September 2009 Ethanol Producer Magazine

INSIDE: EXPANDING FIRST RESPONDER SAFETY TRAINING SEPTEMBER 2009

Rewriting the Book on RINs Proposed Program Overhaul Means Big Changes for Producers

WWW.ETHANOLPRODUCER.COM

Montréal InterContinental Montréal

September 13–18, 2009 A Tradition of Industry Education For 28 years, The Alcohol School has been educating fuel ethanol and distilled beverage producers in the science of alcohol production. The weeklong program is designed for lab, plant, and management personnel and is organized around lectures, laboratory demonstrations, seminars, and plant visits.

The program will cover the process of ethanol and beverage alcohol production from milling and mash preparation through fermentation and distillation.

Enzyme usage, yeast biology, bacterial contamination and control will also be discussed, along with other issues currently affecting both industries.

For More Information Registration is open to fuel ethanol, distilled beverage, and allied industries. Now is a good time to invest in education.

Registration materials and additional information are available online at www.ethanoltech.com

6120 W Douglas Ave | Milwaukee WI 53218 USA +1 414 393-0410 | Fax +1 414 358-8012

2

ETHANOL PRODUCER MAGAZINE

September 2009

Graphic design s Marie RIO

Our fermentation experts offer custom made recommendations to adapt to your process, your needs & your economics.

From the selection of the yeast strain to the definition of its format up to onsite training of your staff, Fermentis offers your ethanol plant a global fermentation approach to maximize your efficiency & profitability.

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

September 2009

3

4

ETHANOL PRODUCER MAGAZINE

September 2009

contents

vol. 15 no. 9

features 44 RINS Rewriting the Book on RINs The U.S. EPA has proposed ways to improve and streamline the renewable identification number (RIN) system as part of the second stage of the renewable fuel standard.

–By Erin Voegele 58 SAFETY The First Line of Defense Maintaining training for first responders is a vital part of the overall safety and success of the ethanol industry.

–By Kris Bevill 66 BYPRODUCTS Creative Byproduct Possibilities From pest control to deer attractants and biocomposite materials, an Arizona company is developing a range of products to utilize an ethanol production byproduct.

–By Hope Deutscher

58

ETHANOL PRODUCER MAGAZINE

September 2009

5

UNLIMITED PARTNERSHIP Need help meeting the challenges facing your plant?

Our technology and know-how help you thrive.

We’re here to lend a hand In today’s competitive environment, it takes unparalleled knowledge and strong partners to make a fuel ethanol plant flourish. Novozymes is already the partner of choice for most plants and we would like to work with yours as well. We can provide you with the best support and guidance in the industry, as well as new product developments that squeeze the maximum out of your corn.

Find out more at www.bioenergy.novozymes.com

Novozymes is the world leader in bioinnovation. Together with customers across a broad array of industries we create tomorrow’s industrial biosolutions, improving our customers’ business and the use of our planet’s resources.

contents contributions

departments

74

78

80

74 BRAZIL Brazil’s Ethanol-Enhanced History The “Pró-Álcool” program, key to the development of Brazil’s ethanol industry, was created by the country’s military regime during the tumultuous 1970s.

–By Pedro G. Seraphim

78 QUALITY Higher Blends Require Higher Quality Ethanol Along with the benefits that would come from increasing the amount of ethanol blended into gasoline will come increased product quality requirements for producers.

–By Tom Slunecka

80 CARBON Greenhouse Gas Regulation Impacts Ethanol producers will be among the regulated emitters if a proposed mandatory greenhouse gas emissions reduction program becomes law, making it vital for producers to know their options for reducing or selling carbon dioxide.

–By Sam A. Rushing

9 Advertiser Index 12 The Way I See It Harvesting Straw Men

By Mike Bryan 18 Business & People 20 Commodities 22 View From the Hill Time to Influence Climate Legislation

By Bob Dinneen 23 RFA Update 24 BIObytes 26 Industry News 38 Drive Increased Corn Yields: Another Reason to Increase Blends

By Tom Buis 40 Legal Perspectives Federal Grants Spur Electricity Production

By Hamang B. Patel and Porter J. Martin 42 eBIO Insider Europe’s take on ILUC

By Robert Vierhout 82 Events Calendar 84 Marketplace

Ethanol Producer Magazine: (USPS No. 023-974) September 2009, Vol. 15, Issue 9. Ethanol Producer Magazine is published monthly. Principal Office: 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. Periodicals Postage Paid at Grand Forks, North Dakota and additional mailing offices.

POSTMASTER: Send address changes to Ethanol Producer Magazine/ Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, North Dakota 58203.

BPA Worldwide Membership Applied for October 2006 ETHANOL PRODUCER MAGAZINE

September 2009

7

AdIndex

56 2010 International BIOMASS Conference & Expo 50 & 91 2010 International Fuel Ethanol Workshop & Expo 8 Afton Chemical Corp.

48 Agra Industries Inc. 52 Aqua Power 81 BBI Engineering & Consulting 77 BetaTec Hop Products Inc. 73 Biodiesel Magazine 64 & 89 Biomass Magazine 46 BP Biofuels UK Ltd. 33 Brown, Winick, Graves, Gross, Baskerville & Schoenebaum, P.L.C. 28 Buckman Laboratories Inc. 10 Burns & McDonnell

51 Genencor 速 - A Danisco Division 16 Hydro-Klean Inc. 4 ICM Inc. 14 & 15 Inbicon 32 Indeck Power Equipment Co. 37 Intersystems 68 Kennedy and Coe, LLC 2 Lallemand Ethanol Technology 43 Mettler Toledo 41 MOR Technology, LLC 61 & 76 Nalco Co. 53 Natwick Associates Appraisal Services 36 Nexen Marketing USA Inc. 62 North American Safety Valve 6 Novozymes

75 Cereal Process Technologies

17 PaceSetter Management

34 Check-All Valve Mfg. Co.

39 PhibroChem

60 Christianson & Associates, PLLP

92 POET, LLC

71 Crown Iron Works Co. Inc.

70 R&R Contracting Inc.

72 & 90 ethanol-jobs.com

57 Renewable Fuels Association

65 Ethanol Producer Magazine

35 Resonant BioSciences

55 ETS Laboratories

49 Roskamp Champion/CPM

30 Fagen Inc.

54 Salco Products Inc.

31 FCStone, LLC

63 Victory Energy Operations, LLC

3 Fermentis

69 Vogelbusch USA Inc.

13 Gavilon

79 Wabash Power Equipment Co.

47 GEA Barr-Rosin Inc.

29 Watson-Marlow Pumps Group

ETHANOL PRODUCER MAGAZINE

September 2009

9

Need refueling?

Build it better with Burns & McDonnell.

Ethanol? Gas-to-Liquid? Biodiesel?

Finding the right alternative energy source can be challenging. It takes more than a one-size-fits-all, Band-Aid approach. Burns & McDonnell — with more than 30 years of biofuels experience — will engineer the right energy-efficient, sustainable solution for your facility with the follow-through and support you need.

Comprehensive Services Project Development • Environmental Studies and Permitting • Engineering and Construction Front-End Planning • Engineering Design-Build (EPC) • Unit Operations

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

Enhancing biofuel design since 1977.

E n g i n e e r i n g ,

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

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

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

a n d

C o n s u l t i n g

S o l u t i o n s

Atlanta • Chicago • Denver • Houston • Kansas City, Mo. • Miami • Phoenix • San Diego • St. Louis Chattanooga, Tenn. • Cincinnati • Dallas-Fort Worth • Minneapolis-St. Paul • New York • O’Fallon, Ill. • San Francisco • Wallingford, Conn. • Washington, D.C. • Wichita, Kan.

HOW TO REACH US

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

EDITORIAL

PUBLISHING & SALES

Kris Bevill Editor kbevill@bbiinternational.com

Mike Bryan Publisher & CEO mbryan@bbiinternational.com

Erin Voegele Associate Editor evoegele@bbiinternational.com

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

e-mail to kbevill@bbiinternational.com.

Letters should include the writer’s full name, address and telephone number, and may be edited for purposes of clarity and space.

SUBSCRIPTIONS Ethanol Producer Magazine is now free of charge

Hope Deutscher Associate Editor hdeutscher@bbiinternational.com

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

Jan Tellmann Copy Editor jtellmann@bbiinternational.com

Matthew Spoor Sales Director mspoor@bbiinternational.com

Megan Skauge E-Media Coordinator mskauge@bbiinternational.com

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

ART

Jeremy Hanson Senior Account Manager jhanson@bbiinternational.com

to everyone with the exception of a shipping and handling charge of $49.95 for any country outside the United States, Canada and Mexico.

To subscribe, visit www.EthanolProducer.com or you can send your mailing address and payment (checks made out to BBI International) to: Ethanol Producer Magazine Subscriptions,

Jaci Satterlund Art Director jsatterlund@bbiinternational.com Sam Melquist Graphic Designer smelquist@bbiinternational.com Elizabeth Slavens Graphic Designer bslavens@bbiinternational.com Jack Sitter Graphic Designer jsitter@bbiinternational.com

308 Second Ave. N., Suite 304, Grand Forks, ND 58203.

You can also fax a subscription form to (701) 746-5367.

CUSTOMER SERVICE AND CHANGE OF ADDRESS For service, please use our Web site at www.EthanolProducer.com.

Clay Moore Account Manager cmoore@bbiinternational.com

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

Chip Shereck Account Manager cshereck@bbiinternational.com

BACK ISSUES AND REPRINTS

Marty Steen Account Manager msteen@bbiinternational.com

Select back issues are available for $3.95 each, plus shipping. To place

Bob Brown Account Manager bbrown@bbiinternational.com

For more information, contact Kelly Ehlears at (701) 746-8385 or

an order, contact Subscriptions at (701) 746-8385 or subscriptions@ ethanolproducer.com. Article reprints are also available for a fee.

Marla DeFoe Advertising Coordinator mdefoe@bbiinternational.com

kehlears@bbiinternational.com.

ADVERTISING For advertising rates and our editorial calendar,

Jessica Beaudry Subscriptions Manager jbeaudry@bbiinternational.com

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

Jason Smith Subscriber Aquisition Manager jsmith@bbiinternational.com

COPYRIGHT Š 2009 by BBI International

ETHANOL PRODUCER MAGAZINE

September 2009

11

The Way I See It Harvesting Straw Men As I write this, our country is celebrating the 40th anniversary of Neil Armstrong’s historic walk on the moon.

Right up until the moment that Armstrong took that first memorable step, many said it couldn’t be done — that going to the moon would cost too much and wouldn’t be meaningful. The naysayers were eventually proven wrong and what we know today is that all of that hard work — the innovation and creativity of the scientists and the dedication of all those involved in the mission — has made us a more prosperous and secure country.

Today we are faced with an even greater challenge — producing enough energy to sustain the world. Right now we have a negative mandate that dictates 90 percent of the fuel we use must come from fossil sources. We need to change this harmful policy, and the first step is to increase the amount of ethanol that can be blended into gasoline to 15 percent.

Predictably, this increase in sustainability and energy independence is unnerving to those who profit from the status quo. When the U.S. EPA’s commentary period on the E15 waiver opened up, participants lined up to take their turn at the podium. Those against the increase consisted of a “who’s who” of traditional anti-ethanol groups — poultry and cattle producers, food manufacturers and Big Oil. Small engine and off-road engine industry groups complained that an increase in ethanol would be disastrous for their engines and they would have no choice in using E15. The Association of International Automobile Manufacturers came out with a strongly worded comment in which they pointed to a lack of testing, lessened drivability and increased evaporative emissions — the same tired arguments they trotted out against the mandate for E10.

All of these arguments are straw men. I will say this as bluntly as possible: E15 has no harmful impact on perfor-

mance, maintenance or emissions. Increasing our reliance on domestic sources of fuel can only strengthen our economy at a time when creating jobs is exactly what we need. The ethanol industry currently supports more than half a million jobs and increasing ethanol’s blend in gasoline to 15 percent would create an additional 130,000 jobs.

AIAM has a point when it says testing needs to be done to ensure that modern engines are capable of handling E15 blends. It errs, however, in assuming that this testing can take the place of substantive change that makes a difference in the lives of average consumers eager for more sustainable fuels. Small engine manufacturers complain that every retail station in the country will sell E15 if allowed. But if consumers request gasoline with less than 15 percent ethanol or if, for some reason, ethanol-blended fuel costs the retailer more than straight gasoline, the retailer can choose not to sell it.

Perhaps the best alternative of all is the Open Fuel Standard which requires that 50 percent of new cars be flexible fuel vehicles by 2012. These vehicles would be warranted to operate on gasoline, ethanol or methanol. They would create real competition in the marketplace and would give consumers the choice they demand. Given the chance, ethanol will create more domestic jobs, a sustainable energy economy and a better environment. It’s a win-win-win situation.

That’s the way I see it.

Mike Bryan Publisher & CEO mbryan@bbiinternational.com

12

ETHANOL PRODUCER MAGAZINE

September 2009

As an industry,

renewable fuels is volatile.

Your risk management and marketing provider should be anything but.

With the right risk management and marketing provider, you’ve got the support you need to navigate today’s volatile markets. As leading experts in the renewable fuels industry, Gavilon offers a unique niche in scale, scope and capability. This gives us the capacity to handle logistics while watching margins. And we’re backed by a global network and a dedicated team of industry analysts with their fingers on the pulse of the markets. What this means for our customers is the competitive advantage you need to minimize your risk and maximize your opportunities.

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

w w w. G a v i l o n . c o m ETHANOL PRODUCER MAGAZINE

September 2009

|

402.889.4069 13

Introducing The New Ethanol .™

New hope for meeting the most ambitious cellulosic mandates. Our proven cellulosic ethanol technology is ready now for the next phase: commercial scale-up to 20 million gallons per year. Ready to win grants, secure tax credits, and attract capital for North American producers, developers, and investors.

Ready to integrate with existing ethanol plants and produce The New Ethanol for North American markets.

For nearly six years, Inbicon has been discovering, testing, refining our proprietary conversion process in Denmark. At our pilot plant, we’ve optimized it for wheat straw, proven it for soft biomass like corn stover, sugar bagasse, and miscanthus.

We’re now building a demonstration model of the Inbicon Biomass Refinery™. It’s the first stage of our

$70 million Inbicon Biomass Technology Campus™. Imagine a technology transfer station, an idea incubator, a collaborative lab for ongoing feedstock testing, and an international round table for exchanging knowledge.

We’ll showcase The New Ethanol and our conversion capabilities during the 15th U.N. World Climate Summit, held in Copenhagen this December.

Now we’re bringing The New Ethanol to old-ethanol plants in North America. Start the conversation today with Inbicon’s North American partners. Call Thomas Corle at 717.626.0557 or e-mail info@inbicon.com.

Inbicon Biomass Refinery. Making ethanol work for the world.™

© 2009 Inbicon, Kraftværksvej 53-Skærbæk, 7000 Fredericia, Tel +45 76 22 20 00 The New Ethanol™ and Inbicon Biomass Refinery™ are trademarks of Inbicon A/S and DONG Energy A/S.

www.inbicon.com

LEADERSHIP, AT YOUR SERVICE!

TM

Dependable Service 24/7

Tank Cleaning and Inspection

Wet/Dry Industrial Vacuum Services

Waste Collection Transport & Disposal

Hydroblasting Services

Fan Blasting

Emergency Response

Des Moines (515) 283-0500

Duluth (218) 733-0500

www.hydro-klean.com

Business&People Ethanol Industry Briefs

Royal Dutch Shell plc announced on June 10 it would be providing cellulosic E10 at one of its Ottawa service stations for one month, during which regular gasoline purchased at the station contained 10 percent cellulosic ethanol produced by Iogen Corp. using wheat and barley.

“We are leading the pack in cellulosic ethanol production technology and, with this event, showing what is possible in the future,” said Dr. Graeme Sweeney, Shell’s executive vice president of future fuels and carbon dioxide.

Shell also blended the fuel into the company’s Shell V-Power race fuel at the 24 Hours of LeMans Race in France.

The National Ethanol Vehicle Coalition (NEVC) has joined Growth Energy as the industry group’s market development branch. As part of its new role, the NEVC will continue to maintain its mission to increase availability of higher ethanol blends and flexible fuel vehicles.

18

Phil Lampert, who served as the executive director of the NEVC, will now hold the position of vice president of market development at Growth Energy.

This is the second ethanol association to become part of Growth Energy. The Ethanol Promotion and Information Council joined Growth Energy a year ago.

A United Nations climate change conference to be held in December in Copenhagen will focus on the commercialization of cellulosic ethanol.

A group of international companies, including cellulosic ethanol technology developer Inbicon A/S, Novozymes A/S, and Genencor, a division of Danisco, will provide wheat straw-derived E85 for use in vehicles at the conference. Denmark oil supplier Statoil A/S will distribute the ethanol.

“As host nation Denmark makes an effort to secure a green and climate-friendly conference in December, it also wants to showcase to the conference delegates some of the new technologies that could

contribute to solving the climate challenge,” Svend Olling, Denmark’s foreign secretary, said.

Verenium Corp., a cellulosic ethanol and specialty enzyme producer, and British Petroleum plc have entered the due diligence phase of the U.S. DOE’s loan guarantee program for their jointly-owned cellulosic ethanol project. The project, located in Highlands County, Fla., is scheduled for groundbreaking in 2010.

The DOE program awards loan guarantees to qualified clean energy projects believed to accelerate commercial use of innovative technologies that will help sustain economic growth, yield environmental benefits, and produce a more stable and secure energy supply.

Verenium President and CEO Carlos Riva said this type of government support is critical to enable the growth of emerging, high impact industries such as cellulosic ethanol.

Edgar Hicks has joined Omaha, Neb.-based CFO Systems LLC as part of the CFO outsourcing specialist team. CFO Systems is a provider of chief financial officers and controllers

to the Midwest.

At CFO, Hicks will support the company’s renewable fuels and commodity-related clients in risk Hicks management efforts. His experience includes a history in the grain industry throughout the Midwest, including work at FCStone, Pillsbury, Cargill Inc., Farmers Co-op, and the Chicago Board of Trade.

Enerkem, a waste-tobiofuels and green chemicals technology company, has joined the City of Edmonton, Alberta, and the Alberta Energy Research Institute to form an advanced energy research center. The center is part of a comprehensive waste-to-biofuels initiative that is scheduled to be completed the first quarter of 2010. The center will focus on the development and demonstration of novel catalytic conversion processes to produce advanced biofuels from non-hazardous industrial and municipal waste.

Daniel Anderson has been named vice president of corporate operations services for Ohio-based The Andersons Inc. Anderson is replacing Dale Fallat, who recently retired.

ETHANOL PRODUCER MAGAZINE • September 2009

Sponsored by

Anderson will continue to serve as president of the company’s retail group and will oversee retail operaAnderson tions, corporate engineering, safety, sourcing and procurement, continuous improvement and facility services. Anderson has been employed at The Andersons since 1979 and has served as retail group president since 1996.

Pure Energy Corp. has launched the first national radio show dedicated to the business of renewable energy. The show, hosted by American Biofuels Council Executive Director Sean O’Hanlon, airs Mondays from 6 to 7 p.m. EDT on WZAB in Miami, Fla., and at www.pureenergyshow.com. The program focuses on the latest energy news from around the world and covers topics ranging from energy policy and petroleum concerns to renewable energy and biofuels technologies.

Syngenta Biotechnology Inc. has entered into a license agreement with Chro-

matin Inc. for the use of Chromatin’s proprietary gene stacking technology in sugar cane.

The agreement gives Syngenta exclusive rights to use Chromatin’s technology, which uses the plant’s DNA for trait genes in members of the genus Saccharum, including sugar cane and energy cane. Syngenta offers crop protection products for sugar cane growers and is in the process of developing planting technology that will reduce production costs.

“Chromatin is pleased to continue our work with Syngenta,” said Chromatin President and CEO Daphne Preuss.

“The broad Syngenta pipeline and crop production programs make them an ideal partner for us in applying Chromatin’s gene stacking technology in sugar cane worldwide.”

Genencor, a division of Danisco, has announced the promotion of Mark Oostendorp to director of global sales for grain processing. For the past two years, Oostendorp has served as director of sales for Genecor’s European, Middle Eastern and African regions.

Prior to joining Genencor, Oostendorp worked for Quest Communications International Inc. in commercial roles, including director of business process improvement.

ETHANOL PRODUCER MAGAZINE • September 2009

Anne Steckel has joined Growth Energy as director of government affairs and Ted Monoson has been appointed as the group’s director of legislative affairs. Their roles at Growth Energy will include advancing policy priorities, including increasing the blend of ethanol in U.S. fuel supply to 15 percent.

Steckel previously served as legislative director for former Rep. David Phelps (D-Ill.), and also worked as legislative assistant to the majority whip of the U.S. Senate, Sen. Dick Durbin (D-Ill.).

Monoson worked as an agriculture reporter and senior legislative assistant for Rep. John Boehner (R-Ohio) prior to joining Growth Energy.

Biomass energy provider Frontline BioEnergy Inc. has completed a Series A equity transaction with Chippewa Valley Ethanol Co. The investment increases CVEC’s ownership and governance position in Frontline. The partners are working together on a commercial gasification system and have advanced their understanding of system dynamics and feedstock processing.

Through the partnership, a new management team has also been created. CVEC General Manager Bill Lee has accepted the position of Frontline CEO and will work directly with the Frontline team. Dr. Thomas

Paskach has been promoted to manager of business development for Frontline. Paskach will lead the company’s sales and marketing efforts and will work with Lee and company founders to shape Frontline’s strategic direction.

Kristy Moore, director of technical services for the Renewable Fuels Association, recently received the award of appreciation from ASTM International’s Moore Committee DO2 on Petroleum Products and Lubricants in recognition of her diligent work in fuel regulations and specification on behalf of America’s ethanol producers.

Moore’s work at the RFA focuses on technical and safety issues important to the ethanol industry. She also oversees the association’s technical committee, which is responsible for increasing market share for ethanol, including opening new markets for ethanol. EP

SHARE YOUR INDUSTRY BRIEFS To be included in Business & People, send information (including photos or illustrations if available) to: Industry Briefs, Ethanol Producer Magazine, 4650 38th Ave. S. Suite 160, Fargo, ND 58104. You may also fax information to (701) 373-0638, or e-mail it to kbevill@bbiinternational.com. Please include your name and telephone number in all correspondence.

19

COMMODITIES REPORT Natural Gas Report

Natural gas fund remains strong July 16 — In the second quarter of 2009, the macroeconomic reasoning creating an interest in owning commodities (particularly energy commodities) revolved around an anticipated economic recovery. In June, speculators in futures and exchange traded funds bid up the natural gas futures market during a time of record oversupply.

A reversal in sentiment and reduction in bullish speculators has driven natural gas prices down 24 percent from the July contract highs to the current August contract lows. Interestingly, the U.S. Natural Gas Fund (UNG) has not seen drastic withdrawals. In fact, withdrawals were modest in the latter half of June and the UNG has seen such significant inflows in July that it has run out of available shares.

Because UNG has grown so substantially during a time when fundamentals have pushed prices back down to 2002 levels, many commercial hedgers are unaware of its existence. UNG is an exchange traded fund that attempts to replicate the percentage return of holding the front month natural gas futures contract. For the buyer or seller of the fund, it trades very similarly to a stock. The fund has grown from $700 million to over $4 billion year-to-date and holds approximately 18.5 percent of the open interest in the Nymex August natural gas futures contract.

The fact that UNG investors bring a new risk profile and investing horizon to the natural gas futures market will inevitably create periods of increased or unanticipated price volatility. In the short term, what is the potential consequence of UNG not being able to issue new shares? If UNG is halted from additional share issuance,

By Brad Smith, U.S. Energy Services Inc.

it will remove one of the biggest buyers of natural gas futures from the market. It could create significant downward price pressure. Conversely, if UNG is approved for 1 billion new shares traders who are short and see continued buying coming to the market through UNG may cover and bid the market up. EP Brad Smith, price risk manager, can be contacted at bsmith@ usenergyservices.com.

Corn Report

By Jason Sagebiel, FCStone

Volatile market results in rally July 20 — In June, the market was flooded with USDA reports.

At mid-month, the supply and demand report was released and, at the end of the month, the acreage and stocks report was revealed.

Nearby corn had a whopping $1.12 1/4 trade range in the month of June. The high of $4.50 was tested roughly three times, offering ample opportunity for the producer to make sales. However, the extreme bearish month-end acreage report sent corn futures plummeting 30 cents, the limit move.

The June 30th acreage report was very surprising as the USDA projected corn plantings at 87.035 million acres, up from 85 million acres in March and up 1.053 million acres from last year. This was a shock to the market because the new data figure was even greater than the top end of analysts’ estimates. The end result was that corn and soybean total acreage was 3.5 million acres greater than first reported in June. Corn plantings increased in Iowa, Nebraska, South Dakota, Illinois, Minnesota, Missouri and Ohio. Notably, North Dakota acres were decreased by 400,000 acres.

Quarterly corn stocks on June 1 totaled 4.27 billion bushels, up 6 percent from a year ago. This indicated that the March-May disappearance was 2.69 billion bushels versus 2.83 billion bushels a year ago.

20

The accompanying graph illustrates current corn values versus the past five years. With a big corn carry-out projected — 1.55 billion bushels and growing — the next marketing year will be an interesting one for corn price levels. EP ETHANOL PRODUCER MAGAZINE • September 2009

COMMODITIES REPORT DDGS Report

By Sean Broderick, CHS Inc.

Distillers grains ride the price rollercoaster July 21 — July has been a rollercoaster ride for DDGS prices. After lurching up at the end of May and slowly coming back down in the first half of June, prices ratcheted up and down again near the 4th of July. Some of the move was influenced by dramatic soymeal and corn futures drops, but other parts of it were seasonal and physical issues.

Animals eat less as the weather gets warmer and cattle are also generally put out to pasture and/or marketed.

This has always led to a big drop in the wet and modified distillers demand, and plants start to place dry feed into the rail market, pushing prices down for rail destinations — notably in the California, Pacific Northwest, and Texas/New Mexico markets. This year, the Mississippi River and Gulf

of Mexico have been more viable options than in years past. The river has been pulling in feed from as far away as western Nebraska and South Dakota which highlights the weakness of destination markets in the Southwest and West Coast. The phenomenon is already losing steam with the onset of later season barge freight, which gets more expensive before harvest.

Domestic demand does not traditionally pick up until October. Given the distinct value in rations versus most other commodities, most feeders have inclusion rates at a maximum.

Stagnant demand, along with the potential for increases, does not lend itself to higher price expectations. The only things that are going to pull up DDGS prices are futures prices and exports. EP

Regional Ethanol Prices ($/gallon as of July 20)

SPOT

West Coast

1.680

1.910

Midwest

1.640

1.850

East Coast

1.690

1.980 SOURCE: DTN

Regional Gasoline Prices ($/gallon as of July 20)

REGION

SPOT

RACK

West Coast

1.7749

1.9988

Midwest

1.8265

1.8007

East Coast

1.7470

1.8297 SOURCE: DTN

DDGS Prices ($/ton) LOCATION

JULY 2009

JUNE 2009

JULY 2008

Minnesota

90

130

165

California*

124

174

202

Chicago

116

145

155

Buffalo, N.Y.

110

159

163

Central Florida

114

159

195

*Central Valley

SOURCE: CHS Inc.

Corn Futures Prices DATE

Ethanol Report

RACK

REGION

(Sept corn, $/bushel)

HIGH

LOW

CLOSE

July 20, 2009

3.25

3.18 1/4

3.18 1/4

June 22, 2009

4.07 3/4

3.88 1/4

3.93 1/2

July 21, 2008

6.05

5.84

5.89 1/4 SOURCE: FCStone

By Rick Kment, DTN Biofuels Analyst

Slow demand weakens energy prices July 20 — Weaker overall summer driving demand, combined with a lack of speculative buying following a recent sell-off, have continued to erode gasoline prices. Prices are nearly half of what they were last summer but most consumers continue to spend conservatively. This has affected overall energy prices and taken a significant toll on industries that typically benefit from summer travel.

Overall buying by traders looking to step into the market is down due to uncertainty of the potential for higher prices. The continued weak economy and lackluster consumer buying patterns are adding fuel to the downward moving market. Gasoline prices have fallen 20 cents to 30 cents over the past month.

Ethanol prices have weakened

significantly through the first half of summer as the combination of lower gasoline prices and weaker corn prices have created a downward push on overall markets. Although prices slipped significantly from mid-June to mid-July, plants’ profitability levels have improved due to lower corn costs. Ethanol prices are trading at a significant discount to the gasoline markets, which is boosting demand by stimulating additional blending activity in many parts of the country.

Trade activity has remained light in the ethanol market with overall futures markets moving in a relatively narrow range over the past couple of weeks. However, pressure is expected to increase as overall energy usage is expected to remain light through the remainder of the summer. EP

ETHANOL PRODUCER MAGAZINE • September 2009

Cash Sorghum Prices ($/bushel) JULY 17, 2009 JUNE 17, 2009 JULY 18, 2008 Superior, Neb. Beatrice, Neb. Sublette, Kan. Salina, Kan. Triangle, Texas Gulf, Texas

2.72 2.74 2.33 2.72 2.43 3.47

3.58 3.48 3.19 3.53 3.20 4.00

5.07 5.12 53.27 5.12 5.39 5.16 SOURCE: Sorghum Synergies

Natural Gas Prices

($/MMBtu)

JULY 2009

JUNE 2009

JULY 2008

NYMEX

3.949

3.538

13.105

N. Ventura

3.36

3.05

11.85

Calif. Border

3.27

3.02

12.28

SOURCE: U.S. Energy Services Inc.

U.S. Ethanol Production Output March 2009

641,000

February 2009

640,000

March 2008

562,000

(barrels/day)

SOURCE: U.S. Energy Information Administration

21

VIEW FROM THE HILL

Dinneen

Time to Influence Climate Legislation In just eight short months, the financial crisis that threatened to cripple the nation has been replaced in the spotlight by health care reform and climate change legislation. Congress is poised to pass climate change legislation this year. However, as is often the case, the devil is in the details — and the details of climate change legislation have yet to be written.

The legislation that passed the U.S. House and is being negotiated in the U.S. Senate has the potential to greatly influence how America’s ethanol industry grows in the future. As I write this column, Congress is preparing for its August recess. The House has already passed its version of climate change legislation and Sen. Barbara Boxer (D-Calif.), the lead author of the Senate version, has promised a bill sometime during the first full week of September. While the final details of Boxer’s proposal are not yet known, we do have a sense of what is being discussed. Thanks to the leadership of House Agriculture Committee Chairman Collin Peterson (DMinn.), agriculture and biofuels were given the fair treatment they deserve in climate change discussions. The House bill calls for a necessary time-out from the U.S. EPA’s inclusion of international indirect land use change (ILUC) calculations in its greenhouse gas profile for ethanol and requires five years of desperately needed additional scientific research.

The notion of ILUC is so complex and lacking consensus that implementing such a penalty against biofuels alone is putting the policy cart in front of the scientific horse.

While the bill in the Senate is far from complete, Senate Agriculture Committee Chairman Tom Harkin (D-Iowa) has pledged to include all of the language included by Peterson and expand upon it if possible.

Even Senate Majority Leader Harry Reid (D-Nev.) recognizes the importance of this issue and has instructed Boxer to include Harkin and other members of the Ag Committee in crafting the bill.

Members of Congress from agricultural and rural areas are unified in their support of common sense policies and preventing distortion of this legislation at the expense of rural America. But the bill is a long way from the finish line. A final Senate version is still needed and a conference committee to reconcile differences in the bill is likely to be contentious. In addition, a coalition of well-funded and determined groups has organized to stop any policies they see as beneficial to ethanol. Big Oil, giant food processors and environmental groups are united to maintain the status quo at all costs.

The complex and confusing nature of this bill and its march through Congress underscores the importance of vigilance and awareness of the legislative vehicles moving through all levels of government that will influence the future of this industry.

The RFA will continue to engage with legislators’ offices on a daily basis. We will ensure that those crafting the legislation are aware of the facts and pitfalls that an overreaching and not-ready-forprime-time policy present. And we will be sure that you have all the information you need to be effective advocates for this industry.

Bob Dinneen President and CEO Renewable Fuels Association

22

ETHANOL PRODUCER MAGAZINE • September 2009

RFA UPDATE

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

Fourth edition of gasoline manual now available Increasing availability of renewable fuels is changing the composition of the fuels offered to American drivers.

Ethanol blends such as E10 as well as ethanol alternatives such as E85 are becoming more the norm than the exception.

With these changes in mind, the Renewable Fuels Foundation has released its definitive resource on gasoline quality, “Changes in Gasoline Manual IV.” This is the fourth update to the manual, which has more than 500,000 copies in circulation and has become the definitive reference source for information on gasoline quality and its relationship to vehicle performance for auto service professionals.

The manual focuses on changes in gasoline composition resulting from the passage of the Energy Policy Act of 2005 and the Energy Independence and Security Act of 2007, as well as fluctuating fuel prices leading to greater interest in renewable fuels. It provides important updates in fuel quality ratings, octane ratings, ethanol fuel for nonautomotive uses, and a new feature on E85 and flexible fuel vehicles designed to run on higher ethanol blends.

“With old requirements for oxygenates and other fuel additives gone and new mandates for renewable fuel use in place, it was clear the changing fuel landscape needed to be addressed,” said Robert Reynolds, president of Downstream Alternatives and lead author of the manual. “This manual addresses all the concerns from vapor pressures to octane ratings to drivability standards for all ethanol-blended fuels, including E85. It also focuses on the use of ethanol-blended fuels in non-automotive applications, a growing area of unnecessary concern for consumers. Simply put, ethanol fuels are safe and effective for use.”

A copy of the “Changes in Gasoline Manual IV” can be downloaded for free at www.ethanolrfa.org.

ETHANOL PRODUCER MAGAZINE • September 2009

The case for E12 Currently, the U.S. EPA is considering a formal waiver request from the ethanol industry to allow for the blending of up to 15 percent ethanol in a gallon of gasoline. The RFA strongly believes that both the science and existing statute compel EPA to approve this waiver.

Under the law, however, EPA has 270 days to consider the request. The clock is running and a decision is due on Dec. 1. In the meantime and regardless of its decision, EPA can immediately take steps to increase ethanol use in America safely and responsibly.

EPA has authority to define E12 blends as “substantially similar” to fuels used in certified motor vehicles. The basis for this conclusion is that the weight percentage of oxygen that EPA allows in oxygenated gasoline actually equates to an oxygen percentage that would be present in 12 percent ethanol blends. Ethanol as a fuel additive is an oxygenate. Including ethanol raises the oxygen content of gasoline, causing for a cleaner, more complete combustion of gasoline.

Much of the concern being raised has to do with the amount of oxygen in gasoline as a result of increased ethanol use and increased combustion temperatures. However, it is likely that fuels containing oxygen levels equal to those in E12 have been in the marketplace since the early 1990s.

Considering this and the authority given to the EPA in the Clean Air Act, the EPA should acknowledge that it has already permitted E12 blends in terms of equivalent oxygen content and that, such blends are “substantially similar” to certification fuels under its interpretation.

“We need not wait until EPA decides on the formal E15 waiver request to increase the amount of ethanol we use,” RFA President Bob Dinneen said. “This interim and legally supported step of approving E12 blends would provide an immediate boost to America’s ethanol producers and provide gasoline marketers the flexibility they need to meet the requirements of the renewable fuels standard and capitalize on the cost savings associated with increased ethanol blending.”

23

BIObytes Ethanol News Briefs

Report: Biofuels market growth expected despite challenges A new report from Pike Research forecasted combined sales from the biodiesel and ethanol markets to reach $247 billion by 2020, despite industry challenges. This represents a $76 billion growth from predicted sales for 2010. The report states challenges facing the biofuels market as limited availability of inexpensive feedstocks, the food U.S. distillers grains demand continues to grow in Canada due to poor crop conditions for cattle producers.

Poor crop conditions lead to US DDGS demand Demand for U.S. distillers dried grains with solubles (DDGS) has grown in Canada due to poor crop conditions of barley, cattle producers’ main feedstock. Rycom Trading Ltd., the country’s largest distillers grains importer, recently purchased approximately 31,500 metric tons of U.S. DDGS. Canada imported 772,000 tons of U.S. DDGS in 2008, up

453,000 tons from 2007, making it the second largest market for U.S. DDGS. Ryan Slozka, senior trader at Rycom, said they will wait to see if crop conditions improve, “but as long as cattle feeders continue to see good results with feeding U.S. corn DDGS, we anticipate this upward trend in demand to continue.”

BBI International releases CHP technical report BBI International has released a technical report titled “Technoeconomic Analysis of Biomass CHP at Illinois Corn Ethanol Plants.” The report investigates the impact that biomass powered combined heat and power (CHP) plants could have on Illinois’ renewable portfolio standard, which requires 25 percent of the state’s energy to be derived

24

from renewable power by 2025.

The report also details biomass combustion system efficiencies, estimated harvest costs for woody biomass residues, biomass feedstocks available in Illinois, CHP unit sizes, and financial modeling and sensitivity analyses for several CHP plant sizes. The report is available for purchase at http://store. bbiinternational.com.

verses fuel debate, petroleum price volality and overcapacity of production. The report, “Biofuels Markets and Technologies,” examines technologies that will drive the future of the industry, and includes profiles of key players and comprehensive forecasts for biodiesel and ethanol broken down by country and region.

EPA extends RFS2 comment period The U.S. EPA has extended the comment period by 60 days for its proposed rule for the implementation of the second stage of the renewable fuel standard (RFS2).

The extension, granted in response to several requests submitted to the EPA, was originally scheduled to end July 27 but will now end Sept. 25. The EPA said a 60-day extension should allow adequate time for the public to provide comment on the pro-

posal while also allowing the agency enough time to implement new standards in a timely manner.

The proposed implementation for RFS2, which addresses life-cycle greenhouse gas modeling among other changes to the current RFS, was released May 5, with public commentary beginning May 26th.

Comments can be submitted at http://www.epa.gov/otaq/ renewablefuels/index.htm.

University of Tennessee expands switchgrass program The University of Tennessee has contracted with 38 farmers to grow 1,901 acres of switchgrass for its incentive program as part of its partnership with DuPont-Danisco Cellulosic Ethanol LLC. This is the second growing season in the program — 12 farmers participated last season. Farmers are being paid $450 per acre to plant the ener-

gy crop on their own land. The university provided seed and assistance with planting. Farmers will assume full responsibility for harvesting and baling the crop. The switchgrass will be used as feedstock at DuPontDanisco’s demonstration-scale cellulosic ethanol biorefinery in Vonore, Tenn.

ETHANOL PRODUCER MAGAZINE • September 2009

Mansfield Oil acquires C&N Companies ers. According to Mansfield Oil executives, the acquisition represents a substantial investment

by Mansfield into the renewable fuels and ethanol industries.

Mansfield Oil Executive Vice President Doug Haugh said he expects the acquisition to continue growth in ethanol and biodiesel sales.

PHOTO: BLENDSTAR

Mansfield Oil Co. has acquired ethanol marketer C&N Companies. C&N represents 500 MMgy of ethanol production capacity and 150 MMgy of biodiesel production capacity. Mansfield Oil, which operates 650 bulk terminals and 900 supply points in 48 states, plans to immediately market C&N products to refiners and blend-

CHS transload terminal in Birmingham, Ala.

PHOTO: JASON KOSKI, CORNELL UNIVERSITY PHOTOGRAPHY

CHS opens Alabama ethanol terminal

Professor Larry Walker, second from left, and researchers in the Biofuels Research Laboratory

Cornell University opens biofuels research lab On June 23, Cornell University held a ribbon-cutting ceremony to celebrate the opening of its Biofuels Research Laboratory. The $6 million, 11,000-square-foot facility will serve as the hub of Cornell’s research and development of sustainable and economical biofuels derived from nonfood crops.

Susan Henry, Cornell’s Ronald P. Lynch dean of agri-

culture and life sciences, said the new lab will catapult Cornell to the forefront of renewable energy research and will be the centerpiece of the university’s work on cellulosic biofuel and bioproducts. According to Henry, the goal of the laboratory is to develop renewable energy sources that will stimulate opportunities for New York agriculture.

ETHANOL PRODUCER MAGAZINE • September 2009

CHS Inc., an energy, grains and foods company, held a grand opening for its new ethanol distribution venture in Birmingham, Ala., on June 9. According to CHS Renewable Fuels Marketing Director John Litterio, the exclusive transload terminal

will allow ethanol to move more quickly and efficiently to blender customers in the Southeastern U.S. He said the terminal will not only improve the flow of ethanol from plant to buyer but also reduce dependence on foreign oil and add value for grain producers.

Indiana presents agriculture roadmap In June, Ind. Lt. Gov. Becky Skillman presented the Indiana State Department of Agriculture an agriculture roadmap to serve as a guide in growing the state’s agriculture industry over the next four years. State leaders want Indiana to become a global leader in innovation and commercialization of food, fuel and fiber production and plan to

accomplish that by focusing on advocacy, economic opportunity and environmental stewardship, as highlighted in the guide.

“We believe that the possibilities for Indiana agriculture are endless — and with those possibilities comes progress in the form of jobs, capital investment and wealth for rural Indiana,” Skillman said.

Company develops novel citrus peel-to-ethanol process Spain-based process technology provider HRS Spiratube has announced the development of a new process for the continuous thermal pretreatment of citrus peels to produce ethanol.

The technique, which can be used to convert half of the peel’s

organic matter into ethanol, was developed through a research collaboration with the University of Cartagena. The company intends to use the technology in a commercial-scale citrus peelto-ethanol facility in the Murcia region of Spain by 2010.

25

If passed as proposed by the U.S. EPA, the second stage of the renewable fuel standard will require renewable fuel producers to track their feedstocks to ensure that they meet the definition of renewable biomass.

RFS2 could require biofuel producers to track feedstock The U.S. EPA’s proposed rule for the second stage of the renewable fuel standard (RFS2) states that renewable identification numbers can only be generated for renewable fuel that is produced from feedstock which meets the definition of renewable biomass. This limits the participation of feedstocks in the program according to the management practices of the land they are produced on. In the case of crops and crop residues, these feedstocks must be harvested from agricultural lands cleared and cultivated prior to Dec. 19, 2009. In addition, the land used to produce them must be actively managed or fallow, and non-forested.

To ensure compliance with this aspect of the proposed rule, the EPA is proposing to require renewable fuel producers to provide a demonstration of the type of land used to produce the feedstocks they use at their facilities. One way this could be accomplished would be to require renewable fuel producers to obtain documentation from their feedstock suppliers and include that information in production reports sub-

26

mitted to the EPA. According to the EPA, the agency expects this type of requirement would result in renewable fuel producers amending their contracts and altering their supply chain interactions to ensure they receive documented assurance and proof of their feedstock’s origin.

In a comment submitted to the EPA regarding the RFS2 rulemaking, Adam Dunlop, Blue Flint Ethanol LLC’s director of health, safety and environment, states that his company is very concerned about the definition of renewable biomass and the land use restrictions provided in the proposed rule. “The rule appears to place an impossible burden of tracking feedstocks on renewable fuel producers,” said Dunlop in the comment. “Furthermore, we believe that this burden serves little purpose as the multiple use nature of feedstocks for renewable fuel may allow feedstock producers to circumvent the intent of the rule…

The proposed recordkeeping requirements for production facilities and producers to comply with the ‘existing land’ require-

ments appear to be applying a significantly larger financial and regulatory burden than necessary.”

In the proposed rule, the EPA also describes a variety of alternatives that could be used to comply with this aspect of the RFS2. One alternative would be to establish a chain-of-custody tracking system that could ensure land use data followed the feedstock throughout the supply chain.

Alternatively, the EPA could require renewable fuel producers to set up and administer a quality assurance program. Similarly, the agency would require that renewable fuel producers and renewable fuel feedstock producers and suppliers develop an industry-wide quality assurance program modeled after the Reformulated Gasoline Survey Association. An additional option includes using existing satellite and aerial imagery to develop a mapping Web site that could assist regulated parties in identifying where their feedstocks are produced.

—Erin Voegele

ETHANOL PRODUCER MAGAZINE • September 2009

PHOTO: ALGENOL BIOFUELS INC.

Algenol Biofuels Inc. has demonstrated the growth of algae to produce ethanol at its test facility in Florida.

Algae and ethanol partnerships grow Algae producers are turning to the ethanol industry in an effort to create ethanol and use its byproducts.

The focus of most algae producers is drop-in replacements, such as renewable diesel or renewable gasoline, said Todd Taylor, lead attorney in biofuels and biomass at Fredrikson & Byron PA. “The algae people that are looking at ethanol are doing it because there’s an immediate market for it,” he said.

“Algenol Biofuels has been far and away the company that has been focused on this.”

Algenol Biofuels Inc. was formed in March 2006 as a company dedicated to the utilization and commercialization of algae for ethanol production. In June, Algenol and Dow Chemical Co. announced plans to build and operate a pilot-scale, algae-based integrated biorefinery that will convert carbon dioxide into ethanol on 24 acres at Dow’s Freeport, Texas, site.

Growing algae for biodiesel and ethanol may look similar, however, Paul Woods, co-founder and CEO of Algenol Biofuels, said the two processes are very different. Algenol grows different algae species, cultivates and harvests the product differently. “From our perspective, ethanol is an evaporative

product. So we have a closed and sealed bioreactor where we introduce carbon dioxide into it. The algae, sunlight and seawater form ethanol, which enters the culture but very quickly evaporates into the headspace. We collect off and purify the headspace.”

According to Woods, based on an acreage basis, Algenol’s technology could produce 6,000 gallons of algae per year per acre.

The first of its kind pilot-scale technology biorefinery will have the potential to produce more than 100,000 gallons of ethanol per year, while consuming two dry tons of carbon dioxide obtained from industrial emissions daily.

In June, Algenol submitted a formal request to the U.S. DOE to obtain a grant for financial support to successfully conduct the pilot project. Upon approval of the grant, Algenol, Dow and other collaborators will work to demonstrate the technology at a level to sufficiently prove that it can be implemented on a commercial scale.

The biggest potential for algae and ethanol is probably more on the coproducts side, according to Taylor. For example, one of Fredrikson & Byron’s clients is working with other algae companies to use the high carbo-

ETHANOL PRODUCER MAGAZINE • September 2009

hydrate algae biomass left after oil extraction to add it back into the fermentation tanks with corn to create more ethanol. Another client is using the dead algae bodies to create an algae bio-coal that can be fed into the energy system of a facility just like natural gas.

“I don’t think you’ll start seeing [design/ build companies] offering algae-to-ethanol conversion kits any time soon, but I do think that you’ll see a whole lot of algae companies approaching ethanol companies saying, ‘Can I partner with you to take the fermentation carbon dioxide and grow algae?’” Taylor said, adding that costs to install such technology could be a prohibitive factor.

Recently, the U.S. DOE announced that up to $85 million from the American Recovery and Reinvestment Act has been set aside to develop algae-based biofuels and advanced, infrastructure-compatible biofuels.

The DOE expects to select two to three partnerships and fund projects over three years.

The announcement targets two crucial areas: algal biofuels research and development and advanced, infrastructure-compatible biofuels research and development.

—Hope Deutscher

27

U.S. EPA reviews E15 waiver request comments The U.S. EPA is currently reviewing thousands of comments received in response to a waiver request submitted earlier this year

by Growth Energy and dozens of other industry groups, asking the agency to increase the allowable ethanol content of gasoline to 15 percent. The public commentary period, initially set to expire May 27, was extended by the EPA to July 20 following a National Corn Growers Association request to allow Midwest farmers a fair chance to participate in the commentary process. The EPA is set to issue its final decision by Dec. 1.

Interested parties took advantage of the extension and filed lastminute comments, both for and against the ethanol increase. The Alliance for a Safe Alternative Fuels Environment (AllSAFE), a small engine lobby group, filed a 47-page comment in which the group claimed Growth Energy failed to provide any test data or studies to support

The U.S. EPA is considering a waiver request to increase the allowable blend of ethanol in gasoline to 15 percent. The agency could also approve a smaller increase of ethanol blend rates, specifically E12.

When it comes to treating your water problems ... we don’t kid around.

When you need experience, you need Buckman. For over 60 years, we have been solving water-related problems for our customers. We are committed to delivering solutions that are uniquely designed to help you increase productivity, improve quality, and give you a return on your investment. Other suppliers have chemicals.... only Buckman adds experience and knowledge for a total system approach.

BECAUSE IT’S NOT JUST CHEMICALS YOU WANT – IT’S RESULTS.

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

28

ETHANOL PRODUCER MAGAZINE • September 2009

its waiver request. “Growth Energy has presented very limited data on an unrepresentative and incomplete group of non-road engines, vehicles and equipment,” the group stated. The limited scientific evidence that was supplied by Growth Energy was flawed, according to AllSAFE, and should not be considered by the EPA. The Renewable Fuels Association submitted multiple studies in support of the ethanol increase on the final day of the comment period. The RFA stated that, while the original request contained substantial data to support the waiver request, additional data had become available and served to support the request. The group urged the EPA to also consider ongoing project results as they become available prior to the agency’s deadline for a decision.

The Brazilian Sugarcane Industry Association commented that its extensive experience with various blends of ethanol validated its recommendation that the EPA allow the ethanol increase. “Nearly a century of Brazilian experience with ethanol blended fuels at 15 percent and higher demonstrates that such fuels can lead to significant environmental and greenhouse gas benefits without environmental concerns or technology modifications that differ from those of E10,” the group stated.

Proponents of the waiver are hopeful that even if the E15 waiver is not approved, the request will open the door to lesser

ethanol rates — perhaps E12. The RFA said the EPA already has the authority to approve E12 if it defines the blend as being “substantially similar” to E10.

Dave Vander Griend, president and CEO of ICM Inc. and founding member of Growth Energy, said the approval of ethanol blends greater than 10 percent is essential to the successful implementation of the second stage of the renewable fuel standard and to assist in improving the U.S. economy. Vander Griend commented that if the allowable blend rate were to remain at the “current stagnant rate,” the development of advanced biofuels will be restricted. “Since its inception in 1995, ICM’s mission has been to sustain agriculture through innovation, and along with other industry leaders, we’ve proven our ability to do just that by producing a clean, affordable and renewable means to reduce imports of foreign sources of oil,” he said. “It is incumbent for all stakeholders involved to collaborate and provide continued leadership and seek well-informed policy decisions that will ensure the 36 billion gallon goal is reached, and that a greener, more secure energy future is within reach for all Americans.”

—Kris Bevill

The pump of choice for biofuels!

Improve production and reduce costs with our sealless, valveless pumps.

• Low shear, accurate metering for enzymes and pH control • Pump acids, mash, stillage and lime slurries with ease • No costly seals, rotors, stators or universal joints • Rugged 24/7 continuous duty dependability

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

1-800-282-8823

ETHANOL PRODUCER MAGAZINE • September 2009

29

Climate change bill advances The American Clean Energy and Security Act of 2009 (ACES) passed the U.S. House of Representatives on June 26 by a vote of 219 to 212 and is now being addressed by the U.S. Senate. The House version of ACES includes a provision regarding international indirect land use change, which could change how the U.S. EPA considers international indirect land use change in its proposed rule for the second stage of the renewable fuel standard.

The provision, spearheaded by House Agriculture Committee Chairman Collin Peterson (D-Minn.), would ensure that widespread scientific agreement linking biofuels to indirect land use change before the EPA could impose a greenhouse gas penalty on biofuels.

Under the agreement, an entity such as the National Academy of Sciences would conduct a five-year study to determine a possible link between biofuels and tropical deforestation. In the meantime, the EPA would be prevented from imposing an indirect land use penalty on biofuels. At the end of the study, the EPA, U.S. DOE, and the USDA would need to agree that such a link is present and Legislation that could change how the U.S. EPA considers indirect land use change is being debated in the U.S. Senate.

can be accurately predicted. At that time, Congress would have one year to review the issue before the EPA could move forward.

According to David Crass, a partner at Michael Best & Friedrich LLP, the Senate is expected to address the bill on Sept. 28. However, by mid-July it remained unclear whether the Senate would be able to harmonize the various climate change bills or if legislation would be moved to a conference committee. “I do believe that it is Congress’s overall goal to get one omnibus provision sent up to the White House in advance of the climate change conference in Copenhagen in December,” Crass said. “I think President Obama has made very clear that in order to have credibility walking into those discussions, he needs something from Congress on this.”

Crass noted that initial comments made by Sen. Tom Harkin (D-Iowa) indicate he will make similar political manuevers as Peterson did in the House to ensure that key agriculture and forestryfriendly compromises are secured in the Senate bill.

While the indirect land use change provision of ACES would be beneficial to ethanol producers, cap-and-trade provisions will also affect the industry. “I think unquestionably [ethanol producers] will be a segment of the economy that will be regulated,” Crass said. “The key question is how.”

Crass is encouraging his clients to take action in four areas.

First, he recommends they stay engaged in the debate of this bill via active participation in an industry trade group.

ETHANOL PRODUCER MAGAZINE • September 2009

Second, Crass recommends his clients continue to defend the renewable fuel standard (RFS). He said some entities have stated that if the implementation of indirect land use change is postponed, the whole RFS program should be postponed as well. “I don’t think that will happen, but it’s a dangerous argument…and the industry needs to continue to defend the RFS and push it forward,” Crass said.

Third, Crass encourages his clients to pursue opportunities to establish their climate change footprint and explore ways to reduce that carbon footprint. “What I mean by that is taking a look at fuel switching projects and explore opportunities to reduce natural gas use,” he said. “A biomass fuel switch…may gain them eligibility for some early action credits that they could sell in an offset market that develops as a result of the bill.”

Finally, Crass said many of his clients are looking at opportunities to pursue a cooperative model for the purposes of aggregation and collection of biomass. “That biomass either can be used for market opportunities that will be developed by the bill for selling biomass as a feedstock into the electricity market [or for] their own combined heat and power projects they may be adopting or developing to minimize their carbon footprint.”

—Erin Voegele

31

USDA programs help biofuels producers In response to a request by President Barack Obama to expedite the implementation of programs to assist the development of biofuels, the USDA has moved forward with several 2008 Farm Bill provisions that could serve to benefit ethanol producers.

The Repowering Assistance Program provides $35 million in fiscal year 2009, and authorized $15 million of that funding for fiscal years 2009 through 2012, to provide payments to biorefineries to replace fossil fuel-derived heat and power with renewable biomass systems. To receive funds, a biorefinery must have been in existence at the time the 2008 Farm Bill was passed. The USDA is accepting applications for the competitive program until Nov. 1.

Recipients of loan guarantees via the Loan Guarantees for Biorefineries Program are expected to be named Sept. 15. Guarantees will The 2008 Farm Bill provides a number of programs that will benefit biofuels producers and feedstock suppliers.

32

ETHANOL PRODUCER MAGAZINE • September 2009

be awarded to applicants using second- and third-generation biofuels technologies to produce a variety of renewable fuels, including cellulosic ethanol and methane gas.

The USDA has also agreed to spend $30 million to pay eligible agriculture producers to support and expand production of advanced biofuels as part of its plan to encourage production of nextgeneration biofuels.

Through the Rural Energy for America Program, the USDA will accept applications for renewable fuel energy systems and efficiency improvement feasibility studies, loan guarantees and grants, as well as applications for conducting energy audits on behalf of agriculture producers and rural small businesses.

The Biomass Crop Assistance Program will provide financial assistance to producers or entities that deliver eligible biomass material to designated biomass conversion facilities for use as heat, power, biobased products or biofuels. Initially, assistance will be given for the collection, harvest, storage and transportation costs associated with the delivery of eligible materials. According to the USDA, for up to two years producers or entities will be eligible for up to a dollar per dollar match, up to $45 per dry ton, for the value of the biomass delivered to a designated biomass conversion facility.

Recently, BCAP’s implementation was expedited and the pro-

ETHANOL PRODUCER MAGAZINE • September 2009

gram start date was moved up to 2010. The USDA’s Farm Service Agency will move forward on fully implementing BCAP later this year. As the program grows, FSA county offices will educate and assist producers and facilities on how to participate. It is not known how many project sites will be chosen.

On June 25, the Minnesota Project hosted a webinar focused on BCAP. Presenter Joel Tallaksen, who is also the gasification project coordinator at the University of Minnesota-Morris, said one of BCAP’s major benefits is that it promotes sustainable land use. In addition, Tallaksen said the program also can help the biomass market grow, providing stable revenue sources and reasonably priced biomass for consumers. “One of the biggest things we’ll have to do is form a biomass market,” he said. “It’s hard to get new facilities to start up, unless they know there’s a market out there.”

The USDA is working on some technical assistance issues and developing regulations relating to the issuance of producer contracts and BCAP project areas, said Kelly Novak, program analyst for the USDA Farm Service Agency. The agency is also conducting an environmental impact study; however, she said everything should be completed by the 2010 start date.

—Hope Deutscher

33

Increased corn acreage benefits ethanol In the past few months, reports have shown that corn acreage has increased by 3 percent, forcing prices to fall, but boosting corn-based ethanol producer profitability. According to the USDA National Agricultural Statistics Service crop acreage report released June 30, 2009, corn acreage is estimated at 87 million acres, making it the secondlargest planted acreage since 1946, behind 2007.

The July 10 World Agricultural Supply and Demand Estimate report projected the 2009-‘10 marketing year average farm price for corn to be $3.35 to $4.15 per bushel, down 55 cents on both ends of the range. On July 13, the CME Group reported that ethanol prices had dropped sharply, but corn prices had dropped even further, resulting in a July ethanol-corn crush margin that was showing improvement.

On July 13, it was moderately below the record 7.5 month high of 34.7 cents per gallon.

In the past few months, corn acreage has increased and prices have dropped, benefiting ethanol producers across the country.

PHOTO: SUE RETKA SCHILL, BBI INTERNATIONAL.

SPEC IT AND FORGET IT. Check-All Valve is your one-stop supplier for the check valves you need in the materials you require. Better yet, every valve includes the experience, engineering, and application know-how you need for “spec-it-and-forget-it” reliability.

After all, you have better things to do, and check valves are all we do.

Call us at 515-224-2301 or e-mail us at sales@checkall.com.

www.checkall.com 34

Since 1958 West Des Moines, Iowa USA ETHANOL PRODUCER MAGAZINE • September 2009

“I think corn prices should be relatively stable because we’ve got a decent supply,” said Richard Asplund, research director for Commodity Research Bureau. “On the other hand, oil prices have some potential to go up over the next year as the global economy starts to recover, which hopefully it will in the second half of this year. It appears that there is some room for oil and gasoline prices to go higher over the next six months and into next year, whereas corn prices should be relatively stable. So that’s a good outlook for ethanol producers. That should help their margins even more.”

Volatility in the commodity markets continues to dominate the scene, said Nathan Fields, director of biotechnology and economic analysis for the National Corn Growers Association. “I think what the markets are probably doing is that with the price of oil, price of ethanol, price of corn, there looks to be some weakness in demand categories and that’s eroding away at the price of corn. There’s a lot of uncertainty around some of the ethanol plants out there. If oil price goes up, you’re probably going to see corn demand increase; if you see any indication from the U.S. EPA that they are going to release the 10 percent blend limit on ethanol, you may see corn prices be supported a little bit, but with corn prices going down, we keep getting indications that supply is going up. That’s fundamentally not an odd occurrence to happen.”

Fields said the market is cyclical — high corn prices lead to farm-

ers planting more acres, which leads to lower corn prices and reduced acreage.

“Corn producers are a bit concerned,” Fields said. “They are still engaging in a lot of hedging practices to maintain the viability and profitability of their operation. Really, for them, the volatility that we have seen in the past few years has been a heck of a rollercoaster ride but they are happy to be in the area of non-$2 corn because we’re still up operating at a price point area where we’re not relying so heavily on that government safety net.”

Fields expects ethanol plant profitability to begin to turn around and more facilities to produce more ethanol – if they can feed it into the market.

“The USDA reported the acreage bumping up. I think that’s a pretty clear indication that corn is still one of the best value propositions out there and we’re going to see strong demand, even through some of this price volatility,” Fields said. “The report also shows that there is plenty of supply out there to address any concerns that those who oppose biofuels may have. There’s plenty of corn to go around, plenty to meet all of our market needs, we’re not sacrificing one market for the other; we’re serving all markets and serving all markets very, very well.”

—Hope Deutscher

PureMash ® Non-Antibiotic Fermentation Technology • Treats infections antibiotics cannot, • Antibiotic-free distillers grain such as heat exchangers and piping • Eliminates infections • Kosher, Organic, and NSF Certified • Patent-pending

Arrestol ™ Antimicrobials • Antibiotic formulations specifically designed for ethanol production • Can be combined with PureMash for synergistic and unparalleled control

PureVida™ Yeast • Tolerates high levels of gravity, temperature, sugar, and alcohol • Resistance to organic acids well-suited to zero discharge plants

Cellulosic

Other Services

• Enzyme manufacturing • Substrate pre-treatment • Fermentation

• VOC abatement • Sodium-free cooling tower biocide • Fermentation consulting

Call 866.933.0408 or visit www.puremash.com or email us at info@puremash.com

ETHANOL PRODUCER MAGAZINE • September 2009

35 RBS specializes in FDA Compliance

®

PHOTO: BUCKEYE TECHNOLOGIES INC.

Myriant Technologies plans pilot-scale cellulosic biorefinery

Clay Beathea, Buckeye Technologies wood cellulose sustainability manager (left); Lonnie Ingram, a professor with the University of Florida’s Department of Microbiology and Cell Science and director of the Florida Center for Renewable Chemicals and Fuels; and Howard Drew, Buckeye Technologies vice president of wood cellulose manufacturing, pictured at the future site of the University of Florida’s pilot-scale biorefinery.

BioEnergy International LLC, a privately held biotech developer and manufacturer of next-generation renewable biochemicals and biofuels, recently announced the formation of Myriant Technologies LLC, which will incorporate its biobased chemicals business and intellectual property. BioEnergy International and Myriant Technologies will operate as separate entities.

BioEnergy International will continue its pursuit of biofuels opportunities, including the development of a Clearfield, Penn.-based ethanol plant that is expected to begin operations in January 2010.

Myriant Technologies is partnering with the University of Florida on a pilot-scale biorefinery facility that will produce cellulosic ethanol and biobased chemicals.

“The university was awarded $20 million by the state of Florida to develop what we feel is the first true integrated biorefinery that will take advanced cellulosic feedstock and then produce a multiple of products, including biofuels and biochemicals,” said Samuel McCon-

The Ethanol Industry’s Leading Supplier of Denaturant.

MARKETING We recognize the value of reliable supply and ensure that your plant will never run out of denaturant.

Our logistics professionals manage every aspect of the transportation – from the pipeline movements to the cargo ships to the trucks and railcars.

We Deliver!

Mike Corbus

620.245.0005

USA Supply

Simon Di Marzo

403.215.7455

Canadian Supply

www.nexeninc.com 36

ETHANOL PRODUCER MAGAZINE • September 2009

nell, who serves as the senior vice president of corporate development for both Myriant Technologies and BioEnergy International.

According to Kevin Heinicka, the University of Florida’s director of facilities planning and operations, the pilot-scale biorefinery project will employ two technologies developed by the university: a cellulosic ethanol technology that has been licensed to Verenium Corp., and a biochemicals technology that has been licensed to Myriant Technologies. Myriant Technologies will co-operate the facility with the university. Verenium is not expected to be actively involved in the project.

The point of the facility, said Heinicka, is to further develop the two technologies and experiment with different feedstock sources.

The company has scheduled a groundbreaking ceremony for the new facility to take place in October. Heinicka estimated that construction will begin during the first quarter of 2010, with the facility being operational by the end of year.

According to McConnell, the project is currently in the design phase and a site has been identified adjacent to Buckeye Technologies Inc.’s wood processing plant in Perry, Fla. Buckeye will supply a portion of the feedstock used by the facility, including slash pine that is processed by the company and the waste streams coming out of its production process. A variety of other feedstocks will be utilized by the pilot biorefinery, including energy cane, sugarcane bagasse, pop-

ETHANOL PRODUCER MAGAZINE • September 2009

lar, sweet sorghum, wood waste, and waste-based biomass materials.

According to McConnell, Buckeye also has access to significant acreage immediately adjacent to the site, which could be used to grow a wide variety of organic feedstocks that will be employed by the pilot facility.

Once complete, the pilot-scale biorefinery is expected to have the capacity to process approximately 5 dry tons-per-day of cellulosic biomass material. The facility will be capable of producing more than 140,000 gallons of ethanol or 1,000 tons of biobased chemicals annually.

BioEnergy International began commercial production of its D(-) lactic acid product in 2008 for use in polylactic acid. D(-) lactic acid solves polylactic acid’s thermal stability problem, unlocking its potential and expanding its applications to engineering and high performance plastics. Myriant is currently working to develop biobased succinic acid, which can be used as a building block for plastics and as a replacement for petroleum-based chemicals. “We see this [pilot-scale biorefinery] as an ideal weapon for us in acclimating our technology for each chemical to waste-based feedstocks,” McConnell said.

—Erin Voegele

37

DRIVE Buis

Increased Corn Yields: Another Reason to Increase Blends

By Tom Buis ith this year’s corn harvest just around the corner, it’s worth recalling the USDA’s crop report and its yield report released earlier this year. Both reports indicate that once again the American farmer can produce enough corn to both feed and fuel our country. Our critics continue to say otherwise, but time and again, we prove them wrong.

Based on the USDA’s reports, American farmers are expected to produce 12.3 billion bushels of corn, the second largest U.S. crop in history. At the same time, 2009 corn acreage is 7 percent below 2007, and it is the secondlargest planted acreage since 1946, behind 2007. And after estimating all of the uses of corn, the USDA projects an excess corn supply of 1.6 billion bushels.

These record-breaking statistics are good news for many reasons. First, they dismiss the claims from our critics who say ethanol production drives up the cost of food.

Indeed, we’re producing more ethanol than ever and corn prices are less than half of what they were last summer.

The fact is, American farmers continue to be the most productive in the world and can grow enough corn for food, fuel, feed and exports, and still have excess supply that is carried over to the next year. Farmers continue to produce more corn on less land, further hurting the credibility of those who argue that ethanol production leads to global land use changes. And as technologies continue to advance, our farming techniques and abilities will only get better and increase yields even more.

The truth is, it’s our critics who have yet to address the issue of high food prices. For almost a year, we have been calling on big food manufacturers, especially the Grocery Manufacturers Association, to halt their misinformation campaign about ethanol and lower food prices. While food

W

38

prices have gone down slightly, they remain at levels much higher than where they should be. The price increases that big food makers adopted last year have stuck and many food companies are seeing increased profits. Companies like General Mills and Kraft all had higher than expected profits in the first half of 2009 due, in part, to higher food prices.

The USDA reports also demonstrate we have the capacity to increase the blend rate from 10 percent to 15 percent without affecting the food supply. Current government regulations, which date back to the 1970s, placed an arbitrary 10 percent limit on the amount of ethanol that can be blended with gasoline. Ethanol producers have hit that cap, producing more ethanol than can be used under current restrictions. This prevents future compliance with the renewable fuel standard and threatens to block research and development into cellulosic and future generations of biofuels. Not to mention, an increase to a 15 percent blend will grow our economy and create jobs. As the unemployment rate rises, job creation is more important than ever.

According to a report released by Growth Energy earlier this year, more than 136,000 new green collar jobs will be created nationwide by moving to a 15 percent blend.

While the comment period for Growth Energy’s 15 percent blend green jobs waiver closed in July, it is still important for you to show your support for increasing the blend of ethanol in our gasoline. Contact your member of Congress and remind him or her that the science is behind an increase to E15, and that it will create domestic jobs and new markets to boost our economy.

Tom Buis is the CEO of Growth Energy. Reach him at TBuis@GrowthEnergy.org or (402) 932-0567.

ETHANOL PRODUCER MAGAZINE • September 2009

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

Sooner or later, you’ll have to to deal de al with wit ith h bacterial bact ba cter eria iall contamination cont co ntam amin inat atio ion n can wait wait – suffer suf uffe ferr the the lost lost production pro rodu duct ctio ion n in your fermentation tanks. You can u ca can n si simp mply ly h elp el p pr prev even entt it it, to toda dayy.

– and treat the problem. Or you simply help prevent today. oll uti t i on ffor or opti optimum timum yi yields i eld lds Either way, LACTROL® is the proven ssolution and higher productivity. eria most damaging to your alcohol LACTROL controls the bacteria ntimicrobial that has an FDA letter production. And it’s the only antimicrobial cts,, when used as recommended. of “no objection” for co-products, prev pr even entt most mo st contamination c on onta tami mina nati tion on from f ro rom m A little LACTROL today will prevent and d di disc scov over er w hy L hy ACTR AC TROL TR OL is is also allso ever happening. Try it. Or wait – an discover why LACTROL oice oi ce is i s your yo ur s. s . For F or d etai et ails ls, ca call ll the leading re me dy. T he choice details, cttr ol.com. l 800-223-0434, or visit www.lactrol.com.

© 2009 Phibro Animal Health Corporation Lactrol is a registered trademark of Phibro Animal Health Corporation and its affiliates.

LEGAL PERSPECTIVES Martin

Patel

Federal Grants Spur Electricity Production

By Hamang B. Patel and Porter J. Martin thanol producers who are considering expanding their facilities to be able to produce electricity can get a jolt to their efforts from the federal government. The American Recovery and Reinvestment Act of 2009 (known as the Stimulus Bill) created a program where the U.S. Department of the Treasury will issue grants to help offset the cost of constructing projects that produce electricity from various renewable energy sources, including biomass, wind power and solar power. The Treasury outlined the terms of this program in guidance published on July 9, 2009.

E

Biomass to Electricity This federal program is most relevant to an ethanol producer as a way to fund part of the cost of constructing a facility to burn waste biomass material to generate electricity. Although the biomass material that will typically be most readily available for an ethanol producer is stillage, a variety of other biomass materials are also eligible for the program – including various forest-related resources, solid wood waste materials, orchard tree crops, grains, legumes, sugar and other crop byproducts or residues.

The electricity generated by the facility can be used by the ethanol plant, sold to a utility or a combination of the two.

It should be noted that the grant will not be available for constructing a co-fired facility that burns fossil fuels beyond the fossil fuels required for startup and flame stabilization.

Amount and Payment of the Grant The amount of the grant is generally equal to 30 percent of the tax basis of tangible property used in the facility, excluding any cost of constructing a building or “soft costs” such as engineering and installation fees. The grant will be paid in one lump-sum payment shortly after the facility starts generating electricity. An ethanol producer would typically need to obtain financing of the entire cost of the facility and use the grant to pay down a portion of the financing when the facility becomes operational.

40

Deadlines To be eligible for the grant, the facility must become operational by the end of 2010. Alternatively, if construction of the facility starts before the end of 2010, the facility need not become operational until Dec. 31, 2013. Construction is treated as starting in 2010 only if physical work of a significant nature has begun. A safe harbor allows this test to be met if more than 5 percent of the total cost of the facility is incurred (or in the case of a cash method taxpayer, paid) before Dec. 31, 2010. The cost of the land and preliminary activities (such as planning, designing, securing financing, exploring or researching) are excluded in calculating the total cost of the facility.

The application for the grant must be filed on or before Oct. 11, 2011. If the facility is not operational by the time the application is filed, documents showing that construction has begun must be submitted. By claiming the grant, the taxpayer cannot also apply for the investment tax credit or production tax credit. However, there is no such restriction to couple this grant with other federal incentives (including federal new market tax credit financing and various federal loan guarantee programs).

The creation of this grant program should cause an ethanol producer to re-evaluate how it disposes of waste materials. To the extent that burning the waste to generate electricity can produce a better financial return than other uses of the waste, an ethanol producer may be well served to learn more about this program.

Hamang B. Patel and Porter J. Martin are partners at Michael Best & Friedrich LLP, a full-service law firm serving the renewable energy industry. Hamang can be reached at (608) 283-2278 or hbpatel@michaelbest.com. Porter can be reached at (608) 283-0116 or pjmartin@michaelbest. com.

ETHANOL PRODUCER MAGAZINE • September 2009

eBIO INSIDER Vierhout

Europe’s take on ILUC uropean regulators have caught indirect land use change (ILUC) fever. A recently adopted EU law states that the European Commission must complete a review of the impact of ILUC on greenhouse gas (GHG) emissions and address ways to minimize that impact by Dec. 31, 2010. Interestingly, the law does not mention biofuels at all. Some might argue that ILUC occurs because of biofuels, so mentioning it explicitly is not necessary. However, one could also argue that by not mentioning biofuels, the legislator acknowledges that the causes of LUC (direct and indirect) and deforestation are multiple, complex and interlinked. To single out one human activity, such as the production of biofuels, is an oversimplification of reality. And this is the bone of contention: Is it possible to agree on a macro-economic model that can deliver proof as to what extent ILUC is caused by biofuels?

Several European Commission services — Transport and Energy, Environment, Agriculture, Trade and the Joint Research Centre — have different views on the role of biofuels and their effect on ILUC. Four of the groups decided to do modelling work either by themselves or through external researchers. The results will be presented this month for critique.

In advance of the modelling results, the Commission has called upon stakeholders and EU Member States to reflect on a document that contains, as they call it, “possible elements of a policy approach on ILUC.” In its document, the Commission presented seven policy elements. Five elements are biofuel-specific and are to be considered as part of policy measures if modeling shows a “satisfactory understanding” of ILUC emissions and how they vary by biofuel has been reached.

This approach is somewhat messy. How can one discuss policy options if we do not know yet if a satisfactory understanding is possible at all? And what is meant by “satisfactory understanding?” Is it the understanding of the politician that often equals “better safe than sorry” or “minimize risk rather than being accurate” or is it the understanding of the scientist that “analytical

E

42

work should be verifiable, rigorous and robust at the same time and should stand the test of falsification?”

Anticipating the verdict, European bioethanol fuel producers have put forth eight principles that we believe should be respected when accounting for GHG emissions from ILUC: 1. The data and methodology must be fully transparent and publicly available so that the results can be replicated and methodology peer reviewed.

2. Accounting must be done on the basis of marginal land use changes caused by increased biofuel use, according to crop and fuel type.

3. The “biofuel scenarios” and the “reference scenario” must be a set of equal amounts of equivalent products.

4. Account must be taken of changes in trade flows and biomass supply across regions to identify where ILUC is likely to occur.

5. Land area changes as a result of biofuel coproducts must be fully accounted for by applying a substitution approach, according to coproduct use.

6. Account must be taken of changes in biomass yield growth with increased demand growth for food, feed and fuel.

7. Account must be taken of the target biofuel trajectory with time.

8. Account must be taken of the type of land where ILUC is likely to occur and the carbon stocks associated with that land.

And I believe a 9th principle should be added: 9. The prevention of LUC arising from the oil supply chain must be fully accounted for by applying a substitution approach.

We are still at the beginning of a debate that will take a year or more if European regulators and politicians decide to follow what seems to be the U.S. approach — take the time to be accurate on ILUC. Robert Vierhout is the secretary-general of eBIO, the European Bioethanol Fuel Association. Reach him at vierhout@ebio.org.

ETHANOL PRODUCER MAGAZINE • September 2009

THE INDEX FINGER.

YOUR GO-TO FOR TITRATION. The One Click Ethanol Analyzer. Now, anyone in the lab can start an analysis with one simple click.

STEP 1: POINT FINGER

Titration Excellence from METTLER TOLEDO offers solutions that make your daily ethanol analyses as easy as One Click. Tasks such as calibrations, sample analyses and sample series can be assigned to Hot Keys so daily routines are intuitive to the first time user, enabling your lab to meet many ASTM ethanol standards: Chloride content Acid Number Sulfate content Water Content by Karl Fischer Fact is, Titration Excellence offers more innovative features than any other titrator on the market. But, in the end, One Click Titration™ is all you’ll care about. Because it does everything your finger tells it to do.

STEP 2: PUSH BUTTON

STEP 3: HOLSTER FINGER

Call 1-800-METTLER or e-mail us at labinsidesales@mt.com for more information.

www.mt.com/us-one-click-titration

RINS

44

ETHANOL PRODUCER MAGAZINE

September 2009

RINS

Rewriting the Book on

RINs

The renewable identification number system was designed to serve as a framework to help ensure that mandates required by the renewable fuel standard (RFS) program are met. As the U.S. EPA works to implement the second stage of the RFS program (RFS2), the agency has proposed ways to improve and streamline the system in order to address problems that emerged under RFS1 and ensure that the additional complexities of RFS2 can be effectively managed.

By Erin Voegele

ETHANOL PRODUCER MAGAZINE

September 2009

45

RINS

T

he U.S. EPA released its proposed rule for the second stage of the renewable fuel standard (RFS2) program in May. The rulemaking is designed to implement changes to the current renewable fuel standard (RFS1) program, as required by the Energy Independence and Security Act of 2007 (EISA). A 60-day public comment period on the proposed rule, originally scheduled to end July 27, was extended to Sept. 25.

EISA requires several changes to be made to the RFS program. Most significantly, the act increased the renewable fuel mandate from 7.5 billion gallons by 2012 to 36 billion gallons by 2022. Other alterations to the program include the establishment of four unique categories of renewable fuel, baseline carbon reduction thresholds for each of those categories, changes in the definition of renewable biomass, new registration requirements, and the inclusion of diesel and non-road fuels in the program.

In addition to these changes, EPA’s proposed rule for the RFS2 program makes several changes to the renewable identification number (RIN) system. According to the EPA’s preamble to the proposed rule, the current RIN system, established to implement RFS1, was designed to be straightforward and maximize flexibility. The

agency says it was ultimately intended to ensure that the required volume of renewable fuel is produced and blended into U.S. transportation fuel, and that the volumes of renewable fuel are verifiable and allow the existing system of fuel distribution and blending to be maintained.

In its proposed rule for the RFS2, the EPA essentially proposes to continue using the existing RIN framework, but with certain modifications that will allow the system to implement the provisions required

by EISA and address new complexities in the RFS program.

Complicated Changes The establishment of four separate categories of renewable fuel is one of the most significant changes, says Clayton McMartin, president of Clean Fuels Clearinghouse, which owns and operates the RINSTAR Renewable Fuels Registry.

The new categories are cellulosic biofuel, biomass-based diesel, advanced biofuel and renewable fuel. “The fact that there are four different categories increases the complexity of the program,” McMartin says.

“The other really unprecedented change is the fact that the [EPA] Administrator has authority and responsibility to assess market conditions on an annual basis and make adjustments to the mandates

or to the standard year over year,” McMartin says. “That is huge.

Never before has EPA had that level of authority.”

Under RFS1, renewable fuel producClayton McMartin ers generated RINs by president, virtue of producing re- Clean Fuels newable fuel. “The way Clearinghouse things are done right now [under RFS1], producers produce the ethanol, they assign the RINs, they sell the ethanol and , at that point, their role in the supply chain is effectively complete and they can David Bennett do their quarterly and annual reporting," says owner, Renewable Energy David Bennett, a certi- Compliance and fied public accountant Advisory Services and owner of Renewable Energy Compliance and Advisory Services. “RFS2, in terms of accountability and responsibility, flips that upside down.

Now there is a lot more responsibility that rests on their shoulders.”

New responsibilities include additional registration requirements, the completion of third-party engineering reviews and the Continued on page 49

Biofuel, reborn.

Biobutanol is an important step forward for biofuels. It can be blended with gasoline at higher rates than ethanol, offers improved miles per gallon and will help to integrate biofuels into the fuel chain at a faster rate. High performance and easy to handle, it is a pioneering solution to the energy challenges to come.

Butamax™ Advanced Biofuels LLC is working at the frontiers of biofuel science and technology. We are dedicated to the commercial development of biobutanol technologies, processes and products worldwide.

Welcome to Butamax™ Advanced Biofuels LLC. We’re shaping the future of biofuel technology.

For more information, visit www.butamax.com

A joint venture between BP and DuPont The DuPont Oval Logo is a registered trademark of E.I. du Pont de Nemours and Company or its affiliates. The BP letters, the Helios Device and Butamax word are trademarks owned by BP p.l.c..

RINS

Selected EISA definitions Renewable fuel: Fuel that is produced from renewable biomass and that is used to replace or reduce the quantity of fossil fuel present in a transportation fuel.

Renewable biomass: Planted crops and crop residue harvested from agricultural land cleared or cultivated at any time prior to the enactment of EISA that is either actively managed or fallow, and nonforested.

Planted trees and tree residue from actively managed tree plantations on non-federal land cleared at any time prior to enactment of EISA, including land belonging to an Indian tribe or an Indian individual that is held in trust by the United States or subject to a restriction against alienation imposed by the United States.

Animal waste material and animal byproducts Slash and pre-commercial thinning that are from non-federal forestlands, including forestlands belonging to an Indian tribe or an Indian individual, that are held in trust by the United States or subject to a restriction against alienation imposed by the United States, but not forests or forestlands that are ecological communities with a global or state ranking of critically imperiled, imperiled, or rare pursuant to a State Natural Heritage Program, old growth forest, or late successional forest.

Biomass obtained from the immediate vicinity of buildings and other areas regularly occupied by people, or of public infrastructure, at risk from wildfire Algae Separated yard waste or food waste, including recycled cooking and trap grease

Advanced biofuel: Renewable fuel other than ethanol derived from corn starch that has life-cycle greenhouse gas (GHG) emissions that are at least 50 percent less than baseline lifecycle GHG emissions. Advanced biofuel may include ethanol derived from cellulose, hemi-cellulose or lignin; ethanol derived from sugar or starch other than corn starch; ethanol derived from waste material, including crop residue, other vegetative waste material, animal waste, and food waste and yard waste; biomass-based diesel; biogas including landfill gas and sewage waste treatment gas produced through the conversion of organic matter from renewable biomass; butanol or other alcohols produced through the conversion of organic matter from renewable biomass; or other fuel derived from cellulosic biomass.

Biomass-based diesel: Renewable fuel that is biodiesel as defined by the Energy Policy Act of 1992 that has life-cycle GHG emissions that are at least 50 percent less than the baseline lifecycle GHG emissions.

Cellulosic biofuel: Renewable fuel derived from any cellulose, hemi-cellulose or lignin that is derived from renewable biomass and that has life-cycle GHG emissions that are at least 60 percent less than the baseline life-cycle GHG emissions.

Baseline life-cycle GHG emissions: The average life-cycle GHG emissions for gasoline or diesel sold or distributed as transportation fuel in 2005. *Information sourced from the Energy Independence and Security Act of 2007

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

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

ETHANOL PRODUCER MAGAZINE

September 2009

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

47

RINS

The D Code RIN: KYYYYCCCCFFFFFBBBBBRRDSSSSSSSSEEEEEEEE K YYYY CCCC FFFFF BBBBB RR D SSSSSSSS EEEEEEEE

= Code distinguishing assigned RINs from separated RINs = Calendar year of production or import = Company ID = Facility ID = Batch number = Code identifying the Equivalence Value = Code identifying the renewable fuel category = Start of RIN block = End of RIN block

Proposed Change to D Code D value meaning under RFS1

Meaning under RFS2

1 2

Cellulosic biofuel Biomass-based diesel

3 4

Cellulosic biomass ethanol Any renewable fuel that is not cellulosic biomass ethanol Not applicable Not applicable

Advanced biofuel Renewable fuel

*Chart sourced from page 44 of the U.S. EPA's preamble to the proposed rule for the RFS2

In the event the RFS2 program is implemented mid-year 2010, some RINs generated during the year would be applicable for the RFS1 standard, while others would be applicable for the RFS2 standard. Because the meaning of the D Code in RFS2 RINs will differ from the meaning of the D Code in RFS1 RINs, one option would be to assign D Codes that don’t overlap between the two standards.

The U.S. EPA’s alternative approach for this situation is presented in the following chart.

Alternative D Code Definitions D value meaning under RFS1

Meaning under RFS2

1 2

Not applicable Not applicable

3 4 5 6

Cellulosic biomass ethanol Any renewable fuel that is not cellulosic biomass ethanol Not applicable Not applicable Not applicable Not applicable

Cellulosic biofuel Biomass-based diesel Advanced biofuel Renewable fuel

*Chart sourced from page 45 of the U.S. EPA's preamble to the proposed rule for the RFS2

48

ETHANOL PRODUCER MAGAZINE

September 2009

RINS

In some cases, more than one fuel pathway may apply to a facility within a compliance period. In the event these pathways have been assigned different D codes, it must be determined which D code to use when generating RINs. EPA’s proposed approach for accomplishing this can be found in the following chart.

Proposed Approach to Assigning Multiple D Codes for Multiple Applicable Pathways Case

Description

Proposed Approach

1

The pathway applicable to a facility changes on a specific date, such that one single pathway applies before the date and another single pathway applies on and after the date.

The applicable D code used in generating RINs must change on the data that the fuel produced changes pathways.

2

One facility produces two or more different types of renewable fuel at the same time.

The volumes of the different types of renewable fuel should be measured separately, with different D codes applied to the separate volumes.

3

One facility uses two or more different feedstocks at the same time to produce a single type of renewable fuel.

For any given batch of renewable fuel, the producer should assign the applicable D codes using a ratio…defined by the amount of each type of feedstock used.

*Chart sourced from page 108 of the U.S. EPA's preamble to the proposed rule for the RFS2.

Continued from page 46

ability to track and verify feedstocks used in the fuel production process.

Under the proposed rule for RFS2, to generate a RIN, the renewable fuel producer must be able to verify that the feedstock used to produce the fuel meets the definition of renewable biomass.

Alternatively, to produce fuel without generating a RIN, the producer must be able to prove that the feedstock does not meet the definition. According to the EPA’s preamble to the proposed rulemaking, this requirement has been included to prevent eligible renewable fuel producers from opting out of the program by simply choosing not to evaluate feedstock and generate RINs. In other words, the EPA is proposing to require a demonstration of the type of land used to produce any feedstock used in the

production of renewable fuel. It further proposes requiring RINs to be generated for fuel that is produced from qualifying feedstocks.

Another significant change applies to the RFS1 provision that requires RINs assigned to fuel blended into heating oil or jet fuel to be retired. Under the proposed RFS2 rule, RINs assigned to fuel used for these purposes would be allowed to remain valid for compliance purposes. During 2009, these RINs would continue to be retired. However, those retired RINs would be eligible for reinstatement by the retiring party in 2010 and would be valid for compliance with the 2010 RFS mandates.

In the proposed rule, the two-year valid life of RINs is maintained, which means that excess 2009 RINs will still be Continued on page 52

ETHANOL PRODUCER MAGAZINE

September 2009

FROM PROBLEMS TO PELLETS TO PROFITS If you’re transporting DDG as meal, you’re losing profits every day. Put that money back in your pocket with a CPM pellet mill.

Get increased energy savings, flowability and dust control with less cleanup from the only pellet mill with a gear drive train.

Durable, energy efficient and trouble-free with parts made and warehoused in the USA to serve you faster. Call for your FREE cost analysis today.

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

CRAWFORDSVILLE, INDIANA 49

Together we can achieve high-performance ethanol production.

Genencor® and you—a partnership of possibilities SPEZYME® ALPHA improves liquefaction performance by efficiently reducing viscosity across a broad range of pH and solids levels.

Genencor® brings 25 years of experience and deep technical knowledge to the ethanol industry. We are committed to working closely with customers to drive innovation and improve plant outcomes. SPEZYME® ALPHA is the latest addition to our total fuel ethanol product line.

For more information, contact your customer service representative at 1-800-847-5311. www.genencor.com © 2009 Danisco US Inc. Genencor® and SPEZYME® are registered trademarks of Danisco US Inc. or its affiliates in the United States and/or other countries.

RINS

<285 &/($5 62/87,21

Continued from page 49

,7Âś6 $0$=,1* :+$7 <28 &$1 *(7 '21( 81'(5

35(6685(

:KHQ \RX QHHG LW GRQH QRZ FRXQW RQ RXU SURIHVVLRQDO FUHZ WR FOHDQ DOPRVW DQ\WKLQJ EHWWHU WKDQ DQ\RQH

72// )5(( ZZZ DTXDSRZHU XV LQIR#DTXDSRZHU XV +\GUR EODVWLQJ DQG YDFXXP VHUYLFHV VLQFH 52

The EPA acknowledges that, through the implementation of RFS1, it has found that RINs have proven confusing for many and that various errors have occurred though the generation and use of RINs. Once an error is made with a RIN, it often propagates throughout the entire distribution system. eligible to meet the 2010 RFS standard.

Although the 60 percent greenhouse gas reduction threshold for cellulosic biofuel will not have been verified for 2009 RINs generated for cellulosic biomass ethanol, the EPA is proposing that those RINs be eligible for compliance purposes to meet the 2010 cellulosic biofuel standard.

Although the EPA proposes to maintain the system by which RINs move throughout the supply chain, it is also taking comment on two options that involve removing the RFS1 restriction that requires RINs to be assigned to and transferred with batches of renewable fuel. The first option would allow renewable fuel producers to sell RINs to any party separately from the volumes of renewable fuel; the second would allow renewable fuel producers to sell unassigned RINs only to obligated parties.

McMartin says that restricting the sale of RINs to obligated parties would result in less market efficiency. â&#x20AC;&#x153;A closed system would probably not be in the best interest of the producer â&#x20AC;&#x201D; or anybody midstream in the supply chain,â&#x20AC;? he says.

In its proposed rule, the EPA has also created an opportunity to generate RINs for renewable electricity, natural gas and propane that is used as transportation fuel. According to the preamble to the proposed rule, this approach is consistent with EISAâ&#x20AC;&#x2122;s requirement that all transportation fuels be included in the RFS2. However, RINs could only be generated for these fuels under limited conditions. The fuel would need to be produced from feedstock meeting the definition of renewable biomass, and the party generating the RINs would be required to identify the specific quantity

of the fuel that was actually used as a transportation fuel.

As established in EISA, the proposed rule for RFS2 also eliminates the RFS1 2.5-to-1 credit for cellulosic biomass ethanol and waste-derived ethanol.

Under the RFS2 rulemaking, these fuels would have an equivalence value of 1, which is consistent with all other forms of ethanol.

Although several details of the RFS program in relation to RINs have been altered under EISA and the RFS2 rulemaking, the EPA is also proposing to leave many of the RFS1 regulatory requirements of the RIN system largely â&#x20AC;&#x201C; or in some cases â&#x20AC;&#x201C; entirely unchanged.

Some provisions expected to remain largely intact are the way RINs are distributed, separated and used to demonstrate compliance by obligated parties; the provisions for exporters; the recordkeeping and reporting requirements; the deficit carryover; the two-year valid life for RINs; and the 20 percent rollover cap.

As in RFS1, the EPA is proposing that each RIN continues to represent one gallon of renewable fuel, and that each RIN continues to be represented by a 38-digit number. Most of the codes contained within the RIN will also continue to have the same meaning, with one exception. The D code will now be used to identify each of the four categories of renewable fuel established by EISA, rather than the two categories of renewable fuel that are applicable under RFS1. Producers will be able to identify the proper D code for their fuel using an EPA-provided look-up table that will identify the specific fuel pathway

ETHANOL PRODUCER MAGAZINE

September 2009

RINS

for each combination of renewable fuel type, feedstock used and production process.

In order for the RFS2 program to be implemented, the EPA intends to require that all parties who generate, own, transfer and/or use RINs reregister with the agency. As part of this re-registration, renewable fuel producers would be required to provide information about their feedstocks, facilities and products. This information would be used by the EPA to verify the validity of RINs as well as their proper categorization into one of the four renewable fuel categories.

Moderated Transaction System In the RFS2 rulemaking, the EPA also proposes to change the 2010 reporting schedule. Under the current schedule, obligated parties, renewable fuel exporters, renewable fuel producers, renewable fuel importers and any party who owns RINs must submit certain information to the EPA on a quarterly and/or annual basis. In 2010, the agency is proposing that these quarterly reports would be required to be submitted on a monthly basis. According to the EPA’s preamble to the proposed rule, this new schedule would help minimize problems associated with invalid RINs while the agency develops the EPA-Moderated Transaction System (EMTS). Once the EMTS system is operational in 2011, batch and RIN transaction reporting could be submitted in real time.

Real-time reporting means that reportable events, such as the generation of a RIN or a RIN transaction, would be submitted to the EPA through the EMTS within three business days. The EPA-managed system, which is currently under development, would be a closed system. EMTS would essentially provide a mechanism for EPA to screen RINs as well as an environment for conducting RIN transactions. Using the EMTS system, the screening and assignment of RINs would be executed as the RINs are generated.

ETHANOL PRODUCER MAGAZINE

The EPA believes the screening system will help ensure market confidence that each RIN is genuine and valid, and will greatly reduce RIN-related errors while efficiently and accurately managing the RINS. “I think the EPA’s Moderated Transaction System will minimize — but won’t eliminate completely — the number of invalid RINs in the marketplace,” McMartin says. “And, certainly the [RIN] market needs a higher level of confidence.”

The EPA acknowledges that, through the implementation of RFS1, it has found that RINs have proven confusing for many and that various errors have occurred though the generation and use of RINs. Once an error is made with a RIN, it often propagates throughout the entire distribution system. Due to the fact that RFS1 reporting for RIN transactions has only been required on a quarterly basis, RIN errors may remain undetected for months. Once they are discovered, correcting an error often requires significant time and resources to complete.

The added complexity of RFS2 creates an environment where these errors could become more common. According to the preamble of the proposed rule, the best way to avoid problems with RIN validity in the future is to screen RINs and conduct RIN-based transactions though the EMTS. Using the EMTS, a renewable fuel producer would electronically submit a batch report for the volume of renewable fuel that has been produced in addition to a list of RINs that were generated and assigned to that fuel. The EMTS would then automatically screen each batch and either reject the RINs, or allow them to be posted to the generator’s account.

In an example of how an EMTS RIN transaction could work, a seller could log into his or her account and post a sale of 100 RINs to a buyer. The seller’s applicable RIN account would be reduced by the same number of RINs —

September 2009

The Specialist in Biofuels Plant Appraisals • • • •

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

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

1-800-279-4757 Natwick Associates Appraisal Services 1205 4th Ave. S., Fargo, ND 58103 www.natwickappraisal.com natwick@integra.net 53

RINS

'The RIN market is going to continue to be volatile as long as there is uncertainty. That’s one thing I know for sure. Until things settle down and the RFS2 is finally promulgated and issues like indirect land use are finalized, the market is going to be pretty thin and there is going to be uncertainty.'

Clayton McMartin, president, Clean Fuels Clearinghouse

in this case 100. The buyer would then log into his or her account and see the pending transaction. In the event the buyer accepts the transaction, his or her applicable RIN account would be increased by 100 RINs. Once the transaction is complete, the EMTS would notify both parties. According to information published by the EPA, it is expected that the EMTS would always require the seller to initiate a transaction. In addition, transactions would be limited to the available RINs in the seller’s account.

While the EMTS is not expected to be fully operational until 2011, the EPA is expected to allow interested parties to opt into the system as it is developed. This option would allow obligated parties to become familiar with the system and allow the EPA to effectively test EMTS before it becomes fully operational.

The EPA is also proposing to add two additional requirements to RIN transaction reporting. For reports of RINs assigned to volumes of renewable fuel, the agency seeks to require that volumes of renewable fuel be reported. In addition, the agency also proposes that RIN price information be submitted with transactions involving both separated RINs and assigned RINs. According to the EPA, this data would be helpful in setting future mandates and would provide additional insight into the market when assessing potential waivers to the RFS program. Parties who retire RINs would also be required to explain why those RINs were retired.

The EMTS is expected to be managed through the EPA’s Central Data Exchange.

In its preamble to the proposed rule, the agency states that parties would be required to establish an EMTS account by Oct. 1,

2010, or 60 days prior to engaging in any transaction involving RINs — whichever is later.

McMartin says it’s important to note that the EMTS is not going to offer a total solution to a company’s recordkeeping needs. “Many people think the EPA is going to provide a system for companies to keep all their records and handle all of their reporting and so forth,” he says. “That’s not true. The notion that EPA is going to build a system that could serve as an in-house enterprise system for companies is not going to happen.” Rather, these parties are either going to have to maintain internal recordkeeping systems or outsource those services to third-party entities.

Bennett says it’s hard to say exactly what kind of impact the EMTS will have. “On the one hand, the benefit is that it requires RINs to be validated to a certain extent up front,” he says. However, the system could create its own problems. “[The EMTS] could easily create a timing issue for parties receiving their RINs,” Bennett says. In order for the transaction to be complete, the EMTS has to validate the RIN and the buyer has to accept the transaction. “That could result in a delay of the transfer of the actual RIN, which would result in a delay for the purchasing party…being able to trade those RINs,” he says. “Since RINs are a commodity subject to daily fluctuations in price, it could poten-

RINS

tially cost traders a lot of money and a loss of the element of control over the ability to move this commodity quickly.”

Bennett also says the EMTS could be a slippery slope in terms of how the EPA interacts with the system and the parties involved. “There are going to be situations where the EPA is going to have to decide… how to resolve…issues with invalid RINs,” he says. “In some of these cases, it may be viewed that the EPA is bordering on being involved in a commercial transaction as opposed to just moderating it.”

Foreign Producers In the proposed rulemaking, the EPA subjects foreign renewable fuel producers importing fuel to the U.S. to the same requirements as domestic producers. This means that foreign renewable fuel producers who export product to the U.S. would face the same feedstock recordkeeping requirements as domestic producers. According to the EPA’s preamble to the proposed rule, an importer would be required to obtain documentation from a foreign producer proving whether or not the feedstock used to produce the fuel meets the definition of renewable biomass.

This involvement of foreign producers in the RIN market represents a potential challenge. “Foreign producers under RFS1 don’t really participate in the RFS

program,” McMartin says. “Instead, the importer of record that brings that product into the United States, deals with RINs and is responsible for assigning the RINs for that product.” The RFS2 feedstock requirements mean the importer won’t be able to serve in this role in the future, he says. Instead, the foreign producer would likely be responsible for assigning RINs to volumes of fuel.

Bennett says he thinks it’s difficult to say how foreign producers will ultimately participate in RFS2. “The laws and regulations that those countries have within their own infrastructure may not be conducive to the rules and regulations the U.S. has within our infrastructure,” he continues.

“This means they may have difficulty meeting [the EPA’s proposed] requirements.”

Bennett says the ability or willingness of foreign producers to be able to meet the stringent regulations proposed by the EPA is questionable at this time.

The Future of the RIN Market “The RIN market is going to continue to be volatile as long as there is uncertainty,” McMartin says. “That’s one thing I know for sure. Until things settle down and the RFS2 is finally promulgated and issues like indirect land use are finalized, the market is going to be pretty thin and there is going to be uncertainty.”

When Would You Rather Detect Biocontaminants ?

ETS Scorpions™ identify contaminant microbes at low levels within 4-5 hours

Other methods detect metabolites produced by contaminants after the population increases to higher levels

or

<100 cells/ml ETHANOL PRODUCER MAGAZINE

Bennett says the content of the final rule and the timing for RFS2 implementation will have a significant impact on the market, especially in light of the extension to the public comment period. “We don’t know if that will provide enough time for EPA to put RFS2 into effect by Jan.1,” he says. One option may be for the EPA to put part of the RFS2 program into effect on that date, and implement the rest of the program at a later date. Another option would be to select a later implementation date. “There has been a lot of talk of putting RFS2 into effect mid-year, which I think would be a major difficulty,” Bennett says. “I think it would be a mistake.” He says this is because a mid-year implementation date would add even more complexity to an already complex transition period.

Even so, Bennett says he thinks that the future of the RIN market will be lucrative. “I think it will continue to drive the renewable fuel standard and activity,” he says.

“There are companies that are entering the marketplace that are not involved with physical product and are only focused on trading RINs. This could potentially have a positive impact on the marketplace.” EP Erin Voegele is an Ethanol Producer Magazine associate editor. Reach her at evoegele@bbiinternational.com or (701) 373-8040.

ETS Scorpions™ Diagnostic Kits

ETS LABORATORIES

â

? rapid genetic detection

of contaminant organisms ? specific identification and quantification ? results in 4 hours Dx ? timely and informed decisions on ETS Laboratories antimicrobial 899 Adams St. Suite A St. Helena CA 94574 choices Delivering Pharmacogenomics

>100,000 cells/ml September 2009

707 • 963 • 4806 info@etslabs.com www.etslabs.com

55

4HE NATURAL RESOURCE FOR ETHANOL INFORMATION 4HE Renewable Fuels Association HAS BEEN THE VOICE OF THE RENEWABLE FUELS INDUSTRY FOR OVER YEARS 7E CONNECT POLICYMAKERS AND PRODUCERS

CONSUMERS AND THE MARKETPLACE 7ORKING HAND IN HAND WITH OUR MEMBERS WE VE LED THE FIGHT FOR A CLEANER MORE SUSTAINABLE ENERGY FUTURE *OIN US AS WE LAY THE FOUNDATION FOR THE NEXT GENERATION OF BIOFUELS &OR MEMBERSHIP INFORMATION CALL

OR VISIT ETHANOLRFA ORG

2ENEWABLE &UELS !SSOCIATION s /NE -ASSACHUSETTS !VENUE .7 s 3UITE s 7ASHINGTON $#

©2009, Renewable Fuels Association

SAFETY

The First Line of

Defense Emergency responders carry the burden of knowing how to accurately battle many different emergency situations, but ethanol bears a unique challenge that many departments have only recently become familiar with. Maintaining training for first responders will be a vital part of the overall safety and success of the ethanol industry.

By Kris Bevill

58

ETHANOL PRODUCER MAGAZINE

September 2009

SAFETY

ETHANOL PRODUCER MAGAZINE

September 2009

59

SAFETY

60

PHOTO: KRIS BEVILL, BBI INTERNATIONAL

A

tragic railroad derailment near Rockford, Ill., June 19 that resulted in the explosion of 12 ethanol-filled tank cars and the death of one eyewitness served as a reminder to ethanol industry members that the safe transport of ethanol and ethanolspecific training for first responders should be a top priority. Ethanol producers have long been aware of their fuel’s hazardous potential and take every safety measure possible when handling and loading ethanol at the plant. However, the increasing amounts of ethanol being used in the U.S. fuel supply means that ethanol is being transported by truck or rail through communities that may not be familiar with it.

Last year, ethanol surpassed liquid petroKristy Moore leum gases to become technical services the No. 1 hazardous madirector, terial by volume hauled Renewable Fuels Association by rail in the United States. Kristy Moore, technical services director for the Renewable Fuels Association, estimates that 7 billion gallons of ethanol will be hauled by rail in 2009 and says the frequent transport of ethanol throughout the U.S. makes training first responders an essential part of etha-

Firefighters receive ethanol safety training at a TransCAER training session.

nol safety. “Despite all efforts to prevent accidents, there is the possibility of one happening, and it is essential that the first responders act immediately to the ethanol emergency incident and are as fully prepared as possible to deal with the situation,” she says.

More than 20 fire departments responded to the Rockford fire call. Fire chiefs on the scene opted to let the fire burn itself out while monitoring the situation from hundreds of feet away so as not to risk firefighters’ lives. While the loss of one life was a tragic occurrence, the incident could have

ETHANOL PRODUCER MAGAZINE

September 2009

SAFETY

been much worse if first responders had not been familiar with ethanol fires. Moore credits the state’s long history with ethanol as a major factor in the fire departments’ ability to make quick decisions when fighting the fire. “Illinois has had prolific ethanol blending for more than 20 years,” she says. “The resources that were available for the Rockford incident can be attributed to the fact that Illinois emergency responders have been preparing for ethanol incidents for years.”

TransCAER Ethanol-specific first responder training is not difficult to come by. Several nationwide programs have offered ethanol training courses for years. The TransCAER (Transportation Community Awareness and Emergency Response) program was founded by Union-Pacific Corp. and the Dow Chemical Co. in 1986 to provide training for first responders to prepare for a potential hazardous materials incident. The RFA took notice of the program’s potential to provide ethanol-specific training and joined the non-profit group in 1997. Moore says TransCAER helped to fulfill the association’s desire to define an avenue for getting first response information into the hands of those who need it. “We think that we can link to the emergency response community perfectly through the TransCAER

ETHANOL PRODUCER MAGAZINE

program,” she says, adding that the group expects to reach over 15,000 emergency response providers this year.

A major benefit of the TransCAER program, as related to ethanol training, is the ability for first responders to receive hands-on training. At a recent regional training course held in Fargo, N.D., members of local fire departments had the opportunity to attend a classroom-like training session which covered everything from the chemical make-up of ethanol to the specific types of foam that are best used to suppress ethanol fires before practicing firefighting techniques on an ethanol tank car and a specialized TransCAER rail car. Fargo Fire Department Captain and hazmat team coordinator Chris Rasmussen says it was the first time ethanolspecific training has been offered in Fargo and attendees found the information quite valuable. “It was brought to our attention in the past couple of years that [ethanol] was going to start coming through, and research and a little bit of training was done, but never a hands-on incident like this,” he says.

“Anytime we can get a live prop out there to use, it’s more realistic training. We can simulate things all we want, but when you actually have the ethanol car or the TransCAER car there…they were very nice for letting us crawl around on it and do some training. To actually get to see an ethanol car up close before we have to deal with it is fantastic.”

September 2009

The TransCAER rail car is equipped with all of the various release valves, tops and pressure systems that fire fighters might encounter when responding to a rail car incident. Rasmussen says his hazmat team has responded to four ethanol incidents in the past year or so and all of them were valve issues resulting from human error, so having the opportunity to train new department members on the specifics of valve control is extremely valuable.

According to Moore, there is no shortage of communities seeking out ethanolspecific training. TransCAER organizers plan approximately four major events each year which include multiple weeks, locations and sponsors. Moore says it takes months to plan each event and locations are chosen based on the number of requests for training received by TransCAER. “Requests are a combination of private, government and community,” Moore says. “Either communities are noticing an increase in ethanol or industries know they will be introducing the product to the area and request training.”

EERC Another training option for first responders is a program created by the RFA in collaboration with the International Association of Fire Chiefs and several other groups that specifically addresses the hazards associated with the transport and han-

61

SAFETY

dling of ethanol. The Ethanol Emergency Response Coalition has been distributing ethanol emergency response training guides annually since 2007 and adds new items of information each year. The latest version of its “Complete Training Guide for Ethanol Emergency Response” includes videos, an instructor’s guide and interactive workshops focusing on specific areas of ethanol emergency response and can be acquired at no cost at www.ethanolresponse.com.

Moore says the EERC was created to build a library of information that could be used by first responders nationwide. “We built a program that talks the firefighters’ language,” she says. “What do they need to know? What are the core issues for them and what do they need to know to respond effectively and safely to an ethanol incident?” For example, Moore says there was some confusion as to what type of firefighting foam is appropriate for ethanol fires. So, the EERC created a video - “Responding to Ethanol Incidents” - to address that specific issue.

Chief Tim Butters, chairman of the IAFC’s hazmat committee, says the fire association recognized that increased shipments of E99 for blending purposes meant that there would also be an increased need for fire department training so it became an active member of the EERC. “One of the most important aspects is that, because of the significant increase in production and use of ethanol, there’s a lot more of it being transported, both by tank rail and truck,” he says. “So, if you’ve got a rail line in your community you need to plan for the risk.

You need to be prepared to deal with a derailment should it occur.”

PHOTO: KRIS BEVILL, BBI INTERNATIONAL

SAFETY

The TransCAER training program relies on contributions from ethanol industry members, including the use of ethanol tank cars, to supply ethanol-specific training to fire departments at no cost.

Community Involvement Fortunately for cash-strapped local fire departments, TransCAER training sessions and EERC training materials are provided at no charge to the department.

“I have to hand it up to the railroads,” Moore says. “They have done an excellent job of coordinating, funding and hosting TransCAER training tours. They have really risen to the cause and put tons of resources into the training stops.” Moore adds that the RFA and various other ethanol industry members also provide resources, such as railcars and transport trucks, for training sessions. “Typically, the first responders don’t have any funds,” she says. “If they do have funds, they will spend it to pay their folks to come to the training. We want it to be absolutely free of charge so that all they’re providing is their time.”

Butters says there are some grants available to provide funds for departments to attend training sessions, but they vary from state to state. He recommends local fire departments work with ethanol producers to partner for training.

“My view is that if you have an ethanol facility in your community, striking a dia-

ETHANOL PRODUCER MAGAZINE

logue with that plant, owner and manager to make them understand that we need to have this capability, is an important conversation to have. The plant brings the risk to the community so, to me, there is an obligation to help prepare that department to deal with it. The important thing is, the better we understand the hazards out there and can train to deal with those incidents, the better the outcome is going to be. To me, that’s where the industry is a critical player, because they’re the ones that manufacture and ship this stuff. They understand these products and how they behave [so] they are in the best position to provide assistance.”

Moore agrees that the ethanol community should take part in practicing preventative training measures to reduce the risk should an ethanol incident occur.

“The ethanol producers bring a lot to the community as far as resources, jobs and economic advantages, but ethanol is a hazardous material and we’ve got to take that responsibility seriously.” EP Kris Bevill is the editor of Ethanol Producer Magazine. Reach her at (701) 3738044 or kbevill@bbiinternational.com.

September 2009

Biomass Magazine is a trade journal serving companies that use and/or produce power, fuels and chemical feedstocks derived from biomass.

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

www.BiomassMagazine.com

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

BYPRODUCTS

Creative

Byproduct Possibilities From pest control to deer attractants and biocomposite materials, an Arizona company is developing a range of products to utilize an ethanol production byproduct.

By Hope Deutscher

A pulse combustion spray dryer is used to convert condensed distillers solubles into a variety of products.

PHOTO: J. JIREH HOLDINGS LLC

66

ETHANOL PRODUCER MAGAZINE

September 2009

BYPRODUCTS

ETHANOL PRODUCER MAGAZINE

September 2009

67

BYPRODUCTS

PHOTO: JEFFREY TATE, J. JIREH HOLDINGS LLC

F

or the past 30 years, Jeffrey Tate has carried a packet of tan powder, showing it off to researchers and business people while describing its value and opportunities. Depending on what Tate puts into the frontend process that he’s working on, that tan powder can be a number of things. These days that tan powder is his company’s trademarked Dried Distillers Solubles (DDS), a valuable and stable form of condensed distillers solubles (CDS) that J. Jireh Holdings LLC has found useful in feed and industrial applications.

J. Jireh Holdings, a technology and manufacturing company, was started in the early 1990s

by James Rehkoft. He worked for an engineering company that developed a pulse combustion drying technology to opJeffrey Tate erate more efficiently and executive vice president for quietly than a standard business pulse combustor. The development, J. pulse combustion dryer Jireh Holdings LLC handles and dries materials with high solids and viscosity, as well as handling abrasive and caustic materials, while using low “piece temperature” to preserve the integrity of heat sensitive materials. When the engineer-

A pulse combustion dryer system is used for process development and medium-scale manufacturing.

ing company dissolved, Rehkoft acquired the pulse combustor patents and formed J. Jireh Holdings.

Meanwhile, Tate was the associate director of the Biotechnology Institute at the University of Minnesota, which was focused on various aspects of energy fermentations and ethanol fermentation. The institute bought a combustion dryer to dry fragile biological products, so Tate began exploring what one could do with a pulse combustion dryer and all the possible products that could be created using it. Today, he is the executive vice president for business development at J. Jireh Holdings.

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

J. Jireh Holdings consists of three distinct businesses. Pulse Combustion Systems includes the sale, fabrication and installation of pulse dryers, and develops new pulse-dried products. J. Jireh Products develops and sells premium-quality foods that take advantage of pulse-dried products, including pulse-dried instant coffee, an Agave sweetener, a Trehalose sweetener, and a uniquely bio-available flax product. The third company, Cana BioProducts, exploits the pulse dryer’s unique ability to dry CDS and thereby make it usable for three mid- to high-value applications: “green” thermoplastics substitutes, organic sustained release carrier systems, and high-value animal feed.

The biofuels industry’s accounting, tax and various consulting needs can be nearly as complicated as the refining process itself.

Which is why Kennedy and Coe’s knowledge and experience in the industry can help you identify and capitalize on many opportunities that can significantly impact your organization’s cash flow. Our expertise can help you navigate even the most confusing paths, so you can make the most of your operation’s potential.

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

Not your average accountants.SM ETHANOL PRODUCER MAGAZINE

68 KAC.10862_EPM_Wnd_7.5x3.375.indd 1

September 2009 3/19/09 11:26:14 AM

Using J. Jireh’s pulse dryer technology, an ethanol facility can continually and efficiently convert a high volume of CDS to DDS. With a consistency of butterscotch pudding, CDS is a rich mixture that contains oligo-peptides, free amino acids, organic acids and lipids. In its liquid state, CDS has a short shelf life and can be challenging to dry using conventional drying methods, such as a carrier or spray dryer. However, using the pulse dryer technology, several value-added products have been developed from DDS. “What we discovered was that, with a little adjustment, we could take a pulse combustion dryer and basically dry anything that comes out the back end of an ethanol plant,” Tate says. “One thing we found is that we can take the chunky whole stillage that comes out of an ethanol fermentor after the ethanol has been taken out and we can dry it in one step without any centrifuges and produce a dried distillers grains with soluble (DDGS) product that is as high a quality product as is available in a single step. We were pretty excited about that.”

While stillage coming out of the fermentation vessel is extremely rich in potentially valuable biochemicals, Tate says by the time money is invested in separating those into a pure form to sell them, producers may not even break even. So J. Jireh Holdings began looking at what can be economically separated to produce added profits for the

PHOTO: JEFFREY TATE, J. JIREH HOLDINGS LLC

BYPRODUCTS

J. Jireh Holdings LLC and Ohio State University conducted an efficacy trial with Brimstone Slug & Snail Control active ingredient. The treated leaf is intact; the untreated leaf is eaten; two slugs are visible in the container.

ethanol producer, what was problematic, and what could be addressed using the company’s pulse combustion drying technology.

“And looking at it from that perspective is how we developed our DDS process,” Tate says. “The CDS, a concentrated solution, was already being produced at ethanol plants.

This is a product stream that is already separate. What we found and developed is operating parameters for our pulse combustion dryers that allow us to dry condensed distillers syrup. We have looked at material that is anywhere from about 20 percent solids up to 40 percent solids; we’ve looked at material

VOGELBUSCH The Bioprocess Company

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

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

September 2009

69

BYPRODUCTS

take advantage of the material and chemical properties of the DDS. “When subjected to a little heat and pressure, the dried distillers solubles will polymerize and form a hard durable pellet that’s still biodegradable and breaks down all the time,” Tate says. “Our ability to adjust how hard those pellets are allows us to adjust how quickly they degrade and release material. So we can then put active ingredients with the condensed distillers solubles as a liquid, pulse dry it and have a completely incorporated product, pelletize it, adjust our pelleting to be a harder or softer pellet PHOTO: JEFFREY TATE, J. JIREH HOLDINGS LLC

that is produced in a conventional dry mill corn ethanol plant with no other extractions; we’ve looked at material from dry mill corn ethanol plants where the corn oil is extracted resulting in a reduced fat condensed distillers product that we have dried; and we’ve also looked at the condensed solubles that come out of a dry mill ethanol plant that’s using milo or grain sorghum as a feedstock. We’ve looked at all of those and have produced a dry DDS product from all of those things.”

Tate also found that by using DDS as a sustained release carrier system, one could

J. Jireh Holdings LLC has produced pellets that contain dried distillers solubles, which are used as a thermoplastic additive.

or maybe a mix of hard and soft pellets and produce a sustained release lawn and garden pest control product,” Tate says.

“We’ve developed sample products using this technology for control of slugs, snails, ants and mosquitoes. We’re also working with a couple of companies in the area of nuisance animal repellent.” The sustained release system can also work well to attract animals, such as deer.

In particular, Tate worked with an extension agent at Ohio State University, who has developed a laboratory bench process for testing slug control products.

The active ingredient is organic and on the U.S. EPA's low risk 23B list; the DDS is a sustained release carrier that is organic qualified. “If you spray our active ingredient as a liquid it works great,” he says. “It drives all the slugs out of your garden and off your plants. The first time it rains or you go out there and water your garden, the stuff is washed off. This is the case with many organic pest control products.

They have a very short environmental half-life.”

70

ETHANOL PRODUCER MAGAZINE

September 2009

BYPRODUCTS

Tate says that using DDS as a sustained carrier in a biodegradable pellet allows the product to hold together longer and release the active ingredient into the environment as the material breaks down.

J. Jireh Holdings has also worked with a partner to develop DDS BioComposite, a biorenewable additive that can be added to thermoplastics and thermoplastic processing and can act as an effective filler.

“We have put it in extrusion applications at rates of up to 50 percent, so 50 percent DDS BioComposite and 50 percent some other kind of thermoplastic, and we get some very interesting results. I’m not sure if they are commercially viable but we’ve gotten some very interesting results at those high inclusion rates,” Tate says.

Because of the chemistry and unique formulation of the DDS BioComposite, researchers have found that by adding DDS BioComposite as a processing aid to these kinds of plastic conversions, energy requirements for the plastic processing were reduced as well as the temperature at which the plastic melted and became flowable.

“We also found that under the right conditions this material will produce a microcellular foam,” Tate says. “It reduces the amount of material required to fill a mold and is extremely compatible with a broad-range of thermoplastics.”

Patents are pending on these applications, for which J. Jireh Holdings has developed proof-of-concept demonstration projects. The company is now seeking a marketing partner to work with them in turning these products into commercial reality.

“We have good intellectual property on all of this and have a trademark registered for DDS,” Tate says. “We have a facility in Payson, Ariz., where we have the capacity to produce up to eight tons [of DDS] per week.”

Depending on what is put into the feed tanks, Tate says one can get a variety of products – from a custom-formulated feed, a sustained-release pest control product or a biorenewable thermoplastics processing aid. “I don’t have to set up a separate factory to make each one of those things because of the way our pulse ETHANOL PRODUCER MAGAZINE

combustion dryer is capable of handling a variety of feeds. And that’s significantly different than what goes on at most ethanol plants.”

J. Jireh Holdings is currently in conversations with three different ethanol business players, discussing setting up a demonstration project, according to Tate. “Right now we are focused on where the large volume stream of solubles is coming from – and that is really from the dry corn ethanol plants,” he says. “The idea is to install a dryer at an ethanol facility that has a production capacity of

September 2009

FRACTIONATION

•

EXTRACTION

•

about 25 tons per day. In the big scheme of things, that’s a fairly small production stream.

On the other hand, it is enough so that we can start priming the market and getting this material out there.” EP Hope Deutscher is an Ethanol Producer Magazine associate editor. Reach her at hdeutscher@bbiinternational.com or (701) 373-8046.

OIL PROCESSING

•

DEMO FACILITY

CROWN IRON WORKS COMPANY Call 1.651.639.8900 or visit www.crowniron.com 71

BRAZIL. BY PEDRO G. SERAPHIM Contribution

Brazil’s Ethanol-Enhanced History Together, with the appearance of the flexible fuel vehicles in 2003, the infrastructure and culture that forms the inheritance of Brazil’s 1970s “Pró-Álcool” program is the key for the development of its local ethanol industry, with no strings attached to tax incentives or protective policies.

E

nergy security comes from energy diversity. This phrase sounds very fashionable, but it was the motto that, in the mid-1970s, led Brazil to create its National Alcohol Program, better known as the “Pró-Álcool” program. At that time, the world had been hit by two oil price bombs, caused by production restraints in OPEC countries, and oil prices soared from a few cents per gallon to a couple of dollars per gallon. It is almost funny to compare those prices to the ones we have become accustomed to seeing today, but many people remember how all oil importing countries were affected by

that sudden change, spreading an economic and financial crisis that drove the world into recession (by the way, that also seems to be nothing now).

In those years, Brazil had virtually no production of oil and was totally dependent on imports. The impact was terrible, ending a nice period of development with a rise in unemployment, unpayable external debt, and inflation and recession, all combined with the fact that the country was in the midst of a brutal military regime. Life was hard. However, the scars of those times were healed in just a few decades.

Crisis and Opportunity Two important creative seeds were sown during that tumultuous time. The first reaction to the oil crisis was for Brazil to task Petrobras S.A., the state-controlled oil company, with the development of new production capacity. As a result, Brazil has achieved self-sufficiency in oil with the off-shore findings in the Campos basin in the late 1990s and, more recently, with the huge reserves that were found under a deep off-shore salt sediment, Brazil is likely to become a net exporter of oil and gas in a few years.

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).

74

ETHANOL PRODUCER MAGAZINE

September 2009

The 1970s oil crisis also caused Brazil to turn its attention to the great potential that its agricultural sector had to offer.

Brazil realized that there were many favorable factors, including the fuel-production qualities of sugar cane, existence of unique climate conditions for its growth, great availability of land with such conditions. Those factors, together with the high oil price reference and a range of private investors eager to find new opportunities in the crisis environment, led to the birth of the Pró-Álcool program, with the immediate target of creating conditions to make ethanol a viable car fuel, thus reducing Brazil’s exposure to oil imports.

Building the Infrastructure But making something new and revolutionary is never easy. For instance, to start creating a reasonably sound market for the new fuel, a new generation of vehicles equipped with the necessary technology to handle the new fuel had to be created. This was achieved in 1979, when the first Brazilian ethanol car was brought to the market — a Fiat model 147.

Another very important piece of the Pró-Álcool puzzle was the upgrade of the existing gas stations throughout the country, to make available a new independent pump which would serve only ethanol.

Fortunately, this requirement was achieved by natural forces as a response to the undeniable fact that the market for fuel ethanol existed and was growing. No specific tax incentive or financing line was created for that. Petrobras played an important role by quickly making its truck-based gasoline distribution network capable of carrying ethanol throughout the country, and soon other distributors joined in. Also, as part of the Pro-Alcool program, the gasoline pumps started to receive a small blend of ethanol.

Soon there were clear signs that the Pró-Álcool was a success. The other auto makers present in Brazil at that time (General Motors Co., Ford Motor Co. and Volkswagen) followed Fiat. The producETHANOL PRODUCER MAGAZINE

tion of ethanol cars increased steadily, and by 1983 exceeded the production of gasoline-fueled cars by almost 8 times. In that same year, the government set up a reduction in taxes for the ethanol cars as an additional incentive for the market. Car manufacturing and yearly licensing carry a heavy tax burden and such reductions saved consumers 4 percent on the purchase of an ethanol car versus a gasoline car. Between that first Fiat and the end of the 20th century, more than 5.6 million ethanol cars were produced in Brazil.

However, the ethanol cars had problems. Because fuel ethanol has a small percentage of water, the first ethanol-fueled engines tended to get rusty and, therefore, had a shorter life. Also, the consumption per mile was greater than in a gasoline car, so the consumer’s choice for

Pedro Seraphim partner, TozziniFreire Advogados

The Pró-Álcool program left a significant inheritance in its wake — a working distribution network for ethanol, virtually all gas stations in the country equipped withone pump that served exclusively hydrated ethanol, developed techniques for planting sugar cane, ethanol production capacity and, just as important, a general culture accepting of using ethanol as a fuel.

September 2009

Can fractionation keep ethanol profitable when corn prices go up and ethanol prices go down?

CPT says yes with MarketFlex™, a new way of fractioning that gives you the power to “dial in” the stream fractions the market values most…at any given time.

Fractionation for ethanol just got better. Choose the process with the greatest flexibility. Choose CPT’s MarketFlex™

75

BRAZIL.

Environmental Sustainability, Process )J½GMIRG] • 3D TRASAR® technology – Detect conditions, Determine action, (IPMZIV VIWYPXW©EYXSQEXMGEPP] • Cooling water • Boiler • Fermentation • Fuel additive

Today, 90 percent of the cars manufactured in Brazil carry flex-fuel technology. GM, Ford, Fiat and Volkswagen, as well as Citroën-Peugeot, Renault, Honda, Toyota , Mitsubishi and Nissan all manufacture flexible-fuel vehicles for use in Brazil.

Ethanol currently accounts for more than 50 percent of the whole consumption of light car fuels in the country, which represents the most significant reduction of greenhouse gas emissions in history. an ethanol car was very sensitive to ethanol price changes and its comparison to gasoline prices. These issues were not a real problem until the 1990s, when the general economy recovered, oil prices went to a lower level and gasoline engines gained even more efficiency. Those who opted for an ethanol car were then stuck with their fuel option; the only escape route being the acquisition of a new car.

In 1990, the production of gasoline

cars suddenly rose and, in the following years, the production of ethanol cars was reduced to a very small number. That reduction, combined with a corresponding drop in ethanol production, led to the death of the Pró-Álcool program. Ethanol producers struggled to survive that period by directing their sugar cane to the production of sugar, a product that is certainly less profitable, but with somewhat steady markets. This, together with the 25 percent

• UNISOLV™ Water and Energy Audit • Pretreatment Equipment • Wastewater Solutions

You know Ethanol.

We know Water.

I QEMP JSSHERHFIZIVEKI$REPGS GSQ [[[ REPGS GSQ JSSHERHFIZIVEKI

®

The “e” mark and the “stylized e” are registered service marks of the Ethanol 4VSQSXMSR ERH -RJSVQEXMSR 'SYRGMP

™

2EPGS 'SQTER]

Nalco, the logo and the tagline, 3D TRASAR and UNISOLV are registered trademarks of Nalco Company

76

Brazilian motorists are accustomed to having their choice of ethanol percentages when it comes time to fill their tank with fuel. General acceptance of ethanol as a fuel is an important step toward achieving fuel independency.

ETHANOL PRODUCER MAGAZINE

September 2009

blend of ethanol into gasoline, kept the heart of the ethanol industry beating.

Pró-Álcool Inheritance and the Green Wave The Pró-Álcool program left a significant inheritance in its wake — a working distribution network for ethanol: virtually all gas stations in the country equipped with one pump that served exclusively hydrated ethanol, developed techniques for planting sugar cane, ethanol production capacity and, just as important, a general culture accepting of using ethanol as a fuel.

Brazil had just started a new era in its economy, after taming inflation, bringing external debt under control and enhancing its hard currency reserves. But the energy scenario soon changed again. Besides the notorious fluctuations in oil prices, the level of concern with climate change was significantly raised, especially in connection with the role of fossil fuels in the emission of greenhouse gases. The response given

by Brazil for these challenges came again from the ethanol industry.

Actually, the greatest shift happened in 2003, with the appearance of flexible fuel vehicles (FFVs). These cars have engine systems that are able to run with any mix of gasoline and ethanol. With these FFVs, fuel choice is delayed to the maximum extent possible. Instead of representing one single election at the moment the car is bought, fuel choice can be made each time the car goes to the gas station, depending on price conditions on that very day. From a purely economic perspective, as ethanol is less efficient, its price must be at least 70 percent below the gasoline price to justify its use. But with a production chain that results in up to 89 percent less greenhouse gas (GHG) emissions, and considering the infrastructure remaining from the PróÁlcool program, consumers started to ask “Why not buy a flex-fuel car?” and the almost dormant ethanol production industry boomed again, but now with a much steadier local market environment.

Today, 90 percent of the cars manufactured in Brazil carry FFV technology.

ETHANOL PRODUCER MAGAZINE

GM, Ford, Fiat and Volkswagen, as well as Citroën-Peugeot, Renault, Honda, Toyota, Mitsubishi and Nissan all manufacture FFVs for use in Brazil. Ethanol currently accounts for more than 50 percent of the whole consumption of light car fuels in the country, which represents the most significant reduction of GHG emissions in history.

Based on the unique combination of historical, technological, cultural and financial aspects summarized above, Brazil has developed a mature domestic market

for ethanol. Thanks to FFVs, this market is likely to grow even more. It is a great scenario, where Brazil is controlling its energy sources in a level never seen before and that few countries have, and where great investment opportunities can be found. EP Pedro G. Seraphim is a partner in the Energy and Agroenergy Practice Groups of TozziniFreire Advogados, a premier business law firm in Brazil. Reach him at pseraphim@tozzinifreire.com.br.

Pump more profit per bushel…naturally

September 2009

With IsoStabTM naturally derived antimicrobial IsoStabTM is made from natural acids found in hops. It’s the naturally derived way to effectively control gram-positive bacteria in fermentation.

Eliminate antibiotics and harsh chemicals. Forget problems with resistant bacteria. Add value to your co-products with antibiotic-free DDGS. Plus, many have experienced yield increases using this naturally derived, thermally stable, pH tolerant antibiotic alternative.

Drive your plant to higher productivity with IsoStabTM. You’ll find your map to increased profits at: www.bthp.info

5185 MacArthur Blvd., Suite 300 Washington, DC 20016-33441 202-777-4827 Fax: 202-777-4893 77

QUALITY. BY TOM SLUNECKA Contribution

Higher Blends Require Higher Quality Ethanol Increasing the amount of ethanol allowed to be blended into gasoline would be beneficial for the ethanol industry and the United States, but it is important that producers be aware of the product quality requirements that higher blends will demand.

M

onitoring ethanol quality is nothing new for the industry, but producers must all be aware that adding higher percentages of ethanol to gasoline changes the dynamics of the limits of contaminants that can be accepted in the ethanol. Suppliers, technology providers, plant managers and wholesalers must remain alert to help the industry reduce the occurrences of outof-compliance blended product. The American Society for Testing and Materials (ASTM) and Original Equipment Manufacturers (OEMs) have set standards for transportation fuel

that may cause concerns in the fuel distribution system.

Unintended Consequences The ethanol production process has many feedback loops due to living organisms (yeast), bacteria, process chemical additions and the recycle of water streams. This means that chemical or biological additives can lead to unintended consequences in other parts of the plant.

The first example of an unintended consequence is the detection of high levels of silicon. In the past, some refiners reported denatured ethanol that

contained excessive amounts of silicon. The source of the silicon was traced back to the use of silicon-based antifoam used by an ethanol plant. It was determined that the silicon was a breakdown product from polydimethylsiloxane, an active ingredient in the antifoam formulation. The Renewable Fuels Association was alerted to this and sent a notice to ethanol producers to discontinue the use of any antifoam containing silicon. Current ASTM specifications do not have a limit for silicon. However, section 4.2 from ASTM standard D4806-08A states that customers can hold ethanol producers to lower limits of impuri-

ties. General Motors Co. has stated that no level of silicon can be tolerated in automotive Tom Slunecka fuel because vice president, it will cause marketing Phibro Animal p e r m a n e n t Health Corp. and irreversible damage to the oxygen sensors in an automobile.

Another example of an unintended consequence is the use of sulfur-based compounds that can contribute to sulfate levels in denatured ethanol. These

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).

78

ETHANOL PRODUCER MAGAZINE

September 2009

process-based additives include the water source, sulfuric acid, bisulfites for air scrubbers and sulfamic acid/sodium bisulfate for cleaning heat exchangers. There is speculation that the sulfur in these chemicals forms organic sulfur compounds that are volatile in the distillation part of the process. Over a period of time, these organic sulfur compounds are oxidized to sulfates in the ethanol. Minimizing the use of these sulfur-based compounds will help insure compliance with standards for denatured alcohol and also introduce less sulfur into the distillers grains.

Chlorine dioxide, which could potentially contribute to higher levels of chlorides in denatured alcohol, is another example of a process aid that could have unintended consequences. The presence of higher chloride levels in U.S. fuel supply could greatly damage efforts underway to increase the acceptable amount of ethanol blended into fuel. When higher amounts of ethanol are blended, the chloride concentrations increase, possibly resulting in higher level blends being out of specification.

Judy LaZonby, an expert in the application of industrial biocides and chlorine dioxide at The MicroStar Lab in Crystal Lake, Ill., said that when ethanol plants are considering the use of older chlorine dioxide technology as an antimicrobial in the fermentation phase, they risk contributing unexpected amounts of chloride ions.

LaZonby said that generating chlorine dioxide in the fermentors by using sodium chlorite could open the door to increasing inorganic chlorides in the ethanol. The additional chlorine dioxide flashes overhead with the ethanol distillate and will decompose to oxygen and chloride ion within the distillation process.

Dr. Dennis Bayrock, director of Phibro’s research and development, said Phibro has developed a spreadsheet model that can determine the quantity and potential impact of using chlorine dioxide. The modeling reinforces the belief that the use of chlorine dioxide could be an issue with fuel quality. Using an antimicrobial that is not chlorine-based or carefully testing and ETHANOL PRODUCER MAGAZINE

monitoring chlorides with an ASTM method with a one parts per million (ppm) limit of detection could help remedy the issue.

Chloride Limitations Current ASTM specifications tightly regulate the amount of inorganic chlorides permitted in E10 and E85 to one ppm.

Regulations on chloride limits in denatured fuel alcohol are 10 ppm, thus making all ethanol blends consistent with the one ppm limit in E10, but inconsistent with the E85 limits.

A recent RFA survey shows that while nearly all plants are producing E98 with chloride levels at or below the amount allowed to produce E10, nearly 10 percent of the plants are producing a product that is out of compliance with the limits of higher blends.

Ethanol containing excess levels of chlorides may be problematic for OEMs and car manufacturers due to higher warranty costs from corrosion failure of fuel pumps and fuel injectors. Chloride concentrations as low as one ppm can cause fuel system corrosion in high temperature areas near the engine.

Blender pumps that use one source of ethanol to mix with gasoline to dispense different grades of ethanol from E10 to E85 should meet the current E85 chloride limit of one ppm. This means that, in practice, the 10 ppm limit on denatured alcohol has been reduced to one ppm and any alcohol with unacceptable levels of chloride will be rejected from use in blender pumps.

The continued future growth of the ethanol industry will require a better understanding of the use of different processing aids and their impact within the ethanol process. All stakeholders in the future success of the ethanol industry will need to share information on concerns for potential contaminants to the ethanol process and prevent the industry from harming its image. EP Tom Slunecka is the vice president of marketing for Phibro Animal Health Corp.’s Ethanol Performance Group. Reach him at tom.slunecka@phibrochem.com or (402)

September 2009

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

• • • • • • SELL • RENT• LEASE • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 10HP TO 250,000#/hr • • 250,000#/hr Nebraska 750 psig 750OTTF • • 150,000#/hr Nebraska 1025 psig 900OTTF •• 150,000#/hr Nebraska 750 psig 750OTTF •• • 150,000#/hr Nebraska 350 psig • • • 115,000#/hr Nebraska 350 psig • • 80,000#/hr Nebraska 750 psig • 80,000#/hr Erie City 2000 psig 800OTTF •• • 75,000#/hr Nebraska 350 psig • • O 70,000#/hr Nebraska 750 psig 750 TTF • • • 60,000#/hr Nebraska 350 psig • • 40,000#/hr Nebraska 350 psig • • 20,000#/hr Erie City 200 psig • • 10-1000HP Firetube 15-600 psig • • • ALL PRESSURE AND TEMPERATURE • • COMBINATIONS SUPERHEATED • • AND SATURATED • • • • RENTAL FLEET OF MOBILE • • TRAILER-MOUNTED BOILERS • • 75,000#/hr.

Nebraska 350 psig • • 75,000#/hr.

Optimus 750 psig 750°TTF • • 60,000#/hr.

Nebraska 350 psig • • • 50,000#/hr.

Nebraska 500 psig • • 40,000#/hr.

Nebraska 350 psig • • 30,000#/hr.

Nebraska 350 psig • • 75-300HP Firetube 15-600 psig • • • ALL BOILERS ARE COMBINATION GAS/OIL • • • ENGINEERING • START-UP • • FULL LINE OF BOILER AUXILIARY • • SUPPORT EQUIPMENT. • Electric Generators:• 50KW-30,000KW • • • • • WEB SITE: www.wabashpower.com • 847-541-5600 • FAX: 847-541-1279 •• E-mail: info@wabashpower.com • • • • POWER • EQUIPMENT CO. • • 444 Carpenter Avenue, Wheeling, IL 60090 • • 79

BOILERS

24 / 7 EMERGENCY SERVICE

IMMEDIATE DELIVERY

CALL: 800-704-2002

wabash

CARBON. BY SAM A. RUSHING Contribution

Greenhouse Gas Regulation Impacts Ethanol producers will be among the list of regulated emitters if a proposed mandatory greenhouse gas emissions reduction program becomes law, making it vital for producers to know their options for reducing or selling carbon dioxide.

W

hether ethanol prices are high or low, there are benefits to be had for producers willing to expand their sale of byproduct.

Carbon dioxide (CO2) sales can represent millions of dollars of revenue for a commercial-scale plant selling its raw gas. If the CO2 is liquefied and refined the product can represent significantly more value.

Companies that use CO2 in industry are wide in scope.

Approximately 70 percent of the developed world market for CO2 is dedicated to the food and beverage-grade markets and up to 50 percent of the total CO2

merchant product used in food processing can offer unique opportunities for the ethanol industry.

Ethanol producers should understand the full market composition and potential for CO2 in order to determine if a direct-to-market scheme can be profitable or if seeking vendors is the way to go. Understanding the markets before choosing a gas refiner is essential to yield the best results for the ethanol producer. Also, defining current and new markets for CO2 will be useful in the event that greenhouse gas (GHG) reduction legislation efforts become law.

Legislation Impacts The U.S. EPA published a finding earlier this year that stated CO2 is a hazardous GHG and a threat to public health.

The finding was a precursor to the American Clean Energy and Security Act of 2009, otherwise known as the climate change bill, which includes language that would regulate CO2 emissions.

One possibility for regulating GHGs is the implementation of a cap-and-trade program. In this program, a cap would be established concerning a quantity of CO2 allowed to be emitted into the atmosphere. Compa-

nies would be allowed to trade carbon credits and, theoretically, the market would reward those who find ways to produce less CO2. Should there be an excess of credits, the company could sell these credits to other companies.

It is well known that the lionâ&#x20AC;&#x2122;s share of CO2 emissions is derived from coal-fueled electric power plants. However, the EPAâ&#x20AC;&#x2122;s recent proposed mandatory GHG reporting rule includes any large emitter of GHGs on its list of proposed entities that would be required to report emissions. This would include many ethanol production facilities. Therefore, producers

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).

80

ETHANOL PRODUCER MAGAZINE

September 2009

should prepare to become a regulated emitter of GHGs. It is initially understood that a threshold of 25,000 metric tons per year of GHGs will determine what facilities are required to report GHG emissions. A cap-and-trade system is intended to reduce industry GHG emissions. Once a cap on emissions is established, the ethanol producer would be required to find ways to reduce emissions and be rewarded via credits when less CO2 is produced.

Each year, only a certain number of permits or allowances would be provided to emitters.

These permits would act as currency and would allow a defined level of emissions established at the inception point of cap-andtrade. At the end of the year, if the emissions recorded are less than the start of the year, there

would be a tradable or currencylike value established on a per ton basis – thus an economic reward. If the level of emissions is greater than the beginning of at the year, the result would be a charge against this currencylike system. If an emitter were to purchase CO2, the goal would be to evaluate the net emissions of CO2 not released back into the atmosphere--whetherIf an emitter were to purchase CO2, the goal would be to evaluate the net emissions of CO2 not released back into the atmosphere—whether in a primary manner (exhaust from the fermentation plant) to a secondary or tertiary application in industry (such as certain food and beverage applications)—to determine profit from or cost of the credits.

As to reducing the emis-

sions to the atmosphere, an “over-the-fence,” captive, or niche market which is consuming CO2 in the process versus simply displacing the product is a net reduction. The net reduction or consumption of CO2 could be via select applications in industry which combine a chemical process or perhaps a biological process with the carbon dioxide – thus not returning it to the atmosphere. Markets such as methanol, urea, and sodium bicarbonate could fit such definitions. Using the product in a wide variety of specific applications in industry could represent this reduction in emissions.

In the end, knowledge is essential on a plant-by-plant basis for the existing, potential and emerging CO2 markets; particularly seeking possible niche levels where CO2 is actually con-

tained, combined, or consumed; thus representing a net reduction in annual output from an emissions perspective.. The goal is profits and protection on the part of the ethanol producer.

The so-called currency in the form of CO2 allowances defined at the beginning and end of each year will represent monetary value when all is said and done. Be certain that markets are well known for CO2, and do not blindly accept the opinion of the gas suppliers, but rather independently investigate the markets, exceptions and advantages before negotiating with a gas company. EP Sam A. Rushing is president of Advanced Cryogenics, Ltd, a carbon dioxide consulting firm based in Tavernier, Fla. Reach him at rushing@terranova.net or (305) 852-2597.

New Combined Heat and Power (CHP)

Technical Report

BBI’s Engineering and Consulting Group is proud to announce the first in a new series of technical reports analyzing the potential for biomass combined heat and power facilities installed at corn-to-ethanol plants.

CHP is an efficient, clean, and reliable approach to generating power and thermal energy. CHP greatly increases an ethanol plant’s operational efficiency and decreases energy costs, all while reducing greenhouse gas emissions.

Market Drivers/ Benefits: • Meet thermal and electrical utility needs at plants • Generate Renewable Energy Credits (REC’s) • Lower utility costs • Sell electricity back to the grid • Meet RPS power generation goals • Produce Low-Carbon Fuels

Contact: Rob Kurtz p (303) 526-5655 or rkurtz@bbiinternational.com

Price: $1500

Available for purchase at http://store.bbiinternational.com

BBI INTERNATIONAL

EVENTS CALENDAR

Biofuels Supply Chain Summit 2009 September 15-17, 2009

Hotel Sofitel Rio de Janeiro, Brazil Session topics will include the future of ethanol in the Brazilian and global markets, biofuels sustainability, fuels market outlook, Western Hemisphere ethanol policy and new technology developments.

Ghent, Belgium All major issues within the biofuels industry will be discussed at this summit. Leading authorities from Europe and Brazil will showcase their experiences.

Discussions will cover the latest EU policies, legislations and economic effects, and the current developments and future initiatives for the transportation and logistics of biofuels. Attendees can also take part in 3 interactive panel sessions on: crucial evolution and recent developments of custom taxes and its impact on the European import/export market, current and future outlook of EU’s biofuels market, and exploring current country legislations and their influence on the future of biofuels trading, transportation and sustainability.

(703) 891-4804 www.hartenergyconferences.com/index. php?area=details&confID=124

+44 (0)20 7753 4268 www.vibenergy-events.com/biofuels/programme. htm

From Crude Oil to Biofuels: A U.S. – Brazil Energy Relationship September 9-10, 2009

Next Generation Biofuels Markets September 28-30, 2009 NH Grand Hotel Krasnapolsky Amsterdam, The Netherlands The 5th annual event will address the latest developments in creating cost competitive, industrial scale production of next generation biofuels technologies.

Topics will include commercial strategies and business models, how to make sustainable bioenergy a practical solution and advances in cellulosic ethanol and biobutanol. +44 (0)207 099 0600 www2.greenpowerconferences.co.uk/v8-12/ Prospectus/Index.php?sEventCode=BF0909NL

Sept

The Alcohol School September 13-18, 2009 Montreal This course will educate fuel-ethanol and distilled beverage producers in the science of alcohol production. The program will cover the ethanol production process from milling and mash preparation through fermentation and distillation. Enzyme usage, yeast biology, bacterial contamination and control will also be discussed, along with other issues currently affecting both industries. Registration is limited, with preference given to fuel-ethanol and distilled beverage producers.

(800) 583-6484 www.ethanoltech.com

World Bioenergy – Clean Vehicles & Fuels September 16-18, 2009 Stockholmsmässan Stockholm, Sweden This conference will focus on the practical implementation of bioenergy and sustainable transport systems. A variety of commercial examples from Sweden will be highlighted. Topics will include socio-economic drivers, impact of international trade in biofuels, emergence of bio-refineries, coproduction of fuels, chemicals, power and materials, and the development of markets for clean vehicles and fuels. Attendees will include delegates, officials, researchers, and visitors from Europe and beyond. +46 (0)18-67 38 03 www.wbcvf2009.se

82

Global Sugar Trade & Finance September 29-30, 2009 Goodwood Park Hotel Singapore The conference will focus on the uncertain times ahead for the world sugar industry and marketplace. Specialists, producers, bankers and traders will share their views on altering the direction of the global sugar market. Session topics will include risk management, political initiatives and price volatility.

Attendees will get insights from Brazil, the world’s largest sugar and ethanol producing country, and hear key industry members explore the dynamics of the sugar-ethanol equation.

(65) 6345 7322 www.cmtevents.com/aboutevent. aspx?ev=090937&

ETHANOL PRODUCER MAGAZINE

September 2009

Bioenergy Engineering 2009 October 11-14 Hyatt Regency Bellevue, Wash.

The conference, hosted by the American Society of Agricultural and Biological Engineers, the American Society of Civil Engineers and 25 x â&#x20AC;&#x2122;25, will provide professional education for all aspects of engineering in the biofuels and bioenergy systems from genetics through production, distribution and use.

Topics to be discussed include the future of biofuels production, bioenergy policy and advances in bioenergy engineering research and technology development.

(972) 355-5128 www.bioenergyengineering2009.com

Biomass & WtE: Waste to Energy October 28-29, 2009 Shanghai, China Attendees will include producers of biomass, biodiesel, ethanol and cellulosic ethanol; local, municipal and provincial government representatives; enzymes and catalyst providers; and other industry experts. The conference will focus on power generations, cellulosic ethanol and biotechnology for fuels & chemicals, dedicated energy crops, agricultural residues, and energy from municipal solid waste.

(65) 6345 7322 www.cmtevents.com/aboutevent. aspx?ev=091035&

Nov

Oct

Air Quality VII October 26-29, 2009

Biofuels 2009 October 27-29, 2009

World Ethanol 2009 November 2-5, 2009

Crystal Gateway Marriott Arlington, Virginia This event will be a forum for reviewing the current state of science and policy in conjunction with air quality, particularly as it relates to the energy industry. The focus will be on related air quality impacts regarding policy; markets; health and ecosystems; measurement methods; separation, capture, and storage; emission control and prevention; and atmospheric reactions and modeling.

Budapest, Hungary Industry leaders from more than 50 countries and five continents are expected to attend this event, hosted by the World Refining Association. Session topics will include a global overview on the biofuels industry, strategies of refineries within the biofuels field, new supplies and processing for feedstocks, and a bioethanol market outlook.

Le Meridien Montparnasse Hotel Paris Industry experts, including senior representatives from the oil and automotive industry, will assess the outlook for agricultural commodities and non-food feedstocks. Attendees will include senior executives from all sectors in the value chain.

+44 (0) 20 7067 1800 www.wraconferences.com/2/4/articles/57.php

+44 (0)20 7017 7500 www.agra-net.com/worldethanol

(701) 777-5000 www.undeerc.org/AQ7

ETHANOL PRODUCER MAGAZINE

September 2009

83

EPM MARKETPLACE Ag Products & Services

Water Treatment

Heat Exchanger

Equipment

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

Hydro-Klean, Inc. 515-283-0500

Yeast

Seneca Companies 800-369-5500

Ferm Solutions 859-402-8707

www.ferm-solutions.com

Hydro-Blasting

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

Hydro-Klean, Inc. 515-283-0500

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

www.hydro-klean.com

Premium Plant Services, Inc. 218-929-2166 www.premiumplantservices.com

Stabilized Liquid Yeast, Thermosacc,® Superstart™

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

Hybrid Corn

Cleaning

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

Dryer Systems

Associations/Organizations

Hydro-Klean, Inc. 515-283-0500

EPPIC Environmental Index 334-277-1364 www.eppicenv.com

Seneca Companies 800-369-5500

Trade

Ductwork

API Credit Exchange 202-682-8192

www.api.org/ace

PhibroChem 800-223-0434

www.lactrol.com

Bio-Cide International.Inc 405-329-5556

www.bio-cide.com

www.ferm-solutions.com www.lactrol.com

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

Novozymes 919-494-3101

84

www.hydro-klean.com

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

Plate-Frame

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

www.hydro-klean.com

Hydro-Klean, Inc. 515-283-0500

Hydro-Klean, Inc. 515-283-0500

www.hydro-klean.com

Railcar Spill Response

Fans www.hydro-klean.com

Hydro-Klean, Inc. 515-283-0500

www.hydro-klean.com

Railcars

Filter Media

Enzymes Genencor 585-256-5249

Hydro-Klean, Inc. 515-283-0500 Seneca Companies 800-369-5500

Anti-Microbial

PhibroChem 800-223-0434

www.senecaco.com

Emergency Spill Response

Chemicals

Ferm Solutions 859-402-8707

Hydro-Klean, Inc. 515-283-0500

www.hydro-klean.com

BWF America, Inc. 800-733-2043

www.bwf-america.com

Hydro-Klean, Inc. 515-283-0500

www.hydro-klean.com

Hydro-Klean, Inc. 515-283-0500

www.hydro-klean.com

www.genencor.com www.novozymes.com

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

www.hydro-klean.com

ETHANOL PRODUCER MAGAZINE

September 2009

EPM MARKETPLACE Smoke Stack Hydro-Klean, Inc. 515-283-0500

www.hydro-klean.com

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

Seneca Companies 800-369-5500

www.andyegan.com

HOFFMANN,INC. 563-263-4733

www.hoffmanninc.com

VAL-FAB Inc. 877-482-5322 www.spray.com

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

Andy J.Egan Co. 616-791-9952

Foundations HOFFMANN,INC. 563-263-4733

www.hydro-klean.com

www.valfab.com

www.hoffmanninc.com

Insulation

Lipten 800-860-0790 Reimer Welding Inc. 218-773-0886

www.senecaco.com

Construction

Railroad Tracks

Buildings-Modular

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

www.lipten.com www.reimerwelding.com

www.rrcontracting.net

Railworks 913-888-4091

www.railworks.com

Tanks Agra Industries, Inc. 715-536-9584

www.agraind.com

ATEC Steel 620-856-3488 Caldwell Tanks 502-964-3361

www.atecsteel.com www.caldwelltanks.com

WINBCO Tank Company 641-683-1855 Petrochem Insulation 707-644-7455

www.petrocheminc.com

www.winbco.com

Consulting

Management

Central Energy Plant

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

Lipten 800-860-0790

Mechanical

Environmental

www.lipten.com

Air Resource Specialists,Inc. 970-484-7941 www.air-resource.com Aquaterra Environmental Solutions, Inc. 877-913-8200 www.aquaterra-env.com

HOFFMANN,INC. 563-263-4733

ICM, Inc. 877-456-8588 www.hoffmanninc.com

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

Concrete Silos HOFFMANN,INC. 563-263-4733

Pinnacle Engineering Inc. 507-280-5966 www.hoffmanninc.com

Agra Industries, Inc. 715-536-9584

www.agraind.com

ETHANOL PRODUCER MAGAZINE

www.pineng.com

Plant Construction Agra Industries, Inc. 715-536-9584

Fabrication

www.icminc.com

September 2009

Seneca Companies 800-369-5500

www.senecaco.com

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

85

EPM MARKETPLACE Feasibility Studies Harris Group Inc. 206-494-9422

www.harrisgroup.com

Management Services

Employment

Boilers-Reboilers

Recruiting

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

McDermott & Bull-Energy Practice 415-722-8966 www.mbsearch.net

Combustion Equipment

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

Eclipse.Inc. 815-637-7213

Engineering

Computer Software

Biomass Energy

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

Lipten 800-860-0790

www.eclipsenet.com

www.lipten.com

Design/Build Agra Industries, Inc. 715-536-9584

www.agraind.com

Alaqua Inc.

Evaporators, Crystallizers, Distillation, Columns, Solvent Recovery, Heat-Exchangers, Process Engineering

You produce fuel.

We fuel your success.

7004 Boulevard East, Ste.28A Guttenberg, NJ 07093 USA Tel: 201.758.1577 Fax: 201.758.1522 info@Alaquainc.com

www.alaquainc.com

Ethanol Efficiency.

Process Design ICM, Inc. 877-456-8588

www.icminc.com

Process Engineering Associates, LLC 865-220-8722 www.processengr.com Greenway Consulting,LLC 320-589-3085 www.greenwayconsulting.net

Vogelbusch USA, Inc. 713-461-7374

Plant Optimization

Equipment & Services

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

Agitation Equipment

Harris Group Inc. 206-494-9422 ICM, Inc. 877-456-8588 Lipten 800-860-0790

www.proquipinc.com

www.harrisgroup.com

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

Air Pollution/Odor Control www.icminc.com www.lipten.com

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

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

www.harrisgroup.com

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

86

800.518.0472 JohnDeereAgriServices.com © 2009 John Deere Agri Services, Inc.

ProQuip, Inc. 330-468-1850

Project Development Harris Group Inc. 206-494-9422

www.vogelbusch.com

Integrated business management system for purchase/sales contracting, risk management, plant production and material usage data collection, and automated receiving and loadout.

ICM, Inc. 877-456-8588

www.icminc.com

Revere Control Systems 800-536-2525 www.reverecontrol.com

Conveyors–Mechanical Blowers & Fans Robinson Fans, Inc. 724-452-6121

U.S. Tsubaki 847-459-9500

www.ustsubaki.com

www.robinsonfans.com

Conveyors–Pneumatic Boiler Systems

MAC Equipment, Inc. 816-891-9300 www.macequipment.com Hurst Boiler & Welding Co., Inc. 800-666-6414 www.hurstboiler.com ETHANOL PRODUCER MAGAZINE September 2009

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

Cooling Towers

Fermentors

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

ATEC Steel 620-856-3488

Corn Oil Recovery

WINBCO Tank Company 641-683-1855

ICM, Inc. 877-456-8588

www.icminc.com

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

www.aeroglide.com

Littleford Day, Inc. 859-525-7600

www.littleford.com

www.fluideng.com

flamex@sparkdetection.com

Fractionation-Corn Buhler Inc. 763-847-9900

Barr-Rosin,Inc 630-659-3980

www.barr-rosin.com

Dryers-Rotary Drum Barr-Rosin,Inc. 630-659-3980 ICM, Inc. 877-456-8588

www.icminc.com

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

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

www.icminc.com

Dust Control Systems MAC Equipment, Inc. 816-891-9300 www.macequipment.com

Emission Monitoring Systems www.monitortechgrp.com

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

Fermentation Monitoring www.etslabs.com

ETHANOL PRODUCER MAGAZINE

Carbis, Inc. 800-845-2387

www.carbis.net

SafeRack 866-761-7225

www.saferack.com

Maintenance Services

Mechanical Solutions, LLC 515-332-7035

www.mecsol.com

Maintenance Software www.buhlergroup.com/us

Crown Iron Works 651-639-8900

www.crowniron.com

ICM, Inc. 877-456-8588 www.barr-rosin.com

Loading Equipment

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

Fire Suppression

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

Dryers-Ring

ETS Laboratories 707-963-4806

Filtration Equipment

FLAMEX Inc. 336-299-2933

Dryers-Fluid Bed Aeroglide Corporation 919-851-2000

www.winbco.com

Fluid Engineering 814-453-5014

Distillation Equipment

MonitorTech Corp.

866-682-6771

www.atecsteel.com

www.icminc.com

ICM, Inc. 877-456-8588 Mapcon Technologies, Inc. 800-922-4336

www.mapcon.com

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

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

Millwright

Grain Handling & Storage

Agra Industries, Inc. 715-536-9584

Agra Industries, Inc. 715-536-9584

Moisture Analyzers

www.agraind.com

www.icminc.com

www.agraind.com

McC, Inc. 763-477-4774 www.mccormickconstruction.com

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

Heat Exchangers

Molecular Sieve Desiccant

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

3 Angstrom 630-980-5205

Insulator

Molecular Sieves

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

ICM, Inc. 877-456-8588

www.icminc.com

Laboratory-Outsourcing

Vaperma, Inc. 418-839-6989

www.vaperma.com

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

Motors

Laboratory-Supplies

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

CHATA Biosystems 877-246-2428

Phenomenex 310-212-0555

customerservice@chatasolutions.com

www.phenomenex.com

Paint & Protective Coatings Mongan / Bockman 260-748-7655 www.monganbockman.com

Laboratory-Testing Services

Parts & Services

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

ICM, Inc. 877-456-8588

September 2009

www.3Angstrom.com

www.icminc.com 87

EPM MARKETPLACE Pro-Environmental, Inc. 909-989-3010

Pipe

Size Reduction-Shredders

ISCO Industries 800-345-4726

DuraTech Industries / Haybuster 701-252-4601 www.haybuster.com

www.isco-pipe.com

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

www.rjsales.com

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

www.rjsales.com

www.laidig.com

Structural Fabrication Agra Industries, Inc. 715-536-9584

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

www.rjsales.com

www.agraind.com

Tanks Agra Industries, Inc. 715-536-9584

Pressure Vessels WINBCO Tank Company 641-683-1855

www.winbco.com

Harris Group Inc. 206-494-9422

www.harrisgroup.com

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

Pumps

www.agraind.com

ATEC Steel 620-856-3488 Brown Tank LLC 651-747-0100

Process Control

www.atecsteel.com www.browntank-mn.com

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

www.paragontrailer.com

WINBCO Tank Company 641-683-1855

PeopleFlo Manufacturing 847-929-4774

www.peopleflo.com

Used Equipment

Storage-DDGS Laidig Systems, Inc. 574-256-0204

Pipe-Fittings

www.pro-env.com

www.winbco.com

Thermal Oxidizers

Valley Equipment Co. Inc. 423-753-3541 www.valleyequipment.com

Resource Recovery Valves

Eco-Tec, Inc. 905-427-0077

www.eco-tec.com

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

Scales-Truck Weigh-Tec Inc. 1-800-461-4153

www.truck-scales.com

Seals Aesseal Inc. 865-531-0192

www.aesseal.com

Separation Equipment Fluid Engineering 814-453-5014

www.fluideng.com

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

PROVEN RELIABILITY for VOC, CO & PM ABATEMENT EISENMANN Corporation Crystal Lake, Illinois 815.455.4100 es.info@eisenmann.com

Check-All Valve Mfg. Co. 515-224-2301 North American Safety Valve 800-800-8882

www.nasvi.com

Wastewater Treatment Services Biothane Corporation 856-541-3500x501 Hydro-Klean, Inc. 515-283-0500

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

ICM, Inc. 877-456-8588

www.icminc.com

UEM, Inc. 561-385-7515

www.uemgroup.com

Water Treatment Aquatech International Corporation 724-746-5300 www.aquatech.com Fluid Engineering 814-453-5014

88

www.checkall.com

www.fluideng.com

ETHANOL PRODUCER MAGAZINE

September 2009

EPM MARKETPLACE Yield Enhancement

Marketing

EdneiQ, Inc. 310-592-4158

www.EdeniQ.com

Distillers Grains CGB Feed Ingredients 985-867-3554

Ethanol Production Existing Producers

Fuel Ethanol

Louis Dreyfus Commodities 402-844-2680 LDCommodities.com

Gavilon 402-595-5678

POET LLC 605-965-2200

Miscellaneous

www.poetenergy.com

www.gavilon.com

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

Finance Accounting

Transportation

Christianson & Associates PLLP 320-235-5937 www.christiansoncpa.com

Marine

Eide Bailly LLC 605-977-2703

www.eidebailly.com

Evolution Markets, Inc. 914-323-0259

www.evomarkets.com

Rail

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

Ameritrack RailRoad Contractors, Inc. 765-659-2111 www.ameritrackrailroad.com

Railcar Moving

Due Diligence Harris Group Inc. 206-494-9422

www.harrisgroup.com

Shuttlewagon, Inc. 816-767-0300

www.shuttlewagon.com

Biomass Magazine is a trade journal serving companies that use and/or produce power, fuels and chemical feedstocks derived from biomass.

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

Railcar Parts

Insurance ERI Solutions, Inc. 316-927-4294

erisolutions.com

www.kentgroupinc.com

www.BiomassMagazine.com www.salcoproducts.com

ERS Rail Transload 205-322-8312

www.ersrail.net

Utilities

Risk Management R.J. Oâ&#x20AC;&#x2122;Brien 800-621-0757

Salco Products, Inc. 630-783-2570

Terminals & DSP

Mergers & Acquisitions Kent Group, Inc. 715-358-7528

www.cgb.com

Utility www.rjobrien.com

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

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

Reach your customers Your Solution. Advertise Today.

Software-Commodity

EPM MARKETPLACE

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

Legal Services

Your Ad HERE

Attorneys BrownWinick Law Firm 515-242-2400 www.biofuellawyers.com Faegre & Benson, LLP 612-766-6930

Your Solution. Advertise Today.

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

EPM MARKETPLACE

www.faegre.com

ETHANOL PRODUCER MAGAZINE

September 2009

89

poet.com