December 2011 Ethanol Producer Magazine

www.ethanolproducer.com

INSIDE: TANK CAR FIRE ILLUMINATES NEED FOR PREPAREDNESS

Outlook2012

How Industry Executives Envision the Year AheadPage 46

Export Outlook Spotlights LogisticsPage 60

dEcEmbEr 2011

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Rethink Tomorrow

4 | Ethanol Producer Magazine | DECEMbER 2011

dEcEmbEr ISSuE 2011 VOL. 17 ISSuE 12

contents

Ethanol Producer Magazine: (uSPS No. 023-974) december 2011, Vol. 17, Issue 12. 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. POST-MASTER: Send address changes to Ethanol Producer Magazine/Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, North Dakota 58203.

76

OUTREACHEducating Drivers about FFVs and Renewable FuelsTechniques of other public awareness campaigns applied to FFVsby bURL HAIgwOOD

RISK MANAGEMENTMitigating Ethanol Market Risk by Monitoring Opportunitiesbrokers play valuable role in risk management strategiesby JOHN HARANgODy

CONtRIbutIONS

FEatuRES

On the Cover Ethanol industry executives talk about the challenges and opportunities in the year ahead starting on page 46.

DEPARTMENTS

6 Editor’s Note The year Turns By SuSanne Retka Schill

10 the Way I See It Missing the Future while Clinging to the Past By Mike BRyan

11 Events Calendar Upcoming Conferences & Trade Shows

12 View From the Hill State of Play By BoB dinneen

14 Drive Achieve Our Nation’s Energy Independence By toM BuiS

16 Grassroots Voice Setting Priorities to Defend, Advance Policies By BRian jenningS

18 Europe Calling Solving ILUC by Thinking Out of the box By RoB VieRhout

20 business Matters Implementing HACCP Systems By andRew andeRSon and diana palMeR

22 business briefs

28 Commodities Report

32 Distilled

86 Marketplace

90 ad Index

80

www.ethanolproducer.com

INSIDE: TANK CAR FIRE ILLUMINATES NEED FOR PREPAREDNESS

Outlook2012

How Industry Executives Envision the Year Ahead6

Export Outlook Spotlights LogisticsPage 60

dEcEmbEr 2011

68

OUTLOOK Outlook 2012Top industry executives share perspectives on the new yearby KRIS bEVILL AND HOLLy JESSEN

PrEPArEdNESSPlan for the WorstLessons learned from an ethanol tank car derailment fireby KRIS bEVILL

46 60

LOGISTICSby train, by truck or by boatA look at exports and emerging transportation issues by KRIS bEVILL


With the year speeding to a close, it’s only natural that just as we may be tempted to peek into a wrapped package in December, we might also try to peek into the unwrit pages of the approaching new year. The editors of Ethanol Producer Magazine wonder what those pages will reveal and who better to consult than some top executives in the ethanol industry? We spoke with several who took the time to gather their thoughts and concerns and comment on the state of the industry. Many concerns are raised, but overall, the executives see opportunities ahead. Our columnists this month also highlight their priorities and give insight on important issues. The industry appears to have accepted the demise of the blenders credit and is far more concerned about efforts to dismantle or weaken the renewable fuel standard. In the past, such efforts gained little traction, but the political environment is far different right now, and nothing, absolutely nothing, can be taken for granted.

Associate Editor Kris Bevill covered an ethanol export conference a few weeks ago that she used as the basis of her feature this month, digging into the outlook for exports and the evolving logistics of how ethanol gets to its destination. Bevill also recounts the story, and the insights gained from, the train derailment that set several ethanol tank cars on fire in Tiskilwa, Ill. Dramatic photos of the scene accompany her story. The common wisdom to let the fire burnout didn’t apply in this case, and neighboring ethanol producers contributed their supplies of foam suppressant for the effort. It is an important lesson to heed, as 70 percent of ethanol in the U.S. is moved via rail.

SuSanne Retka Schill, [email protected]

tHE YEaR tuRNS

editor’s note

FOR INDUSTRy NEwS. FOLLOw US: tWIttER.COM/EtHaNOlMaGazINE

ASSOCIATE EDITORS

Associate Editor kris Bevill shares insights from conver-sations with the leaders of BP Biofuels, Ineos Bio and a venture capitalist. Also, fire-fighters and ethanol produc-ers recount the drama of an ethanol fire following a de-railment and lessons learned.

Associate Editor holly Jes-sen talks to ethanol produc-ers Walt Wendland and Todd Becker as well as the cEO of Propel, Matt horton, to share their outlook for the year ahead in the ethanol industry.

DECEMbER 2011 | Ethanol Producer Magazine | 7

TM

EDItORIal

EDITOR Susanne Retka Schill [email protected]

ASSOCIATE EDITORS Holly Jessen [email protected]

Kris bevill [email protected]

COPy EDITOR Jan tellmann [email protected]

aRt

ART DIRECTOR Jaci Satterlund [email protected]

gRAPHIC DESIgNERErica Marquis [email protected]

PublISHING

CHAIRMAN Mike bryan [email protected]

CEO Joe bryan [email protected]

VICE PRESIDENTtom bryan [email protected]

SalES

VICE PRESIDENT, SALES & MARKETINg Matthew Spoor [email protected]

EXECUTIVE ACCOUNT MANAgER Howard brockhouse [email protected]

SENIOR ACCOUNT MANAgER Jeremy Hanson [email protected]

ACCOUNT MANAgERSChip Shereck [email protected]

Marty Steen [email protected]

bob brown [email protected]

andrea anderson [email protected]

Dave austin [email protected]

Kelly Kilgore [email protected]

CIRCULATION MANAgER Jessica beaudry [email protected]

ADVERTISINg COORDINATOR Marla DeFoe [email protected]

SENIOR MARKETINg MANAgER John Nelson [email protected]

EDItORIal bOaRD

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available for $3.95 each, plus shipping. Article reprints are also available for a fee. For more information, contact us at (701) 746-8385 or [email protected]. advertising Ethanol Producer Magazine pro-vides a specific topic delivered to a highly targeted audience. we are committed to editorial excellence and high-quality print production. To find out more about Ethanol Producer Magazine advertising opportunities, please contact us at (701) 746-8385 or [email protected]. letters to the Editor we welcome letters to the editor. Send to Ethanol Producer Magazine Letters to the Editor, 308 2nd Ave. N., Suite 304, grand Forks, ND 58203 or e-mail to [email protected]. Please include your name, address and phone number. Letters may be edited for clarity and/or space.

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Chippewa Valley Ethanol Co. LLLP Mike JerkeCilion Inc. Jeremy Wilhelm

Commonwealth Agri-Energy LLC Mick HendersonPinal Energy LLC Keith Kor

golden grain Energy LLC Walter Wendland

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bert Farrish Lifeline Foods LLC

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The New Ethanol.

Refined, retailed,and rolling across America now.


it’s the 21st century and we still extract and process decayed plants as our primary source of energy. It does seem a bit prehistoric when one thinks about it. That’s the best modern technology has to offer? I suspect if we were able to move ahead 100 years, we would look back and laugh at the simplicity and folly of our energy strategy.

The world has abundant resources in the sun, the ocean, the wind, geothermal and huge amounts of renewable biomass, yet we cling to the past like a child afraid to let go of mother’s leg, afraid of leaving the comfort of what we know. We desperately drill for more and more oil, deeper and deeper, in the four corners of the earth, fearful of running out of the precious and dwindling supply of precious mother’s milk.

The irony is while we seem to subscribe to the “drill baby drill” mindset, we largely ignore the bountiful amounts of free, clean and renewable energy available to us. The sun shines everyday

on our earth, the oceans crash against our shores day and night. The wind blows relentlessly. A billion tons of biomass energy remains largely idle while we struggle with making a real commitment to unleash the power of this massive resource. Drill Baby Drill, that’s the motto we live by, that’s the prehistoric technology that we continue to pursue.

It would take only around 0.3 percent of the world’s land area to supply all of our electricity needs via solar power. One large wind turbine can generate enough electricity for 600 homes. The oceans constitute the largest powerhouse on earth. Geothermal energy could produce 10 percent of u.S. electricity by the year 2050. In the updated billion-ton study, the u.S. dOE estimates that biomass resources could replace 30 percent of fossil fuel use by 2030.

This should not be a partisan issue. Every single congressman and Senator should be 100 percent onboard in their support of the development, support and commitment to clean renewable energy, without exception! Shame on those who support the exploitation of the world’s oil reserves to the detriment of renewable energy. At best it’s short-sighted, at worst it’s a self-serving act of unconscionable proportion.

We launch congressional investigations over the money loaned to a company dedicated to producing clean solar energy panels that fell to foreign price cutters, yet we continue to pour billions of dollars into the oil industry, encouraging them to Drill Baby Drill. It’s all about big money, big business, high returns and take what we can get now and to hell with the future. It’s sad really, that we have only evolved in the past 50,000 years from burning a piece of wood to burning decayed plant life. It’s not much of a legacy of progress to leave to our grandchildren.

That’s the way I see it!

the way i see it

Missing the Future whileClinging to the Past by Mike bryan

author: mike bryanchairman, bbI International

[email protected]


events calendar

theme for RFa in Orlando: accelerating Industry Innovation

The Renewable Fuels Association’s 17th Annual National Ethanol conference, based on the theme Accelerating Industry Innovation, will be

held Feb. 22-24 in Orlando, Fla. The NEC is recognized as the preeminent conference for delivering accurate, timely information on marketing, legislative and regulatory issues facing the ethanol industry. With numerous networking opportunities, more business meetings are conducted and contacts made at this conference than any other ethanol conference.

The program will highlight how the industry continues to evolve to meet the demands of a rapidly changing marketplace. With federal policy changing, the global, market-driven environment in which the industry must compete comes with new market challenges. Industry leaders and experts will address how we are meeting these new demands by accelerating innovation in technology, marketing, logistics and feedstocks for the production of advanced ethanol.

This year’s keynote speaker is James Canton, CEO and chairman of the Institute for Global Futures, who will present “21st Century Energy Trends and the Marketplace.” Energy is mission-essential to the growth, social stability and security of all nations, he says, and oil overdependence and petro-fuel decline offer the world an incentive towards the discovery of renewable energy. At the same time, the biofuels industry is at a pivotal point existing simultaneously as a commodity and consumer good. canton knows that engaging the consumer to grow demand and improve industry image has never been more important. He is a renowned global futurist, social scientist, keynote presenter, author and visionary business advisor. For over 30 years, he has been insightfully predicting the key trends that have shaped our world.

This year’s featured lunch speakers are Karl Rove and Robert Gibbs. Rove and Gibbs provide intimate and insightful commentary as they both speak with great authority and accuracy from a White House insider’s perspective. Each speaker shines a dynamic light on the political issues of the day based on their unique relationships—Karl rove from his years as one of President George W. Bush’s closest confidants and advisors, and robert Gibbs from his years as a longtime advisor to President Obama.

For more information, including program updates, online registration, sponsorship opportunities, off-site events, scholarships and a list of registered attendees, visit www.nationalethanolconference.com.

2/22

Pacific West biomass Conference & trade ShowJanuary 16-18, 2012San Francisco Marriott Marquis | San Francisco, CaliforniaWith an exclusive focus on biomass utilization in California, Oregon, Washington, Idaho and Nevada—the Pacific West Biomass conference & trade Show will connect the area’s current and future producers of biomass-derived electricity, industrial heat and power, and advanced biofuels, with waste generators, aggregators, growers, municipal leaders, utility executives, technology providers, equipment manufacturers, investors and policy makers. (866)746-8385www.biomassconference.com/pacificwest

National Ethanol ConferenceFebruary 22-24, 2012gaylord Palms Resort | Orlando, FloridaSince 1996, the RFA’s national ethanol conference has been recognized as the preeminent conference for delivering accurate, timely information on marketing, legislative and regulatory issues facing the ethanol industry. With numerous networking opportunities, pivotal business meetings are conducted which bring together some of the most influential companies and organizations in the ethanol industry. (202)315-2466www.nationalethanolconference.com

International biomass Conference & ExpoApril 16-19, 2012Colorado Convention Center | Denver, Coloradoa new era in energy: the Future is growingOrganized by BBI International and coproduced by Biomass Power & Thermal and Biorefining Magazine, this event brings current and future producers of bioenergy and biobased products together with waste generators, energy crop growers, municipal leaders, utility executives, technology providers, equipment manufacturers, project developers, investors and policy makers. It’s a true one-stop shop—the world’s premier educational and networking junction for all biomass industries. Presentation ideas are being accepted online through dec. 23.(866)746-8385www.biomassconference.com

International Fuel Ethanol Workshop & ExpoJune 4-7, 2012Minneapolis Convention Center | Minneapolis, Minnesotaevolution through innovationNow in its 28th year, the FEW provides the ethanol industry with cutting-edge content and unparalleled networking opportunities in a dynamic business-to-business environment. As the largest, longest running ethanol conference in the world, the FEW is renowned for its superb programming—powered by Ethanol Producer Magazine. Presentation ideas are being accepted online through Feb. 10.(866)746-8385www.fuelethanolworkshop.com


view from the hill

State of Playby bob Dinneen

the vast majority of progressive, forward-looking policies that have helped to build america’s ethanol industry into the largest alternative fuel industry in the world have emanated from washington. Smart, productive policies such as the Volumetric Ethanol Excise Tax Credit and the renewable fuel standard (rFS) have in no small measure made the construction and operation of more than 200 ethanol biorefineries in 26 states possible.

To be sure, debate over America’s ethanol industry will continue to be en vogue on capitol Hill as we have seen by the numerous committee and subcommittee hearings on ethanol-related topics in the past year. Increasingly, the debate about the role of policy and America’s ethanol industry has moved into state capitals all across the country. In some cases, these debates are forward looking. For example, the state of Iowa has worked very hard to clear the way for the legal sale and use of E15 ethanol blends. So, too, has the state of Illinois.

but far too often, the debate in state legislatures and governments around the country is focused on rolling back the progress we have made in reducing their dependence on oil and creating job opportunities. rather than looking to build upon or continuing to incent the evolution

of American ethanol production, some state legislators are seeking to pull the rug out from under critical investments that businesses have made to produce, distribute, and use a growing supply of ethanol derived from a diverse basket of feedstocks.

Perhaps the most visible is the effort underway in Florida to repeal the state’s mandate for 9 to 10 percent ethanol. One state representative and one state senator have introduced legislation that would seek to unravel the web of investments made in renewable fuel production and infrastructure in Florida since the mandate was put into place in 2008. Given Florida’s importance to the gasoline market and the presence of the federal rFS, repealing the ethanol mandate may not materially impact ethanol demand in Florida. but such an outcome cannot be guaranteed. Nor can it be stated with absolute confidence that the progress of new ethanol production technologies just now taking hold in Florida would continue. In fact, were Tallahassee to reverse its position on renewable fuels, many of the projects underway in Florida may be dealt a death blow as would the jobs and economic activity that go along with them. The result would be a dramatic increase in both Florida’s demand for imported oil from nearby dictators like Hugo Chavez and higher gas prices for all Florida consumers.

Florida is not alone. Earlier this year, the state of New Hampshire sought to ban the use of corn-based ethanol entirely.

And the state of Hawaii, perhaps providing the model for Florida, has sought repeal of its mandate. Similar anti-ethanol efforts are being seen in other state capitals.

As America’s ethanol industry has grown, so too have the concentric circles on its back. And, as more of the gasoline market is constituted by a renewable fuel alternative, efforts to prevent the further loss of market share will be intense.

As an industry, we have a strong track record of successful advocacy. Now is not the time to rest on those laurels. We must continue to be vigilant—both in the halls of congress and in statehouses across the country—of coordinated efforts to undermine the progress our industry has made and to inaccurately portray the facts about domestic ethanol production. challenges to our industry will only continue to increase as the industry grows and evolve. So, too, must our resolve to press forward.

Now, for a much more cheerful subject: On behalf of the entire staff the renewable Fuels Association, I wish you and yours a very happy, safe, and enjoyable holiday season!

author: bob dinneenPresident and cEO of the

renewable Fuels Association(202) 289-3835

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drive

Achieve Our Nation’s Energy Independenceby Tom buis

three years ago, leaders in the domestic ethanol industry gathered to announce the creation of a “new, fresh, aggressive voice in the energy debate”—growth energy. From day one, Growth Energy’s mission has been to drive the message of ethanol forward and debunk the myths and distortions fabricated and propagated by those who seek to perpetuate America’s addiction to foreign oil. Since inception, Growth Energy has taken great strides for our nation’s economy, our environment and our national security, but there are still a number of hurdles and challenges to overcome. In the coming years, we will build upon our successes and work to expand greater access to homegrown, renewable ethanol.

methods to achieve this goal include four main priorities. They are:

commercialization of e15: Today, the U.S. EPA is working toward implementation of its approval of Growth Energy’s Green Jobs petition for E15. This is one of our industry’s top priorities—expanding the market for ethanol by approving E15 in all cars built in the past decade. A full move to E15 will help our nation meet the goals of the renewable fuels standard (rFS). And by expanding the market for domestic ethanol, E15 can

spur private capital investment into the development of ethanol from cellulosic biomass. With cellulosic ethanol, we can turn feedstocks, such as corn stover, citrus waste and even woodchips, into clean, renewable fuel.

defending the RFS: The RFS was designed to set a goal of 36 billion gallons of renewable fuels by 2022, with the majority of that being provided by a combination of grain ethanol and cellulosic ethanol. The industry that is taking the greatest strides toward making cellulosic ethanol a commercial reality is the grain ethanol industry itself, in part because it already has access to an abundant source of biomass as feedstock.

Our industry needs to send congress a clear message: keep the rFS intact. Weakening the rFS goals for cellulosic ethanol would not just block our progress toward a viable cellulosic ethanol industry, but it will put OPEc further in control of our economy. changing the rFS just four years after enactment sends the wrong signal to those looking to invest in next generation fuels. A continued commitment to our nation’s renewable fuel industry will strengthen our energy security, generate more U.S. jobs that can’t be outsourced and improve our environment.

opening the fuels market: We in the ethanol industry recognize that the decision of which type of fuel to use should be left to consumers. This means encouraging the installation of flex-fuel pumps, and encouraging the production and sale of flex-fuel vehicles so the

consumer can make their fuel choice based on price and performance. An investment in ethanol infrastructure would tear the blend wall down completely and allow ethanol to compete in a fair and open transportation fuels market.

educating the public about ethanol: Today, there are still thousands of Americans who have yet to hear ethanol’s story. The American Ethanol partnership with NAScAr is a concerted effort by those within the industry to educate consumers about the benefits of ethanol and dispel the misinformation perpetuated by the special interests that don’t want to see ethanol succeed. The effort to market ethanol through NAScAr means tens of millions of TV viewers see our industry in a positive light every race weekend, particularly as every NAScAr racing vehicle is now using Sunoco Green E15 racing fuel. by putting American Ethanol into the victory lane every race weekend, we are proving E15’s effectiveness as a fuel for every American driver.

Securing our energy future will take time, but America has the talent, ability and ingenuity to answer the economic, energy and environmental challenges we face. Growth Energy will continue to work with everyone in the industry to help achieve our nation’s energy independence goals.

author: Tom BuiscEO, Growth Energy

(202)[email protected]

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Grassroots voice

Setting Prioritiesto Defend, Advance Policiesby brian Jennings

as 2011 comes to a close, members of the grassroots american coalition for ethanol have been building a strategic roadmap for 2012 and beyond. AcE hosted a member planning workshop in November, with plants from across the country sending representatives to help contribute to the development of policy, market development and public relations priorities. Our board of directors discussed our path forward as well.

An obvious short-term priority will be defense of the renewable fuel standard (rFS). Playing defense to protect the rFS may seem underwhelming. many in our industry understandably prefer to go on offense and fine-tune the rFS so corn ethanol may qualify as an advanced biofuel (because the scientific data supports this adjustment). AcE members support this change, but they also appreciate that in politics, timing is everything, and the timing is poor for that particular change right now. Special interests that feel entitled to cheap corn forever have pushed for the introduction of several bills in congress already to reduce or repeal the rFS and the drum beat will only continue in 2012. moreover, an anti-ethanol congressional hearing took place in November, where the deck was stacked with witnesses who oppose the rFS.

In the spirit of the holidays, when we remember the reason for the season and what we ought to be thankful for, AcE members are grateful for the rFS and are conscious of the fact that we did go on offense in 2005 and 2007 to enact this sweeping and historical policy change. We don’t feel ashamed for defending the rFS, for if we fail to play effective defense, unlike with the sacrifice of the Volumetric Ethanol Excise Tax Credit, the consequences would be destructive for our industry.

But we’ve got to look beyond the short-term as well. Earth is now home to more than 7 billion people, and biofuels from a variety of feedstocks are poised to transform how we produce fuel and food in a sustainable way. many midterm and long-term priorities need to be addressed as well.

E15 represents the most important near-term opportunity to increase ethanol demand. AcE will work overtime with u.S. EPA and state regulators to ensure full implementation of E15 this year.

AcE has made consumer fuel choice a priority for years, and we’ll continue to champion legislation to deploy more flex-fuel vehicles (FFVs) and blender pumps in congress and work with states and the uSdA to carry out existing programs for blender pump infrastructure.

Our industry went on the offensive to enact tax credits, the original rFS in 2005 and the larger rFS in 2007, because we assembled coalitions with like-minded groups and convinced a majority in

congress these changes were critical to the future of our country. Going forward, AcE will build coalitions with new groups and mobilize grassroots support for ethanol outside the traditional corn belt to put more states in play so that ethanol can enjoy broader bipartisan support in Congress. This won’t happen overnight, but it is critical spade work that needs to be done. We can also capitalize on the 2012 election to build support for ethanol.

While blender pumps and FFVs will help level the playing field for consumers, AcE wants to address unfair tax policies which today unnecessarily reward fuels of the past such as oil instead of doing what tax policy should: encourage fuels of the future such as cellulosic ethanol.

Finally, new fuel economy rules will require automakers to modify engines in such a way that ethanol’s clean octane benefits, which are too often overlooked today, will become indispensable well into the future. Ethanol is poised to be the primary fuel to not only help achieve landmark fuel efficiency requirements but also to reduce harmful toxins emitted by today’s gasoline.

AcE remains committed to making u.S. ethanol the consumer fuel of choice and we look forward to working with our grassroots members to fulfill this mission in 2012 and beyond.

author: Brian Jennings,Executive Vice President,

American coalition for Ethanol(605) 334-3381

[email protected]

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europe callinG

Solving ILUC by Thinking Out of the boxby Robert Vierhout

in various circles, the current thinking on indirect land use change (iluc) is very much driven by negative perceptions. In the Eu, the concern is that biofuel policy is counterproductive to what policymakers want to achieve in the first place: avoiding increases in greenhouse gas (GHG) emissions. Even though many will agree to the theoretic possibility that biofuel policy could cause unwanted changes in land use, it has not yet been proven.

For the sake of the argument, let’s assume the concern is justified and that promoting biofuels would cause ILuc. Should a policymaker in such situation not try to consider all options, instead of looking at negative measures only? Because, that is what is happening. The measures under discussion are very punitive, resulting in penalties instead of rewards. A penalty, however, will not necessarily lead to a change in behavior or prevent ILuc from occurring; it merely results in certain biofuels not being used in Europe. It certainly doesn’t prevent these biofuels from being used somewhere else in the world. In the end, preventing unwanted land use change is not achieved by the policy.

Assuming ILuc could occur, policymakers should go for measures that will not cause this leakage effect. They should go for a win-win situation

and promote biofuels whilst, at the same time, adopting measures that promote only those biofuels without a high risk of unwanted land use changes.

A consortium of nongovernmental organizations and industry was formed earlier this year to confront policy makers with this more positive, incentive-based approach. The partners, including Shell, Neste Oil, riverstone Holdings LLc, the International union for conservation of Nature, Partners for Euro-African Green Energy and ePurE, commissioned Ernst & Young to study a policy approach that incentivizes ILUC-mitigation practices and supports best practices in the production of biofuels and crops for biofuels.

All the policy options being studied by the European commission have serious drawbacks. None encourage producers to adopt practices that reduce ILuc risks, nor do they improve investor confidence for biofuel development. by assigning a carbon credit to biofuels that prevent or reduce the risk of ILuc, Ernst & Young suggest, financial value can be created to incentivize the adoption of practices that prevent or mitigate ILuc.

The Renewable Energy Directive already has a model in place. One of the annexes contains a bonus mechanism for biofuels produced from feedstock grown on severely degraded or heavily contaminated land—a carbon credit of 29 grams of cO2 equivalent per megajoule. This instrument could be extended to provide a carbon credit to those biofuels that meet specified ILUC mitigation

criteria. Examples include the use of biofuel coproducts to substitute animal feed, the production of biofuel feedstock crops on abandoned or degraded land, yield improvements and the use of wastes.

The ILUC mitigation credit would make qualifying biofuels worth more to fuel suppliers as they need less physical volume to meet mandatory GHG emission reduction targets, and so create financial value without the need for fiscal intervention.

Whether this fifth proposed option will be attractive to policymakers is still an open question. For now the European commission does not want to look beyond the four policy options on the table. but there are good reasons for the member states to look at other options. After all, it doesn’t make a lot of sense to throw an ILuc penalty at an industry that is creating employment opportunities in times of economic crisis. If it is possible to develop a policy that would improve the GHG emission savings performance of biofuels and keep most of the industry up-and-running at the same time, Eu member states might well sign up.

author: robert VierhoutSecretary-general, ePurE

[email protected]


business matters

Implementing HACCP Systems by Andrew Anderson and Diana Palmer

a hazard analysis and critical control point (haccp) system is a systematic approach for identifying, evaluating, and controlling food safety hazards. Federal regulations require that certain industries, including meat and poultry producers, retail food service providers, and juice manufacturers, implement an HAccP system, but there is no regulation or requirement at this time for the implementation of an HAccP system for feed manufacturers or ethanol plants producing distillers grain to be used as feed.

despite this lack of regulation, the Association of American Feed control Officials recently published the “Verification Program for a Voluntary Hazard Analysis Critical Control Point Plan.” The basic steps in the program are an initial hazard analysis, establishment of critical control points that lead to each hazard, establishment of maximum limits for each critical control point, establishment of a monitoring system and corrective action plan for responding to deviations in the critical control points, and provision for a record-keeping system. AAFcO developed the framework for those feed producers interested in adopting an HACCP program—the verification program remains entirely voluntary. An online version of the AAFcO program may be found at the AAFCO website, http://www.aafco.org, in the “regulatory Information” menu. In addition, AAFcO publishes a Guidance/Framework and Checklist for best management Practices, both of which may provide additional guidance as to appropriate and best practices in the feed manufacturing industry.

So, if this is entirely voluntary, why should you consider an HAccP system? You may want to because the FdA has made grants to state officials to encourage HACCP adoption. The Iowa Department of Agriculture and Land Stewardship, for example, is set to complete the publication of its feed manufacturing HAccP materials in early 2012. beginning in April through march 2015, IdALS will make on-site visits to 50 to 100 feed mills and ethanol plants in Iowa each year, surveying high risk behaviors at the facilities and providing information about implementing an HAccP system to reduce these behaviors. The results of the survey will be recorded in a database showing use of HAccP principles at these facilities over time.

In conjunction with this type of survey, state officials may also be testing feed and grain at feed mills and ethanol plants for levels of heavy metals and mycotoxins. For example, the mycotoxins chosen for testing by IDALS are aflatoxins, vomitoxin (DON), zearalenone (ZON), and fumonisins. The FDA has previously issued maximum guidance levels for mycotoxins, and any samples that show levels higher than the maximum guidance level will be immediately reported to the regional FdA office. Heavy metals to be tested through the sampling program include mercury, lead and cadmium. because there are no current FdA standards for heavy metal content in feed, only samples that show “unusually high levels of heavy metals” will be reported to the regional FDA office. Grain sampling has already begun, and between now and 2015, IdALS will take 80 grain dealer samples and 20 ethanol plant samples each

year. Each location will receive a mycotoxin guidance document, and the aggregate results for both mycotoxins and heavy metals will be recorded in a database.

If your plant has not previously considered implementing an HAccP system, these FdA grant programs and on-site visits provide an ideal reason to open the discussion. Implementing an HAccP system prior to these on-site visits could help lead to early detection of high levels of mycotoxins and allow time for a corrective response if needed.

The increased pressure on feed manufacturers to consider implementing an HAccP system also makes it likely that feed manufacturing HAccP systems could become a requirement in the future. In fact, state feed control officials in Texas and california are now accredited to certify feed operations that take part in the voluntary HACCP program. The European Union has also already made adherence to HAccP principles a legal requirement for “feed business operators” in Eu Feed Hygiene Regulation (EC) No. 183/2005. Voluntary implementation now could help resolve any internal difficulties without penalty and prepare your plant for the upcoming visits from state officials.

authors: Andrew AndersonPartner, Faegre and benson

(515) [email protected]

diana Palmer

Associate, Faegre and benson(515) 447-4715

[email protected]

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aaron Potter has been promoted to engineering manager for innovative Pro-cessing Solutions. his responsibilities include customer re-lations, project man-agement, systems and component design, and estimating. In-novative Processing Solutions, an affiliate of Stedman Machine

co., provides custom solutions for pro-cessing systems and specializes in enhanc-ing bulk material-handling systems.

eRi Solutions inc. acquired the en-vironmental affairs department from IcM Inc. in July and, with it, Bill roddy, Andrea Foglesong, Adrien Kogut, lauren Taylor and April lockwood, who have joined the ErI team. In addition, three process engineers have begun working to develop and tailor comprehensive process safety

management programs for the ethanol industry. Jay Beckel, Jim lane and Gary lium have engineering and on-the-job ex-perience working for ethanol companies. The lack of process safety is the leading cause of catastrophic events in the chemi-cal processing industry, and is a current emphasis for OShA inspections around the ethanol industry, says ErI spokesman nathan Vander Griend. The company is staffing up to help meet industry challeng-es in tightening regulations from both the U.S. EPA and the Occupation Safety and health Administration, he adds.

larry MacDonald has joined the board of enerkem inc. he will bring 30 years of experience at nova chemicals corp. in senior executive functions to the cellulosic ethanol developer. “With his ex-tensive knowledge of the chemicals mar-ket, larry represents a strong addition to Enerkem’s board of directors”, said Vin-cent chornet, president and cEO. “We will benefit from his global industry ex-pertise as we strengthen our leadership in biofuels and chemicals.”

codexis inc. named achilles antonio

clement director, latin America. he will head the newly-formed codexis do Brasil Participacoes ltda., with responsibility for managing Codexis’ expanding role in Latin America. The announcement follows the signing of a joint development agreement between codexis and raizen Energia S.A, Brazil’s largest sugar and ethanol producer, to develop an improved first generation ethanol process with enhanced perfor-mance economics. clement joins codexis after working more than 40 years in opera-tions, sales and business development with DuPont in Latin America. He was also ac-tive in developing new biofuels, including ethanol and butanol in the region.

Illinois corn grower Gary niemeyer, Auburn, is the new president of the na-tional corn Growers association, tak-ing office Oct. 1 at the start of the asso-ciation’s fiscal year. Niemeyer emphasizes that his highest priority in 2012 will be the drafting of a farm bill that continues to protect growers from loss due to adverse weather, crop disease and volatile markets. he commends efforts to improve con-sumer knowledge on important subjects such as ethanol and food production, in-cluding the nAScAr partnership and the U.S. Farmers and ranchers Alliance. The ncGA reached a record number of mem-bers at 37,160 this year, topping last year’s record of 36,216.

arborGen inc. has named edward Shonsey chairman of the board. he brings 38 years of senior management experience and has a track record in guiding emerging companies into commercial success. Shon-sey is cofounder and CEO of L1 Agro-sciences Inc., developing agricultural traits such as nitrogen utilization and drought and salinity tolerance in plants. he has had top executive positions with Diversa Inc., novartis/Syngenta Seeds Inc. and

buSINESS bRIEFSPeople, Partnerships & Deals

promoted Aaron Potter has 14-plus years experience as a systems and design engineer for Innovative Processing Solutions and its affiliate, Stedman machine co.

Finance Officer brian conn has held executive positions with emerging and high-growth companies for more than 20 years and has provided financial consulting services to life science companies in both the u.S. and Europe.

expanded Role Steve Jackson has served as Verdezyne’s cFO and cOO since 2008 and will now focus on leading operations and commercialization.

Verdezyne inc. appointed Brian conn chief financial officer (CFO) and Steve Jack-son chief operations officer (COO). As CFO, Conn will head up Verdezyne’s finance, human resources, information technology and corpo-rate communications functions. Jackson will be responsible for the scale-up of manufactur-ing operations and commercial production of all biobased chemicals. california-based Ver-dezyne, an industrial biotechnology company, is developing yeast strains for cost-effective production of biobased chemicals and fuels.


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Pioneer hybrid Inc. ArborGen is working on woody feedstock development for cel-lulosic ethanol and advanced biofuels.

Proterro inc. recently established a three-member advisory board to aid the company in the development and com-

mercialization of Protose, a fermen-tation-ready sugar feedstock using a novel microorgan-ism and photoreac-tor system. harrison Dillon is president and chief technology officer of Solazyme Inc., a renewable oil developer. Thomas Dries is founder and managing partner of ncn Partners, con-sultants in the renew-able chemicals and

fuels markets. he also worked as vice pres-ident of business development for Gevo Inc. christos Papadopoulos, a chemical en-gineer with almost four decades of expe-rience in petrochemical industry research and production, led BP Chemical’s efforts on the green olefins project.

Bill Brady, Mascoma cEO and chair of the Advanced Ethanol council, was welcomed to the board and executive com-mittee of the Renewable Fuels associa-tion at its annual meeting held in October. chuck Woodside, cEO of KAAPA Etha-nol, Minden, neb., was re-elected chair-man. Also re-elected as officers were Vice chairman neill McKinstray, vice president and general manager, ethanol division of

The Andersons Inc.; Treasurer randall J. Doyal, CEO of Al-Corn Clean Fuel, Cla-remont, Minn.; Secretary Walter Wendland, cEO of Golden Grain Energy, Mason City, Iowa; and President Bob Dinneen.

Bin Yang, an assistant professor at Washington State University, received a Defense advanced Research Projects agency award, which is a two-year $300,000 grant supporting his research converting lignin into biobased jet fuel. Feedstock for processing could be accessed from lignin byproduct resulting from cellulosic etha-nol production, among other sources. co-locating the production of cellulosic bio-fuels and lignin jet fuel creates efficiencies that drive down production costs, accord-ing to Yang.

In October, chemetex announced developments on cellulosic ethanol proj-ects—one under construction in Italy and the second planned in Brazil. The 13 MMgy plant under construction in north-ern Italy, expected to be operational in June, was transferred to BETA renew-ables, a joint venture between chemetex, a wholly-owned subsidiary of Mossi & Ghisolfi Group, TPG Capital and TPG Biotech. The new company was formed to exclusively license the trademarked Proesa technology. In Brazil, chemetex will col-laborate with GraalBio Investimentos S.A. to develop and construct the country’s first industrial-scale cellulosic ethanol fa-cility, which will produce 20 MMgy from bagasse with expected startup in 2013.

Faegre & Benson llP and Baker & Daniels llP announced they will merge law firms to form Faegre Baker Daniels LLP effective Jan. 1. The consulting arm of Baker & Daniels will be changed to Fae-greBD Consulting on the same date. The

alignment of practice overlap, including energy and agribusiness, acted as a major factor for the merger, which will expand the depth of legal expertise to a broader geographical footprint.

Pinal energy llc constructed a $250,000 pilot plant to test sweet sorghum viability for ethanol production next to its 50 MMgy corn/milo ethanol plant in Maricopa, Ariz. locally available, sweet sorghum potentially yields 900 gallons of ethanol per acre compared to 300 gal-lons from corn, according to Pinal Energy General Manager Keith Kor. As a joint venture with the University of Arizona, the plant operates as an ongoing research facility and is available for lease by other ethanol producers seeking future testing of various feedstocks.

Gevo inc. received $5 million from the USDA’s National Institute of Food and Agriculture to develop biojet fuel from woody biomass and a $600,000 con-tract to supply 11,000 gallons of fuel to the U.S. Air Force. Gevo will use the funds to optimize its cellulosic fermentation pro-cess through research done at Washington State University. When operational, Ge-vo’s demonstration plant in Silsbee, Texas, will convert up to 120,000 gallons of isob-utanol per year into jet fuel, which will be used for engine testing and demonstration with A-10 aircraft at the Wright-Patterson Air Force Base in Dayton, Ohio.

Yokogawa released a new wireless multi-input temperature transmitter. Built on the ISA100.11a industrial automation wireless communication standard, the YTMX580 is battery powered and features eight analog input channels. The YTMX580 is a cost-effective way to measure mul-tiple temperature points in distant plant

patented Researcher credited with six patents, christos Popadopoulos led research at Amoco as well as led programs on intellectual property strategies for new technology development across bP chemicals.


business briefs

locations where there is no signal cabling or power available for tra-ditional wired instrumentation. The company also released a

new touch screen operator interface as part of a new model series for its DXAdvanced r4 data acquisition and display station.

On track to break ground soon on the proposed 36 MMgy advanced biofuels plant, highlands enviroFuels llc an-nounced receiving its air permit on Sept. 28 and completion of an economic impact

study on Oct. 4. The facility, which will be located near lake Placid, Fla., will initially have a nameplate capacity of 30 MMgy and utilize locally derived sugarcane and sweet sorghum feedstocks. The project will generate 60 full-time and 700 indirect jobs while providing highlands county with $51 million of gross domestic prod-uct annually.

lanzatech nZ ltd., a new Zealand firm with a novel fermentation technology converting gases to ethanol and chemi-cals, has developed another joint venture in china. The partnership with Shougang Group and new Zealand Shougang Tang-Ming will build a demonstration plant at

one of Shougang’s steel mills in China with plans to quickly scale to a fully commercial facility. Beijing-headquartered Shougang is one of the largest steel producers in chi-na. lanzaTech received two global awards this fall for its technology, named to the Global Cleanteach Top 100 and Company of the Year Asia Pacific. It was also judged “Best Innovation by a Small or Medium-sized Enterprise” in the global ICIS In-novations Awards. IcIS, a global energy, petrochemical and fertilizer market intel-ligence provider, is part of reed Business Information ltd.

Zeachem inc. was named to the Global Cleantech 100 list, produced by Cleantech Group, a research firm focused on global cleanteach innovation, in col-laboration with the UK’s Guardian News and Media. To qualify for the list, compa-nies must be independent, for profit and not listed on any major stock exchange. ZeaChem’s 250,000 gallon cellulosic etha-nol demonstration plant is nearing com-pletion in Boardman, Ore.

cim-tek Filtration announced its hydroburn PSr has been used to restore more than $4 million worth of ethanol-blended gasoline in less than two years. For years, the company has provided al-cohol monitor dispenser filters to aid in detecting phase separation. The addition of the proper amount of hydroburn PSr restores separated fuel, and eliminates the need to replace the fuel. An average sta-tion owner can save $19,000 to $27,000 on an underground tank containing 5,000 gal-lons of phase-separated fuel, according to the company.

eco-energy inc. announced signing service agreements with several ethanol plants recently to provide value-added marketing and distribution services and in-ternational sales opportunities. Siouxland Energy and livestock cooperative, Sioux center, Iowa, signed on in late September

Marquis energy llc, hennepin, Ill., is a two-time recipient of the norfolk Southern Railroad Thoroughbred Safety Award. The company qualified by having zero defects and at least 1,000 carloads of hazardous materials shipped without a shipper-caused incident. Marquis Energy actually exceeded the minimum requirements with 2,733 carloads of haz-ardous material, approximately 79.3 million gallons of ethanol, shipped without any safety incidents. Additionally, Marquis Energy in Illinois and Marquis Energy-Wisconsin llc are celebrating new safety records. Marquis Energy-Wisconsin has gone more than 700 days without a lost time-incident and Marquis Energy over 370 days without any such incident.

Safety award Employees of Marquis Energy display their Thoroughbred Safety Award from Norfolk Southern Railroad. From left,Ty Hildum, Andy Lanxon, Robyn Louderback, Adam Kunkel and Jim Craig.


and Utica Energy llc, Oshkosh, Wis., in early november. Two others were added to the portfolio in 2011, Iroquois Bio-Energy co. llc, rensselaer, Ind., and Aberdeen Energy LLC, (Glacial Lake Energy LLC, Mina, S.D).

Verenium corp. secured up to $16 million in new secured financings, which will allow it to borrow up to $10 million against its eligible foreign receivables and up to $3 million against domestic receiv-ables and inventory. It also received up to $3 million in secured equipment financing to help support the planned build-out of its research and bioprocess development laboratories and corporate headquarters in San Diego. The developer of high-performance enzymes also announced it has repurchased its remaining secured 9 percent notes, leaving an aggregate $34.9 million in outstanding unsecured notes. The repurchase was part of its strategy to address debt, strengthen capital structure and promote growth.

Dyadic international inc. completed a private placement of $3 million in con-vertible notes. The company will use the funds for working capital as it continues the development of its proprietary tech-nologies for the discovery and manufac-turing of enzyme and protein products for the bioenergy, industrial enzyme and bio-pharmaceutical industries.

Weaver llP, an independent ac-counting firm in the Southwest, is expand-ing its energy credit brokering services as part of the renewable and energy compli-ance practice. Services include assisting cli-ents with the purchase and sale of various energy credits, including renewable iden-tification numbers (RINs), sulfur credits, benzene credits and low carbon Fuel Standard credits. These services will be managed by Sandra Dunphy, a director in Weaver’s energy compliance practice, and candace loesby, who recently joined the

firm from a multi-national energy com-pany. Together, they will work with clients to market or purchase credits, negotiate and prepare contracts, prepare and upload transactional data and validate credits.

Grundfos Pumps opened its Water Technology center in Fresno, calif., in September. The facility offers a space for government, academic institutions and startups to share and gather information on irrigation, water monitoring, wastewa-ter treatment and other water technology. The center will offer research entities ac-cess to Grundfos resources, helping to catalyze solutions to water scarcity chal-lenges. It will function as a hub for linking research with business development.

BinMaster level controls introduced a newly designed Pro remote capacitance

probe that of-fers the abil-ity to mount the sensor’s e l e c t r o n i c c o m p o n e n t s up to 75 feet away from the sensing probe. This point level indica-tor is designed

specifically for hostile applications such as high temperatures or excessive vibration, featuring a unique split configuration that houses sensitive electronics away from ex-treme conditions that may interfere with proper probe operation. The Pro remote can be used for high-, mid- and low-level detection of solids, liquids or slurries.

Rockwell automation inc. unveiled a new line of programmable automation controllers for process applications. The Allen-Bradley controllogix 5570 Se-

ries controllers significantly improve the amount of information that can be ex-changed between the control and super-visory layers, while allowing more control strategies to be executed. Further model releases in the new line are being planned for December and January for safety-re-lated functions and operations in extreme environments. The company unveiled the new line as part of the 20th annual auto-mation fair hosted by rockwell Automa-tion, Nov. 16-17 in Chicago.

indeck Power equipment co. has a new line of trailer-mounted O-Type rental boilers for planned or emergency outages. The new trailer-mounted fleet ranges in size from 40,000 to 60,000 to 75,000 PPH capacities with design pressures of 395 psig. While unforeseen power outages are devastating to plants, Indeck understands the critical mandate to keep a facility op-erating with boilers for emergency, tempo-rary or back-up usage. The new O-Type boilers are designed for ease of delivery, installation and set-up. Installation of the boilers is simple with easily accessible pip-ing connections and a single electric con-nection. Indeck also offers a no obligation, boiler emergency preparedness program.

business briefs

share your industry briefs to be included in business briefs, send information (including photos and logos if available) to: business briefs, Ethanol Producer Magazine, 308 second ave. n., suite 304, Grand forks nd 58203. you may also fax information to (701) 746-8385, or e-mail it to [email protected]. please include your name and telephone number in all correspondence.

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Nov. 1—As the natural gas market has moved from concern about supply shortages to excesses over the past four years, market prices have naturally responded by steadily dropping. The reason for the swing is dramat-ic technology developments (horizontal drill-ing and high-pressure fracturing) that have allowed economic access to shale formations. Our resource base has grown significantly, and the U.S. is now producing more natural gas each month than ever.

The improved natural gas supply picture has impacted regional basis prices and some pipeline transportation rates. regional basis prices are now tracking nYMEX prices closer than in the past. For example, a common spot index price in the Midwest (Ventura Index) is now trading at a 4-cent-per-million Btu (MMBtu) premium to NYMEX for the next

year, while in 2008, it traded at a 66 cents per MMBtu discount. While the Midwest has still experienced overall price decreases, the degree of decrease isn’t as much compared to 2008, since the geographic basis has tightened. Much of the new shale production directly impacts pricing from the Gulf of Mexico, which is the physical location (Henry Hub, La.) of the nYMEX natural gas contract. Essentially, the market area representing henry hub pricing has experienced much more of a supply in-crease compared to the Midwest.

Another interesting impact is that shale production is occurring within existing major markets, such as Pennsylvania and Ohio, where the need for long-haul transportation services from distant supply basins such as Western canada and the Gulf has diminished. Some, such as Transcanada Pipeline and Tennessee

Natural gas Report

Corn Report

New supplies impact basis, transportation costs bY CaSEY WHElaN

bearish fall corn market still looking at tight supplies bY JaSON SaGEbIEl

COMMODItIES REPORT

Oct. 31—Corn exhibited bearish fun-damentals at the end of September, coupled with global concerns to sell off December fu-tures to just below $5.75. Demand changed as margins improved for ethanol and livestock, giving corn a lift back above $6. Harvest in the western corn Belt moved along, but weather and a later-maturing crop slowed progress in the eastern corn Belt, which resulted in a firmer cash market. While domestic demand remained steady, global demand for U.S. prod-uct slowed as more competitive feedgrains/feedstuffs attracted feeders, indicated by news of china acquiring wheat from Australia and Japan buying feedgrains from the Ukraine.

The USDA October supply/demand report left corn yields unchanged from the previous month at 148.1 bushels. Acreage harvested was reduced by only 100,000 acres

with production at 12.433 bil-lion bushels. carryin increased by 208 million bushels due to Sept. 1 ending stocks adjust-ments. The result was new crop carryout increased from 672 to 866 million bushels. Export de-mand decreased by 50 million bushels to 1.60 billion. Feed and ethanol demand for next year were unchanged from the previous month, though still lower than a year ago. At this time, the carryout-to-use ratio is 6.8, tighter than the 8.6 from last year. Note that at this same time last year, the new carry-out was projected at 6.7. The market rationed corn demand and carry-out ascended.

World corn carry-out was projected

Gas Transmission, requested significant rate increases to cover costs from a smaller base of customers who have naturally pushed back at being asked to pay much higher prices for the same level of service. On the other hand, pipelines have the regulatory right to cover all reasonable costs, even if higher costs are driven by factors beyond the control of either the pipeline or existing customers.

conclusion: Increased shale development and production clearly has been good for en-ergy consumers across the nation. Some im-pacts, however, such as changes in traditional basis relationships and pipeline rate increases, have somewhat mitigated the full value for some energy consumers.

higher at 123.19 million metric tons (mmt) versus the previous 117.39. Corn production increased by 4 mmt in china, though domes-tic demand increased too, as illustrated in the accompanying graph.


DDgS Report

Ethanol Report

Fall DDGS prices jump on tight supplies bY SEaN bRODERICK

Economy, European debt issues play havoc with energies bY RICK KMENt

COMMODItIES REPORT

DDGS Prices ($/ton)

lOCatION DEC 2011 NOV 2011 DEC 2010

minnesota 208 195 145

chicago 227 215 165

buffalo, N.Y. 232 225 162

central calif. 278 254 198

central Fla. 246 238 180SOurcE: cHS Inc.

Natural Gas Prices ($/MMBtu)

lOCatION NOV 1, 2011 OCt 1, 2011 NOV 1, 2010

NYmEX 3.52 3.76 3.29

NNG Ventura 3.77 3.77 3.47

cA citygate 3.85 4.10 4.05

SOurcE: u.S. Energy Services Inc.

Regional Ethanol Prices Front month Futures (Ac) $2.753

REGION SPOt RaCK

West coast $3.025 $2.920

midwest $2.780 $2.800

East coast $3.010 $2.920SOURCE: DTN

Regional Gasoline Prices Front month Futures Price (rbOb) $2.6822

REGION SPOt RaCK

West coast $2.987 $3.134

midwest $2.641 $2.854

East coast $2.725 $2.873SOURCE: DTN

Corn Futures Prices (Dec. Futures, $/bushel)

DatE HIGH lOW ClOSE

October 28, 2011 6.57 6.45 1/4 6.55

Sept. 30, 2011 6.36 5.92 1/2 5.92 1/2

October 28, 2010 5.85 1/4 5.75 1/4 5.79SOurcE: FcStone

Cash Sorghum Prices ($/bushel)

lOCatION OCt 28, 2011

SEPt 29, 2011

OCt 28, 2010

Superior, Neb. 6.33 5.93 5.39

beatrice, Neb. 6.21 5.78 5.14

Sublette, Kan. 6.26 5.73 5.04

Salina, Kan. 6.60 6.05 5.27

Triangle, Texas 6.19 5.99 5.29

Gulf, Texas 6.93 6.68 5.44

SOurcE: Sorghum Synergies

u.S. Ethanol Production (1,000 barrels)

PER DaY MONtH END StOCKS

Aug. 2011 907 28,110 17,900

July 2011 891 27,624 18,700

Aug. 2010 870 26,964 17,380SOurcE: u.S. Energy Information Administration

Oct. 31—October was an odd month for ethanol and gasoline markets. While corn futures made an attempt to bounce back, outside market factors and questions of long-term demand under-mined the overall tone of the market. Ethanol and gasoline markets posted mixed messages at month’s end. Prices posted moderate to strong gains through the ethanol futures rallying over 35 cents per gallon, while rBOB gasoline fu-tures posted a 15-cent gain. Rack and spot markets, however, were all over the board, seeing 40-cent-per gallon increas-es in some regions, while others slipped. The disconnect in ethanol futures, corn futures, spot and rack follows a shift in noncommercial or speculative trader

interest in the futures market and retail and wholesale buyer activity in the cash market. It became evident just how chal-lenging maintaining physical supplies can be for end users.

The potential deal to stabilize the European debt crisis and latest round of economic reports has the energy market in a tizzy with wide price shifts delivered on good and bad news days. late October can be summed up as having more active good days than bad. But the challenge is that this latest spike in market prices has the potential to be just a couple of bad days away from recent lows. Maintaining both risk management strategies as well as physical inventory levels is a challenge, and never as crucial.

Oct. 31—Buyers were waiting for new crop to weigh on corn prices, which didn’t happen as in most years. Ethanol plants took normal fall maintenance downtime, although some went as long as 10 days. For a larger plant that meant 7,000 tons did not get marketed, which adds up. consequently, prices jumped dramatically in late October, up as much as $20 per short ton delivered to cali-fornia and $15 per short ton to Chicago. Obviously, the lack of supply was a fac-tor, as was the cash price of corn, but buyers struggling to find quick replace-ment feed, rallied the spot market. As plants come back on line, and buyers explore alternatives such as feed wheat, we should see some leveling off.

container exports remain strong, though bulk shipments continue to lag last year’s record pace. Mexico increased its usage, but china and South Korea continue to track well below 2010. With the majority of the world’s growing areas having had decent crops, DDGS is com-peting with Black Sea feed wheat and corn and more.

DDGS prices have gained about 6 to 8 percent of corn’s value in the past month. cold weather will soon dictate better feeding, and with strong mar-gins for hogs and cattle, demand should pick up. Whether prices keep pace with a “normal” supply situation will be the story for the winter.

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The response from the biofuels industry regarding the content of a report released in October by the national Academy of Sci-ences on the potential economic and envi-ronmental effects of the U.S. renewable fuel standard (RFS2) was loud and clear: this is a report that should be digested with a large grain of salt and should in no way influence future policy.

“You can read this report in a number of ways because the conclusions are based on variables that will undoubtedly change with technological advancements and innovation within the industry,” says Growth Energy cEO Tom Buis. The study “largely assesses ethanol and other biofuels in a vacuum and fails to appropriately compare the costs and benefits of renewable fuels to the impacts of the marginal petroleum sources they are displacing,” the Renewable Fuels Association adds.

The report, “renewable Fuel Standard: Potential Economic and Environmental Ef-fects of U.S. Biofuel Policy,” is an indepen-

dent assessment by 16 researchers of the economic and envi-ronmental benefits as-sociated with achiev-ing the goals set by the rFS2. committee co-chair Wally Tyner, energy economist, professor of agricul-tural economics at Purdue University, and co-director of the university’s Center for research on Energy Systems and Policy,

says he’s not surprised by the ethanol indus-try’s reaction to the report. “They have a re-sponsibility to protect their turf, if you like, and the people who do studies like this have a responsibility to tell it like we see it,” he says. “I don’t see a problem with that.”

It’s doubtful the in-dustry can seriously dis-pute the finding that the industry is unlikely to meet the 2022 rFS2 man-date for cellulosic biofuel, although Tyner says that finding appears to be the most controversial. “The reality is that with zero gal-lons today, we’re not likely to get to 16 billion gallons of cellulosic by 2022,” he says. “If you look back, it was the Energy Tax Policy Act of 1978 that provided the original impetus and since that time we’ve grown from 0 billion gallons to 14 billion gallons [of corn ethanol production], from zero plants to over 200 plants, and that’s with a technology we knew and a relatively inex-pensive feedstock. With cellulosics, we have a technology that we don’t know well, we have expensive feedstocks and no plants built, and we’re expected to go from 0 gallons to 16 bil-lion gallons in 11 years when it took us 30 years to go from zero to 14 billion gallons for corn. That’s just not likely to happen.”

considering that the overwhelming ma-jority of potential cellulosic ethanol produc-ers agree that they are not likely to meet the 2022 rFS goal, it is reasonable to assume then that the underlying reason for the indus-try groups’ dissatisfaction is a concern that the report will be used to support the move-ment to dismantle the rFS. Tyner says that while the report was prepared for policymak-ers, it offers no policy suggestions and should “absolutely not” be used to support chang-es to the mandates. “This report makes no policy recommendations,” he says. “It’s just findings. It doesn’t say anything about either changing the rFS or keeping it the same. All it says is we’re not likely to meet it. And that’s just for cellulosics. We’re not saying you’re not ever going to meet that [16 billion gallon]

Report in Question The ethanol industry has a responsibility to question and challenge, says Wally Tyner, energy economist at Purdue University. The experts writing the report have a responsibility to call it as they see it.

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No SurprisesExpert committee finds industry unlikely to meet 2022 cellulosic goal

unknown impact The impact of dedicated energy crops such as switchgrass on greenhouse gas emissions reductions will remain unclear until more crops are established, according to a National Academy of Sciences report.

level; we’re saying you’re not going to meet it by 2022.”

Another finding included in the 446-page report that drew significant attention was the conclusion that the rFS2 may be ineffective in reducing global greenhouse gas emissions. In order to reach this tentative conclusion, however, the committee separated biofuels into three feedstock categories, two of which do significantly reduce emissions. Corn etha-nol is widely agreed to neither increase nor decrease emissions significantly, Tyner says. But when residues such as corn stover and forest trimmings are used to produce biofu-els, the result is a major reduction. The im-pact from the use of dedicated crops, the third category, will remain unclear until more crops are grown to serve as an example.

Ethanol industry representatives also questioned why the report did not include a comparison with petroleum. The answer is simple: they weren’t asked to. The U.S. EPA and the california Air resources Board are beginning to conduct those comparisons, however, and Tyner assumes that biofuels will come out on top. he points out that the committee was also not asked to evaluate the national security implications associated with domestic fuel production. —Kris Bevill


Ethanol News & Trends

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Fourteen ethanol producers from Ari-zona, Indiana, Kansas, Missouri, nebraska and Texas will receive a total of $11.5 million in payments through the USDA's Bioenergy Program for Advanced Biofuels program, the agency announced Oct. 31. Payments are cal-culated based on advanced biofuels produced from renewable biomass other than corn

starch. Also on the list of producers that will receive payments are biodiesel and pellet pro-ducers as well as anaerobic digestion units

Ethanol production from sorghum qualifies, according to the National Sorghum Producers. Participating producers are paid quarterly with an additional incremental pro-duction payment that’s calculated at the end of the fiscal year. Of the fourteen produc-ers, White Energy Inc. had the highest award at more than $3.1 million. White Energy owns three plants with a total capacity of 275 MMgy. Two of the plants are located in Tex-as, White Energy hereford llc and White Energy Plainview llc. The third plant is in russell, Kan. The producer that received the smallest award was central Indiana Ethanol LLC at $120,490.

Sorghum is known as a drought-tolerant crop and was planted on about 4.8 million

acres in 21 states in 2010, according to the NSP. The top five sorghum producing states were Kansas, Texas, Oklahoma, colorado and South Dakota. Kansas’ spot at the top of the list is clear, as the lion’s share of funding awards— eight total—were at Kansas etha-nol plants. In fact, of the total $11.5 million awarded, nearly half went to Kansas ethanol producers.

A 2009 study prepared for the United Sorghum checkoff Program showed that 43 percent of the sorghum produced in Kansas and 23 percent of the sorghum produced in Texas is used to make ethanol. At the time of the study, all of the plants in Kansas and Texas planned to use some percentage of sorghum in producing ethanol and some of those plants use 100 percent sorghum. On average, the plants used 48 percent corn and 52 percent sorghum. —Holly Jessen

Sorghum Ethanol in Spotlight USDA announces funding for producers not using corn

Every year, Brazilian sugarcane mills clear and replant about 1.7 million hectares (4.2 million acres) of cane. This year, some mills are planting sweet sorghum developed by Monsanto Co. in the off season. “This isn’t a replacement crop. It’s planted in addition to cane,” says Jose Carlos Carramate, business leader for CanaVialis, Monsanto's sugarcane breeding and technology program.

Sweet sorghum was planted in October and harvested as early as February, a time when sugarcane plants have low sucrose lev-els and produce little ethanol. Monsanto ex-pects to sell enough sweet sorghum for about 20,000 hectares of the secondary ethanol feedstock in Brazil this year. That’s enough to produce about 80 MMly (21.1 MMgy) of ethanol.

The company is working with 20 sugarcane mills and will either sell the seeds or take a cut of the profits in exchange for seed, carramate says. Some farmers have had difficulty planting the small sweet sor-ghum seeds. On the other hand, sugarcane mills can use the same equipment to crush and process sweet sorghum as they do for sugarcane.

A project to grow sorghum seed was first attempted in Brazil in 1980 but wasn’t con-sidered successful due to low yields and sugar content. At that time, sugarcane was considered far more profitable for etha-nol production. In 2004, Mon-santo began a sorghum project for crossbreeding for biomass and sugar traits. In 2008, the company acquired canaVialis, moving the work in Brazil even further forward. The company planted test areas and evaluation fields in 2010, says Uru-batan Klink, sorghum breeding leader for Monsanto Brazil. The first harvest of those

Sorghum Seed Monsanto Co. is providing sugarcane mills in Brazil with sweet sorghum seed to supplement sugarcane for ethanol production in the off-season.

brazil looks to Sweet Sorghum Monsanto providing seed for off-season ethanol feedstock

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sweet sorghum acres began March 17, with the first Brazilian gallons of industrial-scale ethanol from sweet sorghum produced two days later. —Holly Jessen


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In October, a technical malfunction at a Magellan Midstream Partners lP terminal in Mankato, Minn., caused high percentages of ethanol to be blended with gasoline at the terminal. The unapproved fuel was then distributed in 108 truck loads to more than 60 retail gas stations and cooperatives over a four-hour period on Oct. 8, according to information the company provided to state officials Oct. 10. Magellan immediately shut down its terminal to prevent more high-blend ethanol from being distributed and cooperated with state officials to recover the fuel that had already left the terminal. The process was time-consuming, in part, because some of the off-spec gasoline was delivered to bulk plants and secondary distributors. On Oct. 17, Magellan announced it had resumed gasoline loading operations at the terminal. “Virtually all of the remaining gasoline with high ethanol content which was distributed into the local marketplace last weekend has been recaptured and replaced with gasoline meeting the state standards,” the company stated, adding, “We have implemented additional measures to ensure the gasoline distributed from our facility meets state specifications.”

It is unclear exactly what percentage of ethanol was in the blends delivered to Minnesota gas stations, but one fuel sample taken by weights and measures officials was shown to contain a 63 percent concentration of ethanol. had the issue not been noticed and reported as soon as it was, consumer backlash from those who unknowingly filled their nonflex-fuel vehicles with high blends of ethanol could have easily been mistakenly directed at the ethanol industry. Fortunately, there have been no widely reported issues with consumer vehicles as a result of the er-ror.

Magellan has been directed by the De-partment of commerce to provide details as

to how the error occurred and what it plans to do to ensure it doesn’t happen again, but at press time the report had not yet been made available to the public. Mike Turchi, president of Georgia-based Petroleum Mea-surement Equipment co., says that while he’s not familiar with the specifics of this incident, in general, this type of operational malfunction could be caused by any num-ber of equipment failures, although they are rare, he stresses. “There are inventory sys-tems, checks and balances that [are conduct-ed] on a daily basis to ensure that,” he says. “The industry as a whole is very compliant and has very rigid, sound methods to ensure that you catch these mistakes as quick as you can.”

Terminals primarily use one of two methods for ethanol blending: ratio or se-quential. ratio blending consists of side-by-side meters that dispense gasoline and ethanol. Batch controllers pace the flow of ethanol from one meter to create the speci-fied blend based on the amount of gasoline flowing from the main meter. Turchi says ra-tio blending is typically the preferred meth-od at terminals because it ensures that the correct percentage of ethanol is mixed with gasoline, even if the batch is cut short for

some reason. With sequential blending, one meter is used to dispense both ethanol and gasoline. Ethanol is dispensed first, so if the load is stopped before the correct amount of gasoline has entered the tank, the ethanol blend will be higher than intended. “You can fix that, but generally that’s the reason why companies will choose ratio blending over sequential,” Turchi says. Larger terminals may still opt for sequential blending, how-ever, because it is a faster method than ratio blending.

Blending mishaps can also be caused by a flow meter malfunction, a control valve malfunction or an issue within the computer system. Whatever the problem, Magellan took action to immediately correct it, which falls in line with its reputation for being one of the best in the business, Turchi says. “Magellan is one of the best operators in the country and they’ve got some of the best engineers and equipment,” he says. “I sus-pect that their operating methods are con-sistent with, if not above, what the rest of the industry does.” —Kris Bevill

terminal Errorblending mishap sends incorrect blends to Minnesota stations

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Mistakes happen magellan midstream Partners LP acted quickly to correct an operational error at a minnesota terminal that resulted in high ethanol blends being distributed to area gas stations.


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Par for the course, house and Senate Ag-riculture Committees missed a Nov. 1 deadline they set for themselves to provide policy rec-ommendations to the Joint Select committee on Deficit Reduction detailing its suggestions to cut $23 billion from the 2012 Farm Bill. Ahead of the specific policy recommendations release, details as to which programs would be targeted for reduction and/or elimination were sparse. Paul Winters, communications director for the Biotechnology Industry Organization said the committees’ work on the issue had been “a little bit of a black box,” with very little information leaking out to interested parties. But despite the lack of indicators, renewable energy groups decided to launch an aggressive campaign to convince congressional members that the Farm Bill’s energy programs should be spared the chopping block.

The renewable energy sector is a diverse one, and often becomes splintered as indi-vidual industries fight to retain support for their causes in an era of scant federal financial opportunities. The Energy Title of the Farm Bill provides support to all sectors, however, so representatives of biofuels, biomass, wind, forestry and other industries decided to join together to form the new Ag Energy coali-tion. Winters says the coalition allows the groups to speak with one voice as to the im-portance of renewable energy. “That’s why the coalition was formed,” he said. “To unify our voice and say that the Energy Title as a whole and all the programs are important, rather than try to fight for individual programs.”

Programs housed within the 2008 Ener-gy Title include the rural Energy for America Program, the Biomass crop Assistance Pro-gram, the Biorefinery Assistance Program and the Biobased Markets Program. In a letter sent to house and Senate ag committee leaders, as well as the 12 members of the joint select com-mittee, the newly formed Ag Energy coalition pointed out that the popular energy programs have helped fund thousands of projects in ru-ral areas throughout the country. While they have had high impact, the programs carry a relatively low price tag, totaling less than 1 per-

cent of total outlays, according to the group. Secretary of Agriculture Tom Vilsack ad-

dressed the importance of the Energy Title during a speech delivered in October to agri-cultural equipment manufacturers at the John Deere Des Moines Works facility in Iowa. “rural America has done a great job of help-ing to develop the domestically produced re-newable energy and fuel,” he said. “That job must continue because when we create those opportunities, we create jobs, we reduce our reliance on foreign energy sources, and we en-hance our national security. USDA has to have the tools to be able to continue to help this biobased and biofuel and renewable energy economy, and we need to make sure that it's vi-brant in all regions of the country. continuing our investment in renewable energy, biofuel, and biobased products will improve the bot-tom line for farmers as we find creative ways to use that which they grow.”

The joint select committee is scheduled to identify more than $1 trillion in budgets cuts over the next 10 years by Nov. 23. Congress is then expected to vote on the super commit-tee’s budget reduction plan by Dec. 23.

Meanwhile, some members of congress have moved ahead with plans to overhaul the renewable fuel standard (RFS) and delay the introduction of E15 into the marketplace. rep. Jim Sensenbrenner, r-Wis., introduced a bill that would require an independent scien-tific analysis to be conducted on the implica-tions of E15 use in vehicle, marine and small engines. Sensenbrenner said he has “serious concerns” with the U.S. EPA’s approval of E15 for some vehicle models and feels that the introduction of E15 into the marketplace is being rushed. The EPA is currently the de-fendant in multiple lawsuits filed by opponents of E15, including small engine manufacturers and petroleum refiners.

On Oct. 5, Reps. Jim Costa, D-Calif., and Bob Goodlatte, r-Va., introduced legisla-tion that would place limitations on the corn ethanol portion of the rFS based on biannual USDA reports on the corn stocks-to-use ra-tios. In the case of tight corn supplies, the corn ethanol portion of the rFS would be reduced. Ethanol representatives say this approach would place the industry in jeopardy and have no effect on corn prices. —Kris Bevill

Fighting for the Farm billRenewable groups take action to protect energy programs

cuts and attacks The ethanol industry is gearing up for a battle to retain beneficial Farm Bill programs as well as maintain support for the renewable fuel standard and E15.


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researchers representing the U.S. DOE Joint Genome Institute, Novozymes A/S and concordia University in Montreal, recently concluded a genome sequencing project for two heat-resistant fungi that is expected to provide solid base information for future biofuels-related enzyme research. Thielavia terrestris and Myceliophthora thermophila had each already been known to thrive in en-vironments with temperatures above 113 de-grees Fahrenheit. researchers had also pre-viously documented the fact that enzymes in those fungi remained active at temperatures ranging up to 167 F, but little else was known about cellulase enzymes produced by the fungi, says randy Berka, a director at no-vozymes in Davis, Calif.

“Thermophilic fungi can be found worldwide, most commonly in habitats where self-heating of plant material results in high temperatures, such as compost heaps, municipal waste, plant straw, and ani-mal dung,” he says. The two species selected for this project were chosen because of their ability to produce enzymes that degrade cel-lulosic materials at higher temperatures than enzyme blends from nonthermophilic fungi. Samples of the strains used for this project were obtained from culture collections that were originally isolated from soil, Berka says.

The benefits of using enzymes from thermophilic fungi to produce ethanol and other biofuels as well as biochemicals are economical. Enzymes become more active at higher temperatures, so having the ability to turn up the temperature of the produc-tion process will mean faster production times and more volume. “The major inter-est in these enzymes lies in their applica-tion for the biochemical/enzymatic route to cellulosic biofuels,” Berka says. “Because the rates of enzyme reactions increase with temperature—sometimes doubling with an increase of just 10 degrees Celsius—a way to

reduce the production costs of ethanol from lignocelluloses is to carry out the enzymatic hydrolysis at higher temperatures. This could potentially reduce the reaction time, the re-tention time in a reactor and the required enzyme loading.”

Researchers also tested the enzymes’ effectiveness at breaking down flowering plants under a variety of temperatures and found that the enzymes from those two spe-cies of fungi performed well in a variety of temperatures. “Since these thermophiles are much more efficient than other cellulose de-graders in breaking down cellulosic biomass, their enzymes are likely to be more active than known cellulases and/or they have de-veloped new strategies for biomass degrada-tion,” says Adrian Tsang, biology professor and director of the center for Structural and Functional Genomics at concordia Univer-sity.

“These thermophilic fungi represent ex-cellent hosts for biorefineries where biomass is converted to biofuels as an alternative to modern oil refineries,” says Igor Grigoriev, leader of the DOE JGI’s Fungal Genomics Program. “The fact that these organisms not only deliver a broad spectrum of heat-toler-ant enzymes but can also host new enzymes and be optimized for industrial processes holds great promise for significant improve-ments over existing systems.”

Following the genome sequencing, re-searchers now must produce and test the enzymes in pilot-scale conditions to simulate industrial applications. Berka says it’s hard to estimate when the results of this research may be visible in the marketplace, but adds that the findings can be used to advise fu-ture enzyme selections and has the potential to decrease the discovery cycle for enzymes from these fungi by up to one year. —Kris Bevill

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turn up the HeatResearchers explore heat-resistant enzymes

hot Bug An enhanced view of the thermophilic fungus M. thermophila.


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coming to the end of a three and a half month tour of 50 cities, Freedom, a documen-tary film focusing on clean energy solutions, premiered in Washington, D.C., Oct. 26. Also on hand at the film’s screening was the free-dom bus, which runs on ethanol, has 19 solar panels and includes a high-tech mobile learn-ing lab.

Participating in a post-screening debate and Q&A were Dennis V. McGinn, retired vice admiral and the president of the Ameri-can council on renewable Energy and retired four-star general Wesley clark, co-chairman of Growth Energy. They aren’t the only big names associated with Freedom. Presidential hopeful and former Speaker of the house newt Gingrich, singer/songwriter Jason Mraz and actress Michelle rodriguez are some ex-amples of the famous faces that show up in the documentary.

The film was directed by husband and wife team Josh and rebecca Tickell and looks into green solutions such as advanced biofuels like cellulosic ethanol, plug-in hybrid electric cars and other sustainable technologies. “Free-dom is the first documentary to show a clear path for how the United States can end its oil

dependence, turn its foreign debt into a sur-plus of cash, make over $3 trillion a year and put 8 million Americans back to work,” Re-becca Tickell says. “The answer is simple—replace what’s in the gas tank of every one of the 250 million cars on the road today with a high-tech fuel made in America.” It sounds simple—but, as Freedom shows, “the United States has been going about it the wrong way.”

Many well-known companies in the ethanol industry are listed as partners in the project, including Green Plains renewable Energy Inc., Propel Fuels, Marquis Energy, Poet llc, Patriot renewable Fuels and many more. “This is the first documentary that tru-ly showcases the potential of home-grown, renewable ethanol for our economy, our envi-ronment and our national security,” says Tom Buis, cEO of Growth Energy, also a spon-sor. “Josh and Rebecca Tickell’s film clearly illustrates the dangers of our dependence on fossil fuels and showcases ethanol as the one solution that can set America on the path to freedom.”

The documentary points out that Big Oil and environmentalists, who would seem to be extremely divided on the issue of oil, often work together to thwart green fuels. recent efforts to modify the renewable fuel standard (RFS) are a case in point, they say. “How iron-ic that oil and environmentalists would fight the rFS when the rFS is the only hope we have to get us beyond corn and toward using waste as fuel,” Josh Tickell says. —Holly Jessen

Ethanol Hits Red Carpet Documentary film premieres in DC

Road trip Rebecca and Josh Tickell filmed a documentary that focuses on clean energy solutions, including ethanol.

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The U.S. federal government continually names china as being a country to beat in the clean energy race. however, increasingly, cellu-losic ethanol producers and technology devel-opers are coming to view china not as a com-petitor, but as a collaborator. In late October, BlueFire renewables Inc. signed a memorandum of understanding with china huadian Engineer-ing Co. Ltd., one of China’s largest utilities, to finance its 19 MMgy biorefinery in Fulton, Miss., and to potentially finance five other projects in the U.S. huadian and BlueFire are also consider-ing collaborating on projects in similar projects in China, using BlueFire’s technology and Hua-dian’s electricity generation expertise.

The meeting between BlueFire and hua-dian was facilitated by the Washington, D.C.-based, nonprofit National Center for Sus-tainable Development. Formed in 2001, the organization’s mission is to reduce greenhouse gas emissions through the development of sustainable projects and programs that dem-onstrate the economic benefits of positive environmental practices. In 2009, the NCSD joined with the China Clean Development Mechanism Fund Management Center (CDM Fund) to launch the China-U.S. Low Carbon Development Cooperation Program as a way to promote the implementation of low-carbon projects in both countries. It was through this program that NCSD was able to pair BlueFire with huadian.

Mitchell Stanley, president and trustee of the NCSD, says the China-U.S. program is designed to introduce U.S. developers of tech-nologies that are practical and scalable to po-tential counter-parties in china at a high level. “In china, you have to start at the top and work your way down. You cannot start at the bottom. That’s just the way it works,” he says. The CDM

and Chinese government officials approved of BlueFire’s approach to biomass-fired power generation, biofuels and biochemical produc-tion, which opened the door for a partnership with huadian, he says.

huadian was selected as a potential partner for BlueFire because of its interest in biomass-fired power generation. Stanley says one area of focus at NCSD is to find “creative matching” solutions to pair a U.S. company’s strengths with a Chinese firm that has a particular inter-est in those strengths. “The chinese companies have a variety of investment options,” he says. “They can go anywhere on the planet and in-vest anywhere they want to. [But] I think the chinese genuinely feel that America is the mar-ket they need to be in. They have tremendous world-class companies, but you have to make it in the United States to know that you have arrived.”

The agreement between BlueFire and Huadian was the NCSD’s first cellulosic etha-nol-related project and its most significant re-newable energy project to date. —Kris Bevill

China to the RescueU.S. project developers look to China for financial support


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The death of IndyCar driver Dan Weldon was a tragedy that rocked the racing world. Wel-don was killed Oct. 16 in a 15-car accident at las Vegas Motor Speedway.

While there’s nothing good about what happened, Dan Schwartzkopf, a former drag racer who started using ethanol in the early 1990s, points out that things could have been much worse if IndyCar races weren’t fueled by E100. Vehicles fueled by gasoline would have been more susceptible to fire as it is more vola-tile than ethanol and ignites more easily. Ac-cording to information published by Argonne national laboratory from a study done for the

U.S. DOE, gasoline ignites at 495 degrees, methanol at 800 degrees and ethanol at 850 degrees.

The Indycar Series has been running on E100 since 2007 and will switch to E85 in 2012. De-pending on price and availability, some races may use ethanol pro-duced in Brazil from sugarcane. The Iowa corn Indy 250, howev-er, is sponsored by the Iowa corn Growers Association and fuels up strictly with corn-based ethanol. In 2010 the IndyCar Series used about 70,000 gallons of ethanol—the equivalent of about 142 acres of corn planted in Iowa.

Schwartzkopf, today an account manager for IcM Inc., has a rich history in encouraging ethanol use on the racetrack. He’s the former owner of Renova Racing’s six-car team and was involved in helping the Indy racing league switch from methanol to ethanol—among oth-er things. The drawback to using ethanol in race cars is the same is with using methanol, he tells

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Ethanol less Volatile IndyCar crash would have been more fiery with gasoline

Fatal crash A public memorial was held for dan Weldon at the coseco Fieldhouse on Oct. 23.

EPM. Ethanol and methanol burn invisibly un-less a 2 percent denaturant is added.

Indycar is working on a two-phase investi-gation of the crash. "We must continue to move forward with a thorough investigation," says randy Bernard, cEO, Indycar. "Fortunately, that has already begun, and we have the proto-cols in place to get this done. This was a tragic accident, and Indycar needs to understand ev-erything possible about it." —Holly Jessen


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In the process of researching various feedstocks for their startup company clients, Golden, colo.-based hazen research Inc. no-ticed a trend. Feedstocks are not all created equal—even if that feedstock bears the same plant name.

In an independent study, hazen discov-ered differences among lodgepole pine trees, says Brian cooper, senior process engineer. Specifically, beetle-kill lodgepole pine trees re-spond differently to pretreatment and produce different products than healthy wood. “You could convert either one with relative ease with the known processes now,” he tells EPM. “It’s just that if you designed a process around one

flavor of feedstock and then you switch to a different one, you could run into some pretty big problems.”

In a cost-benefit analysis, Hazen deter-mined that for an integrated biorefinery pro-ducing ethanol and pyrolysis oil, revenues only varied by $13 depending on the output of the two products. hazen calculated this based on a 2011 National Renewable Energy Laboratory model, which showed total revenues ranging from $269 to $256 based on $1.79 per gal-lon ethanol and $1.05 per gallon pyrolysis oil. Yield, however, varied widely, ranging from 783 pounds of ethanol and 382 pounds of pyrolysis oil compared to 1,759 pounds of pyrolysis oil and no ethanol.

The lesson is, pick your process based on your feedstock, cooper says. Beetle-kill pine produces low-grade pyrolysis oil, so it would be better to maximize ethanol yield with that type of feedstock. With inefficient or non-existent hydrolysis of feedstock, however, pyrolysis is the better process. “The revenue differences are not that great, so you should consider both of those options,” he says.

What about the recent research from the University of Florida that will allow pine tree breeders to create a new pine variety in only six years, slashing the time element by more than half? could this genetic technique revolutionize the bioenergy industry, because researchers can accurately predict traits for specific uses, such as ethanol or other biofuel production? Theoreti-cally, yes, cooper says. Especially if researchers could design a pine tree where the lignin com-ponent could be easily modified in the pretreat-ment or fermentation process. “That would be a watershed,” he says.

For now, however, revenues for producing ethanol out of softwood aren’t great enough to justify cultivating and harvesting a specific crop. Most economic models today are based on se-lective forest harvesting or waste wood—not cultivating new pine crops. “I would be afraid that your costs of that biomass would be so great that they would offset any yield improve-ments that you would get,” he says. —Holly Jessen

Divergent FeedstocksOne pine tree as good as another? guess again


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A recent USDA report echoes what ethanol producers have said for years: distillers grains are a valuable addition to the nation’s feed supply and can be used to reduce any impact of increased corn use for ethanol by replacing more than its share of corn or soymeal. The USDA Economic Research Service report, “Estimating the Substitu-tion of Distillers’ Grains for Corn and Soybean Meal in the U.S. Feed Complex,” finds that, on average, one metric ton of distillers dried grains with solubles (DDGS) can replace 1.22 metric tons of corn and soybean meal in the U.S. Because only the starch of the corn kernel is used for ethanol production, the remaining fat and fiber in DDGS are increased by a factor of three compared to unprocessed corn, the report states.

“The value of the animal feed produced by the ethanol industry has long been misunderstood, understated and misrepresented,” said Geoff cooper, vice president of research and analysis at the renew-able Fuels Association. “While some critics of the ethanol industry attempt to downplay the role of DDGS, the facts simply can’t be ignored.”

The report found that DDGS surpassed soybean meal to be-come the No. 2 feedstuff in the 2010-’11 crop year. Corn remained the most widely used animal feed. “While ethanol expansion raised demand for corn, DDGS from the dry-mill production process par-tially offsets the impact on the feed market,” the report’s authors state. “consequently, the net effect in the domestic feed market of a bushel of corn being used for ethanol production is less than a bushel.”

The market for distillers grains is also expected to continue to grow, with beef cattle remaining the main consumers of the prod-uct, followed by dairy cattle, swine and poultry. “Some in industry or other researchers believe that consumption of DDGS by dairy cattle is nearing maximum use levels,” the report’s authors say. “We do not find such a constraint at this time.” The authors also dispute claims that smaller cattle, hog and poultry operations will not be able to ac-commodate truckloads of distillers grains, stating that those farm op-erators could devise creative solutions. —Kris Bevill

Valued Feed A recent USDA study finds 1 ton of DDGS replaces 1.22 tons of corn or soy in livestock rations.

ValidationUSDA report confirms value of distillers grains

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distilled

Good biofuel feedstocks are highly pro-ductive, have low input requirements and are widely adaptable. Unfortunately, those same traits are also common with invasive species.

language addressing invasive species is included in the Biomass crop Assistance Program. The proposed farm bill, the rural Economic Farm and ranch Sustainability and hunger Act introduced in mid-October, would widen the number of eligible plant species by striking the phrase “noxious or has the potential to become invasive or noxious” from the defi-nition. If passed into law, only invasive plants would be excluded from BcAP, not plants with the potential to become invasive or noxious.

On the other side of the coin, there is con-cern from some that efforts to replace fossil fuels with biofuels from alternative feedstocks not create one environmental problem in place of another. In other words, if a biofuel feed-

stock becomes a harmful invader, it could undo the good of producing alternative fuel from that feedstock.

In order to evaluate the invasive potential of 12 biofuel species proposed for Florida and the U.S., researchers from the University of Florida’s Nature Conservancy used the Aus-tralian Weed risk Assessment system. Their research identified four plant species—all grasses—that have a low risk of invasiveness. “Overall, the results of this study are consistent with those reported elsewhere: some bioenergy crops pose greater risk of invasion than do oth-ers,” the study says. “A precautionary approach that involves weed risk assessment is being sug-gested by both U.S. and international organiza-tions.”

Damage and control efforts for invasive plants cost the U.S. an estimated $34 billion every year. On the other hand, only about 0.1 to 1 percent of introduced species actually be-come invasive and it should be possible to identify bioenergy corps that won’t have harmful effects on new habitats. Potential biofuel crops should be as-sessed across a variety of geographies, as species have been known to grow for decades without becoming invasive only to rapidly become a serious prob-lem when moved into a new habitat. “Florida incurs substantial ecological and economic impacts from invasive

species every year,” Doria Gordon, one of the study’s four authors, tells EPM. “Our climate and abundant water means that many plants can become established here. So it’s critical that we not purposely introduce known or high probability invaders over the acreage that bio-fuels will be planted.”

Although plume grass, sugarcane, sweet sorghum and miscanthus were identified as ac-ceptable species, the study did point out that miscanthus and sweet sorghum are derived from species that are documented invaders that have had environmental impacts in north America and Europe. “The result that these taxa (plant groups) have a low probability of being invasive assumes that they will not exhibit the invasive traits of the related species and relies on limited data for the hybrid,” the study says. “As a result, cultivation of these taxa should be accompa-nied by long-term monitoring for changes in fertility and other traits.” —Holly Jessen

Species Evaluated for Risk of Invasiveness

Plume grassSugar cane

accept accept

Sweet sorghum Miscanthus

accept accept

cabbage gum evaluate

Giant reedred river gum rose gumJatropha/physic nut

reject reject reject reject

leadtreeElephant grass castor bean

rejectreject reject

Halting Harmful Invaders Research identifies acceptable biofuel feedstocks

SOURCE: STUDY ASSESSING INVASIVE PLANT POTENTIAL PUBLISHED IN BIOMASS & BIOENERGY


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What happens when sorghum doesn’t have to put energy into flowering and grain production? high-biomass sorghum that grows up to 20 feet tall, that’s what.

Texas Agrilife research, part of the Texas A&M University System, is the home of hybrid sorghum, says Adam helms, assis-tant program director. researchers there re-cently identified a genetic marker to help de-velop high-biomass sorghum by prohibiting reproduction, or the flowering/grain stage, allowing that energy to go toward biomass accumulation. “This annually planted feed-stock would add another tool to the toolbox for the producer,” he tells EPM. “When cel-lulosic ethanol conversion facilities become widespread, this feedstock would allow a producer to produce a grain, fiber or high-biomass crop.”

The sorghum hybrid accumulates as much as three times the amount of leaves and stems as grain sorghum. Among two

90-day-old plants, a nonflow-ering high-biomass sorghum was 10 feet tall, while a typical grain sorghum variety was 3 feet tall. “That is a striking dif-ference,” says Rebecca Murphy, a research team member and a biochemistry doctoral student at Texas A&M University

Genetic mapping tech-niques were used to locate a ge-netic determinant of flowering time, first discovered by AgriL-ife Research scientists in 1945. “Flowering time is important for sorghum no matter what type of sorghum is grown,” Murphy says. “In the case of bioenergy sorghum, you want to delay flowering because the more you delay flowering, the more biomass sorghum will ac-cumulate.” She added that the new discovery allows sorghum breeders to determine at a plant’s flowering genotype at a very early stage, before the plant matures.

It will take time before high-biomass sorghum is grown widely, says John Mullet, Agrilife research biochemist. For one thing, there’s not a big demand right now as it will take time for full-scale build out of the U.S.

Energy Sorghum Researchers develop high-biomass sorghum that bypasses flowering

got no grain Researchers at Texas AgriLife Research have discovered the gene that controls flowering in sorghum and allows them to grow high-biomass sorghum without grain. The plants can grow up to 20 feet tall and could be an ideal feedstock for products such as cellulosic ethanol.

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biorefinery industry. In the meantime, re-searchers will continue to develop hybrids, much as new corn hybrids have increased yields over the years. “Breeding and devel-opment are likely to make steady improve-ments in crop design over at least the next 10 years,” he says. —Holly Jessen

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2012

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Outlook

as the calendar turns over to 2012, it’s time to reflect on the year behind and consider the year ahead. Sky-high corn prices caused deep worries in an industry where the single biggest input cost is feedstock. Those worries ultimately turned out to be unwarranted as high oil prices balanced the market, giving ethanol producers opportunities to lock in favorable margins. The loss of the Volumetric Ethanol Excise Tax credit is now considered inevitable, and some, as this year’s selection of CEO interviews show, even welcome it. Far more worrisome are the attempts to dismantle or weaken the renewable fuel standard. And, while Big Oil is often seen as an instigator, our executive from BP Biofuels sees such attempts as a real threat to the invest-ments her company has made in the future of renewable fuels. The challenges for cellulosic ethanol developers are daunting, but the executives representing those firms see the opportunities far outweighing the challenges and are quite optimistic for the year ahead. Indeed, all the executives in this series of outlook interviews are fundamentally optimistic. The industry is healthy and ready to face the challenges that 2012 will present. Read on to learn the particulars.

Insights and perspectives from ethanol industry executivesbY KRIS bEVIll aND HOllY JESSEN


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For every gallon of ethanol sold, that’s one gallon of gasoline that Big Oil doesn’t sell. And that, says Todd Becker, president and cEO of Green Plains renewable Ener-gy Inc., doesn’t make the petroleum industry happy. As a result, the renewable fuel stan-dard (RFS) will remain under attack. “We’re going to have to fight vigorously to defend the rFS, because they are going to come af-ter it,” he tells EPM.

Becker considers that battle the single most important issue facing the ethanol in-dustry today. Minus a market for U.S.-made

fuel, it would mean a mandate for $3 corn and unprofitable agricultural producers. “All they want to do is move the profitability off the farm and into their hands, and I think that’s absolutely wrong,” he says.

Defending the RFS isn’t just about en-suring a market for corn-based ethanol, such as what GPrE produces at its nine ethanol plants with a total capacity of 740 MMgy. It’s also about reaching goals for the future. “If you blow up the rFS, you blow up any chance of next-generation fuels hitting the market,” he says.”I think that’s the basic issue at hand.”

GPRE regards 2012 optimistically due to five fundamental factors. First on the list is the RFS mandate for 13.2 billion gal-lons in 2012. Next is the E15 waiver, which was approved by the EPA but has not yet resulted in retail sales at the pump. “hope-fully we see some early implementation with early adopter states,” Becker says. Another area where ethanol has found a market is blending with 84 octane gasoline—which, without ethanol’s octane boosting power wouldn’t even be allowed to leave the termi-nal. This is allowing refiners to switch over refining capacity to producing more conven-tional blendstock for oxygenate blending, commonly known as cBOB, which creates a market for ethanol producers, Becker says.

Then there are ethanol export oppor-tunities to consider. Export totals through August show that U.S. ethanol producers are on track to export a whopping 900 million gallons by the end of 2011—a dramatic in-crease from 2010, which was also a big in-crease from 2009. notably, exports to Brazil have been up due to short sugar cane har-vests and increased domestic demand, an issue that doesn’t appear will quickly self-correct. “We expect that ethanol will remain competitive to Brazil and the world,” Becker says.

last but not least, GPrE believes blend economics are positive—even with-out the Volumetric Ethanol Excise Tax credit, which is widely expected to sunset at the end of the year. GPrE has long lob-bied for VEETc reform, even when that position wasn’t popular. As one of the few publically owned ethanol producers, GPrE often faces the misconception that ethanol producers receive the tax credit directly when in fact VEETc is a blenders credit. “We always think we have a bull’s-eye on our back when we walk into investor meetings, “he says. “They always ask us how much of the tax credit do we get. It gets a little tiring after awhile and we’re very happy to see it go away.”

Ultimately, GPrE has faith in the prod-uct. “We believe that ethanol can compete with oil on a head-to-head basis for a place in the motor fuels supply,” he said. Look-ing back on 2011, there’s no doubt it was

Fighting Vigorously to Defend the RFSTodd becker, president, CEO, green Plains Renewable Energy

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green power Todd Becker, president and CEO of Green Plains Renewable Energy Inc., speaks April 15 during the unveiling of the Grower Harvester Technology Bioreactors at the GPRE ethanol plant in Shenandoah, Iowa. At left is Secretary of Agriculture Tom Vilsack.

a year of volatility. Still, the industry as a whole did fairly well. Becker believes that’s because of a more disciplined approach to managing the margins. “In general, we’re a lot healthier as an industry then we were in the past,” he says. “We’re finding more and better ways to more efficiently run our ethanol plants and finding new areas of growth within the kernel of corn. We’re not afraid to deploy capital to improve our operations, and I think overall, that’s all just going to be good for the industry.”

GPRE was profitable in 2011 for the third year in a row. “We expect that 2012 will be no different from that perspective,” he says. “We expect to remain profitable, driven by our low-cost platform and our risk management systems.” The company will continue to look for ethanol plants to acquire. “We think scale is meaningful and it is very cost effective,” he says, add-ing that with each acquired ethanol plant, GPrE has been able to drive down costs in a significant way.

And, GPrE will continue to focus on vertical integration with its other agribusi-ness segments. “Don’t forget, we’re not just an ethanol company, we make over $50 million dollars a year of additional operating income from other businesses,” he says. “We are going to look for oppor-tunities to grow each and every compo-nent—not just the ethanol component. We believe that all of those are important to make any profitability through times of volatility.”

author: Holly JessenAssociate Editor, Ethanol Producer Magazine

(701) 738-4946 [email protected]

‘In general, we’re a lot

healthier as an industry

then we were in the past.

We’re finding more and bet-

ter ways to more efficiently

run our ethanol plants and

finding new areas of growth

within the kernel of corn.’

—Todd Becker

[email protected]

Clean Air & Energy Technology

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BIOGAS-TS

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erative agreement for shared management.

That profit-ability was a bit of a surprise. “The indus-try has its ups and downs,” Wendland tells EPM, “and I’m thinking that this was a much better year than what we thought it might be.”

record-breaking exports of ethanol were another pleas-ant surprise for 2011. “We knew we were going to produce probably somewhere around a billion gal-lons more than what the rFS required and that could be a real downer for prices,” he says. “But with the export opportunities to Brazil, canada and Europe, we really had a nice balance between production and demand.”

With the Volu-metric Ethanol Ex-cise Tax credit set to expire at the end of the year, profits might be down somewhat in 2012. That built-in cushion between the price of gasoline and the price of ethanol will disappear with the 45-cent credit.

Still, Wendland’s outlook for 2012 remains fairly positive. “This year was an up—next year may be a little bit down as we kind of reposition ourselves to operate without VEETC,” he says. Without the blenders credit, the rFS becomes more vital than ever for the ethanol industry. “We’re depen-dant far more on the rFS staying in place because that becomes the most important

thing keeping our product included into the fuel supply,” he says.

In another bit of good news for 2012, despite concerns about possible corn short-ages due to poor growing conditions, north central and northeast Iowa’s corn crop looks great. “We have a near bumper crop in this area, so we do have ample feedstock abil-ity to keep the ethanol plants going through 2012,” he says.

Wendland predicts the battle of misin-formation about E15 will continue, as the industry works to get the fuel ready for sale at retail stations. Big Oil has been doing ev-erything it can to keep that from happening. “If they could stall E15, they could create a reason to open up the rFS because there wouldn’t be a market for ethanol,” he says. “It really seems like they have made this a real important line in the sand that they are defending. They don’t want to give up any more of their market share so they are re-ally pulling out all the stops to try to stop E15.”

While E15’s opponents have a myriad of excuses why E15 shouldn’t become part of the mainstream fuel supply, NASCAR’s partnership with American Ethanol says otherwise. Golden Grain is one of many financial contributors to the six-year spon-sorship deal that made it possible to put E15 in every nAScAr racecar at every race—among other things. “When everybody is saying [E15] won’t work, NASCAR said, ‘We’ve run it a million miles and it works fine,’” he said, referring to the sanctioning body’s September announcement.



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In a year of $7 corn, higher oil prices led the way to higher ethanol prices, which added up to profits for the ethanol indus-try. Golden Grain Energy llc and home-land Energy Solutions llc, 80 MMgy and 100 MMgy corn-ethanol plants located in northeastern Iowa, each had an “extremely good” year, says Walt Wendland, president and cEO. The two companies have a coop-

Pleasant Surprises in 2011 walt wendland, president, CEO, golden grain Energy, Homeland Energy Solutions

‘The industry has its ups and

downs, and I’m thinking

that this was a much

better year than what we

thought it might be.’

—Walt Wendland

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The stage is set for 2012 to be a very exciting year for Ineos Bio. Earlier this year, Ineos made history when it broke ground on its first-of-its-kind 8 MMgy cellulosic ethanol plant and renewable energy production facil-ity at Vero Beach, Fla., and by early October, construction of the facility was 30 percent complete, according to Ineos Bio cEO Peter Williams. The project is on schedule and on budget so far, and if things continue to go as planned, the plant will be mechanically com-plete in April and will be continuously churn-ing out waste-based ethanol by the second half of the next year.

Anticipation is high at Ineos Bio’s joint venture—Ineos new Plant BioEn-

Patience is a VirtuePeter williams, CEO, Ineos bio


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ergy llc—as well as at its parent company, global petrochemical firm Ineos. “We see this as a very important project for the Ineos group as a whole,” Williams says. “There’s a huge amount of work left to do, and a huge amount of capability that we have to bring to that, but we are doing it.”

It may seem like the Ineos project will have been a long-time coming when it begins to produce ethanol next year, but Williams suggests that that would be a misconcep-

tion. While it may seem to some that there is a significant lag-time between project an-nouncement and construction, the fact is these innovative facilities require a healthy dose of engineering and machinery design, all of which needs to be completed before any steel can be put in the ground. This is what Ineos and other project developers have been earnestly working on in the past few years as they prepare for commercial production, he says. So while there may not yet be many fa-

cilities to point to as proof of the cellulosic ethanol’s feasibility, Williams says a little pa-tience may soon pay off as engineering ac-tivities are settled and construction projects take off. “It’s not like the IT industry. This requires engineering, it requires attention to all of the safety, health and environmental aspects,” he says. “There’s a certain timeline between discovery and commercial execution of the actual plant. There will be a gestation period and we have to allow companies the time they require to become a commercial re-ality. For sure, many will fall by the wayside, but we have to allow time for those that can become a reality to actually be converted to a commercial reality.”

In August, Ineos new Planet BioEn-ergy LLC received a $75 million USDA loan guarantee, without which the company would have had a more difficult time carrying out its project. Financing is unquestionably the no. 1 problem facing cellulosic producers today, even those with deep-pocket backers such as Ineos, but Williams suggests that developers need to possess a suite of tools in addition to access to capital if they want to succeed in the industry. “It’s insufficient just to have the idea,” he says. “You need the idea plus the ability to scale that idea, to engineer that idea, to convert it into a commercial reality. If you look at the three companies that have closed out on loan guarantees—Poet, Aben-goa and ourselves—we’re all companies that have been able to bring existing capabilities to the process.”

As far as competition in cellulosic etha-nol goes, the game is friendly for now be-cause each company’s singular advancements provide a boost to the entire industry. Wil-liams would extend that concept to incorpo-rate other countries including china, which is repeatedly identified by U.S. government offi-cials as the country to beat in the clean energy race. “There is competition in the world, but that’s always going to happen,” he says. “As for energy independence and security, we’ll never really get it unless other nations have it too. So while there is competition from china and others in this industry, it’s probably not so bad that there are multiple participants in the race.”

As Ineos nears the final stages of

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preparation for its first plant, the project has attracted plenty of on-lookers who are also interested in applying Ineos’s waste-to-energy technology for converting vegetative and municipal solid waste to their own proj-ects. “We’re seeing very strong interest, both within and outside the U.S.,” Williams says. “I think this theme we’ve taken of using waste materials and converting them to biofuel and renewable energy resonates not just with the people we traditionally deal with—the petro-chemical companies—but also with the com-munities in which we work and communities that we touch with our other products.”

Even as the Vero Beach facility, dubbed the Indian river BioEnergy center, begins operating, Ineos will already be moving ahead with licensing agreements and project oppor-tunities in other areas of the U.S. and beyond. “Clearly we’d like to replicate our technology throughout the U.S. and around the world,” he says. “We’d like to introduce [it] at a com-munity level wherever there are waste materi-als and where waste is collected. We think we

provide an extremely efficient solution to that waste management problem.”

Of the handful of most promising cel-lulosic ethanol projects, most have now made public their plans to produce biochemicals in addition to fuel. This move toward chemical production has largely been viewed as a finan-

cial necessity because although the markets for some chemicals are much smaller than ethanol, they bring in much more revenue per gallon. Williams agrees with this strategy and predicts that biochemical production and technology partnerships will be emerging trends in the next year or two. Ineos has been quiet so far on its plans for biochemical pro-duction, but with its vast knowledge of pet-rochemical markets, it would seem the per-fect candidate to branch out into bio-based chemical production as well. Does it have any plans to become the leader of the pack? “From our perspective, we are definitely of the view that we would like to develop the chemical products,” Williams says. “We’re in a position where we understand exactly the economics required as well as the sustainabil-ity criteria to make those routes attractive. So, yes, we’re certainly interested.”

author: Kris bevill Associate Editor, Ethanol Producer Magazine


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‘There’s a certain timeline

between discovery and com-

mercial execution of the

actual plant. There will be a

gestation period and we have

to allow companies the time

they require to become a

commercial reality.’

—Peter Williams


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Few companies have expanded their biofuels interests as rapidly as oil major BP has over the past five years. BP Biofuels was strategically formed in response to the 2007 renewable fuel standard, commonly referred to as rFS2, with the intent of identifying which technologies and regions would be best suited to comply with the mandate. “We saw the opportunity for change in how liquid transport fuel would be delivered in the future,” says President of BP Biofuels north America Sue Ellerbusch. “We thought biofuels was going to be the most near-term,

big First StepSue Ellerbusch, president, bP biofuels North America

scalable solution for liquid transport go-ing forward. Thus BP formed a business to try to pursue that op-portunity.” Now five years into the process, BP’s biofuels arm has more than 4,000 em-ployees in locations around the globe and has invested hundreds of millions of dollars in the Brazilian and U.S. industries. And it’s just getting started.

To date, most of BP’s high-profile bio-fuels activities have taken place in Brazil. The company was the first oil major to enter Brazil’s biofu-els space, forming a joint venture known as Tropical BioEnergia in 2008. According to Ellerbusch, Brazil of-fers three significant benefits to ethanol that attracted BP to invest in the space: it’s an existing industry with existing assets that can be purchased and used to scale up the com-pany’s presence rap-idly and the industry is strongly supported by

the government. “It’s a very attractive place to enter into because we know the industry exists, we know how the players exist, the model is there, and if you look at things like sugarcane, we understand the economics of that,” she says. “It’s attractive from an eco-nomic aspect and also from a greenhouse gas standpoint. It fits a lot of the opportu-nities for us to have low-cost, low-carbon, scalable technologies.”

In September, BP paid $100 million to gain operational control of three ethanol mills in southern Brazil that it had already

invested hundreds of millions of dollars in, including the mill it operated as part of the joint venture. In the coming year, Eller-busch says BP will work to increase the three mills’ combined crushing capacity to 15 million tons. “Of course that won’t all happen in a year, but there will be work go-ing on to expand in Brazil,” she says.

Expanding production capacity is also a near-term focus in the U.S., although at a smaller scale. Currently, BP controls just 1.4 MMgy of ethanol production in the U.S., in the form of a demonstration-scale facil-ity in Jennings, la., but its main priority for 2012 will be to advance its $400 million, 36 MMgy cellulosic facility project in high-lands county, Fla., Ellerbusch says. This year BP began building out what will even-tually become a 20,000-acre farm growing energy cane to supply the facility. “That is a primary goal— to continue to advance the construction of the farm,” Ellerbusch says. “We look to break ground on the industrial facility late next year as well.” Working in conjunction with lykes Bros. Inc., one of Florida’s largest landowners, BP expects to have about 1,500 acres of energy cane planted in areas surrounding the production facility site by the end of this year. Energy cane has a 10-1 planting ratio, Ellerbusch says, so while the company hasn’t settled on its exact planting plan for 2012 yet, it will have the potential to plant up to 15,000 acres of feedstock. The ethanol plant is ex-pected to begin production in 2013.

As with everything BP does, the deci-sion to focus on energy cane and other tall grasses was a strategic one. research fund-ed by BP has shown that energy grasses can yield four times as much ethanol per gal-lon as corn, up to 2,000 gallons of ethanol per acre of feedstock. Also, energy grasses are particularly well-suited for growing in southern regions, which matches well with BP’s targeted area for biofuel pro-duction along the Gulf coast. The citrus, cotton and rice producers along the lower Gulf coast have struggled in recent years and Ellerbusch says the chance to partner with BP to grow energy grasses will offer a way to revitalize those communities. The company is currently scouting plant sites in


Texas, louisiana and Florida, knowing that it will take several years to establish the feedstock. “We’re going to start initially in the Gulf coast—it has the right weather and climate—and look to move a bit further to the north, but still in the South, as we expand our portfolio of grasses,” she says.

Another priority of BP Biofuels officials in the coming year will be to maintain a clear path on the regulatory front, Eller-busch says. The rFS2 has been a vital element to every player in the biofuels industry, she says, and without it she questions whether BP would have accelerated its pace in the arena as much as it has. “This is a technology that is not competitive with fossil fuel today. Therefore, we need to have some form of a market targeted by the government in order to incent those to produce,” she says. There is no doubt that it will be challenging for cellu-losic biofuel producers to meet the 2022 rFS2 goal of supplying 16 billion gallons of fuel to the market, but if efforts to revoke the policy are successful, it will likely deliver a crushing blow to an industry that is just now beginning to gain ground. “I think I can point to [BP] and several other players—Poet, DuPont, Abengoa, Ineos—that have recently started to get government funding or their own funding to move their projects forward,” she says. “This is the first step in establishing the industry.”



outlooK

‘This is a technology that is not

competitive with fossil fuel today.

Therefore, we need to have some form

of a market targeted by the government

in order to incent those to produce.’

—Sue Ellerbusch

expanding acres BP’s energy cane and tall grass feedstock for its Florida cellulosic ethanol facility will eventually be grown on 20,000 acres of land surrounding the facility site.

PH

OTO

: BP

BIO

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www.intlfcstone.com


This is the situation of many technology develop-ers in the cellulosic ethanol industry, including, until ear-lier this year, Massachusetts-based Qteros Inc., develop-ers of a technology platform centered on what it calls the Q microbe—a microorgan-ism with a love for all things biomass and a natural ability to produce ethanol. This little bug has attracted the attention of multiple investors and last January Qteros announced a strategic partnership with global engineering firm Praj Industries ltd. to commer-cialize cellulosic ethanol fa-cilities using Qteros technol-ogy within the next two years. Through the partnership, Qteros is expected to finally have the steel in the ground with which to promote its ca-pabilities.

Jason Matlof, a partner at venture capital firm Battery Ventures and leader of the company’s cleantech team, is a member of the board at Qteros and was also the com-pany’s first institutional inves-tor. he declined to specify how large Battery Venture’s stake in Qteros is, but he is passionate about promoting the company and its potential

for return on investment. “We as a firm are fundamentally opposed to investing in com-panies that require many hundreds of mil-lions of dollars to get to commercial scale,” he says. “There’s not enough equity in the ven-ture capital world to fund those types of busi-nesses. So you have to figure out a model that works. Qteros has done that in that they’re licensing like a biotech company would do to a big pharmaceuticals company.”

Financing continues to be a major hold-up in the commercialization of second-gen-eration ethanol, and Matlof says Battery Ven-ture’s team is always on the lookout for new

opportunities, but they have to meet a few strict criteria. As mentioned, the firm refuses to invest in building facilities. Secondly, once the firm places its bets on a certain technol-ogy, it won’t play with a competing company. “We don’t ever invest in conflicting, competi-tive players,” Matlof says. “Most people do. And we just won’t do an investment where there’s not a presumption that you can build a company to get it to profitability and exit on traditional capital investment dollars, which are $25 million to $75 million typically. That is an absolute sacrosanct requirement.”

If you can meet those criteria, there is one other major stipulation to Battery Ven-tures’ biofuels investment policy that may trip you up: the firm has a strict “no sugar al-lowed” rule. “As much as the market ebbs and flows in the short term, the long-term market for producing biofuels from waste biomass is an enormous market opportunity,” Matlof says. “Anything that’s using biomass as a feed-stock is very interesting, but at the same time, we’re not going to invest in technologies that use sugar as a feedstock. I just think that’s a fool’s errand.”

Oh, and one more thing. If your com-pany’s business model is based on projects being built only in the U.S., your chances of attracting big investors are probably slim. “The reality is that the market is internation-al,” Matlof says. “That’s where the biomass is. We don’t have nearly as much biomass as in the tropic regions. The real opportunity is outside of the U.S. and the lack of congres-sional incentives with any teeth is ensuring that’s the case.”



outlooK

Finding investment dollars for second-generation biofuels has been challenging for all, so EPM sought out a venture capitalist to share his perspective on the industry. For a technology developer, the biggest selling point when seeking investors might be that the business model does not require hundreds of millions of dollars to build a production facility. The company’s success is beholden to someone else building the facility to use that technology, however, and, until they build it, the company is unable to prove its own tech-nology and reap the licensing benefits of hav-ing a proven, successful process.

‘The real opportunity is out-

side of the U.S. and the lack

of Congressional incentives

with any teeth is ensuring

that’s the case.’

—Jason Matlof

taking 2G technology to taskJason Matlof, partner, battery Ventures


outlooK

From the standpoint of Matt horton, CEO of Propel Fuels, efforts in 2011 to extend the Volumetric Ethanol Excise Tax credit imperiled the future of the industry. “For so long, the industry has been focused on preserving that credit for the entire etha-nol industry that I think we’ve backed our-selves into a bit of a corner,” he says.

The redwood city, calif.-based com-pany firmly believes the future is high-level blends and advanced ethanol. The company owns and operates a network of self-serve filling stations in California and Washington state, with plans to add more than 200 ad-ditional sites in the next two years.

First-generation ethanol has done a fantastic job of filling the need for E10,

horton says. As the industry moves forward into 2012, however, there needs to be an aggressive and massive build out of infra-structure to handle higher blends of etha-nol. Secondly, cellulosic and other advanced ethanol products need to begin entering the marketplace. “We’re at a critical transition point in the industry. We need to recognize that what got us to this point is not going to be able to carry us forward in a fast-growth kind of way that I think we want to see,” he tells EPM. “The industry is beginning to shift but we’ve got to come together and fo-cus on the future of our industry. I believe that if we do that, the future for the etha-nol industry is unlimited. We will become a true substitute for gasoline, and we will

be the leading fuel in this country to offset imported petroleum.”

horton feels the single most critical is-sue for the industry is a tax credit for E85. That’s why the company is a part of the coalition for E85, which is lobbying for the fuel to receive a 50-cent-per-gallon tax credit as part of the Alternative Fuel credit. currently, compressed natural gas, propane and hydrogen are eligible for the tax credit. “If we are going to continue to grow, we’ve got to be able to competitively price E85,” he says.

As for E15, although Propel focuses on getting the highest ethanol blends to market, it does also offer its customers midlevel blends where there is demand.

VEEtC is Old NewsMatt Horton, CEO, Propel Fuels

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The reality is, however, most of the gaso-line retailers Propel has talked to just aren’t interested in making the move to E15, he says. Again, infrastructure investments are needed and Propel is committed to making those kinds of investments and doing what it takes to push the market forward until it gains traction. “In general, our mission is to increase the amount of renewable fuels in the market and that’s easiest to do with high-level blends,” he says. “We want to see oil replaced by ethanol.”

For 2012, Propel saw record sales of ethanol thanks to strong support from the state of california as well as the public. “Individual consumers driving flex-fuel ve-hicles have shown their enthusiasm for this product and they have been coming out in droves to buy the product,” he says. “[That] sends that strong market signal that when we have ethanol products that are competi-tively priced with gasoline, consumers will prefer them and will buy them.”

Although there are negatives, horton

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says it’s the opportunities that keep him awake at night. “We think that there’s just a huge untapped market out there for high-blend ethanol,” he says. “There are still huge pockets of the nation that really don’t have much access to high-level blends of ethanol, so we think there’s a tremendous opportunity to effectively market the prod-uct in new markets.”

The other exciting thing is the potential for movement in advanced ethanol produc-tion. “We’ve also seen a number of the bet-ter-funded, cellulosic ethanol startup com-panies continue to make great progress on their production facilities and getting their financing lined up,” he says. “We think 2011 was a great year of preparation for those companies and we’ll look for 2012 to hope-fully be a breakout year for the advanced ethanol industry.”



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choose home grown Fuels Propel Fuels signed an agreement in August with Pacific Convenience and Fuels to co-locate Propel “clean Fuel Points” with Pc&F retail stations throughout the western u.S.

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How ethanol moves and where it’s goingbY KRIS bEVIll

2011 will go down in history as being one of the best years for u.S. ethanol exports in the industry to date. In July alone, U.S. producers sent 127.4 million gallons of ethanol out of the country, setting a new monthly record for exports. Much of it was delivered to canada, which has been the No. 1 outside market for U.S. ethanol. However, a series of poor sugarcane harvests combined with high sugar prices led to a shortage of fuel in ethanol-thirsty Brazil, which emerged as a major new market for U.S. ethanol this year. European Union countries that would have otherwise received Brazilian ethanol also became large consumers of U.S. ethanol as a result of Bra-zil’s shortages.


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The export boom came just in time. Many believe the U.S. is at or very near its ethanol blend wall and without the imple-mentation of E15 into the market yet, pro-ducers need to find other ways to expand their market.

In September, Ed hubbard, legislative counsel for the renewable Fuels Associa-tion, addressed the topic of ethanol exports

during a presentation at an ethanol logistics conference held in new Orleans. he noted that the amount of ethanol exported from the U.S. this year exceeded everyone’s ex-pectations and served as a stabilizer for the industry. “We think it’s going to continue, and continue aggressively,” he said.

Others have a more cautiously opti-mistic view toward ethanol exports in the coming year, based on some known and several unknown factors, which will play out over the next several months. In Oc-tober, the European Union took action to reclassify E90 as a fuel rather than a chemical, a move that resulted in increased import duties. Maelle Soares Pinto, direc-tor, Europe and Africa, at Hart Energy’s Global Biofuels center, says the higher tax could have a negative impact on U.S. exports to EU member states. Part of the reason the U.S. enjoyed demand for its product in the EU this year was because Europe’s high grain prices resulted in more expensive domestically produced ethanol. “Wheat in particular was quite high last year and that’s why U.S. corn ethanol had a much higher advantage on the market,” Soares Pinto says. “Whether it’s going to continue, I’m not sure. Taxes will increase, yes, but if European grain prices stay high, I think U.S. ethanol could still find a market in Europe.”

Pinto believes that the EU’s newly en-

‘Over the last few years,

the ramp up in ethanol has

occurred as the economy

has been plummeting. As

the economy improves,

more goods will be

shipped via rail and truck,

so you could see turn-

times increasing, more

congestion on the rail and

more fuel to haul by truck.’

— Chad Conn, vice president operations, Eco-Energy

long haul Truck transport continues to play an important role for ethanol producers, particularly in areas that still require rail-to-truck logistical solutions.


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forced sustainability requirements could be of great consequence to U.S. ethanol pro-ducers next year. “If producers were not in production by 2008, they will have to meet a 35 percent greenhouse gas saving thresh-old,” she says. “For those who were operat-ing before 2008, they don’t have to bother with the greenhouse gas-saving threshold until 2013, so it won’t affect them next year. But they still have to be certified.”

In July, the EU belatedly approved seven global certification schemes meant to assure a fuel’s sustainability as required by the EU’s Renewable Energy Directive. After announcing the approval of the seven schemes, EU Energy commissioner Günther Oettinger noted that the 27 EU member states have the highest sustain-ability standards in the world and said the schemes are necessary to guarantee the sustainability of the entire biofuels produc-tion and supply chain. While some of the member states have upheld sustainability requirements previously, the commission’s approval of sustainability schemes means that U.S. producers looking to the EU for market opportunities need to make certifi-cation a priority. “Producers should really be concerned with trying to certify their production because so far it has not really been enforced in member states, but now we have seven schemes that have been rec-ognized at the EU level,” Soares Pinto says. “I think many producers are forgetting this aspect of the mandate in Europe and [certi-fication] would help them increase the value of their product on the European market.”

Brazil’s ethanol demand is somewhat

of a wildcard for the coming year. The government there took action this fall to address the country’s ethanol supply shortage and temporarily reduced the na-tionwide blending mandate from 25 per-cent to 20 percent. It appeared to have an immediate downward impact on demand for U.S. ethanol, but Adhemar Altieri, communications director for UnIcA, the Brazilian Sugarcane Industry Association, says demand for fuel in Brazil continues to increase due to sustained economic growth, so it is unclear how deep the blow will be to U.S. producers as a result of the reduced mandate. It is anticipated that Brazil will reinstate the 25 percent blend-ing mandate after the next sugarcane har-vest in the spring, provided that the har-vest is a good one and depending on the relative price between sugar and ethanol. What happens in Brazil will have a direct impact on how well U.S. producers do in markets worldwide. Markets in Japan and elsewhere in Asia have traditionally been served by Brazil but have been open to re-ceiving imports from the U.S. in light of nonexistent Brazilian supplies. Brazil has historically been the preferred supplier for EU states as well, but as long as U.S. pro-ducers follow through with certification requirements, low-cost corn ethanol could continue to fill their need.

blame It on the bakkenBut no matter the ultimate destina-

tion, the location of the vast majority of U.S. ethanol production, in rural areas in the center of the country, means that the

transport Shift more ethanol is being moved by rail today than three years ago, due in large part to markets in the Southeast opening up for ethanol blending. SOurcE: EcO-ENErGY INc.


fuel is traveling long distances to get to the market. The rule of thumb is that 70 per-cent of all U.S. ethanol is hauled by rail, 20 percent by truck and 10 percent by barge. But, while rail is the undisputed ruler of U.S. ethanol transport, bottlenecks and tank car shortages have led to many headaches over the past year that will likely continue for some time.

Just a couple of years ago, tank cars could be leased for around $250. In recent

months, that price has spiked to nearly $1,000. Why? An oil boom in the Bakken Formation in western North Dakota that has caused demand for railcars to skyrocket can be blamed in large part for the increase. Additionally, when the ethanol industry bust occurred in 2008, tank car manufacturers halted production. Since the industry has begun to recover, ethanol producers, too, have needed more cars to transport their product. Tank car manufacturers have re-

sponded by ramping up their production, but it’s likely to be some time before they can provide any relief to the situation, says chad conn, vice president of operations at ethanol marketing firm Eco-Energy Inc. “I don’t think this is something that is going to change any time soon,” he says. “I think it will affect how we go into the next year as well as the next few years.” The tank car shortage will likely result in producers hav-ing to increase their ethanol prices as they struggle to maintain profitable operations, he says, adding that he believes this scenario may already be occurring.

Unit trains, already a popular mode of rail transport for many producers, are ex-pected to become increasingly important due to their efficiency and discounted rates. conn estimates that about 70 percent of ethanol producers are able to ship ethanol via unit train. however, he says only about 35 percent of all terminals are capable of receiving them. Terminals are responding to this situation by building out capabilities to service that type of train, which could cause issues for the minority of ethanol producers who are unable to use unit trains. “As unit trains become more and more a part of the logistics chain, I would expect that to reduce

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where plants that are single manifest train capable are actually able to get into,” Conn says. For example, Dallas is a market that was once served primarily by single manifest trains, he says. Today, there are two unit train facilities serving the entire market. “If you were once a single manifest player serving the Dallas market, because of what’s hap-pened over the past couple of years, this would be a market that you now just can’t economically serve,” he says.

Other terminal operators, particularly in the South, are in the midst of expansion projects to enable them to service unit trains. Eco-Energy has branched out to become in-volved in this area and, along with its part-ner J.T. russell & Sons Inc., is developing an ethanol unit train and storage facility in Den-ton, n.c., that is expected to become opera-tional in early 2012. The company is expect-ed to embark on several similar projects in the Southeast in the coming year, although Conn declined to offer specific details. He says Eco-Energy believes unit train and rail access in general is a bottleneck in that area and, as an advocate of the ethanol industry, the company believes it is important to open up those markets. In areas such as Atlanta, rail tie-in projects have increased in neces-sity as terminal operators seek to find a way to get rail back to their facilities. “here you have an area of the country that were very small markets 75 years ago when the gaso-line terminals were being built,” he says. “If you go to these cities today, you’ll see that rail exists into these terminals. The problem is that if you were to walk about three miles up that track you’ll find that there’s now a shopping mall.”

For ethanol producers currently using single manifest modes of transport, conn suggests that they could try to collaborate with a neighboring producer to form a unit train. But he cautions that railroad compa-nies aren’t particularly receptive to this type of creative solution. In the face of sustained high rail car prices, more producers may for-get about rail transport entirely and seek out trucking alternatives, but the downfall of truck transport is that trucks just can’t cover the long distances as efficiently as trains can. conn says there are also limitations as to

which cities can handle truck deliveries and which can use rail. Barge transport has obvi-ous limitations and isn’t likely to experience a major increase in popularity.

As producers plan their operations and weigh their logistical options in the coming year, Conn says he’s reminding his custom-ers to keep an eye on the economy. “Over the last few years, the ramp up in ethanol has occurred as the economy has been plummeting,” he says. “As the economy

improves, more goods will be shipped via rail and truck, so you could see turn-times increasing, more congestion on the rail and more fuel to haul by truck.”



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preparedness

Bird’s eye An Illinois state police helicopter provides the bird’s eye view of the wreckage from a massive ethanol tank car fire that kept fire crews on site for more than 48 hours. PHOTO: JOHN PETRAKIS, PRINCETON FIRE DEPARTMENT


preparedness

The Tiskilwa ethanol tank car fire demonstrates the need for preparedness and cooperation between local fire crews and ethanol plantsbY KRIS bEVIll

in the early hours of oct. 7, 26 cars on a 131-car train destined for the east coast derailed in northwest illinois just outside the tiny village of tiskilwa, ill., jolting the town’s residents awake as tank cars filled with 30,000 gal-lons of ethanol exploded into flames. Some said it sounded like bombs going off as the rail cars caught fire. The fire was so bright it looked like the sun was rising from the south, according to one first responder.

Plan for

Worstthe


preparedness

needless to say, the initial response to the incident was a bit chaotic. law enforce-ment officials were the first to arrive and identified the source of the fire as ethanol after reading placards on the cars from a dis-tance. But, it was difficult to immediately tell how many cars were involved and just exactly how first responders should deal with the situation. Local fire crews responded to the call immediately, but as in many rural areas, fire departments there are small and staffed mostly by volunteers. This would be the larg-est fire many of them had ever responded to. Supporting units from towns near Tiskilwa got there as fast as they could, but many had 20-minute drive times to get to the scene due not only to the distance between towns but also detours they were forced to take because of the train’s derailment.

At 2:21 a.m., Princeton Fire Depart-ment, located just about seven miles north of Tiskilwa, received a call for a train derail-ment and fire near Tiskilwa. By the time the PFD unit arrived, Tiskilwa firefighters were in the process of forming an evacuation plan for some of the town’s 745 residents. Princ-eton fire chief, John Petrakis, a 15-year fire-fighting veteran trained in hazmat response,

requested to take a closer look at the fire and then grabbed his camera and headed off for a better view of the situation. “You could hear the containers hissing and the roar of the flames,” he says. “We saw a great big ball of fire coming from where the engine had disconnected. right off the bat, I think it was safe to say this was way over our heads. There’s not many of us in the area that have a lot of exposure to this.”

Because of the ferocity of the fire, crews could only survey the situation from the south side of the railroad tracks and the pitch black of the predawn hours made it difficult to get a visual on the condition of the cars. however, a manifest obtained from the train engineer helped responders estimate that be-tween seven and nine ethanol cars were in-volved. The remaining derailed cars carried distillers grains which, according to Petrakis, were “completely lost,” their contents having been strewn across the tracks, adding more potential fuel for the fire. “What was going through our minds at that point was: ‘What’s the plan here?’” Petrakis says.

being PreparedEthanol derailments are not common.

Out of more than 300,000 ethanol shipments hauled via rail in 2010, only 50 tank cars were involved in incidents, according to the Fed-eral railroad Administration and the Asso-ciation of American railroads. The number of ethanol shipments has likely increased substantially since then, with more ethanol being produced and greater emphasis being placed on unit trains as the preferred method of transport. “Ethanol is the largest volume hazardous material transported by rail today, with approximately 75 percent of all ethanol produced in the U.S. moving by rail,” the Re-newable Fuels Association said in a statement following the Tiskilwa incident. “We encour-age all first responders and those in the etha-nol and fuel business to take this unfortunate incident as a reminder to ensure they have the proper safety planning, training and materials in place to respond effectively to an ethanol-related emergency.”

It is unclear how many of the more than 50 firefighters who worked the weekend-long Tiskilwa incident had received ethanol safety training prior to the derailment. A number of ethanol-related courses are offered through the Illinois Fire Service Institute’s Hazard-ous Materials Program, including an online

Fire and Foam Many rural fire departments lack the resources to purchase specialty foam required for ethanol fires. Foam used during the Tiskilwa incident was provided in part by area ethanol plants.

PH

OTO

: SC

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night light A huge fireball rises from the scene of the derailment soon after the incident occurred.

plan of attack Smoke billows from derailed ethanol tank cars as crews monitor the situation.

Messy clean-up crews work to clear tipped rail cars from the derailment site.

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awareness course, a course dedicated to spe-cialized foam applications, and even one de-signed specifically to train ethanol plant per-sonnel on fire awareness and hazmat rescue. none of the courses, however, are manda-tory requirements for fire fighters. The state fire marshal would have to take action to make ethanol awareness courses mandatory and that is not likely to happen, according to ray Palczynski, director of special operations training programs at the Illinois Fire Service Institute. he says that because so much etha-nol moves around the country without inci-dent, it can be difficult to generate interest for ethanol safety training among fire fighters. “This will probably spike [interest] again,” he says. “Just like when somebody falls off a lad-der, we get calls for ladder training. If some-body has a line advancement issue, that’s the new big ticket issue. I expect we’ll be getting calls from folks asking for a refresher course after this.”

Petrakis and his crew had received etha-nol training—it’s a mandatory requirement at his station—so they entered the situation somewhat prepared, but none of them had responded to a real-time ethanol incident un-til that night. And as important as training is, every incident is unique and brings with it its own set of challenges. In this case, establish-ing a chain of command was the first struggle. “The fire was far enough away that the likeli-hood of a container failure was low,” Petrakis says. “Our biggest need was a strategy.”

An incident the size of the Tiskilwa de-

railment brought out a number of respond-ing agencies, from various hazmat units to the state environmental protection agency and Homeland Security officials, to a specialized hazmat unit contracted through the railroad company. “The biggest thing we learned is that as large as these incidents become, more organizations are going to be involved and everyone needs to work together,” Petrakis says. “You don’t get the private and public interaction often and when people come to-gether there’s always a chance for authority issues, but there was none of that.”

crews also lacked one of the key com-ponents to fighting ethanol fires, a foam sup-pressant that many rural fire departments sim-ply do not have the budget to keep on hand. But as luck would have it, some of Tiskilwa’s volunteer fire fighters are also ethanol plant employees, and as soon as they learned of the fire, they contacted officials at the 140 MMgy Marquis Energy llc plant in henne-pin, located about 14 miles east of Tiskilwa, and the 110 MMgy Patriot Renewable Fuels llc plant in Annawan, about 25 miles west of Tiskilwa, to request their foam supplies. Both plants readily offered their support and within a few hours fire crews had hundreds of gallons of foam suppressant at their dis-posal.

It would be several more hours before the foam could be used, but as day broke and Petrakis and other fire officials were able to survey the scene from a state police helicop-ter, it became clear that the mantra of letting

the fire burn itself out was not going to be the best course of action and foam would be required to get the situation under con-trol. Firefighters were able to negotiate the removal of most of the cars, but the ethanol tanks were piled on top of one another. The tipped grain cars also presented major hid-den fire and heat build-up concerns. That, combined with 30 mile-per-hour wind gusts, prompted the responding units to move into a “defensive cooling operation,” using the suppression foam to cool down the railcars that weren’t yet burning. “We weren’t so wor-ried about the tanks that were on fire,” Petra-kis says. “We were more concerned about the rail cars that weren’t on fire.”

As hazardous as the situation was, the Tiskilwa incident ends as a success story. no one was injured, and while local fire depart-ments were stretched to their limits—many had members on-site for more than 24 hours—by the following Monday, all of the village’s residents were back in their homes and fire fighters were discharged from the scene.

Petrakis says the blaze offered invaluable hands-on training for firefighters who spent their weekend working at the scene. “We see a lot of ethanol travel through here, but we don’t get a lot of ethanol incidents,” he says. “So it was a great learning experience.” He hopes that their experience will inspire other rural fire departments to check their equip-ment and update their training. “The fire ser-vice has become very demanding and training is sometimes unfunded, but be resourceful,” he advises. “I’ve never been turned down when I’ve asked people for help getting train-ing. With ethanol, even though it’s a low fre-quency incident, it’s high impact.”

Plant OutreachAn ethanol plant can be a valuable part-

ner in helping train the local fire department by inviting the fire fighters to the facility and encouraging an open dialogue with the fire chief. Often it is the case, as it was in Tiskil-wa, that because of the ethanol plant’s rural location, some of the volunteer fire fighters are also ethanol plant employees. Matthew hagrelius, general counsel and head of safety and environmental matters at Marquis En-

pooling Resources More than 2 million gallons of water were used by a coalition of area fire fighters while battling the train derailment near Tiskilwa, Ill.

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ergy, says a strong working relationship be-tween the ethanol plant and the local fire de-partment is why firefighters knew they could count on Marquis’ help during the Oct. 7 firefight. “We have them out here on a pretty regular basis just to familiarize them with the facility,” he says. “They noticed our stores of foam and had asked if we would have some available if something arose out on the high-ways or anything. Of course we said ‘yes.’”

Palczynski says he’s found that most often the relationships between local fire de-partments and ethanol plants are good ones. “It’s either great or it’s nonexistent,” he says. “It depends who you’re dealing with. Having a relationship with an ethanol plant in your neighborhood seems to be an automatic, but that doesn’t always happen.” For ethanol plants, developing a relationship with the lo-cal fire department can make the difference between your assistance being welcomed or shunned in the case of a nearby incident, he says. In the case of Tiskilwa, because the local fire chiefs knew the ethanol plant operators, it wasn’t a stranger offering help, it was some-one they knew and so they willingly received their assistance, he says.

While this incident involved a rail car fire, the chance always exists that the next incident will be at an ethanol facility. All the more rea-son to open the lines of communication, Pal-

czynski says. he offers as an example a recent case of a small town fire department that re-quested ethanol training. In order for the class to be offered at no cost, the local fire chief needed to sign up at least 15 people from two or more departments to attend. Despite the fact that the fire department is within eyesight of an operating ethanol plant, the fire chief was unable to get any fire fighters from the nearby towns to attend the training. “I just gave it to the handful from that little depart-

ment,” Palczynski says. “The fact that they’re smarter for having been there is great. But the fire chief was very disappointed that no one else came. I told him it’s going to take a prob-lem before they realize they should have been here. And that’s how it goes.”



Taking InitiativeIt was ironic that Aventine renewable

Energy Inc. hosted an ethanol and anhy-drous ammonia safety training event at its Pekin, Ill., plant just weeks after the Tiskilwa train derailment. Brad cantrell, safety/loss control manager at Aventine, says the derail-ment spurred additional interest in Aven-tine’s training seminars and provided a re-gional example of the types of incidents first responders need to be prepared for.

About 100 people attended the daylong seminars, held Oct. 21 and 22, including rep-resentatives from local volunteer fire depart-ments, chemical companies, power plants, fertilizer production facilities, insurance com-panies, area health departments and the U.S. Department of Transportation. TransCAER and the Ethanol Emergency response coali-

tion assisted in planning the event and pro-vided financial assistance to cover the cost of hosting the seminars.

Aventine makes a point of maintain-ing a strong relationship with its local fire department. cantrell recommends other ethanol plants do the same and also consider taking the initiative to host similar ethanol safety seminars. “There are resources avail-able; you just have to reach out,” he says. He commends the ready assistance and guidance offered through TranscAEr and the EErc and says Aventine is also willing to provide resources gathered for its event to interested parties. “We’d be more than happy to share that with anybody, whether it’s an ethanol plant or an emergency response group or whatever,” he says.

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risK manaGement

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).

Mitigating Ethanol Market Risk by Monitoring Opportunitiesbrokers play an important role in effectively using swaps, other risk management toolsbY JOHN HaRaNGODY

Whether it’s incessant grow-ing demand for commodities from Brazil, Russia, india and china or Middle east turmoil, changes in u.S. federal energy policy or a drought in the plains, all these events have one unique thing in common: a significant impact on the price of ethanol.

In fact, there is no market existing today that may be more acutely affected by such a broad array of factors.

At first glance, the ethanol business appears elementary. One acquires corn, fer-ments it, and co-produces alcohol and dis-tillers grain. The industry refers to this as the “corn crush.” If the acquisition cost of corn and the cost of production are less than the

market value of ethanol and distillers grain, the business is profitable.

If only it were that simple. The ethanol market has many diverse participants that view price from different perspectives, in-cluding relationships to corn, basis locations, reformulated gasoline blendstock for oxygen-ate (RBOB) blending, renewable identifica-tion numbers (RINs), sugar, crude oil, the U.S. dollar and even equity markets. To complicate matters more, while most of the relevant for-ward commodity price curves are in contango (that is, futures prices are above the expected


risK manaGement

spot prices and the two converge), some are backwardated (futures are generally below the expected spot price, desirable for net long positions), and some have elements of both imbedded in their structure. This trans-lates into price alignments that are extremely dynamic, requiring constant monitoring for opportunities to lock in profitable margins.

What It TakesEthanol risk management is not for

the faint of heart. It requires a strong intel-lect, nimbleness, decisiveness and the ability to respond quickly to changing conditions. Possession of all these talents and skills is not sufficient for success, however.

To be effective, one needs well-de-signed financial products and physical mar-kets to manage price risk. In addition, the market needs to be structured in a manner that pools liquidity and facilitates rapid dis-semination of price information. Fortunate-ly, notwithstanding the fact that the ethanol markets are still in their nascent stage of development, many financial risk products have been developed to accommodate the most demanding of managers.

The list of exchange-cleared risk prod-ucts that can be employed is impressive. CME Group’s product suite includes Chi-cago Board of Trade ethanol swaps, options on cBOT ethanol swaps, chicago Platts swaps, nY harbor Platts swaps, rBOB cal-endar swaps and corn calendar swaps. cBOT ethanol futures, ethanol block futures as well as corn futures are also available. About 80 percent of all exchange-cleared ethanol con-tracts are over-the-counter (OTC) swaps. In addition, rIns and distillers dried grains with soluble (DDGS) are traded as physical products.

By nature OTc swap markets do not have strong institutional structure. conse-quently, a final ingredient necessary for the markets to function effectively are good brokers who constantly monitor changes in conditions, quickly communicate that infor-mation and assist their clients in understand-ing the impact on price.

Advantages of a brokerIn the physical and financial ethanol

markets, a broker is a neutral intermediary that matches buyers and sellers at the best

price in the market. A good broker will keep company names anonymous until an actual transaction that meets the client’s require-ments is executed. Because a pure broker does not leverage a balance sheet or take actual ownership of the underlying asset, transacting parties are assured of getting the best price without risk of bias.

Some ethanol brokers utilize a refined hybrid approach that melds voice brokering with electronic trade to produce the deepest, most efficient OTC ethanol swap markets. Mike Bridges, founding member of Atlas commodity Markets llc states, “We have found benefits to both forms of execution. Our selection is predicated by customer preference and our internal assessment of which venue will produce the best results for our customers. While a majority of today’s OTc ethanol swap trades are transacted via voice and instant message, there is a grow-ing contingent of market participants that want to execute on our electronic trading platform.”

A proposed commodity Futures Trad-ing commission rule governing swap trans-actions would require commodity swaps


risK manaGement

that are mandated to be exchange cleared to be executed on a designated contract market or a swap execution facility (SEF). Swaps that are not mandated to be exchange cleared may be executed bilaterally. This re-quirement may result in the migration of many swap contract transactions to SEFs. It remains to be determined which, if any, ethanol swap contracts will be mandated for clearing.

Some may ask why a broker is even necessary given the bilateral nature of OTc swap transactions and the ability for parties to trade directly. There are several ways that a broker can enhance a trader’s performance. The first is efficient utilization of time. A full service broker employs the optimum number of knowledgeable professionals to provide complete coverage to each counter-part in the marketplace. Within seconds, a well functioning desk can respond to a re-quest for a quote with confidence that every relevant market participant has been queried regarding price and volume. This insures maximum liquidity and best price.

A skilled broker also provides market in-telligence and completely understands where price values are in each geographic location across the time curve. This insight frequent-

ly results in the ability to combine disparate markets where interest is expressed, to cre-ate liquidity in a different market. The best brokers are market neutral and have excep-tional market insight. This enables traders to always transact at the most competitive terms and frees their time to focus on ways to create additional value for their business.

chris Yarrow, the anchor on Atlas com-modity Markets’ financial products desk, says “a broker should serve as your eyes and ears for the market, helping to determine value by monitoring inter-market and intra-market spreads and to alert you to market opportunities.” An intermarket spread is a price differential between two distinct mar-kets such as rBOB and ethanol, whereas an intramarket spread is a time spread such as first-quarter versus second-quarter ethanol.

The execution of the “corn crush” is an excellent example of a broker adding value to the trade process. An experienced broker can source the relevant markets, calculate the crush, communicate the bid and offer in cents per gallon of ethanol produced, and execute the trade in a matter of seconds.

DDGS traders face a unique set of chal-lenges. For one, no liquid DDGS financial risk products are available for hedging pur-

poses. In addition, the growth in the num-ber of ethanol plants has not only increased DDGS production, but has created a wider variance in product from a nutritional per-spective. Specific nutritional knowledge rel-ative to different quality grades of DDGS needs to be disseminated. As nutritionists become more comfortable utilizing DDGS in feed rations, corn and other feed ingre-dients will experience some displacement in the formula.

The increased number of ethanol plants provides merchandisers arbitrage op-portunities that previously didn’t exist. Bart Vance, Atlas’ physical grains desk, says “a knowledgeable physical broker is an asset to both transactional parties. Whether as an extension of a company’s sales force or as a part of a procurement team, both get the benefit of another employee without the direct overhead. Brokers that have trad-ing experience understand the challenges that confront today’s market participants. Their tacit knowledge is invaluable to solv-ing problems that may arise. For example, this year in drought stricken Texas, local buyers desperately needed alternative feeds. We were able to quickly locate DDGS sup-ply from nontraditional regions throughout the U.S. while also creating new distribution points for processors.”

In summary, a reasonable person might think that corn, ethanol and DDGS com-prise three distinct, somewhat untethered markets, each with a different array of risk products, liquidity, execution venues and methods of communication. Some may find it a clumsy arrangement that impedes effi-cient trade. These markets should represent great opportunity. The key is to invest the time to research and understand each mar-ket’s nuances, and risk products. If one then identifies and employs the most experienced brokers with the broadest market reach, the structure will be in place to simultaneously monitor all three and capture pricing oppor-tunities as they occur.

author: John HarangodyChief Operating Officer, Atlas Commodity Markets


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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).

Educating Drivers about FFVs and Renewable FuelsCan your motor vehicle administration break the blend wall and help meet the RFS?bY buRl HaIGWOOD

in order to earn the privilege to drive, potential drivers must not only learn the rules of the road, but also show an understanding of safety issues. It is time that the privi-lege includes the responsibility to understand how their gasoline addiction has a direct im-pact on safety as it relates to their economic/environmental/energy/national security—and personal health. A national public education strategy worked for littering, recycling, smok-ing, seat belts and child safety seats. It’s time we give our national energy crisis and the na-tional renewable fuel standard (RFS) the same reverence we give auto safety and trash—and with the same order of magnitude.

The national FlexFuel Vehicle Aware-ness campaign initiated such a project by working with the American Association of Motor Vehicle Administrators. The AAMVA recently reached out to all of their state motor vehicle administrators (MVAs) and informed them about our new FlexFuel Vehicle Aware-ness/Motor Vehicle Administration Driver Education Project. The FFV/MVA project creates the opportunity to collaborate on driv-

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er education projects in six states with high concentrations of flex-fuel vehicles (FFVs) and/or flex-fuel pumps. Why? In some areas it is estimated that 90 percent of FFV owners don’t know they are driving this special vehi-cle. Therefore, it would be safe to guess that an equally high number don’t know where to find nearest flex-fuel pump. How to reach those drivers—the motor vehicle administra-tion. The first question to be asked—“Are you driving an FFV?”

The initial response to the FFV/MVA project has been favorable because it also sup-ports the goals of the rFS which are synergis-tic with state goals to create jobs, protect the environment and public health of citizens and improve energy diversity. Two components of this project point to its potential effective-ness. First, states think this project is timely because they believe chronic high gasoline prices and supply shortages will continue and become status quo. Second, FFV owners and flex-fuel pumps could be an important part of the state’s energy emergency preparedness plan, in the event of a price spike or shortage caused by a natural or diplomatic disaster.

The FFV awareness campaign will work to combine its education tools with the MVAs’ ability to communicate with all drivers, and specifically FFV owners. First, we will encour-age states to develop their FFV owner/vehi-cle registration database, similar to projects pi-loted by the American lung Association and other stakeholders in Ohio, nebraska, Minne-sota and Wisconsin. Each state is unique, so we have found different procedures need to be followed.

To further the FFV/MVA project, we will also help MVAs explore, and include in the daily work routine, other no- to low-cost activities that could make energy and FFV awareness part of driver education culture. Activities include posting website informa-tion, reaching out to FFV dealers, incorporat-ing FFV information in driver preparation and testing, including information in vehicle reg-istration and license renewal mailings, safety inspection and emissions notices, and provid-ing information at point-of-service locations. Our preliminary research shows MVA partici-pation does not need outside agency approval

for most activities and actual internal costs are zero to minimal.

Our research dis-covered that signifi-cant education projects that are aimed at the driver and focused on energy awareness, and especially the rFS or FFV owners simply do not exist outside a few Midwestern states. Our efforts will begin to fill that void by creating demonstration pro-

grams and encouraging other states to do the same. For example, the North Dakota state government recently partnered in a program that will invest nearly $500,000 to start reach-ing FFV owners in their state. USDA, the U.S. EPA, and the Governors Biofuels coalition have added their support to the FFV Aware-ness campaign. Our goal now is to appeal to more stakeholders to join in.

Supporting the rFSThe project addresses many of the chal-

lenges that face stakeholders trying to support the rFS. It will:

help sustain existing E85 infrastruc-1. ture to support the rollouts of midlevel blends and transition to flex-fuel pumps.complement industry/government re-2. fueling infrastructure investments—by educating customers and helping them locate flex-fuel pumps.Generate energy awareness while creat-3. ing positive information about the rFS, ethanol and alternative fuel vehicles.

Leverage the support of EPA, USDA, 4. the Governors Biofuels coalition, several clean cities coalitions, and over 30 other energy/environment/national security organizations for the campaign.Educate consumers that they can move 5. from the existing involuntary purchase of ethanol to one of choice. The rFS is not a consumer requirement.Help break the E10 blend wall by reach-6. ing demand levels that will justify invest-ment in cellulose and advanced ethanol/biofuels.We hope stakeholders don’t see this as

“instead of ” project that would deter from other market development and refueling in-frastructure investment efforts. It’s part of a portfolio approach. We trust most rFS advo-cates will also see this effort is not just about FFVs or specifically E85. It is a tremendous opportunity at hand. The project is first about the rFS, and then how the states and the public can achieve those benefits with the use of higher blends of ethanol—safe and valuable common ground for many diverse groups to rally around.

considering the end game in this adult education process, it is likely that more con-sumers will be willing to try and sustain the purchase of higher blends of ethanol if they were truly enlightened. More FFV own-ers would look for a flex-fuel pump, if they knew it was for their flex-fuel car. We hope industry and government stakeholders share our vision. There are multilevel values of the FFV campaign as both a near and long term strategy—and it needs to be supported now.

regardless of the eventual price point for higher ethanol blends, education will play an important role in consumers valuing fuel choice. After all, hybrids, Volts, and electric vehicles do not have an economic advantage today—but they are all sold on the same FFV value proposition of energy and environ-mental security. This project will generate as much goodwill about the rFS and ethanol as simply encouraging ethanol use. regardless of the burden of proof, consumers will con-tinue to be exposed to fear and doubt gener-ated in the media and they will need counter-balancing information.

Reaching consumers burl Haigwood, program director of the clean Fuels Foundation, asks stakeholders to help enlist the aid of motor vehicle administrators in educating drivers about FFVs and flex-fuel use.

PHOTO: PHOTO: NATIONAL FLEXFUEL VEHICLE AWARENESS CAMPAIGN


collaborating with AutomakersThere also are many value propositions

and justification for automakers to support this FFV/MVA project and therefore support the rFS and the use of higher blends of etha-nol in their vehicles.

First, education aimed at all drivers will reach millions of consumers. This will en-gage drivers in the first step of educated deci-

sions—to determine if their vehicles can use a higher blend of ethanol. This will reduce au-tomaker concerns about proper refueling, and in the end, create a satisfied consumer for all stakeholders.

When specifically aimed at FFV owners, the project is aligned with the proper refuel-ing goals of all automakers and the need to increase the utilization of alternative fuel in

FFVs to meet corporate average fuel econ-omy standard (CAFE) credit usage verifica-tion requirements. In addition, the project addresses the long-term complaints from the environmental community regarding minimal flex-fuel use in FFVs.

Success in educating consumers will en-hance the value of the FFV credit/technol-ogy option to reduce greenhouse gas emis-sions, and could serve as a safety net should consumers not fully embrace the introduc-tion of electric vehicles, which is needed to meet new cAFE regulations. Furthermore, energy awareness will accelerate the desire of the public to buy more new fuel-efficient, clean-burning alternative fuel vehicles as they come to market. This would help move en-ergy usage responsibility from being solely the burden of the automaker to one of a shared responsibility with the vehicle owner and the fuel provider.

While many state governments are in-terested in the economic, environmental and energy security benefits of the RFS, we have found very few focus on how to reach that endgame. The clean fuels and clean cars stake-holder coalition created during the clean Air Act Amendments of 1990 led to a historic change in fuel quality, emissions reductions and, as an added bonus, crude oil reduction. The next round of cAFE requirements, and possible changes to fuel, represent the next historic opportunity.

The FFV/MVA project is a win for states interested in developing biofuels, a win for FFV makers and dealers, a win for gasoline re-tailers, a win for agriculture, a win for the bio-fuels industry looking to hurdle the E10 blend wall, and a win for the public. This project is truly in the national interest and supports the goals of the general public.

author: burl Haigwooddirector, Program development, clean Fuels Foundation


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Support the FFV Awareness campaign, get more information about the FFV/MVA project: www.FFV-Awareness.gov

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Stackhoffmann, inc. 563-263-4733 www.hoffmanninc.com

Tanksagra industries, inc. 715-536-9584 www.agraind.com

j.c. Ramsdell enviro Services, inc. 877-658-5571 www.jcramsdell.com

consultingEnvironmentalcantley inc. 865-360-4080

icM, inc. 877-456-8588 www.icminc.com

Rtp environmental associates 516-333-4526 www.rtpenv.com

Seneca companies800-369-5500 www.senecaco.com

Feasibility Studiesharris group inc. 206-494-9422 www.harrisgroup.com

Plant OptimizationicM, inc. 877-456-8588 www.icminc.com

SafetyRail Safe training, inc. 712-212-4145 www.railsafetraining.com

EducationBismarck State college701-224-5735 www.BismarckState.edu/energy

EmploymentrecruitingSearchpath of chicago 815-261-4403, x100 www.searchpathofchicago.com

Strategic Resources425-688-1151 www.strategicresources.com

EngineeringDesign/Buildagra industries, inc. 715-536-9584 www.agraind.com

Burns & Mcdonnell 816-333-9400 www.burnsmcd.com

EPM MARKETPLACE


conveyors–Enclosedwolf Material handling Systems763-576-9040 www.wolfmhs.com

conveyors–mechanicalwolf Material handling Systems763-576-9040 www.wolfmhs.com

conveyors–Screwwolf Material handling Systems763-576-9040 www.wolfmhs.com

Cooling Towersdelta cooling towers, inc. 800-BUY-DELTA www.deltacooling.com

corn Oil recoveryicM, inc. 877-456-8588 www.icminc.com

ddGS dieseltotal-yield diesel from distillers 402-640-8925 www.total-yield.com

dryers-Fluid bedBuhler aeroglide 919-851-2000 www.aeroglide.com

wolf Material handling Systems 763-576-9040 www.wolfmhs.com

Process designadF engineering inc. 937-847-2700 www.adfengineering.com


preprocess, inc.949-201-6041 www.preprocessinc.com

Vogelbusch uSa, inc. 713-461-7374 www.vogelbusch.com

Equipment & ServicesAir Pollution/Odor Controlanguil environmental Systems, inc.414-365-6400 www.anguil.com

biogas Scrubberseco-tec, inc. 905-427-0077 www.eco-tec.com

blowers & FansFlaktwoods 716-845-0900 www.flaktwoods.com

catwalksl&M ethanol Maintenance contracting, inc. 515-955-2010 www.lmethanol.com

centrifugesaaron equipment 630-350-2200 www.aaronequipment.com

control SystemsicM, inc. 877-456-8588 www.icminc.com

kahler automation corp.507-235-6648 www.kahlerautomation.com

conveyors-belt wolf Material handling Systems763-576-9040 www.wolfmhs.com

conveyors–dragwolf Material handling Systems763-576-9040 www.wolfmhs.com

EPm MARKETPLACE

dryers-rotary drumicM, inc. 877-456-8588 www.icminc.com

Dryers-Rotary Steam TubeicM, inc. 877-456-8588 www.icminc.com

Elevator bucketswolf Material handling Systems763-576-9040 www.wolfmhs.com

Emissions Testing & ReductionaRi environmental, inc.847-487-1580 www.arienv.com

Fermentation monitoringetS laboratories707-963-4806 www.etslabs.com

FermentorsBioengineering, inc.781-672-2620 www.bioengineering-inc.com

Fractionation-cornBuhler inc. 763-847-9900 www.buhlergroup.com/us

cereal process technologies 217-779-2595 www.cerealprocess.com

crown iron works company 651-639-8900 www.crowniron.com


Grain Handling & Storageagra industries, inc. 715-536-9584 www.agraind.com

hoffmann, inc.563-263-4733 www.hoffmanninc.com

Sukup Manufacturing co.641-892-4222 www.sukup.com

Heat Exchangerspick heaters, inc.800-233-9030 www.pickheater.com

HoppersAiroflex Equipment563-264-8066 www.airoflexequipment.com

EPM MARKETPLACE

With all contact information placed in one convenient loca-tion, Ethanol Producer maga-zine not only contains top edi-torial content but also a useful directory in each publication. Whether a first-time advertiser wanting to raise awareness of your business or a frequent dis-play advertiser looking for add-ed exposure, EPm marketplace is the perfect solution.


wolf Material handling Systems763-576-9040 www.wolfmhs.com

Laboratory-Testing Services Foundation analytical laboratory 712-225-6989 www.foundationanalytical.com

Loading EquipmentBear Boring llc 309-695-5150 www.bearboring.com

Loading Equipment-Liquiddeterman Fluid Solutions763-571-8110 www.determan.com

pFt-alexander, inc.1-800-696-1331 www.pft-alexander.com

maintenance Servicesdeterman Fluid Solutions763-571-8110 www.determan.com

l&M ethanol Maintenance contracting, inc. 515-955-2010 www.lmethanol.com

pFt-alexander, inc.1-800-696-1331 www.pft-alexander.com

maintenance SoftwareicM, inc. 877-456-8588 www.icminc.com

meterspFt-alexander, inc.1-800-696-1331 www.pft-alexander.com

millwrightagra industries, inc. 715-536-9584 www.agraind.com

Tanksagra industries, inc. 715-536-9584 www.agraind.com

Thermal Oxidizers

Truck Receiving/DumpersAiroflex Equipment563-264-8066 www.airoflexequipment.com

used EquipmentupM Machine713-440-8200 www.upmmachine.com

molecular SievesicM, inc. 877-456-8588 www.icminc.com

Parts & Servicesdeterman Fluid Solutions763-571-8110 www.determan.com


Pipel&M ethanol Maintenance contracting, inc. 515-955-2010 www.lmethanol.com

Robert-james Sales, inc. 800-666-0088 www.rjsales.com

Pipe-Fittingshammertek corp. 717-898-7665 www.hammertek.com

Robert-james Sales, inc. 800-666-0088 www.rjsales.com

Pipe-FlangesRobert-james Sales, inc. 800-666-0088 www.rjsales.com

Productivity EnhancementsicM, inc. 877-456-8588 www.icminc.com

PumpspeopleFlo Manufacturing 847-929-4774 www.peopleflo.com

Sealsaesseal, inc. 865-531-0192 www.aesseal.com

Storage-ddGShoffmann, inc.563-263-4733 www.hoffmanninc.com

Structural Fabricationagra industries, inc. 715-536-9584 www.agraind.com

l&M ethanol Maintenance contracting, inc. 515-955-2010 www.lmethanol.com

EPm MARKETPLACE

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www.eisenmann.us.comEmail: [email protected]

Marketplace_EthanolProducer.indd 1 5/18/2011 3:34:27 PM

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75 2012 International biomass conference & Expo

84 2012 International Fuel Ethanol Workshop & Expo

83 2012 Pacific West Biomass Conference & Trade Show

26 2012 National Ethanol conference

74 AcE American coalition for Ethanol

53 AdI Systems Inc.

73 Agra Industries

13 Ashland Hercules Water Technologies

85 BetaTec Hop Products

64 brock Grain Systems

39 brownWinick Law Firm

59 buckman

38 burns & mcdonnell

45 cHS renewable Fuels marketing

65 Cloud/Sellers Cleaning Systems

37 cPm roskamp champion

52 crown Iron Works company

44 Distillers Grains Production & Markets

79 dynamic Pricing Platform

49 EISENmANN corporation

30 Fagen Inc.

55 FcStone, LLc

19 Fermentis - division of S.I. Lesaffre

AdIndex

EPm MARKETPLACE

Valvescashco, inc.785-472-4461 www.cashco.com

Wastewater Treatment ServicesicM, inc.877-456-8588 www.icminc.com

Water Treatmenth2o innoVation 763-566-8961 www.H2OINNOVATION.com

Yield Enhancement edeniQ, inc.559-302-1780 www.edeniq.com

FinanceInsuranceeRi Solutions, inc. 316-927-4294 erisolutions.com

mergers & AcquisitionsMoglia advisors 847-884-8282 www.mogliaadvisors.com

marketingFuel EthanolchS Renewable Fuels 651-355-6271 www.chsinc.com

miscellaneousMaas companies 507-424-2640 www.maascompanies.com

research & developmentEngine TestingRoush industries 734-779-7736 www.roush.com

Transportationrailcar Gate Openersthe arnold company 800-245-7505 www.arnoldcompany.com

51 Freez-it-Cleen

36 Gamajet cleaning Systems, Inc.

21 & 92 GENENcOr® - A danisco division

2 Growth Energy

27 Highmark renewable Inc.

5 Icm, Inc.

8 & 9 Inbicon

40 Indeck Power Equipment co.

43 Johnson System, Inc.

31 Life Technologies

67 Load Toad

41 Louis dreyfus

82 Nalco company

62 Natwick Associates Appraisal Services

91 North American bioproducts corp.

3 Novozymes

17 Pioneer Hi-bred International, Inc.

66 renewable Fuels Association

58 Robert-James Sales, Inc.

15 Syngenta Seeds, Inc.

42 Vogelbusch uSA, Inc.

63 Wabash Power Equip. co.

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December 2011 Ethanol Producer Magazine

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Transcript of December 2011 Ethanol Producer Magazine