november 2008 ethanol producer magazine
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November 2008 Ethanol Producer MagazineTRANSCRIPT
INSIDE: ACE FUELS ETHANOL REVOLUTION AT ITS ANNUAL EVENT
WWW.ETHANOLPRODUCER.COM
NOVEMBER 2008
EP
MN
ovem
ber
2008
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ETHANOL PRODUCER MAGAZINE NOVEMBER 2008 7
features
insideNOVEMBER 2008 . VOLUME 14 . ISSUE 11
86 INNOVATION Furfural: Future Feedstock
for Fuels and Chemicals
Rising oil prices prompted researchers to take a second look at using biobased
furfural to produce cellulosic ethanol and other chemicals.
By Jessica Ebert
94 POLICY Clearing the Air
In the first of a two-part series, EPM looks at the current U.S. carbon trading
platforms and the companies that are generating carbon credits. Although
ethanol producers aren’t big players yet, that could change if the country
moves to a mandatory emissions reduction system. By Kris Bevill
102 USE Cruisin’ on E85
A South Dakota biofuel enthusiast’s 2004 Electra Glide Harley-Davidson
motorcycle runs cooler and smoother on 85 percent ethanol, and it has more
power. By Hope Deutscher
110 EVENT Fueling a Revolution
The American Coalition for Ethanol’s 21st Ethanol Conference & Trade Show
showcased the industry’s accomplishments and addressed its challenges
head on. By Anna Austin and Erin Voegele
54 FEEDSTOCK Making the Switch
What will it take to get farmers to switch from profitable crops such as
soybeans and corn to cellulosic ethanol feedstocks? EPM details three
programs aimed at making energy crops more attractive.
By Susanne Retka Schill
62 TECHNOLOGY On Target for 2012
Developing the technology required to economically produce cellulosic ethanol
is more than just a goal at the National Renewable Energy Laboratory—it’s a
mandate. By Ryan C. Christiansen
70 ENZYMES Second-Generation Enzyme Logistics
Enzyme makers are preparing for the challenges posed by the switch from
corn-based to biomass-based ethanol. By Ron Kotrba
78 FRACTIONATION Is Fractionation the Cure
for High Corn Prices?
Higher corn prices have led many ethanol producers to look at ways to reduce
production costs. In their quest for cost savings, many are considering
fractionation. By Amanda Watkins
Page 54 Page 94 Page 102
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ETHANOL PRODUCER MAGAZINE NOVEMBER 2008 9
departments contributors
120 RISK
Tighter Markets Provide Opportunities, ChallengesAs recent industry events attest, sustained profitability remains uncertain when margins get
crunched. Some ethanol companies provide good examples of how to survive the tough times,
while others don’t.
By Todd Taylor
126 CELLULOSE
The Important Role of Enzymes in Cellulosic EthanolThe commercial-scale production of ethanol from biomass is much more complicated than the
corn-to-ethanol process. However, cellulase and hemicellulose enzymes are being developed that
could simplify the process while reducing overall costs.
By Emmanuel Petiot
132 PROCESS
From the Lab to Production: Direct Steam Injecting Heating of Fibrous SlurriesPretreating and pumping cellulosic materials is a challenging hurdle en route to commercial-scale
ethanol production. Direct steam injection may provide a pathway, allowing the process to move
off the research table and into a full-scale plant.
By Bruce Cincotta
138 PROPAGATION
A Guide to Successful Yeast PropagationOne of the initial steps in the fermentation process is propagating yeast. While this step in ethanol
production may be simple, it’s success is vital to everything that happens in, and comes out of, the
plant.
By Patrick Heist
142 OPTIMIZATION
Emerging Energy Optimization Opportunities for Ethanol FacilitiesEthanol producers continually look for ways to become more efficient. The second of a three-part
series on plant optimization focuses on energy-related changes that improve the ethanol
production process or reduce energy costs.
By Philip A. Marrone, Kenneth R. Liberty and David J. Turton
148 INDUSTRY
Cellulosic Ethanol Collaborations: Matchmaking Isn’t EasyCreative partnerships are quickly making cellulose-to-ethanol production a reality. However, what
happens to an agreement after the initial research initiative is met?
By Paul Landen and Jordan Carey
insideNOVEMBER 2008 . VOLUME 14 . ISSUE 11
11 Advertiser Index
14 The Way I See It
By Mike Bryan
Cellulose Advances with
Help from Corn-Based Industry
20 Business & People
24 Commodities
26 A View from the HillBy Bob Dinneen
Be Thankful for the Ethanol Industry
27 RFA Update
28 eBIO InsiderBy Robert Vierhout
Is the Tide Changing?
30 Industry News & BIObytes
40 Plant Construction List
48 Drive
By Toni Nuernberg
Stakeholders Launch Proactive Message
50 Legal Perspectives
By Judd W. Vande Voort
Risk Management Committees
Hedge With Best Practices
154 Events Calendar
156 EPM Marketplace
Ethanol Producer Magazine: (USPS No. 023-974) November 2008,
Vol. 14, Issue 11. 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 NOVEMBER 200810
Policy, Projects and Life Cycle StandardsEthanolProducer.com’s most-read Web exclusive news stories for September
Industry responds to GOP’s anti-ethanol policy
Several ethanol industry stakeholders espressed
concern over the Republican Party’s policy platform
the day after it was announced.
2
U.S. sugarcane-to-ethanol projects underway
Pacific West Energy LLC and Coskata Inc. are
pursuing projects in Hawaii and Florida, respectively,
which would use sugarcane as a feedstock.
3
Abengoa receives grant for new Illinois plant
The Spain-based company received $4 million for its
proposed 88 MMgy plant in Madison, Ill.
4
VeraSun Energy starts up Dyersville plant
Iowa’s 32nd operational ethanol plant was VeraSun’s
14th when it started production Sept. 5.
�For up-to-date Web exclusives, visit www.ethanolproducer.com.
5
Republicans pass anti-ethanol platform
The Republican Party’s 2008 policy platform says the
U.S. government “should end mandates for ethanol
and let the free market work.”
No. 200
on the Horizon
Contributions Editor
Dave Nilles is keep-
ing an eye on the
number of ethanol
plants currently on
line in the United
States. There are
178 operating so
far, and the industry may indeed hit No. 200
in 2009.
1
McDaniel to become Delta-T CEO
An oil industry veteran takes the helm of a company
focused on reestablishing its role in the North
American ethanol industry.
7
BioEnergy Africa to build Mozambique plant
A British Virgin Islands-based company has raised
more than $15 million toward the development of a
large-scale ethanol plant in east Africa.
8
Researchers: Standard for life cycle analysis needed
Two Nebraska researchers are helping clear up
confusion surrounding ethanol, and its greenhouse gas
reduction and net energy yield.
9
California marine dock mistakenly receives E100
A distribution error led to a refueling dock in southern
California mistakenly selling boaters 100 percent
ethanol blended down to E40.
10
Mascoma, Dartmouth create high-yielding bacteria
Research succeeded in engineering a thermophilic
anaerobic bacterium that ferments xylan and
biomass-derived sugars to produce ethanol.
6
webON THE
PODCAST
TOP 10 WEB EXCLUSIVES
BLOG
TAKINGSTALK
Staff Writer Susanne Retka
Schill updates our readers
with the latest news regarding
her October EPM feature,
titled “Beefing Up Barley.”
One ethanol plant planning to
use barley as a feedstock has
announced a groundbreaking
date in October.
To listen to this podcast and others, visit www.ethanolproducer.com/podcast. To view this blog and others, visit
www.ethanolproducer.com/takingstalk
/archive.jsp.In the ethanol world barley may be corn’s poor cousin,
but research efforts have made it an attractive feed-
stock option in the U.S. mid-Atlantic region.
By Susanne Retka Schill
BarleyBeefing Up
2009 InternationalFuel Ethanol Workshop & Expo
Agra Industries Corp.
Air Resource Specialists Inc.
American Railcar Industries Inc.
Anhydro Inc.
Aqua Power Inc.
Aquatech International
Ascendant Partners Inc.
Barr-Rosin Inc.
BBI International CommunityInitiative to Improve EnergySustainability (CITIES)
BBI Project Development
Best Energies Inc.
BetaTec Hop Products Inc.
Biodiesel & Ethanol 101 DVDs
Bioenergy AustralasiaBiofuels CanadaBiofuels Recruiting
Biomass MagazineBiothane Corp.
Buckman Laboratories Inc.
Buhler Aeroglide
Buhler Inc.
Burns & McDonnell
Calbrandt
Centrisys Corp.
Cereal Process Technologies LLC
Check-All Valve Mfg. Co.
Christianson & Associates PLLP
CIT Group
Clifton Gunderson LLP
Coverall Building Systems
Crown Iron Works Co.
Crown Iron Works/HarburgFreudenberger
Davenport Dryer LLC
dbc SMARTsoftware Inc.
Delta-T Corp.
Distillers Grains QuarterlyDuPont Chemical Solution Enterprise
Duratech Industries International Inc.
Eaton Filtration
Eco-Tec Inc.
Eisenmann Corp.
Electro Sensors
ethanol-jobs.com
Ethanol Promotion & Information Council
ETS Laboratories
Exothermics Inc.
Fagen Inc.
FCStone LLC
Fermentis
Flottweg Separation Technology
Gavilon
GEA Ecoflex
61
32
34
4
6
117
69
150
139
109
68, 76 & 125
90
112
46
153
60
166
59 & 165
64
85
31
23
5
35
58
91
57
42
92
128
53
140
74
137
118
38 & 39
124
22
134
130
45
81
12
98 & 136
77
72
135
3
129
131
141
29
116
Ad Index
Genencor International Inc.
GreenShift Corp.
HEMCO Industries
ICM Inc.
Indeck Power Equipment Co.
Interstates Cos.
Intersystems
ITT Goulds
Kennedy and Coe LLC
Lallemand Ethanol Technology
Mapcon Technologies Inc.
Martrex Inc.
Maas Cos.
McC Inc.
Metso Automation
Mettler Toledo
Miner Enterprises Inc.
National Ethanol Conference
Natwick Associates Appraisal Services
Nebraska Public Power District
Nestec Inc.
Nexen Marketing USA Inc.
North American Safety Valve
Novozymes
Petroleum Equipment Institute
PhibroChem
Pioneer Hi-Bred International Inc.
Poet LLC
Primafuel Inc.
R&R Contracting Inc.
R.J. O’Brien & Associates
RailWorks Track Systems Inc.
Renewable Fuels Association
Resonant BioSciences LLC
Robert-James Sales Inc.
Romer Labs Inc.
Ronning Engineering
Roskamp Champion/CPM
SafeRack LLC
Salco Products Inc.
Seneca Waste Solutions
Smar International Corp.
Spraying Systems Co.
Strongform Nationwide Industrial Builders
Sulzer Chemtech USA Inc.
Syngenta
TDC Dryers
Trico TCWind Inc.
Tri-Mer Corp.
U.S. Water Services
Vaperma Inc.
Victory Energy Operations LLC
Vogelbusch USA Inc.
Volkmann Railroad Builders Inc.
W.Soule & Co.
WINBCO
ETHANOL PRODUCER MAGAZINE NOVEMBER 2008 11
146
16 & 17
151
2
56
44
101
147
33
18
36
37
127
43
47
52
152
84
108
105
67
133
122
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99
51
15
168
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83
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113
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89
88
145
82
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75
121
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ETHANOL PRODUCER MAGAZINE NOVEMBER 2008 13
EDITORIAL
Jessica Sobolik Managing Editor
Dave Nilles Contributions Editor
Rona Johnson Features Editor
Ron Kotrba Senior Staff Writer
Jerry W. Kram Staff Writer
Susanne Retka Schill Staff Writer
Kris Bevill Staff Writer
Erin Voegele Staff Writer
Anna Austin Staff Writer
Ryan C. Christiansen Staff Writer
Bryan Sims Staff Writer & Plant List Manager
Hope Deutscher Online Editor
Jan Tellmann Copy Editor
Amber Armstrong E-Media Coordinator
ART
Jaci Satterlund Art Director
Sam Melquist Graphic Artist
Elizabeth Slavens Graphic Artist
Jack Sitter Graphic Artist
PUBLISHING & SALES
Mike Bryan Publisher & CEO
Kathy Bryan Publisher & President
Joe Bryan Vice President of Media & Events
Tom Bryan Vice President of Communications
Matthew Spoor Sales Director
Howard Brockhouse Sales Manager
Clay Moore Account Manager
Jeremy Hanson Account Manager
Chip Shereck Account Manager
Tim Charles Account Manager
Chad Ekanger Account Manager
Marty Steen Account Manager
Marla DeFoe Advertising Coordinator
Jessica Beaudry Subscriptions Manager
Jason Smith Subscriber Aquisition Manager
Erika Wishart Administrative Assistant
Christie Anderson Administrative Assistant
Nicole Zambo Receptionist
HOW TO REACH US
LETTERS TO THE EDITORWe welcome letters to the editor. Send your letter to:
Ethanol Producer Magazine Letters, 308 Second Ave. N.,
Suite 304, Grand Forks, ND 58203 or e-mail to [email protected].
Letters should include the writer’s full name, address
and telephone number, and may be edited for purposes of clarity and space.
SUBSCRIPTIONSEthanol Producer Magazine is now free of charge to everyone with the exception of
a shipping and handling charge of $49.95 for any country outside the United States, Canada and Mexico.
To subscribe, visit www.EthanolProducer.com or you can send your mailing address and payment
(checks made out to BBI International) to:
Ethanol Producer Magazine Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203.
You can also fax a subscription form to (701) 746-5367.
CUSTOMER SERVICE AND CHANGE OF ADDRESSFor service, please use our Web site at www.EthanolProducer.com. You can also call (866) 746-8385, or write to:
Ethanol Producer Magazine, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203.
BACK ISSUES AND REPRINTSSelect back issues are available for $3.95 each, plus shipping. To place an order, contact Subscriptions at (701) 746-8385
or [email protected]. Article reprints are also available for a fee. For more information, contact Christie
Anderson at (701) 746-8385 or [email protected].
ADVERTISINGFor advertising rates and our editorial calendar, visit www.EthanolProducer.com or call (866) 746-8385.COPYRIGHT © 2008 by BBI International
ETHANOL PRODUCER MAGAZINE NOVEMBER 2008 13
ETHANOL PRODUCER MAGAZINE NOVEMBER 200814
he theme of this issue of EPM is cellulosicethanol. Many companies involved in the conven-tional ethanol industry are now turning their atten-
tion to cellulose as the renewable fuel of future. In doing so,it seems that corn-based ethanol has unfairly taken it on thechin.
As more facts are released, it becomes increasingly clearthat corn-based ethanol has not caused global food short-ages, the marginalization of women, increases in gas prices,and deforestation. I have been involved in agriculture forwell over 30 years, and for the first time in my memory,farmers are actually able to make a decent living and, as aresult, are being villainized for doing so. In actuality, farmersare the ones who have been marginalized.
Opponents of this industry have done a stellar jobtrashing corn-based ethanol, and perhaps it’s best to justmove on. It does make me wonder, though, what the nextissue will be once an increasing amount of ethanol is pro-duced from cellulose. It may be land use, water, energy ...who knows? Trust me, there will be another battle that wewill have to fight on the cellulosic front.
As you’ll see in the pages of this issue, much progresshas been made in the development of cellulosic ethanol, butmuch more still needs to be done. Feedstock collection andstorage, the economic fermentation of C5 sugars and pre-treatment options are just part of a list of challenges facing
the industry. These are thingsthat we’ll overcome, however,and out of this will emerge arobust industry that will carry usinto the next generation of bio-fuels.
The years ahead will seeimprovements not only in cellu-lose-to-ethanol technology butin other technologies, as well. Processes such as pyrolysis,gasification and anaerobic digestion will be part of ourfuture energy mix. So while some concede that the corn-to-ethanol debate was a battle lost (others may call it a draw),we most certainly have not lost the war.
I try to avoid politics in this column, but I have to saythat it will be difficult to support any presidential candidatethat doesn’t demonstrate a strong commitment to biofuels.They are the future of our transportation infrastructure, andthey are in existence now, not in some futuristic dream.Biofuels, along with the development of all domestic energyresources, has to be part of an intelligent energy strategy. Wecan’t drill our way out of the current energy crisis, and weshouldn't ignore other domestic resources, including billionsof gallons of clean renewable energy from grain and cellu-lose.
That’s the way I see it!
The Way I See It
Cellulose Advances with Help from Corn-Based Industry
Mike BryanPublisher & CEO
T
®, TM, SM Trademarks and service marks of Pioneer Hi-Bred.All purchases are subject to the terms of labeling and purchase documents.© 2008 PHI INDSL010514P238AVC
Today Pioneer is driving new opportunities to help industry become
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Several key Pioneer® brand hybrids have been developed for
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Delivering high-output products is only one piece of the
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commitment to American agriculture, visit www.pioneer.com/enduse
GreenShift is the original inventor and industry pioneer of Corn Oil Extraction technology.With over 40,000 hours of operational run time on our systems and years of know howintegrating extraction technology into corn ethanol plants, GreenShift has established itstechnology leadership and proven its reliability.
Participating in GreenShift’s corn oil extraction program is guaranteed to bring you the highestreturn, on the shortest lead time, at the lowest risk, and for the least amount of capital deployed.
Take advantage of GreenShift’s turn-key Corn Oil Extraction and Biodiesel Productioncapabilities and chose between extracting oil for conversion at our new fully operational biodiesel
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BI008_Ethanol_Producer_vend.indd 1 8/13/08 2:05:45 PM
ETHANOL PRODUCER MAGAZINE NOVEMBER 200820
Business
Business&PeopleEthanol Industry Briefs
BUSINESS&PEOPLE
LDC Bioenergia invests
in eight ethanol plantLDC Bioenergia, the ethanol business
unit of Louis Dreyfus Commodities, hasinvested $433 million in a new sugar milland ethanol production plant in Brazil.The facility will have the capacity to refinemore than 42 MMgy of ethanol and340,000 tons of sugar. It is being built inthe state of Mato Grosso do Sul, whichshares borders with Bolivia and Paraguay.The plant is Louis Dreyfus’ eighth ethanoland sugar facility in Brazil and its third inMato Grosso do Sul. Louis DreyfusCommodities is one of the top three sugarmerchandisers and traders in the world. EP
To be included in Business & People, send information(including photos or illustrations if available) to: IndustryBriefs, Ethanol Producer Magazine, 308Second Ave. N., Suite 304, Grand Forks, ND 58203. Youmay also fax information to (701) 746-5367, or e-mail it to [email protected]. Please includeyour name and telephone number in all correspondence.
Share your Industry Briefs
MBI, SunEthanol partner
to scale up ethanol processSunEthanol Inc. and MBI Inter-
national have announced a joint venture toscale up a fermentation method that usesSunEthanol’s Q-Microbe to effectivelydigest and ferment cellulosic feedstocks inorder to produce ethanol in a single-stepprocess.
Bobby Bringi, president and chiefexecutive officer of MBI, said his compa-ny has significant experience in scaling upand de-risking new technologies. In thepast, MBI has lent its services to multipleuniversities and companies such as CargillInc. for a polylactic-acid-based biodegrad-able plastics technology, which is broadlyused around the world in clothing, carpets,plastic food containers, garbage bags andcar parts. EP
Range Fuels,
Ceres collaborate Colorado-based Range Fuels Inc., a
cellulosic ethanol producer, and California-based Ceres Inc., an energy crop seeddeveloper, have formally announced a col-laboration to research, develop and com-mercialize energy crop feedstocks forethanol production. The two companiesbegan working together during the 2008spring planting season and plan to contin-ue the collaboration for several years.
Range Fuels is building its first com-mercial-scale cellulosic ethanol productionfacility near Soperton, Ga. The 20 MMgyfacility is scheduled to begin production in2009, according to a Range Fuels spokes-woman. Woody biomass is the primaryfeedstock, but the spokeswoman saidRange Fuels is considering other biomassfeedstocks, as well, and has partnered withCeres to explore those options. EP
John Deere adds RIN
management to softwareJohn Deere Agri Services has incorporat-
ed the use of a renewable identification num-bers (RINs) registry into its trademarked AgrisV9 business management software. The CleanFuels Clearinghouse is allowing Agris usersaccess to its RIN management capabilities andwill enable them to connect seamlessly withClean Fuels’ RINSTAR Renewable FuelRegistry.
The tracking and managing of RINshave been issues for many biofuels producerssince the U.S. EPA mandated the use of RINsas a method to track the amount of domesti-cally produced biofuels. Compliance is manda-tory, but there is no type of federally regulatedmethod for tracking and regulating numbers.Clean Fuels is the only RIN registry in theUnited States. EP
Inbicon, G-Team to market
pretreatment technologyDanish biofuels company Inbicon
announced in August a partnership with G-Team, a U.S.-based marketing and brandbuilding company, to market and license itscellulosic pretreatment technology inNorth America. The technology pretreatsagricultural waste through a hydrothermalprocess, turning it into liquefied sugars thatcan be fermented into ethanol. Inbicon hasbeen developing the technology since 2003and currently uses it on a commercial scalein Denmark. In addition, G-Team issearching for collaborators to create sus-tainable, carbon-neutral energy parks thatwould produce renewable electricity, liquidbiofuels, livestock feed and high-valuefoods. EP
ETHANOL PRODUCER MAGAZINE NOVEMBER 2008 21
BUSINESS&PEOPLE
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People
Range Fuels adds to board
Range Fuels Inc.has appointed GregKing to its board ofdirectors. He currentlyserves as president ofGCK Ventures LLC, aprivate consultingfirm, and was previ-ously president ofValero Energy Corp. “Greg’s extensiveexperience in the oil-refining business andexpertise in transportation fuels logisticswill greatly enhance our board of direc-tors’ already deep-rooted understanding ofthe evolving energy landscape,” said RangeFuels Chief Executive Officer MitchMandich. EP
Delta-T names CEOThomas McDaniel
took the helm ofDelta-T Corp. inSeptember, replacingChief ExecutiveOfficer Les Ward. Asmanaging director,McDaniel will focus onthe successful comple-tion of all existing Delta-T contracts, as wellas the improvement and expansion of itsoperating facilities. He will also function asmanaging director of North and SouthAmerican operations for Delta-T’s parentcompany Bateman Litwin NV. EP
Council names ethanol
executives to boardThree ethanol plant executives have
been named to the board of directors of thenewly formed American Ag & EnergyCouncil, an organization that aims to bridgegaps between the agriculture, agribusinessand renewable energy sectors. The ethanolexecutives are Ray Defenbaugh, presidentand chief executive officer of Big RiverResources LLC in Burlington, Iowa; BruceRastetter, chief executive officer ofHawkeye Energy Holdings LLC in Ames,Iowa; and Walter Wendland, president andchief executive officer of Golden GrainEnergy LLC in Mason City, Iowa.Defenbaugh, who is also a director for theRenewable Fuels Association, said the coun-cil aims to show that it's not just ethanolproducers who support ethanol. "Whenpeople hear the story from a company that'sproducing ethanol, they might assume thatit's a biased story," he said. “However, wethink we've got a very valid story within theethanol industry, and so we're trying tobring in voices from within the agriculturalcommunity that would validate the positivefacts that we have to present about ethanoland [distillers grains]." EP
Mascoma promotes
Schumacher, adds ForrestMascoma Corp.
has promoted JimSchumacher to seniorvice president of cor-porate development,and has addedRichard Forrest to itsleadership team asvice president andcorporate counsel.Schumacher, who hasbeen with Mascomasince 2007, mostrecently led the estab-lishment of a strategicpartnership betweenMascoma and automanufacturer GeneralMotors Corp. He will be responsible forcorporate development activities, such asworking on new production facility proj-ects, raising capital and building strategicpartnerships. Forrest has experience inrepresenting emerging growth companies.Most recently, he was appointed a lecturerat Harvard Law School to teach a courseon legal issues relevant to venture-backedtechnology companies. EP
Ho joins Hudson
Clean EnergyHudson Clean Energy Partners LP, a
private equity firm that invests in compa-nies focused on renewable power, alterna-tive fuels, energy storage and demand-side energy management, has hired PaulHo as principal to oversee efforts inHudson’s biofuel and biomass sectors.Previously, he worked for Credit Suisse inNew York as alternative energy groupdirector. He has more than 14 years ofcombined experience in the renewableenergy and alternative fuels sectors. EP
Slunecka joins PhibroChem Tom Slunecka,
former executivedirector of theEthanol Promotionand InformationCouncil, has joinedPhibroChem Ltd. asvice president of mar-keting for the compa-ny’s Ethanol Performance Group. He willbe responsible for expandingPhibroChem’s position within the ethanolindustry. PhibroChem produces Lactrol, anantibacterial product that minimizes lacticacid during fermentation.
In late 2007, Slunecka left EPIC forKL Process Design Group LLC, where heheld positions in marketing and businessdevelopment. Before joining EPIC, heworked for the National Corn GrowersAssociation. EP
King
Forrest
Schumacher
McDaniel
Slunecka
www.buhlergroup.com
Standards for tomorrow.
We see food, feed, and fuel.
Fractionation makes it all possible.
What do you see?
Buhler has the equipment and process know-how to make it happen:
Material Handling: truck, train, or shipGrain CleaningFractionation & MillingGrinding & MixingPelleting of Feed & BiomassBulk Loading & Bagging
COMMODITIES REPORT
Sept. 21—Lehman Brothers filed for bankruptcy, AmericanInternational Group Inc. (AIG) got a big helping hand from thefederal government and Warren Buffet’s MidAmerican EnergyHoldings Co. swooped in to buy Constellation Energy at a shareprice not seen in the past five years. It’s a lot of action in one week.
What does this mean for the natural gas industry? LehmanBrothers, AIG and Constellation Energy either directly or indirect-ly account for a significant amount of marketing and trading vol-umes in the natural gas industry. In fact, Lehman Brothers,Tenaska Marketing Ventures (of which AIG owns 50 percent) andConstellation are all among the top 10 North American marketersin terms of volume, according to the trade publication Natural GasIntelligence. Collectively, they account for more than 24 billion cubicfeet per day in traded volume. To put that number in perspective,average daily natural gas consumption is approximately 60 billioncubic feet per day. Certain financial and possible operational tur-moil impacting this degree of market volume and this number oflarge participants is bound to have an impact on the market. Whatthe impact will be is yet to be seen.
During these times of chaos and uncertainty, we have a fewrecommendations. First, make sure you understand the creditcapability of the party supplying your natural gas needs. Second,
always have a backup plan in the event that your primary supplierfails to deliver. Finally, determine how much supplier risk you cantolerate, and take action if your exposure level exceeds your com-fort level. As always, consider some coverage for this fall and nextwinter using options or futures structures. EP
Casey Whelan, vice president of strategic initiatives, can be contacted [email protected].
More chaos, uncertainty
Natural Gas Report By Casey Whelan, U.S. Energy Services Inc.
Corn, crude oil fundamentals change
Corn Report By Jason Sagebiel, FCStone
Sept. 22—The corn market has been volatile despite the upcom-ing harvest season. Outside influences have allowed that volatility toprosper whether due to the energy complex, the U.S. dollar, the finan-cial crisis or the slowing world economy. Nonetheless, each componenthas complemented one another.
The September USDA supply and demand report indicated thatthere may be a problem with U.S. corn production. The yield wasreduced by 2.7 bushels per acre (from 155 to 152.3), equating to areduction of 216 million bushels compared with the last report, ordown 1 billion bushels from one year ago. One thing to note is this willstill be the second-highest yield in U.S. history.
U.S. demand for exports, food, seed and industrial use wasunchanged. However, a reduction of 100 million bushels in feeddemand was noted. Therefore, the U.S. carryout now rests unsettled at1.2 billion bushels (an 8 percent carryout-to-use ratio). From a worldperspective, wheat carryout increased by 3.73 million metric tonsdespite corn carryout being reduced by 2.44 million metric tons. Theresult is more wheat feeding around the globe.
The adjacent graph depicts crude oil and its relationship to corn.Will there be a disconnect between agricultural commodities and ener-
gies? The relationship between crude oil and corn has been 75 percentsince 2007. Going back to 2003, that same correlation is 65 percent.The correlation between soybean oil and crude is 88 percent since2007. Therefore, the market may have put corn fundamentals into playand may see that spread begin to uncorrelate. EP
ETHANOL PRODUCER MAGAZINE NOVEMBER 200824
COMMODITIES REPORT
DDGS Report By Sean Broderick, CHS Inc.
Ethanol Report By Spencer Kelly, OPIS
Sept. 19—Most ethanol spot marketsfailed to get a boost from the chaos inSeptember gasoline markets drummed upby the hit that Gulf Coast refiners tookfrom Hurricane Ike, which made landfallonly weeks after Hurricane Gustav.
Houston was in a jumble with shortethanol supply and a storm-related halt tobarging into the region. Bulk truck deliver-ies to Houston fetched prices from $2.50 to$2.58 per gallon for a time with supplytrucked in from far-away Midwest sources.However, with prompt spot gasoline pricessurging up to $5 per gallon in a buying fren-zy, such ethanol prices were almost a foot-note.
In fact, most ethanol marketsremained more closely tied to the fortunesof corn, depressed through most of themonth even when gasoline spiked. Chicagospot deals for September averaged between$2.10 and $2.20 per gallon, down 15 centssince the previous month—a price levelleaving ethanol producers with little or nomargin even as corn prices cooled.
Midwest rack prices moved lowerthrough September. Average rack postingsin Iowa at $2.29 per gallon dropped morethan a dime. Low prices at racks such asDes Moines, Iowa, indicated more slack inthe offing, sinking to $2.12 to $2.13 per gal-lon.
Gasoline demand and logisticsbecame a growing concern. Gulf Coastrefiners closed down for Gustav and Ike,leading to gasoline supply shortages atsome terminals flush with ethanol but nogasoline for blending. Some terminals inthe Southeast had railcars backing up withno place to put the ethanol.
While ethanol blending economicsremained as healthy as ever, concern fromethanol sellers focused on lower gasolineproduction and demand, which couldmean less ethanol demand regardless ofeconomics. EP
For more information, contact OPIS Ethanol& Biodiesel Information Service at (888)301-2645.
Ike spike leaves ethanol behind
Source: OPIS
Source: U.S. Energy Services Inc.
*Central Valley Source: CHS Inc.
Sept. 23—As we entered fall, theDDGS market started to feel the pressureof logistics, at least in the Western markets..Last month, I said the first to blink wouldhave the market move against them. Asthey looked at the two weeks of transit timethat it was going to take to get product intotheir feed mills, Southwestern andCalifornia buyers determined that theyshould start ordering early and often. Thatmoved the market upward approximately$15 per ton in around three days. Thedeferred bids moved an additional $5 to$10, as well.
The Gulf numbers have risen, notonly because of Western business, but alsobecause overseas buyers are buying the“least-cost” product, which for the most
part has been DDGS.The Eastern market is not quite as
bullish, due largely to new plants that havestarted up in that area, particularly in theOhio market. Some railcars have shipped“over the top” of Chicago and St. Louis togo to the hotter Western market. Thisshouldn’t happen in a normal scenario.
Looking ahead, the impending coolerweather has sellers looking to maintain thecarries in the deferred months and mimicthe corn market. The “scare” of ethanolcompanies reporting large hedging losses,along with minimal margins in the forwardmonths, has buyers looking at potentiallyexplosive supply situations that remindthem too much of 2007. Both sides areplaying it conservatively, which should keep
Source: FCStone
Market to remain tight
REGION
West Coast
Midwest
East Coast
SPOT
291.069
315.284
291.469
RACK
307.313
312.279
308.495
RETAIL
382.909
373.46
367.314
June 2008
May 2008
June 2007
585,000
598,000*
418,000
REGION
West Coast
Midwest
East Coast
SPOT
232.833
223.306
233.5
BULK TRUCK (rack)
232.2
225.59
- - - -
SPLASH/TOP OFF (rack)
262.835
249.277
285.699
DATE
Sept. 19, 2008
Aug. 19, 2008
Sept. 19, 2007
CLOSE
5.42 1/4
5.84 1/2
3.58
LOW
5.27 1/4
5.61
3.47 1/4
HIGH
5.48
5.93 1/4
3.58 3/4
LOCATION
Minnesota
California*
Chicago
Buffalo, N.Y.
Central Florida
NOV. 2008
140
188
120
147
176
OCT. 2008
135
180
135
150
180
NOV. 2007
110
158
117
130
147
Source: OPIS
NYMEX
N. Ventura
Calif. Border
SEPT.24 , 2007
6.08
5.42
5.08
SEPT.22 , 2008
7.50
6.19
5.70
AUG..25 , 2008
7.82
6.99
7.24
Regional Ethanol Prices (Monthly averages in cents per gallon)
Regional Gasoline Prices (Monthly averages in cents per gallon)
DDGS Prices ($/ton)
Corn Futures Prices (December corn, $/bushel)
Cash Sorghum Prices ($/bushel)
Source: Sorghum Synergies
Natural Gas Prices ($/MMBtu)
U.S. Ethanol Production Output (barrels/day)
*all-time monthly high Source: U.S. Energy Information Administration
Superior, Neb.
Beatrice, Neb.
Sublette, Kan.
Salina, Kan.
Triangle, Texas
Gulf, Texas
SEPT. 20084.47
4.42
4.54
4.58
4.57
5.44
AUG. 20084.77
4.82
4.97
5.25
5.21
5.98
SEPT. 20073.84
3.65
3.55
4.02
3.66
4.44
ETHANOL PRODUCER MAGAZINE NOVEMBER 2008 25
With the Thanksgiving holiday quickly approaching,
many find themselves stopping to reflect on the past year
and what they have to be thankful for. While those of you
who drive America’s ethanol industry reflect, also take the
time to appreciate the contributions you’re making to
America’s energy future, for which all of us are thankful.
It is ethanol that is reducing our dependence on for-
eign oil and increasing our ability to control our energy
security future. The 6.5 billion gallons of ethanol pro-
duced in 2007 displaced the need for 228 million barrels
of imported foreign oil. Ethanol is also adding volume to
the market at a time when supplies are low and prices
are high. For example, Bear Stearns analyst Nicole
Decker estimated in early 2008 that the 400,000 barrels
of ethanol produced daily in 2007 could displace the
gasoline output from two to three average oil refineries.
It’s America’s ethanol industry that is creating a nutri-
ent-rich animal feed as a coproduct of ethanol produc-
tion. According to a recent study, the U.S. ethanol indus-
try provided 23 million metric tons of livestock and poul-
try feed to the world last year, or nearly three times the
amount of wheat, sorghum, barley and oats fed to U.S.
livestock in the 2007-’08 marketing year. In other words,
the amount of feed produced by the ethanol industry in
2007-’08 is roughly equivalent to the total amount of feed
consumed by cattle last year in Texas, Kansas,
Nebraska and Colorado—the nation’s four largest feed-
lot states.
Especially important in these troubled times is the
ethanol industry’s commitment to rural revitalization. In
2007, the ethanol industry created more than 230,000
jobs across all sectors of the economy, added nearly $48
billion to the nation’s gross domestic product and put an
additional $12.3 billion into the pockets of American con-
sumers. Specifically, in a
study released by LECG
LLC in February, a rural
ethanol plant was found
to not only create 2,400
local jobs, but also boost
local incomes by more
than $100 million.
Ethanol has several
environmental benefits,
too. It displaces the use of
toxic gasoline compo-
nents, and is water-solu-
ble, biodegradable and
completely renewable. It
reduces carbon dioxide
emissions by up to 29 percent. The 9 billion gallons of
ethanol we will produce in 2008 will reduce greenhouse
gas emissions by more than 14 million tons, or the equiv-
alent of taking 2.5 million vehicles off the road. Ethanol
contains a positive energy balance, and ethanol produc-
tion is becoming more efficient every day.
So as you sit down with your loved ones this holiday
season, remember what we as an industry have to be
thankful for. Our product reduces dependence on oil from
increasingly unstable regions. We’re able to not only pro-
vide a renewable, clean fuel that reduces greenhouse
gas emissions and has a positive energy balance, but
also put a significant portion of animal feed back into our
markets, which helps to produce healthy livestock and
poultry for a growing domestic population. Moreover,
we’re helping to create economic stimulus when our
economy needs it the most. As an industry, we truly have
much to be thankful for this year.
VIEWFROMTHEHHIILLLL
Be Thankful for the Ethanol Industry
ETHANOL PRODUCER MAGAZINE NOVEMBER 200826
Dinneen
Bob DinneenPresident and CEO
Renewable Fuels Association
RFAUPDATE
NEC registration opens
It’s time to start planning for the RFA’s 14th Annual National Ethanol
Conference. Registration is now open for the event, which will be held Feb. 23-25
at the San Antonio Convention Center in San Antonio. This year’s conference is
themed “Growing Innovation: America’s Energy Future Starts at Home.”
The event, which drew more than 2,100 to Orlando, Fla., in February 2008,
will again feature a general session, breakout sessions and a networking recep-
tion. A golf tournament will be held at The Club at Sonterra. New this year is an
additional networking opportunity that will feature a visit to the Knibbe Ranch, a
family-owned working ranch recognized as a Century Heritage Ranch by the state
of Texas.
RFA ads tout ethanol’s benefits
In late September, the RFA launched two advertisements that clearly state the benefits of the domestic
renewable fuels industry. Titled “Faces” and “Places,” the 30-second spots feature Americans from Hereford,
Texas, who are actively leading America toward a more secure energy future. In “Faces,” local Hereford residents
explain why ethanol is critical to America’s energy future. In “Places,” the geographic diversity of America’s ethanol
industry is on display since the self-proclaimed “Beef Capital of the World” is also home to two ethanol facilities.
Panda Hereford Ethanol LP is building a 115 MMgy facility there, while White Energy Hereford LLC opened a 100
MMgy facility in March.
“America’s ethanol producers are on the leading edge of an energy evolution in this country but far too often
aren’t given the credit they deserve,” Dinneen said. “As oil supplies peak and jobs are shipped overseas, ethanol
is providing much needed energy security and economic opportunity today. This industry is about real people all
across the nation committed to doing their part to ensure a brighter energy future for generations to come.
ww
w.e
thanolR
FA
.org
ETHANOL PRODUCER MAGAZINE NOVEMBER 2008 27
RFA analyzes ethanol coproduct production
According to an analysis conducted by the Renewable Fuels Association, U.S. ethanol producers made 23
million metric tons of livestock and poultry feed as a coproduct of the ethanol production process last year. In the
results released in late September, the RFA also pointed out that approximately 1 billion bushels of corn were dis-
placed by ethanol feed coproducts in 2007-’08, an amount equivalent to roughly 15 percent of total corn use for
feed. One-third of every bushel of grain brought into an ethanol plant is turned into animal feed, most often in the
form of distillers grains (the most common ethanol feed coproduct), corn gluten feed and corn gluten meal.
The RFA also analyzed distillers grains exports, determining that exports will increase to more than 4 million
metric tons in 2008, or the equivalent of approximately 160 million bushels of corn.
“The livestock feed coproducts of ethanol production are the best kept secret of this industry,” said RFA
President Bob Dinneen. “The focus of the public has been on the industry’s production of fuel ethanol as a renew-
able alternative to imported oil, but the production of a high-quality livestock feed is equally important. Our indus-
try is truly in the business of producing both feed and fuel.”
The RFA’s full eight-page analysis, titled “Feeding the Future,” can be found at www
.ethanolrfa.org/resource/reports/#EconomicImpacts.
ETHANOL PRODUCER MAGAZINE NOVEMBER 200828
or the European Union biofuels industry, and mostlikely the American industry, 2007 and the first half of2008 will be remembered as the nadir of its history.We were blamed for more things than a sensible mind
could think of.The U.K. newspaper I read, the Financial Times, was one
of the first newspapers that started reporting and commentingalmost daily on how bad biofuels were for society. It was as ifthey invented biofuel bashing.
Remarkably, at press time, the Financial Times has not writ-ten a single word, negatively or positively, on biofuels since July.It is as if biofuels no longer exist. The paper didn’t even coverthe Organization for Economic Cooperation andDevelopment report published in mid-July that heavily criti-cized the United States and the EU for their biofuel policies.When that happens I’m left wondering if something haschanged their stance on biofuels? I could think of a number ofreasons that might explain this change.
Perhaps it’s the holiday season. Why bother publishinganything if politicians and biofuels detractors are on annualleave? A more cynical explanation could be that after more than12 months of hammering into people’s minds that biofuels arebad, they consider the mission accomplished.
Or could the real reason be the much quicker-than-expect-ed adjustment of agricultural crop prices and the higher yield inalmost every region of the world? Could it be that biofuelsaren’t the true drivers for the inflated food prices the paper hadclaimed? They prefer to remain silent instead of admitting thatthey have been wrong in their analysis.
Two other reasons explain this ubiquitous silence. The firstwas presented in early July. Renewable Fuel Agency ProfessorEd Gallagher and his team’s eagerly awaited review on the indi-rect effects of biofuels, which was requested by the U.K. gov-ernment, was published. The report concluded that, by defini-tion, biofuels are not bad. They have a role to play in the ener-gy mix, but only if produced in a sustainable way.
Gallagher’s report con-cluded that the U.K. govern-ment should not question theEU target of 10 percent biofu-els by 2020 nor abandon its bio-fuel policy. However, it shouldadjust its medium-term target.As expected, the U.K. govern-ment shared Gallagher’s view.The U.K. government’s debateon biofuels policy and its valueshas come to an end.
The second reasonappeared immediately there-after: BP announced they will construct a wheat-to-ethanolplant in northeast England. The investment is worth $400 mil-lion. Since that announcement the U.K. newspapers likely con-cluded that criticizing biofuels any longer would neither lead tochange in government policy nor be appreciated by one of theBritish industry’s crown jewels.
Does this reaction provide a similar picture for the rest ofEurope? I must admit that it is beyond my abilities to make anyfirm statements on all of Europe, but I do notice a similarsilence in Brussels-based media and other papers I read.Biofuels might well no longer be the hobbyhorse of the media.
It’s too early to tell if the media has turned the corner onbiofuels coverage. The final decision on the EU biofuels policyhasn’t been made. The media might try another shot at it beforethe law is adopted later this year. In any case, this period ofsilence provides time to prepare for another round of anti-bio-fuels coverage.
Robert Vierhout is the secretary-general of eBIO, the
European Bioethanol Fuel Association. Reach him at
Is the Tide Changing?By Robert Vierhout
F
eBIOINSIDER
BIObytesEthanol News Briefs
Chrysler announces
2009 FFV lineup
Chrysler LLC has released its flexible-fuel vehicle lineup for 2009. The majorautomaker is now offering 10 vehiclemodels with three different E85-capa-ble engine sizes for the model year: thesmaller 2.7-liter V-6, the midsized 3.3LV-6, and the 4.7L V-8. Chrysler’s 2009lineup includes the Dodge Avenger,Grand Caravan, Dakota, Ram andDurango; the Chrysler Sebring, Townand Country, and Aspen; and the JeepCommander and Grand Cherokee. Fora complete list of 2009 FFVs, visitwww.e85fuel.com.
Northern Ethanol to build
Niagara Falls ethanol plant
Northern Ethanol LLC, a wholly ownedsubsidiary of Toronto-based NorthernEthanol Inc., has formed an agreementwith Connecticut-based Praxair Inc. toacquire 70 acres for a hydropoweredethanol production facility to be built inNiagara Falls, N.Y. The New YorkPower Authority approved the 9,000-kilowatt project in May. The 108 MMgyethanol facility is expected to breakground during the second quarter of2009 and will take approximately 20months to construct. At press time, theproject was waiting to be accepted intothe New York State Brownfield CleanupProgram before continuing to moveforward.
Sweet potatoes outperform corn
Sweet potatoes produced two to threetimes more carbohydrates for ethanolproduction compared with corn in stud-ies conducted in Maryland andAlabama, according to researchers withthe USDA’s Agricultural ResearchService. In a series of trials, carbohy-drate production from sweet potatoeswas 4.2 tons per acre in Alabama and5.7 tons per acre in Maryland, comparedwith corn at 1.5 tons per acre in
�continued on page 32
INDUSTRYNEWS
ETHANOL PRODUCER MAGAZINE NOVEMBER 200830
Energy has been a hot-button issuethroughout the 2008 U.S. presidential race withboth sides claiming they know the best way tohelp the United States through its current energycrisis. While there have been some similaritiesbetween the Republican and Democratic parties’solutions, there have also been some glaring dif-ferences.
Both sides agree that the government needsto continue to support the advancement ofdomestically produced energy. Both parties aresupportive of second-generation biofuels andthe development of technologies necessary tomake those types of fuel a reality. That’s wherethe similarities end.
The Republican Party made headlines whenit passed a party platform during its conventionin St. Paul, Minn., that included a call to end allethanol mandates, breaking from the currentadministration’s views on ethanol. The Bushadministration has been historically pro-ethanol,even playing a role in establishing the currentrenewable fuels standard that has now beenrenounced in the party’s new platform. TheRepublican Party’s platform vow to “let the freemarket work” was a return to the party’s roots,according to Republican National CommitteeChairman Robert “Mike” Duncan. The plat-form stated it would continue to support thedevelopment of cellulosic ethanol and other bio-fuels, but that coal would play a major role inachieving America’s energy independence, aswould the increase of domestic oil drilling.
Not all Republicans agreed with the plat-form. Sens. John Thune, R-S.D., and SaxyChambliss, R-Ga., spoke out in defense ofethanol at an agriculturally focused gatheringduring the conference. Chambliss said he was“disappointed” with the platform, but stressedthat it was only a platform and not policy. Thunesaid the ethanol portion of the republican plat-form was a “big mistake” and illustrated thatRepublicans aren’t always right. Sen. ChuckGrassley, R-Iowa, a long-time advocate ofethanol, said he disagreed with the ethanol man-date portion but said he couldn’t argue thatthey’re entirely necessary because ethanol pro-
ducers continue to meet mandates ahead ofschedule. Secretary of Agriculture Ed Schafersaid he raised his eyebrows when he read theportion of the policy concerning the removal ofethanol mandates. However, he also doesn’tbelieve mandates should remain in place indefi-nitely. “I believe those incentives ought to staythere until the industry is mature, profits can bemade and the infrastructure developed,” he said.
From the other side of the Congressionalaisle, the democrats passed a party platform dur-ing their convention in Denver that commentedonly briefly on biofuels. According to its plat-form, the Democratic Party plans to “invest inadvanced biofuels like cellulosic ethanol, whichwill provide American-grown fuel and help freeus from the tyranny of oil.”
Party platforms are meant to convey theparty’s stance on various issues. However, theytend to more closely represent the views of eachparty’s presidential nominee rather than the partyas a whole. “I don’t recall ever once campaigningon a Republican platform that I saw reduced toactual public policy,” Schafer said.
Regardless, the issue of energy in this elec-tion year has been closely watched by membersof the ethanol industry, spurring some organiza-tions to take action when they otherwise wouldremain neutral. For example, the American CornGrowers Association publicly endorsed demo-cratic nominee Sen. Barack Obama, based on hissupport for renewable energy and rural commu-nities. This is only the second time in the associ-ation’s 20-year history that it has publiclyendorsed a presidential candidate.
—Kris Bevill
Energy policies differ
in presidential race
McCain Obama
ETHANOL PRODUCER MAGAZINE NOVEMBER 2008 31
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INDUSTRYNEWS
Energy prices remained high onCongress’ list of priorities as the currentsession winded toward a conclusion.However, the Wall Street financial crisis hasdelayed consideration of new energy legis-lation to sometime after Election Day.
With time to consider new legislationshrinking, the House of Representativesapproved House Resolution 6899, theComprehensive American Energy Securityand Consumer Protection Act. While main-ly focused on oil production, the bill hasseveral titles dealing with alternative energy,including cellulosic ethanol. The bill passedthe house in mid-September by a vote of236 to 189.
Meanwhile, a bipartisan group of 20senators led by Sens. Kent Conrad, D-N.D.,and Saxby Chambliss, R-Ga., launched itsown compromise energy bill called theNew Energy Reform Act, also known asNew ERA, before the financial crisispeaked. In a joint statement, Conrad andChambliss said, “Unfortunately, with thefiscal crisis unfolding, time to debate acomprehensive energy policy is not avail-able. Instead, we will share our plan withour colleagues and ask that the New ERAbill be among the first orders of businesswhen Congress reconvenes.”
The Senate Agriculture Committee hasalso been active in trying to move ethanollegislation over the past several months.The committee held a field hearing inOmaha, Neb., titled “Food, Feed and FuelProduction.” Jeff Lautt, executive vicepresident of Poet LLC, spoke in favor ofthe ethanol industry and told senators thatthe choice between food, feed and fuel wasnot one or the other. “Food or fuel is not achoice we have to make,” he said. “It can beboth, and it will be both if we have the willto do so.”
Lautt listed five positions that wouldhelp support the production of corn-based ethanol and ease the introduction ofcellulosic ethanol into the marketplace.First, Congress should allow higher-levelethanol blends for use in automobiles
rather than the 10 percent standard now inplace. He also called for all new automo-biles to be flexible-fuel vehicles (FFVs),saying that the cost of converting existingmodels to FFVs is minimal and there wasno reason to delay it any further. He alsocalled for the installation of blender pumpsat filling stations to give consumers accessto higher-level ethanol blends, increasedfunding for research and development ofcellulosic ethanol, and the continuation ofthe tariff on imported ethanol to ensurethat U.S.-based solutions will continue tobe developed.
Sen. Tom Harkin, D-Iowa, chaired theOmaha hearing and has sponsored severalpieces of legislation to aid the ethanolindustry in the past. With Sen. RichardLugar, R-Ind., he introduced legislationaimed at giving ethanol producers access tolower-cost transportation via pipelines bygiving pipeline owners the same tax bene-fits they receive for moving petroleumproducts. Harkin and Lugar subsequentlyintroduced legislation to expand the avail-ability of FFVs to American consumers byrequiring half of all light-duty vehiclesmanufactured for sale in America to beFFVs by 2011, increasing to 90 percent by2013. These bills are unlikely to be consid-ered in the waning days of the currentCongress but could be incorporated intofuture legislation when the 111th Congressconvenes in January.
—Jerry W. Kram
Congress plots U.S. energy future
It's unlikely that Congress will pass additional energy
legislation this year, but several bills are being
developed for further discussion next year.
PH
OT
O: JE
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Alabama and 2.5 tons per acre inMaryland. In Alabama, the corn yieldswere 80 bushels per acre, and inMaryland, they were 102 bushels peracre. The national average corn yield is151 bushels per acre.
Grant aids distillers
grains, E. coli study
Kansas State University researchersreceived a $939,220 grant from the USDANational Research Initiative in FoodSafety to study the connection betweendistillers grains feed and the naturallyoccurring pathogen E. coli 0157:H7 incattle. The researchers will study whetherfeeding varied amounts of distillersgrains—dried or wet—has an effect onthe prevalence of E. coli in cattle feces.The three-year study will begin in thesummer of 2009, the season when thepathogen is typically most prevalent.
Hurricane season
brings rain to Corn Belt
This year’s hurricane season has broughtdistress and destruction to coastal states. Ithas also affected the Corn Belt. Somefarmers in the Midwest, who had been
INDUSTRYNEWS
Poet to produce cellulosic ethanolSioux Falls,
S.D.-based PoetLLC announcedAug. 13 that con-struction of itspilot-scale cellulosic ethanol plant in Scotland,S.D., will be completed by the end of the year.The plant is adjacent to Poet’s pilot-scale,corn-based ethanol production and researchfacility, and will produce 20,000 gallons ofcellulosic ethanol annually.
The new addition will allow Poet to fur-ther improve its technology before construc-tion begins in 2009 on Project LIBERTY, thecompany’s commercial-scale cellulosicethanol production facility to be located inEmmetsburg, Iowa. Project LIBERTY willtransform an existing 50 MMgy corn-basedethanol plant into an integrated facility thatwill produce 100 MMgy of corn-basedethanol and 25 MMgy of cellulosic ethanol.Production at Project LIBERTY is expectedto begin in 2011.
Poet’s cellulosic technology utilizes corncobs and corn fiber. According to ChiefExecutive Officer Jeff Broin, research hasdetermined that corn cobs are a waste prod-uct that provides little value when left in thefield and they do little to control soil erosion.Broin estimates that approximately 80 gallons
of ethanol can beproduced fromeach ton of corncobs and fiber.
Poet has beenworking to develop this technology for eightyears. In recent months, Poet scientists havebeen able to produce significant amounts ofethanol in fermentation, improving the yieldof ethanol from biomass. In addition, thecompany is working with farmers and equip-ment manufactures to develop equipmentthat will collect both the corn kernels andcobs in one pass without slowing harvest.
On Sept. 11, Poet announced that theIowa Power Fund committed $14 million toProject LIBERTY, which stands for Launchof an Integrated Biorefinery withEcosustainable and Renewable Technologiesin Y2009. It’s estimated that Project LIBER-TY will create at least 35 new jobs and bene-fit local farmers through the sale of corn cobsto the facility, which are currently valued at$30 to $60 per ton. Poet’s long-term plansinclude adding cellulosic ethanol productionto the company’s other existing ethanol facili-ties. The company may also license its cellu-losic technology to other companies.
—Erin Voegele
ETHANOL PRODUCER MAGAZINE NOVEMBER 2008 33
THE ROAD TO SUCCESS IS FILLED WITH TWISTS AND TURNS. FORTUNATELY, WE ALREADY KNOW THE WAY.
The biofuels industry’s accounting, tax and various consulting
needs can be nearly as complicated as the refi ning 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 signifi cantly impact your organization’s
cash fl ow. 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
The “e” mark and the “stylized e” are registered service marks of the Ethanol Promotion and Information Council. Used with permission.
KAC.10442_EPM_Wnd_7.5x3.375_4C 1 7/24/08 11:10:53 AM
INDUSTRYNEWS
Blender pumps increase;
boom prompts EPA cautionThe proliferation of blender
pumps, particularly in Kansas andIowa, is giving consumers more accessto higher-level blends. However, theincrease has also caused some confu-sion on blending practices, which wasquickly addressed by the U.S. EPA
In Kansas, the EthanolPromotion and Information Council,the state Corn Commission and ICMInc. announced a statewide initiativeAug. 18 to launch a blender pump pro-gram. The announcement followed anethanol promotion event in Colwich,Kan., at TJ’s Convenience Store, whichoffered discounts on E10, E20, E30 and E85blends.
The major initiative of the program is tohelp fuel station retailers obtain funding andequipment needed to sell higher blends ofethanol. Currently, there are four blender pumpsin Kansas, courtesy of a pilot program support-ed by the state Department of Agriculture. Thevarious groups hope to increase the state’sblender pump infrastructure by installing a min-imum of 100 blender pumps over the next year.“Our program will help strengthen our econo-my by encouraging blender pump infrastructuredevelopment and take us one step closer to less-
ening our dependence on foreign oil,” saidKansas Corn Commission Chairman BobTimmons.
In Iowa, WestMor Industries LLC installedthe state’s first blender pump at Galva HolsteinAg LLC in Galva, Iowa, at the end of August.Galva Holstein Ag was awarded a grant fromIowa’s Renewable Fuel Infrastructure Board inJune, which covered nearly half of the pumpand installation costs. Corey Poppe, aspokesman for WestMor Industries, said that bythe end of the summer, the company plans toinstall three more blender pumps in Holstein,Manning and Sibley, Iowa. In early September,
two unrelated blender pumps openedin Olds and Rock Rapids, Iowa.
The recent blender pump boom,although a positive development forthe ethanol industry and flexible-fuelvehicle (FFV) owners, has caught theattention of the EPA. In late July, theEPA issued a letter in response to ques-tions raised by Bob Greco, director ofdownstream and industry operations atthe American Petroleum Institute. Inthe letter, the EPA addressed self-directed blender pumps at retail outletsand the risks involved when using fuel
blends containing more than 10 percentethanol. “Gasoline containing more than 10percent ethanol may cause damage to certainemissions control devices and systems, andincrease emissions from gasoline-only vehiclesand engines,” the letter stated. “For this reason,the Clean Air Act prohibits retail gasoline sta-tions from selling gasoline blended with morethan 10 percent ethanol for use in gasoline-onlyvehicles.” The EPA said steps will be taken toinvestigate retail distribution of noncompliantfuel.
—Anna Austin
Blender pumps such as this one have spurred comment from the U.S. EPA.
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experiencing drought conditions, wel-comed rain caused by hurricanes such asGustav and Ike. For others, problemsoccurred when their fields stayed underwater longer than expected. Winds gustingfrom 60 to 70 mph also flattened somecrops, according to Ken Reeves, seniormeteorologist at AccuWeather Inc.
U.K. agency releases
biofuel supply report
The United Kingdom’s Renewable FuelsAgency has published its second monthlyreport on the supply of biofuels under theRenewable Transportation Fuel Obligation,which was implemented April 15. BetweenMay and July, biofuels accounted for 2.92percent of U.K. road fuel, totaling 2.53 per-cent for 2008. This meets the EuropeanUnion’s 2.5 percent target. Greenhouse gasreductions of 46 percent were alsoachieved, totaling 44 percent this far in2008, compared with a 40 percent target.However, only 29 percent of biofuels metenvironmental standards in the latestreport, bringing the 2008 total to 24 per-
INDUSTRYNEWS
China, U.S. collaborate
on sorghum for biofuels
ETHANOL PRODUCER MAGAZINE NOVEMBER 200834
The USDA and the Chinese Ministry ofScience and Technology signed an accord at theInternational Conference on Sorghum forBiofuels in Houston in mid-August. The accordformalizes collaboration on biofuels researchbetween scientists in the two countries.
Molecular biologist Zonglin “Lewis” Liu isone of the researchers with collaborationunderway. In his work at the National Centerfor Agricultural Utilization Research in Peoria,Ill., Liu has developed stress-tolerant yeaststrains that aren’t inhibited by the toxic com-pounds found in the biomass-to-ethanolprocess. A Chinese researcher has collaboratedon testing the yeast in the systems that he hasunder development, using corn cobs andsorghum as the substrate.
This summer, Liu traveled to China withGale Buchanan, chief scientist and USDAundersecretary for research, education and eco-nomics, where they saw work being done in thedevelopment of cold- and drought-tolerantvarieties of sweet sorghum for biofuel. “I wasvery impressed with the progress China hasmade in its sorghum biofuels research,”Buchanan said in his remarks at the Houstonconference. Several scientists from China werepresent at the event, where the accord wassigned Aug. 20.
Zhao Lixin of the Chinese Academy ofChemical Engineers said not only has theChinese government adopted a policy banningthe use of food crops for biofuels production,but it has also said no existing arable land will beused for energy crops. Turning to sweetsorghum as a biofuel feedstock, a pilot-scaleethanol plant was built in 2006, which uses aconventional ethanol process in the Heilongjianprovince of China, he said. Researchers fromTsinghua University are also experimenting withan advanced solid state fermentation technolo-gy in Inner Mongolia.
—Susanne Retka Schill
Gale Buchanan, USDA undersecretary for research,
education and economics, left, and Liu Yanhua,
vice minister of China’s ministry of science and
technology, sign a formal accord Aug. 20 to cooper-
ate on biofuels research.
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INDUSTRYNEWS
E85 builds momentum around the worldEfforts to increase awareness, availability
and use of E85 blends in consumer and com-mercial fleets are actively underway across theUnited States and even Antarctica.
State officials in Maryland are working toincrease the accessibility of E85 for consumers.In August, Gov. Martin O’Malley, joined by Lt.Gov. Anthony Brown and other administrationofficials, devised a proposal to build four new E85 fuel pumps through-out the state. E85 will also be used by the state transportation fleet, andE85 pumps will be installed at the Maryland State Police barracks andState Highway Administration facilities.
In Minnesota, the state’s American Lung Association releasedstatistics that illustrate a change in traditional fuel consumption.Statewide sales of E85 in July were 16 percent higher than salesfrom one year ago. During that same time period, gasoline salesdecreased 10 percent, dropping from approximately 233 milliongallons in July 2007 to approximately 211.9 million gallons in July2008. Monthly sales of E85 are averaging between 2 million and2.5 million gallons.
Additionally, Freedom Valu Centers in the Minneapolis metroarea and a Holiday Stationstore in Eagan, Minn., held E85 promo-tions during the Republican National Convention. For two hours,the Holiday Stationstore pared back the price of E85 by $1 per gal-lon. The promotion was intended to occur during the RNC and toprovide fuel for the fleet of flexible-fuel vehicles that GeneralMotors Corp. made available to RNC officials and guests.
One gas station owner was recently cited for not properly han-dling E85. On Aug. 13, the Iowa attorney general’s office filed a
state consumer-protection lawsuit againstJerry Fratzke, owner of Pronto Market gasstations in Sumner and Fairbank, Iowa, for“improperly and fraudulently” selling E85 asregular unleaded gasoline or E10. A tempo-rary restraining order was granted, preventingFratzke from selling E85. At press time, ahearing was scheduled for Sept. 22.
The American Petroleum Institute recently asked the U.S. EPAfor clarification on the legalities of selling ethanol blends higherthan E10 at the retail level. The EPA’s response stated that theClean Air Act does not prohibit retail gasoline stations from sellingfuel blended with up to 85 percent ethanol for use in flex-fuel vehi-cles.
To prevent errors such as the one in Iowa, the U.S. DOE’sNational Renewable Energy Laboratory in Golden, Colo., updatedits “Handbook for Handling, Storing and Dispensing of E85.”Published for the DOE’s Clean Cities program, the handbookupdates are intended to help E85 blenders, distributors and retail-ers respond to the rising demand for the fuel.
As for performance, E85 will be put to the ultimate test inNovember when the Moon Regan Trans-Antarctic Expeditionputs E85 in the tank of its Concept Ice Vehicle, a propeller-driven,three-skied vehicle. During the expedition, the viscosity of E85—along with the fuel’s flame point at varying temperatures, altitudesand temperatures—will be tested. The CIV will lead a 3,000-mileexpedition across Antarctica, which is scheduled to begin Nov. 14.
—Bryan Sims
ETHANOL PRODUCER MAGAZINE NOVEMBER 200836
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BIObytesEthanol News Briefs
cent, compared with a 30 percent target.
Russian miller
considers fractionation
OJSC PAVA, one of the largest wheatmillers in Russia, is planning to build a grainfractionation plant in the Rebrikha district ofAltay Territory, Russia. The facility will pro-duce wheat gluten, starches, syrups, com-pound livestock feed, alcohols of differentgrades, wheat germ oil and carbon dioxide.Yulia Chebotavera, OJSC PAVA public rela-tions manager, said fuel ethanol productionhad been a focus of the project, but becauseof changing market conditions, the compa-ny would concentrate on industrial and bev-erage alcohols instead.
New Jersey governor
considers RFS waiver petition
New Jersey Gov. Jon Corzine is consider-ing filing a waiver request with the U.S.EPA, asking that the federal renewablefuels standard be reduced or frozen at the2008 level. A spokeswoman for the gover-nor said “environmental concerns” are apotential reason for a request, but thegovernor hadn’t decided whether to filethe request at press time. EP
INDUSTRYNEWS
USGC identifies additional
DDGS markets in AsiaThe U.S. Grains Council was busy promoting
expanded markets for corn and distillers driedgrains with solubles (DDGS) this summer. Sixmembers from the 2008 Corn Mission visitedVietnam, Indonesia and Taiwan in August to growmarkets for U.S. corn and DDGS.
Of the three countries visited, the least-devel-oped market for DDGS is Vietnam, according tothe USGC. One particular DDGS market growthopportunity there is aquaculture, specifically catfishand tilapia farms. Mike Callahan, USGC directorof international operations in Asia, noted thatVietnam aquaculture can potentially absorb up to200,000 metric tons of the ethanol coproductannually.
However, concerns were raised over yellow-ing of catfish flesh when the fish were fed DDGS,according to the USGC, spurring the council toplan DDGS feeding trials on catfish for the nearfuture. Tilapia feeding trials using 15 percentDDGS were previously conducted by the council.
Mission members also identified a lack ofavailable credit due to no Export Credit GuaranteeProgram (GSM-102) in Vietnam and the sur-rounding regions. The GSM-102 program isadministered by the USDA’s Commodity CreditCorp. and helps to establish export credit guaran-tees to “encourage exports to buyers in countrieswhere credit is necessary to maintain or increase
U.S. sales, but where financing may not be availablewithout CCC guarantees,” according to theUSDA’s Foreign Agricultural Service.
In other DDGS news, an eight-membergroup from the Japanese Feed Industry DDGSPelleting Team recently attended the NorthernCrops Institute’s “DDGS: Nutrition, Use andFeed Manufacturing Short Course” in Fargo, N.D.The team, sponsored by the USGC, attended theshort course to learn more about incorporatingDDGS into pelleted feed. The team also visited adairy research program, and both small and largeethanol plants to gain better understanding of whyDDGS variability exists, according to Kim Koch,NCI Feed Center manager.
—Ron Kotrba
Catfish farms in Vietnam have been identified as a
potentially large DDGS market by members of the
U.S. Grains Council’s 2008 Corn Mission.
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INDUSTRYNEWS
U.S. industry renews interest in sugarcaneCompanies in the coastal and island
regions of the United States are movingforward with projects that aim to produceethanol from sugarcane.
Brawley, Calif.-based CaliforniaEthanol & Power LLC has enlisted FagenInc. in Granite Falls, Minn., to act as thelead contractor for construction of a 60MMgy sugarcane-to-ethanol plant inCalifornia’s Imperial Valley. According toDavid Rubenstein, chief operating officerfor CE&P, Fagen is working diligently todetermine construction costs for the proj-ect, which has been pre-estimated at $500million. He said the company is looking atproduct offerings from Dedini S/AIndústrias de Base in Brazil for processingsugarcane and also ICM Inc. in Colwich,Kan., for producing ethanol. Constructionof the plant could begin within a year andis expected to take two years, with the plantslated to go on line in 2011. The facility willbe located near Imperial, Calif.
More than 37,000 acres of sugarcanewill need to be planted to support the facil-ity’s expected capacity, Rubenstein said.Currently, CE&P is growing more than 650acres of more than 10 varieties of sugar-
cane to be used for seed. The companyplans to plant 3,500 acres next year.
Rubenstein said the plant will producemore than just ethanol. He said the leftoverplant material will be used to heat a boilerthat runs generators to produce the plant’selectricity. The generators are expected toproduce 50 megawatts, 15 of which will beused by the plant. The company aims toenter into a power sales agreement with SanDiego Gas & Electric for the remainingpower, he said.
A byproduct from the production ofethanol will be used as fertilizer for the sug-arcane fields, Rubenstein said, adding thatthe company plans to sell the fertilizer toother agricultural businesses, as well.
Meanwhile, Pacific West Energy LLCin Kaumakani, Hawaii, is in negotiations tolease land and other assets from sugar pro-ducer Gay & Robinson Inc. in order togrow sugarcane and produce ethanol fromsugar juice and molasses at a proposed 12MMgy plant on the island of Kauai. After119 years, Gay & Robinson is closing itsdoors, according to company PresidentAlan Kennett. It operated a 7,500-acre sug-arcane plantation and sugar mill on the
island, and produced approximately 50,000tons of sugar annually.
Coskata Inc. in Warrenville, Ill., hasbeen in discussions with Clewiston, Fla.-based United States Sugar Corp., thenation’s largest producer of cane sugar,about building a 50 MMgy to 100 MMgyethanol plant adjacent to United StatesSugar’s mill in Clewiston, according toCoskata spokesman Matthew Hargarten.He said Coskata may be interested in build-ing multiple sugarcane-to-ethanol plants inFlorida. However, discussions betweenCoskata and United States Sugar were puton hold in June when United States Sugarannounced it was negotiating a $1.75 billiondeal with the state of Florida. Under thatagreement, United States Sugar would sellits nearly 300 square miles of land south ofLake Okeechobee to the state forEverglades restoration. United States Sugaris continuing to negotiate the deal with thestate, which might include allowing somesugar assets to be used for ethanol produc-tion.
—Ryan C. Christiansen
INDUSTRY
EXPANSION COMPLETEPLANT EXPANSIONPROJECT COMPLETENEW PROJECT
Ethanol Plant Construction
lants under construction in this month’s issue of EPM are
exhibiting a tremendous amount of resilience despite hard-
ships brought on by unpredictable weather conditions during
the hurricane season, and rising commodity prices. In addition,
crude oil prices experienced their largest one-day point gain since trading
began in 1984, rising more than $16 per barrel to a high of $130 per barrel
in mid-September. By the end of the month, however, that price dove just
below $100, perhaps reflecting the turbulence of today's economy.
Two of the biggest ethanol players in the industry—VeraSun Energy
Corp. and Aventine Renewable Energy Inc.—have taken the brunt of rising
commodity prices recently, which could hamper progress on their respec-
tive ethanol projects. Aventine, which is building facilities in Aurora, Neb.,
and Mt. Vernon, Ind., stated in a Sept. 17 filing through the U.S. Securities
and Exchange Commission that it may not have sufficient funds to finish its
projects, and it’s reevaluating whether it will delay construction and/or start-
up at both sites. Similarly, VeraSun confirmed in its Sept. 16 filing through
the SEC that it has delayed construction of its plant in Welcome, Minn., and
is waiting “until market conditions improve” because of profit losses it expe-
rienced in the corn futures markets. Construction continues at the compa-
ny’s Janesville, Minn., project with an expected start-up by the end of the
year.
Despite commodity challenges, six ethanol plants recently completed
construction: IGPC Ethanol Inc. in Aylmer, Ontario; Indiana Bio-Energy LLC
in Bluffton, Ind.; Pacific Ethanol Stockton LLC in Stockton, Calif.; Platinum
Ethanol LLC in Arthur, Iowa; Poet Biorefining-Fostoria in Fostoria, Ohio; and
VeraSun Dyersville LLC in Dyersville, Iowa. These facilities represent a
combined production capacity of 479 MMgy.
As for the projects continuing construction, workers are keeping pace
by meeting respective schedules and deadlines, especially in the upper
Midwest where preparations for impending winter weather are underway.
For example, crews at Highwater Ethanol LLC in Lamberton, Minn., are
making sure they enclose the distillers grains building, energy center and
administration building before harsh weather hits. The site will include a
place for workers to warm up and store excess building materials. Project
Manager Robin Spaude said much of the project’s dirt work should be com-
pleted by October before the ground freezes. “The administration building
shell should be up in October,” he added. “The water treatment plant build-
ing shell and roof should be up in November so that pipefitters can store
their materials in it. Outside work will be a tough time for us this winter, that’s
for sure.”
—Bryan Sims
Weather, Economics Affect Projects
P
ETHANOL PRODUCER MAGAZINE NOVEMBER 200840
To provide updates to this list, contact Bryan Sims at (701) 738-4950 or [email protected].
Archer Daniels Midland Co.
Location Cedar Rapids, Iowa Ethanol marketer Archer Daniels Midland
General contractor undeclared Distillers grains marketer undeclared
Process technology undeclared Carbon dioxide marketer undeclared
Capacity 275 MMgy Broke ground June 2007
Feedstock corn Target start-up date first quarter 2010
Synopsis of progress
N/A
Archer Daniels Midland Co.
Location Columbus, Nebraska Ethanol marketer Archer Daniels Midland
General contractor undeclared Distillers grains marketer undeclared
Process technology undeclared Carbon dioxide marketer undeclared
Capacity 275 MMgy Broke ground July 2007
Feedstock corn Target start-up date third quarter 2009
Synopsis of progress
N/A
Aventine Renewable Energy-Aurora West LLC
Location Aurora, Nebraska Ethanol marketer Aventine Renewable Energy
General contractor Kiewit Energy Co. Distillers grains marketer Aventine Renewable Energy
Process technology Delta-T Corp. Carbon dioxide marketer undeclared
Capacity 113 MMgy Broke ground September 2007
Feedstock corn Target start-up date first quarter 2009
Synopsis of progress
According to a Sept. 17 filing through the U.S. Securities and Exchange Commission, Aventine is “poten-
tially delaying construction or start-up” of its Aurora facility due to limited liquidity of funds to build upon its
Phase 1 expansion. No further information was available at press time.
Aventine Renewable Energy-Mt. Vernon LLC
Location Mt. Vernon, Indiana Ethanol marketer Aventine Renewable Energy
General contractor Kiewit Energy Co. Distillers grains marketer Aventine/Consolidated Grain and Barge
Process technology Delta-T Corp. Carbon dioxide marketer undeclared
Capacity 113 MMgy Broke ground September 2007
Feedstock corn Target start-up date first quarter 2009
Synopsis of progress
According to a Sept. 17 filing through the U.S. Securities and Exchange Commission, Aventine is “potential-
ly delaying construction or start-up” of its Mt. Vernon facility due to limited liquidity of funds to build upon its
Phase 1 expansion. No further information was available at press time.
Construction Represents 3.31 Billion Gallons Annually
ETHANOL PRODUCER MAGAZINE NOVEMBER 2008 41
Bionol Clearfield LLC
Location Clearfield, Pennsylvania Ethanol marketer Bionol Clearfield
Design/builder Fagen Inc. Distillers grains marketer Land O’Lakes
Process technology ICM Inc. Carbon dioxide marketer N/A
Capacity 110 MMgy Broke ground February 2008
Feedstock corn Target start-up date December 2009
Synopsis of progress
Foundations are poured. Water intake and outfall systems are being installed. Grains area is being built.
Cardinal Ethanol LLC
Location Union City, Indiana Ethanol marketer Murex
Design/builder Fagen Inc. Distillers grains marketer CHS Inc.
Process technology ICM Inc. Carbon dioxide marketer N/A
Capacity 100 MMgy Broke ground February 2007
Feedstock corn Target start-up date fall 2008
Synopsis of progress
Permanent power has been turned on. Water main is complete. Cleanup work is being done in the process
area. Finishing work is underway in the energy center. Construction of rail loop is complete.
Cardinal Ethanol LLC
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Bridgeport Ethanol LLC
Location Bridgeport, Nebraska Ethanol marketer Poet Ethanol Products
Design/builder ICM Inc. Distillers grains marketer Colorado Agri Products
Process technology ICM Inc. Carbon dioxide marketer undeclared
Capacity 50 MMgy Broke ground September 2007
Feedstock corn Target start-up date October 2008
Synopsis of progress
N/A
Cilion Inc.
Location Keyes, California Ethanol marketer Eco-Energy
General contractor Harris Construction Distillers grains marketer Western Milling
Process technology Praj Industries Ltd. Carbon dioxide marketer N/A
Capacity 55 MMgy Broke ground July 2006
Feedstock corn Target start-up date October 2008
Synopsis of progress
N/A
First United Ethanol LLC
Location Camilla, Georgia Ethanol marketer Eco-Energy
Design/builder Fagen Inc. Distillers grains marketer Palmetto Grain Brokerage
Process technology ICM Inc. Carbon dioxide marketer Airgas Inc.
Capacity 100 MMgy Broke ground January 2007
Feedstock corn Target start-up date October 2008
Synopsis of progress
At press time, construction was approximately 95 percent complete with finishing touches being applied and
start-up scheduled for Oct. 9. Inspections have been conducted, and all process technicians have been hired.
Clean Burn Fuels LLC
Location Raeford, North Carolina Ethanol marketer undeclared
General contractor Biofuels Design/Clean Burn Fuels Distillers grains marketer undeclared
Process technology Katzen International Carbon dioxide marketer undeclared
Capacity 60 MMgy Broke ground January 2008
Feedstock corn Target start-up date September 2009
Synopsis of progress
N/A
Ethanol Grain Processors LLC
Location Obion, Tennessee Ethanol marketer Aventine Renewable Energy
Design/builder Fagen Inc. Distillers grains marketer undeclared
Process technology ICM Inc. Carbon dioxide marketer N/A
Capacity 100 MMgy Broke ground December 2006
Feedstock corn Target start-up date October 2008
Synopsis of progress
At press time, construction was in the final stages, and testing procedures were underway in preparation for start-
up.
E Caruso LLC
Location Goodland, Kansas Ethanol marketer undeclared
General contractor JMC Engineering/Agri-Systems Distillers grains marketer undeclared
Process technology JMC Engineering/Agri-Systems Carbon dioxide marketer N/A
Capacity 20 MMgy Broke ground June 2006
Feedstock corn Target start-up date first quarter 2009
Synopsis of progress
N/A
ETHANOL PRODUCER MAGAZINE NOVEMBER 200842
GreenField Ethanol
Location Johnstown, Ontario Ethanol marketer GreenField Ethanol
General contractor SNC-Lavalin Group Distillers grains marketer Commercial Alcohols
Process technology ICM Inc. Carbon dioxide marketer undeclared
Capacity 200 MMly (53 MMgy) Broke ground October 2006
Feedstock corn Target start-up date December 2008
Synopsis of progress
Natural gas piping is complete. Siding and roofing work continues. Construction of distillers dried grains
building, and installation of truck scale and probe, continue. Fire protection equipment is being installed.
Holt County Ethanol LLC
Location O'Neill, Nebraska Ethanol marketer undeclared
General contractor Adams Construction Distillers grains marketer undeclared
Process technology Vogelbusch Carbon dioxide marketer N/A
Capacity 100 MMgy Broke ground July 2007
Feedstock corn Target completion date late 2008
Synopsis of progress
N/A
Hawkeye Renewables
Location Menlo, Iowa Ethanol marketer Hawkeye Gold LLC
Designer/builder Fagen Inc. Distillers grains marketer undeclared
Process technology ICM Inc. Carbon dioxide marketer N/A
Capacity 110 MMgy Broke ground July 2007
Feedstock corn Target start-up date fourth quarter 2008
Synopsis of progress
N/A
Hawkeye Renewables
Location Shell Rock, Iowa Ethanol marketer Hawkeye Gold LLC
Designer/builder Fagen Inc. Distillers grains marketer undeclared
Process technology ICM Inc. Carbon dioxide marketer N/A
Capacity 110 MMgy Broke ground July 2007
Feedstock corn Target start-up date first quarter 2009
Synopsis of progress
N/A
Highwater Ethanol LLC
Location Lamberton, Minnesota Ethanol marketer RPMG
Design/builder Fagen Inc. Distillers grains marketer CHS Inc.
Process technology ICM Inc. Carbon dioxide marketer N/A
Capacity 55 MMgy Broke ground November 2007
Feedstock corn Target start-up date May 2009
Synopsis of progress
Rail construction continues. Electrical substation is nearly complete. All perimeter walls are complete.
Construction of administration building is underway. Construction on water treatment building began in
September and was slated to run into October before winter hits.
Indiana Bio-Energy LLC
Location Bluffton, Indiana Ethanol marketer Aventine Renewable Energy
Design/builder Fagen Inc. Distillers grains marketer Indiana Bio-Energy
Process technology ICM Inc. Carbon dioxide marketer N/A
Capacity 101 MMgy Broke ground November 2006
Feedstock corn Start-up date September 2008
Synopsis of progress
Corn grinding began Sept. 11. Congratulations Indiana Bio-Energy LLC!
Project Complete
Homeland Energy Solutions LLC
Location Lawler, Iowa Ethanol marketer Green Plains Renewable Energy
Design/builder ICM Inc. Distillers grains marketer CHS Inc.
Process technology ICM Inc. Carbon dioxide marketer N/A
Capacity 100 MMgy Broke ground May 2007
Feedstock corn Target start-up date March 2009
Synopsis of progress
Foundation work is complete, and all buildings are erected.
IGPC Ethanol Inc.
Location Aylmer, Ontario Ethanol marketer Eco-Energy
General contractor North America Construction Ltd. Distillers grains marketer Furst-McNess
Process technology ICM Inc. Carbon dioxide marketer undeclared
Capacity 150 MMly (40 MMgy) Broke ground August 2007
Feedstock corn Start-up date September 2008
Synopsis of progress
All major construction and the first phase of testing is complete. Boilers are operational, and at press time,
corn grinding was slated for the end of September. Congratulations IGPC Ethanol Inc.!
Project Complete
ETHANOL PRODUCER MAGAZINE NOVEMBER 2008 43
Kawartha Ethanol Inc.
Location Havelock, Ontario Ethanol marketer undeclared
General contractor Profab International Distillers grains marketer Thompson's Ltd.
Process technology Delta-T Corp. Carbon dioxide marketer undeclared
Capacity 80 MMly (21 MMgy) Broke ground October 2007
Feedstock corn Target start-up date February 2009
Synopsis of progress
Process building, fermentation tanks and distillers grains area are complete.
Louisiana Green Fuels LLC
Location Lacassine, Louisiana Ethanol marketer undeclared
General contractor Praj Industries Ltd. Distillers grains marketer N/A
Process technology Louisiana Green Fuels Carbon dioxide marketer undeclared
Capacity 25 MMgy Broke ground April 2008
Feedstock sugarcane/sweet sorghum Target start-up date mid-2009
Synopsis of progress
Dirt work and preliminary engineering is complete. Foundations for buildings are being poured. One of three
equipment shipments is on-site.
NEDAK Ethanol LLC
Location Atkinson, Nebraska Ethanol marketer Eco-Energy
General contractor Delta-T Corp. Distillers grains marketer Frahm and Deitloff
Process technology Delta-T Corp. Carbon dioxide marketer N/A
Capacity 44 MMgy Broke ground June 2006
Feedstock corn Target start-up date October 2008
Synopsis of progress
At press time, the company intended to grind corn Oct. 1. Finishing touches on fire safety systems were being
applied. Final walk-downs were being conducted.
Northwest Renewable LLC
Location Longview, Washington Ethanol marketer U.S. Ethanol LLC
General contractor Makad Construction Corp. Distillers grains marketer Lansing Trade Group
Process technology Lurgi Inc. Carbon dioxide marketer undeclared
Capacity 55 MMgy Broke ground November 2006
Feedstock corn Target start-up date second quarter 2009
Synopsis of progress
N/A
Pacific Ethanol Stockton LLC
Location Stockton, California Ethanol marketer Kinergy Marketing
General contractor W.M. Lyles Co. Distillers grains marketer Pacific Ag Products LLC
Process technology Delta-T Corp. Carbon dioxide marketer undeclared
Capacity 50 MMgy Broke ground April 2007
Feedstock corn Start-up date September 2008
Synopsis of progress
The company announced start-up of this facility Sept. 29. Congratulations Pacific Ethanol Stockton LLC!
Project Complete
Platinum Ethanol LLC
Location Arthur, Iowa Ethanol marketer Hawkeye Gold LLC
Design/builder Fagen Inc. Distillers grains marketer Hawkeye Gold LLC
Process technology ICM Inc. Carbon dioxide marketer N/A
Capacity 110 MMgy Broke ground November 2006
Feedstock corn Start-up date September 2008
Synopsis of progress
The company began corn grinding in late September. Congratulations Platinum Ethanol LLC!
Project Complete
One Earth Energy LLC
Location Gibson City, Illinois Ethanol marketer Eco-Energy
Design/builder Fagen Inc. Distillers grains marketer Ag Motion Inc.
Process technology ICM Inc. Carbon dioxide marketer N/A
Capacity 100 MMgy Broke ground October 2007
Feedstock corn Target start-up date March 2009
Synopsis of progress
Tank farm, rail and water pipelines are complete. Grain receiving building is erected. Work on distillers grains
wet pad continues. Cooling tower foundations are nearly complete.
Panda Hereford Ethanol LP
Location Hereford, Texas Ethanol marketer Aventine Renewable Energy
General contractor Panda Ethanol Inc. Distillers grains marketer Panda Ethanol Inc.
Process technology Thermo-Kinetics/Lurgi PSI Carbon dioxide marketer undeclared
Capacity 105 MMgy Broke ground September 2006
Feedstock corn Target start-up date first quarter 2009
Synopsis of progress
This project changed general contractors when construction was approximately 98 percent complete.
Remaining construction tasks are being assessed.
ETHANOL PRODUCER MAGAZINE NOVEMBER 200844
Poet Biorefining-Fostoria
Location Fostoria, Ohio Ethanol marketer Poet Ethanol Products
Design/builder Poet Design & Construction Distillers grains marketer Poet Nutrition
Process technology Poet Design & Construction Carbon dioxide marketer N/A
Capacity 68 MMgy Broke ground August 2007
Feedstock corn Start-up date September 2008
Synopsis of progress
At press time, a grand opening ceremony was scheduled for Sept. 30. Congratulations Poet Biorefining-
Fostoria!
Project Complete
Poet Biorefining-Marion
Location Marion, Ohio Ethanol marketer Poet Ethanol Products
Design/builder Poet Design & Construction Distillers grains marketer Poet Nutrition
Process technology Poet Design & Construction Carbon dioxide marketer N/A
Capacity 68 MMgy Broke ground May 2007
Feedstock corn Target start-up date October 2008
Synopsis of progress
No further information was available at press time.
Route 66 Ethanol LLC
Location Tucumcari, New Mexico Ethanol marketer undeclared
General contractor APS/United Stainless Process Technology Distillers grains marketer undeclared
Process technology United Stainless Process Technology Carbon dioxide marketer N/A
Capacity 10 MMgy Broke ground October 2007
Feedstock corn/milo Target start-up date November 2008
Synopsis of progress
All foundations are poured, and the grain system is installed and operating. Because of delays in change
orders on equipment and supplies, the original target start-up date in September has been pushed back.
Southwest Iowa Renewable Energy LLC
Location Council Bluffs, Iowa Ethanol marketer Lansing Ethanol Group
Design/builder ICM Inc. Distillers grains marketer Bunge
Process technology ICM Inc. Carbon dioxide marketer N/A
Capacity 110 MMgy Broke ground November 2006
Feedstock corn Target start-up date December 2008
Synopsis of progress
Administration building is complete and occupied. Testing of grain systems is underway. Energy center walls
are erected. Steam building is nearly complete. Start-up is tentatively slated for Dec. 18.
Tharaldson Ethanol LLC
Location Casselton, North Dakota Ethanol marketer Green Plains Renewable Energy
General contractor Wanzek/Valley Engineering Distillers grains marketer Verde Bioproducts Inc.
Process technology Vogelbusch Carbon dioxide marketer N/A
Capacity 120 MMgy Broke ground June 2007
Feedstock corn Target start-up date December 2008
Synopsis of progress
Most electrical work is complete. Piping is nearly complete.
Plymouth Energy LLC
Location Merill, Iowa Ethanol marketer C&N Cos.
General contractor Delta-T Corp. Distillers grains marketer Plymouth Energy LLC
Process technology Delta-T Corp. Carbon dioxide marketer undeclared
Capacity 50 MMgy Broke ground May 2007
Feedstock corn Target start-up date October 2008
Synopsis of progress
All major buildings are complete. Work on boilers and water treatment is nearly complete. Work on piping,
instrumentation and roads is in progress. Grain receiving building is erected, and rail is being laid. Most of the
staff is being trained through Delta-T. At press time, start-up was slated for Oct. 28.
Plymouth Energy LLC
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ETHANOL PRODUCER MAGAZINE NOVEMBER 2008 45
VeraSun Dyersville LLC
Location Dyersville, Iowa Ethanol marketer Provista
Design/builder Fagen Inc. Distillers grains marketer VeraSun Energy
Process technology ICM Inc. Carbon dioxide marketer undeclared
Capacity 110 MMgy Broke ground November 2006
Feedstock corn Start-up date September 2008
Synopsis of progress
Start-up of this facility was announced Sept. 5. Congratulations VeraSun Dyersville LLC!
Project Complete
VeraSun Janesville LLC
Location Janesville, Iowa Ethanol marketer Provista
Design/builder Fagen Inc. Distillers grains marketer VeraSun Energy
Process technology ICM Inc. Carbon dioxide marketer undeclared
Capacity 110 MMgy Broke ground January 2007
Feedstock corn Target start-up date fourth quarter 2008
Synopsis of progress
Construction continues. No further information was available at press time.
VeraSun Welcome LLC
Location Welcome, Minnesota Ethanol marketer VeraSun Energy
Design/builder Fagen Inc. Distillers grains marketer VeraSun Energy
Process technology ICM Inc. Carbon dioxide marketer N/A
Capacity 110 MMgy Broke ground November 2006
Feedstock corn Target start-up date fourth quarter 2008
Synopsis of progress
According to a Sept. 16 filing with the U.S. Securities and Exchange Commission, VeraSun has again
delayed construction of this facility "until market conditions improve."
Southwest Iowa Renewable Energy LLC
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Tharaldson Ethanol LLC
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Remember in "Dragnet"
when Joe Friday always said he just
wanted the facts? American con-
sumers also want the facts, and they
are often bombarded with them.
Unfortunately, the facts aren’t
always what they seem.
The ethanol industry experi-
enced this in a fiery round of “envi-
ronmental blame game” after two
studies were posted in mid-February
in Science Express. The papers,
authored by Timothy Searchinger
and Joseph Fargione, reached con-
clusions regarding the greenhouse
gas emissions associated with
potential global land-use changes
caused by increasing biofuels
demand, specifically for corn-based
ethanol. Their conclusions were
considered debatable and even
ridiculous by some in the scientific
community.
With the studies promoted by
forces opposing corn-based
ethanol, prominent media outlets
from Time to USA Today were quick
to pick up on these studies.
Unfortunately, these media failed to
consult experts in the field of biofu-
els life-cycle analysis, such as Bruce
Dale of Michigan State University
and Michael Wang of the U.S.
DOE’s Argonne National Laboratory.
Both agree that the studies by
Searchinger and Fargione raise
important issues. However, Dale
and Wang questioned many of their
assumptions, and termed them
“highly speculative and uncertain
scenarios for what might happen as
a result of increased demand for
corn grain.”
Following their release, the
Ethanol Promotion and Information
Council, National Corn Growers
Association, Renewable Fuels
Association and American Coalition
for Ethanol—supported by the
expertise of Dale and
Wang—kicked into high
gear individual efforts to
expose the nature of the
conclusions and the
motives of the
researchers authoring the
studies.
Not long after this
flurry of “facts” came the
food-versus-fuel assault on ethanol,
and the corn and ethanol industries
again went to work gathering factual
information from resources such as
Texas A&M University, Iowa State
University, the American Farm
Bureau, the USDA and others to
present the true causes of rising
food prices based on the research of
experts in domestic and global food
production.
Through the years, other
ethanol detractors have distorted the
facts to call into question everything
from the use of water for corn and
ethanol production to alleged detri-
mental environmental impacts of
row-crop production, fertilizer and
chemical use, and a myriad of other
issues.
It’s ironic that some of these
studies are funded by ethanol
detractors who remain committed to
the status quo. Dominant forces
within the energy industry are reluc-
tant to relinquish any part of this
market. A lack of public disclosure
on some of the funding of this
research is not in the consumer’s
best interest.
While the collective result of
these industry organizations’ individ-
ual efforts were successful at provid-
ing an objective counterbalance in
defense against detractors’ negative
“facts,” there is power in numbers.
Therefore, it’s exciting to announce
that organizations and researchers
within the ethanol industry are band-
ing together and moving to an offen-
sive strategy that is both proactive
and collective.
It’s of utmost impor-
tance that industry mem-
bers collectively encour-
age and invest in basic
coordinated energy
research in order for
America to achieve ener-
gy independence. New,
highly efficient and sus-
tainable technologies for
biofuels production must be the
result. In addition, research to evalu-
ate the economic, environmental
and social impact of these new tech-
nologies by credible experts must be
conducted and promoted as the new
technologies are developed and
introduced.
EPIC, the NCGA, the National
25x’25 Alliance and Dale, among
others, are banding together to
adopt just such an “offensive”
approach to help maintain a long
and secure future for the biofuels
industry.
A first step, spearheaded by
industry leaders joining with coali-
tions representing the leading public
and private research institutions,
and industry and academic organi-
zations, was calling on policymakers
to fully commit to the vital role of
basic research in solving America’s
energy crisis.
As a result, these industry
stakeholders will be able to launch
new and proactive communication
efforts presenting consistent and
coordinated messages based on
sound scientific facts that present
the industry in a responsible, sus-
tainable and positive light.
Stay tuned. We’ll keep you
updated on the efforts and how you
can join them on a local basis.
Toni Nuernberg is the executive
director of the Ethanol Promotion and
Information Council. Reach her at
[email protected] or (402)
932-0567.
Stakeholders Launch Proactive MessageBy Toni Nuernberg
Nuernberg
ETHANOL PRODUCER MAGAZINE NOVEMBER 200850
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oards of directors at operat-
ing ethanol plants under-
stand the importance of risk
management. In today’s
market environment, decid-
ing how to effectively manage costs of
goods sold and a facility’s margins often
makes the difference between being in
the black or the red. Many of our ethanol
clients have established risk manage-
ment committees at the board level con-
sisting of the board members best suited
to interact with management on procure-
ment, marketing and hedging decisions.
How risk management committees
function varies significantly, but they
share a common goal: overseeing the
procurement and pricing of feedstocks
and other inputs, as well as the market-
ing and pricing of ethanol, distillers grains
and other coproducts. How can a partic-
ular board determine if the risk manage-
ment framework in place at their compa-
ny is adequate? Does it depend entirely
on whether the company is making
money? What about fiduciary duties and
director liability? Has the committee tied
management’s hands or have they dele-
gated too much responsibility to man-
agement? The answers to these ques-
tions aren’t necessarily clear. Each com-
pany has varying degrees of risk man-
agement expertise at the board level and
the management level, varying personal-
ities and degrees of risk aversion, and
varying levels of liquidity available to
implement certain strategies. Accord-
ingly, it’s no surprise that each company
has its own approach to risk manage-
ment.
Ethanol companies filing periodic
reports with the U.S. Securities and
Exchange Commission can appreciate
the necessity of having certain proce-
dures regarding the use of derivative
instruments clearly articulated and docu-
mented in their quarterly and annual
reports. Further, board members can
appreciate the importance of making
business decisions in good faith after
informing themselves of material facts
necessary to exercise good judgment to
meet their fiduciary duties to the compa-
ny. Finally, board members and man-
agers can both appreciate the impor-
tance of being able to answer a share-
holder’s question about a decision with a
well-reasoned and process-oriented
response. For these reasons, regardless
of whether your ethanol company was in
the black or the red last quarter, it is
important for your company to have a
well-defined process for delegating risk
management responsibilities and
assessing per-
formance.
Regardless
of who is respon-
sible for making
trading decisions,
whether it’s the
risk management
committee, the
general manager,
an in-house com-
modities manager, a third-party risk man-
agement consultant or a combination
thereof, each should be acting in accor-
dance with a written risk management
policy adopted by the risk management
committee. From a best practices per-
spective, the creation and utilization of a
risk management committee consisting
of knowledgeable and informed board
members—implementing a risk manage-
ment policy that has been adopted by the
company’s board—is the best way to
ensure that the board of directors is
doing its part to oversee some of the
company’s most important decisions.
Judd W. Vande Voort is a securities attor-
ney with BrownWinick, a law firm based
in Des Moines, Iowa. Reach him at
[email protected] or (515)
242-2440.
Risk Management Committees
Hedge With Best PracticesBy Judd W. Vande Voort
This article is only a general summary for informational purposes and does not
constitute legal advice. Consult a qualified and experienced legal advisor for your
specific situation or particular questions.
BVande Voort
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ETHANOL PRODUCER MAGAZINE NOVEMBER 2008
The commercial production of cellulosic ethanol will require
thousands of tons of biomass. EPM details three programs
designed to entice farmers to switch from corn and soybeans
to energy crops.
By Susanne Retka Schill
54
hat will it take to convince farmers to plant ener-gy crops when corn and soybean prices are at ornear all-time highs? Nationally, all eyes will be onWashington this winter as USDA begins the
process of implementing the Biomass Crop Assistance Programinitiated in the 2008 Farm Bill. In Minnesota, policy-makers arewaiting to piggyback their Reinvest in Minnesota-Clean Energyprogram onto the new USDA program. Minnesotans have givenserious thought to what it will take to get farmers to make theswitch from planting corn and soybeans to grass on productiveland. They’ve found that it’s not going to be cheap. In southeast-
ern Iowa, the Natural Resource Conservation Service has hadsome success signing farmers up for a unique application of theUSDA Environmental Quality Improvement Program.
Waiting for BCAP to Unfold
BCAP was designed to help farmers located near biomassfacilities switch part of their acreage to dedicated energy crops.John Moore, a senior attorney with the nonprofit EnvironmentalLaw and Policy Center, expects it will be a couple of years beforeUSDA will be signing up acres in the program. Farm ServiceAgency regulations call for an environmental impact study on any
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ETHANOL PRODUCER MAGAZINE NOVEMBER 2008 55
new programs, which could take from nineto 18 months, in addition to the rule-makingprocess, which includes public hearings. Theenvironmental law and policy nonprofit hadhoped USDA would fast-track the imple-mentation of BCAP, possibly even signingup acres in 2009 under a Notice of FundingAvailability, which allows a program to beimplemented while the rules are being writ-
ten. ”As long as it takes to get energy crops going—a couple ofyears at least—and given that the next Farm Bill comes up in2012, we need to get those dedicated energy crops in the groundsoon,” Moore says.
The BCAP language in the 2008 Farm Bill provides a frame-work of the program, but also gives USDA a fair amount of flex-ibility. The program calls for an application that can be initiatedby a group of individuals or a biomass conversion facility. A bio-mass conversion facility is rather broadly defined to include anyfacility that will use the biomass to make biobased products orenergy—heat, power or advanced biofuels. The application mustinclude a commitment from at least one biomass conversionfacility in the area defined in the application to use the biomassin the facility. Moore expects that in practice, the biomass conver-
sion facility will apply and then get farmers to sign up, althoughin a few well-organized states, farmers or economic developmentgroups may take the lead. Biomass crop producers, however, willsign contracts directly with the USDA. Moore expects the firstapplications to come from projects that are well underway, espe-cially those targeting corn stover and other crop residues as feed-stocks, although the incentives for producers utilizing cropresidues will probably be lower than for those planting dedicatedenergy crops.
Details of BCAP implementation will unfold as USDA goesthrough the rule-making process. In the meantime, there are anumber of provisions contained in the legislation including:Production Incentives
Ag producers in project areas will receive a payment for upto 75 percent of establishment costs to plant energy crops.Incentives also include an annual payment intended to compen-sate the producer for the opportunity cost associated with grow-ing an energy crop. Land that was formerly planted to row cropswill likely garner a larger annual incentive than land that was fal-low, or pasture, the ELPC says. The annual payments can contin-ue for up to five years for producers growing perennial grassesand up to 15 years for tree crops.
Ag producers are required to implement a conservation plan
Moore
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on the enrolled land and to provide information to USDAfor research purposes.
LogisticsAnyone collecting and selling biomass crops or agricul-
tural or forest waste for energy is entitled to receive the har-vest, transport, processing and storage payment. The pay-ment is structured to match the amount of money the bio-mass collector, which doesn’t have to be a farmer, receivesfrom the biomass user. USDA will match dollar for dollar,up to $45 per dry ton. Materials not eligible for this paymentinclude animal waste and byproducts, food and yard waste,and algae.
Criteria and EligibilityAll biomass production must occur on either agricultur-
al land or industrial private forest land. BCAP excludes allland in federal land protection programs and native sod.BCAP also excludes any crops otherwise eligible for USDAcommodity programs covered in Title I of the Farm Bill,along with noxious and invasive species.
USDA will determine whether projects meet the mini-mum threshold for selection, based on criteria in the statuteand others to be determined by USDA. The statutory crite-ria include:
�The amount of crops to be produced and the likelihood that those crops will actually be used to produce energy
�The amount of biomass likely to be available from sources other than the crops grown with support from BCAP
�The local economic impact of the project�The opportunity for local investors to participate in
ownership of the facility�The participation of beginning or socially
disadvantaged farmers�The environmental impacts of the proposal�The variety of agronomic practices and species—
including mixes of different crops—proposed within a BCAP area
�The range of crops across project areasOrganizations such as the ELPC will be paying close
attention to the public hearings and rule-making process asthey progress. “I expect the agency will establish scoring cri-teria for a lot of these issues,” he says. “Projects that aremore environmentally protective will get more points.”
FundingThe funding basis for BCAP is not typical of other
Farm Bill programs. The funding is mandatory for “such
ETHANOL PRODUCER MAGAZINE NOVEMBER 200856
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sums as are necessary,” Moore says. Congress did that soprojects that qualify will be funded, unlike many other pro-grams that are based on a national competition for limitedfunds. “The budgeteers estimated it would cost $75 millionover four years, but who really knows?” he says. Congresscan always establish funding caps in the future or the Officeof Management and Budget, which oversees USDA spend-ing, may attempt to limit spending in the program, he adds.
The ELPC Web site, www.farmenergy.com, is followingthe development of BCAP, as well as other programs. Itoffers details on writing applications for one popular pro-gram established in the 2002 Farm Bill—Section 9006, theRenewable Energy Systems and Energy EfficiencyImprovements Program. The 2008 Farm Bill expanded theprogram somewhat and it was renamed the Rural Energy forAmerica Program. REAP was implemented using a NOFAduring the two to three years it took to develop the rules,Moore says. He expects the BCAP process will take lesstime. “BCAP doesn’t have the complexity,” he says.
Enhancing BCAP
Minnesotans will be watching BCAP’s developmentclosely, hoping to piggyback a recently-passed state initiativeonto the program. The 2007 Minnesota Legislative Sessionestablished a Reinvest in Minnesota-Clean Energy program.
The RIM-Clean Energy program builds on the state’s long-established RIM easement program that paid for easementson targeted environmentally sensitive areas such as wetlands,highly erodible soils and riparian buffer strips. In the twodecades the program has been in place, 4,800 conservationeasements were enrolled covering 180,000 acres. WhenConservation Reserve Program enhancements were author-ized in the 1996 Farm Bill, the program piggybacked withCRP contracts to extend the benefits paid to farmers and thecontract duration.
Hearings have been held and the framework of theRIM-Clean Energy program is in place. A technical commit-tee involving representatives from farm and environmentalgroups, economic development agencies and industry,served as advisers in the process. However, the state legisla-ture held back on funding the program because the 2008Farm Bill had not yet passed when they adjourned their lastsession, says Greg Larson, state soil specialist with theMinnesota Board of Soil and Water Resources, whichadministers the RIM program. The state hopes to extend thereach and effectiveness of USDA’s BCAP.
RIM-Clean Energy is a working lands program wherebiomass production is equally as important as environmen-tal benefits. The easements are for 20 years, which matchesthe amortization time of the bonding authority the state will
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use to fund the program. The programinvolves a base payment to landownersof 80 percent of the estimated marketvalue as shown on the land’s tax state-ment, with an additional payment thatincreases as more species are planted.There is an additional incentive forenrolled lands that meet local environ-mental needs such as land protecting awellhead or an aquifer recharge area, orplanting on flood-prone riparian orhighly erodible lands. The maximumpayment is 105 percent of the estimat-ed market value. The easement pay-ment will be a single payment when thepaperwork is completed. In addition,the program will pay 100 percent of theestablishment cost for the biomasscrop, plus landowners are free to pock-et whatever they are paid for their bio-mass production. The land stays on thetax rolls and the landowner retains con-trol of the access to the land.
While that may seem quite gener-ous, Larson says they have learnedfrom the RIM wetlands programadministered in recent years that it hastaken payments of 140 percent of mar-ket value to get farmers to sign up.“This was for land that was much moremarginal,” he adds. There was a time inthe late 1980s when most of the RIMacres were enrolled at less than marketvalue, but with high commodity pricesfor corn, soybeans and wheat, Larsonanticipates the clean energy incentiveswill be needed to coax farmers to makethe switch. “To go out and entice alandowner who’s been growing cornand soybeans to forsake that knownincome, we’re going to have to meet[row crop income] dollar for dollar,” hesays.
Larson acknowledges that in someareas of the state, the payments mayamount to several thousand dollars peracre to enroll land, plus the addedamount for establishment. He expectsthe program will start out relativelysmall, perhaps paying out $5 million the
first year and increasing to $20 million,and will ultimately involve only a fewthousand acres. “The idea was never tobe the major payer in promoting bio-mass,” he says. “It is to find strategical-ly located sites where we can show byexample how to do this in an environ-mentally safe way. We’ll take some ofthe risk away from the energy enter-prises, get in, get it started and 20 yearslater back out.”
The RIM-Clean Energy reportdelivered to the state legislature early in2008, after a year of public input andtechnical committee discussions, identi-fied 22 projects in Minnesota thatmight utilize the program, includingtwo ethanol plants—Central MinnesotaEthanol Co-op in Little Falls, Minn.,for boiler fuel for its gasification sys-tem and an announced cellulosicethanol project with SunOptaBioProcess Inc. and Chippewa ValleyEthanol Co. LLLP in Benson, Minn.,for a biomass combined-heat-and-power system. Three cellulosic ethanolplants are also included on the list aspotential projects—Chisago CountyCellulosic, White Earth Cellulosic andBois Forte Band Cellulosic.
Iowa Gets a Jump-Start
Iowa is ahead of the curve when itcomes to encouraging farmers to growenergy crops. The Natural ResourceConservation Service in southeast Iowais using the Environmental QualityImprovement Program to give farmerscost-share and incentive payments toplant switchgrass. Switchgrass produc-tion for biomass has been on the draw-ing board in southeast Iowa for morethan a decade. In 1996, Chariton ValleyResource Conservation andDevelopment Inc. received a U.S. DOEgrant to investigate the production anduse of the native prairie grass for ener-gy production. A number of projectsare in various stages of development,ranging from cofiring switchgrass with
58
ETHANOL PRODUCER MAGAZINE NOVEMBER 2008
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coal in Alliant Energy Corp.’s Ottumwa(Iowa) Generating Station that’s readyto go, to a switchgrass pelletizing proj-ect that’s nearing fruition, to a cellu-losic ethanol plant that’s still in thetalking stage.
At the peak of the Iowa switch-grass project, more than 6,000 acres of
land were planted tothe native perennialgrass, which was noteven close to the esti-mated 100,000 acresneeded to supply thepower plant and otherprojects being consid-ered. “We realized we
needed to get serious about the supplyside,” says Bruce Trautman, area con-servationist for southeast Iowa withthe Natural Resource ConservationService. It took a year to put the com-ponents together before farmers wereoffered EQIP contracts in the 12southeast Iowa counties that chose toparticipate. Through EQIP, farmersreceive a 50 percent cost-share pay-ment to help with establishment costs,which Trautman says amounted to $60
per acre. In addition, the contractincludes an incentive payment of $75per acre per year to cover additionalexpenses such as baling, storage andtransportation. “We want it to be aworking lands program,” Trautmansays.
The program isn’t as restrictive asother programs such as USDA’sConservation Reserve Program andproducers can harvest the biomass.“We’re getting conservation benefits,”he adds. “It makes very good wildlifehabitat because the nature of utilizingswitchgrass for biomass means we’renot harvesting until the middle of sum-mer or wintertime.” Trautman admitsthe 57 contracts worth a total of 2,270acres of switchgrass may not seem likea lot. “It certainly isn’t enough for whatwe need,” he says. “But given the cli-mate of high commodity prices andthat fact that it’s something new to pro-ducers, we think it was a goodresponse.” EP
Susanne Retka Schill is an EthanolProducer Magazine staff writer. Reach her
at [email protected] or
(701) 738-4922.
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. It’s all here.
www.BiomassMagazine.com
For additional informationplease contact us at (701) 746-8385 or at
Contour buffer strips planted to grass, like these in Iowa, could be used for biomass energy crops.
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J u n e 1 5 – 1 8 , 2 0 0 9
D e n v e r C o n v e n t i o n C e n t e rD e n v e r , C o l o r a d o, USA
For more information or to submit an abstract v is i t :
www.fuelethanolworkshop.com
C a l l f o r A b s t r a c t s N o w O p e n !S u b m i s s i o n D e a d l i n e : J a n u a r y 9 , 2 0 0 9
TECHNOLOGY
The National Renewable Energy Laboratory must help the United
States to develop the technology necessary for making cheap fuels
from cellulosic biomass by 2012. It’s a goal that’s not negotiable.
By Ryan C. Christiansen
ETHANOL PRODUCER MAGAZINE NOVEMBER 200862
PHOTO: PAT CORKERY, NREL
ON TARGET FOR 2012
TECHNOLOGY
ETHANOL PRODUCER MAGAZINE NOVEMBER 2008 63
y 2012, cellulosic ethanol production in the UnitedStates must be cost-competitive with ethanol pro-duced from corn—such is the goal of the U.S. DOEOffice of Energy Efficiency and Renewable Energy'sBiomass Program. A key player in the program’s mis-
sion is the National Renewable Energy Laboratory in Golden,Colo., and its Alternative Fuels User Facility, which houses the lab’sBioethanol Pilot Plant, an 8,000-square-foot facility designed to testtechnologies used to produce ethanol and other fuels from cellu-losic biomass.
In 2005, NREL co-endorsed a federal report, commonlyknown as the “Billion Ton” study, which in 2006 prompted theDOE’s “30x’30” initiative to annually produce enough ethanolfrom biomass to replace 30 percent of the petroleum used fortransportation fuel in the United States by 2030.
With a $304 million fiscal year 2008 budget, NREL workswith industry, academia and other national laboratory partners toresearch, develop, and demonstrate biochemical and thermochem-ical technologies that can be used commercially to convert biomassinto cost-competitive ethanol and other fuels. NREL is the leadnational laboratory of the virtual National Bioenergy Center,which was established in 2000 in Denver to support and coordi-nate the nation's biomass research activities. NREL’s facilitiesinclude a $2.85 million Biomass Surface CharacterizationLaboratory that opened in 2005, and features advanced researchtools to help study chemical and biological reactions at atomic andmolecular levels.
Working With the Industry
According to John Ashworth, team leader for partnershipsand business development at NREL, entering into cooperativeresearch and development agreements is how NREL helps theindustry make new discoveries. Cooperative research and develop-ment agreements (CRADAs) frequently involve background intel-lectual property (IP), Ashworth says, which is when a company orthe NREL brings some proprietary knowledge to a research proj-ect. NREL and the company negotiate licensing agreements forbackground IP, as well as rights for the company to commercializeany new discoveries found during research activities. Workingtogether means that a company might have researchers working atNREL or NREL staff might work at a company’s lab. Other times,researchers work independently and share information.
CRADAs, however, are not the only way industry works withNREL. Ashworth says NREL frequently trains industryresearchers how to use analytic methods, for example, how to con-duct compositional analysis of biomass. Company researchers canvisit the NREL lab and use its equipment to learn processes, orNREL can send consultants to a company to help them get theirlabs set up. “Our job is to grow the biorefinery industry, but theindustry has to do all of this stuff on their own,” Ashworth says.“We don't expect that we're going to do this [training] forever.”
Because cellulosic biomass pretreatment reactors are expen-sive, Ashworth says companies will often ask NREL to produce a
B
TECHNOLOGY
specific amount of pretreated feedstock for testing. Alternatively, hesays a company might have positive results for a pretreatmentprocess at the bench scale and then will ask NREL to test theprocess at the pilot scale. During a large-scale pilot run, NREL col-lects “an enormous amount of data,” Ashworth says, between 700and 900 data points such as temperature, pressure, flow rates and
material weights. “A pretreatment run may only last a few days, butthe actual analysis of the stuff, developing of the reports and the fig-uring out what you learned can take weeks,” he says.
Other companies might have a process that is working well ona larger scale, Ashworth says, but the process needs to be optimizedand they will ask NREL to help with that. “Very frequently, [a com-pany will] want to try and see what the economic impacts of theirprocess improvements are,” he says. “What we will do is take the con-ditions that were achieved in the experiments, plug them into themodel, and see what the resulting cost of the ethanol is.” He saysNREL has developed techno-economic models for multiple process-es, which companies can modify and use in their own organizationsto monitor how close their processes are to market economics.
Biochemical Pretreatment Projects
Biochemical conversion involves using a dilute acid pretreat-ment and enzymatic hydrolysis to convert cellulosic biomass tosugar and other fermentation feedstock. NREL researchers arehelping to understand and improve the chemistry that is at work inthe pretreatment of biomass and the hydrolysis of hemicelluloses,which includes developing cost-effective enzymes for the process.
NREL’s Advanced Pretreatment Project began in 2000 as apartnership with the Biomass Refining Consortium for AppliedFundamentals and Innovation, a USDA- and DOE-funded pro-gram to develop comparative information about cellulosic biomasspretreatment among researchers from Auburn University,
The Alternative Fuels User Facility at the National Renewable Energy
Laboratory in Golden, Colo., houses the lab’s Bioethanol Pilot Plant, an 8,000-
square-foot facility designed to test technologies used to produce ethanol and
other fuels from cellulosic biomass.
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ETHANOL PRODUCER MAGAZINE NOVEMBER 200864
TECHNOLOGY
NREL Expands Biochemical, Thermochemical Research
Biochemical conversion research projects at the National Renewable Energy
Laboratory were limited until recently because the plant only had one large pretreat-
ment reactor, says John Ashworth, team leader for partnerships and business
development at NREL. He says they recently retrofitted equipment to bring a sec-
ond large pretreatment reactor on line and the U.S. DOE has provided funding to
expand the plant. By February 2010, the Bioethanol Pilot Plant at the lab’s
Alternative Fuels User Facility should be double in size and NRELwill have the abil-
ity to work on four major biochemical conversion projects at the same time.
The NREL is expanding its thermochemical conversion research and is look-
ing at making multiple fuels from clean synthesis gas. “We're trying to be respon-
sive to what people are looking for,” Ashworth says. There is a resurging interest in
algae, he says, “but in our case, it's basic science right now. The stuff that we're
working on is nowhere near the marketplace.”
The following are some of the projects NREL is cooperatively working on:
Chevron: Chevron Technology Ventures LLC, a subsidiary of Chevron Corp.,
and NREL signed a five-year agreement in October 2007 to develop next-genera-
tion processes to convert cellulosic biomass, such as forestry and agricultural
wastes, into biofuels such as ethanol and biodiesel. Chevron also recently
announced research partnerships with the University of California, Davis and the
Georgia Institute of Technology that focus on advanced manufacturing technologies
for cellulosic biofuels. So far, Ashworth says, there haven’t been any major cellulosic
biomass projects started between NREL and Chevron. Under a separate agree-
ment, he says, NREL is working with Chevron to identify possible species of algae
that might be used to produce fuel.
ConocoPhillips: In March, ConocoPhillips and Iowa State University agreed
to work with NREL to identify the most efficient and cost-effective thermochemical
and biochemical cellulosic biomass conversion technologies for converting plant
biomass into liquid transportation fuels. The partnership is expected to produce an
initial report by January.
In 2007, ConocoPhillips
entered into an eight-year, $22.5
million research program with ISU.
The research program is studying
various biofuel production tech-
nologies, conducting technical and
economic analyses of different
types of biorefineries, and produc-
ing crops for biofuels production.
The program is also examining the
sustainable production of crops
and biomass, the harvest, storage
and transportation of biomass, and
the combustion performance of
biofuels in engines.
ConocoPhillips has also
signed a $5 million, multiyear
research agreement with the
Colorado Renewable Energy
Collaboratory, which is a joint ven-
ture between NREL and others, to develop new ways to convert biomass into low-
carbon transportation fuels. The first project will involve converting algae into fuel.
Dow: In July, Dow Chemical Co. and NREL agreed to develop and evaluate
a process that uses a mixed alcohol catalyst to convert synthesis gas derived from
gasified biomass to ethanol and other chemical building blocks that can be used to
produce chemicals and plastics for consumer products. Dow is prepared to produce
the catalysts at the commercial scale, according to Jolen Stein, global business
communications manager for Dow. She says the company originally developed the
catalysts in the 1970s and 1980s for use with coal-derived synthesis gas.
Juan Luciano, left, business president of
hydrocarbons and energy for Dow Chemical
Co., shakes hands with Dan Arvizu, director
of NREL, during an agreement-signing cere-
mony July 17.
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Dartmouth College, Purdue University,Michigan State University and Texas A&MUniversity. The project included developingan organic solvent-based pretreatment tech-nology dubbed “clean fractionation,” whichcan be used to produce chemical-grade cel-
lulose, hemicelluloses, sugars and lignin. Theproject also looked at whether biomass canbe converted to free sugars more efficientlyusing a greater variety of enzymes and lesssevere pretreatment. The project developedstandard methods for analyzing and charac-terizing biomass samples before and afterpretreatment.
NREL has helped Genencor, a divisionof Danisco A/S and also Novozymes tomeasure the economic performance ofusing enzymes to convert biomass to sugars.Both companies worked with NREL toachieve significant improvements. Usingcorn stover as the model feedstock, NRELwent on to use those enzymes to developintegrated enzymatic cellulose hydrolysis-based sugar-ethanol platform technologies.
Partnering With
DuPont, Genencor
NREL’s work with Genencor and laterDuPont has led to an ongoing partnershipbetween the lab and those companies.
In 2003, NREL entered into a $7.7 mil-lion research project with DuPont, DiversaCorp. (now part of Verenium Corp.), Deere
& Co. and Michigan State University todevelop a pilot-scale biorefinery to makeethanol from the entire corn plant. InOctober 2006, Broin Companies (now PoetLLC) and DuPont agreed to develop a cornstover-fed ethanol plant by 2009. A yearlater, Poet and the DOE agreed to developa commercial cellulosic ethanol project inEmmetsburg, Iowa.
Meanwhile Charles Wyman, who atone time led research and development oncellulosic ethanol at NREL, went on tobecome a consultant and chairman of thescientific advisory board for Mascoma Corp.In December 2006, Mascoma received a$14.8 million award from the New YorkState Department of Agriculture andMarkets and the New York State EnergyResearch and Development Authority tobuild a $20 million 0.5 MMgy biomass-to-ethanol demonstration plant in Rochester,N.Y., near Genencor’s enzyme manufactur-ing facility. The facility is now functional andis expected to be fully operational by the endof this year, according to Kate Casolaro, aspokesperson for Mascoma.
Late last year, the University of
Novozymes’ Enzymes
In May 2006 Richard Truly, a for-
mer director of the National Renewable
Energy Laboratory, filled a vacancy on
the Edenspace Systems Corp. board of
directors. In January 2007, Edenspace
received a $1.9 million U.S. DOE grant to
work with NREL, Oklahoma State
University and ICM Inc. to develop a
hybrid corn feedstock that includes
enzymes. In February, ICM enlisted
Novozymes’ and Edenspace’s help to
develop a demonstration-scale cellulosic
ethanol facility in St. Joseph, Mo., which
is funded in part by a $30 million DOE
grant. Also in February, Novozymes was
selected to receive additional funding
from the DOE to focus on improving
enzyme systems for converting cellu-
losic material into sugars. Novozymes
will use the DOE funding for Project
DECREASE (Development of a
Commercial-Ready Enzyme Application
System for Ethanol).
ETHANOL PRODUCER MAGAZINE NOVEMBER 2008 67
TECHNOLOGY
Tennessee announced plans to develop a research and businessmodel for biomass conversion, called the Tennessee BiofuelsInitiative, and the university announced a partnership withMascoma to develop a 5 MMgy switchgrass-to-ethanol plant in theNiles Ferry Industrial Park in Vonore, Tenn., about 35 miles southof Knoxville.
However, in July the university shifted its partnership fromMascoma to DuPont Danisco Cellulosic Ethanol LLC, a new part-nership between DuPont and Genencor, turning away from apotential $26 million award from the DOE for the project. Just twomonths prior to the switch, NREL announced that it would collab-orate with DuPont Danisco to commercialize cellulosic ethanolproduction and DuPont Danisco announced a $140 million initialinvestment in the project, which is to integrate the pretreatmentprocess and fermenting organism that was developed with NRELand the enzyme technologies developed by Genencor to convertcorn stover and sugar cane bagasse to ethanol. The companies planto have a pilot plant in operation at the Tennessee site by 2009 andto have a commercial-scale facility operational in three years, accord-ing to Jennifer Hutchins, a spokesperson for Genencor. The goal isto create a technology package that can be sold directly to ethanolproducers worldwide. Existing ethanol facilities will be able to addthe technology, enabling them to use cellulosic feedstocks. The tech-nology package will also serve as the design basis for stand-alonecellulosic facilities.
Market-Competitive by 2012
The DOE has communicated clearly to NREL that it mustcreate automotive fuels from biomass and make them cheap tomanufacture, Ashworth says. “We don’t work on fossil fuels,” hesays, although the lab frequently receives requests from industry tohelp with fossil fuels research.
Ashworth says while NREL does collect licensing revenuesfrom companies for its work, the fees charged to industry are notabout making money for NREL. “The DOE insists that if welicense a technology, it has to be used,” he says. “In the licensingagreement it says that you have a certain period of time to test thetechnology at scale. If you don't do it, we take it back, and license itto somebody else, because the idea is to get the technology outthere. We don't want somebody sitting on it and preventing theircompetitors from having it.”
Will NREL be able to help make cellulosic ethanol productionin the U.S. cost-competitive by 2012?
“That's not a negotiable target,” Ashworth says. “That is writ-ten in stone.” EP
Ryan C. Christiansen is an Ethanol Producer Magazine staff
writer. Reach him at [email protected] or (701)
373-8042.
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ENZYMES
ETHANOL PRODUCER MAGAZINE NOVEMBER 200870
PHOTO: NOVOZYMES
ENZYMES
EPM talks with three major enzyme makers about the challenges that
lie ahead to cost-effectively manufacture and distribute cellulase and
hemicellulase enzymes for biomass-based ethanol production.
By Ron Kotrba
ETHANOL PRODUCER MAGAZINE NOVEMBER 2008 71
Second-Generation Enzyme Logistics
ENZYMES
ompared with first-generationU.S. ethanol production cur-rently centralized in the CornBelt, the emerging second-
generation industry will exhibit much greaterdiversity in location, feedstock and process.Feedstock supply and geographic locationare naturally tied to each other, and this isdisplayed in all of the plants dotting theMidwest. There is a subtler but definite con-nection between process design and loca-tion.
Standardizing a process design is muchmore calculable when every project isdesigned to use the same feedstock. Forthose processes based on locally or regional-ly available feedstock supplies, which includewood, stover, straw, dedicated energy cropsor hundreds of other lignocellulosics, stan-dardizing any one process for a myriad ofpotential feedstocks has proven to be moredifficult. This is why so many viable process-es have emerged in second-generationethanol project development, including ther-mochemical, biochemical and hybrid tech-nologies.
For biochemical processing, enzymatichydrolysis can play an important role inoverall process design but even within thisspecified aspect of biochemical conversion,there is no clear-cut image of what the sec-ond-generation enzyme manufacturing andsupply chain will look like. Those closest tothe situation tell EPM there are still a lot offactors that will influence how this particularaspect of a second-generation ethanolindustry is likely to unfold. Moving forward,however, it seems evident enzyme manufac-turing and delivery will be as varied as proj-ect location, feedstock choice and processdesign.
In corn-ethanol production, alphaamylases help break down complex starchcarbohydrates into polysaccharides duringliquefaction. Then, during saccharification,glucoamylases further deconstruct polysac-charides into simple glucoses ready for fer-mentation.
For first-generation enzymes, central-ized production by major enzyme-manufac-turers is the norm, followed by transporta-tion and delivery to the various dry-grind
ethanol plants.Novozymes has oneenzyme manufacturingplant in the United States,located in Franklinton,N.C., from which it servesU.S. customers as far awayas the West Coast.According to EmmanuelPetiot, Novozymes global business develop-ment manager, this centralized model hasbeen successful thus far in first-generationethanol enzyme production and delivery, buttimes are changing. “Yes this model has beenone that has worked but, because of theincreased size of the first-generation ethanolindustry, in addition to the volume ofenzymes needed for biomass [hydrolysis],we need to get closer to our customers,” hesays. “That’s a given.”
The Case for On-Site or Near-
Site Enzyme Manufacturing
Novozymes’ first step in developingwhat Petiot coins as its near-site model forenzyme production, as compared with itscurrent strategy of centralized manufactur-ing, is its new enzyme plant project in Blair,Neb. Construction on the enzyme plant isslated to begin late this year, with operationsexpected to start in late 2010.
“Initially, the [Blair] plant will primarilyserve first-generation plants,” Petiot says.“But as pilot, demonstration and the firstcommercial biomass ethanol facilities comeon line, we’ll serve these plants as well. Thenumber of biomass plants will be small inthe beginning—maybe six, eight or 12 ofthem by 2012—but it will put us in the posi-tion to serve all of the needs of the biomassindustry in its first years of development.”
In order to deconstruct and hydrolyzethe polymeric sugars imbedded in extremelycomplex structures of lignocellulosic mate-rials, cocktails of cellulases and hemicellu-lases are required. “The volumes ofenzymes required for biomass are going tobe much higher than for first-generationethanol because the feedstocks are muchmore complex,” Petiot says.
Verenium Corp. vice president ofresearch and development, Nelson Barton,
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Petiot
ENZYMES
agrees. “We are talking very large volumes ofenzymes,” Barton tells EPM. “The nature ofthe lignocellulosic substrate will requiremore complex enzyme cocktails and, whenyou start talking about manufacturing verylarge volumes of enzymes, you’re talkingabout transporting large volumes of wateraround as well.”
In 2007, Verenium was formedthrough the merger of Cellunol (formerlyBC International) and enzyme-makerDiversa Corp., putting Verenium in theunique position of possessing its own spe-cialty enzymes division. “Out of our Diversaheritage comes our development ofprocess-optimized enzymes,” Barton says.“We do plan to produce a targeted set of[second-generation] enzymes, but we alsohave the ability to optimize and evolve theseenzymes and make them more stable.”
Within minimal processing and mini-mal stabilization models, Verenium is work-ing to process-optimize and stabilize its cel-lulase and hemicellulase cocktails for bio-mass hydrolysis. “The farther you need totransport the enzymes, the more you need tostart thinking about stability issues duringtransport,” Barton says. Issues of cost arehuge in all aspects of the emerging biomassindustry, so if second-generation enzyme
cocktails are transported long distances to abiorefinery and the enzymes destabilize enroute, how much processing of the enzymescan you afford to do after you’ve producedthem in order to stabilize them? Barton fur-thers this question by asking, “Could youeven afford to do any sort of formulationsto stabilize them in any way?” He respondsto his own question by stating, “The answeris minimal, if any. So really it becomes a mat-ter of being much more amenable to on-sitemanufacturing of enzymes.”
Clearly the enzyme manufacturing andlogistics chains will be evolving over time.“Early on it’s going to be on-site productionuntil the industry gets to a point whereregional manufacturing makes sense,”Barton says. Verenium plans to supply itsown cellulosic ethanol plants withenzymes—the first of its demonstrationplants, the 1.4 MMgy facility in Jennings, La.,is up and running—and Barton says thecompany is willing to supply enzymesthrough regional distribution or on-site pro-duction as needed. “If [non-Verenium]plants were to require on-site enzyme pro-duction in order to meet their logistics needs,then that is something we can do,” Bartonsays.
Verenium and its specialty enzymes
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Inside the lab is where much of the cellulase and hemicellulase work is still being done, even though the
big players say commercial enzyme production will be ready in a couple of short years from now.
PH
OTO
: V
ER
EN
IUM
CO
RP.
ETHANOL PRODUCER MAGAZINE NOVEMBER 2008 73
ETHANOL PRODUCER MAGAZINE NOVEMBER 200874
ENZYMES
division is not the only player advocating enzyme production on-siteof a biorefinery complex. Genencor International’s vice president ofbiorefineries, Jack Huttner, tells EPM there are several well-knownchallenges to using cellulases for commercial-scale conversion ofbiomass to ethanol—including the economic and technical chal-lenges of transporting enzyme cocktails.
“In general, cost savings through on-site enzyme productionwould be significant considering shipping and storage costs, as wellas the potential to share energy infrastructure costs with the mainethanol plant,” Huttner says.
Genencor, a division of Danisco A/S, has what Huttner char-acterizes as a two-pronged approach to meeting the many challengesfacing a biomass-based ethanol industry. One of these “prongs” iscalled DuPont Danisco Cellulosic Ethanol LLC, a joint venturebetween DuPont and Genencor. The joint venture’s latest develop-ment is a pilot plant and process development project with theUniversity of Tennessee’s Genera Energy LLC, which is focused ontwo specific feedstocks: corncobs and switchgrass. “DuPontDanisco Cellulosic Ethanol is on a fast-track to develop and licensean integrated biorefinery package,” Huttner says. This biorefinerypackage covers the entire production process from feedstock collec-tion, to pretreatment and hydrolysis, to fermentation and recovery,and will include on-site enzyme production for the licensee.“Producing enzymes at the ethanol production site would allow for
numerous advantages in production time, cost and energy efficien-cies, as well as equipment and material quality control,” he says.
Genencor’s second avenue to supply enzyme cocktails for thebiomass industry is through its more conventional-style merchantenzyme business using a centralized distribution system moreresembling first-generation logistics. However, even then Huttnersays, “Genencor is willing to discuss on-site enzyme production withpotential beorefinery operators, or enzyme supply from one ofGenencor’s regional manufacturing plants.”
Along with the higher volumes of enzymes needed tohydrolyze biomass and shipping these formulated products there’sanother factor to consider, according to Verenium spokeswomanMorgen Grandjean. “It’s also a matter of carbon footprint,” she says.Transporting huge volumes of enzymes entails moving large quan-tities of water to keep the enzymes stable and active. Grandjeanstresses that on-site enzyme production would help keep the carbonfootprint of the enzyme industry to a minimum.
The Case Against On-Site
Enzyme Manufacturing
Petiot admits the topic of making cellulases and hemicellu-lases on-site of a biorefinery is chic today. “This is somethingeveryone is talking about,” he tells EPM. However, he saysNovozymes has not yet reached the conclusion that this is going
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ENZYMES
to be the case—at least for Novozymes. “We believe that manu-facturing enzymes is a complex technology,” he says. Because ofthe complexities involved in the manufacturing of enzyme mixesfor a biomass-based ethanol industry, Petiot says it could prove tobe difficult to produce everything needed on-site. “Say if yourfeedstock changes, or if enzyme suppliers find new and more effi-cient activities, it is not easy to switch from one production strainto another,” he explains. In other words, on a technical basis alone,there may be limits to what can be done with enzyme manufactur-ing at a biorefinery.
First-generation ethanol production from corn requires alphaand gluco amylases, but second-generation hydrolysis of lignocel-lulosic materials will likely require a minimum of four enzymes:endogluconase, cellobiohydrolase 1, cellobiohydrolase 2 and betaglucosidase for starters. Cocktail formulation depends not entirelyon feedstock selection but also on which pretreatment method isincorporated into the overall process design. An enzyme cocktailfor a producer using a mild acid pretreatment, which converts thehemicellulose to monomeric sugars, is going to be formulated dif-ferently than an enzyme mix for a producer using a more alkalinepretreatment. “An alkaline pretreatment process would require youto add [hemicellulases] to convert hemicellulose to C5 sugars, inwhich case you’re talking about adding xylanases and hemicellu-lases to complete that cocktail,” Barton says. “It comes back to
having your core workhorse enzymes that do a lot of work on theprimary cellulose component and, depending on the feedstockpreferences and region, the slightly different compositions of yourhemicellulose fractions. I could see the need to optimize the basiccocktails by adding accessory enzymes to optimize the perform-ance on a given substrate.”
A biorefinery based on the biochemical process platformusing enzymatic hydrolysis may have multiple feedstock supplyarrangements, which again would require switching to slightly dif-ferent formulations of proteins and activities. “That is not goingto be easy for an on-site production facility to do, whereas in amore centralized site you can switch around these activities moreeasily because enzyme formulation is all that is done at that loca-tion,” Petiot says. “If the industry picks up as we expect, and if wehave to build several [near-site] facilities, then those enzyme man-ufacturing sites will be able to manufacture these complex activi-ties, but also be able to switch them around in a more efficientmanner.” EP
Ron Kotrba is an Ethanol Producer Magazine senior writer. Reach
him at [email protected] or (701) 738-4942.
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FRACTIONATION
ETHANOL PRODUCER MAGAZINE NOVEMBER 200878
Is Fractionation the Cure for
High Corn Prices?In the wake of recent price hikes in the corn market and rising global food costs,
ethanol producers are looking for ways to cut operating costs. One option that is
starting to gain traction is fractionation. While the process isn’t new, it is
becoming an attractive option for ethanol producers who are feeling the financial
pinch of this turbulent year.
By Amanda Watkins
FRACTIONATION
ETHANOL PRODUCER MAGAZINE NOVEMBER 2008 79
FRACTIONATION
thanol producers have had to shiftgears significantly in the past yearas the price of corn has reached all-time highs. Producers who are
used to corn prices in the $2 per bushel rangehave recently been faced with prices as high as$6 a bushel and little hope of any near-termprice drops. As producers struggle to stay prof-itable, technologies such as fractionation areavailable to help overcome this hurdle.
Fractionation is a simple process that canhelp producers realize major benefits by creat-ing a waste-free system. The purpose of thetechnology is to make use of each part of thecorn kernel, rather than the traditional methodof extracting only the starch. Fractionationseparates the kernel into three sections: thegerm, bran and endosperm. The germ containsoil, and is responsible for kernel growth. Thebran resides in the fibrous outer layer of thekernel and protects it. The endosperm contains98 percent of the kernel’s starch, and accountsfor 83 percent of its dry weight. The process isdesigned to isolate the starch for ethanol pro-duction, and separate the germ and bran anduse both as coproducts.
FWS Technologies in Winnipeg,Manitoba, has been developing fractionationsystems since 2004. The company has designeda unique technology adapted from grain clean-ing and machine milling systems that is spark-ing the interests of many U.S. and Canadianethanol producers. Its technology removesnearly half of the oil from the corn kernel toprevent the fermentation process from becom-ing “sluggish.” According to Rick Chale, chiefexecutive officer at FWS, the process allows thecompany to keep its costs lower than otherfractionation processes. Glen Foster, processengineer at FWS, believes their fractionationsystem is the “best bang for the buck,” costingone-third to half as much as their competitors.
Separating the Facts
According to Chale, the reason for theincreased interest in fractionation is simple:cost savings. “A couple years ago all ethanolproducers wanted [was] to have capacity …they wanted to make more ethanol,” Chalesays.. “That focus has since changed within the
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ETHANOL PRODUCER MAGAZINE NOVEMBER 2008
FRACTIONATION
industry. [The price of] corn has gone upand we’re very much at a break-even sce-nario for ethanol producers. So now theyhave to start looking at ways to decreasethe cost of production. Fractionation isone of those tools.”
FWS’s economic models show thatadding a fractionation system to a 190MMly (50 MMgy) plant can increase itsnet income between $10 million and $20million. This increase is a result of revenuefrom the bran and germ coproducts aswell as the production of ethanol. FWSestimates that adding a fractionation sys-tem to an ethanol plant could increase aplant’s revenue by $15 million. By remov-ing the nonfermentable products from thestarch, the percentage of starch in the slur-ry increases, which accounts for a 9 per-cent to 10 percent increase in yield. Theaddition of germ as a coproduct addsmore than $11 million dollars in revenue,while the bran brings in close to $3 millionper year. Chale says that those savings arenearly a single year’s profits and thatethanol producers should be reducingtheir production costs if they aim toremain profitable. “[Ethanol producers]have to learn to get back to earning moneyand … to lower their production costs,” hesays.
Another appeal of fractionation isthat producers can attain higher quality dis-tillers grains with solubles (DDGS), whichcreates additional opportunities. By remov-ing the bran and germ from the DDGSthe feed is better suited for the swine indus-try. Currently, DDGS are not ideal feed forswine, as they prefer a soybean meal diet.The low lysine and poor amino acid con-centration in the DDGS make them insuf-ficient for the swine’s nutritional needs.With fractionation, not only do the branand germ become available to produceother coproducts, but the higher qualityDDGS can be sold to a wider market,which includes swine industry.
Production costs also decrease due tothe potential to reduce energy use in theplant. Drying the wet cake that is latermixed with solubles to create the DDGS iseasily the largest energy consumer in a typ-ical ethanol plant. According to Foster, theremoval of the nonfermentable productsfrom the dryers reduces the energy use ofthe facility significantly. Fractionationallows not only for more money to bemade by opening up the market with high-er quality DDGS, but it also saves the plantmoney through the removal of productsfrom the drying process.
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Bisson, left and Chale showcase the FWS Technologies fractionation system at the 2008 International
Fuel Ethanol Workshop & Expo.
PH
OTO
: B
BI B
IOFU
ELS
CA
NA
DA
FRACTIONATION
A Waste-Free Process
The benefits of fractionation extend even further than costsavings. With fractionation nearly the entire corn kernel is used.U.S.-based ICM Inc. is currently marketing its system with thepremise that fractionation can provide both food and fuel to theconsumer. The food that can be provided comes from thecoproducts extracted through fractionation. The bran is high in
fiber and can be used as an ingredient in a variety of foods includ-ing bread, muffins and cereals. The bran is also valuable as areplacement for natural gas. “[Bran] could be used as part of theprocessed fuels to produce ethanol, which then reduces thereliance of the facility on natural gas,” Chale says. The germextracted from the corn kernel also has many possible uses. It canbe processed into corn oil, which can be sold to the food indus-try as an additive, used as cooking oil or used in the productionof biodiesel.
Fractionation has been regarded as the next step towarddeveloping cellulosic ethanol once that technology is perfected.David Vander Griend, chief executive officer at ICM, envisionsthe steps toward gaining energy independence as starting with thetraditional dry-grind ethanol plant, then moving to ethanol pro-duction with dry fractionation, and finally to stand-alone cellulosicethanol plants. According to Vander Griend fractionation is a keystep in the advancement of full-scale cellulosic production.
Installing Fractionation in Your Plant
Ethanol producers interested in installing a fractionationcomponent to their plant should expect a fairly seamless processonce a service provider is found. The fractionation facility shouldbe 100-by-60-feet and about 100 feet high. It must be adjacent tothe corn starch silos and would require additional land space fortwo extra silos where the germ and bran could be sent for pro-cessing after being separated from the starch. These silos would
ETHANOL PRODUCER MAGAZINE NOVEMBER 200882
The FWS fractionation system separates the corn kernel into three distinct
sections, producing more coproducts and higher quality DDGS.
SOURCE: FWS TECHNOLOGIES
FRACTIONATION
have to be separate from one anotherand the fractionation building.“Instead of the whole corn going intothe ethanol plant we would interceptthat corn, run it through our mill, andthen separate it into three differentfractions,” Chale says. “[Then] wewould send the endosperm fraction tothe ethanol plant and the other twofractions to other silos for further pro-cessing or usage.”
Considerations
for Canadians
Chale believes Canadian ethanolproducers have a lot of potential togrow if they adopt a fractionation sys-tem. One of the main areas forgrowth is within the corn ethanolindustry. In Canada, the main cornproducing areas are in southernOntario, Québec and parts of south-ern Manitoba. Major corn ethanolplants such as Greenfield Ethanol andSuncor Energy are in southernOntario, while Husky Energy Inc., insouthern Manitoba, recently convert-ed its primary feedstock from wheatto corn. As wheat becomes increasing-ly expensive (with wheat stocksexpected to be their lowest since thelate 1970s by the end of the year),more companies continue to dependon corn as a feedstock. Fractionationis not meant for wheat-based ethanolplants and if the Canadian marketcontinues to produce corn-basedethanol, then fractionation willbecome a more appealing option. Alsoimportant for Canadian ethanol pro-ducers is the possibility of selling theirDDGS to the swine industry. As theDDGS produced from a facility usingfractionation are not as high in fiber,both the Canadian swine industry andthe ethanol industry stand to benefitfrom the exchange.
FWS is looking forward to whatit hopes will be a bright future in the
industry. The company is currently workingon several projects including building a col-umn crushing plant, grain elevators and grainstorage. “We’re doing a lot of things in theagricultural industry, we think that’s a goodplace to be,” Chale says. “We think that frac-tionation adds another dimension to what wedo, and we think it’s going to catch on, andwill add a further dimension to our compa-ny.” Fractionation has the potential to changehow the Canadian ethanol industry progress-es. As the price of stock commodities such
as wheat and corn continue to rise, the indus-try must begin to consider other technologiesto remain strong and profitable. EP
Amanda Watkins is a Biofuels Canada mag-
azine staff writer. Reach her at
[email protected] or (519)
576-4500. This article was reprinted from the
October 2008 issue of Biofuels Canada.
ETHANOL PRODUCER MAGAZINE NOVEMBER 2008 83
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INNOVATION
ETHANOL PRODUCER MAGAZINE NOVEMBER 200886
INNOVATION
ETHANOL PRODUCER MAGAZINE NOVEMBER 2008 87
Furfural, a sister chemical to the increasingly popular
hydroxymethylfurfural or HMF molecule, is regaining attention
as a biobased alternative for the production of everything
from cellulosic ethanol and fertilizers to plastics and paints.
By Jessica Ebert
Furfural: Future Feedstock
for Fuels andChemicals
INNOVATION
ver the past couple ofyears, several researchgroups have describedapproaches to convert-
ing six-carbon sugars such as glucoseand fructose into a chemical calledhydroxymethylfurfural or HMF. Thismolecule represents a renewable build-ing block for the synthesis of plastics,and industrial and household chemi-cals. In addition, last October,Avantium, an Amsterdam, theNetherlands-based technology compa-ny, announced the results of enginetests of its novel furan-based biofuelderived from HMF. The companydubbed its fuel, Furanics, and reportedthat various blends of Furanics withregular diesel yielded positive resultsincluding smooth engine performancefor several hours and significant reduc-tions in soot emissions from vehicleexhaust.
Now, a sister chemical to HMF,furfural, is beginning to gain the atten-tion of cellulosic ethanol producersand academic researchers. Furfural isan almond-scented, oily, colorless liq-uid that turns yellow to dark brownwhen exposed to air. It is used as a sol-vent for refining lubricating oils, as afungicide and weed killer and in theproduction of tetrahydrofuran, animportant industrial solvent. In addi-tion, furfural along with its sister mol-ecule HMF, can serve as a buildingblock for other potential transporta-tion fuels including dimethylfuran andethyl levulinate.
Furfural is produced by removingwater from or dehydrating five-carbonsugars such as xylose and arabinose.These pentose sugars are commonlyobtained from the hemicellulose frac-tion of biomass wastes like cornstalks,corncobs and the husks of peanutsand oats. In fact, in the 1920s severaltons of furfural was produced eachmonth from the cereal waste stock-piles at the Quaker Oats Co. in Cedar
Rapids, Iowa. But cheap oil prices inthe latter part of the 20th centurybrought domestic production of fur-fural to a veritable halt. Today, about90 percent of furfural productioncapacity is installed in three countries,China, which houses the most at about74 percent, South Africa and theDominican Republic, according to SRIConsulting, an international businessresearch service for the chemicalindustry. However, in this climate ofunprecedented high oil prices, interestin producing furfural in the UnitedStates is growing.
“One of the largest applicationsof furfural was to convert it intotetrahydrofuran,” explains KendallPye, chief scientific officer at LignolInnovations Ltd., a Canadian develop-er of biorefining technologies and asubsidiary of Lignol Energy Corp. Butthe oil industry found a way to makefurans from petroleum-based maleicanhydride. However, when oil priceswere sky high there was a renewedinterest in producing furfural.
A Biorefinery
Revenue Stream
In the cellulosic ethanol produc-tion technology employed by Lignol,furfural represents a “happy coinci-dence,” a potentially lucrative conse-quence of the process. “We don’t
ETHANOL PRODUCER MAGAZINE NOVEMBER 200888
O ‘We regard this technologyas being the closest thing toa high-quality biorefinery.We take wood and split itup into its various fractionsand get the highest valuewe can for each of thosefractions.’
ETHANOL PRODUCER MAGAZINE NOVEMBER 2008
INNOVATION
deliberately make furfural,” Pyeexplains. “The whole objective of ourbiorefinery is to cook up wood underpressure and relatively high tempera-tures to remove lignin.” The processproduces a highly pure lignin that canexceed the value of the ethanol that issubsequently produced from glucoseobtained from the cellulose. In addi-tion, it turns out that as the hemicellu-lose fraction of the wood continues tocook, the polymer degrades into thexylose sugars, which under those sameprocess conditions, turns into furfural.“We get furfural as a consequence ofthe conditions that we use in ourprocess,” Pye says.
This up-front, delignificationprocess was first developed by theUniversity of Pennsylvania andGeneral Electric in the early 1970s.Later dubbed the Alcell pulpingprocess, it was commercialized and
applied to the pulp and paper industryin the ’90s. Lignol acquired the tech-nology in 2001 and modified it byrecently developing processes for sac-charification and fermentation. Thissummer, the company announced thatit has begun building a 100,000-liter(26,000 gallon) ethanol pilot plant onthe campus of the British ColumbiaInstitute of Technology in Burnaby,British Columbia. The company alsohas plans to build a commercial-scaledemonstration plant that will be basedin Colorado, which will be partiallyfunded by a $30 million U.S. DOEgrant.
“We regard this technology asbeing the closest thing to a high-quali-ty biorefinery,” Pye says. “We takewood and split it up into its variousfractions and get the highest value wecan for each of those fractions.”
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Lignol Innovations Process Diagram
ETHANOL PRODUCER MAGAZINE NOVEMBER 200890
INNOVATION
be the primary products of theprocess, furfural will provide a thirdsource of revenue. The significance of
that money stream, however, willdepend on the source of the feedstock.Softwoods like lodgepole pine harbor
less xylose than hardwoods or annualcrops such as straw and corn stover.But in a demonstration-size plant thatprocesses hundreds of tons of bio-mass per day, the proportion of furfur-al that can be extracted from a soft-wood feedstock would still be signifi-cant, Pye says.
For Raven Biofuels International,a New Jersey-based biofuels company,the origin of the feedstock is not a bigfactor because the company’s technolo-gy is tunable to the concentration ofsugar in the feedstock. Raven Biofuelsuses commercially available technologythat’s used in the pulping industry toproduce ethanol and furfural from awide variety of cellulosic feedstocks,including construction waste and woodchips, explains John Sams, chief oper-ating officer of Raven Biofuels.
The two-stage process has beentested extensively at the U.S. federallaboratory, Tennessee Valley Authoritypilot facility at Muscle Shoals, Ala.Over the past eight years, 32 differentfeedstocks have been tested and engi-neering and scale-up data has beengenerated.
In the first step, the biomass feed-stock is treated with steam and weak
SOURCE: RAVEN BIOFUELS
Cellulosic Ethanol Technology
ETHANOL PRODUCER MAGAZINE NOVEMBER 2008 91
INNOVATION
Along with ethanol, the company cansell the raw furfural or install additionalequipment to convert that furfural intoderivative chemicals. “The primary thrustof the process is to produce ethanol butfurfural is a key part of that because whatmakes our plant very profitable is that thefurfural sells for $4.50 to $5 per gallon,”Sams explains.
Although it may be too early to makesweeping predictions about the future offurfural in a biobased economy, it’s clear
that producers are diversifying and thatthe production of specialty chemicals andthe expansion of those industries willpiggyback the growth in cellulosicethanol production. EP
Jessica Ebert is a freelance writer for EthanolProducer Magazine. Reach her at jebertserp
@yahoo.com.
sulfuric acid in an anaerobic digestorto break down the wood to the pointwhere various sugar streams can beremoved. Under these same condi-tions of heat and acid, the pentosesugars are dehydrated and subse-quently converted into furfural,which is further refined through adistillation process. Meanwhile, thehexose sugars are fermented in a sec-ond step to ethanol. “The reason oursystem is more forgiving is that wecan adjust the concentration of theacid, the flow of the acid or thesteam to get more of the sugar out ifthere’s a lower sugar content in thefeedstock,” Sams says.
In addition, the process allowsfor the extraction of any remainingfibers that can be sold or put in aboiler to provide process heat for theplant. “In our case we’re removingC-5 sugars in the first stage of theprocess to make furfural and in thesecond stage, the C-6 sugars aremade into ethanol through a normalfermentation process,” he explains.“The Raven patented technology iscentered around the production offurfural in combination with ethanoland for the production of high-levelderivative chemicals from furfural.”
The first project that RavenBiofuels is developing will be locatedin Washington state. The plant willproduce 7 MMgy of cellulosicethanol and 4 MMgy of furfuralfrom 500 tons of construction wasteper day collected by a companybased in the state. Sams says theplant is expected to be in operationby the spring of 2010. “We believewe’re going to the have the first realcommercial plant operating in theUnited States and certainly the firstone in the West,” he says. In addi-tion, the company is planning tobuild a similar plant in BritishColumbia, which will use wood frompine beetle-infested forestlands.
POLICY
ETHANOL PRODUCER MAGAZINE NOVEMBER 200894
POLICY
ETHANOL PRODUCER MAGAZINE NOVEMBER 2008 95
Clearing the
AirPrudent ethanol producers have shown an interest in
becoming generators of carbon credits and are leading
the way for others to follow despite the fact that carbon
trading the United State is done on a voluntary basis.
This is the first of EPM’s two-part look at the current
U.S. market and what might be in store for 2009.
By Kris Bevill
POLICY
he voluntary carbon market in the United Stateshas been functioning efficiently for several yearswith little involvement from biofuels producers.Time might be of the essence, however, for com-
panies that are tossing around the idea of entering the mar-ket. All signs point to a future that includes federally man-dated emissions regulations. Early market entry could resultin several benefits, including a chance to help shape futuremandates and benefits. Generally speaking, corn ethanolfacilities are tremendous energy consumers and are current-ly unable to generate carbon credits without modifying theiroperations. For producers looking to become more energyefficient, the carbon market offers the perfect reason toinstall the equipment and/or technology necessary to reduceenergy input. It could save producers money in operatingcosts, help change the industry’s “high energy input” imageand give them the opportunity to become leaders in the car-bon market.
About Carbon Credits
Carbon markets are commodity-based markets that existfor the buying and selling of carbon credits. The term “car-bon credit” can be misleading because it’s not just carbondioxide that’s traded, but rather all pollutants that increasegreenhouse gas (GHG) emissions. Included in that category
are carbon dioxide, methane, nitrous oxide and a list of flu-orinated gases.
GHGs are assigned a number representing their globalwarming potential (GWP). According to the U.S. EPA, GWPcan be defined as “the ratio of heat trapped by one unit massof the greenhouse gas to that of one unit mass of carbondioxide over a specified time period.” Therefore emissionsare traded on a carbon dioxide equivalent, which leads to thegeneral term “carbon credit.” For example, carbon dioxidehas been determined to have a GWP of 1 while methane’sGWP is 21. Therefore one ton of methane emissionsreduced equals 21 carbon credits. Nitrous oxide, a majorcomponent of corn production, has a GWP of 310.
Several emissions trading schemes have been developedto reduce the effects of global warming. Variations includeregulatory systems, similar to what is being used in Europe,and voluntary systems, currently at play in the United States.
The European Union’s emissions trading scheme is thelargest carbon market in the world. It’s a cap-and-trade-sys-tem where industrial companies are required to limit GHGemissions to certain levels every year or buy credits fromother lesser emitters to make up the difference. The EU’ssystem may be the largest but it’s not the oldest. Althoughit’s been in operation since 2005, the U.K. had an emissionstrading scheme in place prior to that. The European Union
T
POLICY
scheme follows the framework for GHG reductions setforth in the Kyoto Protocol.
In the meantime, other countries have recentlyannounced plans to develop mandatory emissions reductionstandards including Japan, Australia and New Zealand. Theprovince of Alberta, Canada, has implemented a regulatorysystem and because of the oil drilling that is occurring in thetar sands in that province, carbon credits are in high demand.
In contrast, the United States’ carbon market is a volun-tary system where a multitude of private trades are conduct-ed for a variety of corporate and personal objectives.
Trading on the U.S. Carbon Market
There are only a couple of programs in the UnitedStates designed to entice businesses to reduce their carbonemissions. Carbon offset programs include the CaliforniaClimate Action Registry and the Regional Greenhouse GasInitiative. CCAR is a nonprofit GHG registry established byCalifornia as a way to promote early actions taken by mem-bers to reduce emissions. Members agree to measure, verifyand report GHG emissions and in exchange the state willensure those members receive adequate consideration forbeing early actors in the event of future state or federal reg-ulations. As with many other California-based environmen-tal programs, it serves as a leader among rule makers.
Greenhouse Gases
Carbon dioxide: a colorless, odorless, incombustible gas, somewhat heav-
ier than air that is a product of respiration and combustion. The only green-
house gas that is also emitted into the atmosphere through various natural
processes, carbon dioxide also enters the atmosphere through the burning
of fossil fuels and other chemical reactions. Nature does its part to remove
carbon dioxide via the "sequestration" of the compound from the atmos-
phere by plants.
Methane: a colorless, odorless, flammable, gaseous alkane that is emitted
into the atmosphere via livestock and various agricultural practices, and by
the decay of organic waste from landfills. It is also emitted during the produc-
tion and transport of fossil fuels.
Nitrous oxide: a colorless, nonflammable gas, used as an anesthetic and
in aerosols. Agricultural soil management is by far the largest source of
nitrous oxide emissions. Other sources include various industrial activities
and the combustion of fossil fuels and solid waste.
Fluorinated gases: to introduce fluorine into or cause to combine with fluo-
rine. A fluorine is a corrosive, toxic, greenish-yellow gaseous chemical ele-
ment, one of the halogens and the most reactive nonmetallic element, form-
ing fluorides with almost all known elements and includes three groups of
gases: hydrofluorocarbons, perfluorocarbons and sulfur hexafluoride. All are
synthetic gases that are referred to as High Global Warming Potential gases
due to their potency, even in small amounts. These gases are emitted into
the atmosphere through a variety of industrial practices, including at times
as a substitute for ozone-depleting substances such as CFCs chlorofluoro-
carbons.
POLICY
Protocols set forth by CCAR are oftennoted by other carbon offset organiza-tions in the country.
The RGGI is a conjunctive effortamong 10 Northeastern states—Connecticut, Delaware, Maine,Maryland, Massachusetts, NewHampshire, New Jersey, New York,Rhode Island and Vermont—to man-date a cap on current emissions, and itcalls for a 10 percent reduction in emis-sions by 2018. It is the first mandatory,market-based carbon dioxide emissionsreduction program in the United
States, however it was created only toregulate power plants and so does notyet hold relevancy to ethanol produc-ers. Participating states created a modelto serve as the basis for each state’sindividual regulations.
And then there is the voluntarytrading market, which is led by theChicago Climate Exchange (CCX).Established by Richard Sandor in 2003,the CCX is the world’s first and NorthAmerica’s only voluntary, legally bind-ing integrated trading system to reduceGHG emissions. It was formed to pro-
vide structure, transparency and rulesto the carbon market.
Members of the CCX agree to anaggregate reduction of GHG emis-sions by 6 percent between 2000 and2010. Simply put, the membership as awhole must reduce its emissions bythat percentage. Some individual com-panies may successfully reduce emis-sions by more than 6 percent and oth-ers aren’t so successful—that is wherethe trading of credits comes into play.
The first step for a prospectivecarbon market member is to have itscompany analyzed to determine itsbaseline, which is the amount ofGHGs determined to be emitted bythat company in 2000. The baselineserves as the starting point for eachcompany to work from when attempt-ing to meet reduction goals and alsodetermines that company’s monetarymembership fee.
Once a company becomes a mem-ber of the exchange, it can begin gen-
ETHANOL PRODUCER MAGAZINE NOVEMBER 200898
Corn Plus has found a way to utilize its corn syrup and CVEC
has chosen to focus on biomass gasification, but there are
many other methods to reduce input costs and produce
carbon credits, including landfill gas utilization and anaerobic
digestion. It is up to each plant to choose the method that
works best for that particular facility.
POLICY
erating, selling or buy-ing carbon credits.Members who reduceemissions by morethan the annualrequirement generatecredits which can bemonetized into CarbonFinancial Instrument
contracts, each one representing theequivalent of 100 metric tons of car-bon dioxide emissions reductions, andcan be sold on the exchange. Memberswho fail to meet reduction require-ments must buy credits from anotherexchange member or complete anapproved reduction project to negatethe emissions being put forth by thecompany.
Membership compliance check-ups and verifications are conductedannually by the Financial IndustryRegulatory Authority. CCX employsdemanding annual independent verifi-cation methods that have yielded 100
percent membership compliance withits annual emission goals.
At press time, the exchange was ontrack to trade between 80 million and100 million tons worth of CFIs, worthan estimated $300 million to $400 mil-lion in 2008. At that time, spot pricingfor CFIs were firm at $2.50, futureswere a bit higher and ranged from$2.70 to $2.80 per contract.
Industry Trendsetters
When the CCX was launched in2003 there were 13 members. Today,there are more than 400 membersincluding the Renewable FuelsAssociation, Ford Motor Co., CargillInc., Monsanto Co., and a multitude ofvarious municipalities, universities andstate governments. Each member hasits own reason for signing up. Somecompanies see the value in having anenergy audit conducted at their facilityand plan to bank it for future use.Other companies join as a way to
remain in good standing with theirshareholders. For many, as cliché as itsounds, company leaders believe cli-mate change is a major problem andthat it's part of their corporate respon-sibility to take part in reducing GHGemissions.
Regardless of their reasons forjoining, one common theme sharedamong members of the exchange isthat they believe it is in their best inter-est to get a jump start on what theyperceive will be a requirement in thefuture, and to lead by example.
One can’t talk about carbon trad-ing in the ethanol industry withoutmentioning Corn Plus LLLP. TheWinnebago, Minn., company made his-tory earlier this year when it becamethe first biofuel producer to sell carboncredits on the CCX. The 44 MMgyethanol plant joined the exchange inAugust 2007, after it had alreadyinstalled a fluidized bed boiler to con-vert leftover corn syrup into energy,
ETHANOL PRODUCER MAGAZINE NOVEMBER 2008 99
Kor
POLICY
thus reducing the facility’s need for natural gas by 52 per-cent. Plant manager Keith Kor says Corn Plus has alwaysbeen proactive in finding ways to reduce its operating costs.They began researching the fluidized bed boiler back in 2003as a way to reduce energy costs as natural gas was about $4per million Btu (MMBtu). The technology has certainly paidoff as natural gas prices have since increased to $7.50 to $8per MMBtu.
The idea of generating carbon credits was an after-thought. After installing the bed, Kor began conferring withCarbon Green LLC, a carbon market consulting and tradingfirm and realized that Corn Plus could turn its energy-savingtechniques into a money maker on the carbon market.“That’s what got the ball rolling,” Kor says.
Corn Plus signed on with Carbon Green and began theprocess of becoming a CCX member. According to Kor, thecompany paid a $25,000 membership fee to join the CCXand spent many months reviewing years of natural gasintake and other records as part of the analysis, but he saysit was worth it. The entire process took nine months, accord-ing to Carbon Green president Jim Murphy, a time period hehopes to reduce as more ethanol producers sign up with hiscompany.
Kor says Corn Plus will generate 40,000 tons of carboncredits this year and looks to do about the same in 2009. Thecredits the company sold in March went for a bargain priceof $6 per ton. Kor expects that price will continue to rise asmore interest is paid to the possibility of a federally-mandat-ed market. Corn Plus plans to hold its credits until the pricegoes up. “If you look at the price of carbon credits over inEurope, they’re at $20 or $30 per ton,” he says, hinting at thepotential of things to come in the United States.
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ETHANOL PRODUCER MAGAZINE NOVEMBER 2008100
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Chippewa Valley Ethanol Co. installed a biomass gasification system in early
2008 at its 47 MMgy ethanol plant near Benson, Minn., as a way to reduce the
company’s natural gas costs. The gasification system will also allow the
company to become a generator of carbon credits.
POLICY
input]. They either need to make a dra-matic improvement in efficiency and/orthey actually have to start displacing fos-sil energy inputs with something of alower carbon nature.”
Corn Plus has found a way to utilizeits corn syrup and CVEC has chosen tofocus on biomass gasification, but thereare many other methods to reduce inputcosts and produce carbon credits, includ-ing landfill gas utilization and anaerobicdigestion. It is up to each plant to choose
the method that works best for that par-ticular facility. One thing is certain—energy input costs will only increase andethanol plants will continue to need tofind ways of generating revenue. Formany the solution might lead to the sameplace—the U.S. carbon market. EP
Kris Bevill is an Ethanol Producer Magazinestaff writer. Reach her at kbevill
@bbiinternational.com or (701) 373-8044.
signed on with Carbon Green and itspartner, Environmental CreditCorp., in June and is in the processof becoming a carbon credit genera-tor on the CCX. While the end resultwill be similar, CVEC’s method ofreduction is different from themethod used by Corn Plus. CVECchose to install a biomass gasifica-tion system, which will burn cornstover, corncobs and other biomassto offset the plant’s natural gasusage. Bill Lee, plant manager, saysthey became interested in a biomassgasification system for multiple rea-sons, only one of which was to fitwith what they perceive is a movetoward a federally regulated carbonemission environment. Lee says thefirst priority was to reduce the plant’ssecond-highest input cost—energy.The gasification system has applica-bility in cellulosic ethanol produc-tion, which could serve the facilitywell in the future. And finally, Leesays the system fit with the plant’soverall desire to move toward a fullyrenewable process. “More ethanolplants ought to be moving in thisdirection,” Lee says.
CVEC is preparing to become acarbon credit generator, according toLee. They began working withCarbon Green in late summer andexpect to complete the auditingprocess and become a member ofthe CCX within a year. Lee says asidefrom the investment for new tech-nology to consume less energy at theplant, the front-end investment for aplant to become involved in the car-bon market is low. Although there ismoney to be made, selling carboncredits in the current market is mod-est. But companies like CVEC andCorn Plus aren’t looking for aninstant return on their investment.“We’re looking forward to what liesbeyond the voluntary market in thiscountry,” Lee says. “A corn ethanolproducer needs to be doing some-thing to actually reduce [energy
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ETHANOL PRODUCER MAGAZINE NOVEMBER 2008 103
Craig Ammann of KL Process Design Group and a South Dakota Harley-
Davidson dealership converted Ammann's 2004 Electra Glide
Harley-Davidson motorcycle to run on ethanol.
By Hope Deutscher
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n the spring of 2007, Craig Ammann took a leap of faith—using Harley-Davidson parts his 2004 Electra Glide Harley-Davidson motorcycle was converted to use E85 as its pri-mary fuel source and, when necessary, premium fuel as its
secondary source.“I just kind of started thinking about this concept—wouldn’t it
make a great story if we had an American-made bike with anAmerican-made fuel all coming together,” Ammann says.
Ammann, who has been riding motorcycles for six years andhas worked in sales and marketing the past 15 years, has been inter-ested in the ethanol industry for some time. He joined the renewablefuels industry two years ago when he was hired by Rapid City, S.D.-based KL Process Design Group as its director of marketing anddistribution in Sioux Falls, S.D. KL Process Design operates cornethanol plants in South Dakota and Nebraska, and a wood-waste-to-ethanol plant in Upton, Wyo.
Three years ago, Ammann bought a used, but well-cared-for2004 Electra Glide Harley-Davidson motorcycle, and shortly there-after, upgraded it. He used a standard big-bore kit to increase theengine size, and added a new exhaust system and a high-perform-ance air intake—all to increase the horsepower and torque.
Then, in 2007 he suggested to his boss, David Litzen, an ownerof KL Process Design Group, that he would offer up his personalmotorcycle to the Black Hills Harley-Davidson dealership in RapidCity to be modified to use an 85 percent ethanol blend. Litzenencouraged Ammann to do it. “I approached the owner of Black
Hills Harley with the idea and he offered his master technician to dothe work on the bike to get it remapped to burn on E85,” Ammannsays. “The owner is a big fan of ethanol and was all for what I wasproposing.”
So, with the help of Chris Myers, a Black Hills Harley-Davidsonmaster service technician, Ammann’s fuel-injected bike was put to
I
ETHANOL PRODUCER MAGAZINE NOVEMBER 2008104
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Craig Ammann, KLProcess Design Group director of marketing and distribution
in Sioux Falls, S.D., worked with a Harley-Davidson dealership to convert his
2004 Electra Glide Harley motorcycle to run on E85.
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the test to see what, if any, affect E85 would have on it. Deep downAmmann told himself it would run fine but if anything happenedto the bike, it would be at his own expense.
“Basically, being in the industry and knowing ethanol, I had noreservations about doing this with the bike,” Ammann says. “I knewthat the ethanol was not going to hurt the bike, if anything it wasgoing to help it run more smoothly and more efficiently. So I said‘Let’s do this. Let’s put a tank of E85 in, let’s run it and let’s see howit goes.’ So we literally drained the tank and put in a full tank of E85and just ran the bike, just to see how it would run.”
Modifying the Hog
From the first tank of E85—without any initial modifica-tions—Ammann says the bike’s fuel injection system ran rather well.However, he admits, it did choke a little bit at first, due to the differ-ence between premium fuel and E85.
The fuel-injected bike’s electronic computer module, which isprogrammed with the engine and fuel type specifications, had to beremapped. “So basically we needed to put the bike on the Dyno(dynamometer machine) and let the technician literally just play withdifferent mapping scenarios to compensate for the alcohol contentand adjust the air intake and the fuel injection so that the bike ransmoothly,” Ammann says. Because E85 has a higher ethanol con-tent, it runs at a higher octane level—but Ammann says it runs clean-er and burns more completely.
Myers says, like most mechanics, he was skeptical of E85because of the negative rumors he had heard. However, he wasreceptive to the idea of modifying Ammann’s motorcycle. Aftersome researching, experimenting, and spending approximately 12hours adjusting the bike’s computer mapping scenarios to find thebest equation for air intake and fuel, Myers was impressed by E85and how the bike operates on the renewable fuel—which burns
ETHANOL PRODUCER MAGAZINE NOVEMBER 2008 105
‘In essence we’re pushing the envelope a little bit, but this
gives them a real-life example and scenario and they can
see the E85 is not ruining engines, it’s not melting parts
and engines aren’t blowing up and overheating.’
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cooler and should burn better in high-compression engines, such asthose used in Harley-Davidsons.
Although the bike can use both E85 and premium fuel, Myersrecommends that for optimal use the bike should operate on a steadydiet of E85.
Myers admits until E85 is more readily available, he’s reluctantto convert more bikes. He is open and receptive to doing the work,but it’s important that people understand that the long-term affectsof using E85 in a modified Harley-Davidson motorcycle are not yetknown. “I’m happy to get involved and see where the road takes us,”Myers says.
To his knowledge, Ammann says custom bikes using ethanolhave been built, but nobody has taken a Harley-Davidson motorcy-
cle, straight from the factory, and worked with a dealership to con-vert a bike to use E85.
Ammann went through a Harley-Davidson dealership to makethe conversion, in part, so they could go to the manufacturer, and say“look, we’ve done this with Harley technicians and Harley parts tomake this work—and it’s working just fine.”
“I’ve got to believe that within their confidential confinesthey’ve got some of this testing going on,” Ammann continues. “It’llbe a long time before we have Harley putting their flex-fuel bike outthere but it’s got to start somewhere.” Harley-Davidson has given itsapproval to use E10 and E15. “In essence we’re pushing the enve-lope a little bit, but this gives them a real-life example and scenarioand they can see that the E85 is not ruining engines, it’s not meltingparts and engines aren’t blowing up and overheating,” Ammann says.“Ultimately, I’d like to see them develop a flex-fuel computer chipthat really requires no Dyno time, that’s just simply a chip that youcan buy at the dealership and takes just a little bit of time to down-load it into the engine and away you go. Or just like the car manufac-turers do with a flex-fuel vehicle that comes off the line, it would bea flex-fuel bike, something that would be an added feature to a bikethat came right off the factory floor.”
Showing Off the Bike
Even though Ammann lives in Sioux Falls, he approached theBlack Hills Harley-Davidson dealership because KL Process Groupis headquartered in Rapid City and he thought the Sturgis MotorcycleRally in Sturgis, S.D., which is just north of Rapid City, would be anideal place and time to promote his bike cruising on ethanol.
“The idea was to launch the idea and make noise about it, inconjunction with the Ethanol Promotion and Information Council,at the Sturgis Rally last year,” he says. EPIC also featured its ethanol-fueled Indy car. Ammann says the initial reaction from the hundredsof curious motorcyclists who looked over the bike was positive.
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Ammann’s 2004 Electra Glide Harley was converted to run on E85.
ETHANOL PRODUCER MAGAZINE NOVEMBER 2008 107
“Everybody thought it was very cool,” he says. “We didn’t have any-body come up and say ‘this is ridiculous’ or ‘you’re wasting your time.’
There is a lot of education to be done with the general public,
Ammann says. For example at Sturgis there were questions aboutethanol causing the engine to overheat and the components toerode—all of which, Ammann says is really misinformation
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E85 Conversion Kit for Motorcycles
A conversion kit is now available for drivers interested in mod-
ifying their motorcycle to use E85.
Tony Michael Dabbs, owner and founder of Dabbs
Engineering and Design, has produced a conversion kit allowing
air-cooled motorcycles to accept E85. He began selling the ALKY-
HAWG two years ago. “The ALKYHAWG was designed at the
request of a customer,” Dabbs says. “Before contacting me, he had
called a couple of dealerships, a performance shop and an auto-
motive engineer about converting his bike to E85.” All responded
that it was impossible. Dabbs says that when he answered “yes” to
the potential customer’s question of “can you convert my [Harley-
Davidson] Softail to run on E85?” the phone went silent as the
shocked motorcycle rider on the other end contemplated the pos-
sibility. Six months later, Dabbs’ first conversion kit was installed on
his motorcycle.
The reasoning behind the initial request for a conversion kit,
and Dabbs’ attempt to design it, was to coax more power from the
engine. But since designing the kit, Dabbs says he has become
more aware of renewable fuels and the benefits they offer. “Why
not feed American hawgs [Harley-Davidsons] with American corn?”
he says. “Cleaner burning E85 could add some life to the motorcy-
cles we Americans love.”
Although the ALKYHAWG was designed for off-road use with
Harley-Davidson motorcycles, Dabbs says he knows customers
use his parts on the road everyday. The kit hasn’t been approved
by the U.S. EPA and has to be designated for off-road use.
However, “clients have run their bikes through state emissions test-
ing and passed,” Dabbs says. He adds that the kit can be easily
modified for use with any gasoline-powered engine and he’d be
happy to design one for use on imported motorcycles.
According to Dabbs, motorcycles currently equipped with the
conversion kit are used for racing, so the kit has been constantly
tested. He receives regular feedback from his customers and has
used that data to compile performance averages for the kit. He
says a basic kit results in 33 percent higher horsepower, a 13 per-
cent increase in torque and a 10 percent gain in mileage, as com-
pared with gasoline-powered stock engines.
The conversion kit costs about $2,000. “This may seem high
to someone unfamiliar with performance kits for [Harley-Davidson]-
type engines, but it is much cheaper than kits delivering far fewer
power gains,” Dabbs says. He is currently researching ways to
lower the cost of the kit without decreasing the quality of the prod-
uct. For more information interested motorcyclists can contact
Dabbs at [email protected].
—Kris Bevill
ALKYHAWG E85 conversion kit developer Tony Michael Dabbs used his
own motorcycle, the Buell Blast shown here, as the prototype for the kit.
Dabbs says his motorcycle is capable of running on anything from 87 octane
gasoline to E85.
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ETHANOL PRODUCER MAGAZINE NOVEMBER 2008108
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“because ethanol really helps the engine runcooler and smoother and burns more com-pletely. So for an air-cooled engine like a V-twin Harley-Davidson engine, it’s a perfectfuel for it.”
Challenge is Finding E85
“The bike has been running for over ayear now just fine with ethanol,” Ammannsays. “We've pulled the engine apart to adegree and looked at things and there’snothing to be concerned about.” Ammannsays he wasn't expecting any problemsbecause he learned about ethanol's proper-ties since coming on board with KLProcess, and he knows that there's a lot ofmisinformation out there .
In fact, Ammann says the bike getsabout the same gas mileage, approximately35 miles per gallon, using E85 as it did run-ning on premium unleaded gasoline—andit has more horsepower and torque.“Basically that’s because the engine, being ahigh-compression engine, it is able to utilizethe efficiencies of the ethanol itself,”Ammann says. “An E85 blend is a 105 to108 octane fuel straight out of the pump.Anybody who rides a Harley-Davidson,when they hear those kinds of numbers,their ears pick up right away because Harleypeople want more power and this is oneway to get it.”
In Sioux Falls, Ammann, says stationscarrying E85 are pretty prevalent. However,he’s driven the modified bike around Iowa,Nebraska, Minnesota and Wyoming, andhas found that he must do his homeworkbefore hitting the pavement. “You have todo a little research in finding where the E85stations are at, but the beauty of this wholestory is that if you have to go back to pre-mium because E85 is not available, the bikestill runs fine,” he says. “It might not run asefficiently but the bike still runs on premi-um fuel so it’s not a situation where if youwent to premium fuel because there was noE85 available, that the bike just wouldn’trun.” As Ammann travels back and forthacross South Dakota he has had to use bothE85 and premium gasoline.
Ammann’s friends are also interestedin converting their motorcycles to use
ethanol. The only thing stopping them isgetting the bike to the Rapid City Harley-Davidson dealership. “I can’t think of anyreason why you wouldn’t want to [make theconversion] other than if E85 is not avail-able close to you,” Ammann says. “Thebiggest thing to remember is that you are inunchartered territory at this point. Sit downwith your dealership and see if they are will-ing to spend the time to do this. Obviouslythis is in its infancy stages of what we hopeto be a kind of revolution of motorcyclingwith E85.”
Being an ethanol believer before heput his motorcycle to the E85 test,Ammann is not surprised by how well themotorcycle has run on the ethanol-blendedfuel. “Somebody’s got to get out there andmake a difference and test those naysayers’concepts and negative energy and say‘Look—here it is. Here is living proof thatthis works. It’s not bad, it’s not eroding myengine and my engine is running better andcleaner’ and anybody who is a Harley riderwho has sat in a parade and felt the heatcome off their engine, when they hearabout cooler burning fuel, that speaks tothem very loudly. And it’s a good thing.”
Ammann admits though, that higherblends of ethanol fuels may not work wellin all small engines, such as boats and lawn-mowers, where he says the plastic, rubberand aluminum parts are a cheaper grade andalcohol may erode them.
This winter, Ammann plans to returnthe bike to the Black Hills Harley-Davidsondealership and let Myers inspect the engineto see if, after using E85 for more than ayear, there are any signs of deterioration.“I’m confident there won’t be but it’s thelast step, offering visual proof that runningon E85 won’t hurt a motorcycle,” Ammannsays. EP
Hope Deutscher is the Ethanol ProducerMagazine online editor. Reach her at
(701) 373-8046.1-800-279-4757
Call us for a free, no-obligationconsulation today.
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EVENT
The theme and tenor of the American Coalition for Ethanol's 21st Ethanol
Conference & Trade Show clearly signaled that the industry is determined
to overcome challenging economic conditions, negative press and
misinformation that has plagued the industry.
By Anna Austin and Erin Voegele
ETHANOL PRODUCER MAGAZINE NOVEMBER 2008110
Fueling a Revolution
EVENT
ETHANOL PRODUCER MAGAZINE NOVEMBER 2008 111
EVENT
he 21st Ethanol Conference &Trade Show attracted nearly1,200 attendees. The event washeld Aug. 12-14 at the Qwest
Center in Omaha, Neb. Nebraska Gov.Dave Heineman's enthusiastic welcomeaddress at the conference’s general session inwhich he expressed his support for theethanol industry set the tone for the event.“The No. 1 issue is energy,” Heineman said.“It is on the mind of every Nebraskan. It’son the mind of every American.”
For more than 25 years, the federal gov-ernment has talked about reducing our
dependence on foreign oilwithout taking any realaction, Heineman said.“It’s time we did some-thing,” he said. “Americaneeds leadership when itcomes to energy, andethanol is part of thatfuture. We’ve got to quittalking, and start doing
something to reduce our dependence onforeign oil.”
Following Heineman’s address threeACE representatives provided updates onthe industry and their organization’s initia-tives. ACE President Bob Scott encouragedattendees to fight back against the prolifera-
tion of negative press. “Ethanol is the fuel ofa revolution,” Scott said. “We are the fuel forthe revolution. We must continue to fight.We must fight hard.”
Brian Jennings, ACE executive vicepresident, acknowledged that some peoplethought the event’s theme, “FuelingRevolution,” was too forceful. But thephrase accurately describes the current stateof the industry, he said. “Let’s face it,”Jennings said. “We are underdogs. We are agrassroots coalition of farmersand ranchers, of entrepreneursand investors, of ethanol produc-ers and industry vendors whotime and time again are out-spent,overlooked—recently relentlesslyattacked—but, my friends, youkeep going and you keep win-ning.”
Jennings summarized some of theindustry’s accomplishments and encouragedattendees to support the industry by writingtheir governors, commenting on online arti-cles, and contributing money to and votingfor political candidates who support ethanol.
Midlevel blends was a popular topic atthe event. Ron Lamberty, ACE vice presi-dent of market development, said ethanolblender pumps and midlevel blends are cru-cial to overcoming the blend wall and
increasing the nation’sethanol consumption. Healso addressed the needfor U.S. EPA approvalthat would allow the useof midlevel blends instandard vehicles. “Wethink all cars can be moreflexible,” Lamberty said.
The conference also featured a paneldiscussion on innovations in corn-based
ethanol production. NationalCorn Growers Association ChiefExecutive Officer Rick Tolmanbelieves that corn growers candouble current yields by 2030without increasing plantedacreage. He also pointed out thata significant amount of cornused for ethanol production re-
enters the market as livestock feed. RobNelson, director of technology develop-ment for VeraSun Energy Corp., and AndyZurn, engineering manager for ChippewaValley Ethanol Co., participated in thatpanel discussion.
Revamping the RFS
The U.S. EPA’s Paul Machiele received awarm welcome, a response likely generatedfrom the agency’s Aug. 7 denial of Texas
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�continued on page 114
Jennings
Tolman
Heineman
EVENT
Economics of Feeding Distillers Grains
Breaking away from the events’ two main themes—cellu-
losic ethanol and midlevel blends—Terry Klopfenstein, a pro-
fessor in the Ruminant Nutrition Department at the University
of Nebraska, Lincoln, led a breakout session detailing the
results of experiments on the economics of using distillers
grains as a livestock feed. He also touched on correlations
between E. coli and feeding distillers grains rations to cattle.
Alan Janzen, owner of Circle Five Beef Inc., concluded
the presentation with data collected at his company involving
storage and feeding practices of wet distillers grains (WDG).
Studies showed that distillers dried grains and modified
distillers grains have 115 percent of the feed value of corn,
while WDG has 130 percent, Klopfenstein said. “In 2007, if we
sold dried distillers [grains] at 84 [percent] or 85 percent of the
price of corn, we paid somewhere between 30 [percent] to 40
percent for the cost of drying,” he said. “We pay to dry it, but
then there is less feeding value.” Klopfenstein added that while
drying may be cheaper for some who have heat recovery sys-
tems, his calculations have suggested that considering the
higher feed value attributed to extra fat and protein content,
using WDG is more economical than feeding DDG. “It does
take more loads of wet than dry feeds, but we have tried to
account for all of that,” he said. “At this time, we would prefer
to not have it dried at all. The economics are favorable.”
Recently, studies such as the one performed by Kansas
State University suggest that there may be a correlation
between distillers grains feed and increased fecal shedding of
E. coli O157:H7 in cattle. “It is reasonable to think that what we
feed cattle might affect the bacterial population of the hindgut,”
Klopfenstein said. “This has already been demonstrated in dif-
ferent studies.” At this point, however, there is no scientific evi-
dence that feeding distillers grains, at least at levels being used
commercially, has been the cause of any E. coli food crisis, he
said.
However, Klopfenstein said research at Kansas State and
the University of Nebraska-Lincoln suggest that under some
feeding levels, and a combination of other unknown conditions,
there is a possibility that distillers grains may increase fecal
shedding of E. coli O157:H7 in cattle. “Response in E. colishedding to distillers grains feeding may be affected by dis-
tillers grains levels and other dietary ingredients such as the
corn type,” he said, adding the issue is highly complex and
more research is needed to address the many factors involved.
“Interventions and research on interventions is much more
important than finger pointing at different feedstuffs, especially
when data are inconsistent and more research is needed,”
Klopfenstein concluded.
Janzen provided an overview of Circle Five Beef, a feed-
ing company that has been operating since 1972. With yards in
Fairmont and Henderson, Neb., Janzen said his company
feeds about 35,000 animals yearly.
In 1995, Circle Five Beef began using rations of 10 per-
cent to 15 percent dry matter and WDG for protein supplemen-
tation and ration conditioning. “Levels of 25 percent to 40 per-
cent WDG have worked well in rations as a corn replacement
when pricing warrants,” Janzen said. “This year we have fed 50
percent WDG rations with the 34 percent dry matter product
and 60 percent with the 50 percent dry matter product with
good results.”
To date, the company has found no negative impacts on
carcass quality while feeding different levels of WDG in rations.
“In 2008, we have had 74.6 percent choice or better carcasses
out of 7,288 cattle sold, finished on 50 percent to 60 percent
WDG rations,” Janzen said.
Janzen believes the use of WDG for cattle feed will
increase as traditional corn exporting areas experience corn
deficits.
EVENT
Gov. Rick Perry’s request for a 50 percentwaiver of the renewable fuels standard(RFS).
Machiele, who has been with the EPAfor more than 20 years and is currently direc-tor for fuel programs for the EPA’sAssessment & Standards Division, touchedbriefly on the decision. After careful consid-eration of the 15,000-plus commentsreceived—the EPA didn’t take the situationlightly, he said. The decision was delayedbecause of the large number of staff mem-bers needed to sift through the comments,and because it was the first waiver requestedsince the original mandate was enforced.
Before getting into RFS 2, Machielewent through the details of the original RFSunder the 2005 Energy Policy Act. “For RFS2 we are planning to build on the foundationof RFS 1, continuing the RIN (renewableidentification numbers) system, and othervarious design elements that we struggled toput into place with RFS 1,” he said. Headmitted that while there have been growingpains in implementing the new program soquickly, they are already beginning to lessen.
“There is now an extensive registra-tion, record keeping and reporting system—if you are an ethanol producer then youknow what I’m talking about,” Machielesaid. He added that along with the new stan-
dard, many other major modifications havebeen implemented. Despite the modifica-tions, which have been challenging, Machielesaid the value of the RINs have been posi-tive. “The market is up and running, theRIN value has really escalated in the past fewmonths and there is a really viable market.”RINs are the serial numbers assigned by pro-ducers to each gallon or batch of renewablefuel produced. The EPA created the systemto ensure RFS compliance. RINS can beacquired by blending renewable fuel or theycan be purchased to meet blending require-ments. Since the December signing of theEnergy Independence & Security Act, RINmarket values have risen from 0.25 cents pergallon to 5 cents per gallon, Machiele said.
While developing the RFS 2 rules hasbeen quite similar to the construction of theRFS 1 policy, slightly different measures willbe taken as it is further developed, Machielesaid. “We plan to engage early and often withstakeholders throughout the process,” hesaid. “The main change was the volume, butthere are many new obligations and defini-tions.” The new RFS raised the mandate to9 billion gallons in 2008; the original policyrequired 7.5 billion gallons by 2012. “Theworld changed for us in December whenCongress passed the new RFS 2 require-ments,” Machiele said. The EPA is currently
evaluating implementation methods and willmake the final RFS 2 rule by Dec. 19, whichwill be effective Jan. 1.
“What everyone mainly looks at is thevolume requirement—36 billion gallons by2022,” Machiele said. “This is the mainchange. Also, there is not one standard, ortwo standards, but rather four. Within the 36billion gallons, 1 billion has to be advancedbiofuels, and also within that, 17 billion gal-lons of it has to be biomass-based diesel orcellulosic ethanol. So, they all count towardthat total.”
Machiele said that in addition to thelarger mandate, there are a number of newobligations and definition changes. “Now,there aren’t just gasoline requirements, butrequirements for diesel fuel and refiners,” hesaid. “There are new obligated parties andnew customers for the new system. Themost unique thing about the new rule is therenewable fuels must now be producedfrom biomass.”
Machiele continued, “There is life-cycleGHG (greenhouse gas) thresholds, grandfa-thering provisions associated with that, andthe new renewable biomass definitions.” Hepointed out that conventional biofuels,advanced biofuels, biomass-based diesel andcellulosic biofuel categories are now allrequired to meet the new GHG reduction
�continued from page 112
ETHANOL PRODUCER MAGAZINE NOVEMBER 2008 115
thresholds. Under EISA, fuel life-cycleGHG assessments will be done, which arealso called fuel cycle or wheel-to-wheelanalyses. The impacts of each fuel through-
out its life cycle will be assessed, includingindirect emissions such as those generatedfrom land-use change. Production andextraction of feedstocks, feedstock trans-
portation, fuel production and distribution,and tailpipe emissions will also be consid-ered.
The EPA will continue discussions
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Pipeline Projects Progress
In the past, the idea of an ethanol-dedicated pipeline has
largely been regarded as unachievable. However, representa-
tives from Kinder Morgan Energy Products L.P. and TEPPCO
Partners L.P. assured ACE conference attendees that what
was once just a pipe dream is now becoming a reality.
Dan Ownby, TEPPCO director of business development,
said the company’s ethanol pipeline strategy dated back to
May 2007. Although the approach seemed small initially—
transporting a batch of ethanol just 150 miles from Indianapolis
to an Argo, Ill., facility—it was a stepping-stone to larger proj-
ects, Ownby said.
“We haven’t looked at the long-term effects yet,” he said.
After extensive ethanol quality testing, the most significant find
was that the fuel turned a dark amber color. Ownby said the
color change was due to the heavily oxidized solid hydrocar-
bons, often referred to as gum, that exist inside the pipes.
In early August, TEPPCO began transporting ethanol by
truck and barge from its new 5 million gallon storage terminal
in Boligee, Mo., Ownby said. In phase two, the company plans
to expand its storage capacity to 42 million gallons.
Although TEPPCO doesn’t currently have any ethanol
pipelines, Ownby believes the logical solution for efficiently
transporting ethanol includes pipelines. “Pipeline companies
are all working for it, but we need to work together to solve the
biggest problem—stress crack corrosion,” he said. “We can’t
jeopardize the pipelines until we know exactly why it happens
and how it will affect the pipelines. Right now, there is no clear
pipeline strategy, but everyone is working on it.”
Jim Lelio, director of business development for Kinder
Morgan, which is the second-largest transporter of petroleum
in the United States, says the company is working to perfect its
pipelines to be ethanol capable. “We focus on where our cus-
tomers want us to go,” he said. “As our customers look to meet
the renewable fuels standard quantity, they will be looking at
this—and we will respond to that.”
All of Kinder Morgan’s West Coast terminals are ethanol
capable and the company is currently evaluating expanding
blends from 5.7 percent ethanol to E10, Lelio said. Kinder
Morgan also expanded a central Florida pipeline in April. The
pipeline is currently handling 25 percent of all ethanol blended
in Florida. “We are rapidly expanding ethanol capabilities in the
Southeast along primary pipeline delivery system terminals,”
Lelio said. He added that a test batch of pure ethanol would be
sent through a 16-inch dedicated gasoline line in central
Florida in late September 2008. The pipeline stretches for 104
miles between the Port of Tampa and the Orlando Airport in
Florida. “There is a lot of preparation going on to get ready for
that,” Lelio said. “Tens of thousands of new parts have to be
brought in and replaced … valves, pumps and the pipeline.”
Kinder Morgan decided to test pure ethanol in the compa-
ny’s pipelines because the company believed that it would be
more successful than other strategies. “It’s what we see in the
future. If you’re blending it ahead of time, then there’s more
interface—you have to add more tankage and that’s a higher
expense.”
Lelio said Kinder Morgan plans to be done testing by
early January.
EVENT
with stakeholders and worldwide industry groups, and work on anumber of drafts prior to the submission of the final proposal.Some of those discussions will focus on modeling framework thatcaptures both domestic and international agricultural sectorchanges and their GHG emission impacts. The agency will collab-orate with experts to improve understanding of agriculturalnitrous oxide emissions, develop country specific GHG emissionsfactors associated with land-use change and agricultural practices,and update petroleum baselines and renewable fuel productionprocess data.
Every three years the EPA will report to Congress on theRFS impacts. “We will also be doing studies on how these biofu-els affect our air quality as a result of these different blend-levelrequirements,” Machiele said.
Midlevel Blends
Minnesota Department of Agriculture senior market special-ist Ralph Groschen, National Renewable Energy Laboratory proj-ect leader Steve Przesmitzki, and Lamberty launched the midlevelethanol blends panel on the final day of the conference.
According to Groschen, Minnesota cur-rently produces three times more ethanol thanthe state can use. To increase ethanol consump-tion in his state and in the country the E10blend wall must be overcome, he said. Beforethat can happen the EPA has to sign off onmidlevel blends. Groschen presented informa-tion on the process that is required to gain EPAapproval for E20 and outlined the five kinds ofdata that must be generated, including information on materialcompatibility, vehicle drivability, vehicle exhaust emission, healtheffects and durability or mileage. Groschen said Minnesota’s pushfor E20 approval could benefit the ethanol industry on a nationallevel because EPA approval of a new fuel will not be state specif-ic.
The EPA is the biggest hurdle that must be overcome to geta new fuel approved for use,” Przesmitzki said. “Their responsibil-ity is to protect the air quality in the United States, and any programfor any fuel has to go through EPA to prove that it is substantiallysimilar to a certification fuel,” he said. Przesmitzki explained thatapproval of E10 was different because it was done under old rules,while E20 approval falls under a new standard. Before the fuel isapproved, it has to be proven that air quality will not be impactedby increased ethanol blends.
According to Przesmitzki, the U.S. DOE predicts the E10market will be saturated by 2013. Two paths can be taken to meetthe RFS: quickly expanding the market for E85 or certifying amidlevel ethanol blend. Although the DOE supports expanding
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ETHANOL PRODUCER MAGAZINE NOVEMBER 2008116
Groschen
ETHANOL PRODUCER MAGAZINE NOVEMBER 2008
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the use of flexible-fuel vehicles (FFVs), it isunlikely that the market could grow quicklyenough to keep pace with current RFS targets.Only about 6 million of the estimated 220 mil-lion vehicles on U.S. roads today are FFVs.Even if automakers push to make 50 percentof their sales FFVs, that would only accountfor 7 million more on the road each year.These statistics make it unlikely the RFS couldbe met with increased E85 usage.
That being said, midlevel ethanolblends are the likely path to increasedethanol consumption. Przesmitzki sum-marized various studies currently beingconducted on midlevel ethanol blends. Heexplained that priority has been given tothe study of small engines for two rea-sons. First, it is much easier to detect achange in emissions when working with asmall engine when compared with auto-mobile engines. Second, small engines aremore affordable to purchase and test thanautomobiles. However, he assured atten-dees that testing is also being done onvehicles.
According to Przesmitzki, the DOEshould soon be issuing an interim reporton small, nonroad engines. He also sharedsome of the preliminary results of a studythe national labs have been undertakingusing 16 vehicles. He said that they haveexperienced some decrease in fuel econo-my, some higher exhaust temperaturesand higher catalyst temperatures. So far,the effects have been seen in seven of the16 vehicles tested. Przesmitzki alsoaddressed the suggestion that FFVs areequipped with the same parts as regularvehicle engines, by assuring attendees thatthat many engine parts are significantlydifferent.
The 22nd ACE Ethanol Conference& Trade Show will be held Aug. 11-13 inMilwaukee, Wis. EP
Anna Austin and Erin Voegele are EthanolProducer Magazine staff writers. Reach
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(701) 738-4968 and evoegele
@bbiinternational.com or (701) 373-8090.
117
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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).
hen this article was originallywritten in August, VeraSunEnergy Corp., Aventine
Renewable Energy Inc. and other largeethanol producers were in relatively goodfinancial condition. However, since mid-September, VeraSun, Aventine and manyother plants have experienced severe financialdifficulties whose ramifications remainedunknown at press time. Despite these compa-nies' worsening circumstances, the underlyingpoint of this article and the examples usedremain valid for other ethanol plants that arestruggling to thrive, not just survive.
After several years of impressive growth,the soaring expansion of the ethanol industryhas been brought back to earth. As a result,ethanol producers are experiencing the strainof reduced profit margins. To weather thisbusiness cycle and come out stronger, savvyethanol producers must take steps to assessand improve their situation. Those that do notmay not make it to the industry’s nextupswing.
Several options are available for ethanolproducers feeling the pinch in today’s industry
climate. The most basic step is to cut costs andincrease revenue. The least appealing, obvi-ously, is liquidation. Between these twoextremes lie other options, such as adding newtechnologies, refinancing company debts orfinding a buyer. An analysis of how other pro-ducers are dealing with market changes canoffer important lessons for you to determineyour own route.
A Multifaceted Response
An example of an ethanol company thathas developed a multifaceted response to thetightening of margins is VeraSun Energy Co.,one of the largest ethanol producers in thenation. By 2008, VeraSun had the capacity toproduce 870 million gallons of ethanol annu-ally, and had ambitious plans to expand itsmarket share significantly. According to thecompany’s 2007 annual report, by the end of2008, VeraSun projected that it would beoperating 16 refineries and have capacity toproduce 1.64 billion gallons of ethanol annu-ally.
However, market trends have forced areassessment of that expansion. VeraSun cut
its costs by delaying the opening of new 110MMgy production facilities in Hankinson,N.D., Welcome, Minn., and Hartley, Iowa.After analyzing its options, the companychose to delay commencing operation at eachfacility until “the outlookfor ethanol selling pricesand overall marginsimprove[d].” On July 22,the Hankinson plantbegan production afterroughly a month delay.On Aug. 14, VeraSunannounced start-up ofthe Hartley facility. Atpress time, the Welcome plant was not operat-ing. Though the company remains optimisticabout the future of the ethanol productionindustry, short-term analysis suggested itcould protect assets and shareholder value byavoiding the high cost of starting up and oper-ating these new plants in a climate whereethanol was “being sold at a deep discount tounleaded gasoline.”
VeraSun has nonetheless continued withproduction at its other facilities and with the
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Tighter Markets ProvideOpportunities, ChallengesBy Todd Taylor
Taylor
ETHANOL PRODUCER MAGAZINE NOVEMBER 2008 121
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construction of other projects, such as newproduction facilities in Janesville, Minn., andAurora, S.D. This continued constructionreflects VeraSun’s strategy of identifyingways to increase revenue while reducingcosts. The Aurora project, for example, is anoil extraction facility scheduled to be com-pleted this fall and expected to yield 7 MMgyto 8 MMgy of corn oil annually, extractedfrom the distillers grains created duringethanol production. The oil will then be soldon the biodiesel market and “is expected togenerate increased revenues and improvedproduction economics,” according to PeteAtkins, VeraSun vice president of corporatedevelopment.
VeraSun’s approach to handling thechanging ethanol market goes a step further.In addition to cutting costs and finding newrevenue streams, the company has refinancedin order to achieve additional liquidity.According to a June 2 press release, VeraSunentered a new revolving credit facility withUBS Investment Bank allowing maximumborrowings of $125 million, up from a pre-vious secured revolving credit facility of $30million. Every business expansion carriessome inherent risks, especially during an eco-nomic downturn, but by refinancing its cred-
it, VeraSun is attempting to manage its risksby maximizing its available funds in order tobe sure it can achieve continued expansion inthe face of current market difficulties.
VeraSun’s proactive approach combineda number of strategies, but most importantwas VeraSun’s strategic approach to analyzingits situation and addressing potential troublebefore it became a crisis.
Other Alternatives Available
Another alternative to consider is look-ing for a buyer. For some producers, the mar-ket downturn has raised the difficult questionof whether to continue operations in the faceof financial stress or merge with anotherproducer to achieve financial stability.Millennium Ethanol LLC chose the latterwhen it was purchased by U.S. BioEnergyCorp. in the spring of 2007. Formed in 2005in Marion, S.D., Millennium Ethanol wasaffiliated with a large South Dakota farmers’cooperative, Fremar Farmers Co-op, and wasfounded with the support of hundreds oflocal investors. The company’s foundingvision was to support the local rural commu-nity and be a low-cost ethanol producer.Nevertheless, Millennium merged with themuch larger U.S. BioEnergy in 2007, beforeit had even completed the construction of its100 MMgy production facility.
At the time, U.S. BioEnergy was one ofthe larger ethanol producers in the nation,with eight facilities and production capabili-ties of 700 MMgy after the merger withMillennium. (U.S. BioEnergy has sincemerged with VeraSun). Though founded onthe principle of supporting local farmersthrough community investment, when theopportunity to consolidate with one of thelargest production companies in the UnitedStates presented itself, Millennium Ethanoldecided to go forward with the merger. Thecompany executives examined their strategicoptions while keeping in mind their fiduciaryduties and recognized a chance to “gainaccess to geographic diversity, managementresources and cutting-edge technology...while also gaining access to capital resourcesand... capitaliz[ing] on the economies of alarger scale,” according to Steve Domm,Millenium Ethanol chief executive officer.
While Millennium may have beenstrong enough to survive and thrive inde-pendently, in the end, the board and mem-
RISK
bers decided to sell and U.S. BioEnergy paidmore than $133 million in cash and stock forMillennium Ethanol, most of which came inthe form of 11.5 million shares of U.S.BioEnergy stock, according to a report inMinneapolis/St. Paul Business Journal.
In order to make these hard decisions,companies such as Millennium need toknow where they stand in the marketplace,through benchmarking and other tools thatemploy hard data to analyze options andcarefully assess their options.
Smaller Producer Remains
Poised
Smaller producers can develop similarstrategies for dealing with the market down-turn. Central Minnesota Ethanol Co-op suc-cessfully weathered similar market difficul-ties just as the company began productionabout nine years ago. CMEC was formed in1994 but spent five years constructing aplant before finally opening its 15 MMgyfacility in March 1999. Unfortunately, pro-duction commenced during a time of histor-ically low ethanol prices, and substantial con-struction cost overruns had left the thinlycapitalized company highly leveraged. In anindustry climate where margins were slim,the company’s revenue was insufficient toservice its debts.
CMEC decided that its best chance ofsurvival was to engage its lenders in conver-sations about refinancing. CMEC had somenegotiating power because, unless producingethanol, the value of the property and equip-ment on which liens could be asserted wasminimal. With the help of an experiencedattorney, the company was able to restruc-ture a large portion of its secured debt andwas in negotiations to do the same withother lenders when ethanol prices began toclimb. Because it had carefully weighed itsoptions when facing financial stress, CMECwas able to survive long enough to thrive inthat next wave of industry growth.
Today, CMEC has a reputation forbeing forward-thinking. The facility was firstin the nation to install biomass gasificationtechnology in 2006 in an effort to becomefully energy independent. CMEC isresearching the feasibility of creating achemical catalyst-free cellulosic ethanol plantin collaboration with SunOpta BioProcessesand has applied for a grant to develop tech-nology that will facilitate the extraction of
ETHANOL PRODUCER MAGAZINE NOVEMBER 2008 123
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moisture from wood chips used in the gasifi-cation unit for water needs during ethanolproduction. When times got tough forCMEC, it fought hard to survive and is nowimplementing new technologies and process-es to enhance revenues and ensure its survivalfor the future.
Worst-Case Scenarios Happen
For producers that are slow to respondto market changes, especially those that haveturned a blind eye to their troubles, strategiesto avert disaster may not be available. Suchproducers may find themselves unable tofinance new revenue-generating strategies,obtain refinancing or find a buyer on favor-able terms. Then, facing mounting debts andforced to seek a buyout, such producers willhave few choices left. Such was the case forCentral Illinois Energy, which was bought outfrom bankruptcy in March 2008.
CIE was formed to build and operate a37 MMgy cooperative ethanol productionfacility in Fulton County, Illinois.Construction began in the spring of 2006 andwas projected to cost approximately $90 mil-lion, $13 million of which was to go towardstart-up costs and working capital. CIE wasfunded, in part, through the investment of250 local farmers, with the goal of continuedeconomic benefits for the surrounding com-munity. Substantial additional funding camefrom lender Credit Suisse.
However, by December 2007, with theplant nearly finished, construction and start-up costs for the production facility had goneup to $130 million. Investors ran out ofmoney, unpaid contractors abandoned thejob site and CIE declared Chapter 11 bank-ruptcy. It was later revealed that the financialproblems at the facility went unnoticed due tounorthodox bookkeeping. According toCIE’s bankruptcy attorney, the CIE plantmanager had been drawing money from threeseparate accounts (for the operating compa-ny, holding company and cooperative) to paybills, depending on which account had suffi-cient funds at the time, according to theCanton, Ill., Daily Ledger.
CIE was bought out by a consortium oflenders for $80 million, roughly the amountof the company’s outstanding debts. CIE’ssenior lender, Credit Suisse, was a part of theconsortium of lenders, along with Whitebox
Advisors, a Minneapolis hedge fund, thatbought out CIE. The buyers formed a newentity, New CIE OpCo LLC, and are respon-sible for $22 million in mechanics liens and theexpense of completing the construction ofthe plant, an estimated $25 million. The origi-nal CIE investors lost all of their investment.
CIE is a valuable example of the impor-tance of having systems in place for the earlydetection of financial difficulties. Much likeCIE, Wyoming Ethanol LLC and its parentcompany, Renova Energy, filed for Chapter 11bankruptcy at the end of June, citing increas-ing costs of constructing a 20 MMgy facility inHeyburn, Idaho. Ethanex Energy Inc. and
Convergence Ethanol Inc. went a step furtherand filed for Chapter 7 liquidation bankruptcyin March 2008 and December 2007, respec-tively, leaving nothing behind for the equityinvestors.
Unfortunately, many industry expertsexpect to see more small to mid-size ethanolcompanies facing severe financial stress as aresult of current market pressures. Don’t letyours be one of them. Learn from the experi-ences of other producers. EP
Todd Taylor is the lead shareholder in the biofuels
group at the law firm Fredrikson & Byron. Reach
him at [email protected] or (612) 492-7355.
ETHANOL PRODUCER MAGAZINE NOVEMBER 2008126
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).
he future of biofuels is gettingcloser as the industry works tire-lessly to turn biomass into eco-
nomical fuel ethanol, but many questionsstill need to be answered. One importantpiece of the puzzle is the enzyme hydrolysisstep, which is key to making the feedstockavailable to allow an efficient fermentationof the lignocellulosic materials celluloseand/or hemicellulose.
The production of ethanol from bio-mass can be broken down into the stepsshown below. Although the process con-sists of many of the same steps as currentstarch-based ethanol conversion, it is not aseasy to perform and, as yet, no commercialprocess is available. To develop a successfulcommercial process, all of these steps needto be integrated because there is a complexinterplay between them. One reason why
this process is much more difficult thanstarch-based conversion is because biomassmaterial is much more complicated than itsstarch-based counterparts.
Biomass contains lignocellulosic fibers,which are composed of three major frac-tions: cellulose, hemicellulose and lignin.While enzymes are able to attack the poly-meric sugar chain in the cellulose and hemi-cellulose fractions, releasing monomeric
CELLULOSE
T
The Important Role of Enzymes in Cellulosic EthanolBy Emmanuel Petiot
SOURCE: NOVOZYMES
The steps needed to convert lignocellulosic feedstock
into ethanol are more complicated than corn-to-ethanol production.
ETHANOL PRODUCER MAGAZINE NOVEMBER 2008 127
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sugars for fermentation, they cannot breakdown the lignin. The presence of this lignin,a complex natural polymer, makes process-ing biomass more difficult.
Solutions for a Complex Problem
It has been noted much in the newsthat one of the stumbling blocks for trans-forming biomass into biofuels is the lack ofcost-efficient enzymes. Enzyme cost hasalready been dramatically reduced due todedicated research, but it needs to be fur-ther reduced. This is due to the complexityof the biomass material discussed earlier. Tosolve this issue, new types of cellulases andhemicellulase activities are being developed.Unfortunately, a complete “one-stop solu-tion” is not possible as the type of feed-stock and its composition, as well as thesteps prior to enzymatic hydrolysis, have alot to do with which enzymes are needed tooptimally perform.
Pretreatment is needed to open up thefibers and make the lignocellulosic substrate(cellulose and/or hemicellulose) accessibleto enzyme action. A variety of pretreatment
methods are available that normally dependon a mechanical and/or chemical disrup-tion of the feedstock. These methods makethe cellulose and/or hemicellulose accessi-ble for the enzymatic action, but due totheir harshness, loss of material and gener-ation of inhibitory compounds often takeplace as well. So far there is no clear winnerin pretreatment, and the relative severity ofthese technologies is a difficult concept tomaster. It is imperative that a maximumamount of sugars be made available with-out destroying any valuable material.
A major complexity to note is that theenzymes must match the selected technolo-gies—the feedstock used as well as theprocess. For example, if a dilute acid pre-treatment is used, most of the hemicellu-lose is degraded and hemicellulases will notbe needed. However, if an alkaline or neu-tral pretreatment is used, the hemicellulosestill needs to be hydrolyzed and hemicellu-lases will be needed. The enzymes neededfor cellulosic conversion must be tailor-made to fit the rest of the process.
Another difficulty is in the cellulose
ETHANOL PRODUCER MAGAZINE NOVEMBER 2008128
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CELLULOSE
component of the biomass. In order to efficiently break it down, amixture of several proteins with different activities is required. Thiscocktail includes three basic types of enzymes.
Endoglucanases break bonds between adjacent sugar mole-cules in a cellulose chain, fragmenting the chain into shorter lengths.Endoglucanases act somewhat randomly along the length of thecellulose chain, although they prefer amorphous regions where thechains are less crystalline.
Cellobiohydrolases attack cellulose chains from the ends of thechain. This exo- or processive action releases mainly cellobiose(composed of two glucose sugar units). Because endoglucanasescreate new ends for cellobiohydrolases to act upon, the two classesinteract synergistically.
Beta-glucosidases break down short glucose chains, such as theglucose dimer cellobiose, to release glucose, a fermentable sugar.Beta-glucosidases are important as they act on cellobiose, whichinhibits the action of the other cellulases as it builds up the hydrol-ysis reactor.
After successful enzymatic hydrolysis has taken place a furtherchallenge is faced at the fermentation stage. The five-carbon sugarsproduced by the hydrolysis of hemicellulose cannot be fermentedby any yeast or microorganism currently in use—at least not incommercially relevant conditions. Research is proceeding to devel-op organisms that can effectively use these sugars in order toincrease ethanol yields and make the whole process cost-efficient.
Sugarcane Bagasse, Corn Stover
Sugarcane bagasse is made up of approximately two-thirds car-bohydrates. The remaining one-third is lignin and other materials.The second-generation process revolves around accessing the largeamounts of cellulosic material blocked within the lignin-based shelland creating ethanol from it.
Theoretically, one ton of sugarcane bagasse produces up to300 liters (79 gallons) of ethanol. In reality the yield depends on anumber of parameters such as quality of feedstock and process effi-ciency.
Currently, 6,000 to 7,000 liters (1,600 to 1,800 gallons) ofethanol is produced from one hectare (2.47 acres) of sugarcane, notincluding the bagasse. When bagasse is included, the amount will asmuch as double: 12,000 to 15,000 liters per hectare (1,280 to 1,600gallons per acre).
Sugarcane bagasse has the most positive net energy balance ofthe common feedstocks. Eight times more energy is produced fromsugarcane than what is used in its creation, according to theBrazilian Sugarcane Industry Association. When bagasse is includ-ed in the equation, it is estimated that the number may increase toas much as 16 times.
Corn stover, which in a strict definition only includes leaves andstalks but also cobs when considered more broadly, is another feed-stock of choice by some of the early industry movers. It is a rela-tively widespread feedstock used all over the world, and an abundantsource of biomass.
One metric ton of corn stover can theoretically be converted
CELLULOSE
into 375 liters (99 gallons) of ethanol, but thesame processing constraints apply as thosementioned earlier for sugarcane bagasse. Inpractice, the best lab- and pilot-scale plantscan only produce approximately 290 liters (77gallons) worth of ethanol with an aim to beas close as possible to the maximum yield.
Corn stover consists of approximately66 percent carbohydrates, with a good bal-ance between five- and six-carbon sugars,which makes the efficient conversion of thelatter as important as the former.
One metric ton of harvested corn cropequals one metric ton of available cornstover. At this point, all projects pertaining tothis feedstock take into account stringent sus-tainability criteria. When sourcing the agricul-tural residue for a given plant, players actuallyensure that enough stover is left in the fieldsto maintain nutrition parameters at appropri-ate levels and to prevent soil erosion. A lot ofwork is being put into collection and storage,which remains a challenge as corn stover hasa high bulk density. This, by the way, limits thevalue one can make out of burning cornstover.
Conclusion
Although no one has a definitive answerto the question of when cellulosic ethanolwill become economically viable, a reasonableanswer is about two to three years from now.All of the elements are in place to almost cer-tainly ensure eventual success for the indus-try. Within this timeframe it is probable thatseveral plants will begin to produce cellulosicethanol from feedstocks such as agriculturalresidues, wood residues and industrial waste.Ultimately, they will likely produce this on anindustrial basis with 25 MMgy to 50 MMgyplants.
Novozymes is putting a lot of effort intomaking cost-effective lignocellulosic ethanol areality. Currently, a wide range of cellulaseand hemicellulase enzymes are in the experi-mental stage. Bringing the cost of theseenzymes down is the major challenge. Anestimate of two to three years to support eco-nomically viable processes is realistic. EP
Emmanuel Petiot is global biomass business
development manager for Novozymes. Reach
him at [email protected] or (919) 494-
3022.
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ETHANOL PRODUCER MAGAZINE NOVEMBER 2008132
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).
he past five years have witnessedan explosion in the laboratoryeffort put into finding an econom-
ical way to develop pretreatment processesfor biomass feedstocks in order to preparethem for conversion to sugar and ethanol.The next step requires taking that base oflaboratory knowledge and converting it toon line processes. Because of the high tem-peratures and high desired-solids levelsrequired for most pretreatment techniques,direct steam injection is the most practicalapproach to heating the slurry. The follow-ing introduces the challenges associatedwith scaling the lab pretreatment process toproduction levels, and some practicaladvantages of developing successful pilotstrategies.
All structural plant matter is a combi-nation of cellulose, hemicellulose andlignin. Only the direct cellulose is readilyconvertible to fermentable products.Hemicellulose must be converted to a fer-mentable form of sugar, and the lignin isgenerally not convertible and must be
removed. Cellulose is the part of the carbo-hydrate portion of plants such as grass,corn stover, straw and trees. Like conven-tional starch conversion to ethanol, hemi-cellulosic materials can be converted to sug-ars and fermented to create ethanol,biodiesel or other useful energy products.
The Process
In all biomass processing cases, themain technological problem is to free thecellulose material in the plant to allow it tobe converted without significantly reducingthe yield of the existing cellulose material.This process is generally referred to as “pre-treatment” of the biomass.
In the pretreatment step, a slurry offeedstock is treated with heat, time andsome type of chemical to convert the hemi-cellulose to a sugar. Pretreatment could alsobe used to change the nature of the hemi-cellulose in order to allow a secondaryagent, such as an enzyme, to hydrolyze thecellulose. This step is conducted in either abatch or continuous process. In the batch
process, high-solids (20 percent to 25 per-cent) slurry of feedstock, usually cornstover, is fed to a high temperature reactorand subjected to high temperature (morethan 300 degrees Fahrenheit). A strongchemical such as sulfuric acid, caustic or asolvent may also be present in the reactor.At the conclusion of the pretreatment stepan acid or enzyme is added to hydrolyze thecellulose and form sugars. These sugars arethen further processed and fermented tocreate ethanol.
The continuous process is anotherapproach to pretreatment taking a pump-able slurry of feedstock and subjecting it toheat and time to soften the hemicellulosicstructure. The softened slurry is then treat-ed with acid or alkaline to break down theslurry to a form that can be hydrolyzed withan enzyme to form sugars. This processwould be in-line as opposed to batch.
Transition from
Lab to Production
Most of the current biomass research
T
PROCESS
From the Lab toProduction: Direct Steam InjectionHeating of Fibrous SlurriesBy Bruce Cincotta
ETHANOL PRODUCER MAGAZINE NOVEMBER 2008 133
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work has focused on laboratory techniquesto determine the effects of temperature andpH (among others) on the conversion rates.These lab settings resemble the chemistrylabs one might have experienced in highschool and college. Pretreatment laboratorywork is almost exclusively batch-drivengiven the complexities involved in control-ling low flow processes. As a result, there isa general lack of knowledge in the bestapproaches and potential problems withcontinuous heating of the biomass feed-stock stream during pretreatment in a pro-duction process.
Factors to consider when scaling upthe lab process include:
� Flow rates will increase and addcomplexity to fluid transfer
� Residence times will change froma relatively fixed-hold vessel to a continuousflow
� The flowability of the slurry is animportant factor
� Piping design and flow dynamicscan add and/or change fluid velocities andimpact the slurry flow.
Pilot Scale Considerations
As with all new process development,technologies need to evolve from the labstage to production-level processes. This isa significant leap as there is more focus onthe chemistry than the mechanical processin most lab settings. The goal is to developproduction-level processes that maintainthe unique design technology and can bescaled to reach economically feasible pro-duction-level processes. For most transi-tions, a pilot plant stage allows companies totest out actual process components such asconveyors, heat transfer, mixers and pumps.
Considerations for developing a pilotplant include:
� Design to mimic full scale processlayouts
� Use equipment similar to full scaleprocesses
� Be careful on the compromisesfrom full scale
� Determine what you are trying tolearn
� Make sure production-level equip-ment exists similar to pilot scale.
PROCESS
ETHANOL PRODUCER MAGAZINE NOVEMBER 2008134
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PROCESS
Unlike grain mash ethanol, there aresignificant differences in the pretreatmentof corn stover, switchgrass and woodfiber. Challenges associated with fiberslurry heating include:
� Heat exchangers are generallynot viable because of processing tempsof 300 degrees Fahrenheit or greater
� Mixing of steam and fiber ischallenging
� Consistencies greater than 14percent create potential pumping issues
� Fluid behaves as a pseudo-plasticfluid, limiting mixing in the pipe.
The Advantages of
Direct Steam Injection
Direct steam injection has a long trackrecord in challenging slurry heating applica-tions. Steam is readily available and can beinexpensive to produce. Scaling from small tolarge flows with steam is effective and reliable.Steam can also assist with producing sterileconditions. A number of methods of directsteam injection can be considered.
Spargers, fixed eductors and Venturi-styledirect steam injection units generally use afixed nozzle to inject steam. Steam control isattempted via an externally modulated steamcontrol valve. With an externally modulatedsteam injector, the steam pressure is adjustedto control the flow rate of steam with a con-trol valve. The use of external steam controldevices to control the steam flow by modulat-ing the steam pressure can lead to excessivesteam hammer and vibration. Steam hammerand vibration often result from poor mixingand condensing of the steam. As temperaturedemand drops, steam pressure drops, lower-ing the steam velocity and potentially causinginstability. Uncondensed steam bubbles willtypically collapse when they come in contactwith a cold pipe wall in the liquid piping.When these bubbles collapse, the slurry rush-es in to fill the void and impacts the pipe wall.In some cases this will result in some pingingnoise and, in severe cases, steam hammer andvibration.
Reactor vessels for batch processing arecapable of high solids percentage consisten-cies. They are flexible for hold time, tempera-ture and pressure changes. Reactor heatingcan also be energy efficient with minimalwater usage. Challenges with reactor heatinginclude limitations associated with scaling upfor production and their ability to be integrat-ed with continuous production strategies.Reactor heating vessels also have high equip-ment costs associated with them.
Inline direct steam injection is well suitedfor continuous fiber slurry heating processes.Inline direct steam injection heaters are capa-ble of high temperature rise and can bearranged in a multi-stage layout to allow forprecise temperature control and smooth oper-ation. Inline direct steam injection heatershave a low pressure drop across the heater
SOURCE: PROSONIX LLC
Flow diagram of a steam sparger
ETHANOL PRODUCER MAGAZINE NOVEMBER 2008 135
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PROCESS
be given to proper screening and separationtechniques. Preheating of water may be apractical way to reduce the steam and waterdemand.
Developing a successful pretreatmentstrategy is obtainable and can be achieved byusing available planning and utilizationresources. The integration of heat into thepretreatment plant design can be done reli-ably and with predictable results. The pro-cessing of fibrous slurries has a long historyin the pulp and paper industry with processfiber flow resources available through organ-izations such as the Technical Association of
the Pulp and Paper Industry. Remember thata well thought out pilot plant plan is essen-tial for identifying and resolving potentialbottlenecks in the process. Once the pro-duction plant is operational, the pilot plantcan continue to pay off by allowing for opti-mization of process design off line. EP
Bruce Cincotta is the chief technical officer and
co-owner of ProSonix LLC. Reach him at
[email protected] or (800) 849-1130.
which minimizes energy demand on the slur-ry pumps and limits flow disruptions to theslurry.
Keys to Successful
Direct Steam Injection
One of the key factors to successfuldirect steam injection is maintaining highsteam velocity for effective mixing and con-densation of the steam into the fiber slurry.Internal modulation allows steam to be inject-ed at sonic velocity to achieve choked flow.Choked flow is the phenomenon of accelerat-ing a vapor to sonic velocity by creating a pres-sure differential through an engineered noz-zle. By establishing choked flow, the steammass flow can be metered to precisely controlthe heating of the slurry. This produces pre-dictable results based on position of the stemplug. Through a variable-area steam diffuser,steam flow is metered at the point wheresteam and liquid first contact and mix. Thismethod eliminates the need for an externalsteam control valve or downstream mechani-cal mixing devices. Also:
� High velocity steam is essential(1,000 feet per second is ideal).
� Process and steam pressure differ-ential are required.
� Steam jet characteristics critical todisperse steam and avoid hot spots.
� Proper sizing is important.� Mechanical mixers to blend steam
are not practical.Steam injection transfers a tremendous
amount of energy and needs to be appliedproperly for successful results.
Process, Equipment
Design Considerations
When designing a pilot plant or scalingup for production-level processing, severalfactors should be considered when integratingdirect steam injection for the pretreatmentprocess. Avoid large, single-point steam addi-tions and ensure a means for even steam dis-tribution. Design the pumping and pipingprocess to promote steady and stable slurryflow. Be aware of the pH environment andthe potential for corrosion. Abrasives can bepresent depending on the feedstock, and par-ticulates can be present from the biomass col-lection process. Some consideration needs to
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ETHANOL PRODUCER MAGAZINE NOVEMBER 2008138
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).
very ethanol producer under-stands that active and healthy yeastare an integral part of the fuel
ethanol production process. Many of theduties of laboratory and production staff
involve monitoring theactivities of yeast inpropagation and fer-mentation. One of thefirst steps to optimalfermentation involvesproper yeast propaga-tion, a process that dif-fers in several waysfrom fermentation.
Here we dissect the yeast propagationprocess, examine its purpose, commonproblems and how it can be optimized forbest results.
Yeast propagation holds several pur-poses. It serves to rehydrate, condition andincrease yeast populations using their naturalreproduction capabilities as living organisms.Unlike the various chemicals that are used inthe process of making fuel ethanol, it isimportant to appreciate yeast as living
organisms and their requirement for anenvironment that supports their growth.
The first thing to consider before deliv-ering or “pitching” yeast to the propagationtank is the status of the yeast itself. The yeastSaccharomyces cerevisiae is typically used in fuelethanol production. Check the yeast’s expi-ration date to make sure it isn’t spoiled orotherwise expired. Make sure the yeast isfrom a reliable source and has been storedproperly, avoiding high temperatures forexample.
For active dried yeast this means check-ing that the yeast has remained vacuum-sealed to retain viability, and wet cake yeasthas been properly refrigerated and does notemit any odors associated with spoilage orrot. Fresh yeast, whether active dried yeast orwet cake, has a characteristic smell that canbe equated with bread making with a slighthint of molasses, the substrate most oftenused to produce yeast on an industrial scale.Once it has been determined that the yeastis of high quality and viability, it can beadded to the propagation tank with confi-dence. Tank size is important for propaga-
tion and is normally between 2 percent and5 percent of the fermentor size.
Optimal Conditions
The conditions of propagation are alsocritical for optimal yeast production andsubsequent fermentation. They include ade-quate glucose, aeration, temperature andnutrient additions. First, the yeast needs asource of carbon, provided by adding lique-fied mash, for cell wall biosynthesis andenergy production. Without further enzy-matic conversion, liquefied mash is low inglucose, typically below 0.5 percent. Glucoselevels are elevated in propagation by addingthe enzyme glucoamylase, similar to whatoccurs in fermentation. Higher polymers ofglucose (DP4+, DP3 (maltotriose), andDP2 (maltose)) are converted to individualglucose subunits (saccharification), whichare subsequently utilized by the yeast. Onemajor difference between propagation andfermentation is that a much lower level ofglucose is preferred in propagation com-pared to fermentation. Glucose levelsshould be targeted at or just above 2 percent
PROPAGATION
E
A Guide to Successful Yeast PropagationBy Patrick Heist
PHOTO: KEITH WELLER
Heist
at the beginning of propagation becausehigher glucose concentrations can inducethe yeast to produce ethanol, resulting in less
energy production per molecule of glucose,rather than utilizing more of the availableenergy through aerobic respiration.
Saccharomyces yeast is good at producingethanol, and higher glucose concentrationswill cause a default metabolism leading toethanol production, a process known as theCrabtree effect. The proper amount of glu-coamylase to add to the propagation mix toachieve close to 2 percent glucose is depend-ent on several factors, such as choice ofenzyme, solids concentration in the mash,mash-to-water ratio and temperature. For atypical corn-to-ethanol plant with slurrysolids measured at 32 percent to 34 percentwith a mash-to-water ratio of approximate-ly 70:30, which is standard, the amount ofglucoamlyase is typically 0.5 to 1 gallon.
Glucoamylase is typically added at thebeginning of propagation at the same timeas, or just prior to, yeast addition. Althoughquite easy to maintain at optimal levels, highglucose (5 percent and higher) in propaga-tion is a chronic problem at fuel ethanolplants. One common misconception is that,compared to fermentation, glucose uptake ismuch slower in propagation. This is some-
what counterintuitive because of theincreased energy production per moleculeof glucose in propagation compared to fer-mentation. One must remember that closeto 16 times more energy is generated duringaerobic respiration per molecule of glucosewhen compared to fermentation. Anotherway to explain it is that during fermentationyeast uses only a portion of the energy con-tained in the glucose molecule, resulting inthe high-energy byproduct ethanol, whereasyeast utilize much more of the energy whenrespiring aerobically during propagation. Ananalogy is taking only one bite out of a sand-wich and leaving the majority behind (fer-mentation), compared to eating the wholething (aerobic respiration), which takes moretime and provides more energy.
In addition to a carbon source, suppliedby glucose, additional nutrients above whatis naturally provided in the corn are added tooptimize growth. Nitrogen in the form ofurea is most often used at a rate of between300 parts per million to 500 parts per millionor higher. Although ammonia is also a goodnitrogen source for the yeast, it can beinhibitory to yeast during rehydration.
ETHANOL PRODUCER MAGAZINE NOVEMBER 2008 139
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PROPAGATION
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PROPAGATION
Failure to add additional nitrogen can causesluggish yeast growth, resulting in abnor-mally low yeast counts or slower metabo-lism. Additional ingredients like magnesiumand zinc are sometimes added for addition-al benefit, but it is unclear whether this isnecessary as the grain itself contains a cer-tain amount of these elements.
Providing Proper Aeration
As mentioned earlier, propagation isan aerobic process, thus the propagationtank must be properly aerated to maintain acertain level of dissolved oxygen. Adequateaeration is commonly achieved by air induc-tors installed on the piping going into thepropagation tank that pull air into the prop-agation mix as the tank fills and duringrecirculation. The capacity for the propaga-tion mix to retain dissolved oxygen is afunction of the amount of air added andthe consistency of the mix, which is whywater is often added at a ratio of between50:50 to 90:10 mash to water. “Thick”propagation mixes (80:20 mash-to-waterratio and higher) often require the additionof compressed air to make up for the low-
ered capacity for retaining dissolved oxy-gen. The amount of dissolved oxygen inthe propagation mix is also a function ofbubble size, so some ethanol plants add airthrough spargers that produce smaller bub-bles compared to air inductors. Along withlower glucose, adequate aeration is impor-
tant to promote aerobic respiration, whichdiffers from the comparably anaerobicenvironment of fermentation.
One sign of inadequate aeration orhigh glucose concentrations is increasedethanol production in the propagation tank.There will always be some ethanol pro-
Yeast propagation is a critical step in ethanol production.
PH
OTO
: JE
RR
YK
RA
M, B
BI IN
TE
RN
ATIO
NA
LIN
C.
PROPAGATION
duced during propagation, but limiting thatis a good sign that the yeast is respiring aer-obically as should be occurring duringpropagation.
Time and Temperature
Yeast requires a comfortable tempera-ture for growth and metabolism. A goodtemperature for propagation is between 92and 94 degrees Fahrenheit. Lower temper-atures result in slower metabolism andreduced reproduction, while higher temper-atures can cause production of stress com-pounds and reduced reproduction. Due tothe small tank sizes relative to fermentationand the fact that most propagation tanksare indoors and protected from the insult ofhigh summer or low winter temperatures,maintaining optimum temperatures ofbetween 92 and 94 degrees is usually not aproblem.
Another common question is howlong to propagate yeast before adding it tothe fermentor. Propagation times varybetween ethanol plants, but most oftenrange between six and 10 hours, which cor-responds to the time it takes for the yeast to
reach exponential growth phase. Longerpropagation cycles can result in the yeastentering stationary phase or a stage ofdecline due to depletion of nutrients andaccumulation of byproducts such as aceticacid, which can cause a subsequent lag inyeast performance once in the fermentor.Shorter propagation cycles do not allowtime for adequate doubling or reproductionof the yeast, one of the primary reasons forpropagating in the first place. Determiningoptimal drop times for propagation mayinvolve charting growth under the condi-tions described above and deciding whenthe yeast has reached exponential growth inrelation to when it enters into the subse-quent stationary or rapid decline phases.
Bacterial or wild yeast contamination israrely a problem during propagationbecause yeast propagation tanks are smallerand can be more easily cleaned than fer-mentation tanks. Propagation tanks are alsoindoors, allowing for better temperaturecontrol. Another factor contributing tolowered contamination is that propagationtakes much less time than fermentation,thus contaminating microorganisms don’t
have adequate time to reach significantnumbers. In addition, there is less glucoseavailable for contaminating bacteria andwild yeast. If contamination does occur inthe propagation tank it is almost alwaysrelated to inadequate cleaning, malfunction-ing or damaged equipment, or other error.Heat exchanger or piping issues are a lead-ing cause of contamination in propagationtanks.
Apart from cleaning, antibacterialproducts are often added to prevent growthof unwanted microbes. Prefermentors atcontinuous plants are more likely to harborcontaminating microbes due to lengthyperiods between cleanings, which can go onfor more than a year in some cases.
In summary, yeast propagation is anintegral part of the fuel ethanol production process. By following the afore-mentioned guidelines, propagation can beoptimized and problems in fermentationminimized. EP
Patrick Heist is chief scientific officer for Ferm
Solutions Inc. Reach him at eheist
@ferm-solutions.com or (606) 218-5429.
ETHANOL PRODUCER MAGAZINE NOVEMBER 2008142
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).
n the October issue of EPM, severaloptions for improving ethanol plantoperation were presented from a
process-related perspective. This article, thesecond in a three-part series, focuses onenergy-related changes that could improvethe ethanol production process or reduceenergy costs.
Many of the energy-related optimiza-tion options available are related to fuelchoice and efficiency with respect to theheating/cooling and power requirementsfor running the various unit operationsinvolved in ethanol production. The goal ofall of these options is to decrease the netenergy requirement (and consequently theassociated cost) of fuel ethanol productionrelative to the standard process in theUnited States. All of the options yield sig-nificant savings but are not yet in wide-spread use or considered standard. A moredetailed discussion of these and additionaloptions can be found in the full-length ver-sion of this three-part series, available atwww.ethanolproducer.com/articles/EmergingOptimizationOpportunities.
Pervaporation,
Capillary Distillation
The act of purifying ethanol throughtraditional distillation techniques is the sin-gle-largest consumer of energy in ethanolproduction. Roughly between 50 percentand 60 percent of the energy used in thefermentation process can be accounted forduring distillation. Consequently, it's appro-priate to examine the distillation processfirst when identifying energy-saving oppor-tunities. Two techniques for reducing ener-gy consumption during distillation are per-vaporation and capillary distillation.
Pervaporation involves the separationof two or more components across a mem-brane by differing rates of diffusionthrough a thin polymer and an evaporativephase change comparable to a simple flashstep. A concentrate and vapor pressure gra-dient is used to allow one component topreferentially permeate across the mem-brane. Using such membranes to replaceboth the rectification column and themolecular sieve unit has been proposed in aconventional process. This process could
save up to 50 percent of the overall energyconsumption in distillation while at thesame time yielding a 99 percent pureethanol stream. This technology has beeninstalled on a demonstration scale in anethanol plant in Chatham, Ontario.
Capillary distillation utilizes fractionat-ing plates with capillary-type passages toalter the vapor-liquid equilibrium of twocompounds and yield high tray efficiencies.The overall result is a shorter columnrequirement and less energy input to affectthe same separation as conventionalcolumns.
Cogeneration
Also referred to as combined heat andpower, cogeneration is the combined gener-ation of steam and electricity for use in aplant. In a cogeneration facility, steam isgenerated in a boiler, passed through a tur-bine to generate electricity and then sent onto a process that requires heating.Alternatively, the hot flue gases from thefuel combustion can be sent directly to a gasturbine for electricity generation and then to
I
OPTIMIZATION
Emerging EnergyOptimizationOpportunities for Ethanol FacilitiesBy Philip A. Marrone, Kenneth R. Liberty and David J. Turton
OPTIMIZATION
a waste heat boiler or other device for fur-ther heat recovery. Cogeneration thusallows a plant to eliminate or reduce theneed to purchase electricity and allows for amore efficient use of fuel in generating theplant’s energy needs.
While cogeneration technology isn'tnew, its application in the ethanol industryhasn't been widely implemented. Most ofthe ethanol plants that utilize cogenerationare wet mills, likely because of their largersize relative to a typical dry-grind plant.While the capital cost of installing or retro-fitting cogeneration isn't insignificant, thebenefits of reduced utility costs over timemakes this a worthwhile option to consider,particularly as fuel costs continue to rise.
Biomass for Fuel
Biomass holds potential not only as anethanol feedstock but also as a direct fuelsource or a feedstock for other fuels thatcan be used for power generation. Mostethanol plants generate energy for the plantby burning fossil fuels. This is expensive,especially with today's rising fuel prices. Theuse of low-cost and/or readily availablebiomass as an alternative fuel can thereforebe very attractive.
The most obvious source of biomass
for an ethanol plant to consider is that asso-ciated with the dead yeast cells and othernon-fermentable solids (e.g., protein, fiber)in the stillage. Whether stillage is more valu-able as fuel or livestock feed depends on theprice of alternative fuel sources (e.g., natu-ral gas) versus the selling price of distillersgrains. Other sources of available biomassinclude agricultural waste (e.g., corn stover),manure and lignin. The most popular waysto convert biomass to fuel are by directburning, gasification or anaerobic digestion.
Direct burning is the simplest way toextract the energy value of biomass.Distillers grains and condensed distillerssolubles (i.e., syrup) have a sufficiently highheating value, so they can be burned as fuelto generate steam or operate the drum dry-ers used to generate distillers dried grains(without solubles). A Minnesota plant thathas burned syrup since 2005 has reduced itsnatural gas use by up to 54 percent. In addi-tion to the energy savings, burning distillersgrains or syrup avoids the logistical difficul-ties in having to store, transport and sellthese coproducts, although it also elimi-nates the income from their sales.
If conveniently available, agriculturalwaste is an ideal fuel or fossil fuel supple-ment because it provides a use for wastematerial. Dry manure (less than 20 percentmoisture) can also be burned directly. Useof these materials is most economical forethanol plants located near farms or ranch-es since transportation costs can outweighthe energy value.
Conventional gasification or reform-ing uses high temperature and steam withlimited or no oxygen to break down organ-ic substances into synthesis gas (primarilycarbon monoxide and hydrogen). Thesegaseous products are valuable for use as afuel by itself or for building larger organicmolecules (including ethanol) via a catalyticFischer-Tropsch synthesis reaction.Gasification isn't a new technology, but itsconsideration for biomass feeds such ascorn stover has only occurred over the past30 years. Although there has been consider-able recent interest in gasification for gener-ating alternative liquid fuels from biomass,use of this technology in an existing ethanolplant at the present time is unknown.
Anaerobic digestion is a process whereorganic matter is decomposed by bacteria in
ETHANOL PRODUCER MAGAZINE NOVEMBER 2008144
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OPTIMIZATION
the absence of oxygen to generate a gaseous mixture (referred to asbiogas) consisting primarily of methane. The process is commonlyused for wastewater treatment and has been utilized by several ethanolplants for processing relatively small quantities of off-spec fermenta-tion batches. Digestion of the much larger quantities of stillage that areproduced in a typical plant would generate a volume of gas that couldjustify its recovery and use as a fuel within the plant. Several designswhere an anaerobic digestion system replaces the centrifuge, evapora-tor and dryer within an ethanol plant have recently been proposed.Anaerobic digestion can easily accommodate other biomass sourcessuch as agricultural waste and manure. The main hurdle that has pre-vented widespread use of anaerobic digestion by the ethanol industryhas been cost (up to 30 percent greater in capital cost). However, elim-ination of two critical economic factors in plant operation—fuel anddistillers dried grains with solubles (DDGS) prices—provides a power-ful incentive that may make the initial high cost worthwhile.
Improved Efficiency, Energy Extraction
This is a key reason why energy use in ethanol plants has droppedconsiderably over the past few decades. The most efficient plants aregetting at least two uses out of most of their energy inputs. One wayto increase energy production efficiency is through cogeneration.Plants have also been reusing waste heat and utilizing regenerative heat-ing. Examples include using hot gaseous effluent from the DDGSdrum dryers to heat the thin stillage evaporators and using evaporatorwaste heat to augment what's needed for distillation. The improvedenergy costs must be weighed against the higher capital expense andmore complex operation.
Another strategy to consider is cooperative energy. Excess heat orpower can be captured and transferred from a nearby industrial facilityto the ethanol plant or vice versa. This synergistic relationship fostersgood neighbors and reduces overall energy costs. The downside to thisstrategy is the dependence on this synergy. For example, if there is aplant shutdown for maintenance, there needs to be a backup plan so
that there is no effect on the collaborating plant. This backup systemcould result in additional capital costs and maintenance to ensure nodisruption to the dependent processes.
In addition, pinch technology is a methodology that seeks to max-imize heat recovery in a process facility by systematically identifying allheat gradients and then determining the optimum heat recovery sce-narios. Many facilities that have applied this methodology have seenenergy savings of 20 percent.
Elimination, Minimization of Drying
Drying distillers grains and solubles is one of the most energy-intensive unit operations in a dry-grind ethanol plant, consuming asmuch as one-third of a plant's entire energy requirements. Thus, anymethod of incrementally reducing the energy demand of the dryingstep can yield substantial savings. Of course, elimination of the dryersand evaporators altogether is the most straightforward solution if thereis either a nearby market for distillers wet grains or if the stillage is usedfor its heating value within the plant.
One way to minimize dryer energy costs is to reduce the load ofmaterial or water content that is sent to the dryer. This can be accom-plished by eliminating or reducing the flow of condensed distillers sol-ubles, or syrup, to the dryer. Elimination of this liquid from the dryerfeed can reduce the dryer energy requirement. Another option is toincrease the concentration of the syrup before sending to the dryer,decreasing the water load. While the increase in viscosity can makemore concentrated syrup difficult to handle without a properlydesigned evaporator, the downstream dryer energy savings may be con-siderable. The syrup could also be concentrated by a less energy-inten-sive method than evaporation by utilizing one of various types of low-temperature filtration such as reverse osmosis or nanofiltration. Such asystem can provide energy savings by both eliminating the evaporatorand reducing water load to the dryer.
OPTIMIZATION
Raw Starch Hydrolysis
Also referred to as cold saccharification, cold cooking or coldhydrolysis, raw starch hydrolysis is a process that converts starch to glu-cose directly, without heating. It thus avoids the traditional energy-intensive and high-temperature (more than 158 degrees Fahrenheit) liq-uefaction and saccharification steps.
In the raw starch process, ground corn is slurried with water andenzymes at a temperature between 86 and 104 degrees Fahrenheit. Thisis comparable to the temperature range of fermentation, which followsonce the starch has been fully hydrolyzed to glucose. Although work onthis process began as far back as the 1940s, it wasn't until 2004 that itbecame a mature commercial-scale process. A key breakthrough forthis process was the development of alpha-amylase and glucoamylaseenzymes capable of converting solid starch to sugar without heat.Several companies, most notably Poet LLC and the team of Genencor(Danisco Inc.), ICM Inc., and Fagen Inc., have developed versions ofthis process. As of early 2006, there were at least 10 ethanol plantsemploying this technology. However, not all companies are fully con-vinced that the benefits of raw starch hydrolysis outweigh its draw-backs.
The main advantage of the raw starch process is the significantreduction in energy consumption caused by not heating the feed abovethe temperature of fermentation (i.e., approximately 86 degreesFahrenheit). The elimination of the liquefaction and saccharificationunit operations also provides considerable time and cost savings. Otherbenefits are reduced water and waste costs, improved conversion effi-ciency, and increased protein content and quality of feed coproducts.Disadvantages of utilizing a lower temperature include the increasedcost and amount of enzymes needed for raw starch hydrolysis, slowconversion, an increased number of undesirable microorganisms andtoxins that would normally be destroyed/inactivated by heat, and theincomplete liberation of endosperm starch. While these disadvantagesaren't insurmountable, addressing them will minimize the cost savingsderived from the process benefits. Each plant needs to weigh the pros
and cons subject to its own unique operating conditions to determinewhether raw starch technology is worthwhile to implement.
Summary of Energy Optimization Options
Most of the options presented here address energy savings byoperation either 1) at lower temperatures, 2) with a more efficient andeffective use of energy, or 3) with alternatives to traditional fossil fuels.Many of these options have the initial hurdle of high capital costs butultimately achieve savings over the long term through decreased ener-gy costs. The key to whether an option is worth implementing for aparticular facility will likely depend on how quickly the return on invest-ment is achieved. As energy prices continue to rise, implementation ofthese energy-saving options may become more favorable. Unlike theprocess-related optimization options (discussed in the October issue),many of the energy options (e.g., cogeneration, anaerobic digestion,regenerative heat exchange) aren't unique to an ethanol productionplant. Many of these options are more fully developed and maturebecause of their more extensive industrial uses, even if they have yet tobe fully embraced by the fuel ethanol production industry. Regardless,the cost of energy plays such a critical role in plant viability that evensmall improvements can result in significant savings.
The next and final installment of this three-part series will focuson waste and coproduct-related options to improve the ethanol pro-duction process. EP
The authors would like to thank Bryan Yeh of Science ApplicationsInternational Corp. for his contributions to this article.
Philip A. Marrone is a chemical engineer, Kenneth R. Liberty is a biochemi-
cal engineer and David J. Turton is a civil engineer with Science Applications
International Corp. Reach Marrone at [email protected] or (617) 618-
4686. Reach Turton at [email protected] or (443) 402-9209.
ETHANOL PRODUCER MAGAZINE NOVEMBER 2008148
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).
oaring oil prices, the concentrationof hydrocarbon reserves in coun-tries with unfriendly or unstable
regimes, the worldwide push to lowergreenhouse gases, and the emerging politi-cal concerns regarding food-based biofuelshave led some to refer to cellulosic ethanolas a “silver bullet” solution to the energycrisis. The U.S. renewable fuels standardmandates that advanced biofuels, whichinclude cellulosic ethanol, constitute 21 bil-lion gallons of the nation’s gasoline poolby 2022. However, no commercially avail-able cost-effective cellulosic biofuel tech-nology is yet available.
Start-up ventures, funded largely byventure capitalists, have taken the early leadin developing cellulosic biofuel technology.In the race to develop cost-effective com-mercialization of cellulosic biofuels, majoroil, chemical and automotive companies,acting as strategic partners, have enteredinto collaborations with these start-ups.These arrangements, likened by some tothe tie-ups between big pharmaceuticaland biotechnology companies, provide thestart-ups with needed cash and potential
project development, logistics and infra-structure support, and allow the strategicpartner to immediately bolster its greencredentials and provide key technologieswithout the delays, risks and costs inherentwith in-house development.
Recent examples of these include thestrategic alliance between BP Amoco PLCand Verenium Corp., the joint venturebetween DuPont and Genencor, andinvestments by Marathon Oil Corp. andGeneral Motors Corp. in Mascoma Corp.
Left unstated in the glowing pressannouncements looms the potential fordivergent interests between the strategicpartner and the start-up. Both partiesshould choose the other with care andunderstand the potential areas of misalign-ment.
Are the Parties Aligned?
The start-up will seek to commit thestrategic partner to provide financing suffi-cient to satisfy its investors, as well as toenable the start-up to weather scheduleslippages and problems that arise duringthe pilot process or commercialization. In
addition, the start-up may be looking tothe strategic partner for much-neededexpertise in project/construction manage-ment and plant opera-tion, regulatory com-pliance, logistics sup-port, marketing toblenders, and/or pur-suing and maintainingpatent protection on aglobal basis. The start-up will also want toprevent the strategicpartner from foreclos-ing other options for itto exploit its technolo-gy to provide itsinvestors with thequick returns and exitoptions venture capi-talists and hired-inprofessional manage-ment teams seek.
The strategic partner’s objectives willin part depend on the nature of theinvestor. For instance, it's likely thatDuPont wants to commercialize and
INDUSTRY
S
Cellulosic EthanolCollaborations:Matchmaking Isn’t EasyBy Carey Jordan and Paul Landen
Jordan
Landen
ETHANOL PRODUCER MAGAZINE NOVEMBER 2008 149
INDUSTRY
license technology that it believes will beuseful in the field. GM wants to secure agreen source of ethanol production for itsnext-generation flexible-fuel vehicles butdoesn't want to be an ethanol producer.On the other hand, Weyerhaeuser Co. like-ly sees opportunities for its wood mills andforest plantations as cellulosic ethanol canbe produced from wood chips and woodmill tree waste.
Some objectives will be shared bymany strategic partners regardless of theirnature, and these objectives often are notaligned with the start-up’s objectives. First,the strategic partner won’t want to belocked into a single company or singletechnology as indicated by GM’s invest-ments in both Mascoma and Coskata,which have different technologies.Additionally, Shell has invested in Choren
Industries GmbH, a German companyfocused on producing biofuels from bio-mass (e.g., wood chips), in addition to tak-ing an approximately 50 percent owner-ship interest in Iogen Energy, a Canadianfirm making biofuels from non-foodsources (e.g., wheat straw).
Second, a strategic partner will wantto control its spending both in the aggre-gate and year-to-year. Moreover, the strate-gic partner will seek the flexibility to cut itslosses and stop funding if milestonesaren’t met or test results are unfavorable.
If the technology proves successful,the strategic partner likely has a longerinvestment horizon than the start-up’sinvestors and will seek an exploitation plantailored to its strategic objectives, whichlikely differ from the start-up’s investors.The introduction of a strategic partnercould potentially accentuate divergence inthe interests of the start-up constituencies.While the strategic partner likely will befocused on ensuring that the founders andtechnology gurus of the start-up are prop-erly incentivized to stay, it may have far lessinterest in protecting the start-up’s profes-sional management and financial backers.
A Range of
Collaboration Forms
Just as there is an array of potentialtypes of strategic partners, there is a range
ETHANOL PRODUCER MAGAZINE NOVEMBER 2008150
INDUSTRY
of potential collaborative forms to con-sider. They are not all mutually exclusive.The most straightforward and least entan-gling arrangement is a technology licensefrom the start-up to the strategic partner.
A variety of commercial arrange-ments short of a full joint venture arepossible. The BP/Verenium strategicalliance is one example. During an initial18-month “strategic alliance” that isintended to last through development ofa pilot plant, the parties license theirrespective technologies to a newly formedspecial-purpose entity owned by them50/50, with the parties retaining owner-ship of their respective technologies.Jointly developed intellectual propertyduring such a period is owned by the spe-cial-purpose entity. Following the strategicalliance, the parties are expecting to nego-tiate a joint venture for commercial pro-duction of cellulosic biofuels.
Dupont Danisco Cellulosic EthanolLLC is illustrative of a robust joint ven-ture. Dupont and Genencor (a division ofDanisco AS) announced that they haveformed a 50/50 joint venture to whicheach partner contributed certain technol-ogy. The partners have committed tospend a total of $140 million over threeyears to develop the technology and con-struct pilot plants with a view to licensingthe technology once it is proven success-ful.
In connection with a strategic alliance
Collaborations in the Race to CommercializationSeveral high-profile collaborations have
impacted the race to commercialize cellulosic
ethanol. A few are highlighted here:
� DuPont and Genencor: In May, the duo
formed a 50/50 global joint venture named DuPont
Danisco Cellulosic Ethanol LLC. The intent is the
develop and commercialize technology for cellu-
losic ethanol production. The three-year, $140 mil-
lion investment will initially target corn stover and
sugarcane bagasse. Future feedstocks include lig-
nocellulosic sources, a variety of energy crops and other biomass. The parent compa-
nies will license their combined existing intellectual property and patents related to cel-
lulosic ethanol.
� BP and Verenium: In August, these companies announced a strategic part-
nership to develop and commercialize cellulosic ethanol. The financial terms of the ini-
tial phase of the strategic alliance include $45 million for broad access to Verenium’s
cellulosic ethanol technology platform, production facilities, and employee scientific
knowledge and expertise. An additional $2.5 million per month over 18 months will co-
fund Verenium’s various scientific and technical initiatives within the cellulosic field.
The companies’ joint efforts will be directed by a joint development agreement.
Beyond the initial phase of the alliance, the companies said they expect to negotiate
a joint venture to accelerate commercial deployment of the technologies.
� GM and Mascoma: In May, GM and Mascoma announced a strategic rela-
tionship to develop cellulosic ethanol based on Mascoma’s single-step biochemical
conversion of non-grain biomass into low-carbon alternative fuels. The relationship
includes an undisclosed equity investment by GM. GM said it’s multi-dimensional
involvement with Mascoma will include projects to evaluate materials and other fuels
for specific engine applications as well as collaborating on Mascoma’s efforts to
expand its commercialization projects globally.
� Marathon and Mascoma: Also in May, Marathon announced a $10 million
equity investment in Mascoma, which will go toward the funding of research and
development activities at Mascoma, as well as the construction of operating facilities.
Verenium Corp. is using its partnership
with BP to commercialize its cellulosic
ethanol process.
PH
OTO
: V
ER
EN
IUM
CO
RP.
ETHANOL PRODUCER MAGAZINE NOVEMBER 2008 151
INDUSTRY
commercialization of the start-up’s tech-nology. By performing the due diligence,however, the strategic partner should beaware that if the negotiations fail, it couldsubject itself to potential claims by thestart-up, especially if the strategic partnermakes a different investment with anothercompany using similar technology.
A key concern for the start-up in anytechnology licensing arrangement with astrategic partner is how much control thestart-up retains over the technology to beable to continue to monetize this primaryasset. Ownership of improvements andthe start-up’s ability to license those willalso be a concern. To protect the start-up’sinterests, the agreement could carve out“fields-of-use” (i.e., restricting permitteduse to a particular industry or product) tocreate future licensing paths for develop-ment with other players. The strategic part-ner may insist that these be limited toindustries or products outside of its pri-mary field or to companies that are not itskey competitors.
Another key negotiating area for boththe strategic partner and the start-up willconcern what happens to the technologyand licensing rights should the collabora-tion fail. These must be considered.
Choose Carefully,
Do Homework
Both the constituent members of thestart-up and the strategic partner mustchoose their partners carefully in any col-laboration, structure arrangements thatmeet their specific needs, do their diligenceand other homework, go into negotiationswith eyes open and develop a negotiationstrategy that addresses both the possibili-ties of future success and potential failuresof the collaboration. EP
Paul Landen is a partner in the global projects
group of Baker Botts LLP. Reach him at
[email protected] or (713) 229-
1173. Carey Jordan is a partner in the intellec-
tual property group of the law firm Baker Botts
LLP. Reach her at carey.jordan
@bakerbotts.com or (713) 229-1233.
or a technology license, the strategic partnermay make an equity investment in the start-up. The equity investment creates alignmentby providing economic reward to the strate-gic partner for the start-up’s future success.Often the investment will be accompaniedby board representation or other gover-nance, access or intellectual property rights.Recent examples include the GM andMarathon investments in Mascoma, GM’sinvestment in Coskata, and Shell’s invest-ment in Iogen and Choren Industries.
The ultimate collaboration is a fullacquisition of the start-up by a strategicpartner. Once companies develop technolo-gies that are proven to be commerciallyviable, acquisitions of start-ups by strategicplayers are expected.
Technology Ownership,
Licensing Issues
A host of issues, including governanceand exit strategies, valuation of relative con-tributions and other matters are presentedby these various collaborative arrangements.Because technology is the core asset of thestart-up and the key to unlocking the successof cellulosic ethanol as an industry, the fol-lowing focuses on a few key technologylicensing issues.
By virtue of a collaboration with astart-up, the strategic partner is risking notonly its cash outlay for unproven technolo-gy, but also exposing itself to potential liabil-ity for patent infringement if commercializ-ing the start-up’s technology infringes theintellectual property rights of others. In aninfringement suit, the strategic partner willbe the “deep pocket,” and therefore a targetof any potential patent action, which is def-initely undesirable as treble damages arepossible. Moreover, such risks are real andlooming, not only because of the buzz sur-rounding cellulosic ethanol, but also thesheer number of companies developingtechnology.
Because of these potential risks, it iscritical that the strategic partner do the nec-essary due diligence before entering into acollaboration with the start-up. The dili-gence should not only evaluate the start-up’stechnology and patent portfolio, it shouldalso involve a clearance analysis to identifyany other patents that may prove to beblocking patents to the strategic partner’s
EVENTS CALENDAR
World Ethanol 2008November 3-6, 2008
Le Meridien Montparnasse Hotel
Paris, France
This 11th annual event, hosted by F.O. Licht, will
feature top industry experts, including senior repre-
sentatives from the oil and automotive industries,
and assess the outlook for agricultural commodi-
ties and nonfood feedstocks. The conference
includes an ethanol production workshop, a risk
management seminar and an exhibition hall. Last
year, the conference attracted more than 800 del-
egates from 58 countries.
+44 (0) 20 7017 7499
www.agra-net.com/worldethanol
Oklahoma Biofuels ConferenceNovember 12-13, 2008
Skirvin Hilton Hotel Conference Center
Oklahoma City, Oklahoma
This third annual event takes an in-depth look at the
latest regulatory, agricultural and technical develop-
ments impacting the biofuels industry in Oklahoma.
The agenda will offer updates on the Oklahoma
Bioenergy Center’s research fields, legislative
developments, feedstock options, biorefinery con-
struction, carbon control policies and sustainability.
(800) 203-5494
www.growok.com
Bio-Fuels Thailand November 12-13, 2008
Centara Grand at CentralWorld
Bangkok, Thailand
This seventh annual event’s keynote address will
provide a market overview, and address pricing
and challenges of ethanol in Thailand.
International perspectives will be presented, along
with technology strategies and other critical con-
cerns for the biofuels industry. A roundtable panel
will discuss E85. A tour of the Thai Agro Energy
Ethanol Plant, and PTT Research and Technology
Institute, will be available to attendees.
(66 02) 254 8321-4
www.abf-asia.com/project/c908($).pdf
Waste to Energy: International Exhibition &
Conference for Energy fromWaste and Biomass
December 10-11, 2008
Bremen Exhibition & Conference Centre
Bremen, Germany
This fourth annual event will focus on waste as a
resource for the production of biogas, biofuels and
more. Agenda topics will include material flow
management, separation and sorting, residues,
shredding and grinding, and power and biogas
plants. A breakout session will address biofuels,
including ethanol in particular.
+49-421-3505-347
www.wte-expo.com
National Ethanol ConferenceFebruary 23-25, 2009
San Antonio Convention Center
San Antonio, Texas
This event will cover the industry’s impact on the
U.S. economy, the environment, food prices and
the international market. A record of nearly 2,500
people attended in 2008. An agenda will be avail-
able as the event approaches.
(202) 289-3835
www.ethanolrfa.org
Renewable Energy TechnologyConference & ExhibitionFebruary 25-27, 2009
Las Vegas Convention Center
Las Vegas, Nevada
This event will include a business conference, a
trade show and several side events. The business
conference will address the status and outlook of
renewable energy. One breakout session in partic-
ular will focus on biomass and biofuels. It will
address sustainability, feedstocks, financing,
ethanol production technology, a global market
outlook, engines and fueling stations, and next-
generation facilities.
(805) 290-1338
www.retech2009.com
ETHANOL PRODUCER MAGAZINE NOVEMBER 2008154
Ethanol & BiodieselManagement University
November 19-21, 2008
Millennium Knickerbocker Hotel
Chicago, Illinois
This three-day conference will focus on the purchas-
ing, handling, hedging and managing of renewable
fuels. Agenda topics focusing on ethanol will
address supply, demand and policy; imports and
exports; feedstocks; coproducts; blending; hedging
and risk strategies; credit trading under the federal
renewable fuels standard; federal tax law; and cellu-
losic ethanol. Attendees will also be able to tour
CME Group and hear a presentation explaining
CME’s ethanol contracts.
(866) 620-5940
www.opisnet.com/ethbiouniv
Biofuels Markets AfricaNovember 20-21, 2008
Table Bay Hotel
Cape Town, South Africa
The approval of the Biofuel Industrial Strategy for
South Africa in December provides fresh impetus for
the country’s biofuels market, along with a founda-
tion and road map to advance the market. The initial
2 percent biofuels penetration scenario totaling 105
MMgy will create 25,000 jobs, according to the strat-
egy. This third annual event will bring together exec-
utives from across Africa to discuss strategies that
will enhance the development of a sustainable,
regional biofuels industry.
+44 207 801 6333
www.greenpowerconferences.com
Canadian Renewable Fuels Summit
December 1-3, 2008
Hilton Hotel Lac Leamy
Hull, Quebec
Themed “Growing Beyond Oil,” the Canadian
Renewable Fuels Association’s fifth annual event
will continue discussion of the progress, challenges
and opportunities facing the Canadian biofuels mar-
ket. It will focus on policy and marketing, and will be
attended by a number of industry representatives
from all levels of the ethanol and biodiesel indus-
tries.
(519) 576-4500
www.canadianrenewablefuelssummit.com
Canadian Renewable Energy Workshop
March 9-11, 2009
Regina, Saskatchewan
This second annual conference facilitates the con-
tinued development of Canada's renewable ener-
gy industry. Presentation abstracts will be accept-
ed until Nov. 10. More information will be available
as the event approaches.
(719) 539-0300
www.crew2009.com
Alternative Fuels & VehiclesNational Conference + Expo
Apr i l 19-22, 2009
Orlando, Florida
This 14th annual event will represent all fuels, vehi-
cles and technologies that provide an alternative to
petroleum, including ethanol. Information will be
disseminated via preconference sessions, a gen-
eral session and concurrent breakout sessions.
There will also be a ride-and-drive event, industry
tours and niche market workshops. More informa-
tion will be available as the event approaches.
(702) 254-4180
www.afv2009.com
International Fuel EthanolWorkshop & ExpoJune 15-18, 2009
Denver Convention Center
Denver, Colorado
This will mark the 25th anniversary of the world’s
largest ethanol conference, which was recently
recognized by Trade Show Week magazine as
one of the Fastest 50 events in the United States
for the second consecutive year. More details will
be available as the event approaches.
(719) 539-0300
www.2009few.com
ETHANOL PRODUCER MAGAZINE NOVEMBER 2008 155
ETHANOL PRODUCER MAGAZINE NOVEMBER 2008156
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Inland Waters
313-841-5800 www.inlandwaters.com
Seneca Waste Solutions
800-369-5500 www.senecacompanies.com
Summit Industrial Products
800-749-5823 www.klsummit.com
Hydro-Blasting
Hydro-Klean, Inc.
515-283-0500 www.hydro-klean.com
Inland Waters
313-841-5800 www.inlandwaters.com
Plate—Frame
Hydro-Klean, Inc.
515-283-0500 www.hydro-klean.com
Seneca Waste Solutions
800-369-5500 www.senecacompanies.com
Stabilized Liquid Yeast,Thermosacc,® Superstart™
ETHANOL PRODUCER MAGAZINE NOVEMBER 2008 157
EPM MARKETPLACE
Railcars
Hydro-Klean, Inc.
515-283-0500 www.hydro-klean.com
Inland Waters
313-841-5800 www.inlandwaters.com
Seneca Waste Solutions
800-369-5500 www.senecacompanies.com
Smoke Stack
Hydro-Klean, Inc.
515-283-0500 www.hydro-klean.com
Inland Waters
313-841-5800 www.inlandwaters.com
Seneca Waste Solutions
800-369-5500 www.senecacompanies.com
Tank Cleaning Equipment
Spraying Systems Co.
630-665-5000 www.spray.com
Tank Cleaning Services
Hydro-Klean, Inc.
515-283-0500 www.hydro-klean.com
Inland Waters
313-841-5800 www.inlandwaters.com
Professional Environmental Cleaning Services
402-212-0949 www.professionalECS.com
Seneca Waste Solutions
800-369-5500 www.senecacompanies.com
Construction
Buildings-Modular
Fabrication
Macomber Welding & Fabricating, Inc.
616-698-0819 www.macomberwelding.com
VAL-FAB Inc.
877-482-5322 www.valfab.com
W. Soule & Company
1-877-976-8531 www.wsoule.com
Grain Storage
Coverall Building Systems
800-268-3768 www.coverall.net
Insulation
Mavo Systems
763-788-7713 www.mavo.com
Mayes Coatings, Inc.
866-93MAYES www.mayescoatings.com
Miller Insulation Co, Inc.
701-258-4323 www.millerinsulation.com
Mechanical
With all contact information placed in
one convenient location, EthanolProducer Magazine not only contains
top editorial content but also a useful
directory in each publication. Whether a
first-time advertiser wanting to raise
awareness of your business or a
frequent display advertiser looking for
added exposure, EPM Marketplace is
the perfect solution.
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Toll Free: (800) [email protected]
JIC
ETHANOL PRODUCER MAGAZINE NOVEMBER 2008158
EPM MARKETPLACE
Mid-States Mechanical Services, Inc.
800-950-0279 www.mid-statesmechanical.com
W. Soule & Company
1-877-976-8531 www.wsoule.com
Plant Construction
Agra Industries, Inc.
715-536-9584 www.agraind.com
Agri-Systems
406-245-6231 www.agrisystems.net
CYC Construction
402-333-1652 www.cycconstruction.com
Reimer Welding Inc.
218-773-0886 www.reimerwelding.com
Wanzek Construction,Inc.
701-282-6171 wanzek.com
Railroad Tracks
R & R Contracting, Inc.
800-872-5975 www.rrcontracting.net
Railworks
913-888-4091 www.railworks.com
Volkmann Railroad Builders, Inc.
262-252-3377 www.volkmannrr.com
Tanks
DCI, Inc.
320-252-8200 www.dciinc.com
Eagle Tanks, Inc.
888-678-0698 www.eagletanks.com
WINBCO Tank Company
641-683-1855 www.winbco.com
Consulting
Business Plans
ICM, Inc.
316-796-0900 www.icminc.com
Environmental
Air Resource Specialists,Inc.
970-484-7941 www.air-resource.com
Send resume to [email protected] or call toll free 1-877-MORTENSON
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With all contact information placed in
one convenient location, EthanolProducer Magazine not only contains
top editorial content but also a useful
directory in each publication. Whether a
first-time advertiser wanting to raise
awareness of your business or a
frequent display advertiser looking for
added exposure, EPM Marketplace is
the perfect solution.
EPM MARKETPLACE
ETHANOL PRODUCER MAGAZINE NOVEMBER 2008 159
EPM MARKETPLACE
ICM, Inc.
316-796-0900 www.icminc.com
Inland Waters
313-841-5800 www.inlandwaters.com
Seneca Companies
800-369-5500 www.senecacompanies.com
TKDA
651-292-4602 www.tkda.com
Feasibility Studies
Harris Group Inc.
206-494-9422 www.harrisgroup.com
Groundwater Services
Leggette, Brashears & Graham, Inc.
651-490-1405 www.lbgweb.com
Personnel Recruiting
SearchPath of Chicago
815-261-4403 www.searchpath.com/chicago
Plant Optimization
Granatus Consulting, Inc.
218-773-0005 www.granatusinc.com
Harris Group Inc.
206-494-9422 www.harrisgroup.com
Terratec Biofuels of Solutia
800-742-1476 www.TerratecBiofuels.com
Project Development
Ethanol Productions
813-968-6867 [email protected]
Harris Group Inc.
206-494-9422 www.harrisgroup.com
Public Relations
Lanser Public Affairs, LLC
262-797-7876 www.lanserpublicaffairs.com
Quality Assurance
Eurofins Scientific, Inc.
551-580-9140 www.eurofinsus.com
Regulatory
Air Resource Specialists.Inc.
970-484-7941 www.air-resource.com
Risk Management
National Fuel Marketing
303-996-6781 www.NationalFuelMarketing.com
Education
Iowa BioDevelopment
641-969-4167 www.iabiodevelopment.com
Iowa Biofuels Training International
641-969-4167 www.biofuelstraining.org
Iowa Lakes Community College
800-242-5108 www.iowalakes.edu
Employment
Recruiting
Hobbs & Towne
610-783-4600x108 www.hobbstowne.com
SearchPath of Chicago
815-261-4403 www.searchpath.com/chicago
The Richmond Group USA- BioEnergy Search Division
804-285-2071 www.trgbioenergy.com
Engineering
Civil
Antioch International, Inc.
402-289-2217 www.antioch-intl.com
TKDA
651-292-4602 www.tkda.com
Control Systems
Bachelor Controls
785-284-3482 www.bachelorcontrols.com
Control System Integrators, Inc.
319-377-6538 x19 www.csystemi.com
Design/Build
Agra Industries, Inc.
715-536-9584 www.agraind.com
Agri-Systems
406-245-6231 www.agrisystems.net
Delta-T Corporation
757-941-0188 www.deltatcorp.com
ECE Design
312-235-6960 www.ecedesign.com
Ethanol Productions
813-968-6867 [email protected]
GS CleanTech Corp.
678-566-3588 www.gs-cleantech.com
ICM, Inc.
316-796-0900 www.icminc.com
Your Solution. Advertise Today.
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Grading, sampling, mycotoxins, proximates, residues, GMOs.QA / QC Consulting: HACCP, GMPs, SOPs, NIR calibrationCo-products: Quality assurance testing; Lot certification; Export assistance
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ETHANOL PRODUCER MAGAZINE NOVEMBER 2008160
EPM MARKETPLACE
Wanzek Construction, Inc.
701-282-6171 wanzek.com
Process Design
Agri-Systems
406-245-6231 www.agrisystems.net
ChemSim
781-248-5057 www.chemsim.com
Process Engineering Associates, LLC
865-220-8722 www.processengr.com
Vogelbusch USA, Inc.
713-461-7374 www.vogelbusch.com
Equipment & Services
Agitation Equipment
ProQuip, Inc.
330-468-1850 www.proquipinc.com
Air Pollution/Odor Control
Ceco Abatement Systems, Inc.
630-493-0624 www.cecoenviro.com/Abatement
ICM, Inc.
316-796-0900 www.icminc.com
Analytical Instruments
Anton Paar
+1-804-550-1051 www.anton-paar.com
Perten Instruments, Inc.
801-936-8165 www.perten.com
Blowers & Fans
Robinson Industries, Inc.
724-452-6121 www.robinsonfans.com
Boiler Systems
Factory Sales and Engineering, Inc.
985-867-9150 www.fsela.com
Rentech Boiler Systems, Inc.
325-794-5701 www.rentechboilers.com
Catwalks
Lean Technologies LLC
701-352-9620 www.leantechnologiesllc.com
Centrifuge Repair
Nosnhoj Services Inc.
317-887-6436 www.nosnhojinc.com
Centrifuges
Westfalia Separator,Inc.
201-784-4322 www.wsus.com
Combustion Equipment
Eclipse.Inc.
815-637-7213 www.eclipsenet.com
John Zink Company LLC
800-421-9242 www.johnzink.com
Compressors
FlaktWoods
716-845-0900 www.flaktwoods.com
Computer Software
dbc SMARTsoftware, Inc.
770-427-7633 www.dbcsmartsoftware.com
Encore Business Solutions
204-989-4330 www.encorebusiness.com
John Deere Agri Services
770-238-5100 www.johndeereagriservices.com
Summit Software, Inc.
800-433-5724 x 181 www.summit-soft.com
Control Systems
FeedForward, Inc.
770-426-4422 www.feedforward.com
Kahler Automation Corp.
507-235-6648 www.kahlerautomation.com
SoftPLC Corporation
512-264-8390 www.softplc.com
Control Systems-Distributed
Control System Integrators, Inc.
319-377-6538 x19 www.csystemi.com
Conveyors—Enclosed
Grisley Components, Inc.
303-756-6474 www.grisley.com
Conveyors—Pneumatic
Blower Engineering
800-388-1339 www.blowerengineering.com
Gusmer Enterprises, Inc.
847-277-9785 www.gusmerenterprises.com
Decanters
Distillation Equipment
SRS Engineering Corporation
800-497-5841 www.srsengineering.com
Dryers—Flash
Barr-Rosin,Inc.
630-659-3980 www.barr-rosin.com
Dryers—Fluid Bed
Aeroglide Corporation
919-851-2000 www.aeroglide.com
ETHANOL PRODUCER MAGAZINE NOVEMBER 2008 161
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Dryers—Other
Davenport Dryer, LLC
309-786-1500 www.davenportdryer.com
Dryers—Ring
Barr-Rosin,Inc
630-659-3980 www.barr-rosin.com
Dryers—Rotary Drum
Aeroglide Corporation
919-851-2000 www.aeroglide.com
Barr-Rosin,Inc.
630-659-3980 www.barr-rosin.com
FEECO International, Inc.
920-468-1000 www.feeco.com
ICM, Inc.
316-796-0900 www.icminc.com
Ronning Engineering Company, Inc.
913-239-8118 www.ronningengineering.com
Emission Monitoring Systems
MonitorTech Corp.
866-682-6771 www.monitortechgrp.com
Emissions Testing & Reduction
Lantec Products, Inc.
617-265-2171 www.lantecp.com
Evaporators
GEA NIRO Inc
410-997-8700 www.niroinc.com
HRS Process Technology, Inc.
623-915-4328 www.hrs-americas.com
Fermentation Monitoring
ETS Laboratories
707-963-4806 www.etslabs.com
Fermentors
WINBCO Tank Company
641-683-1855 www.winbco.com
Filters
Eaton Filtration
800-656-3344 ext 581 [email protected]
Larox
301-543-1200 www.larox.com/cpi
Filtration Equipment
BWF America
800-733-2043 www.bwf-america.com
Fluid Engineering
814-453-5014 www.fluideng.com
W.S. Tyler
1-800-321-6188 www.wstyler.com
Fractionation—Corn
Buhler Inc.
763-847-9900 www.buhlergroup.com/us
Cereal Process Technologies
217-779-2595 www.cerealprocess.com
FWS Technologies
204-487-2500 www.fwsgroup.com
Sturtevant Inc.
781-829-6501 www.sturtevantinc.com
Gas Detectors
UE Systems, Inc.
914-592-1220 www.uesystems.com
Gaskets
Allegheny Coupling Company
814-723-8150 www.alleghenycoupling.com
Grain Handling & Storage
Sukup Manufacturing Co.
641-892-4222 www.sukup.com
Heat Exchangers
Custom Metalcraft Inc.
417-862-0707 www.custom-metalcraft.com
Munters - Des Champs Products
540-291-1111 www.deschamps.com
Instrumentation
Endress+Hauser,
317-535-2174 www.us.endress.com
Instrument Associates
708-597-9880 www.instrumentassociates.com
Perten Instruments, Inc.
801-936-8165 www.perten.com
Process Sensors Corp.
508-473-9901 www.processsensors.com
Shimadzu Scientific Instruments
800-477-1227 www.ssi.shimadzu.com
WIKA Instrument Corporation
888-945-2872, x5127 www.wika.com
Continuous Emissions Monitoring SystemsEasiest installation, operation and maintenance
Meet or exceeds EPA requirementsNOx, O2, CO, SO2 and others
Turnkey systems for under $100,000.00P.O. Box 9271, Columbus, Oh 43209
866-682-6771 [email protected]
ETHANOL PRODUCER MAGAZINE NOVEMBER 2008162
EPM MARKETPLACE
Insulator
Industrial Construction & Engineering
636-970-1650 www.ic-e.cc
Jet Cookers
ProSonix Corporation
800-849-1130, x. 801 www.pro-sonix.com
Laboratory-Equipment
Astoria-Pacific International
800-536-3111 www.astoria-pacific.com
Perten Instruments, Inc.
801-936-8165 www.perten.com
Laboratory—Outsourcing
SGS North America Inc.
281-479-7170 www.sgs.com/alternativefuels
Laboratory—Supplies
Midland Scientific, Inc.
800-642-5263 www.midlandsci.com
Laboratory—Testing Services
Eurofins GeneScan, Inc.
504-297-4330 www.gmotesting.com
Midwest Laboratories
402-334-7770 www.midwestlabs.com
Romer Labs, Inc.
636-583-8600 www.romerlabs.com
SGS North America, Inc.
281-478-8234 www.sgs.com/alternativefuels
Trilogy Analytical Laboratory
636-239-1521 www.trilogylab.com
Loading Equipment
Hemco Industries, Inc.
877-347-7106 www.hemcocpm.com
SafeRack
866-761-7225 www.saferack.com
Maintenance Services
Joule’ Industrial Contractors
[email protected] www.jouleinc.com
Maintenance Software
Mapcon Technologies, Inc.
800-922-4336 www.mapcon.com
Mills—Hammer
CBT Wear Parts, Inc.
888-228-3625 www.cbtwearparts.com
CPM/Roskamp Champion
800-366-2563 www.cpmroskamp.com
Prater-Sterling
630-679-3254 www.prater-sterling.com
Millwright
Agri-Systems
406-245-6231 www.agrisystems.net
Mixers
KINEMATICA, INC.
631-750-6653 www.kinematica-inc.com
Moisture Analyzers
Perten Instruments, Inc.
801-936-8165 www.perten.com
Sartorius Mechatronies-Omnimark
800-835-3211 www.sartorius-omnimark.com
Molecular Sieves
Gordon Technologies
570-279-8086 www.gtsieve.com
Vaperma, Inc.
418-839-6989 www.vaperma.com
Zeochem, LLC
502-634-7600 www.zeochem.com
Motors
Trico TCWind, Incorporated
320-693-6200 www.tricotcwind.com
Pipe
American Stainless & Supply
800-845-5511 www.americanstainless.com
ISCO Industries
800-345-4726 www.isco-pipe.com
Robert-James Sales, Inc.
800-666-0088 www.rjsales.com
Pipe—Fittings
Robert-James Sales, Inc.
800-666-0088 www.rjsales.com
St. Louis Pipe & Supply
800-737-7473 www.stlpipesupply.com
Pipe—Flanges
Robert-James Sales, Inc.
800-666-0088 www.rjsales.com
Pressure & Temperature
WIKA Instrument Corporation
888-945-2872, x5127 www.wika.com
Pressure Vessels
WINBCO Tank Company
641-683-1855 www.winbco.com
Process Control
Harris Group Inc.
206-494-9422 www.harrisgroup.com
Pumps
ITT Industries Goulds Pumps
315-568-2811 www.gouldspumps.com
Watson-Marlow Bredel Pumps
800-282-8823 www.watson-marlow.com
Yamada America, Inc.
800-990-7867 www.yamadapump.com
QA Test Products
Perten Instruments, Inc.
801-936-8165 www.perten.com
Phenomenex
310-212-0555x3328 www.phenomenex.com
RTO Media
Lantec Products, Inc.
617-265-2171 www.lantecp.com
Resource Recovery
Eco-Tec, Inc.
905-427-0077 www.eco-tec.com
Safety
SimplexGrinnell
800-746-7539 www.simplexgrinnell.com
Seals
Aesseal Inc.
865-531-0192 www.aesseal.com
Utex Industries, Inc.
432-333-4151/800-873-0946 www.utexind.com
Sensors
Electro Sensors
800-328-6170 www.electro-sensors.com
Separation Equipment
Fluid Engineering
814-453-5014 www.fluideng.com
Puritan Magnetics, Inc.
248-628-3808 www.puritanmagnetics.com
ETHANOL PRODUCER MAGAZINE NOVEMBER 2008 163
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Separators
Westfalia Separator,Inc.
201-784-4322 www.wsus.com
Steel Suppliers
Chapel Steel
800-320-6042 [email protected]
Outokumpu Stainless
847-517-4050 www.outokumpu.com
Sandmeyer Steel Company
215-464-7100 www.sandmeyersteel.com
Storage—DDGS
Laidig Systems, Inc.
574-256-0204 www.laidig.com
Structural Fabrication
Cherokee Steel Fabricators, Inc.
903-759-3844 www.cherokeesteelfabricators.com
Tanks
Agra Industries, Inc.
715-536-9584 www.agraind.com
Brown-Minneapolis Tank
281-252-9809 www.bmt-tank.com
CMC Letco Industries
417-831-1528 www.cmc-letco.com
Federal Equipment Company
800-652-2466 www.fedequip.com
Greenberry Industrial
541-757-8458 www.greenberryinc.com
Paragon Trailer Sales
800-471-8769 www.paragontrailer.com
WINBCO Tank Company
641-683-1855 www.winbco.com
Thermal Energy
American Waste Removal
505-417-9933 www.americanwasteremoval.com
Thermal Oxidizers
ICM, Inc.
316-796-0900 www.icminc.com
Pro-Environmental, Inc.
909-989-3010 www.pro-env.com
Turbines—Gas
Kawasaki Gas Turbines
281-970-3255x18 www.kawasakigasturbines.com
Used Equipment
VOC Scrubbers
Lantec Products, Inc.
617-265-2171 www.lantecp.com
Valve Actuators
Rotork Controls,Inc.
585-247-2304 www.rotork.com
Valves
Central States Group
800-318-2747 www.centralstatesgroup.com
Check-All Valve Mfg. Co.
515-224-2301 www.checkall.com
Metso Automation
508-852-0215 www.metsoethanol.com
North American Safety Valve
800-800-8882 www.nasvi.com
Wastewater Treatment Services
Biothane Corporation
856-541-3500x501 www.biothane.com
Your Solution. Advertise Today.
EPM MARKETPLACE
Your Ad HERE
PROVENRELIABILITYfor VOC, CO & PM
ABATEMENT
EISENMANN CorporationCrystal Lake, Illinois
With all contact information placed in
one convenient location, EthanolProducer Magazine not only contains
top editorial content but also a useful
directory in each publication. Whether a
first-time advertiser wanting to raise
awareness of your business or a
frequent display advertiser looking for
added exposure, EPM Marketplace is
the perfect solution.
EPM MARKETPLACE
ETHANOL PRODUCER MAGAZINE NOVEMBER 2008164
EPM MARKETPLACE
Water Treatment
Aquatech International Corporation
724-746-5300 www.aquatech.com
Fluid Engineering
814-453-5014 www.fluideng.com
Siemens Water Technologies
800-525-0658 www.siemens.com/water
Ethanol Production
Existing Producers
Louis Dreyfus Commodities
402-844-2680 LDCommodities.com
Future Producers
Syntec Biofuel, Inc.
604-648-2092 www.syntecbiofuel.com
Finance
Accounting
Christianson & Associates PLLP
320-235-5937 www.christiansoncpa.com
Kennedy and Coe, LLC
800-303-3241 www.kcoe.com
Appraisals
Natwick Associates Appraisal Services
800-279-4757 www.natwick.com
Due Diligence
Harris Group Inc.
206-494-9422 www.harrisgroup.com
Equity Procurement
Greenman Funding
888-802-7678 [email protected]
Jordan, Knauff & Company
312-254-5900 www.jordanknauff.com
Insurance
Armor Companies, Inc.
612-501-5654 [email protected]
ERI Solutions, Inc.
316-927-4294 erisolutions.com
Lender Representatives
Greenman Funding
888-802-7678 [email protected]
Mergers & Acquisitions
Thomas Group Capital
404-504-6050 www.thomassec.com
Risk Management
First Capitol Risk Management
800-884-8290 www.firstcapitolrm.com
R.J. O’Brien
800-621-0757 www.rjobrien.com
Software—Accounting
Encore Business Solutions
204-989-4330 www.encorebusiness.com
Summit Software, Inc.
800-433-5724 x 181 www.summit-soft.com
Government
State
Legal Services
Attorneys
BrownWinick Law Firm
515-242-2400 www.biofuellawyers.com
Dorsey & Whitney LLP
612-343-8275 www.dorsey.com
Faegre & Benson, LLP
612-766-6930 www.faegre.com
Stoel Rives LLP
612-373-8800 www.stoel.com/biofuels
Marketing
Distillers Grains
CHS, Inc.
651-355-6271 www.chsinc.com
Gavilon
402-595-5678 www.gavilon.com
Hawkeye Gold, LLC
515-663-6429 www.hawkgold.com
Fuel Ethanol
Atlas Renewable Energy, LLC
800-884-8290 www.atlasenergyllc.com
C&N Ethanol Marketing Corp.
952-854-6675 www.candncompanies.com
Gavilon
402-595-5678 www.gavilon.com
Noble Americas Corporation
626-585-1705 www.thisisnoble.com
Provista Renewable Fuels Marketing
651-355-8519 www.provistafuels.com
Transportation
Heavy Highway Transport
Landstar Carrier Group
920-487-3877 www.landstar.com
Rail
Ameritrack RailRoad Contractors, Inc.
765-659-2111 www.ameritrackrailroad.com
Blacklands Railroad
903-439-0738 www.blacklandsrailroad.com
Your Solution. Advertise Today.
EPM MARKETPLACE
Reach your customers
ETHANOL PRODUCER MAGAZINE NOVEMBER 2008 165
EPM MARKETPLACE
Rail Consulting
TKDA
651-292-4602 www.tkda.com
Rail Ties
Thompson Industries, Inc.
317-859-8725 www.thompsonindustries.net
Railcar Moving
Heyl & Patterson Inc.
412-788-9810 www.heylpatterson.com
Shuttlewagon
816-767-0300 www.shuttlewagon.com
Railcar Parts
Salco Products, Inc.
630-783-2570 www.salcoproducts.com
Utilities
Natural Gas
Utility
Integrys Energy Services
608-235-2547 www.integrysenergy.com
RAILCAR MOVING
P 412-788-9810 F 412-788-9822 E [email protected]
The CUB™ is an electromechanicalmachine designed to move single
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124 W. Broadway, Suite 300Madison, Wisconsin 53716www.integrysenergy.com
Contact Mark Rundle [email protected]
or (608) 222-5170.
With all contact information placed in
one convenient location, Ethanol
Producer Magazine not only contains
top editorial content but also a useful
directory in each publication. Whether a
first-time advertiser wanting to raise
awareness of your business or a
frequent display advertiser looking for
added exposure, EPM Marketplace is
the perfect solution.
EPM MARKETPLACE
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. It’s all here.
www.BiomassMagazine.com
For additional informationplease contact us at (701) 746-8385 or at
www.biofuelsrecruiting.com
EXPANDING?UPGRADING?
Keep Your Plant Runningwith our In-Stock Stainless PVF
Robert-James Sales—the leading distributor of in-stock stainless pipe, fittings, valves and flanges—got yournew plant up and running when it was built. Now look to us to service all your continuing MRO requirements.Over 80% of all orders are shipped the same day from our nine regional warehouses. We also ship the largersize products up to 54” in diameter demanded by the biofuel processing industry today.
Buffalo, NY 800-666-0088Cleveland, OH 800-777-0820Cincinnati, OH 800-777-2260Chicago, IL 800-777-2008Indianapolis, IN 800-777-0510Minneapolis, MN 800-777-1355South Plainfield, NJ 800-777-1858Raleigh, NC 866-493-8834Tavernier, FL 305-852-1694www.rjsales.com
Free Product CDContact the Robert-James Sales locationnearest you and ask for a freecopy of our comprehensive,up-to-date CD. It outlines our stainless product lineincluding reference charts,graphs and tables to help you calculate what your processing plant needs.
Stocking
a full r
ange of
2205 Duplex in 1/2" to 24"
poet.com