Vital Magazine - Summer 2014

THE ESSENTIAL PERSPECTIVE

A DATE WITH

F A N TA S Y After years of being called a fantasy fuel, Project LIBERTY makes cellulosic ethanol a reality.

A Productive Prelude The community of Emmetsburg is harvesting the benefits of LIBERTY

A Whole New Game Start up of presents new challenges and victories

The First of the First The team members behind Project LIBERTY are becoming some of the first cellulosic experts Summer 2014

THE FUTURE LOOKS

SO MUCH BRIGHTER ABOVE GROUND + At POET, we’re turning traditional ideas about energy production on their head. We combine human ingenuity with nature’s miracle of growth to produce efficient biofuels, foods, feeds and renewable alternatives to petrochemicals.

Opportunity is everywhere, if you know where to look. poet.com

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THE FIRST OF THE FIRST

by Steve Lange Many team members at POET have spent countless hours researching, developing and constructing Project LIBERTY and are becoming the first cellulosic experts in their fields.

contents FEATURES

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OPENING LIBERTY

by Thom Gabrukiewicz After years of research and development, Project LIBERTY

is starting up at commercial scale.

Visit www.poet.com for the latest news, career opportunities and plant profiles.

Contents photo by Greg Latza

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A PRODUCTIVE PRELUDE

by Darrell Boone POET-DSM Advanced Biofuels’ Project LIBERTY in Emmetsburg, Iowa is now starting production of cellulosic ethanol, but the community’s been harvesting the benefits for some time now.

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A WHOLE NEW GAME

by Lori Weaver POET-DSM Advanced Biofuels becomes one of the first in the world to start production of cellulosic ethanol.

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TWISTS & TURNS

by Lori Weaver As the renewable fuel industry advances technology, the

changes in federal policy will help move the U.S. closer to

energy independence.

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LIBERTY FEEDSTOCK

by Lori Weaver Collecting feedstock for LIBERTY has morphed over the years from massive cob piles to a simple EZ Bale™

contents COLUMNS

04 IN SIGHT

by Jeff Broin

06 FIRST LOOK

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P / 605.965.2200 F / 605.965.2203

56 FROM THE HEARTLAND

ARTICLE SUBMISSIONS

DEPARTMENTS

08 TOP TWEETS 10 PULSE 18 PERSPECTIVE

by Daron Wilson

52 A PERFECT FIT

by Steve Lange

54 CONUNDRUM

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POET, LLC 4615 North Lewis Avenue Sioux Falls, SD 57104

by Jeff Lautt

by Greg Breukelman

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MAIL

Please direct all article ideas, as well as questions or comments regarding the magazine to: vital@poet.com

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COPYRIGHT Vital is published quarterly by POET, LLC and other individuals or entities.

All materials within are subject to copyrights owned by POET. Any reproduction of all or part of any document found in Vital is expressly prohibited, unless POET or the copyright owner of the material has expressly granted its prior written consent to so reproduce, retransmit or republish the material. All other rights reserved. For questions, contact the POET legal department at 605.965.2200.

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THE ESSENTIAL PERSPECTIVE

©2014 POET, LLC. All rights reserved.

Publication Design & Layout: Cassie Medema info@gofunkyfresh.com

HIGHER YIELD. BETTER RETURNS. Together, we maximize the potential of biofuel.

We work with our customers to develop the most advanced new technologies and solutions in the industry. As a true partner, we seek to maximize the potential of biofuel.

For more information, visit www.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. Read more at www.novozymes.com.

© Novozymes A/S · 2013-14677-02

IN SIGHT

by Jeff Broin, Executive Chairman and Founder of POET

With a mixture of exceptional vision and tremendous risk, 500 years ago an exploration mission led to the discovery of the new world, almost 50 years ago a man walked on the moon and today a cellulosic ethanol plant will change the future of fuel as we know it. Many of the world-changing events and inventions so famed in our history have transpired from an inspiring vision – combined with the guts to take a risk.

We choose to go to the moon in this decade and do the other things, not because they are easy, but because they are hard.

John F. Kennedy

John F. Kennedy may have said it best when announcing his decision to put a man on the moon.

“We choose to go to the moon in this decade and do the other things, not because they are easy, but because they are hard.”

They are hard. And they were risky.

This defines very clearly our choice to move forward

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THE ESSENTIAL PERSPECTIVE

with Project LIBERTY and produce cellulosic ethanol.

It was not perceived to be easy when we began. Many called it a fantasy fuel and some still do. I’ll be the first to admit that when we started researching this, it was a long shot at best. And the fourteen years we’ve invested in turning biomass into fuel hasn’t been easy. But I can assure you, those years weren’t wasted. We encountered road block after road block and surpassed each and every one of them. Dozens of mistakes were made and better production methods were born. Equipment was installed, modified and occasionally scrapped completely, leading to new and better technology in every circumstance.

Through each hurdle, something told me that we had to do it. I really felt strongly in my heart that what we were doing was right regardless of the cost and the risk.

I always had faith that the technology would develop and we’d find the right process solutions, the right microorganisms and the right partners. And here we are, opening the facility that can change the way the world produces liquid transportation fuel.

We know there will be some challenges starting up the facility because the path we chose was hard. We know getting from where we’ve been to where we’re going isn’t going to be easy. But, it’s going to be worth it. As in the past, we’ll knock down the road blocks one-at-a-time.

We’ll set sail and we’ll defy gravity in our own way.

And Project LIBERTY will go down in history as a hard and risky endeavor that changed the world.

Machines That Reveal Many Opportunities

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Our 120 year history includes more than 20 years in the ethanol industry. During this time, we have developed technologies that maximize profits and deliver savings through the entire processing chain. Our stable of separating equipment, including standard decanters, gas-tight decanters, high g-force self-cleaning disc clarifiers and separators, is capable of handling the full range of both established and new feedstocks. Plus, we offer separators for both by-product and wastewater processing.

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FIRST LOOK

by Jeff Lautt, CEO, POET

Seeing firsthand that Project LIBERTY is starting production – an effort that has been such a large part of our company’s identity both internally and publicly – is a surreal experience. The scope of what has been built in Emmetsburg, Iowa is truly a sight to behold, and I am awed once again by what our team has been able to accomplish.

This project has touched every area of this organization, from the business and finance groups to policy to research, engineering and plant operations. It spawned an entirely new division – POET Biomass – and prompted POET’s first ever joint venture when we teamed up with the Netherlands-based DSM to take the project through to completion.

This ethanol plant is special; there is nothing like it in the world. The ground-breaking science and engineering, the blazing of new trails in feedstock acquisition and the enormous amount of coordination between teams that was demonstrated through this process marks this endeavor as a highlight in the history of POET. But despite the unique qualities of this project, in many ways it is simply an evolution of what we have always been and how we have always worked. Throughout our history we have defied the odds and found opportunities in what others thought was nothing more than a fantasy.

We were made for this.

When the ethanol industry got on its first shaky feet decades ago, it was the focused and frugal approach on the Broin family farm that that proved on a micro-scale what this industry could be. Others went bankrupt trying large-scale production; the business just didn’t “pencil out.” But then it did. It did when Broin Enterprises introduced creative thinking and new efficiency to the endeavor. This company did nothing but get better from there. Water use was cut in half again and again and again. Yields and ethanol fermentation rapidly increased as we applied continuous improvements and broke through barrier after barrier.

There were many arguments against ethanol then, just as there are those who argue against developing a cellulosic ethanol industry today. The arguments are familiar.

Regarding grain ethanol production, some doubted that our corn supply could handle increased demand.

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Today we are expecting an enormous surplus of grain even with 14 billion gallons of installed ethanol production capacity across the U.S. Similarly, I have heard doubts about securing biomass for cellulosic ethanol production. Amidst that, POET Biomass built a feedstock program from the ground up, ensuring a steady supply of as much as 770 tons of baled crop residue per day through the plant.

During grain ethanol’s ramp-up, distillers grain was regarded as a low-value byproduct, a liability. Amidst that, POET saw opportunity and created a new brand – Dakota Gold – to encourage greater appreciation and use of the high-protein feed product. Today, it’s the number one feed ingredient in the U.S. and sought after by all those looking to feed animals. Since then, we’ve developed numerous other bio-products that further improve the bottom line for producers.

In cellulosic ethanol production, we have a good market for our primary co-product – biogas and steam, and we are now exploring alternative uses for the remaining products. We are experts at turning perceived liabilities into assets.

Capital costs, water use, yields were all questioned in grain ethanol production. But we found ways to be profitable under those early conditions even as we worked to improve the process. We will do so in cellulosic ethanol production as well.

In many ways, we are better equipped today to make things happen than we were 25 years ago. We have more resources, a larger team and existing policy support. Along with that, we have the same grit and determination that we have always had to make fantasy a reality.

The doubters and the naysayers are not people who accomplish great things. Great things don’t happen because a quick and easy business case exists. Great things happen because great people at great companies make them happen.

When I look at Project LIBERTY jutting out of the skyline today, I see thousands of accomplishments piled onto each other. We are people who accomplish great things, and the sum of our greatness is POET.

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

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

Learn more at GrowthEnergy.org

TOP TWEETS

6/26

Fuels America

6/10

@FuelsAmerica

POET @ethanolbyPOET

This July 4th, let’s strive 4

POET’s James Moe on

independence from foreign

developing #E15, market share

oil and develop American

in the RFS: “We deserve the

renewable fuel. Ask USA’s

right to let the consumer make

leaders to protect America’s

that choice.” #FEW14 #ethanol

#RFS

6/24

Paul Winters

6/10

Joost Dubois

@PaulWinters

@joostdubois

at #BIO2014: if @EPA bends to

on cell ethanol for me personally

whim of oil industry in #RFS, US

is on feedstock collection and

will always be at mercy of OPEC

management” @stevehartig

Doug Berven of @ethanolbyPOET

Most important lesson learned

@POETDSM #FEW14

6/16

National Corn (NCGA)

5/30

@NationalCorn

@POETDSM

Did you know? EPA and other

6/10

are 9% cob and 35% stalk,

CO emissions up to 30% and

POET-DSM’s EZ Bales are

fine particulate matter up to 50%

33% cob, 16% stalk. #cobsrule

#renewable #fuels

#biofuels #biomass #ethanol

POET-DSM

Rachel Gantz @OPISBiofuels

#ethanol succeed? It’s more

proposal: “This is not the time to

@stevehartig on possible RFS changes #FEW14

||

5/14

@POETDSM

WHERE will it succeed?”

vital

While traditional stover bales

studies show #ethanol reduces

It’s not a matter of WILL cellulosic

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THE ESSENTIAL PERSPECTIVE

Sen. Franken re: 2014 #RFS tell investors we’re backing off.

5/7

Growth Energy @GrowthEnergy

Enough is enough! The #RFS is helping to bring renewable sources of energy to the pump, no wonder #BigOil is crying foul.

5/1

Matt Merritt @mdmerritt

API wants cellulosic volumes based on “actual production” & in same breath say they can’t accommodate corn #ethanol actual production.

4/29

Herman Wang @HermsTheWord

Four cellulosic ethanol projects with 82 million gal capacity scheduled to come online in 2014, according to @FuelsAmerica

Twitter is a forum for thousands of conversations taking place in 140-character comments, with participants from all over the world. People or organizations are represented by user names such as @ethanolbypoet.

The topic of conversation is often highlighted with a hashtag (#). This is a sampling of what’s being said about energy and biofuels.

The comments do not necessarily represent the opinions of POET, LLC. WWW.VITALBYPOET.COM

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PULSE

7/25 “NASCAR conducted an exhaustive analysis before making the seamless transition to Sunoco Green E15, a race fuel blended with 15 percent American Ethanol. As we eclipse 6 million tough competition miles across our three national series, we can definitely say this renewable fuel stands up to our rigorous racing conditions while significantly reducing our impact on the environment.”

- Brian France, NASCAR Chairman and CEO.

7/1

6/26

“As drivers, we are proud to use Sunoco Green E15 because it’s not only better for our engines, but it’s better for the environment and supports jobs throughout the Midwest. The ethanol industry has an important role to play in supporting our local economies. What folks are doing right here in Coon Rapids will help end our nation’s dependence on foreign oil.”

- Jeb Burton, a NASCAR Camping World Truck Series driver, after participating in a plant tour and meet-and-greet at POET Biorefining – Coon Rapids.

“We are also out there trying to sell licenses to expand this technology to corn ethanol producers, and anything that is going to hurt their confidence in the RFS is going to factor into their decisions whether to make a significant investment in cellulosic ethanol. So really, the cellulosic ethanol number is difficult to predict, but the real hurdle is the corn ethanol number – we really need the EPA to hear the response from America on that.”

- Matt Merritt, Director of Public Relations for POET-DSM, in response to proposed 2014 RVO numbers.

From issues relating to government policies, to infrastructure and opinion pieces, the ethanol industry has much to be reported on. Here is a representation of the past few months of news coverage.

The comments do not necessarily represent the opinions of POET, LLC.

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6/26 “Any time there is unrest in oil-producing regions overseas, it’s a recipe for jittery markets and inflated oil prices back home. It’s the reason why the nation can’t afford to scale back the RFS now and put all of our eggs in Big Oil’s basket.”

- Jeremy Funk, spokesman for Americans United for Change, in a statement about a recent Americans United for Change advertisement encouraging the EPA to set high levels for the RFS.

6/11 “Successful deployment of cellulosic bioenergy production operations such as the POETDSM ‘Project Liberty’ program near Emmetsburg, Iowa can strengthen rural economies, help ensure energy security, and reduce greenhouse gas emissions without contributing to soil degradation – another global challenge.”

- Dr. Douglas Karlen, a researcher with USDAAgricultural Research Service, interpreting research indicating that Project LIBERTY’s biomass harvesting process is consistent with proper farm management.

6/10 “It is no surprise that when faced with possible loss of market share, the oil industry fights so vehemently to keep us out of consumers’ gas tanks, reducing available options to their consumers. But we have fought back.”

- Tom Buis, CEO of Growth Energy in a guest column for Ethanol Producer Magazine detailing the benefits of E15.

5/22 “NASCAR has driven more than 5.5 million miles on E15 and we hope that fans will make the connection that they can also choose E15 or another flex-fuel ethanol blend, like E85 for their own cars. It’s good for the environment, performs well, and saves money at the pump.”

- Larry Hasheider, farmer and chairman of the Illinois Corn Marketing Board, in a press release announcing a June “Drivin’ for Linemen 200” NASCAR Camping World Truck Series event in St. Louis, Missouri.

5/8 “The policy stability offered by the Renewable Fuel Standard – with a gradual ramping up of renewable fuel targets year by year – created the market certainty needed to foster the private sector investment in these innovative new fuels. With the proposed rule, the EPA is changing the rules in midstream, replacing market certainty with uncertainty, and making it very difficult for additional U.S. cellulosic ethanol facilities to secure financing and investor support. If the United States continues on this course, future investments in advanced biofuels will increasingly shift to Asia, South America and Europe.”

- from a letter to President Obama signed by Abengoa Bioenergy, Advanced Ethanol Council, Biotechnology Industry Organization, DSM, DuPont, Growth Energy, National Corn Growers Association, Novozymes, Renewable Fuels Association and POET.

WWW.VITALBYPOET.COM

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Jeff Broin, Founder and Executive Chairman of POET speaking at the 2008 Project LIBERTY Field Days

OPENING

LIBERTY 12

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After years of research and development, Project LIBERTY is starting up ethanol at commercial scale.

by Thom Gabrukiewicz photos by Greg Latza

To hear Jeff Lautt tell it, it’s no wonder that back in 2007, a bunch of POET engineers, thinkers, tinkerers and data geeks just knew they were on the cusp of something big when a certain Apollo astronaut told them that the future was in their hands, within their grasp.

Because when Neil Armstrong tells it to you straight, you listen.

You can’t help but be inspired to take that first step into the unknown venture of replacing gasoline with ethanol made from the leftover parts and pieces of the corn plant – you know, cellulosic ethanol.

Putting a man on the moon Jeff Lautt, POET’s Chief Executive Officer recalled the day in late 2007 when the company’s Founder and Executive Chairman, Jeff Broin, changed the name – and the very direction – of the Sioux Falls-based ethanol entity.

“We knew that Project LIBERTY was going to be similar to putting a man on the moon. And it was a great correlation, because the

guy who put the first foot on the moon stood before all of our team members – engineers, researchers, economists - and said, ‘Back in the ‘60s, when Kennedy said let’s put a man on the moon by the end of the decade, we had three things: We had government support, we had capital and we had a lot of smart engineers,’ ” Lautt said. “So he says, ‘Now, you’re trying to crack the code on cellulose and you’ve got government support and you’ve got capital and I’m looking around here and I’m seeing a lot of smart engineers. If we did it in the ‘60s, you guys can do this today, I have no doubt.’”

Some seven years after Armstrong told POET team members they’d change the world (and 14 years after POET researchers conducted the first research on the viability of cellulosic ethanol), it’s actually happening.

In 2014, POET is launching Project LIBERTY, the first-of-itskind commercial cellulosic ethanol plant. And after the start-up kinks are worked out, the Emmetsburg,

Iowa plant is expected to convert 285,000 or so tons of biomass into 25 million gallons of cellulosic ethanol annually.

Cellulosic ethanol If you look to the future of renewable energy, there is one thing that’s certain: The world’s most abundant organic material, cellulose, offers the best promise to end America’s dependence on the Earth’s dwindling supply of petroleum. With more than 1.3 billion tons of cellulose – the cellular structure that makes up trees, grass and all things organic – available each year in the U.S., it soon will be possible to replace millions of gallons of oil-based gasoline every year in the U.S. And Project LIBERTY aims to prove to the world that cellulosic ethanol is the future of renewable energy.

POET’s entry into cellulosic ethanol began in 2001, when researchers in Sioux Falls conducted the first tests to try and unlock ethanol from corn cobs.

WWW.VITALBYPOET.COM

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Whereas the traditional ethanol process converts the abundant sugars of the corn kernel into ethyl alcohol, or ethanol,

researchers have to coax every bit of sugar from the corn stover, mix it with enzymes, yeasts and microorganisms to wring the ethanol out.

“I have to say, in the beginning, this was a very high-risk venture,” Jeff Broin, POET Founder and Executive Chairman said. “I had a really strong feeling that this was something we had to delve into to see if there was an opportunity there. So then we started moving forward, we started knocking down

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the hurdles, we kept knocking on the doors to see if they would open – and they kept opening, and we kept moving forward.”

One of those doors – and a couple of the key elements Armstrong talked about – was government support and financing. And in 2007, the company was awarded an $80 million grant from the U.S. Department of Energy to build Project LIBERTY in Emmetsburg.

And with the DOE onboard, things began to accelerate. Looking at the timeline arc for Project LIBERTY, progress grew by leaps and bounds.

• In 2007, POET begins testing biomass collection on 4,000 acres of farmland in South Dakota.

• In 2008, the pilot-scale cellulosic plant becomes operational in Scotland, S.D. • In 2009, there’s a breakthrough in reducing the cost to make a gallon of cellulosic ethanol.

• In 2010, the stackyard, where biomass for Project LIBERTY will

be stored and tested in Emmetsburg, Iowa is completed. It’s also the year that the first commercial harvest of 56,000 acres of biomass is completed.

• In 2011, Project LIBERTY breaks ground.

• And in 2012, POET, along with Royal DSM, the global Life Sciences and Materials Sciences company, come together to form POET-DSM Advanced Biofuels, LLC. [see sidebar]

Choosing Emmetsburg But why Emmetsburg?

“We were really looking for an area of the corn belt that was as reliable of a corn crop as anywhere,” said Larry Ward, Senior Vice President of Project Development for POET, who has been involved with each and every one of POET’s 27 current ethanol plants. “We were looking at the stover crop at that point. And Emmetsburg, all things considered, is the garden spot, the sweet spot. And, it has the right kinds of infrastructure – roads, rail, pieces that we felt would be able to accommodate a second facility.”

Project LIBERTY has risen alongside POET Biorefining – Emmetsburg, a plant that went online in 2005 that consumes some 19 million bushels of locally-grown corn and produces 55 million gallons of ethanol a year.

The synergy between the two plants, Broin said, will become the blueprint for other cellulosic

POET-DSM Advanced Biofuels ethanol plants POET-DSM Advanced Biofuels intends to build in the future. The future cellulosic ethanol plants will be built alongside existing corn-based ethanol plants where each can share resources and inputs to create renewable biofuels for decades to come.

“I say sometimes that we’re building an ark in Emmetsburg,” Broin said, laughing. “And I imagine Noah was pretty excited when the ark actually floated. I feel pretty similar to that. I think that when (Project LIBERTY) is running smoothly, we’ll know that the ark floats and I think we can all get pretty excited about that.”

Iowans couldn’t be happier that POET decided to place Project LIBERTY in Emmetsburg, a community of some 3,900 people that was founded on the banks of the Des Moines River in 1856 by Irish immigrants.

“I think it’s one of the most wonderful things that has happened to this community,” said Emmetsburg Mayor Myrna Heddinger. “They’ve not only brought in all the construction workers to Emmetsburg, which has helped to fill our hotels and our restaurants and has helped out our economy, of course – but the people from POET have shown that they want to be part of this community.

It’s amazing what they’ve done.”

“It’s been an economic boost not only to the community and Palo Alto County, but for all of Iowa,” Heddinger added. “You’re talking

about farmers in a 40-mile radius of Emmetsburg who will supply the plant with the corn stover it needs to operate. That is huge for this part of the state.”

It’s estimated that the farmers within that 40-mile radius of Emmetsburg could reap an additional $20 million in a new revenue stream just from corn stover.

“As corn farmers, we are continually working to do more with every acre,” said Bob Bowman, President of the Iowa Corn Promotion Board and a farmer from DeWitt, Iowa. “As we increase our yields, we also increase the amount of residue. The next generation of biofuels like POET is creating, brings another opportunity for Iowa’s farmers to be a part of the value chain.”

Even Iowa Governor Terry Branstad said he recognizes the importance of cellulosic ethanol – not only to the Hawkeye State, but to the world – as Project LIBERTY comes online.

“I have been a supporter of biofuels from the beginning – back when we called it ‘gasohol’,” Branstad said. “The industry has advanced a lot since then and its success has been built on the strength of our strong agriculture base, the workers at the ethanol and biodiesel plants and the local Iowans that invest in its future.”

“The use of biofuels reduces our dependence on foreign oil, provides good jobs, benefits to our local

Together, the partnership

adds the yeast and enzyme expertise of Royal DSM

to POET’s experience in biorefining and years of

work refining the process to produce cellulosic ethanol.

“We were always ready to

go it alone and along comes DSM,” Lautt said. “Their

vision is aligned with ours – they really believe that the

world needs to move away

from its dependence on oil and coal and natural gas.

That it needs to move to

cleaner, more renewal fuels.

The common synergy, the

common passion was there.”

“This partnership is an

exciting opportunity,” DSM Chief Executive Officer

Feike Sijbesma said in 2012.

“Together we will work to unlock new sources for renewable fuel.”

WWW.VITALBYPOET.COM

15

Project LIBERTY Groundbreaking held on March 13, 2012.

economies and offers a lower cost option to consumers at the pump,” he added. “I am excited to see the tremendous growth we have had in biofuels here in Iowa, and welcome and support the next generation of biofuels.”

Building LIBERTY But what does it take to actually construct a $250 million commercial cellulosic plant in the heart of Palo Alto County, Iowa?

“It’s so hard to articulate to people how complex and how intricate the design of Project LIBERTY is,” said Jeff Heikes, Vice President of Project Management – Engineering at POET. “It takes an army of people. It’s been an all-hands-ondeck project, because we know how important it is to the POETDSM joint venture, but also to the industry.”

Simply, POET-DSM Advanced Biofuels creates cellulosic ethanol by taking the top third of the biomass from the corn plant and bringing it into the facility where

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it’s put into storage, or processed directly. The stover is sorted, ground into like-sized pieces and then is pre-treated to extract the cellulose.

Enzymes are added to change the cellulose into sugars that can then be brought into the fermenters that create the ethanol we use in our vehicles.

As simple as the process sounds, Heikes said POET is expecting that there will be hiccups along the way once Project LIBERTY rumbles to life.

“This is a first in the world, firstof-its-kind operation, and as we commission the facility, there are things that pop-up and things we didn’t plan for, but we’ve been able to work through them all with due diligence this far,” he said. “We have a great team of people who are dedicated to making this project work.”

As the excitement builds, and the day soon comes when the first-ever cellulosic ethanol begins to flow from Project LIBERTY, there will be much celebration.

For Broin, the starting of Project

LIBERTY is the apex of a long, arduous climb that many in the ethanol industry said couldn’t be done. That there was no way you could coax that much energy out of corn cobs, stalks and leaves – and do it cheaply enough to compete with petroleum-based gasoline – to make cellulosic ethanol a viable player in the world’s energy needs.

“It’s the culmination of more than a dozen years of hard work by hundreds of people all coming together to do something that will change the world,” Broin said.

“That’s really exciting for me, and I think it’s pretty exciting for our team members and really do think it’ll help us change the world in a bigger, brighter way.

“I believe that everyone benefits when we get our energy from the surface of the earth rather than below the surface of the earth,” Broin continued. “Everyone on the planet can benefit from that – and will benefit from that. Of that, I have no doubt.”

SAVE THE DATE 31st ANNUAL

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INNOVATION CONNECTING THE INDUSTRY

Networking Opportunities

All Ethanol Facilities Receive 2 Free Passes

PERSPECTIVE

by Daron Wilson

Daron Wilson, POET Biorefining – Emmetsburg General Manager

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Surprise, excitement, curiosity, BUT MORE THAN ANYTHING:

honor.

Those feelings rolled together through my mind when I first heard years ago that POET Biorefining – Emmetsburg would be the home of the project that had internally been codenamed “LIBERTY.” This was going to be something revolutionary, much more than another ethanol plant.

Even so, I had no idea just how big – both physically and symbolically – this would be.

I was familiar with the concept of cellulosic ethanol, just as all of us who work in the ethanol industry are.

But understanding something from the 30,000-foot level and understanding it with the level of detail that the general manager of a plant needs to have are two very different things. I had no idea what this would look like, and the more I thought about operations, the more questions I had.

It quickly became clear that our plant was not going to be going it alone in this project. POET Design and Construction was not going to just design and build a plant and then roll out of town. This was a POET (and later, POET-DSM) project that would make all the resources in the company available. We have been from the start a team made up of strong leadership from the very top of POET and DSM along with experts in every field from every department. Experts in emissions, permitting, automation, human resources, communications, IT, engineering, chemical processes, environmental health & safety, management, feedstock and more focused their talents on making this project a success from the start.

Looking at it as a whole, it certainly appeared to be a daunting task. But like any other challenge, it became more manageable as our teams broke it down into smaller pieces. As the general manager, I try to be involved in everything, but with so much talent around me, I could see that the best strategy was often to just step back and let people do what they’re good at. We’ve moved bit-by-bit through every step to get to where we are today, and it’s been such an honor to witness this process.

I’d be lying if I said this project hasn’t also included stress. This is uncharted territory; when you run into a problem, you can’t just pick up the phone and call someone who has dealt with it before. We work together to come up with our own answers, and many times what looks like the right answer today, might not be the right answer tomorrow. That’s part of the learning process.

But the things that make this project stressful are the very things that make it so special. We get to be the first.

And 10 years down the line, when another cellulosic ethanol plant runs into a challenge, we’re the ones they’ll call.

The feelings I have had about Project LIBERTY are also present in many of the people in this area, and just like I didn’t initially understand the scope of what was going to happen, neither did they. I got a phone call at 5:45 one morning from a good friend and local farmer, Charlie Kolasch.

“I’m sitting in the Casey’s parking lot, and I can’t get in to get my coffee and roll because it’s packed with construction people!” he said.

That’s another side of the project that I’ve been blessed to witness: its effect on the community. We’ve changed this area’s economy and given it another point of pride. Their partnership in this has been so valuable.

“We embrace change,” is one of the principles that POET reinforces with all its teams, and I have to imagine that there’s no group that lives by that motto more than the people involved with Project LIBERTY. “Change” really is the only constant here, and it’s the reason that even today, moving toward full operation of a commercial scale cellulosic ethanol plant, I have the same feelings I had at the very beginning. Surprise, excitement, curiosity, but more than anything: honor.

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A Productive Prelude

POET-DSM Advanced Biofuels’ Project LIBERTY in Emmetsburg, Iowa is now starting up, but the community’s been harvesting the benefits for some time now.

by Darrell Boone

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For the past few years, there’s been a tremendous amount of excitement surrounding the opening of Project LIBERTY, one of the very first commercial cellulosic ethanol production facilities in the world.

But in the weeks leading up to the start of actual production, that excitement reached a crescendo.

“How many times in your life do you get the chance to be part of something that’s one of the first anywhere?” says Daron Wilson, POET Biorefining – Emmetsburg General Manager. “Literally, the whole world is watching us.”

But beyond the thrill of POET-DSM pulling off a world-class accomplishment, Wilson points out that much of that excitement springs from the economic and quality-of-life benefits that have already begun kicking in around Emmetsburg (pop. 3,904) and the surrounding area, even before LIBERTY started production.

“At times we’ve had upwards of 450 construction workers on-site, and we’re adding about 50 full-time, highly technical, good-paying jobs,” he says. “Anytime you can do something like that in a rural community, it’s huge. Then there are the new opportunities for farmers and farm businesses too.”

In the vignettes that follow, a few of the actual players share their perspectives about what LIBERTY means to them and their community.

photo by Greg Latza

Eric and Mary Woodford

photo by Greg Latza

Moving Out of His Comfort Zone Before opening a farm equipment dealership in Emmetsburg four years ago, Eric Woodford farmed and operated a custom hay and biomass baling service in Minnesota. In the process, he invented and patented a device to aid in harvesting biomass.

He then licensed his invention to Vermeer, where it became an integral component on that company’s “Cornstalk Special” round baler.

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Soon after, Vermeer made Woodford a very interesting offer – sell his farm, move to Emmetsburg, Iowa, and open a Vermeer dealership specializing in biomass harvesting and moving equipment for what would become Project LIBERTY. “Who better to sell these balers and train farmers on them than the guy who invented it,” Vermeer officials said. After thinking it over, Woodford decided to accept their offer.

“I’ve always had a strong commitment to renewable energy and we really wanted to show our children an example of being part of the solution,” he says. “But it definitely took us out of our comfort zone.”

Looking back, Woodford has no regrets. His business has grown from one to nine employees, and his current facilities are stretched to the limit. But he also draws immense personal satisfaction from his new life.

“An unintended result has been that when farmers buy biomass equipment, they decide to get more mileage out of it by expanding into livestock,” he says. “That’s creating opportunities and spawning rural development.”

Woodford continues.

“I’m glad we made the decision to be part of the future,” he says. “A lot of the farmers I deal with can see beyond just the monetary benefit [of harvesting biomass] and see the environmental benefits too. It’s fun when they understand that.”

Just What He Was Looking For After receiving his master’s degree in organic chemistry from the University of Nebraska, Mike Richardson moved to the area about a year ago when his wife got a position as a physician’s assistant.

Richardson was hoping to find a job in his chosen field, but found pickings to be slim. When POET put out the job searches for Project LIBERTY, Richardson quickly applied.

“I was really excited to find an actual lab doing real chemistry,” he says.

He began working at LIBERTY in February of this year as a lab technician, and loves it.

“It’s a lot of fun,” he says. “The team’s great, and

by being one of the world’s first cellulosic ethanol plants, we get to work with the research department almost on a daily basis. And to see all the different engineering departments, plant technicians, lab technicians, research groups and management working so well together has been really neat. There are huge challenges, but that keeps it interesting. I learn something new every day.”

From Blocking to Biomass It’s not often that someone from a small town makes it in pro football. But in 2003, Emmetsburg’s own Bruce Nelson was drafted as an offensive lineman by the NFL’s Carolina Panthers, following an AllAmerican career at the University of Iowa. When his career was shortened by injury, Nelson returned to his hometown, where he farms with his dad and uncle.

With the coming of Project LIBERTY, Nelson and some partners launched a side business doing custom baling and harvesting biomass for farmers who contract with LIBERTY, but do not have their own biomass harvesting and moving equipment. Then after harvesting the biomass, they haul it to Project LIBERTY. Now in its fifth year, Nelson says it’s been a good business, but is not without its challenges.

“The biggest challenge has been that if we have a question, there’s no one to call,” he says. “But we’re helping farmers gain a significant source of supplementary income that can help them make an

extra farm payment from time to time.”

Nelson reports that their business has thrived, and that they use a lot of high school and college students to help out part-time, plus are adding some full-time employees during their busy season.

“We’re definitely creating jobs, and we’ve bought a lot of equipment,” he says. “Working with LIBERTY is pretty cool. There aren’t too many opportunities in a community like Emmetsburg to start up a business and have a ready demand. It’s pretty special, really feels good.”

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The Bucks Stay Here As President and CEO of the Iowa Trust and Savings Bank and a member of the Palo Alto County Economic Development Committee, Kris Ausborn has his thumb on the economic pulse of the Emmetsburg community.

“The financial benefit to the community from LIBERTY has been tremendous,” he says. “Anytime you add more than 400 construction workers and 50 full-time good jobs to a community of this size, it’s boosted our housing, service sectors, agribusiness and much more. Statistics show that money earned here turns over more than three times, which means that the payrolls for those jobs is spent locally, stays locally, and aids the whole economy.”

But Ausborn says that LIBERTY’s contribution to the Emmetsburg area is more than just economic development.

“POET’s community support is top notch,” he says.

“They donated to a new community center we’re building this year, and many of their staff are involved in local charitable organizations. We need the human resources as much as the financial ones.”

LIBERTY Put Emmetsburg on the Map Recently retired, long-term State Senator Jack Kibbie was an early and staunch advocate of renewable energy – ethanol, biodiesel, and wind – but admits that he never saw something like LIBERTY coming.

“Back in those days, I didn’t even know what the word ‘cellulosic’ meant,” he chuckles. But today, he is justifiably proud of his role in helping to make things like Project LIBERTY a reality.

“By LIBERTY being one of the first in the world, it’s been a very positive thing for our community, and has put Emmetsburg on the map,” he says. “This is what rural America ought to be – taking advantage of new technology in order to compete, not die. When I see the young people who’ve come back to Emmetsburg to live and work, this industry is what doesn’t happen often enough in rural America.”

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For years, we’ve been told that cellulosic ethanol is a “fantasy fuel.” And it is.

And now it’s going to change the world. For real.

So we’ve spent a decade planning, researching, and working hard to make that fantasy a reality. ®

POET-DSM.COM

Advanced Biofuels

LIBERTY TIMELINE From researching feedstock to collecting 100s of 1000s of tons of biomass, each and every event on the timeline below was important to bringing Project LIBERTY where it is today. photos by Greg Latza

Began researching cellulosic ethanol production processes

Bench scale cellulosic research on feedstocks and processes

2001

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Pilot scale cellulosic Announced facility becomes Breakthrough on cost POET will use operational reductions at corn cobs pilot facility as cellulosic feedstock

2007

2008

2009

Began testing biomass collection methods on 4,000 acres in SD

Biomass collection testing continues on 5,000 acres in SD, IA and TX

Bales first tested in biomass collection – 12,000 acres harvested

Biomass stack yard becomes operational

Project LIBERTY began site construction

Announced POET-DSM Advanced Biofuels Joint Venture

Construction underway on Project LIBERTY

On schedule for startup

2010

2011

2012

2013

2014

1st commercial biomass harvest of 56,000 acres held in Emmetsburg, IA

Harvested 63,000 tons of biomass

Harvested 75,000 tons of biomass

Collected 105,000 tons of biomass

Targeting harvest of 285,000 tons of biomass

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a

new

WHOLE GAME POET-DSM Advanced Biofuels becomes one of the first in the world to start production of cellulosic ethanol.

by Lori Weaver photos by Greg Latza

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The Statue of Liberty is well known as a universal symbol of freedom. It’s not surprising, then, that those same values are reflected in the name POET chose for its new commercial-scale cellulosic ethanol plant. Project LIBERTY in Emmetsburg, Iowa is likened to a symbol of freedom from the country’s reliance on foreign oil.

Project LIBERTY represents the first undertaking of a POETDSM Advanced Biofuels Joint Venture and comes after years of research, bench-scale demos and pilot operations into the production of cellulosic ethanol.

With the commercial-scale facility underway, make no mistake about it: producing cellulosic ethanol is a whole new game.

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Cellulosic Ethanol Cellulosic ethanol is ethanol made from cellulose and hemicellulose, a non-grain material/feedstock that provides the cellular structure for all plants. The end product – a clean-burning, high-octane fuel – is the same as ethanol made from corn.

“In grain-based ethanol, starch is broken down by enzymes into sugars and fermented by yeast into ethanol,” explains John Evans, POET’s Vice President of Science and Technology. “But for cellulosic ethanol, instead of grain we use the rest of the plant. On a corn plant, we use the stalk, the leaves, the husk, and the corncob, but not the kernels.”

This plant material, referred to as biomass, is pre-treated to allow enzymes to act on the cellulose and hemicellulose. That tough structure that allows plants to stand erect is also what makes cellulosic e t h a n o l production a challenge. It is much easier to digest starch into sugar with enzymes than to digest cellulose and hemicellulose into sugar, so pretreatment is necessary.

To determine the best approach for producing cellulosic ethanol, POET started

in the lab, then built a pilot scale facility which laid the groundwork for Project LIBERTY and allowed a ramp up to commercial scale.

Pilot Scale Project LIBERTY traces its roots back more than a decade, to 2001, when POET began studying cellulosic ethanol production. Labscale cellulosic research on various feedstocks and processes followed.

By 2007, POET had announced its plans to use corncobs as cellulosic feedstock and began testing biomass collection methods on 4,000 acres in South Dakota.

A year later, POET was ready for a pilot-scale cellulosic facility to become operable, while continuing its biomass collection testing.

The whole purpose of the pilot facility, according to Dave Bushong, Vice President and General Manager at POET Research Center was to develop technology and reduce risk for Project LIBERTY. POET was replicating, on a small scale, what the commercial-scale facility in Emmetsburg, Iowa would later become.

When POET applied for grants through the U.S. Department of Energy, one of the main criteria was that a plant would be able to process 700 metric tons of biomass.

Bushong says the necessary input of 700 metric tons of biomass per day has posed a challenge. “But it’s something we’ve had in mind as we moved from bench top to pilot to commercial,” says Bushong.

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“All our research has shown the technology is very replicative going from smaller to larger scale. What we have been able to learn from the pilot plant has served us well.”

Jeff Heikes, Vice President of Project Management and Engineering for POET Design and Construction, remembers those early days very well. A POET veteran of 12 years, Heikes started

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preliminary work for Project LIBERTY back in 2006.

“We knew we had to process a minimum equivalent to about 770 short tons on a daily basis. We basically scaled all the processes forward from that knowledge, the fermentation, the digester and so on. All unit operations were set from there. That was the basis of our entire design,” says Heikes.

Research and development at the front-end (biomass) is only part of the picture. Bushong explains that the pilot project has also provided opportunity to further develop solutions for the back end of cellulosic ethanol production. “You have these solids left over. So what to do with them is a challenge as well,” he adds.

When biomass is brought into the

facility and converted to cellulosic ethanol, there are polysaccharides from unconverted cellulose and hemicellulose, as well as remaining lignin that is left over.

One of the back-end innovations that has come into play as a solution to dealing with these leftover solids is an anaerobic digester, which is used to convert waste into methane and other biogas components that can then be used as renewable fuel. The energy provided through such processes is consumed at the integrated site, by the cellulosic plant and the starch plant alongside of it, Bushong explains. “In that sense, we are using green energy to produce green energy.”

Another part of the picture is the significant advances in both yeasts and enzymes that needed to be made to achieve commercial production levels. The pilot project afforded POET the opportunity to take what was learned about the most effective strains of yeast during earlier research and development stages, and apply it on a small commercial scale before moving on to the Project LIBERTY facility.

A similar scenario unfolded for enzymes, as the pilot project enabled bench-scale enzyme technology to be moved to pilot-level production, prior to the launch of the fullscale plant. Enzymes are critical to cellulosic ethanol production and act as key catalysts in the process.

Further enzyme development may also lead to onsite manufacture

of enzymes, which could improve efficiencies and reduce operational costs.

Ramping up The challenge of moving to commercial scale has been massive.

“We don’t have a lot of back-up data to support us other than what we’ve done in our pilot plant. There is a lot of risk mitigation that goes into Project LIBERTY. But this is what POET does. It’s what we’re good at,” Heikes says.

Final preparations for the commercial-scale plant to become operable in Emmetsburg began back in January as the plant moved through the checkout process for becoming fully commissioned.

Because the plant is co-located with an existing ethanol plant, agreements are in place to share resources and opportunities, allowing both sites to run more efficiently.

Construction of the plant itself was a tremendous undertaking from a manpower standpoint.

“There was a point in time where there were well over 300 people just working on construction. It was like an orchestra for our project manager to put people in the right place at the right time, compared to a typical ethanol plant’s construction where there are maybe 100 to 150 at peak,” Heikes recalls.

As Project LIBERTY moves to commercial production, it ranked at or near the top as one of the industry’s largest-scale cellulosic

ethanol plants – not only in North America, but worldwide.

The plant will be producing at a rate of 20 million gallons of cellulosic ethanol per year as it gets off the ground. Once it reaches full capacity, it will churn out 25 million gallons on an annual basis.

“For a cellulosic ethanol facility, that’s quite large,” Evans notes.

“For a regular POET biorefinery, that would be a little on the small side. But cellulosic ethanol is in its infancy, so capacity would be similar to where grain ethanol was in the 1970s.”

Probably the biggest difference between producing starchbased ethanol and embarking on a commercial-scale cellulosic ethanol operation is that cellulosic plants have not previously existed anywhere in the world.

That’s what makes it revolutionary.

The team at LIBERTY has been putting in long hours working through the kinks of starting up a first-in-the world process. Moving from the lab to pilot scale to commercial scale has definitely had its challenges, but as LIBERTY will start to churn out cellulosic ethanol, it will all be worth it. Sacrifices were made by many who have touched this project, but they’ve all had a hand in creating a process that will change the way the world views liquid transportation fuel and reduce the U.S. dependence on foreign oil.

That’s a pretty cool story to tell the grandkids.

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Like every world-changing endeavor, commercially viable cellulosic ethanol started as a fantasy. We didn’t let that stop us. At POET-DSM, we know that the only real obstacle to progress is a lack of imagination.

So we spent years developing an efficient process for refining cellulosic ethanol. Now, commercial scale cellulosic ethanol – the “fantasy fuel” that so many said was an impossible dream – is a reality.

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When it comes to renewable energy, cellulose – the world’s most abundant organic compound – offers a truly fantastic opportunity. In addition to providing the cellular structure for trees, grass and all things organic, it can also provide the energy to fuel our cars. And with over 1.3 billion tons of biomass available in the U.S. for ethanol production, it will be possible to replace millions of gallons of gasoline with cellulosic ethanol.

The environmental and economic benefits will be equally impressive – and Project LIBERTY is just the start. Biomass is available in all 50 U.S. states, and around the globe, giving cellulosic ethanol enourmous potential to improve the economies of agricultural areas worldwide.

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TWISTS & TURNS As the renewable fuel industry advances technology, the changes in federal policy will help move the U.S. closer to energy independence.

by Lori Weaver

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Ever since the oil embargo of 1973, demand for a workable national energy policy has continued to grow. Over the past 40 years, a variety of strategies have been molded and shaped an attempt to move the United States closer to energy independence.

But like a Rubik’s Cube, every turn or twist has brought new ramifications and finding a solution to satisfy all has remained a challenge.

The oil embargo awakened the U.S. to the geopolitical vulnerabilities and economic risks that come with dependence on foreign oil. Following the crisis, policymakers scrambled to bring about firmer ground for the nation’s energy security. Such steps included the formation of the Strategic Petroleum Reserve, attempts at increased domestic production and energy conservation measures.

But evolving energy policy also brought about a demand for energy diversification, including incentives for domestically-produced, environmentally-friendly, renewable biofuels.

The Renewable Fuel Standard The Renewable Fuel Standard (RFS) first came into play with the Energy Policy Act of 2005, and was later extended and expanded with the Energy Independence and Security Act of 2007 (EISA).

The RFS is administered by the U.S. Environmental Protection Agency (EPA) and requires renewable fuel to be blended into transportation fuels by growing amounts each year, culminating at 36 billion gallons by 2022.

Cellulosic ethanol, like what will be produced by POET-DSM Advanced Biofuels’s Project LIBERTY, is one of four renewable fuel categories recognized by the RFS, as outlined in the chart below. Each fuel must emit lower levels of greenhouse gases (GHG Reduction Requirement) relative to the petroleum products it displaces.

Biofuel category

Description and Source

GHG reduction requirement

Cellulosic Biofuel

Plant components of cellulose, hemicellulose and lignin

Requires a 60% reduction in GHG emissions compared to the gasoline and diesel it replaces

Conventional Biofuel

Starch feed stocks, such as corn, wheat or sorghum

Requires a 20% reduction in GHG emissions compared to the gasoline and diesel it replaces

Biomass-based Diesel

Renewable feedstocks; cannot be co-processed with petroleum

Requires a 50% reduction of GHG emissions compared to the gasoline and diesel it replaces

Other Advanced Biofuels

Any other fuel derived from renewable feedstocks, including sugar beet or sugar cane based biofuels, as well as biofuels that may exist in the future.

NOTE: Cellulosic ethanol and biomass-based diesel exceeding their respective categories can be used to meet this category.

Requires a 50% reduction in GHG emissions compared to the gasoline and diesel it replaces

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This renewable fuel policy, coupled with private investment, has enabled the ethanol industry to develop new technologies and grow their current infrastructure. POET-DSM’s Project LIBERTY, a cellulosic ethanol facility in Emmetsburg, Iowa, is symbolic of the latest advances toward an energy security solution.

Commercial-scale production of cellulosic ethanol has long been anticipated by clean energy advocates.

“Without a strong RFS to give the private equity community certainty, nobody would be willing to lend us the capital needed to finance these massive advanced biofuels projects,” says Rob Walther, POET’s Director of Federal Affairs.

While the RFS is helping the development of cellulosic ethanol, there is concern about the strength of those opposed to the industry and the impact on continued investment.

“The unfortunate thing is, there is a lot of political rhetoric out there, particularly on Capitol Hill, about changing course,” Kyle Gilley, POET’s Senior Vice President of Public Policy and Corporate Affairs, cautions. “That includes not letting the RFS run its course to 2022. This is causing some uncertainty, and impacting the future of cellulosic ethanol.”

The Battle with Big Oil The RFS calls for more cellulosic ethanol and other biofuels which will eventually replace more and more petroleum products every year. As this happens, the political battle will intensify.

“That’s what the fight is about: homegrown, clean, domestic energy and getting more of that product into the marketplace versus keeping the country dependent on high-carbon, polluting fossil fuels from countries that are unstable,” Gilley says.

The battle with Big Oil interests is nothing new.

It has been around since the start of the grainbased ethanol industry. Even with a sound strategy, going up against the force of Big Oil is an immense undertaking.

“There are only so many hours in a day. We have to be dedicated to spending as many hours as we can to win over champions,” Gilley says. “If we want to get this country off of high-carbon fuels and imports, we have to continue to make our case, one-on-one.”

Which is why Gilley focuses his team on elected officials and regulators.

“We have to convert people one-on-one. We are

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going up against the best-funded industry in the world. They can run mass advertising campaigns and influence thousands at a time,” he points out. “We don’t have the funds to compete with that.”

But the ethanol industry is prepared for the fight.

This isn’t the first time Big Oil has fought back. A strong and competitive grain-ethanol industry exists today which Walther credits to changes in federal energy policy.

Like it did with grain-based ethanol, Gilley says the RFS policy successfully created a period for perfecting cellulose technology. It allowed time and funds to lay the groundwork to move from a lab setting, to commercial-scale production, to scaling up across the country.

“I think the policy incubates the industry for a period of time until it becomes viable,” Gilley says.

“We’ve just brought on the first cellulosic plant. The whole idea about building the first is you’ve now made it scalable.”

Growing infrastructure In the not-so-distant future, the marketplace, not the policy, will dictate greater biofuel use. The ethanol industry, auto companies and local retailers are making strides to grow infrastructure with flex fuel vehicles, flex pumps and the biggest advancement, the acceptance of mid-level blends.

In January 2014, Tennesee-based convenience store operator MAPCO Express, Inc. announced it would begin offering E15 at new sites as well as select existing MAPCO megastores.

As consumers are offered a lower-cost, renewable option, the demand will only continue to grow. Not solely for consumers, all major retailers will need to take a serious look at E15 as well in order to remain competitive.

“The more flex pumps that roll out, the less we will need to rely on the RFS to prove a market exists for ethanol and we can rely on the free market,” Walther says. “But for now, it is the cornerstone of a federal strategy to break us of our addiction to oil.”

“Frankly, if we stay the course and continue the implementation of the RFS, there are very few tweaks that will need to be made to give us the free and open fuels market we are working towards,” Walther says.

“The RFS is the key mechanism we need to compel change in this nation.”

E V E RY WO R L D- C H A N G I N G E ND E AVO R S TA RT ED WIT H A J O B IN TE RV I E W. MAKE HISTORY. JOIN PROJECT LIBERTY.

PROJECT LIBERTY IS A COMMERCIAL-SCALE, CELLULOSIC ETHANOL PLANT SCHEDULED TO BEGIN OPERATIONS IN EMMETSBURG, IOWA IN 2014. OPERATIONS WILL CREATE APPROXIMATELY 45 NEW JOBS IN THE REGION.

POET IS SEEKING PIONEERS TO FILL THE FOLLOWING POSITIONS THROUGHOUT 2014: Plant Merchandiser // Plant Technician // Materials Supervisor // Material Handler

LEARN MORE AT POET-DSM.COM

Advanced Biofuels

PROJECT LIBERTY IS THE FIRST PROJECT OF THE POET-DSM ADVANCED HH JOINT VENTURE.

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THE

first OF THE

first Many team members at POET have spent countless hours researching, developing and constructing Project LIBERTY and are becoming the first cellulosic experts in their fields.

by Steve Lange photos by Greg Latza

In the last three issues, Vital has started introducing the people who are the heroes of their local communities and of POET’s 27 Biorefineries. This issue will be a little different with an ethanol plant that is a little different. Working in a first-of-its kind facility, the teams behind the research, development and operations of Project LIBERTY are also the first of their kind and they’re paving the way for cellulosic ethanol.

These teams have been essential from the beginning – from the very idea of Project LIBERTY. They have done everything from writing grants, patenting chemical processes and creating new baling processes. They’ve been responsible for the design and construction of first-of-its-kind equipment, forming international partnerships and collecting biomass at an unprecedented scale.

These accomplishments come at a cost including working double shifts and weekends, shoveling spilled material, unclogging heat exchangers, and replacing valves. Some have spent months completing processes to realize a better way only to scrap the original process and design a better one.

Today, as Project LIBERTY is starting production, the team is putting in long hours and taking on tasks above and beyond their typical positions. And this isn’t the first time team members at POET have stepped up to make cellulosic ethanol a reality. In 2008, many team members (some of the same team members working on LIBERTY today) put in the hours to see the success of the pilot scale facility at POET Research Center in Scotland, SD.

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Pilot Scale

Dave Carlson, Engineering Research Director, POET

Engineering Research Director Dave Carlson was involved with the pilot plant’s planning stages.

In those early years, he sometimes wondered if Project LIBERTY would ever get built. But he’s seen firsthand how this team has made sure the world’s first commercial-scale cellulosic plant would become reality.

“There were lots of challenges getting the pilot plant to duplicate results we’d gotten at lab scale,” he says. “I spent most days in the plant, wearing a hard hat, carrying a wrench.”

Today, the Scotland facility has grown to 70 employees, many of whom work directly on the pilot plant.

Carlson has recently been in Emmetsburg, Iowa working on LIBERTY’s start-up, and his typical day feels a lot like Scotland in 2008.

“The LIBERTY opening is reminiscent of the pilot plant’s early days,” he says. “Just on a humongous scale.”

And that humongous scale requires many man hours.

Putting in the Time POET Process Engineer Blake Gomer’s days, like many others at LIBERTY, begins and ends with the plant’s 7:15 a.m. and 7:15 p.m. shift meetings, where he receives his action item list, everything from troubleshooting a vibration in a motor to analyzing data to improving the biomass pre-treatment process.

“Every day, something different is waiting for me,” Gomer says. “There’s never monotony. We’re always troubleshooting or improving some area of the plant.”

After that 7:15 p.m. meeting, Gomer heads back to his hotel room or, maybe, makes the two-hour drive home to Sioux Falls.

The team is coming from Sioux Falls and Scotland, SD, but it’s also Emmetsburg’s very own who have stepped up to get this plant up and running. Everyone from lab staff to engineers to maintenance has been uniquely involved in the opening of Project LIBERTY. Blake Gomer, Process Engineer, POET

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Nick Pokorzynski, LIBERTY Lab Technician

Complete and precise With a long-term interest in the development of cellulosic ethanol, the position as Lab Technician at Project LIBERTY seemed like a natural fit for Nick Pokorzynski. He’s been thrown right into the mix, which, for him, focuses on making sure the plant’s instruments are designed properly and working like they should.

“Currently, with the start-up of LIBERTY, the biggest challenges we face are making sure that all of our instruments are performing adequately, all of our procedures are complete, precise and thoroughly vetted for errors,” Pokorzynski says. “We need to be prepared for future developments concerning the start-up and the future of LIBERTY as a whole.”

While Pokorzynski’s hands-on experience with the instrumentation has been his top priority, he says the real satisfaction has come from the team effort.

“For me personally, the most interesting part of my job thus far has been the opportunity to work closely alongside the POET research team in the development and implementation of these new procedures,” he says. “I think that this really speaks volumes to just how cutting edge this process and facility really is.

We are undertaking a very unique endeavor and have a very uniquely prepared team to handle the task.”

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Anna Cline and Ted Elverson, Plant Engineers for Project LIBERTY

Maintaining focus Since starting as a Plant Engineer for Project LIBERTY in January, Ted Elverson has been through everything from trainings to plant shutdowns to jumping into LIBERTY’s start-up.

Having grown up on a farm, Elverson knew he wanted a job that would keep him connected to agriculture. He even chose his degree, Ag and Biosystems Engineering degree from South Dakota State, knowing it would prepare him for a career in the ethanol industry.

“There is always a long list of tasks to be completed at each shift exchange,” Elverson says about the startup. “Experienced leadership and eager staff are able to complete the list and provide another list of things for the next shift. There are set-backs, but maintaining focus on the steps forward has been the emphasis.”

Those steps forward have been essential. Before start-up, trainings were held, but Elverson mentions that nothing can really prepare you for the real-thing.

“It has been a stressful, tiring few weeks, but everyone is maintaining a positive attitude and that goes a long way,” Elverson says. “Pressure is needed to create diamonds and I think our team will be sparkling after this.”

Setting Goals In her nine months working as a LIBERTY Plant Engineer, Anna Cline’s team approaches the process by setting goals to accomplish the challenges that arise daily.

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“We always tackle the challenges as best as we can.

It can make it hard to plan or predict how close to the goal we’ll get that day – but we’re always bettering the plant as we go,” Cline says.

The team doesn’t have experts to turn to. As they start-up LIBERTY, they troubleshoot issues never seen before and improve processes originally thought to be ideal.

“The first time starting up new equipment and the first time running a new process – Murphy’s law can come into effect quickly, but the team is great at staying positive and committed to doing their best to accomplish a great shift,” Cline says. “We all get taxed from time to time from the extended hours and multiple days, but when there’s a challenge to tackle or help needed, everyone, even those not involved or already working in other areas are stepping up as needed.”

And while start-up is taxing on the entire team, it’s the big picture that keeps them going. Eventually the kinks will be worked through, the processes flushed and the start-up complete. And when the dust settles, a first-in-the world process will be complete and a new set of experts born because of it.

“Sure, there’s a lot of time away from home,” Gomer says. “But everyone here makes sacrifices. Everyone here knows we’re doing something revolutionary. I can’t wait for the dust to settle so we can let everything we’ve done sink in.”

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LIBERTY Feedstock Collecting feedstock for LIBERTY has morphed over the years from massive cob piles to a simple EZ Baleâ„¢

by Lori Weaver photos by Greg Latza

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2008 cob harvest

When POET announced in 2007 that Project LIBERTY would use corn cobs to produce cellulosic ethanol, they knew it would be an uphill climb to collect the feedstock.

Looking at the history of comparable collection projects, POET researchers only found one. And that project – in which just 50,000 tons of biomass was collected in Iowa in the late 1990s – was discontinued after one year.

In order for Project LIBERTY to be fully operational at commercial scale, POET would need to collect 285,000 tons of corn cobs annually in the Emmetsburg, Iowa area.

“We realized we needed to collect cobs on a scale never seen before,” says Adam Wirt, POET’s Biomass Logistics Director. “With only one harvest a year, we needed to get into the fields and learn by doing.”

In 2007, POET partnered with a single farmer – Darrin Ihnen – and tested collection methods on 4,000

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acres of his Hurley, South Dakota land. They retrofitted combines to collect both cobs and broken cobs and towed specially-designed cob collectors behind combines.

“We were testing equipment never seen in a field before, or since,” says Ihnen. “It felt like we were on the cutting edge of farming technology, and we were.”

While the processes may have been cutting edge, the results often created more questions than answers.

“It was challenging,” says Wirt.

“Those first bales weren’t even bales, just loose material. Imagine a large pile of cobs at the edge of a field. Storage was a problem.

Transportation was a problem.”

When it came to the production side of cellulosic ethanol, much of POET’s initial work had been based on extracting ethanol from corn cobs.

“Cobs are a great source for ethanol,” says Wirt. “But we also

needed to be able to collect and transport cobs effectively. Around the same time, on the production side, we realized that we could bring in other elements of the corn plant, like some stalks and husks, and still be effective in making ethanol.”

After similar cob collection and transportation issues in 2008, the team knew they needed a new direction.

Project LIBERTY was a year away from requiring 50,000-plus tons of biomass for its first largescale test run. POET, in its most productive year, had only collected 15,000 tons.

“We learned a lot from those first two years, but we had to rethink our approach,” says Wirt. “When we realized we could incorporate other plant materials into the ethanol process, that gave us more options, and we started to think about baling the materials.”

While farmers regularly bale stover (the stalk, husks, cob, and

EZ Balesâ„¢

2008 LIBERTY Equipment Field Days

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leaves left in the field following harvest) for animal feed, these bales contain too little cob and too much stalk and ash for Project LIBERTY. “In 2009, one of our team members, [POET Commodities Manager] BJ Schany, devised a bale-based method that collected a higher percentage of cob and less stalk and ash,” says Wirt.

That bale-based process, called EZ Bale™, allowed farmers to collect biomass with a traditional combine and baler and store it like hay or straw. In testing, EZ Bales contained nearly four times the amount of cobs as a traditional stover bale and required less nutrient replacement. EZ Bales proved better for farmland and also may increase future corn yields.

“If you want to talk about one major shift that moved us in the

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right direction, it’s the day we committed to EZ Bales,” says Wirt.

In 2010, POET collected 56,000 tons of biomass from 85 farmers who could now deliver to Project LIBERTY’s new, 22-acre stockyard.

EZ Bale allowed farmers to bale biomass in round or square bales and to store the bales in various configurations. While the tonnage increased dramatically, it was the buy-in from growers that moved the collection process forward.

“That year we went through the motion of collecting, storing and delivering bales,” says Wirt. “We stumbled a bit, but we had growers right there helping us. We learned better ways to set balers. We learned how not to handle bales. We ultimately failed enough to make for a huge jump in efficiencies.”

While 2011 and 2012 saw steady

increases in biomass collected (63,000 and 72,000 tons) and continued improvements in the collection process, the biggest breakthroughs came in the increased options and ease for farmers selling biomass.

“Today, selling biomass to Project LIBERTY has really become a no-brainer for area farmers,” says Schany. “They not only make extra money, but they also get rid of some of that extra residue from the field, which is a real benefit for future yields.”

When it comes to the collection and transportation of biomass, farmers can choose from either the Grower Model or the Custom Model.

In the Grower Model, farmers (or biomass collection agents) bale, stage, store and transport biomass.

“It’s just like selling grain,” says Schany. “The farmer is going to bale it, pick a delivery month, and haul it in.”

In the Custom Model, the grower harvests the grain and forms the windrow, then simply calls POETDSM who takes over from there.

“We’re doing all the work and they’re getting paid,” says Schany.

“We’ve got farmers that say this is the easiest money they’ve ever made. Either way, farmers have a newfound revenue stream for something that had previously been a waste product.”

Last year’s biomass harvest produced 110,000 tons, and 2014 is expected to reap 285,000 tons.

“Tons are fun to measure,” says Wirt. “But the greatest measure of our success is the number of

growers. Today, we have more than 250 farmers, compared to just one back in 2007.”

That original farmer, Darrin Ihnen, has seen firsthand how POET’s biomass collection process has improved in the last seven years and changed farming.

“I remember my grandfather collecting cobs so he could burn them in the cookstove,” Ihnen says. “Look what POET-DSM is doing today by collecting biomass on a scale never seen before.

I wish my grandfather was alive to see how far biomass collection has come.”

For Wirt, those piles of corn cobs in the corners of farm fields seem like a world of technological

advancements away. “In 2007, this was just a hope and a prayer,” he says. “Today, it’s happening. That dream has become reality.”

CenterPointEnergy.com/CES • 800-495-9880 © 2014 CenterPoint Energy 140285

A PERFECT FIT It didn’t take long for Jeff Heikes, Vice President of Project ManagementEngineering, to know that POET was the right fit for this family man.

by Steve Lange photo by Greg Latza

It didn’t take long – it was during his first assignment at POET, in fact – for Jeff Heikes to realize that project management was the perfect fit for him.

“Right after I started in 2002, I helped with the commissioning of the plant in Big Stone, South Dakota, and I loved it,” says Heikes. “I’m an engineer, and most engineers want to see a project assembled and finalized, though they don’t always get that chance. I’m definitely one who wants to oversee the completion of a project.”

A dozen years later, Heikes (now POET’s Vice President of Project Management-Engineering) is about to help oversee the completion of arguably the largest undertaking in POET’s history, Project LIBERTY, the commercial-scale cellulosic plant slated to open this summer.

“Jeff is responsible for the commercialization of Project LIBERTY, and he is absolutely the right person for that,” says James Moe, POET’s President of Design and Construction/Plant Management. “Jeff has played a major role since the beginning of LIBERTY. He

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makes sure we’re looking at the big picture, but he’s also someone who can connect the dots between the technical aspects of the project and the completion.”

Moe, who has been Heikes’ boss for seven years, describes Jeff as “a driven, level-headed leader,” “an engaged listener,” and “a straightforward communicator.”

But the word Moe uses most frequently when describing Heikes is “passionate.”

“He’s very passionate about his role with POET and about ethanol,” Moe says. “He’s also passionate about life. He’s committed to living a full life and brings that passion to both his work and family.”

While Jeff ’s passion clearly centers around his wife Doreen (a former POET employee) and two kids (7-year-old Allison and 5-year-old Emmet), it also spills over into things like his drive to exercise. And here’s all you need to know about that passion: During his triathlon training, Heikes often listens to podcasts … about triathlon training.

You came to POET in 2002. When did you know this was where you wanted to be?

JEFF: On my first day I got to shadow one of the project managers. My background is in chemical engineering [he graduated from South Dakota School of Mines and Technology in 1999], but I always loved the construction process, too. We went to Big Stone, South Dakota to commission that plant and I got to work with the engineers and contractors. That’s when I knew this was what I wanted to do.

How did you meet your wife, Doreen?

JEFF: It’s not that glamorous. She got hired [at POET] as a project accountant a year before me. A bunch of people in the accounting group were all about the same age, and we started hanging out.

It’s always a good idea for the new guy to start dating someone at work right away.

JEFF: Oh, yeah. Definitely. Luckily, it worked out well for me. When we started dating, we were leery about saying anything because we weren’t sure how it would work out. Everyone found out when one of our co-workers got married and we went to the wedding, together, as a couple. We sat next to another coworker and he asked, “Are you guys here together?” That was our cat-out-of-the bag story. That was awkward and interesting. The following Monday the news spread like wildfire.

keep me from touching base. When I wanted to come back, I had an opportunity to ask James [Moe] to let me know if anything opened up where I could add value to POET. And something opened up. I was very blessed they gave me an opportunity. I got to return to a project I started with in 2006, and that meant a lot.

That project is Project LIBERTY. The last few months have been pretty exciting for LIBERTY.

JEFF: It’s amazing. I helped write the original grant application in 2006. Project LIBERTY is so much more than anyone realizes. Unless you were there for the design and construction, you won’t be aware of how complex it is, how much stuff is built inside the tanks alone. It’s just amazing the detail our engineers and project managers had to put in. If you were a fly on the wall watching this entire process, it would blow you away how much work has gone in by all our team members. POET’s always been so successful, sometimes we almost take for granted how much hard work it takes to complete a project of this magnitude.

How many miles do you run per week?

JEFF: If I’m doing run training, between 30 and 35.

Now that I’m doing triathlon training, it’s closer to 15.

Is that what you do, hobby-wise?

JEFF: It’s 90 percent of it. If I’m not spending time with my kids, I’m exercising. Exercise is my stress release.

Were you always holding hands in the office?

Any embarrassing hobbies?

JEFF: [laughing] No, not even close. We didn’t even drive to work together. Our schedules were completely separate. We were married in 2004 and she left POET in 2009, after our son was born.

JEFF: I listen to a lot of nutrition and endurance training podcasts when I’m driving or working at home. Drives my wife crazy. I also listen to them when I’m training.

Last year, you left POET for a few months and then came back.

JEFF: I had the opportunity to do some consulting, and it was something I needed to explore. After a short period of time, I realized where my talents really lie and that my desire for my career was back at POET. I’m bringing this up because, really, it seems like a great reflection on you and POET. They seem to want the best for the company and the team members, without the “Don’t let the door hit you on the way out” attitude other companies might have.

JEFF: They were very professional. I met with Jeff Lautt [POET CEO] and Jeff Broin [POET Founder and Executive Chairman] in my exit interview. Both of those guys told me that if it didn’t work out, to not let my ego

You listen to podcasts about running or triathlon training while you’re actually training? That sounds a bit extreme.

JEFF: Now that I say it, it sounds weird.

I’ve heard you’re a big family guy…

JEFF: Getting married to my wife, I say this to everyone, is one of the best things that happened to me.

I absolutely mean that. She keeps me grounded about what’s really important in life. We get the opportunity to do great stuff here at POET, but it comes with a lot of stress and anxiety because everyone wants to make a difference. Doreen keeps me plugged into what’s important. And getting to come home and spend time with her and the kids is what’s important. Then, the next day, I get to work on the kinds of things that can change the world. That’s a good life.

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CONUNDRUM ACROSS 1. Atomizer output 5. What a QB might throw 10. Ozone depleter (Abbr.)

13. Hollow cylinder for transport

of liquids

14. Energy 15. Lentil sauce 16. It’s black and white, in China 18. Small quantity 19. Kind of deer 20. Anchorage native 22. Vegetable oils, ethanol and

methanol, for example

26. Kind of propulsion 27. Frat party staple 28. Agreed!

29. Japanese garment 30. Secret store 32. Tapestry threads 36. Surf and __ 38. Nasal passage 40. Shower bar 41. Replacement’s place 43. Majestic 45. Association concerned with

increasing the use of ethanol as a

fuel, for short

46. Modern (Prefix) 48. Make a high-pitched noise 49. Small newt 50. POET’s cellulosic plant expected to

produce 20 million gallons of ethanol

55. Subject of a famous statue 56. Former Chinese leader 57. Quite often or quite a bit 58. Starred 64. Sleep indicators 65. “And there you are!” - industrial

corn oil!

66. Student driver, usually 67. Horse’s long-eared cousin 68. Foe 69. “The Piano” actress Paquin

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DOWN

33. Be a sign of something to come

1. Measure of auto efficiency

35. Mild tiff

2. Three on a clock

37. Airplane engines

3. Trunk item

39. Imperfection in yarn

4. Carpentry joint

42. Forest grazer

5. Tablet download

44. Resin for varnishes

6. Jungle reptile

47. Eight tone interval

7. BYOB part

50. Town square

8. Decoration

51. Gets to

9. Iowa Congressman awarded by

52. Double reeded instruments

53. 1980’s-90’s ring champ

the RFA, Bruce ____

34. Stretchy candy

10. Not come through in the clutch

54. Reggae musician, often

11. Disastrous

59. Connect to

12. Related groups

60. English or Wych

15. Neglects

61. Bit of sun

17. Molars

62. Before night (old word)

21. Some

63. The latest in evidence

22. Prove otherwise 23. Coaxes 24. Once more 25. Nocturnal bird 26. Makes quick notes 31. Persian Gulf emirate

FOR ANSWERS, VISIT

vitalmagazineonline.com/answers

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FROM THE HEARTLAND

by Greg Breukelman

MORE THAN MEETS THE IOWA 42 years ago the Des Moines Register started this crazy event called RAGBRAI. If you haven’t heard of RAGBRAI before, it’s the Registers Annual Great Bike Ride Across Iowa. It was started by a couple of the Register writers and has turned into the world’s largest, oldest and longest ride (they want you to know it is not a race).

Spending a majority of my life within 20 miles of the Iowa border, I’d heard about RAGBRAI but never really had much of an interest since I’m not a serious bicycle rider. Actually, I haven’t even owned a bike for the last several years. But an opportunity came up to join some friends when American Ethanol decided to have a “team” in the event. So my wife and I said “let’s go for it!”

Soon after the actual ride started, I learned that I had a lot to learn about biking terminology. I’d see a rider stick his arm out and show jazz hands while shouting out “rumbles”. Naturally I got excited because I thought someone had been cut off and started a fight. But, it was actually a sign alerting other riders about the road ripples coming up. I heard people shouting “car back” to warn people about a RAGBRAI vehicle coming from the rear. And “car up” meant a car was coming from the front. (I thought if a person couldn’t see that a car was coming right at them, maybe they deserved to get hit.)

I even learned what Butt’r is and gained a much greater appreciation for padded bicycle shorts.

As we went through the small towns in Iowa, riders were able to learn a little something about each town.

Rock Valley had banded together to overcome the devastation of a 500 year flood that occurred a month earlier. Hull is the home of the Gummy Worm and the Roundup Pizza with the headquarters of the Foreign Candy Company and Pizza Ranch. Boyden has the pink

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pig and teen guitarist Eli Rocks. Okoboji has North America’s only fresh blue water lake. Tiffin has the creativity to have professional wrestling going on Main Street at the break of dawn. And Graettinger... well, let’s just say they sure know how to throw a party at The Lodge!

We also got to meet people from all over. Not just Americans, but people from Scotland, Italy, and Australia. There were people of all shapes, sizes and ages. Some who could probably give Lance Armstrong a run for his money. And others who couldn’t beat a three-year-old on training wheels. Some who had done this crazy thing for years and others like us who were dubbed “virgins” and had to proudly advertise it on our calf.

And as we were riding from small town to small town to small town on our way to our final destination, (the real crazies had much further to go) surrounded by the various shades of deep green with corn, soy beans and freshly mowed yards and ditches all around, it made me think about how this part of the world feeds the rest of the world. And I realized why tens of thousands of people keep coming back to this event with all the Iowa hospitality. Farmers who lived near the route open up their farms and welcome the riders with drinks, food and of course, Porta Potties, or KYBO’s in Iowa. I even saw a Go American Ethanol sign (held proudly by my niece).

As we were arriving at our final town on my group’s ride, I was wishing the other riders knew what I knew about the possible world-changing event that was happening at this particular community. Beyond the thousands of tents and beer gardens and custom RAGBRAI school buses, stands a technological masterpiece that is the result of over a decade of hard work by thousands of researchers, engineers and scientists; hundreds of millions of dollars of investment; and strong determination by leaders who just wouldn’t quit regardless of the obstacles. Of course, the town I’m talking about is Emmetsburg and the event is Project LIBERTY. And I think Project LIBERTY and RAGBRAI have a lot in common. They each started with a dream, take the teamwork of thousands, and make the world a better place. And of course, neither could happen without Iowa.

Greg Breukelman works at POET as Senior Vice President of Communications and has lived most of his life in the beautiful state of South Dakota. He has no particular fondness for Iowa. As a matter of fact you can often hear him cursing the slowness of Iowa drivers.

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