dryer ducting, Edmundson says. Dry ice blasting is used on the plant’s centrifuges, economizers and air-to-air preheater, typically. “Refractory is the main reason we prefer dry ice,” he says. If the ceramic fiber modules used for insulation gets wet, it may need to be replaced.

Werzyn says another advantage of the dry ice method is that it is gentler on the steel fins used to increase surface

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area. He adds that dry ice reduces water usage and eases clean up. “All the water that would be used in a water blast method must be kept within the plant and processed through. This takes a lot of energy to complete and can reduce the time to return to full rates,” he says.

Some producers opt for hydroblasting over dry ice. “We don’t have the issue with getting rid of the water like other facilities might,” Larson says about Siouxland Energy. “We can hold quite a bit of water here at the plant.”

Some service providers have started offering a chemical circulation process for cleaning the shell side of the exchangers to remove scale buildup on the steam side of process vessels. Seneca and Mist Chemical performed this process at Siouxland Energy. Larson says it gave him and his team “peace of mind.”

The process has also been used at ElkHorn Valley Ethanol. “The CIP of the shell side of the exchangers has made the vessels more efficient in their ability to evaporate,” Werzyn says.

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Author: Katie Fletcher Staff Writer, Ethanol Producer Magazine 701-738-4920 kfletcher@bbiinternational.com

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NOVEMBER 2014 | Ethanol Producer Magazine | 45

COMPLIANCE

Accurate VOC, HAP Measurement Critical For Permit Compliance Proper understanding helps maximize production, avoid unexpected compliance mistakes.

By Dan Despen

Understanding and correctly measuring and reporting ethanol facility volatile organic compound (VOC) and hazardous air pollutant (HAP) emissions are critical for a facility to avoid unexpected, unwanted and costly compliance mistakes. VOC and HAP emissions are generated at various steps in ethanol production. In accordance with each ethanol facility’s air emission permit, these emissions must be measured and reported for certain sources at the facility on a periodic basis.

VOCs and HAPs are regulated by the U.S. EPA. The EPA’s broad definition of a VOC is “any compound of carbon, excluding carbon monoxide, carbon dioxide, carbonic acid, metallic carbides or carbonates, and ammonium carbonate, which participates in atmospheric photochemical reactions,” which encompasses a very long list of compounds. Fortunately that list can be narrowed down considerably for a dry mill ethanol facility.

The EPA’s definition for HAP is “those pollutants that are known or suspected to cause cancer or other serious health effects, such as reproductive effects or birth defects, or adverse environmental effects.”

This definition is much more limited in scope and, in fact, the original list of HAPs published by the EPA contained only 189 individual compounds or elements. Many of these 189 HAPs are also VOCs, however, only four are generally present and tested for in the air emission streams of a dry mill ethanol facility.

In general, the EPA has delegated the oversight of air emission regulations to the states. The states, however, also apply the EPA definitions and the federal limits in the process of permitting and regulating dry mill ethanol facilities. Each state has some degree of flexibility in how it implements and oversees these programs within its respective region. This results in some variations in air emission permit language and enforcement personnel preferences in each state.

To avoid compliance mistakes, it is important to know what VOC and HAP compounds are typically present at ethanol production facilities and what differentiates a HAP from a VOC. Grasping common terminology regarding the description and reporting of these compounds and the various common methods of measurement for VOCs and

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).

46 | Ethanol Producer Magazine | NOVEMBER 2014

COMPLIANCE

VOC Volatile Organic Compound

HAP Hazardous Air Pollutant

“Any compound of carbon, excluding carbon monoxide, carbon dioxide, carbonic acid, metallic carbides or carbonates, and ammonium carbonate, which participates in atmospheric photochemical reactions.” Common VOCs tested for in the ethanol process include:

“Those pollutants that are known or suspected to cause cancer or other serious health effects, such as reproductive effects or birth defects, or adverse environmental effects.” Four VOCs also listed as HAPS are generally present and tested for in the air emission streams of dry mill ethanol plants:

Acetaldehyde Acetic acid Acetoin Acrolein 2,3-butanediol 2,3-butanedione Ethanol Ethyl acetate Formaldehyde 2-furaldehyde Isoamyl alcohol Methanol

HAPs is important as well. Ethanol production facilities that avoid compliance mistakes are aware of the advantages, disadvantages and challenges associated with each of the VOC and HAP measurement methods. Knowing these points is key to maximizing plant ethanol production while simultaneously maintaining constant compliance with air emission regulations.

VOCs Explained

The manufacture of ethanol from corn starch in the dry mill ethanol industry involves the conversion of starch to sugar with enzymes and sugar to ethanol with yeast. A number of VOCs are generated in the fermentation process. Some are controlled by wet scrubbers on the fermentation vents. Additional VOCs are driven off in the handling and drying of the distillers dried grains with solubles and typically controlled by a regenerative thermal oxidizer (RTO). The fermentation scrubbers and dryers RTOs tend to be two of the larger sources of VOC emissions in an ethanol facility.

The VOCs generated are the result of the natural actions of the enzymes and yeast on the various constituents of the corn that have been milled and added to the fermenters. An excellent resource for understanding these processes and the resulting VOCs is “The

Acetaldehyde Acrolein Formaldehyde Methanol HAPs are subject to more stringent emission requirements than VOCs in general. For some facilities very stringent limits have been placed on HAP emissions. Acrolein limits, in particular, can require very low mass emission rates.

Alcohol Textbook,” edited by Jacques, Lyons and Kelsall. While no single master list of VOCs from ethanol production has emerged, some common VOCs tested for include acetaldehyde, acetic acid, acetoin, acrolein, 2,3-butanediol, 2,3-butanedione, ethanol, ethyl acetate, formaldehyde, 2-furaldehyde, isoamyl alcohol and methanol.

Not all of these VOCs are emitted from all sources, so selectivity is required in choosing which ones to evaluate for a given source.

Some of these VOCs are dependent on the conditions of the fermentation, and ratios of these compounds can vary depending on which specific enzymes and strains of yeast are used. Obviously, ethanol is the product, so it will always be present and in most cases is the most prevalent VOC. Some of the VOCs are not always present and may reflect undesired conditions in the fermentation.

The list of VOCs is subdivided into special compounds of interest known as HAPs. Some of the VOCs listed above are also HAPs, including acetaldehyde, acrolein, formaldehyde and methanol.

HAPs are subject to more stringent emission requirements than VOCs in general. For some facilities very stringent limits have been placed on HAP emissions. Acrolein limits, in particular, can require very low mass emission rates.

NOVEMBER 2014 | Ethanol Producer Magazine | 47

COMPLIANCE Testing Methods

The EPA provides several methods for testing and reporting the VOCs and HAPs generated in the production of ethanol.

The most commonly used methods include Method 18, Method 25A and Method 320.

In the configuration used in testing ethanol facilities, Method 18 is typically composed of a series of water impingers followed by silica gel tubes. The samples

are collected in the field and returned to a laboratory for analysis, typically using gas chromatography with flame ionization detection for the compounds listed above.

They can be analyzed on-site if equipment can be provided. Other analytical techniques can also be applied, if needed, for other compounds or requirements. Concentrations and mass rates of individual compounds are measured and reported. Detection limits of

individual compounds are variable, but the final detection limit can be controlled by varying sampling rates, times and volumes, and employing sample concentration techniques to achieve very low detection limits.

Method 25A is a field instrumental method (using a heated flame ionization detector) that measures the concentration of VOCs against a standard gas, typically methane or propane. Method 25A does not measure individual compounds, only the total response of the gas stream to the standard, so it is not applicable for determining HAPs nor specific compound emission rates. The detection limit for Method 25A is based on the instrument and calibration gases used, but generally one part per million is typical (as methane or propane).

Method 320 is another field instrumental method that measures VOC and HAP

48 | Ethanol Producer Magazine | NOVEMBER 2014

COMPLIANCE

concentrations based on Fourier transform infrared (FTIR) spectroscopy. The method is capable of measuring individual and HAP concentrations. Detection levels are variable depending upon instrument characteristics and the presence and concentration of interfering compounds such as water and carbon dioxide. The availability of necessary reference spectra for all targeted compounds can present challenges.

Another EPA method that is frequently cited is Method 207, designed to aid in determining and confirming the list of compounds that any given specific source may be emitting. For a source that has not been previously screened for appropriate VOC and HAP compound lists, or if the source has undergone an operational change that could affect the VOC and HAP emission profiles, many agencies recommend or require that this method be employed in advance of VOC or HAP compliance testing.

effective and successful emission compliance testing program. Understanding the test methods used and how they relate to VOC and HAP measurement is useful for plant environmental personnel in evaluating air emission permits and compliance test reports.

In summary, VOCs and HAPs are a natural result of the process of producing ethanol in a corn dry milling ethanol facility.

Most facilities already have stringent control systems in place such as wet scrubbers and

RTOs for the removal of these compounds.

Understanding the differences between these compounds and how they are measured and reported is important for the successful operation of the plant and adequate compliance with a facilityâ&#x20AC;&#x2122;s air emission permit.

Author: Dan Despen President, Interpoll Laboratories 763-786-6020 ddespen@interpoll-labs.com

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Keeping in Compliance

The air emission permit for each facility will give the various emission levels that each source to be tested must achieve to maintain compliance. There are usually separate limits for VOC and HAP emissions (although the HAP compounds do contribute to the total VOC measurement). Some permits will also include the specific methods to be applied for the emission testing program. Many permits, however, allow sufficient flexibility for the ethanol facility environmental manager and the testing company to present appropriate test methodologies in a written test plan.

Careful review of individual permit requirements is necessary to prepare an efficient and effective request-for-quote for obtaining proposals that will meet a facilityâ&#x20AC;&#x2122;s compliance requirements. Determination of concentration levels and the associated mass rates for each source to be tested is important information in selecting the most appropriate test methodologies to be employed.

Thorough communication of permitting requirements and close consultation with testing firms facilitate an

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NOVEMBER 2014 | Ethanol Producer Magazine | 49

TALKING POINT

Waste Not, Want Not: Turning Crop Residues Into Sustainable Fuel

By Manuel Sánchez Ortega

The industry has predicted 2014 to be a pivotal year for second-generation ethanol in the United States, and recent industry momentum only confirms this prediction. Thanks to recent technological

and policy advancements, many bioenergy companies are now moving away from first-generation fuel production, toward more advanced and sustainable second-generation technologies.

Less expensive and higher octane than equivalent petroleum fuels, ethanol has long been touted as a promising and environmentally friendly biofuel option with a low greenhouse gas output. There are limitations to how far the industry can go with purely starchbased ethanol, however. For this reason, Abengoa has spent the last 10 years perfecting its second-generation technology through the development of proprietary enzymes that extract sugars from nonstarch cellulosic materials. In this time, the company was able to vastly diversify potential feedstock options, dramatically increasing the efficiency and yield of the process.

One of the first second-generation ethanol plants to come online in the country, Abengoa’s new advanced biorefinery can be found nestled amongst the cornfields in southwest Kansas, about 20 miles from the Oklahoma border and only 50 miles from Colorado, where a massive expanse of gleaming stainless steel pipes and tanks erupt from a 400-acre tract of extremely flat land. Built by workers from the local area, the industrial compound includes 30,000 cubic yards of concrete that supports miles of industrial pipe and interconnecting control cables winding and twisting their way, connecting systems and tanks to produce 25 million gallons of cellulosic ethanol annually when running at full capacity. The plant’s cogeneration component allows it to utilize biomass solids from the ethanol conversion process to create 21 megawatts of electricity— enough to power itself and the local community.

Dry and fertile, surrounded by abundant farmland, Hugoton, Kansas, is the perfect place for Abengoa to cultivate a new

50 | Ethanol Producer Magazine | NOVEMBER 2014

technology that turns low-value agricultural crop residue—stalks, leaves and stems—into a renewable fuel source: cellulosic ethanol.

The company also has extensive plans for future development and implementation of this proprietary technology utilizing many different agricultural residues as well as municipal solid waste.

As the United States, and countries around the globe, strive for energy security through affordable solutions that remove reliance on oil imports, they also aim to protect the environment and the health of future generations by investing in cleaner technologies with a lower carbon footprint. The realization of commercial-scale cellulosic ethanol is not only a milestone for the companies involved, but also the biofuels industry at large. The success of the Hugoton project will further demonstrate the viability of cellulosic ethanol as a commercial fuel source, creating a market opportunity for a mainstream cost-competitive alternative to petroleum.

Commercial cellulosic ethanol production also creates jobs that support the new infrastructure of a decarbonized economy, and can help revitalize hard-hit rural America. We can turn agricultural waste into extra income for local farmers and create cost-competitive, highoctane fuel. Harnessing this technology will provide a tremendous economic benefit to the local economies where the fuel is produced, while also simultaneously benefiting consumers through lower fuel costs.

The future of biofuels is a bright one, and as companies continually improve their technology processes and streamline production, cellulosic ethanol will continue to show great promise as a transformative solution, providing the cost competitive edge needed for widespread adoption.

Author: Manuel Sánchez Ortega CEO, Abengoa communication@abengoa.com 636-532-2111

For information on RFA membership: info@ethanolrfa.org | 202.289.3835

NOVEMBER 2014 | Ethanol Producer Magazine | 51

BUSINESS MATTERS

Is it Time to Establish a Deferred Compensation Plan?

By Joe Leo

The ethanol industry is arguably experiencing its most profitable year despite the uncertainty exists with the 2014 renewable volume obligation, distillers grains exports to China and rail transportation logistics difficulties. As a result of this profitability, many

executives in the ethanol industry are considering the impact that taxes will have on their annual bonuses, which are frequently tied to the economic performance of their plants. A number of clients have recently inquired about developing deferred compensation plans in order to reduce their taxable income. While it is too late this year for many executives to defer current year income, it is possible to establish a nonqualified deferred compensation plan that will allow deferrals in future years. This tax planning tool can pay dividends, especially if the ethanol industry continues to experience its current profitability. Further, this tool can be very effective for executives as they near retirement age, when they presumably will have less taxable income than they currently have.

Deferring the payment of taxes is nothing new in the ethanol industry. Many corn suppliers are well-versed in deferring payments for corn until their next tax year. The concept of a nonqualified deferred compensation plan operates in much the same way. Electing to defer compensation to a future year, presumably when your taxable income will be lower, can significantly reduce the amount of taxes you pay.

There are risks associated with income deferrals that you should be aware of before implementing a nonqualified deferred compensation plan, however.

Participants in nonqualified deferred compensation plans can defer income until a certain date in the future or on the occurrence of some event in the future, such as retirement or termination of employment.

Participants in a nonqualified deferred compensation plan should work with their financial advisers to implement a strategy for deferring income that makes sense for their particular circumstances. IRS regulations allow participants in a nonqualified deferred compensation plan to be taxed on the deferred income in the year that it is received, instead of the year the income is earned, provided certain requirements are met.

Failure to meet these requirements can result in a 20 percent penalty and interest, which are intended to negate the benefit received from the income deferral.

The general rule for nonqualified deferred compensation plans is that an employee must elect to defer income in the taxable year, before 52 | Ethanol Producer Magazine | NOVEMBER 2014

the year in which the compensation is earned. For example, an employee who wishes to defer a portion of their annual salary for 2015 must elect the deferral on or before Dec. 31. There are exceptions to this general rule for newly hired employees, employees who are newly eligible to participate in the nonqualified deferred compensation plan or when an employer implements a new plan.

The deadline for making a deferral is different for performancebased compensation, such as a net income bonus or production related bonus. For performance-based bonuses, the deferral election must be made at least six months before the end of the period for which the performance-based bonus relates. Further, the deferral election cannot be made after the amount of the performance-based pay for that year becomes readily ascertainable.

Keep in mind that once the deferral election has been made, it may not be revoked except in limited circumstances. Those circumstances include the disability of the employee who has made the deferral election and an unforeseeable emergency experienced by the employee.

There are risks associated with nonqualified deferred compensation plans. These plans are not the same as more traditional retirement vehicles such as 401(k) plans which are held in separate accounts that cannot be reached by an employerâ&#x20AC;&#x2122;s creditors. Those who have deferred income in a nonqualified plan are subject to losing the entire amount of their deferred income in the event the employer files for bankruptcy or the employer does not have the assets to make the deferred compensation payment when it is due. An executive who participates in a nonqualified deferred compensation plan is a general unsecured creditor of the employer and is subject to the same risks as any other nonsecured creditor. In addition, participants in a nonqualified deferred compensation plan are subject to the risk that tax rates will increase in the future since the participant will pay taxes on the income when it is paid, as opposed to when it is earned.

Even though nonqualified deferred compensation plans are not without risk, they can be important tax planning tools for executives who are eligible to participate.

Authors: Joe Leo Attorney, BrownWinick Law Firm 515-242-2462 leo@brownwinick.com

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