2018 September Ethanol Producer Magazine

SEPTEMBER 2018

UNLEADED88

UNVEILED Growth Energy Releases E15 Name, Branding Strategies Page 16

ALSO

Corn Oil: Evolved Extraction Page 24

The Cost of Noncompliance Page 30

Above and Beyond OSHA Page 36

www.ethanolproducer.com

Year-round E15 is good for farmers and our economy.

See our story at GrowthEnergy.org/RVPrelief

We need RVP relief now to make E15 available year-round.

ADVERTISER INDEX

EDITORIAL President & Editor in Chief Tom Bryan tbryan@bbiinternational.com Editor Lisa Gibson lgibson@bbiinternational.com Associate Editor Tim Albrecht talbrecht@bbiinternational.com Copy Editor Jan Tellmann jtellmann@bbiinternational.com

ART

Badger Meter

21

Bion Companies

28

BetaTec Hop Products Buckman

D3MAX LLC

DuPont Industrial Biosciences

Art Director Jaci Satterlund jsatterlund@bbiinternational.com

Durr Systems, Inc.

Graphic Designer Raquel Boushee rboushee@bbiinternational.com

Ethanol Producer Magazine's Top News

PUBLISHING & SALES

Fluid Quip Process Technologies, LLC

CEO Joe Bryan jbryan@bbiinternational.com Sales & Marketing Director John Nelson jnelson@bbiinternational.com Business Development Director Howard Brockhouse hbrockhouse@bbiinternational.com Senior Account Manager/Bioenergy Team Leader Chip Shereck cshereck@bbiinternational.com Circulation Manager Jessica Tiller jtiller@bbiinternational.com Marketing & Advertising Manager Marla DeFoe mdefoe@bbiinternational.com

Fagen Inc.

Growth Energy ICM, Inc.

J.C. Ramsdell Enviro Services, Inc.

Leaf-Lesaffre Advanced Fermentations Mole Master Services Corporation Nalco Water POET LLC

EDITORIAL BOARD

Ringneck Energy Walter Wendland Little Sioux Corn Processors Steve Roe Commonwealth Agri-Energy Mick Henderson Pinal Energy Keith Kor Aemetis Advanced Fuels Eric McAfee Western Plains Energy Derek Peine Corn Plus Mike Jerke Front Range Energy Dan Sanders Jr.

R.S. Stover

Salco Products, Inc.

Victory Energy Operations, LLC

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 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 highquality 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 lgibson@bbiinternational.com. Please include your name, address and phone number. Letters may be edited for clarity and/or space.

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4 | ETHANOL PRODUCER MAGAZINE | SEPTEMBER 2018

32 38

22-23

44

3

7

27

9

2

39

29

13

35

41 43

33 11

18-19

CONTENTS

SEPTEMBER 2018 VOLUME 24

DEPARTMENTS 4

AD INDEX

6

EDITOR'S NOTE

7

EVENTS CALENDAR

8

DRIVE

10

12

ISSUE 9

FEATURES E15

On the Brandwagon

Growth Energy reveals new brand for E15: Unleaded88

By Lisa Gibson

Branding and Policies, With a Little Production

By Lisa Gibson

RVP Season Ends, New Identity for E15 Begins

By Emily Skor

16

GROWTH ENERGY

CORN OIL

Extraction Optimization

New techniques require process adjustments

By Susanne Retka Schill

GLOBAL SCENE

A Reality Check on Clean Mobility

By Emmanuel Desplechin

GRASSROOTS VOICE

An Open Letter to EPA Acting Administrator Wheeler

By Brian Jennings

14

BUSINESS BRIEFS

42

MARKETPLACE

24

TRUCENT

REGULATORY COMPLIANCE

Violation, Education and Documentation

Thorough rule understanding reduces chances of penalties

By Tim Albrecht

30

FILE PHOTO

SAFETY

Outside OSHA’s Umbrella Compliance doesn’t completely remove risks

By Tim Albrecht

ON THE COVER Growth Energy is providing branding materials and guidelines for Unleaded88 so retailers can set up their marketing strategies. Pictured is a Minnoco fuel pump.

PHOTO: MICHAEL K MCCANN

36

FILE PHOTO FILE PHOTO

Ethanol Producer Magazine: (USPS No. 023-974) September 2018, Vol. 24, Issue 9. 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.

ETHANOLPRODUCER.COM | 5

EDITOR'S NOTE

Branding and Policies, With a Little Production Generally, when I pull my white Buick Regal (her name is Claire) up to the gas pump, I look for the familiar 91 octane fuel with a 10 percent ethanol blend. That’s what I know. That’s what I buy.

Lisa Gibson

Editor lgibson@bbiinternational.com

Defaulting to the recognizable is a standard consumer behavior and it takes some blame for the slow growth of E15 acceptance. Consumers, for the most part, aren’t interested in taking the time to learn about a new product at the gas pump. We don’t like to hang out there longer than we have to.

Branding E15 across the industry has been a main goal of Growth Energy’s Prime the Pump initiative. Retailers call E15 different names, market it differently and sell it sporadically. After what sounds like thorough research and on-the-ground surveys with customers at fuel stations, Growth Energy says the best name for E15, and the name PtP will promote to all retailers, is Unleaded88.

Depending on market guidelines, a retailer could use Regular88, but the branding and presentation will be the same. The large retailers already partnered with PtP are starting to make the switch now. But for total market coverage, it needs to go beyond those retailers to every little gas station in, say, Petersburg, North Dakota.

The cover story, “On the Brandwagon,” (page 16) looks at Growth Energy’s new name and complete marketing strategy, and how it expects them to spread beyond its cohorts. Market pressure plays a role, but one large retailer who hasn’t participated in PtP says he’ll switch to the Unleaded88 brand on his pumps. He says it’s just good marketing and a sound business decision to sell the product that’s recognizable. It’s wise for retailers of all sizes to follow along, he adds.

Switching our focus to coproducts, the feature on page 24, “Extraction Optimization,” addresses the process changes required to accommodate some of the new enzyme and fractionation techniques for corn oil extraction. It’s worth the investment and extracting more oil doesn’t necessarily make the DDGS less valuable, experts say, adding that producers are “leaving money on the table.”

“Violation, Education and Documentation” reports the figures on EPA fines levied in the past few years, common mistakes that can prompt penalties, best practices to avoid accidental violations, and more. In some instances, a violation can result from one mistake in a permit. It starts on page 30.

Finally, “Outside OSHA’s Umbrella,” communicates to producers that 100 percent compliance with Occupational Safety and Health Administration mandates does not eliminate safety hazards.

Facilities should go above and beyond those regulations, implementing their own programs to maintain safe workplaces. It’s a story idea from a prominent figure in the safety sector. Turn to page 36 to learn more about suggested safety plan goals.

We’ve covered several topics in this issue, across many sectors of our industry: branding and policies, with a little production. Our cover story on E15 is particularly relevant, as the Reid vapor pressure season ends this month. Of course, a waiver is crucial to the continued spread of Unleaded88 sales and several sources in that feature say they expect it (perhaps optimistically, I suspect) next year.

With that waiver, I hope more stations here in Grand Forks, North Dakota, will offer Unleaded88.

Claire would appreciate the upgrade.

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EVENTS CALENDAR

2019 International Fuel Ethanol Workshop & Expo June 10-12, 2019 Indiana Convention Center

2019 Advanced Biofuels Conference June 10-12, 2019 Indiana Convention Center

From its inception, the mission of this event has remained constant: The FEW delivers timely presentations with a strong focus on commercial-scale ethanol production—from quality control and yield maximization to regulatory compliance and fiscal management. The FEW is the ethanol industry’s premier forum for unveiling new technologies and research findings. The program covers cellulosic ethanol while remaining committed to optimizing existing grain ethanol operations.

866-746-8385 www.fuelethanolworkshop.com

Colocated with the International Fuel Ethanol Workshop, the Advanced Biofuels Conference is tailored for industry professionals engaged in producing, developing and deploying advanced biofuels, including cellulosic ethanol, biobased platform chemicals, polymers and other renewable molecules that have the potential to meet or exceed the performance of petroleum-derived products.

866-746-8385 www.advancedbiofuelsconference.com

Indianapolis, Indiana

Indianapolis, Indiana

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ETHANOLPRODUCER.COM | 7

DRIVE

RVP Season Ends, New Identity for E15 Begins

By Emily Skor

September marks the end of the Reid vapor pressure (RVP) season that runs from June 1 to Sept. 15 and severely limits the summertime sale of E15 throughout most of the U.S. As I have often said, the biofuels industry is a shining example of a true American success story, and the rapid growth and expansion of E15 has been a landmark chapter in that story. Growth Energy’s leadership with the Prime the Pump

program has seen us double the number of stations selling E15 for the past four consecutive years. Currently, we have over 1,400 retail locations selling E15 across the U.S., and we have secured commitments from more than 2,800 retail sites that will offer E15 by 2021, generating approximately 350 million new gallons of ethanol annually.

The progress we have made with E15 is despite an outdated regulation in the 1990 Clean Air Act that grants a 1 pound per square inch RVP waiver for evaporative emissions to fuel blended with 10 percent ethanol, in order to be sold in the summertime. That waiver was granted to E10 because EPA recognized that ethanol displaces toxic chemicals in gasoline while also significantly reducing greenhouse gas (GHG) emissions that far offset the added evaporative volatility.

Unfortunately, when the law was written, higher blends including E15 had not yet been conceived of, and oil interests are doing all they can to ensure these blends do not receive equal waiver treatment to E10.

And yet, more than 5 billion consumer miles have been driven on E15 and more leading retailers are adding it to their fuel portfolios because they recognize the competitive advantage of carrying a higheroctane fuel that they can sell for 5 to 10 cents per gallon less than E10.

But the RVP issue remains a constant thorn in the side for consumers, retailers and indeed the biofuels industry. Estimates based on sales, projected sales and growth of our current Prime the Pump retailers show that obtaining immediate year-round RVP relief for E15 would deliver 1.3 billion gallons of new ethanol demand in the next five years.

The potential for growth is immense.

8 | ETHANOL PRODUCER MAGAZINE | SEPTEMBER 2018

Leading the charge for RVP relief is a primary mission of our association and our entire industry, but it is not the only weapon in our arsenal. For the past three years, Growth Energy has worked with our retail partners to better understand how and why consumers make the choices they do at the pump – with the end goal of increasing E15 sales.

Through over 4,000 qualitative and quantitative surveys, field tests at over 350 locations in key states, and analyzing over 300,000 transactions, we discovered that the identity, the name itself—E15—was holding us back.

Working in lockstep with the Prime the Pump board to uncover the most effective name, visual identity and messaging for fuel blended with 15 percent ethanol, our data show that an “unbranded” strategy delivers the greatest lift in sales. Rather than position E15 as a niche product, we need E15 to become the new normal at the pump to ensure continued widespread adoption that in turn paves the way for market acceptance of even higher blends.

Prime the Pump retailers are coalescing around this unbranded strategy to market E15 as Unleaded 88/Regular 88, depending on each retailer’s current fuel marketing guidelines, because our research has shown that when E15 is treated more like any other fuel, consumers reach for it. Rather than focusing on the ethanol content (what our industry cares about), the unbranded strategy focuses on the octane value proposition that ethanol delivers to consumers because, first and foremost, the fuel purchase is about value for performance. Secondary are added societal benefits such as fewer toxic emissions and cleaner air. We are using hard data, science and testing to continue to push the envelope for American biofuels and reintroduce ethanol to consumers across the country. With RVP season in the rearview mirror, you will start to see leading retailers roll out Unleaded 88/Regular 88 as the marketing for E15 at their pumps. This is an important step for the industry, and we are thrilled to work with our retail partners to write the next chapter of this great American success story.

Author: Emily Skor CEO, Growth Energy 202.545.4000 eskor@growthenergy.org

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GLOBAL SCENE

A Reality Check on Clean Mobility

By Emmanuel Desplechin

The EU has high hopes for lowering greenhouse gas (GHG) emissions from cars and light-duty vehicles in the coming decades. But in Brussels, most of

the talk on this important issue focuses on electric vehicles as a so-called “zero-emission” solution.

That’s an admirable goal, but the real story is not quite so clear cut.

Two new studies offer a timely reality check on what kind of cars are likely to be on Europe’s roads between now and 2050—and what will be needed to decarbonize them. The message from the research is clear: With a high percentage of cars with internal combustion engines still in circulation, sustainable low-carbon fuels such as renewable EU ethanol will play a vital role.

A Ricardo Energy & Environment study looked at the makeup and emissions of the potential EU auto fleet mix for the coming decades.

It found that use of low-carbon fuels like renewable EU ethanol could provide additional GHG reductions that would otherwise not be achieved. It also found that the use of sustainable ethanol could lessen potential long-term uncertainties associated with the deployment of electrically chargeable vehicles (ECVs).

The other study, from the European Automobile Manufacturers’ Association (ACEA), looked at barriers hampering the uptake of electrically chargeable cars in the EU, concluding that market penetration is low and “very fragmented.”

Even under the most ambitious scenario examined in the study, with 40 percent of the new passenger cars sales in 2030 being electric vehicles, those vehicles would make up just 15.7 percent of the EU passenger vehicle fleet in 2030.

The study also looked at the related direct and well-to-wheels GHG emissions of these different scenarios depending on the amount of low-carbon fuels in the energy mix.

The report states: “The additional [carbon] savings generated by the increased use of low-carbon fuels mean that even with low electrification rates, reductions achieved under a low-carbon fuels scenario are greater than a scenario with high electrification but no increased use of lowcarbon fuels. This is true even if electricity decarbonizes more rapidly than in the reference scenario.”

10 | ETHANOL PRODUCER MAGAZINE | SEPTEMBER 2018

The ACEA study notes that ECVs currently make up 1.5 percent of total new car sales in the EU and identifies key barriers holding back wider consumer uptake of ECVs: affordability, infrastructure availability, and lack of investment.

The affordability of electric cars remains a strong deterrent for customers across the EU, according to ACEA. Its analysis shows market share is close to 0 percent in countries with a GDP below 18,000 euro, while it is no more than 0.75 percent in half of all EU member states.

“The market is essentially driven by customers,” says ACEA Secretary General Erik Jonnaert. “A natural shift to electric vehicles will simply not happen without addressing consumer affordability.”

The European Commission has proposed a benchmark for the share of zero- and low-emisions vehicles registrations at 15 percent by 2025 and 30 percent by 2030. But battery-electric cars accounted for just 0.7 percent of total EU car sales in 2017. “We are worried that some policymakers have completely unrealistic expectations regarding the pace of market development,” Jonnaert says.

These studies clearly show that betting only on one solution for Europe is not enough to reduce transport emissions. We need a variety of tools to decarbonize the majority of the existing and future fleet still running on liquid fuels.

A more realistic approach to achieving EU clean mobility goals requires incentivizing sustainable renewable low-carbon liquid fuels as an immediate, cost-effective solution to decarbonizing new and future transport.

As the process of deciding on the post-2020 light-vehicle carbondioxide standards begins, the EU should consider a technologyneutral approach in the transport sector, ensure policy consistency by maintaining the Fuel Quality Directive requirement to lower the carbon intensity of transport fuels, and promote deployment of renewable, low-carbon liquid fuels.

The EU needs clean transport that offers motorists viable options and reduces harmful emissions. But we shouldn’t have to wait decades for the uptake of electric vehicles and installation of new infrastructure.

With renewable ethanol, we can deliver results now.

Author: Emmanuel Desplechin Secretary General ePURE, the European Renewable Ethanol Association desplechin@epure.com

GRASSROOTS VOICE

An Open Letter to EPA Acting Administrator Wheeler

By Brian Jennings

With the resignation of Oklahoma’s favorite son Scott Pruitt as EPA Administrator, Andrew Wheeler now assumes the role in acting capacity until the U.S. Senate confirms whomever President Trump decides to appoint for the long haul. As Wheeler becomes

the 21st person to take the reins of EPA, this seems like a good time to offer him some advice.

For starters, a good rule of thumb might be to do the opposite of Pruitt. Don’t fly first class on the taxpayers’ dime. Don’t exploit your position in an effort to get your wife a Chick-fil-A franchise. Don’t expect to pay a coal lobbyist $50 per night to stay at his Washington, D.C., townhouse. I could go on, but you get the point.

On a more serious note, here are some recommendations for how EPA can build bridges back to the ethanol industry. Consider this a blueprint for restoring the trust EPA has broken with farmers and rural America.

1. Make good on the president’s promises to allow E15 use yearround.

Trump has made three or four public promises to allow E15 use year-round and has not said it has to be a package deal whereby refiners get another win in exchange. EPA should issue a clean and legally defensible proposal to provide Reid vapor pressure (RVP) relief for all ethanol blends greater than 10 percent so a final rule is in place before the spring of 2019.

2. Make good on Trump’s Renewable Fuel Standard promises.

As a former Senate staffer, perhaps you will have better appreciation for the need to adhere to the letter of the law when implementing the RFS than Pruitt. Trump proclaims to support the RFS. Here are steps EPA could take with the RFS to reverse some of the damage Pruitt has done to ethanol demand.

• Stop handing Small Refinery Exemptions out like trick-or-treat candy. Immediately reallocate the 2.25 billion gallons already waived. If and when EPA issues legitimate Small Refinery Exemptions, reallocate the waived gallons to remaining obligated parties as required by the law.

• Comply with the court ruling (Americans for Clean Energy et al. vs EPA) on EPA’s improper use of the RFS waiver authority, which requires you to restore a 500 million-gallon renewable identification

number (RIN) obligation to the 2016 renewable volume obligation (RVO).

• Take the export RIN scheme to the trash once and for all. It’s illegal, would add insult to the trade war injury already hurting farmers, and jeopardize our ability to export ethanol.

• Adopt the most recent Argonne National Laboratory’s GREET model to determine the life-cycle analysis of corn ethanol. EPA’s analysis of the carbon footprint of ethanol is severely flawed and has not been updated since 2010.

• Clear the red tape stalling the progress of cellulosic biofuel.

Unfortunately, it can take more than 1,000 days to approve new pathways for cellulosic feedstocks. For plants with approved pathways, EPA appears to be slow-walking the registration process. Accelerate the approval of cellulosic ethanol registration applications. This would help put more volumes of cellulosic biofuels online as intended under the RFS. 3. Unleash high-octane fuels to help meet future Corporate Average Fuel Economy greenhouse gas (GHG) standards.

Ethanol is a superior high-octane, low-carbon fuel that can help automakers comply with fuel economy and GHG standards and save consumers money at the pump. Here are actions EPA should take to help pave the way for a high-octane future.

• Approve an alternative certification fuel with 25 to 30 percent ethanol and a minimum octane of 98 to 100 RON so automakers can begin testing future engines on a high-octane blend.

• Establish a minimum octane performance standard for fuel in the range of 98 to 100 RON. This will foster a marketplace that spurs competition and innovation to produce low-cost, high-octane fuels.

• Restore credits to automakers for the manufacture of flexible fuel vehicles and consider a new incentive for future engines designed to achieve optimal efficiency on high-octane fuels.

• Correct the outdated MOVES2014 model used in calculating the tailpipe and evaporative emissions of ethanol.

Mr. Wheeler, everything we are asking of you is based on the law and enabling consumers to have a choice at the pump. You have an incredible opportunity to build bridges and restore trust. Don’t let us down.

Author: Brian Jennings Executive Vice President American Coalition for Ethanol 605.334.3381 bjennings@ethanol.org

12 | ETHANOL PRODUCER MAGAZINE | SEPTEMBER 2018

BUSINESS BRIEFS

People, Partnerships & Projects

ACE Scholarship Program announces 2018 winners The American Coalition for Ethanol has announced its 2018 scholarship recipients: Keithen Drury, Brett Galles and Emma Baker. Each student receives a $1,000 scholarship through ACE’s Scholarship Program to help further their collegiate education.

“ACE wishes these bright young students of ACE member plant employees the best of luck as they pursue their future careers,” says Brian Jennings, ACE CEO. “Students today are the leaders of tomorrow and their education is critically important for the future development of biofuels, its associated industries and beyond.”

Drury, from Blue Hill, Nebraska, is pursuing a degree in mechanical engineer-

ing at Dordt College in Sioux Center, Iowa.

Drury is the son Drury of Terry and Penny Drury.

Terry Drury is employed at Chief Ethanol Fuels in Hastings, Nebraska.

Galles, of Remsen, Iowa, will be attending Iowa State University in Ames where he plans to study industrial engineering. Galles is the son of Bart and Kelly Galles. Bart Galles is employed at Little Sioux Corn Processors in Marcus, Iowa.

Baker is from Lena, Illinois, and will be pursuing nursing at Highland Community College in Freeport, Illinois. She is the

Galles

Baker

daughter of Ray and Amy Baker. Ray Baker works at Adkins Energy in Lena.

The ACE Scholarship Program was initiated in 2004 and has awarded $53,000.

Scholarships are made available to employees and dependents of employees and shareholders of ACE ethanol producers, voting and associate member companies and organizations in good standing.

Poet to develop 80 MMgy ethanol plant in Indiana On July 23, Poet LLC received an approval from the Shelbyville, Indiana, planning commission that will allow it to proceed with the development of an 80 MMgy ethanol plant at a site five miles northwest of the city.

“Poet is thankful for the community leaders who worked to move this state-ofthe-art biofuels facility forward,” said Buck Yerdon, with Poet commercial development. “This project is a big economic win, not only for Shelbyville, but the entire area.

It creates new jobs, injects $200 million into the local economy each year and allows local farmers and residents to take part in the national effort to grow our use of clean biofuels.

“Our 28 biofuel facilities are all active members of their local business communities,” Yerdon added. “We strive to be good neighbors and help our communities grow and thrive. We know we could do that here as well, and we’re excited to be able to take the next step towards making Poet Biore-

14 | ETHANOL PRODUCER MAGAZINE | SEPTEMBER 2018

fining – Shelbyville a reality. Poet will make future announcement related to this project as developments warrant.”

The 80 MMgy facility will take in about 28 million bushels of corn annually. The project represents an expected $150 million to 160 million capital investment and will create nearly $3 million in added value for local crops, contribute $2 million to the local community in annual payroll and have a total $200 million annual economic impact in its area.

BUSINESS BRIEFS¦

National Corn Growers Association names interim CEO The National Corn Growers Association board has selected Jon Doggett, NCGA executive vice president, to serve as the organization’s interim CEO. Doggett started in his new capacity on Aug. 1, upon the departure of Chris Novak.

Doggett has served as executive vice president since 2014. Before that, he served as vice president of public policy, and continues to manage the organization’s 11-person Washington, D.C., office and lead its public policy efforts.

Raised on his family’s Montana ranch, Doggett has substantial knowledge of production agriculture and more than 30 years of agricultural policy experience.

Before joining NCGA, Doggett served 11 years at the American Farm Bureau Federation as lead lobbyist on a number of public policy issues, including ethanol, climate change, land use, conservation and endangered species.

While in Washington, Doggett also worked for the National Cattleman’s Beef

Association/Public Lands Council and served as senior legislative assistant for former Rep. Ron Marlenee (RDoggett Mt.).

An announcement regarding the formal search process for a permanent CEO will be made at a later date.

Hawkins joins Phibro Ethanol Performance Group Andrew Hawkins has joined Phibro’s Ethanol Performance Group as director of laboratory services and will be responsible for all functions of the St. Paul Technical Center, which includes research and development projects, customer diagnostic services and quality assurance/quality control functions, among other technical duties.

Hawkins joins Phibro with more than

20 years of experience in microbiology, bioprocessing and biotechnology. He received a Bachelor of Science in Biology from the University of Dayton in Ohio and a Ph.D. in Microbiology from the University of Iowa.

“We are excited to have someone of Andrew’s caliber join Phibro EPG,” says Jenny Forbes, vice president of products and services for Phibro EPG. “The knowledge

and experience that Andrew brings to Phibro will provide great leadership and continued top-notch technical support for our customers.”

Hawkins

USDA announces United Sorghum Checkoff Program board appointments Agriculture Secretary Sonny Perdue announced the appointment of four members to serve on the United Sorghum Checkoff Program board for three-year terms: Craig A. Poore, Alton, Kansas; Boyd Funk, Garden City, Kansas; Jim Massey IV, Robstown, Texas; and Adam Schindler, Reliance, South Dakota (at-large).

“The United Sorghum Checkoff Program board works to help increase demand for sorghum both domestically and internationally,” Perdue said. “Last year, more than $1 billion of U.S. sorghum was sold in more than 21 countries around the world. I truly appreciate the time and expertise these individuals have agreed to give to guide their

industry and help it thrive.”

The 13-member board is composed of nine sorghum farmers who represent Kansas, Texas and Oklahoma, the three states with the largest sorghum production, and four at-large national representatives.

ETHANOLPRODUCER.COM | 15

ON THE

BRANDWAGON Prime the Pump has branded E15 as Unleaded88, with a strategy in place to expand the name and pump design across the industry.

By Lisa Gibson

SAMPLE STRATEGY: Growth Energy has unveiled the branding it has settled on for E15 after years of research and experimentation through its Prime the Pump initiative. It is offering retailers information on its new brand, Unleaded88, as well as ideas for presentation at the pumps.

PHOTO: MICHAEL K MCCANN

16 | ETHANOL PRODUCER MAGAZINE | SEPTEMBER 2018 16 | ETHANOL PRODUCER MAGAZINE | SEPTEMBER 2018

E15

ETHANOLPRODUCER.COM | 17 ETHANOLPRODUCER.COM | 17

E15 After two years of customer surveys, interviews and branding experiments at large retailers in the U.S., Growth Energy’s Prime the Pump initiative has landed on what it says is the best-suited name for E15: Unleaded88. Many

of the 20 large retailers that participated in PtP plan to make their full branding switch beginning this fall, according to Mike O’Brien, vice president of market development for Growth Energy.

Currently, 1,400 stations across the country are selling E15 blends through PtP, and soon will update their branding to Unleaded88. A total of 2,800 stations are committed to selling E15 through PtP, meaning Unleaded88 will account for 3 percent of the total fuel sold in the U.S., O’Brien says. If current retailers committed to the brand through PtP continue to expand, the path for a 15 percent market share is already laid out, he adds. And that’s the tipping point. “That’s a big chunk of the market,” he says. “People pay attention.

Competition happens.

“If we didn’t do anything more, just work with our current retailers and keep building out, there’s a path to 15 percent of the market.

And that’s when the market takes off.”

Crucial to that market takeoff, O’Brien and others emphasize, is a consistent brand that customers recognize and understand. Enter Unleaded88.

Unleaded88

A main goal of PtP is to establish a consistent brand for E15, which goes by numerous names at different retail stations across the country. Through surveys, interviews with more than 4,000 consumers—including many right at the pump when decisions are made— and branding tests that evaluated customers’ responses to certain names, PtP settled on Unleaded88, O’Brien says. Retailers also can use the name Regular88, depending on their current fuel marketing guidelines. “’E15’ is a foreign name for customers,” he says. “They’re used to ‘unleaded.’ They’re used to ‘regular.’”

Branding E15 as Unleaded88 in PtP experiments showed an increase in sales of 16 percent, vastly larger than any other names

tested, O’Brien cites. The name “E15” showed a sales increase of just 3 percent, and various uses of the term “Eblend” showed increases of up to 10 percent. “We really analyzed the consumer reaction to everything,” he says.

“They’re used to buying unleaded. They’ve been buying it for 30 years. This is the way they buy fuel. So our intent here is this is just like the other fuel, just a little better.” Use of the word “ethanol” didn’t come across negatively in brands, but it also didn’t boost sales, O’Brien notes.

Unleaded88 will be presented with blue signage and tags such as “Engine Smart. Earth Kind.” or “Burns cleaner. Higher Octane.” On the pump design PtP is pushing, Unleaded88 will appear on the left, likely accompanied by pump toppers and a video Growth Energy is preparing for fuel pumps equipped with screens.

“They’re already selling these unleaded varieties, and we’re unleaded as well, but now you call it 88 because of the octane,” O’Brien says. “That takes away some of the fear of it.

But, unfortunately, because the hose is to the left, we have to call it out a little bit.

E15

“We want Unleaded88 to be this intuitive thing that people just do because that’s what they do. We’ve just got to get them over that initial hump. We’ve worked really hard to build out this approach. We have a branding playbook that we give to retailers.”

Competition by the Book

For the “big 20,” as O’Brien calls them, switching to the new brand will be simple, as PtP is equipped to help provide funding and knowledge as needed for the transition. Casey’s General Store, which has been working with PtP, already has E15 branded as Unleaded88 at a few of its stations and will continue its rebranding effort with overlays and road signs, says Nathaniel Doddridge, director of fuels for the retail chain. Forty of the company’s stations offer E15 now, he says, with a commitment to upgrade 10 to 15 more. Moving forward, all new stations will offer the Unleaded88 brand, as well. So far, the branding technique and name have been accepted well by customers, he says.

Initially, Casey’s had an agreement with PtP to help get traction with E15, Doddridge

PRIME PRESENTATION: Growth Energy's Prime the Pump initiative has put together a pump design to be used by retailers selling Unleaded88.

SOURCE: GROWTH ENERGY

explains. “Historically, we haven’t been a fast mover when it comes to changing our product specs in regard to fuel.” But the PtP program showed that Growth Energy had enough in-

dustry knowledge to guide Casey’s in the initiative, he says.

Doddridge says Unleaded88 is an ideal name for the product, as it’s recognizable and

SIGN OF THE TIMES: Growth Energy hopes to see its new Unleaded88 brand spread across the country. E15 can retail for up to 10 cents less than regular unleaded.

PHOTO: MICHAEL K MCCANN

not overwhelming to consumers. Most people don’t even know regular fuel contains 10 percent ethanol, he says. “In a lot of customers’ eyes, fuel is fuel.

“When you start talking about percentage of ethanol, customers get a little skeptical and a little uneasy. So 15 percent ethanol really creates a lot of confusion in our customer base.” An overwhelming number of options at a pump causes the paradox of choice, O’Brien and Doddridge say, prompting customers to default to their usual selection. Most people just look at octane and price, O’Brien adds.

But how will it spread beyond the big 20?

Competition, of course. “Other retailers will look at us and realize this is a competitive advantage,” Doddridge says. “Once other competitors of ours start to see that this product is creating value that they’re not getting, I think you’ll start to see more and more bend a little bit and start offering this. We’ll naturally navigate to the most common product name.”

It seems to be happening already. Randy Gard, chief operations officer for Bosselman Enterprises, says the company’s Pump & Pantry stations across Nebraska likely will adopt the Unleaded88 name and look, despite the fact that Bosselman is not among the big 20 and hasn’t been working with PtP at all. “We may jump on that bandwagon for that because it’s spot on,” he says of the name Unleaded88.

Currently, Pump & Pantry brands its E15 as Clean88, but isn’t “married to” the brand, Gard says. “Consumers know what unleaded is. They’re accustomed to seeing it.”

But branding across the industry isn’t easy, Gard cautions. “It’s always been difficult to get retailers on the same page with a consistent dispenser overlay that consumers become accustomed to. … I think it needs to be a team effort. Growth Energy’s biggest obstacle is to try to pull together retailers to get that brand consistency.”

20 | ETHANOL PRODUCER MAGAZINE | SEPTEMBER 2018

Pump & Pantry’s E15 sales in 2017 were up 400 percent over 2016, selling at 5 cents less than E10, Gard says. That’s without any additional promotion or marketing. It’s foreshadowing of what Unleaded88 as a brand could do in the marketplace, essentially forcing the transition at all retailers, just to maintain market share. “If you’re a small retailer, quite frankly, the faster you go there, the better off you’re going to be.”

Bosselman has worked with the state of Nebraska, which has some grant money through USDA, in updating its stations in Lincoln and other large markets to sell E15. Two more locations are set for updates to tanks and blender pumps, and likely will start selling E15 as Unleaded88 right away, he says.

Assistance from the state helps Bosselman fund the transition and pump upgrade, PtP will help some of its participating retailers, but many others won’t have funding assistance.

Still, the switch will be crucial for business and a wise move, O’Brien and Gard agree. “Do we wish we had more money to help expand that and buy blender pumps? Sure. But that’s not going to stop us.” Retailers can inquire about funding from state agencies or corn growers’ associations, O’Brien says.

Gard cautions about misinformation regarding whether retail stations are equipped to handle E15. Most infrastructure is, he says, and small retailers should contact their infrastructure distributor to ensure their pipes and tanks are compatible. “The truth is, the majority of infrastructure can handle E15,” he says.

Gard told Ethanol Producer Magazine that Bosselman would reach out to Growth Energy right away to discuss the branding and consistency at its locations. “We’ll probably follow that lead.”

O’Brien says PtP is working to get marketers on board with Unleaded88, which should prompt branded oil to adopt the Unleaded88 brand, or face losing market share like any other retailers who don’t transition. Some terminals are starting to sell E15, he says, and the key to getting “mom and pop” retailers on board is breaking the brand guidelines.

RVP Obstacle

Of course, it’s clear to anyone in the ethanol industry that, in the absence of a Reid vapor pressure waiver, retailers might not jump

E15

GROWTH GRAPHICS: Growth Energy has provided possible tag lines and marketing ideas for retailers to make the switch to Unleaded88.

SOURCE: GROWTH ENERGY

on that bandwagon, if they’re not already selling E15. Gard and Doddridge are unconcerned and explain it away using the principle of demand.

“It is an issue, but at the end of the day, the demand for that product is going to force

the RVP waiver to get taken care of,” Gard says. “It’ll be an obstacle this year, but I’m confident that, hopefully by the RVP season next year, that that’s nothing but a bad memory.”

Doddridge says, “Retailers are still on edge about the 1-pound waiver, but that will be the tipping point for the product.” When the waiver is issued, the ripple effect will take off throughout the industry, he says. “We’re optimistic that there has been enough positive traction that we feel like we’re not two years out and really hopeful next year will be the year we finally cross that threshold.” Other stumbling blocks, such as noncontainment areas, have crumbled, he adds, and this is just another. “If we pound that drum loud enough, it’s eventually going to happen.”

Sales figures show a large appetite for Unleaded88, Doddridge says. “We want to sell the products that customers want. If customers are asking for it, why wait to give it to them?”

And if a 95 RON high-octane standard is eventually implemented, the Unleaded88 market will only burgeon further. “I truly believe it must be met with ethanol,” Doddridge says.

With an RVP waiver, at a minimum blend rate of 15 percent, the 9,300 retail stations represented by the large retailers PtP is working with could achieve additional ethanol sales of 1 billion gallons per year, O’Brien says. “I think it’s doable. I think it’s pretty reasonable.”

And there’s room for brand adaptation if higher blends become the norm, O’Brien assures. For instance, if E25 has a 95 octane, the brand would be Unleaded95, he says.

“There’s room for evolution,” Doddridge says. “I don’t think it’s beyond the realm of possibility to say Unleaded88 could become the standard.” That would open the gateway for E20 and E25 to enter the market next, he adds.

Author: Lisa Gibson Editor, Ethanol Producer Magazine 701.738.4920 lgibson@bbiinternational.com

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CORN OIL

24 | ETHANOL PRODUCER MAGAZINE | SEPTEMBER 2018

EXTRACTION OPTIMIZATION New enzymes and fractionation technologies require multiple adjustments to corn oil extraction.

By Susanne Retka Schill

TECHNIQUES AND TWEAKS: Evolution in corn oil extraction causes changes downstream.

It’s a complicated process, but experts say producers are leaving money on the table when they don’t extract optimally.

PHOTO: SOLENIS

ETHANOLPRODUCER.COM | 25

CORN OIL

PROPER APPROACH: Two types of centrifuges employ different strategies to separate oil. Disk stack centrifuges (left) use high speeds and short residence times, while decanter centrifuges offer longer residence times with lower speeds.

PHOTOS: SOLENIS

Realizing the promise of greater corn oil extraction rates using new enzymes or fractionation technologies requires working with partners, says Scott Lewis, biorefining research and development scientist with Solenis. “When you implement these technolo-

gies on the front end, everything is going to change on the back end.”

Oil separation is complicated because syrup contains more than one form of oil, he explains. Free oil forms droplets that are stabilized by naturally occurring emulsifiers, be it free fatty acids, proteins or phospholipids.

Other oil is attached to solid surfaces such as cellular debris or proteins. And then there are oleosomes—oil bodies that are 95-plus

percent oil encased in a protein-stabilized covering—the corn kernel’s strategy for storing energy for germination. The oleosomes present a problem for ethanol producers trying to maximize oil yields, because centrifuges require a minimum droplet size. “These oleosomes are 2 microns in diameter at most, so the centrifuges aren’t going to separate those out, and even if they do, it will be a messy emulsion,” Lewis says. Demulsifying extraction aids improve the separation of these types of oil.

Adding a cellulase opens up the cellular debris, releasing oil trapped in the complex cellulosic structure. Adding a protease liberates the oil in the oleosomes and emulsified oil droplets. Not only does it make the oil more available, but it also impacts other separation factors, Lewis says. Proteases, for example, break down the proteins into shorter peptides, but since the proteins act

26 | ETHANOL PRODUCER MAGAZINE | SEPTEMBER 2018

as emulsifiers, altering proteins also impacts the efficiency of the demulsifiers in the traditional dry grind process. There are changes to other properties, he adds, “the viscosity, dissolved solids, suspended solids. All those have impacts on separation in the centrifuge; [new enzymes and fractionation technologies] also change the distribution of the oil in those process streams and even the forms of oil.”

On the Market

It’s important to take a holistic approach, Lewis says. Solenis offers a broad family of its Dimension corn oil extraction aids, designed for different conditions and goals, he says, but there are other things to consider. “We are working on the chemistry side, but there are also things from a mechanical standpoint or by changing the spot you’re pulling the syrup from that can have a big impact.”

ETHANOLPRODUCER.COM | 27

CORN OIL

Using proteases and cellulases increases the oil available in the thin stillage by 10 percent, says Jennifer Aurandt-Pilgrim, technical services director for Trucent (formerly Valicor). The enzyme effects include increased dissolved solids or increased viscosity. “You have to optimize the centrifuges or deploy other technologies—either extraction aids or the operation of your centrifuges. Also, there are ways to decrease viscosity.” A former college chemistry professor, AurandtPilgrim refers to Stokes’ Law when working

with plant operators on optimizing oil separation. Stokes’ Law is a formula that shows the relationship of oil droplet size, density and viscosity to the velocity and acceleration of the centrifuge itself. The variables affecting viscosity include dissolved solids properties such as particle size, residual sugars, suspended solids, total solids or temperature, and are the easiest to manipulate in the ethanol process, she says.

Trucent has conducted a benchmarking study of more than 40 ethanol plants to find

a wide range of separation efficiencies. Oil recovery starts in the decanters separating thin stillage from wet cake, with a range of efficiency in partitioning oil to thin stillage between 45 and 75 percent and an average of 60 percent. The range narrows at the oil centrifuges, to a low of 75 percent and a high of 95 percent, with an average of 86. In another study, Trucent looked at 250 variables impacting some 6,000 samples to identify more than 50 that have strong and moderate correlation with high corn oil yield and efficiency at the decanters and centrifuges.

The amount of oil extracted averages 0.7 pounds per bushel, Aurandt-Pilgrim reports, with a range between 0.5 and 1.2. The potential is 1.9 pounds of oil per bushel— the average oil content in the corn kernel.

Because the oil is worth far more sold separately than when left in the distillers grains, she says, “Plants are leaving profits on the table.” At early summer prices, selling the DCO at 25 cents per pound would make an extra $10.73 per ton on top of the revenue from the DDGS for each half pound of oil extracted per bushel of corn processed. For a 55 MMgy plant making 450 tons of DDGS per day, it adds up to $1.6 million in revenue annually, she says.

Oil and Energy

With that sort of economic incentive and tight margins, Aurandt-Pilgrim questions why plants hesitate to pull off as much corn oil as possible. “We have clients that are turning down their demulsifiers because they aren’t meeting their feed tags,” she explains.

“But even if you are extracting more oil, the energy content in the DDGS isn’t decreased as much as you think because of the breakdown of other components to get that oil out.”

“We see it both ways,” Lewis replies when asked whether plants are concerned about pulling out too much oil. “An interesting thing about the industry is that you have a lot of different feed markets. One customer may be more hesitant because they have to meet a pro-fat feed tag and another customer wants to take out as much oil as possible.”

“There’s the perception as you take out the oil you reduce the energy in feed,” says Kevin Herrick, technical service director for Poet Nutrition. “When Poet first started tak-

28 | ETHANOL PRODUCER MAGAZINE | SEPTEMBER 2018

ing additional oil, we did meet resistance. Then we did a lot of research to look at how the oil relates to energy in DDGS.” If oil is removed without change to the process, energy also is removed, he says. “But at the same time, there are other components in DDGS that affect energy even more than oil.”

Metabolizable or digestible energy is more predictive of what’s available to the animal than gross energy, he explains. To illustrate that, researchers plotted the results for digestible versus gross energy in the same set of samples.

“When we do that, we see no relationship whatsoever between digestible energy and oil content of the DDGS,” he says. The samples were gathered from both Poet and other designs, including DDGS with a range of oil content from 4.5 percent up to 10 percent. “It wasn’t only our internal research where we collected samples and sent them to the university to get measured,” Herrick adds. “We also see it in peer-reviewed studies. We pulled studies and graphed the results to see a similar response.”

Domestic livestock producers are getting on board with the lower-oil DDGS, Herrick says, and in some cases, it is preferred. In dairy cows, for example, there’s less chance of milk fat depression with greater inclusion of low-fat DDGS. “The international market still really associates oil content with energy,” he says. “That’s still a work in progress, but we’re slowly but surely working with them on it as well.”

SAMPLE SETS: Test results from a pig feed trial sample show strong correlation between gross energy and fat content, but none between fat and digestible energy.

Author: Susanne Retka Schill Freelance Journalist retkaschill@yahoo.com

PHOTO: POET NUTRITION

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30 | ETHANOL PRODUCER MAGAZINE | SEPTEMBER 2018

REGULATORY COMPLIANCE

VIOLATION, EDUCATION AND

DOCUMENTATION Up-to-date knowledge of environmental permits and laws, as well as thorough record keeping, can prevent noncompliance that results in costly penalties.

By Tim Albrecht

In the past five years, EPA Inc. That includes 306 formal actions by to them. If you have supervisors who don’t at 172 facilities, along with 165 infor- care, the employees won’t care. People look has levied $12.7 million in pen- EPA mal actions. Each violation under the Clean to management for guidance of their work.” alties against ethyl alcohol fa- Air Act can cost a producer a minimum of Enforcement Agencies cilities, most in violations of $37,500 per day, up to $97,229 per day.

Regulatory compliance is enforced in It’s an arduous task for producers to enthe Clean Air Act, says Jessica sure their permits are up to date and all regu- a variety of ways and by different agencies, at the federal level by EPA, at a state Karras-Bailey, principal with lations are met. But the best method begins either level or even on a local level. EPA enforces with management, she says. “Management RTP Environmental Associates has to show that compliance is important most permits and all federal environmenDIFFERENTIAL DETERMINATION: Beau Pick, cook operator for Little Sioux Corn Processors in Marcus, Iowa, performs a daily baghouse magnehelic gauge check. Pressure differentials are specified for compliance with air permits.

PHOTO: DEB CRONIN, LITTLE SIOUX CORN PROCESSORS

ETHANOLPRODUCER.COM | 31

WATER WATCHDOG: Cook operator Andrew Gordon runs water tests at Little Sioux Corn Processors in Marcus, Iowa. Effluent outfall must be within LSCPâ&#x20AC;&#x2122;s water permit parameters before being sent to the ditch.

PHOTO: DEB CRONIN, LITTLE SIOUX CORN PROCESSORS

32 | ETHANOL PRODUCER MAGAZINE | SEPTEMBER 2018

REGULATORY COMPLIANCE tal regulations, and levies the highest fines of all enforcement agencies for actionable violations, says Eric Strum, owner and lead consultant at Air Regulations Consulting LLC. “The next level is state agencies that can levy fines at a smaller level, such as $10,000 a day,” Strum says. “They’re the ones that can enforce on the air permit, state regulations and federal regulations that they adopt. Finally, there are local agencies in some states that are a subset of the specific state. It’s almost like a Russian [nesting] doll of enforcement, there’s local, state and federal.”

Splitting up parts of the plant with designated enforcement agencies increases the efficiency of EPA and state agencies, enabling regulation of more areas overall, Karras-Bailey says.

EPA might handle inspections of certain areas of a plant and production because it handles the registration and updates of those areas, such as risk management plans.

“Risk management plan [noncompliance] is a Clean Air Act violation, which has to do with chemical storage and how you control certain chemicals listed under the regulation, such as denaturant or anhydrous ammonia,” she says. “If those are on site, you have to have an RMP and that plan has a number of procedures and requirements that you have to ensure you hit to comply with EPA rules.”

EPA might step in at the state level if a state inspector has reason to suspect federal compliance deficiencies, or if a specific state doesn’t have enough resources to follow up on a certain program.

“EPA could also get involved if a site voluntarily contacts them to say they’ve had violations and they want them to know in order to get in compliance,” Karras-Bailey says. “There are self-disclosure policies that outline how to do that and usually sites will work with an attorney to go through that process. Also, if you’re a bad neighbor and you’re receiving complaints.”

SUSTAINING THE STACK: Matt White, distillation and evaporation operator at Little Sioux Corn Processors in Marcus, Iowa, monitors regenerative thermal oxidizer temperatures to ensure numbers stay in line with stack testing limits.

PHOTO: DEB CRONIN, LITTLE SIOUX CORN PROCESSORS

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Ambiguous Permits

Applications for construction permits required through the Clean Air Act are issued through state or local agencies and can number from just a few pages to more than

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EVENT

ON THE BOARD: Tracy Hoeppner, LSCP lead operator, monitors temperatures and pressures at the distributed control system board.

PHOTO: DEB CRONIN, LITTLE SIOUX CORN PROCESSORS

1,000, depending on the complexity of the project, Strum says. But the process varies among states.

“Most states already have a kind of packaged permit for the ethanol industry, so they’ll tweak that to fit the specific project,” Strum says. “It’s always different from state to state. Lastly, there is a public notice period for 30 days and if there aren’t any comments, the permit is issued. The entire process can take anywhere from six months to a year.”

The fact that each state has different permit regulations, the short time frame a regulator has to draft the permit, and the “absolutely vague” and “arbitrary” requirements of some permits can lead to violations for a producer, Strum says. “A lot of times it’s the state permit writer giving out a bad permit and it’s impossible to follow.

“With every permit that we help companies get, we’re always commenting on the conditions and requirement sections of the permit,” Strum says. “When a permit writer has to assess and write very complex rules

and requirements into a permit, it can get very difficult. Almost any lawyer would tell you that environmental regulations are the toughest regulations in the U.S. to follow.”

Penalties and Bad Press

EPA’s fines can pile up. The agency can recoup what’s called economic benefit from violations, beyond the actual fines, Strum says. “What’s common is if someone did a project and didn’t get a permit for it, which might have required a control device, EPA could fine them whatever avoided costs the producer got for not installing that control device. So that’s $37,500 per day plus the economic benefit.

“It can also look bad on the company and the industry itself, as you’re going to be in the newspaper,” Strum says. “So, it’s a bruise on your company and the industry when there are fines and penalties on environmental standards being seen by the public.”

34 | ETHANOL PRODUCER MAGAZINE | SEPTEMBER 2018

Overall compliance helps make the case when a mistake leads to an unintended violation. “One reason to stay compliant and do your best to show the violation was an honest mistake is the EPA may end up being a little more lenient and be willing to negotiate your fine with you.”

Similarly, a plant might come into question if it keeps conducting quick, temporary fixes on a troublesome piece of equipment in lieu of a solid repair, Karras-Bailey says.

“If you’re a repeat offender, it can cause more problems with the EPA. It brings into question, if you’re having the same problem with a certain violation, are you really trying to stay compliant?

“A couple other benefits of staying compliant are if you have a sustainability program, or other good-neighbor policies, you can actually use that to promote your business, despite that not being specifically what you’re selling. Or if you have a bad compliance record, when you go to get a new permit, that process can be much slower.”

REGULATORY COMPLIANCE EVENT Carefully Compliant

One of the best ways to avoid penalties is to ensure the permitting process is done by knowledgeable experts, Strum says.

“Many times, states will put in extra requirements that are unnecessary. We can use the state for informational purposes, but we should never lean on them as a crutch. Producers should understand the permit and requirements on their own. We help companies understand every part of their permit.

A lot of times, it comes down to one single word that leads to noncompliance.”

And staying up to date is important.

EPA and states issue new rules frequently and might not adequately inform all affected plants of certain compliance steps, Strum says. “That’s probably the toughest part, is having someone on your side who’s watching when the new rules come out and how they affect the facility.”

Steve Roe, president of Little Sioux Corn Processors in Marcus, Iowa, says he enlists many companies to help with compliance. “We have an air quality engineer out of Fort Collins, Colorado, that we use for all of our air issues, including emissions, construction permits and compliance. We also use them to help file all the required periodic reports.

“As far as monitoring compliance internally, Chris Williams (plant manager) and I monitor that to make sure we have a checklist and we keep a list of all of our permits.

We have it set up so that our maintenance system puts out a reminder to check our permits to ensure they’re still valid and alerts us if we have one upcoming that we need to get updated.”

That type of compliance management system is helpful in understanding permits and compliance obligations, and ensuring systems are in place to meet them, KarrasBailey says. “For example, do you have to do daily monitoring on your control devices; are you recording that; do you have standard operating procedures for maintenance; are you submitting your periodic reporting that’s due if there is stack; do you have a way of tracking when those activities occur? So, having a system and being able to check that system is what’s important.”

Strum says documentation is the most important aspect of compliance, and Air

Regulations Consulting assists producers with tracking. “That involves going through and making sure you can document for each condition in your permit, how you meet that condition and what record you show when the inspector asks how a producer is in compliance with the requirement. Building up a documentation system is good.”

Without documentation, he adds, compliance isn’t meaningful. “It’s not that laborious, it’s just the matter of doing it. Some of it is just having a checklist and going down

the list on a regular basis like you’re required.

When they come in to inspect your facility, all they ask for is the documentation you have and that’s the end of it. They don’t go back through a year and check for a miss.

They only check for recent history. If you haven’t done it for a month or two, they’ll assume that you’ve never done it.”

Author: Tim Albrecht Associate Editor, Ethanol Producer Magazine

ETHANOLPRODUCER.COM | 35

SAFETY

Outside OSHAâ&#x20AC;&#x2122;s UMBRELLA Organizational standards and safety strategies can help eliminate incidents that fall outside the coverage of OSHA regulations.

By Tim Albrecht

36 | ETHANOL PRODUCER MAGAZINE | SEPTEMBER 2018

ETHANOLPRODUCER.COM | 37

SAFETY Full compliance with all Oc- those areas to the same degree,” he says. led to people being less educated on cupational Safety and Health “That’s the hazards of those systems and, in turn, Administration regulations still led to a lot of incidents, some of significant doesn't completely remove all size, for this industry.” risk of workplace incidents, Looking Past OSHA says Nathan Vander Griend, OSHA’s regulations are the baseline for a facility, but producers shouldn’t be president and CEO of ERI Socomplacent beyond them, says Scott Beard, lutions Inc. corporate safety officer for Merjent Inc., About 60 percent of incidents in the ethanol industry are the result of violations of OSHA’s regulations. That means the remaining 40 percent occur even under compliance, Vander Griend says. Still, those can be eliminated by following suggested, nonmandatory organizational standards and safety strategies cited under OSHA’s general duty clause, he says. The clause simply specifies that employers must provide a workplace free of recognized hazards that could cause injury or death.

“There’s been no government requirement for ethanol producers to scrutinize

an environmental consulting firm in Minneapolis. Beard cites National Fire Protection Association and American Petroleum Institute regulations and standards as good examples for producers to follow to keep their facilities safe.

For instance, OSHA’s compliance regulations say a plant’s process safety management (PSM) program needs to cover areas of the facility that contain flammable or toxic, reactive, or explosive materials, which for producers is “basically, distillation, dehydration, evaporation, tank farm, loadouts and anhydrous ammonia,” Vander

© 2018 Buckman Laboratories International, Inc. All rights reserved.

Griend says. “But there are other areas of a plant, such as the fermentation, drying, pollution/emission control devices, that aren’t managed under that program at all.

“Let’s say a dryer or pollution/emission control device blows up in the facility,” he adds. “What happened? Did we ever go through a formal process to identify and analyze the hazards of that process in the first place? The answer for four out of five ethanol plants would be no.”

If the processes in an ethanol plant that are not PSM covered were treated like those that are covered, it could be assumed those hazards and subsequent incidents would be significantly minimized, Vander Griend says. “The industry hasn’t had many fires in distillation systems, likely due to the fact that we focus on them so heavily.

But there have been a lot of incidents in the drying and pollution/emission control systems at plants. I would argue it’s because we don’t pay as much attention to them.”

As part of the PSM, OSHA mandates a process hazard analysis (PHA), which is

SAFETY SUGGESTIONS: Jay Beckel (left), senior vice president of client services for ERI Solutions Inc., and Jody Dendurent, technical services engineer for ERI, inspect equipment before installation. OSHA regulates workplaces for safety, but also offers suggestions to avoid incident or injury not alleviated by its rules.

PHOTO: ERI SOLUTIONS INC.

SAFETY

EQUIPMENT INSPECTION: Scott Allen (left), regional account manager for ERI Solutions Inc., and Jody Dendurent, technical services engineer for ERI, inspect equipment at an operating ethanol plant.

PHOTO: ERI SOLUTIONS INC.

a risk assessment tool that identifies worstcase scenarios regarding the release of a flammable or toxic material that could cause harm. The PHA should be expanded, however, to include evaluating employees’ competency, physical hazards and culture, Vander Griend says. The goal is to identify areas of the facility where the risk is considered too high and to develop a plan to reduce it.

“If you were going to operate an ethanol plant starting next week, your concern now is the responsibility of all the employees and keeping the plant running,” Vander Griend says. “And if you knew there have been 20 decent-sized incidents that caused people to get hurt and they were all driven out of the dryer system of a plant, you would dig into ensuring that system is as safe as possible.”

While the PSM covers mostly flammable and toxic chemicals, many safety-related topics are still in OSHA’s purview under other regulations or the general duty clause, Beard says. “There are additional programs and systems available for facilities that want

to focus on reducing safety incidents beyond those covered by PSM.” A plant manager could, for instance, create a culture in which safety is a responsibility of every employee, Beard says. “At facilities I’ve encountered that go above and beyond the OSHA standard, it starts at the plant manager or general manager level and it’s a part of every employee’s life. It’s very clear the minute you walk on site.”

Mike Jerke, general manager of Corn Plus in Winnebago, Minnesota, embraces the idea of safety culture at his facility, calling it a “collective focus.

“People can easily default to this notion that because you have somebody who wears the title of environmental health and safety manager that they’re the ones that worry about it,” Jerke says. “So, you really have to keep the focus around everyone being a part of it.”

Corn Plus has a safety committee with representation from all departments, made up of typically shift supervisors, as well as Jerke and the EHS manager. The committee meets monthly, at a minimum, and has a

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running list of items to address. The committee reviews the existing list, provides updates on progress, takes ownership of the various items, discusses any new items that need to be established and reviews near misses or other events that occurred in the previous 30 days, along with measures taken to handle them.

‘Psychology of Safety’

Beard encourages plants to look internally and identify where their staffs rank in safety. “Start at the top. It has to be a message from the highest level of management first and they can’t just talk about it, they have to live it.”

Jerke uses many resources to develop practices and guidelines for his staff and plant. Insurance companies, for instance, send engineers to conduct periodic inspections to ensure facilities are following their regulations and identify areas in need of improvement, he says.

“Companies such as ERI will do a fullblown audit of your facility,” Jerke says.

“That keeps people tuned into various im-

portant details that need to be maintained and handled in order to operate the facility in a safe way.â&#x20AC;?

Identifying behavioral safety hazards is crucial also, Beard says. â&#x20AC;&#x153;If you have 10 employees that walk over a hose on the ground with no problem and the eleventh trips on it, falls, and is hurt, part of your investigation should include an analysis on what, if anything, makes that employee different. â&#x20AC;&#x153;Many industries have moved beyond traditional safety programs to the psychology of safety itself, including the different types of personalities and how they learn and interpret guidance on safety,â&#x20AC;? Beard adds. â&#x20AC;&#x153;These programs can help identify individuals that may need more frequent reminders or a unique training delivery method.â&#x20AC;?

Incentivized Safety Sword

Incentivized safety programs were once common, introduced when the ethanol industry was getting on its feet. But those suggestions were a double-edged sword, Vander Griend says. Plant employees essentially could choose between reporting an incident, or keeping it private to continue benefitting from the incentive program, he says. â&#x20AC;&#x153;This can cause a minor injury to develop into something major and the incentive actually caused the injury to develop. They can also be positive, but caution must be taken to structure them well.â&#x20AC;?

Beard adds, â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s like having a sign up that says â&#x20AC;&#x2DC;1,300 days since our last recordable injury.â&#x20AC;&#x2122; This type of safety program may de-incentivize communication and reporting of injuries, near misses, and first aids because the goal will become to keep that number high and not necessarily to keep people safe.â&#x20AC;? An incentive-based safety program can work, but it needs to establish and measure the proper metrics, Beard says.

Jerke agrees. â&#x20AC;&#x153;Those programs have to be carefully thought out. The challenge can be if youâ&#x20AC;&#x2122;re providing an incentive for a period of time with no lost time or no reportable accidents, then you have someone who gets injured, but for peer pressure, theyâ&#x20AC;&#x2122;re not telling anyone in order to still get that bonus.â&#x20AC;? For that reason, the Corn

Plus safety program includes an anonymous suggestion box employees can use to report concerns, Jerke says.

All plant staff should be involved in safety, experts say, and more communication with all employees of the plant increases a safety programâ&#x20AC;&#x2122;s success. â&#x20AC;&#x153;The more information you have as a safety manager the easier it is to predict whatâ&#x20AC;&#x2122;s going to come next,â&#x20AC;? Beard says.

And, of course, more communication and information about hazards helps a plant design a proper safety protocol, aiming above and beyond its legal OSHA obligations.

Author: Tim Albrecht Associate Editor, Ethanol Producer Magazine

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