January 2009 Ethanol Producer Magazine

JANUARY 2009

INSIDE: SUSTAINABILITY A HOT TOPIC AT WORLD BIOFUELS SYMPOSIUM

Water Works

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Reducing Water Usage in Ethanol PlantsMaintaining Water Systems Critical to Profi tability Exploring Ethanol’s Impact on Water Use for Irrigation

ETHANOL PRODUCER MAGAZINE JANUARY 20092

ETHANOL PRODUCER MAGAZINE JANUARY 2009 3


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insideJANUARY 2009 . VOLUME 15 . ISSUE 1

features

50 TECHNOLOGY Making Do With Less H2O Ethanol plants have reduced water usage by more than 20 percent, and experts believe further reductions are possible. By Erin Voegele

58 MAINTENANCE Going With the Flow The steady, unhindered fl ow of water is critical to an ethanol plant’s effi ciency and profi tability. By Frank Zaworski

66 FEEDSTOCK Irrigation Mitigation The amount of water used to grow ethanol feedstocks depends on the crop and where it’s produced. According to an International Water Management Institute report, only 3 percent of all irrigation in the United States is used to grow corn for ethanol. By Ryan C. Christiansen

74 EVENT A World of Potential The 4th World Biofuels Symposium held recently in China revealed a growing global demand for biofuels. Sustainability will play an important role in that development. By Travis Hochard

84 FRACTIONATION A Renewed Future A Wisconsin-based ethanol plant is using fractionation to make the most of every kernel of corn. The process also allows the facility to save energy and market a unique high-protein animal feed. By Anna Austin

92 FINANCE Surviving the Economic Storm The aftermath of record-high corn prices and the ensuing economic crisis has generated talk of consolidation in the ethanol industry. EPM talks to industry experts about calculating the value of distressed ethanol plants. By Bryan Sims

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insideJANUARY 2009 . VOLUME 15 . ISSUE 1

departments8 On the Web

9 Advertiser Index

12 The Way I See It By Mike Bryan Leaving a Rough Road Behind

16 Business & People

20 Commodities

22 View From the Hill

23 RFA Update

24 Industry News & BIObytes

34 Plant Construction List

44 Drive By Toni Nuernberg Breaking Through the Blend Wall

46 Legal Perspectives By James L. Pray Understand Your Carbon Credits Contracts

102 Events Calendar

104 EPM Marketplace

Ethanol Producer Magazine: (USPS No. 023-974) January 2009, Vol. 15, Issue 1. Ethanol Producer Magazine is published month-ly. Principal Offi ce: 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. Periodicals Postage Paid at Grand Forks, North Da-kota and additional mailing offi ces. POSTMASTER: Send ad-dress changes to Ethanol Producer Magazine/Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, North Dakota 58203.

BPA Worldwide Membership Applied for October 2006

contributors98 BIOREFININGDanish Company Provides Technology, Innovations for Cellulose Biorefi ningDong Energy uses its domestic network of power production technologies to help keep Denmark independent of Middle Eastern oil. Now the company’s biotechnology spin-off Inbicon is looking to make its mark on the cellulosic ethanol industry. By Roger Moore

Corrections from our December 2008 issue:The person in the photo on page 88 of the Policy feature, titled “Carbon as a Commodity,” is not Jim Murphy, president of Carbon Green LLC. The correct photo is posted with the story on our Web site.

On page 104 of the Vehicles feature, titled “The Road Ahead for FFVs,” it incorrectly stated that miles achieved per gallon for E85 were slightly above vehicles fueled with unleaded gasoline. It should have said miles per gallon were slightly below.

On page 129 of the Finance feature, titled “Bankrolling the Next Generation,” it incorrectly stated that BlueFire Ethanol has broken ground on a 17 MMgy cellulosic ethanol plant near Palm Springs, Calif., and a 3.2 MMgy facility near Lancaster, Calif. Both projects are in development, but haven’t broken ground yet.

Correction from our November 2008 issue:On page 44 of the Plant Construction List, the photo was mislabeled as Plymouth Energy LLC. The photo was taken at Cardinal Ethanol LLC.


Staff Writer Erin Voegele discusses water usage in her January EPM feature, “Making Do With Less H20.” Ethanol producers have dramatically reduced wa-ter consumption through the years, but experts believe further reductions are possible.

Start Planning for San AntonioThe 14th Annual National Ethanol Conference is on the horizon, and Contributions Editor Dave Nilles discusses the highlights of the event that’s sure to bring together the ethanol industry’s movers and shakers in this pivotal year full of

challenges and opportunities.

To listen to this podcast and others, visit www.ethanolproducer.com/podcast.

To view this blog and others, visit www.ethanolproducer.com/takingstalk/archive.jsp.

TOP 10 WEB EXCLUSIVES

Acquisitions, Financing and a Presidential ElectionEthanolProducer.com’s most-read Web exclusive news stories for November

► For up-to-date Web exclusives, visit www.ethanolproducer.com

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Industry: Obama, ethanol won the electionPresident-elect Barack Obama’s pro-ethanol campaign platform leaves many industry stakeholders hopeful the new administration will continue supporting the renewable fuel.

Economist: What if ethanol expansion levels off?An Iowa State University biofuels economist forecasts higher ethanol prices and industry consolidation as new production capacity levels off.

VeraSun receives interim fi nancingFour days after fi ling for Chapter 11 bankruptcy protection, VeraSun receives commitments for up to $215 million in debtor-in-possession fi nancing.

Former Shell executive signs on as Range Fuels CEOFormer Royal Dutch Shell Executive David Aldous replaces Mitch Mandich as chief executive offi cer of future cellulosic ethanol producer Range Fuels Inc.

Cardinal Ethanol starts up Indiana plantIndiana, the nation’s fi fth-largest ethanol producer, sees its 12th ethanol plant start up—a 100 MMgy facility near Union City.

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Soil tilth lab studies corn stover harvestingResearchers at the USDA’s National Soil Tilth Laboratory determine what portions of corn stover are best for cellulosic ethanol production.

VeraSun fi les for Chapter 11 bankruptcy protectionOne of the nation’s largest ethanol producers, VeraSun Energy Corp., fi les for Chapter 11 bankruptcy protection, allowing it to enhance liquidity while the company reorganizes.

Syngenta develops sugarcane farming technologySyngenta announces plans to develop a new technology to improve the cost effi ciency of sugarcane planting for use in ethanol production.

Viaspace acquires Inter-Pacifi c Arts, license to hybrid gasesCalifornia-based Viaspace Inc.’s acquisition of Inter-Pacifi c Arts Corp. allows it to gain a license for commercial farming and sale of a fast-growing grass hybrid suitable for ethanol production.

Monsanto acquires Brazilian sugarcane companiesMonsanto Co. announces the acquisition of two Brazilian sugarcane breeding and technology companies, CanaVialis SA and Alellyx SA.

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Making Do With Less

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EDITORIAL

Jessica Sobolik Managing [email protected]

Dave Nilles Contributions [email protected]

Rona Johnson Features [email protected]

Ron Kotrba Senior Staff [email protected]

Jerry W. Kram Staff [email protected]

Susanne Retka Schill Staff [email protected]

Kris Bevill Staff [email protected]

Erin Voegele Staff [email protected]

Anna Austin Staff [email protected]

Ryan C. Christiansen Staff [email protected]

Bryan Sims Staff Writer & Plant List [email protected]

Hope Deutscher Online [email protected]

Jan Tellmann Copy [email protected]

Megan Skauge E-Media [email protected]

ART

Jaci Satterlund Art [email protected]

Sam Melquist Graphic [email protected]

Elizabeth Slavens Graphic [email protected]

Jack Sitter Graphic [email protected]

PUBLISHING & SALES

Mike Bryan Publisher & [email protected]

Kathy Bryan Publisher & [email protected]

Joe Bryan Vice President of Media & [email protected]

Tom Bryan Vice President of [email protected]

Matthew Spoor Sales [email protected]

Howard Brockhouse Sales Manager, Media & [email protected]

Clay Moore Account [email protected]

Jeremy Hanson Account [email protected]

Chip Shereck Account [email protected]

Tim Charles Account [email protected]

Chad Ekanger Account [email protected]

Marty Steen Account [email protected]

Marla DeFoe Advertising [email protected]

Jessica Beaudry Subscriptions [email protected]

Jason Smith Subscriber Aquisition [email protected]

Christie Anderson Administrative Assistant, [email protected]

Nicole Zambo [email protected]

HOW TO REACH US

LETTERS TO THE EDITORWe welcome letters to the editor. Send your letter to:

Ethanol Producer Magazine Letters, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203 or e-mail to [email protected].

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

SUBSCRIPTIONSEthanol Producer Magazine is now free of charge to everyone with the exception of

a shipping and handling charge of $49.95 for any country outside the United States, Canada and Mexico.To subscribe, visit www.EthanolProducer.com or you can send your mailing address and payment

(checks made out to BBI International) to: Ethanol Producer Magazine Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203.

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

CUSTOMER SERVICE AND CHANGE OF ADDRESSFor service, please use our Web site at www.EthanolProducer.com. You can also call (866) 746-8385, or write to:

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BACK ISSUES AND REPRINTSSelect back issues are available for $3.95 each, plus shipping. To place an order, contact Subscriptions at (701) 746-8385 or [email protected]. Article

reprints are also available for a fee. For more information, contact Christie Anderson at (701) 746-8385 or [email protected].

ADVERTISINGFor advertising rates and our editorial calendar, visit www.EthanolProducer.com or call (866) 746-8385.COPYRIGHT © 2009 by BBI International



The Way I See It

Leaving a Rough Road Behind

Whew! 2008 is fi nally behind us. It was a tough year for the ethanol industry. The squeeze of falling oil and ethanol prices, combined with commodity hedging,

spelled trouble for many and disaster for some. There is hardly a segment of the industry that hasn’t

been affected. The build-out of corn-to-ethanol plants, high grain prices, project fi nancing virtually impossible to obtain and the collapse of major banks all came together to create what some have described as “the perfect storm.”

Looking forward, we can only speculate that interven-tion by the government to bail out banks and automakers will help strengthen the economy. This, combined with a new administration that seems to have a strong bent to-ward renewable energy, could help turn the ethanol industry around in 2009.

Some of the issues that plagued us during 2008, such as the food-versus-fuel debate and unnaturally high grain prices, may be behind us. This isn’t to say that 2009 will be a cakewalk. In fact, it may take much of the fi rst half of the year just to recover from 2008, but recover we will, and the industry will be stronger as a result.

Once again, the partnership with American agriculture has proven its worth during this diffi cult time. As we have seen in the past, the plants that have a strong connection with farmers seem to be better able to withstand unpredict-able market fl uctuations. The fact is, agriculture remains the backbone of the ethanol industry. It’s puzzling that many be-

lieve second-generation ethanol will be largely built by big busi-nesses, not farmers. If history is any predictor of the future, not having the direct involvement of agriculture may be a fatally fl awed path forward.

Farmers need to be in-volved in building the next gen-eration of ethanol plants. We should still be forming farmer-owned cooperatives. Time and time again, we have seen that these boards can provide the kind of intelligent and careful guidance that is needed to make plants successful during a wide variety of market con-ditions.

Somehow, we have gotten the idea that farmers are done building ethanol plants because many of the future plants may not be corn-based. In my opinion, that’s a pretty lame notion. Not only should farmers be involved in next-genera-tion ethanol production, but I believe in order for the indus-try to really prosper, it’s imperative that they’re involved.

This doesn’t mean every cellulosic ethanol plant has to be farmer-owned, but there ought to be a whole lot of them that are. My message to American agriculture is simple: “You built this industry. Don’t stop now. Take it to the next generation.”

That’s the way I see it!

Mike BryanPublisher & CEO

[email protected]


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16 ETHANOL PRODUCER MAGAZINE JANUARY 2009

BUSINESS&PEOPLE

Business&PeopleEthanol Industry Briefs

Business

Share YourIndustry Briefs

To be included in Business & People, send information (including photos or illustrations if available) to: Industry Briefs, Ethanol Producer Magazine, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. You may also fax information to (701) 746-5367, or e-mail it to [email protected]. Please include your name and tele-phone number in all correspondence.

Shell initiates European blending facility contract

Royal Dutch Shell PLC has granted a three-year contract to Jacobs Engineering Group Inc., a consulting, engineer-ing and operations fi rm based in Pasadena, Calif., to design, engineer, procure, construct and install future Shell ethanol and biodiesel blending facilities in company depots throughout Europe. Jacobs will work out of Ghent, Belgium; provide Shell with conceptual designs and basic en-gineering packages for the biofuel blending projects; and fully implement most of them. The projects will help Shell to comply with European Union directives and to satisfy customer demands for renewable fuels, ac-cording to Robert Matha, vice president of Jacobs. EP

Monsanto acquires sugarcane companies

Monsanto Co. announced its acqui-sition of Brazil-based Aly Participacoes Ltd., which operates sugarcane agricultural companies CanaVialis SA and Alellyx SA, for $290 million. CanaVialis is a sugarcane breeding company developing and commer-cializing a sugarcane germplasm that Mon-santo said may result in signifi cantly higher sugarcane yields. CanaVialis has contracts with 46 sugarcane mills, whose production areas cover 2.7 million acres. Alellyx is an ap-plied genomics company focused on devel-oping biotech traits primarily for sugarcane. Monsanto expects to bring the new sugar-cane varieties to market by 2016 in order to meet food and biofuel needs. EP

Ethanol companies receive DOE funding

Following an award announcement made in February 2007, South Dakota-based ethanol producer Poet LLC received $3.7 million in Phase I funding in Octo-ber to transform its 50 MMgy corn-based ethanol plant in Emmetsburg, Iowa, into an integrated corn- and cellulose-to-etha-nol biorefi nery. The DOE also announced that Poet’s Phase II award funding, sub-ject to annual appropriations, may be up to $76.3 million.

In the same month, the DOE award-ed Danish enzyme producer Novozymes with a $12.3 million, 2.5-year contract to increase the effi ciency of enzymes neces-sary to produce cellulosic ethanol. This was the second DOE contract awarded to Novozymes, which will match the latest DOE funding dollar-for-dollar, bringing the total investment of the research proj-ect to $25 million.

Around the same time, Poet and No-vozymes were named “promising alterna-tive energy companies” in an article by Forbes magazine.

Mascoma Corp. also announced in October its receipt of $26 million from the DOE for a proposed 40 MMgy wood-chip-to-ethanol plant in Kinross, Mich. It also received $23.5 million from the state of Michigan. EP

East Coast Ethanol begins equity drive

East Coast Ethanol LLC launched its equity drive Oct. 14 at four locations chosen for 110 MMgy corn-based ethanol plants along the Atlantic Coast: Jackson, N.C.; Columbia, S.C.; Jesup, Ga.; and Car-ollton, Fla. Company Treasurer and Chief Financial Offi cer John Long said the eq-uity drive is moving forward, although he admitted, “The timing of this probably isn’t the best.” Besides seeking farm and urban investors, the project has retained a London fi rm to seek Middle Eastern and Asian investors. The four projects are in varying stages of permitting and site ac-quisitions. Fagen Inc. and ICM Inc. have been named the design/build team. EP

Xethanol changes name, energy focus

Former cellulosic ethanol company Xe-thanol Corp. relaunched on the New York Stock Exchange on Oct. 28 as Global En-ergy Holdings Group Inc., a “diversifi ed en-ergy company” that plans to focus on vari-ous waste feedstocks for the production of energy and natural gas. “We’re moving on from ethanol, and the reason is the business model doesn’t work,” Chief Executive Of-fi cer David Ames said. “With the price of corn and energy ... we’ve lost a lot of money doing that. We’ve spent a lot of money in cellulosic research, and nothing out there is really fruitful and will make a major econom-ic impact on producing ethanol.” EP


BUSINESS&PEOPLE

Business

Sponsored by

Panda Ethanol restructures funding

Panda Etha-nol Inc. has re-structured fund-ing arrangements on its 115 MMgy ethanol plant un-der construction in Hereford, Tex-as, in an effort to complete the project by Jan. 30. The restruc-turing was supported by the project’s senior and subordinated lenders. It included the senior lenders waiving all existing defaults that occurred under the original fi nancing agreements. Now, the project can borrow up to $31.5 million for construction-related needs and has $2.5 million available in new proceeds from the Hereford project’s sub-ordinated lender. Another $2.5 million in new equity investment from Panda Energy International is expected for use as working capital. EP

Aventine purchases Nebraska Energy

Pekin, Ill.-based Aventine Renewable Energy Holdings Inc. has completed the purchase of Nebraska Energy Co-op’s 21.58 percent interest in Nebraska En-ergy LLC, a 50 MMgy ethanol plant in Aurora, Neb. The co-op’s interest was purchased for 1 million shares of Aven-tine’s common stock. The stock was estimated to have a value of $6.6 million, or $6.62 per share, based on the average of Aventine’s closing stock price on the ac-quisition announcement date July 31, and the four days preceding and the four days following the announcement date. Aven-tine now owns 100 percent of Nebraska Energy. EP

Algenol opens new US headquarters

Florida-based Algenol Biofuels Inc. announced the opening of its new U.S. headquarters in Naples, Fla., on Oct. 27. The offi ces will house the company’s de-velopment and executive teams. It also has offi ces in Baltimore and Palm Beach County, Fla.

Algenol has developed an algae-to-ethanol technology trademarked Direct to Ethanol. During the production process, sugar is produced through photosynthesis and immediately converted into ethanol. Algenol’s fi rst commercial-scale facility will be located in Mexico and is scheduled to break ground in late 2008 or early 2009. It’s expected to produce 1 billion gallons of ethanol annually. EP

CFTC clears OTC ethanol contracts

The Commodity Futures Trading Commission issued an order to the Chi-cago Board of Trade to clear over-the-counter (OTC) ethanol contracts Oct. 9. The order allowed the Chicago Mercantile Exchange and registered futures commis-sion merchants to commingle eligible con-tract participants’ funds used to margin, secure or guarantee contracts executed in the OTC markets with other funds held in segregated accounts. The order also calls for CME and the futures commission mer-chants to apply appropriate risk manage-ment procedures to these transactions and to provide specifi ed information to the CFTC. EP

KL Process Design changes name, goes public

South Dakota-based engineering fi rm KL Process Design Group announced Oct. 8 that it had become a public compa-ny through completion of a reverse merger with ethanol marketing company KL En-ergy LLC. In doing so, it has changed its name to KL Energy Corp. It has operated a 1.5 MMgy wood-waste-to-ethanol plant near Upton, Wyo., since January 2008. This latest move and accompanying funds will allow the company to construct a sec-ond facility, which Chief Executive Offi -cer Randy Kramer said will be announced in further detail in the near future. EP

ICM partners with GevoIn late October, Colorado-based Gevo

Inc. announced its partnership with Col-wich, Kan.-based ICM Inc. to advance the development of Gevo’s Integrated Fermen-tation Technology, which enables retrofi tted ethanol plants to produce isobutanol and hy-drocarbons. Under the terms of the agree-ment, a demonstration facility will be built at ICM’s biofuels research center in St. Jo-seph, Mo. ICM would serve as the exclusive engineering, procurement and construction contractor for the retrofi t of future ethanol plants utilizing Gevo’s technology.

Prior to this announcement, ICM re-leased 73 employees in addition to the 105 it released in April. ICM attributed the staff reduction to the nationwide economic downturn has also affected the ethanol in-dustry. EP


PeopleBusiness

BUSINESS&PEOPLE

Verenium appoints research VP

Gregory Powers has been named ex-ecutive vice president of Verenium Corp.’s research and devel-opment division. He replaces Geoffrey Ha-zlewood, who resigned for personal reasons earlier this year, but continues to serve as consultant and scientifi c advisor. Prior to joining Verenium, Powers served as vice president of United Technologies Corp.’s carrier division. EP

Former USDA secretary joins AE Biofuels board

California-based proposed cellulosic ethanol producer AE Biofuels Inc. has ap-pointed former U.S. Secretary of Agricul-ture John Block to its board of directors. He served as agriculture secretary from 1981 to 1986 and has since held various executive positions in the food industry, including positions at Hormel Foods Corp. EP

Memorials being acceptedfor Alfa Laval manager

Brian Pike, agro market unit manager for Alfa Laval Inc., passed away in Octo-ber after a brief illness. Well-known in the ethanol community, he was instrumental in introducing Alfa Laval decanter cen-trifuges to the industry. Memorials dona-tions can be sent to Rush University Medi-cal Center’s Lung Cancer Research at 1725 West Harrison St., Suite 821, Chicago, IL 60612. EP

Oklahoma academy names Scientist of the Year

Richard Dixon, a senior vice president, professor and direc-tor of the Plant Biol-ogy Division at The Samuel Roberts Noble Foundation Inc. agri-cultural research cen-ter in Ardmore, Okla., has been named Oklahoma Scientist of the Year by the Oklahoma Academy of Science. He developed low-lignin plant varieties for producing cellulosic ethanol. EP

Seurer heads Glacial Lakes Energy

Glacial Lakes Energy LLC has named its Chief Financial Offi cer Jim Seurer as the company’s interim chief executive offi -cer, following the departure of Tom Bran-han. Seurer has worked for Glacial Lakes Energy since early 2007 and was formerly chief fi nancial offi cer at South Dakota Soy-bean Processors. He will also take Bran-han’s place on the board of directors of the Renewable Fuels Association. EP

Lignol, Suncor partner Canada-based Lignol Energy Corp. and

Suncor Energy Products Inc. have teamed up to develop a commercial-scale cellulosic ethanol plant in Grand Junction, Colo. Sun-cor, which currently operates a 105 MMgy corn-based ethanol plant in Sarnia, Ontario, will assist Lignol with preliminary develop-ment work. The companies hope to have the agreement fi nalized before Jan. 15.

In January 2008, the U.S. DOE awarded Lignol with $30 million in funding for the commercial-scale cellulosic project, which is expected to be completed between 2010 and 2011. The company also operates a pi-lot plant in Burnaby, British Columbia. EP

Governors group signals support for all biofuels

The Governors’ Ethanol Coalition changed the name of its group to the Governor’s Biofuels Coalition at its annual meeting in Billings, Mont., in late Septem-ber. Its current membership includes gov-ernors from 34 states led by Chairman and Illinois Gov. Rod Blagojevich. The gover-nors chose the new name to refl ect the or-ganization’s support of all biofuels, which have become prominent since the coali-tion was organized in 1991 to promote in-creased ethanol use and production in its members’ states. EP

Block

Dixon

Powers

Duff heads BBI Engineering & Consulting

BBI International Inc. recently pro-moted Brian Duff to director of its En-gineering & Consulting division from his previous position as manager of process development. Before joining the Lake-wood, Colo.-based division of BBI, he was senior pilot plant engineer at NREL, where he was responsible for the design, installation and start-up of an integrated two-ton-per-day lignocellulosic process demonstration unit. He has a master’s de-gree in chemical engineering from Stan-ford University and a bachelor’s degree from Lehigh University. EP

People

BUSINESS&PEOPLE

Amyris-Crystalsev Biofuels appoints board members

Renewable fuel company Amyris-Crystalsev Biofuels has welcomed Ro-berto Rodriques and Fernando Reinach to its staff. Rodrigues joins the company’s new strategic advisory board, where he will advise on commercial-ization ventures of sugarcane-based diesel in Brazil. Reinach was appointed to the Amyris board of directors.

Also in October, Amyris announced a strategic equity investment made by Vo-torantim Novos Negócios, supporting Amyris’ objective of commercializing die-sel fuel made from sugarcane by 2010. It brought the total capital raised by Amyris in 2008 to $100 million. EP

DuPont Danisco names management team

DuPont Danisco Cellulosic Ethanol LLC added three to its management team in October: Georg Anderl, vice president of engineering; Vonnie Estes, vice presi-dent of business development; and Jack Huttner, vice president of commercial and public affairs. Anderl and Huttner moved from similar positions at Genencor, a Danisco division, whereas Estes came from DuPont.

In addition, the joint venture an-nounced its headquarters will be located in Itasca, Ill., a suburb of Chicago. Construc-tion of the company’s pilot-scale cellulosic ethanol facility is underway in Vonore, Tenn., in partnership with the Tennessee Bioenergy Initiative. EP

Reinach


COMMODITIES REPORT

Natural Gas Report

Corn Report

By Casey Whelan, U.S. Energy Services Inc.

By Jason Sagebiel, FCStone

Nov. 17—Natural gas market prices have dropped dramatically over the past several months, in large part due to the general decline in commodity prices. Aside from the general weakness in commod-ity markets, factors unique to the natural gas industry will likely keep prices relatively low as we go through winter. These bearish factors are good for consumers and bad for producers. The following is a brief description of each factor.

First, natural gas production has increased approximately 8 per-cent over the past year. There hasn’t been a year-over-year increase that large over the past 10 years. Increased production is largely due to the extreme success of shale production development over the past few years. Second, liquefi ed natural gas imports may increase over the next few months since Asian storage levels are relatively high, Asian demand is off and the U.S. market is the last resort.

Third, Canadian imports are likely to increase since tar sands production, which consumes a signifi cant amount of natural gas, has been reduced due to low crude oil prices. Fourth, alternative fuel prices (No. 6 fuel oil and fats/grease) have dropped dramatically to the point that some industrial plants are switching from natural gas to alternative fuels.

Fifth, anecdotal information indicates that industrial natural gas demand (biofuels production, steel production, etc.) is dropping due

to production cuts. Sixth, natural gas storage inventory levels are at near historically high levels limiting the ability to “hide” gas. Finally, Gulf of Mexico production shut in since Hurricane Gustav is coming back on line.

Bottom line: Due to the factors above—strong supply and weak demand—there is limited opportunity for natural gas prices to in-crease from current levels. The caveat of course is that oil prices re-main soft, at or below $75 per barrel. EP

Casey Whelan, vice president of strategic initiatives, can be contacted at [email protected].

Nov. 17—The corn and soybean market observed a rare his-torical revision from the October USDA supply and demand report. Therefore, the November report did not reveal anything too exciting. The corn portion in the October revision changed only slightly com-pared to the soybean supply and demand. Corn yield was 154 bushels per acre versus 152.3 in October, and carry-out increased from 1.018 billion bushels to 1.154 billion.

Corn demand for ethanol was reduced by 100 million bushels as gasoline consumption is expected to slow. Livestock feed demand increased by 150 million bushels while other industrial use was low-ered by 10 million bushels. Feed demand increased due to lower grain prices and the reduced availability of distillers grains. World corn in-ventories fell 2.18 million metric tons from September to October. One component of that equation was an increase in world corn use for livestock feed demand. From a coarse grain perspective, the world carry-out actually increased by 0.15 million metric tons.

The November report reduced yield by 0.1 bushels per acre, which was surprising. In the December EPM, we detailed how, his-torically, corn yield increases from October to November if it in-creases from September to October. However, fall 2008 made this untrue partly due to the October USDA revision. Nonetheless, this will be the second-highest yield on record behind 2004, and produc-

tion will be the second largest behind the 2006-’07 crop year. The graph indicates an increase in wheat feeding in 2008 com-

pared to 2007. Total feed demand has been lower due to less livestock feeding and/or more ethanol coproduct feeding. With freight values decreasing due to slowing demand, wheat has actually been rumored to come into portions of the Western Hemisphere. EP

Bearish information continues to roll in

Fall corn reports predict near-record harvest


COMMODITIES REPORT

DDGS Report

Ethanol Report

By Sean Broderick, CHS Inc.

By Spencer Kelly, OPIS

Markets fi rm slightly going into winter

Shine comes off blending margins

Nov. 17—As Thanksgiving neared, the DDGS market felt as though it was feeling the effects of the season. After following the Chicago Board of Trade’s downward trend and reacting to a late start to the cooler fall weather, the market appeared to becoming fi rmer. Generally, plants sell more wet cake to feedlots in the fall and winter, and are looking to buy back previously sold railcars to cap-ture those premiums. The longevity of a major, multi-plant producer is in doubt, and those that were betting on the tonnage from that group of plants are starting to scramble a bit.

The barge market, which for a while was at parity to the California market, is now trading at a $20-plus discount, due to a slackening export

demand and a sharp drop in barge freight. Feed wheat is plentiful around the world, and, along with the dollar’s strength, is hampering U.S. grain ex-ports. The Canadian market, a strong demand pull for the past year, has signifi cantly lightened with successful barley and wheat crops.

Going forward, as grain produc-ers put the crop away and distillers grains supplies stay in doubt, we are back to who needs to buy fi rst. This generally favors the seller, but with a signifi cant amount of corn yet to be harvested amid reports of sizeable yields, sellers must take care to ensure they do not place themselves com-pletely in the spot market. Whether scaling up or down, selling will be the prudent feature going ahead. EP

Nov. 14—Concern over possibly slower ethanol demand growth due to slack overall fuel consumption ratch-eted higher through November as once stellar blending economics were soured by fast falling gasoline values.

Chicago ethanol actually held up rather well over the month compared to losses seen elsewhere. Running a couple of cents on either side of $1.65 per gallon for November spot mate-rial at midmonth represented only a nickel or so slippage against near-term deals concluded the previous month. That was little solace to producers still struggling with tender margins tight enough to bring several producers—most prominently the 14-facility op-eration VeraSun—into bankruptcy.

However, the relatively steady na-ture of ethanol prices versus gasoline also tightened blending economics enough to give some pause, especially

at a time when U.S. motorists were cur-tailing fuel use. Over the past month, Chicago spot gasoline prices dropped 32 percent. At $1.65 per gallon, for example, Chicago ethanol—with the federal blend credit included—was offering only 6 cents advantage ver-sus spot gasoline at $1.20 per gallon. At summer’s end, ethanol could boast blending advantages of $1 or more.

The economic benefi ts of blend-ing ethanol have already disappeared at some racks. Conventional unlead-ed selling in Omaha, Neb., at $1.345 per gallon at midmonth was about 4.5 cents cheaper than the $1.90 per gallon rack low posting reported for ethanol, once the federal blend credit was included. EP

For more information, contact OPIS Etha-nol & Biodiesel Information Service at (888) 301-2645.

Regional Ethanol Prices (Monthly averages in cents per gallon)

Regional Gasoline Prices (Monthly averages in cents per gallon)

DDGS Prices ($/ton)

Corn Futures Prices (March corn, $/bushel)

Natural Gas Prices ($/MMBtu)

U.S. Ethanol Production Output (barrels/day)

Cash Sorghum Prices ($/bushel)

REGION

West Coast

Midwest

East Coast

REGION

West Coast

Midwest

East Coast

LOCATIONMinnesota

California*

Chicago

Buffalo, N.Y.

Central Florida*Central Valley

DATENov. 14, 2008

Oct. 21, 2008

Nov. 14, 2007

NYMEX

N. Ventura

Calif. Border

August 2008

July 2008

August 2007

Superior, Neb.Beatrice, Neb.Sublette, Kan.Salina, Kan.Triangle, TexasGulf, Texas

SPOT

184.026

172.539

182.75

SPOT

149.698

151.213

155.513

NOV. 2008125

165

105

120

145

HIGH3.98 1/2

4.35

3.75

NOV. 20086.31

5.90

3.80

647,000*

614,000

434,000

NOV. 14, 20082.952.802.973.102.973.88

BULK TRUCK (rack)

182.04

173.41

- - - -

RACK

177.591

167.234

168.155

OCT. 2008130

172

125

150

150

LOW3.88

4.25

3.57

OCT. 20086.93

6.21

4.90

OCT. 17, 20083.083.033.193.233.154.03

SPLASH/TOP OFF (rack)

209.252

205.744

196.275

RETAIL

282.271

236.48

252.417

NOV. 2008130

185

137

150

170

CLOSE3.97

4.27 3/4

3.71 1/2

NOV. 20077.70

6.73

4.93

NOV. 16, 20073.693.713.473.803.454.30

SOURCE: OPIS

SOURCE: OPIS

SOURCE: CHS Inc.

SOURCE: FCStone

SOURCE: Sorghum Synergies

SOURCE: U.S. Energy Services Inc.

SOURCE: U.S. Energy Information Administration*all-time monthly high


VIEWFROMTHE HILL

Out with the Old, In With the New?For many, a new year brings pledges to lose weight, travel more, get that pro-

motion, go back to school, and many other self-improvement efforts. To be sure, the ethanol industry has a number of goals it has resolved to achieve: increased use of higher level blends, accelerated development of next-generation technology, and the protection of the Renewable Fuel Standard from scurrilous attacks, to name a few.

While tradition suggests that our resolutions should be the focus on the fi rst col-umn of a new year, we at the Renewable Fuels Association are taking a little different approach. Last month we attempted to wax poetic, relating the Chinese astrological symbols to the challenges facing America’s ethanol producers. This month, we just plain want to have some fun.

So, with our tongue fi rmly in cheek, we say out with the old and in with the new.

RFA’s 2009 Out/In List

Out In

President George W. Bush President Barack ObamaE10 E?? (>10 percent)Red Cavaney Jack GerardFood versus fuel Indirect land use changesEPIC Growth Energy9 billion gallon RFS 11 billion gallon RFSE85 pumps Blender pumpsGov. Sarah Palin Gov. Tim PawlentyHydrogen vehicles Flexible-fuel hybridsNo tanks Iraq Pirate protectedAtlanta lawsuit Tesoro lawsuitChairman Dingell Chairman WaxmanFood before fuel Food Price Truth.comVirtual pipeline Midwest ethanol pipelineDuty drawback Ethanol exportsSen. Tom Daschle Secretary Tom Daschle5 percent denaturant 2 percent denaturantCorporate greening Green jobsCriteria pollutants Carbon emissionsDrill baby, drill Grow baby, grow

2008 was a challenging year in many respects. 2009 will be better. We at the RFA are looking forward to work-ing with everyone in the ethanol industry to pave the way for a brighter tomorrow. Happy New Year!

Dinneen

Bob DinneenPresident and CEO

Renewable Fuels Association


RFAUpdate

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National Ethanol Conference draws nearWith a new administration and Congress taking offi ce at a critical point in the ethanol industry’s history,

anticipation is mounting for the Renewable Fuels Association’s 14th Annual National Ethanol Conference. Registration is open for the event, which will be held Feb. 23-25 at the San Antonio Convention Center in San Antonio. This year’s conference is themed “Growing Innovation: America’s Energy Future Starts at Home.”

The event, which drew more than 2,100 to Orlando, Fla., in February 2008, will again feature a general session, breakout sessions and ample networking opportunities. The conference will cover all the major issues impacting the industry, including:

Marketing higher level blends—An in-depth discussion of the pathways to the use of ethanol blends above 10 percent in today’s marketplace.

The path to cellulosic ethanol commercialization—Companies will provide updates on their cellu-losic ethanol projects underway to produce commercial-scale fuel ethanol.

Washington insiders’ roundtable—Inside the Beltway analysts will discuss and hypothesize on the agenda and priorities of the new administration and the 111th Congress.

The impact of life cycle greenhouse gas emissions on ethanol use—Panelists will discuss current approaches to life cycle greenhouse gas analysis of ethanol, the application of life cycle analysis in new regulations, and the importance of these issues to the future growth of the industry.

Downstream retailing: Our customers’ perspective—Ethanol blenders will discuss the factors that lead them to blend ethanol, including its value and the challenges of bringing ethanol to market.

More information is available at www.nationalethanolconference.com.

Report: Industry return on investment nearly 5 to 1A new report released by LECG LLC Director John Urbanchuk touts the benefi ts the U.S. ethanol

industry has provided for the past three decades. Titled “Economic Contribution of the Partial Exemption for Ethanol from the Federal Excise Tax on Motor Fuel: Increased Revenues and Reduced Dependence on Foreign Oil,” the report details the return on investment the industry provides.

The U.S. ethanol industry has generated an estimated $33.4 billion in tax revenue for the federal government and nearly $17 billion of additional tax revenue for state and local governments since 1978, ac-cording to the report. The industry has also reduced America’s tab for imported oil by $97.5 billion, helped reduce farm payments by more than $3 billion per year since 2006, and put approximately $66 billion into the pockets of Americans in the form of increased household income.

By contrast, the federal government has spend $30.4 billion in the form of the partial exemption for ethanol from the federal excise tax on motor fuel.

The report is available at www.ethanolrfa.org.


BIObytesEthanol News Briefs

Ethanol terminal opens in TexasThe Dallas/Ft. Worth Musket Etha-nol Terminal became operational Nov. 1 and immediately began receiving unit trains of ethanol from BNSF Railway Co. Owned by Musket Corp. and built by Strobel Construction, the facility has a storage capacity of 10 million gallons and was designed to unload a 95-car unit train every 24 hours. The terminal will re-ceive shipments exclusively from BNSF Railway’s Ethanol Express, a service cre-ated to move ethanol from a single origin to a single destination.

Penford Products rebounds from fl oodPenford Products Co. in Cedar Rapids, Iowa, resumed production in October at 90 percent of the ethanol plant’s 45 MMgy capacity, pending tank repairs. The plant was off line for more than three months following record fl ooding in the state in June. The plant had begun production only one month before the fl ood caused $47 million in damages, not including lost profi ts.

Clemson receives grant for pilot research plant Clemson University received a $1.2 mil-lion grant from the U.S. DOE in late September that will go toward building a pilot-scale ethanol plant at Clemson’s Restoration Institute in North Charles-ton, S.C. The university, part of the South Carolina Bioenergy Research Col-laborative, plans to research switchgrass, sweet sorghum, trees and other ethanol feedstocks there. Other participants in-clude the DOE Savannah River National Laboratory, South Carolina State Univer-sity, industry incubator SC Bio and other industry partners.

E85 infrastructure increasesTo help further E85 sales in the United States, the National Governors Asso-

continued on page 26

INDUSTRYNEWS

Ethanol plants look to get back on track

An economic downturn in the United States has resonated in virtu-ally every market, including the etha-nol industry, where some existing ethanol producers recently fi led for bankruptcy protection, while others are making moves to avoid such a fate.

Greater Ohio Ethanol LLC fi led for Chapter 11 bankruptcy protection in Ohio Northern Bankruptcy Court in early October. The company halted production at its 54 MMgy corn-based ethanol facility in Lima, Ohio, and accepted bids from potential buyers. In the same month, Gateway Ethanol LLC fi led for Chapter 11 bankruptcy protec-tion, citing a lack of funds to operate its 55 MMgy corn-based ethanol plant in Pratt, Kan. Dougherty Funding LLC, which fi nanced the construction of the plant with a $54.3 million loan, foreclosed on the facility.

Filing for Chapter 11 bankruptcy protec-tion allows a company to reorganize its busi-ness affairs and assets, and ultimately resume operations if it fulfi lls its obligations under its reorganization plan, according to Todd Tay-lor, an offi cer with Minnesota-based law fi rm Fredrickson & Byron. “Going into bankruptcy with a plan ahead of time is better versus a panic without knowing how to make next month’s bank payment,” he said.

One reorganization option involves re-examining feedstock contracts. Renegotiating feedstock costs with farmers may be viable. “That’s what a lot of plants are going to have to look at doing at some point if corn [prices are] the driver taking them down,” Taylor said. “If you fi led for bankruptcy protection, your duty is to maximize the protection of your as-sets, preserve whatever capital is left and come up with a plan to come out of it to hopefully resume operations.”

Corn prices fl uctuated greatly this sum-mer, but corn supply has also been an issue. Glacial Lakes Energy LLC halted production at its 100 MMgy facility in Mina, S.D., and re-duced production at its 100 MMgy plant in

Watertown, S.D., in October because a late corn harvest forced them to obtain corn from further away and pay more for transportation. Interim Chief Executive Offi cer Jim Seurer stressed the decision was only tem-porary until this year’s corn crop came in. In the meantime, parent company Glacial Lakes Corn Pro-

cessors asked its 4,200 shareholders for funds to sustain operations. Its investors approved the request, providing interim funds worth $1 million.

MGP Ingredients Inc. announced it was taking new business initiatives to correct a net loss of $9.9 million in its fourth quarter of fi scal year 2008. The ingredient and distillery products company operates a 78 MMgy etha-nol plant in Pekin, Ill., and a 4 MMgy ethanol facility in Atchison, Kan. It was MGP Ingredi-ents’ fi rst net loss in more than 10 years. “The main culprit was continuing high prices for our principal raw materials, wheat and corn,” said President and Chief Executive Offi cer Tim Newkirk. “However, a closer review of our results shows that we achieved signifi cant sales growth in food-grade alcohol products, as well as in some key categories in specialty in-gredients. To realize our true long-term profi t potential, we continue to take additional steps to strengthen the organization. The latest of these includes lowering our operating costs through the restructuring of our business with greater focus on those areas that can generate the highest returns while also further reducing risk across the enterprise.”

A lack of fi nancing has affected proposed ethanol plants, as well. Alternative Energy Sources Inc., a publicly owned ethanol compa-ny based in Kansas City, canceled plans to pur-sue ethanol projects in Kankakee and Green-ville, Ill., and Ogden, Iowa. Denver-based LiquidMaize LLC delayed development of a proposed 11 MMgy ethanol plant in Lamar, Colo., due to unfavorable market conditions.

—Bryan Sims

Taylor


INDUSTRYNEWS

Obama to bring energy policy to White House

On Jan. 20, President-elect Barack Obama will be offi cially sworn in as the leader of the United States. His win over Republican candidate Sen. John McCain on Nov. 4 concluded a longer-than-usual cam-paign that featured several highlights for the ethanol industry. Once Obama takes offi ce, however, many in the ethanol industry may be wondering: How soon will we see the re-sults of his new energy policy?

Obama and Vice President-elect Joe Biden’s campaign platform included aggres-sive measures to increase energy indepen-dence and security for the United States. Obama said he would like to see imports of oil from the Middle East and Venezuela elim-inated in 10 years, and the implementation of a low-carbon fuels standard that would reduce carbon in U.S. transportation fuels by 10 percent by 2020. He also intends to increase the 36 billion gallons of renewable fuels required to be consumed in the United States by 2020 to 60 billion gallons by 2030. By 2050, he aims to reduce greenhouse gases by 80 percent. This would be done in part by implementing an economy-wide cap-and-trade program. It would require all pollution credits to be auctioned, with proceeds going to investments in a clean energy future, habi-tat protections and rebates. The president-elect also plans to create 5 million new jobs by investing $150 billion over the next 10

years—$15 billion per year—to catalyze pri-vate efforts to build a clean energy future.

During the campaign, the country’s energy future was a hot-button issue, and both candidates’ actions and words indicated the direction the country may take. McCain expressed his disdain for ethanol subsidies and said he would repeal them. Meanwhile, members of Obama’s campaign party ex-pressed support for renewable fuels by tour-ing Range Fuels Inc., a cellulosic ethanol pi-lot plant in Denver that uses wood waste as a feedstock. The company is also building a demo-scale facility in Soperton, Ga.

Obama began assembling his cabinet shortly after he was elected. At press time, former Sen. Tom Daschle, an ethanol sup-porter, had accepted the lead position of the Department of Health & Human Service.He named Rep. Henry Waxman, D-Calif., as chairman of the House Energy and Com-merce Committee, replacing Rep. John Din-gell, D-Mich.

On Obama’s win, the Renewable Fuels Association stated, “On behalf of America’s grain and cellulosic ethanol producers, we congratulate President-elect Obama, Vice President-elect Biden and all those elected to Congress.”

—Ron Kotrba

=Republican =Democratic2008 U.S. Presidential Election Results


ciation announced Oct. 15 that Gen-eral Motors Corp. is partnering with 10 states—Alabama, Florida, Idaho, Kan-sas, Michigan, Missouri, Nebraska, Ohio, Tennessee and Wisconsin. GM will pro-vide technical assistance, optimize E85 supply from ethanol producers, and use its network of dealers, plants and offi ces to promote E85 usage. In mid-October, the National Ethanol Vehicle Coali-tion announced that more than 1,800 U.S. retail fuel stations now sell E85. In particular, during the fi rst three quarters of 2008, 20 fuel retail stations began of-fering the blend in Iowa. More E85 was sold in the state during the fi rst half of 2008 than was sold in all of 2007. The state’s 100th E85 station opened in late November.

Grassley asks GMA to lower food pricesSen. Chuck Grassley, R-Iowa, has writ-ten a letter to the Grocery Manufactur-ers Association, asking the group to urge its members to lower food prices in light of falling commodity prices. The GMA caused controversy in the spring of 2008 by starting a public relations campaign blaming ethanol for rising food prices.


continued from page 24


INDUSTRYNEWS

EthosGen develops ethanol feedstock greenhouse for military

EthosGen LLC, a business venture incu-bated by King’s College in Wilkes-Barre, Pa., has secured a $1.2 million U.S. Department of Defense contract to study the feasibility of using greenhouses at or near an ethanol plant to grow a sorghum-family hybrid crop for the production of ethanol.

According to Greg Emery, a King’s Col-lege faculty member and an EthosGen busi-ness partner, the goal of the project is to fi nd a way to reduce the cost of procuring, transporting and protecting military fuel sup-ply chains. “One of the important aspects of using a greenhouse means that you can put it just about anyplace in the world (including nonarable land),” he said. “The majority of the transportation costs that are involved with growing a crop and taking it to a centralized ethanol plant, producing it, and then shipping it out hundreds or thousands of miles in dif-ferent directions can largely be overcome if you’re able to grow the crop right at the source where you’re going to blend it into gasoline.”

Emery said EthosGen has been working with Cornell University in Ithaca, N.Y., to de-velop a sorghum-family hybrid that maximizes the amount of fermentable juice that can be extracted from the plant when it’s crushed. The company currently has two seven-acre green-houses growing the potential ethanol feed-

stock at Van Hoekelen Greenhouses Inc. in McAdoo, Pa. He said the company is working with greenhouse manufacturer U.S. Global Re-sources and Merle Jensen, a plant sciences re-searcher at the University of Arizona who has devoted his career to controlled environment agriculture, to design a greenhouse that will be tailored specifi cally for EthosGen.

The company plans to build two green-houses, one in a cool climate and one in a warm climate in locations yet to be determined, ac-cording to Emery. He added that EthosGen is seeking fi nancial support from the state of Pennsylvania.

—Ryan C. Christiansen

EthosGen LLC’s sorghum-family hybrid feedstock is grown at Van Hoekelen Greenhouses Inc. in McAdoo, Pa.

PH

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INDUSTRYNEWS

Indirect land use policy debate heats upAs part of the U.S. EPA’s imple-

mentation of the renewable fuels standard as mandated by the Energy Independence & Se-curity Act of 2007, the pos-sibility of indirect land use change measurement could become reality, and numer-ous groups aren’t hesitating to make their opinions on the mat-ter known.

An example of indirect land use change would be the destruction of rainforests in or-der to clear more land for crop production to meet greater demand, in this instance a crop used in biofuels production. Opponents of such a policy argue that there are no agreed-upon methods to compute land changes as an indirect result of biofuels production and that premature inclusion of such changes in a federal policy will stunt the growth of a young industry. Proponents say that proper calculations of indirect land use changes will result in the use of only the best and most sustainable types of feedstocks.

On Oct. 23, Jim Greenwood, president and chief executive offi cer of the Biotech-nology Industry Organization, submitted a letter to the EPA stating that the organi-

zation’s 1,200 members support the measurement of direct emissions,

but that indirect measurements would be premature. “If the proposed rule contains nu-merical results from fl awed models published prior to the maturing of modeling tools, it

could have a range of perverse effects, including discouraging

and chilling investment and curb-ing U.S. production and use of all biofuels,” Greenwood wrote.

Several scientists and biotechnology companies, including Ceres Inc. and Mendel Biotechnology Inc., also wrote to the EPA and said that the requirement to measure in-direct land use changes is “currently impos-sible.”

In contrast, a letter submitted by a co-alition of environmental groups and scien-tists stated that indirect land use change is the “ripple effect” resulting from converting land from food production to fuel produc-tion. The group, consisting of the Environ-mental Defense Fund, the National Wildlife Federation, the Natural Resources Defense Council and others, added that the inclusion of indirect changes would help determine

the least environmentally detrimental feed-stocks, thus strengthening the industry over-all. “Properly done, accounting for indirect land use will improve the ability of investors and developers to distinguish promising ap-proaches from dead ends,” the letter stated.

The EPA testifi ed before a senate sub-committee in early 2008 that it would need to push back the date for its fi nal renewable fuels standard ruling from January 2009 until later in the year due to the complex issues being covered in the policy. At press time, no time line had been set.

The California Air Resources Board is also considering indirect land use change measurements as part of its Low Carbon Fuel Standard. Bruce Dale, a chemical en-gineering professor and associate director of the Offi ce of Biobased Technologies at Michigan State University, spoke out against the CARB policy. “It makes American fuel producers responsible not only for their own actions … but for the actions of people liter-ally on the other side of the world,” he said, adding that a policy of that magnitude has never been imposed on any industry.

—Kris Bevill



Corn and other commodity prices have fallen by 50 percent June, according to the letter, while food prices have contin-ued to rise.

Tesoro fi les suit against CARBTesoro Refi ning & Marketing Co., an op-erating subsidiary of San Antonio-based Tesoro Corp., fi led a lawsuit against the California Air Resources Board to pre-vent the implementation of a new regu-lation that would require refi ners such as Tesoro to blend more ethanol into gas-oline. CARB ruled in August that Cali-fornia refi ners increase the amount of crop-based ethanol in gasoline from the current level of 5.7 percent to as much as 10 percent by December 2009.

EPIC, Poet give FFV, E85 to Minnesota familyThe Ethanol Promotion and Informa-tion Council, along with ethanol produc-er Poet LLC, teamed up with the popular ABC television show “Extreme Make-over: Home Edition” to award the Dirk Devries family of Albert Lea, Minn., with a fl exible-fuel 2009 Ford F-150 crew cab



INDUSTRYNEWS

Studies remeasure corn-based ethanol’s impact, potential

Corn-based ethanol production has often been and will likely continue to be scrutinized. Recently, two studies commissioned by the Illi-nois Corn Marketing Board updated corn-based ethanol’s energy balance and evaluated global corn supply, while another study examined what would happen if corn-based ethanol plant con-struction levels off.

To determine ethanol’s energy balance, Stef-fan Mueller, principal research economist of the Energy Resources Center at the University of Il-linois at Chicago, conducted a life cycle analysis of Illinois River Energy LLC, a 50 MMgy etha-nol plant near Rochelle, Ill. Using surveys of local corn growers and USDA data, he concluded the facility had 21 percent less of a global warming impact (GWI) than the standard value for exist-ing ethanol plants, and 40 percent less GWI than gasoline from petroleum. “We wanted to dig deeper and actually survey the corn producers who are providing corn to the plant, which led us to get involved in the land-use issue,” said Rod-ney Weinzierl, the board’s executive director. “We think that as you get outside the corn industry, a lot of people may not realize we are continuing to increase yields and use fewer inputs to do it.”

Ross Korves, economic policy analyst at ProExporter Network, examined the ability of

U.S. corn growers to supply adequate grain sup-plies to the feed and fuel industries from 2016 to 2030. Corn yields steadily increased over the past 60 years as fertilizers, pest control chemicals and genetically modifi ed corn varieties were ad-opted by corn growers. By tracking average yield growth since 1990, Korves concluded that by 2030, corn farmers could support the produc-tion of 36 billion gallons of ethanol per year on the same number of acres, plus meet increased demand for feed, food and industrial products.

Robert Wisner, a biofuels economist for the Agricultural Marketing Resource Center at Iowa State University, also explored future corn supply, except he used the assumption that corn-based ethanol production would plateau in the next few years. He found that a leveling off of etha-nol production plus increased corn yields could ease corn supply tightness by the 2011-2012 mar-keting year. Since ethanol demand is expected to increase due to the federal renewable fuels stan-dard. He concluded that production capacity, in-cluding plants currently under construction, will fall 15 percent short of the target for corn-based ethanol in 2015. This could raise ethanol prices and lead to an increased use of corn for ethanol.

—Jerry W. Kram


INDUSTRYNEWS

Trash-to-ethanol projects progressUsing municipal solid waste (MSW) as a

feedstock for ethanol production continues to be a viable option, particularly for two recent projects—one domestic and the other inter-national.

St. Louis-based CleanTech Biofuels Inc. announced the successful testing of process technology developed at the University of California, Berkeley that will use nitric acid, rather than sulfuric or hydrochloric acid, to hydrolyze cellulosic material for the produc-tion of ethanol and other fuels from biomass fi ltered from MSW. It was the fi rst milestone in CleanTech’s mission to validate and com-mercialize the waste-to-ethanol technology that it purchased from the university under an exclusive worldwide sublicense agreement. Under the agreement, CleanTech is required to make payments to HFTA Inc., a company formed by the developers of the technology, when certain development milestones regard-ing validation and commercialization are met. “The core of this technology is that we take garbage from the curbside and separate it into component parts to develop a homogenous, cellulosic feedstock that looks much like a mulch. We already know this can be mixed with coal and burned at a power plant.”

Kime said now that the fi rst round of testing is complete, the technology will be demonstrated at a pilot plant, likely in rural Illi-

nois. “There is already a built-in infrastructure for delivering and collecting garbage, and we are expanding the size and scope of the demonstration plant that we had initially con-ceived,” he told EPM. The facility is expected to process approximately 40 to 50 tons of local MSW, wood and agricultural waste per day. According to Kime, CleanTech is hoping to partner on this project with the University of Illinois, which is developing experimental crops such as miscanthus, and the USDA.

“We think one of the principle problems with the development of the cellulosic etha-nol industry is the lack of an infrastructure to collect and hold the biomass,” Kime said. “We believe our technology for processing MSW can provide a backbone for this. We are proving that biomass can be profi tably turned

with our technologies—or others that present themselves—into cellulosic ethanol or biofu-els.”

He added that CleanTech hopes to com-plete the pilot plant by the end of 2009.

The company also recently completed a merger with Biomass North America Licens-ing Inc., now its wholly owned subsidiary, to obtain the exclusive rights to use a proprietary technology that produces a solid-fuel cellulos-ic biomass fi ltered from municipal solid waste. CleanTech is currently implementing the tech-nology at a commercial waste transfer station in Chicago and plans to market the solid-fuel biomass to companies for multiple purposes, including electricity production in existing coal-fi red power plants.

In a similar project across the Atlantic Ocean, Westerman, England-based Reclaim Resources Ltd. secured a $21 million contract with Philippine province Zambales to supply and install its MSW-to-ethanol technology and system north of Manila. The facility is expect-ed to process approximately 150,000 metric tons of MSW into 8 MMgy of ethanol, and possibly be expanded to 300,000 metric tons and 16 MMgy. Construction of the facility is slated to begin in 2009, followed by start-up by the end of the year.

—Anna Austin

CleanTech’s MSW-to-ethanol technology produces ethanol and other fuels from biomass in municipal solid waste.

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pickup and a year’s supply of E85, valued at $6,000. The family will be able to use its E85 fuel card at the local Freeborn County Co-op Oil Co. At press time, the episode was slated to air Dec. 7.

Agassiz Energy lawsuit dismissedA lawsuit fi led in federal court by Agassiz Energy LLC against Wanzek Construc-tion and its partners was dismissed Nov. 5. Defendant Teton Industrial Group motioned to dismiss for lacking diversity jurisdiction, and Agassiz Energy conced-ed, asking the court to dismiss. “Diversity jurisdiction” covers multiple parties from different states. Agassiz fi led the lawsuit because it claimed the defendants, under the name Bio-Renewable Group, misrep-resented their ethanol industry experi-ence. EP


INDUSTRYNEWS

Novel lignocellulosic ethanol process operates in India

Perth, Australia-based Mission NewEnergy Ltd. has joined the list of cellulosic ethanol de-velopers. The company announced in November that its pilot facility, built through a joint venture with a scientifi c team in India, has successfully produced cellulosic ethanol from agricultural wastes using a novel conversion process. Located in northern India, the pilot plant has a batch pro-cess capacity of 10,000 gallons per year.

Mission NewEnergy is focusing on ligno-cellulosic agricultural waste containing complex C5 and C6 sugars, lignin, and high levels of silica. The company’s technology uses a unique sequence of certain conventional and patent-pending chemical and mechanical processes, said James Garton, head of corporate fi nance, merg-ers and acquisitions at Mission NewEnergy. The company said it achieves 100 percent separation of both cellulose and hemicellulose from lignin, which permits easier and complete hydrolysis of cellulose and hemicellulose into C5 and C6 sugars. The process achieves the separation at low heat and low pressure without enzymes or high-concentration acids, he explained. In addi-tion, the chemicals used in the process can be re-covered to remove any hazardous material from waste material, and the extraction of silica from the lignin improves the effi ciency of lignin for use as a feedstock in energy production.

“While other technologies have been able to produce bio-ethanol from biomass, they have suffered from a low conversion rate of raw ma-terial to bio-ethanol or a high conversion cost,” said Mission NewEnergy Managing Director Nathan Mahalingam. “These high production costs make other projects not commercially vi-able. None of these challenges exist within Mis-sion’s technology, and we believe this positions Mission to become one of the few successful next-generation ethanol producers.”

—Susanne Retka Schill

This pilot plant in northern India has demonstrated a new low-heat, low-pressure cellulosic ethanol pro-cess developed by Mission NewEnergy and a team of Indian scientists.

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INDUSTRYNEWS

Kinder Morgan offers ethanol pipeline; others may follow

Kinder Morgan Energy Partners LP began offering commercial ethanol service along the company’s 16-inch pipeline run-ning between Tampa and Orlando, Fla., in November. The transportation policy for ethanol in the Central Florida Pipeline be-came effective Nov. 17, with the fi rst com-mercial batch of ethanol fl owing within seven days. Ethanol shipments will continue once per week on a regular schedule.

Jim Lelio, Kinder Morgan’s director of business development and manager of national renewable fuels, said the company will keep resources focused on the Central Florida Pipeline for now. “We continue to monitor and improve the process for mov-ing ethanol on this pipeline system,” he said.

According to Lelio, Kinder Morgan’s fi rst step in expanding ethanol shipments into other geographic areas will be compiling a prioritized list that matches the company’s existing assets with commercial demand. “Right now, we are very encouraged with central Florida,” he said.

While Lelio said he was unsure when Kinder Morgan’s next ethanol pipeline proj-

ect would be developed, he said the Central Florida Pipeline will serve as a model as the company undertakes those projects. “Each pipeline system has its own challenges,” he noted. “We hope we will have success in oth-er places, too.” The Central Florida Pipeline ethanol project took approximately 18 to 24 months to develop.

Other companies are moving forward with plans for ethanol pipelines, as well. Georgia-based Colonial Pipeline Co. is studying the feasibility of introducing etha-nol into pipeline shipments using geographic information system technology software. The software, provided by Environmental Systems Research Institute Inc., provides a framework for understanding different ele-ments of the study based on geographic lo-cation and relationship. Colonial Pipeline is using the software to fi nd the best opportu-nities for connecting producers to pipelines, terminals and retail gas stations.

In addition, All Fuels & Energy Co. an-nounced it has entered into agreements with two privately held infrastructure technology fi rms with the purpose of constructing multi-

purpose pipelines capable of transporting all alternative fuels.

Recent legislation has improved the fea-sibility of transporting ethanol by pipeline, making it likely that additional biofuel pipe-line projects will be developed. Language included in the Emergency Economic Sta-bilization Act of 2008 revamps a provision in the tax code that had previously blocked publicly traded partnerships (PTP) from be-ing able to claim income generated from bio-fuels as qualifying income.

Under the old tax code, PTPs such as Kinder Morgan had to earn 90 percent of their income from the exploration, transpor-tation, storage or marketing of depletable natural resources, including oil, gas and coal. If this condition was not met, the PTP would be treated as a corporation for tax purposes. The change to the tax code now allows PTPs to earn qualifi ed income from the transport, storage or marketing of any renewable liquid fuel approved by the U.S. EPA.

—Erin Voegele


Whether you are outfitting an existing or new ethanol plant,

Metso Automation’s NELES R-Series control valves provide up to

three and a half times the flow capacity of an eccentric plug valve,

so smaller valves can be specified.And small is good when

it leads to huge cost savings. Up to a $25K

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Small valves can saveyou a small fortune.


New Project Project Complete Project Expansion Expansion Complete

espite challenging economic times affecting both operat-ing and proposed plants, fi ve were recently able to com-plete their respective projects on schedule.

Cardinal Ethanol LLC offi cially started production at its 100 MMgy corn-based ethanol plant in Union City, Ind.,

in early November. Built and designed by Fagen Inc. and ICM Inc., the $150 million facility will take in approximately 36 million bushels of local corn annually. The facility is Indiana’s 12th ethanol plant to come on line. The state is the fi fth-largest ethanol producer with a total annual capacity of approximately 1.1 billion gallons.

Ethanol Grain Processors LLC, owned by Green Plains Renew-able Energy Inc., offi cially started up its 110 MMgy plant in Obion, Tenn., in late November. The facility is projected to produce approxi-mately 350,000 tons of distillers dried grains per year. Green Plains Renewable Energy acquired the plant in August via a merger agree-ment secured with VBV LLC, giving it a combined production capac-ity of 330 MMgy.

Cilion Inc. completed construction of its 55 MMgy corn-based ethanol plant in Keyes, Calif., in November, as well.

Hawkeye Renewables started up its two 110 MMgy ethanol plants in Shell Rock and Menlo, Iowa, in late October, increasing the company’s combined production capacity—all in Iowa—to 435 MMgy.

Two plants were added to this month’s list. Abengoa Bioener-gy Corp. began preliminary construction of two 88 MMgy plants in Posey County, Ind., and Madison, Ill. The company confi rmed that both projects are fully permitted and funded. General contractors were expected to arrive on-site in late November.

—Bryan Sims

Plants Come On Line During Challenging Economic Times

To provide updates to this list, contact Bryan Sims at (701) 738-4950 or [email protected].

D

Ethanol Plant Construction

Location General contractor Process technologyCapacityFeedstockEthanol marketerDistillers grains marketerCarbon dioxide marketerBroke groundTarget start-up date

Madison, Ill.Abener Energía SAVogelbusch USA Inc.88 MMgycornAbengoa Bioenergy TradingAbengoa Bioenergy TradingundeclaredMarch 2008fourth quarter 2009

Abengoa Bioenergy of Indiana Abengoa Bioenergy of Illinois

Synopsis of progressThis project is fully permitted and funded. The site was ready for the general contractor to arrive on-site in late November.

Synopsis of progressThis project is fully permitted and funded. The site was ready for the general contractor to arrive on-site in late November.

Representing 2.65 Billion Gallons Annually


Posey County, Ind.Abener Energía SAVogelbusch USA Inc.88 MMgycornAbengoa Bioenergy TradingAbengoa Bioenergy TradingundeclaredMarch 2008fourth quarter 2009

Cardinal Ethanol LLC

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Columbus, Neb.undeclared undeclared275 MMgycornArcher Daniels Midland Co.undeclaredundeclaredJuly 2007third quarter 2009


Mt. Vernon, Ind.Kiewit Energy Co.Delta-T Corp.113 MMgycornAventine Renewable Energy Inc.Aventine/Consolidated Grain and BargeundeclaredSeptember 2007fourth quarter 2009

Location Design/builder Process technologyCapacityFeedstockEthanol marketerDistillers grains marketerCarbon dioxide marketerBroke groundTarget start-up date

Clearfi eld, Pa.Fagen Inc. ICM Inc. 110 MMgycornBionol Clearfi eld LLCLand O’LakesN/AFebruary 2008January 2010


Cedar Rapids, Iowaundeclaredundeclared275 MMgycornArcher Daniels Midland Co.undeclaredundeclaredJune 2007fi rst quarter 2010

Archer Daniels Midland Co.

Aventine Renewable Energy-Aurora West LLC

Aventine Renewable Energy-Mt. Vernon LLC

Appomattox Bio Energy

Bionol Clearfi eld LLC

Archer Daniels Midland Co.

Synopsis of progress Aventine announced a six-month suspension of this plant’s construc-tion in November.

Synopsis of progressN/A

Synopsis of progressConstruction continues. Target start-up date was pushed back from the fi rst quarter of 2009. No further information was available at press time.

Synopsis of progressConstruction continues. No further information was available at press time.




Hopewell, Va.Agra Industries Inc.Katzen International Inc. 65 MMgybarleyOsage Inc.N/AN/AOctober 2008second quarter 2010


Aurora, Neb.Kiewit Energy Co.Delta-T Corp.113 MMgycornAventine Renewable Energy Inc.Aventine Renewable Energy Inc.undeclaredSeptember 2007June 2009


Location General contractor Process technologyCapacityFeedstockEthanol marketerDistillers grains marketerCarbon dioxide marketerBroke groundStart-up date

Keyes, Calif.Harris Construction Praj Industries Ltd.55 MMgycornEco-Energy Inc.Western MillingN/AJuly 2006November 2008


Goodland, Kan.JMC Engineering LLC/Agri-SystemsJMC Engineering LLC/Agri-Systems20 MMgycornundeclaredundeclaredN/AJune 2006fi rst quarter 2009

Cilion Inc. E Caruso LLC

Synopsis of progressThis plant began grinding corn in mid-November. Congratulations Cilion Inc.!



Raeford, N.C.Biofuels Design/Clean Burn Fuels LLCKatzen International Inc.60 MMgycornundeclaredHarris Crane Inc.Airgas Inc.May 2008July 2009

Clean Burn Fuels LLC


Location Design/builder Process technologyCapacityFeedstockEthanol marketerDistillers grains marketerCarbon dioxide marketerBroke groundStart-up date

Union City, Ind.Fagen Inc. ICM Inc.100 MMgycornMurexCHS Inc.N/AFebruary 2007November 2008

Cardinal Ethanol LLC

Synopsis of progressThis plant offi cially began production Nov. 3. Congratulations Cardi-nal Ethanol LLC!

Project Complete

Project Complete



Johnstown, OntarioSNC-Lavalin GroupICM Inc. 200 MMly (53 MMgy)cornGreenField EthanolCommercial AlcoholsundeclaredOctober 2006December 2008

GreenField Ethanol

Synopsis of progressConstruction is approximately 97 percent complete. The fi rst ship-ment of corn has arrived on-site. Workers were fi ne-tuning mechani-cal systems at press time.


Menlo, IowaFagen Inc. ICM Inc. 110 MMgycornHawkeye Gold LLCundeclaredN/AJuly 2007October 2008

Hawkeye Renewables

Synopsis of progressThe company announced that this plant is offi cially on line. Congratu-lations Hawkeye Renewables!


Obion, Tenn.Fagen Inc. ICM Inc. 100 MMgycornAventine Renewable Energy Inc.undeclaredN/ADecember 2006November 2008

Ethanol Grain Processors LLC

Synopsis of progressThis plant began grinding corn Nov. 12. Congratulations Ethanol Grain Processors LLC!

In the biofuels industry, you make decisions every day that

can help — or hinder — your future success. At Kennedy

and Coe, we can help ensure that you capitalize on every

opportunity. Our knowledge and experience in the industry

can help you identify opportunities that can signifi cantly

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The “e” mark and the “stylized e” are registered service marks of the Ethanol Promotion and Information Council. Used with permission.

SOMETIMES, CHOOSING THE WRONG PATH CAN COST A LOT MORE THAN YOU THINK.

KAC.10442_EPM_Dir_7.5x3.375_4C 1 7/24/08 11:08:47 AM

Project Complete

Project Complete

Ethanol Grain Processors LLC

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Havelock, OntarioProfab International Ltd.Delta-T Corp.80 MMly (21 MMgy)cornundeclaredThompson’s Ltd.undeclaredOctober 2007February 2009

Kawartha Ethanol Inc.

Synopsis of progressAll buildings are erected. No further information was available at press time.


Lawler, IowaFagen Inc. ICM Inc. 100 MMgycornGreen Plains Renewable Energy Inc.CHS Inc.N/AMay 2007March 2009

Homeland Energy Solutions LLC

Synopsis of progressBins are complete, and rail is approximately 75 percent complete. Work on water treatment plant is ongoing. Administration building exterior is complete, and interior work is underway. All distillation col-umns are erected.


Lamberton, Minn.Fagen Inc. ICM Inc. 55 MMgycornRenewable Products Marketing GroupCHS Inc.N/ANovember 2007May 2009

Highwater Ethanol LLC

Synopsis of progressConcrete grain silos, tank farm and cooling tower are complete. All process tanks are placed. Construction of water treatment building is ongoing. Rail construction is approximately 98 percent complete. Electrical substation is ready to be fi red up, and natural gas lines are being placed.


Shell Rock, IowaFagen Inc. ICM Inc. 110 MMgycornHawkeye Gold LLCundeclaredN/AJuly 2007October 2008

Hawkeye Renewables

Synopsis of progressThe company announced that this plant has come on line ahead of schedule. Congratulations Hawkeye Renewables!

Project Complete



Atkinson, Neb.Delta-T Corp.Delta-T Corp.44 MMgycornEco-Energy Inc.Frahm and DeitloffN/AJune 2006December 2008

NEDAK Ethanol LLC

Synopsis of progressWelding and fortifi cation of various tanks were in progress at press time. No further information was available.


Gibson City, Ill.Fagen Inc. ICM Inc. 100 MMgycornEco-Energy Inc.Ag Motion Inc.N/AOctober 2007March 2009

One Earth Energy LLC



Longview, Wash.Makad Construction Corp.Lurgi Inc.55 MMgycornU.S. Ethanol LLCLansing Trade GroupundeclaredNovember 2006second quarter 2009

Northwest Renewable LLC



Lacassine, La.Praj Industries Ltd. Louisiana Green Fuels LLC25 MMgysugarcane/sweet sorghumundeclaredN/AundeclaredApril 2008mid-2009

Louisiana Green Fuels LLC

Synopsis of progressComponents for the plant’s distillation process are on-site. The col-located syrup mill is operating; it’s expected to supply extracted sugar from sugarcane as a feedstock once the ethanol plant is operational.



Soperton, Ga.undeclaredundeclared10 MMgywoody biomassundeclaredN/AN/ANovember 2006fi rst quarter 2010

Range Fuels Inc.

Synopsis of progressExcavation work continues. No further information was available at press time.


Merill, IowaDelta-T Corp.Delta-T Corp.50 MMgycornC&N Cos.Plymouth Energy LLCundeclaredMay 2007November 2008

Plymouth Energy LLC



Hereford, TexasPanda Ethanol Inc.Thermo-Kinetics/Lurgi Inc.105 MMgycornAventine Renewable Energy Inc.Panda Ethanol Inc.undeclaredSeptember 2006fi rst quarter 2009

Panda Hereford Ethanol LP

Synopsis of progressStatus of project is being evaluated after general contractors were switched. Construction is approximately 98 percent complete. No fur-ther information was available at press time.

Plymouth Energy LLC

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Casselton, N.D.Wanzek Construction Inc./Valley Engineering

Vogelbusch USA Inc. 120 MMgycornGreen Plains Renewable Energy Inc.Verde Bioproducts Inc.N/AMay 2007December 2008

Tharaldson Ethanol LLC

Synopsis of progressCorn has arrived on-site. Equipment, tanks, valves, and automated computer systems are being calibrated and commissioned. This plant will operate at approximately 70 percent capacity once operational.


Council Bluffs, IowaICM Inc.ICM Inc. 110 MMgycornLansing Ethanol Group BungeN/ANovember 2006December 2008

Southwest Iowa Renewable Energy LLC

Synopsis of progressDistillers dried grains area is complete. At press time, the fi nal stages of electrical work in the energy center were being completed. Work on steam line was ongoing. Finishing touches on rail loop were in progress.


Tucumcari, N.M.APS/United Stainless Process Technology

United Stainless Process Technology

10 MMgycorn/miloundeclaredundeclaredN/AOctober 2007early 2009

Route 66 Ethanol LLC



Janesville, Minn.Fagen Inc. ICM Inc. 110 MMgycornVeraSun Energy Corp.VeraSun Energy Corp.undeclaredJanuary 2007fourth quarter 2008

VeraSun Janesville LLC

Synopsis of progressVeraSun announced that it has indefi nitely delayed the start-up of this plant due to its Chapter 11 bankruptcy fi led in October. No further details were available at press time.


w w w . f u e l e t h a n o l w o r k s h o p . c o m

J u n e 1 5 – 1 8 , 2 0 0 9

D e n v e r C o n v e n t i o n C e n t e rD e n v e r , C o l o r a d o, USA


:DR

IVE

Breaking Through the Blend WallBy Toni Nuernberg

he path to energy in-dependence is not for the faint of heart. In the words of President Woodrow Wilson, “If

you want to make enemies, try to change something.”

The ethanol industry knows this lesson all too well after a tumul-tuous 2008. Our foes spent tremen-dous sums of money attempting to discredit us. But we never let a lie go unchallenged, and as we begin the New Year our critics realize that we are a force to be reckoned with.

However, challenges remain, and we must confront them head on. Our industry has faced a triple economic threat posed by fl uctuat-ing ethanol prices, a credit crunch and volatile commodity prices. While there is uncertainty, there is also reason for optimism. Corn prices have retreated, and in sur-vey after survey a large majority of Americans continue to support cleaner sources of energy.

With production outpacing de-mand, it will be crucial for the blend wall to be increased. The current regulatory cap is 14 billion gallons per year. If E10 was blended into all U.S. gasoline it would require something closer to 12 billion gal-lons per year. The blend wall cre-ates two problems. First, it makes it diffi cult to reach the goal of 36 bil-lion gallons of renewable fuels use that was set in the 2007 energy bill. Second, by holding down prices, it stymies growth—not just for corn-based ethanol, but also cellulosic ethanol.

The Renewable Fuel Standard (RFS) program not only provides a foundation for the industry but the promise of long-term stability. How-ever, the 10 percent regulatory cap on the amount of ethanol that can be blended into gasoline places the RFS at risk. The industry is seek-ing approval for mid-level blends to increase the regulatory cap.

Preliminary studies on in-creased blends have proved prom-ising. Test results on vehicles have revealed that tailpipe emissions were similar to E10 blends, and informal observations proved that drivability was unchanged.

While E85 infrastructure has yet to meet the demand of fl exi-ble-fuel vehicle (FFV) owners, the Ethanol Promotion and Information Council has helped lay the ground-work for increasing the regula-tory cap on the amount of ethanol blended into ordinary pumps.

New blender pumps that offer drivers varying levels of ethanol are becoming common at fuel retailers in the Midwest. The ability of con-sumers to choose higher blends of ethanol hinges on the availability of blender pumps, particularly as the number of FFVs continues to increase. The ethanol industry’s blender pump program supports the installation of fuel dispensers that offer a combination of at least two mid-range blends such as E20, E30 or E40, in addition to E85. The program got its start in South Da-kota with help from the South Da-kota Corn Utilization Council. The state now has 45 blender pumps. Active blender pump programs are also underway in Kansas, Missouri, Iowa and Minnesota.

Our ro-bust grain-based etha-nol industry is setting the stage for the coming g e n e r a t i o n of advanced biofuels. The industry is fueling research into technologies that will improve the production of cellulosic ethanol from feedstocks such as switchgrass, crop waste and other renewable biomass. However, the incentive to push for these new technologies may be at risk if we cannot push for higher blends at the pump.

In support of these goals, EPIC plans to join the recently an-nounced Growth Energy, a nonprofi t organization comprised of ethanol producers and industry partners. The public policy organization aims to infl uence elite opinion makers inside the Beltway and increase consumer awareness nationally with public relations and marketing initiatives. Now is a critical time to push the cause of alternative fuels.

Toni Nuernberg is the executive di-rector of the Ethanol Promotion and Information Council. Reach her at [email protected] or (402) 932-0567.

TNuernberg

®, TM, SM Trademarks and service marks of Pioneer Hi-Bred.All purchases are subject to the terms of labeling and purchase documents.© 2008 PHI INDSL010514P238AVC

Today Pioneer is driving new opportunities to help industry become

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To learn more about these products and services and our

commitment to American agriculture, visit www.pioneer.com/enduse


:LEGAL PER

SPECTIVES

Understand Your Carbon Credits Contracts

By James L. Pray

he recent election may clear the way for new greenhouse gas emissions legislation. This legislation may also embolden efforts

already underway to convince ethanol producers to sign complex long-term contracts to trade their carbon credits. Ethanol producers should consider several important attributes of carbon credit contracts before signing. This article discusses these issues.

Brokerage or sale? Carbon trading contracts offered to ethanol producers take very different ap-proaches. Some of the contracts are modeled after conventional broker-age service agreements. After the credit is issued, the ethanol and trad-ing companies split the net revenues according to the agreed formula and depending on the type of credit sold. Other contracts take the “property” approach. Once the credit is convert-ed into a tradable security it is owned by the carbon trading company. The producer is paid a portion of the pro-ceeds when the security is sold. In the end, either approach can accomplish the same thing. However, if a party to the carbon trade fails, a producer may be in a better legal position as an owner of the credit if it is trying to get its credit back.

Contract length: Some carbon credit brokerage contracts have 10-year terms. Given the uncertainty surrounding the coming legislative de-

bate over how carbon emissions will be regulated, most ethanol producers should avoid a decade-long contract.

Commissions: The commis-sions in the contracts are much higher than what are usually encountered in a commodity business, sometimes as high as 50 percent. Because this is a fairly new and evolving market, it is important for companies to carefully review these rates, especially if the contract is long term. Be sure to shop around.

Ownership of carbon offsets: Marketers of carbon credits from the ethanol industry argue that ethanol is “carbon negative” as the ethanol replaces fossil fuels that would other-wise enter the atmosphere. Until leg-islation or the free market adds some clarity, some carbon traders suggest that they are unlikely to buy or sell this kind of carbon credit from an ethanol producer. They argue that it is not the producer that generates the credit but the consumer or distributor who makes the decision to buy or sell the product. It is possible that future leg-islation may clear up this uncertainty. Until then, producers may want to an-ticipate future regulatory changes in the contract.

Carbon reduction technology: The sulfur dioxide and nitrogen oxides emissions trading market is a model for how ethanol producers may gen-erate credits with emission reduction technology. All ethanol producers al-ready have emission reduction tech-nology in place. Some of this technol-ogy may also reduce carbon dioxide or other greenhouse gases. Note that

carbon trading contracts can capture any credits gener-ated by an eth-anol producer from the use of this equipment. The availability of this credit is independent of the status of ethanol as a carbon negative or positive prod-uct.

Thus, the high commission may be unwarranted. Also, some contracts may inadvertently give the carbon credit trader an interest in certain pol-lution reduction equipment or give the trader the right to modify equipment. Avoid this language. Most manufac-turers will not warrant the performance of equipment that is modifi ed by third parties.

Carbon credit trading is an evolv-ing market segment. Ethanol produc-ers should investigate the opportunity but be aware of the unknowns.

James L. Pray chairs the environmen-tal practice group at BrownWinick, a Des Moines, Iowa-based law fi rm serving the renewable fuels industry. Reach him at [email protected] or (515) 242-2404.

TPray


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TECHNOLOGY

Making Do With Less

Some of ethanol’s most vocal critics decry the industry because of the amount of water it uses. Research has shown, however, that ethanol plants on average have reduced their water needs by more than 20 percent in recent years, and industry experts expect that trend to continue.

By Erin Voegele



TECHNOLOGY

In 2007, the Renewable Fuels Asso-ciation conducted a survey of U.S. ethanol plants. The survey collected a variety of information, including data

on water usage. Twenty-two ethanol plants representing more than 1.8 billion gallons of ethanol production responded to the survey. These plants accounted for 37 percent of to-tal U.S. ethanol production in 2006.

The Argonne National Laboratory ana-lyzed the RFA’s data and compared it with a 2003 USDA survey of ethanol plants, and according to the report released in March “Analysis of the Effi ciency of the U.S. Etha-nol Industry 2007,” water consumption at dry-grind ethanol plants decreased 26.6 percent. The report says dry-grind ethanol plants currently use an average of 3.45 gal-lons of fresh water per gallon of ethanol produced, while wet-mill ethanol plants use an average of 3.92 gallons of water per gal-lon of ethanol. According to USDA’s 2003 study, ethanol plants used an average of 4.7 gallons of water to make 1 gallon of ethanol. The study didn’t separate wet- and dry-grind plants.

The ANL analysis also found there are signifi cant variations in water use among individual plants. Dry-grind ethanol plants reported water usage statistics ranging from 2.65 gallons of water per gallon of ethanol to 4.9 gallons per gallon of etha-nol. Wet-mill plants reported water use varied from a minimum of 1.2 gallons of water per gallon of ethanol to a maximum of 6.1 gallons per gallon of ethanol.

Current State of Water UseLarge variations in water usage can be

explained by a variety of factors. Accord-ing to the ANL report, newly constructed plants tend to require less water, primar-ily due to improved designs. According to

Greg Hausmann, ICM Inc.’s vice president of engineering, the quality of incoming water, process considerations, utility sys-tem confi guration and equipment selec-tion considerations also affect a plant’s wa-ter needs. “We believe that the industry is doing very well, and making a big effort to reduce water use, either through recycling or process change,” says May Wu, an ANL environmental scien-tist who authored the March report. “There are a lot of things on-going, and newly built plants are defi nitely much more water ef-fi cient.”

According to Andy Aden, a National Renewable Energy Laboratory senior re-search engineer, energy and water demands at ethanol plants are closely integrated. “Anything you can do to make your plant more energy effi cient is going to help your water usage as well,” he says.

Aden wrote a journal article in 2007

Wu

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‘Anything you can do to make your plant more energy effi cient is going to help your water usage as well.’

titled “Water Usage for Current and Fu-ture Ethanol Produc-tion” about water use in ethanol plants. “The real take-home message of the paper was that the process water—meaning the

water that is in fermentation that goes through the normal part of the process—is really not the issue,” he says. “The de-mand … is in the utilities side. It is water lost to evaporation from the cooling tower. It is water lost to blowdown in the boiler system. It is all these extraneous water uses that have to be made up, and that’s where the improvements lie.”

Carolyn Kotsol, director of process technology for Delta-T Corp., says the fi rst step in reducing water usage is to identify the plant’s largest water consumers. “First and foremost, I think most technology providers have really refi ned the amount of indirect heat that the plant uses,” she says. “Increasing the amount of indirect

heat that you use in the design decreases the amount of fresh water you need for your boiler. That helps signifi cantly.”

Another primary place where water is lost is through dryer exhaust, Kotsol says. If you can capture that exhaust, you are harnessing heat. You can take the vapor, condense it into a liquid stream and then reuse it in the plant to offset some of the biggest water consumers.

“The largest user of fresh water in the plant is the cooling tower,” Kotsol says. One option to reduce that water use is to offset the fresh water used in the cooling tower with another stream, such as dryer

exhaust. “Then you could greatly reduce the amount of fresh water that you are bringing into the plant,” she says. “That technology is out there, and it has been applied in a few plants.” This technology can offset total water usage at the plant by ap-proximately 1 gallon of water per gallon of ethanol.

Kotsol says as the industry recovers from the high corn prices of 2008, many water-saving technologies are being imple-

Aden

Kotsol

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‘We’re really re-evaluating all the water streams in a plant and looking for areas to recycle or reduce the water streams to be

more effi cient in our water usage.’

mented at existing facilities rather than through new construction. Optimiza-tion is often a great option for existing plants, she says. “They may have already done some troubleshooting and some de-bottlenecking, so this is the time to go out there and optimize the plant from a water usage standpoint as well,” Kotsol says.

According to Erin Heupel, Poet LLC’s design and construction lead en-vironmental engineer, her company is trying to incorporate water savings tech-nologies into all future plant designs, and retrofi tting existing plants. “We’re really re-evaluating all the water streams in a plant and looking for areas to recycle or reduce to be more effi cient in our water usage,” she says.

Heupel recently studied Poet’s plants and found that on average they are using less than 3 gallons of water to produce a gallon of ethanol. “Depend-ing on the source water quality, you’ll see variability,” she says. The average was calculated by comparing Poet’s total eth-anol production against the total volume of water used at the plants. In fi ve years, she hopes the facilities will be closer to using 2 gallons of water per gallon of ethanol. “This is dependent on the ini-tial water quality,” Heupel says. “I think the trend we hope to see in our plants is that we can eventually take them to zero-liquid.”

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‘I think it’s safe to say that nobody doing a cellulosic system investigation effort, or development effort, is doing it without consideration of water consumption.’

ICM has also been working on tech-nologies to minimize water usage in its plant designs. “[ICM] has designed a couple of zero-discharge facilities that are in various stages of construction,” Hausmann says. However, the technolo-gies that reduce water usage often carry high capital costs. “When we bring [cap-ital cost] considerations into play, then our technology options start getting lim-ited,” Hausmann says.

Keith Scarberry, ICM’s water sys-tems engineering manager, and Haus-mann agree that one key element to re-ducing water usage is water quality. “The better the water quality is, the less water will be consumed by the factory,” Haus-mann says.

Water Use in the FutureInterest in reducing water use at

ethanol plants is expected to continue. “During the time I’ve been with ICM [water quality and usage] has gone from almost an afterthought by the owners and project developers to a consider-ation most of them are taking with their site selections,” Scarberry says. Wu says that through her attendance at numer-ous ethanol conferences, she has seen that many existing plants are working to further minimize water usage. “I have heard more and more talk about water recycling,” she says. “The key limitation, perhaps, is the cost.” Many technologies, however, are getting more affordable. “I am pretty confi dent zero-water discharge can be realized,” Wu says.

Plant designers and technology pro-viders have developed several methods to reduce water usage, including the re-placement of evaporative cooling tow-ers with air exchangers or other cooling media. “The technology folks have taken some pretty signifi cant steps in the right direction to reduce the amount of water consumption in our plants,” Kotsol says. Those new technologies won’t neces-sarily eliminate the use of cooling tow-ers, but they would certainly reduce the size of the cooling tower need, which would reduce the amount of fresh wa-ter required by the plant. “It’s certainly a

known technology used in other indus-tries,” she says.

While most involved with the indus-try agree water use at traditional corn-based ethanol plants will continue to decline, it is not clear how much water cellulosic technologies will require. “In our studies we have seen numbers as low as 1 gallon of water per gallon of ethanol, and up to 9 to 10 gallons per gallon,” Wu says. “That’s a wide range. It depends on the process you select.”

Although no commercial-scale cel-lulosic ethanol plants currently exist, NREL research suggests the range of water use by cellulosic facilities will be similar to what is seen with corn etha-nol. “The cellulosic numbers are based on our very best detailed modeling ef-forts,” Aden says.

According to Aden, a 2002 NREL report came up with a fi gure of 6 gallons of water per gallon of ethanol at a cellu-losic plant. However, a model optimized for water effi ciency yielded as little as 1.9 gallons of water per gallon of ethanol in 2007.

Kotsol says that analyzing the amount of water coming into a cellulosic ethanol plant will be a primary consider-ation during the design process. “It will constantly be a part of our technology challenge,” she says.

Unlike the early days of the corn-based ethanol plant development, wa-ter usage will be a chief concern when developing cellulosic ethanol plants. “There are still a lot of unknowns with [cellulosic ethanol],” Hausmann says, which makes it hard to predict how wa-ter will be utilized. “I think it’s safe to say that nobody doing a cellulosic sys-tem investigation effort, or development effort, is doing it without consideration of water consumption.” EP

Erin Voegele is an Ethanol Producer Magazine staff writer. Reach her at [email protected] or (701) 373-8040.

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FlowLike a fl uid line of credit at the bank, a steady and unhindered fl ow of water is critical for the effi cient operation of an ethanol plant of any size. And just as interest on that credit varies depending on the unique circumstances of the individual plant, water, depending on its source, contains its own unique set of properties.

By Frank Zaworski


GOING WITH THE

No two ethanol plants in the world, whether a mile or a continent apart, have exactly the same water with exactly

the same characteristics. This uniqueness of a plant’s industrial water creates challenges for plant operation and opportunities for those with technological solutions. “In terms of wa-ter quality, the most demanding water user in an ethanol plant is the energy center,” says Mike Mowbray, marketing manager for U.S. Water Services in Plymouth, Minn. (www.uswaterser-vices.com). “In terms of quantity, the biggest user is usually the cooling system. Both systems require sophisticated control in order to main-tain the effi ciencies needed to make a modern ethanol plant profi table.”

U.S. Water Systems has helped design and start water treatment systems in about 80 dry-grind ethanol plants in the United States. The company provides water management solutions from sophisticated pre-treatment for groundwater or grey water to zero-liquid dis-charge systems.

Mowbray says U.S. Water Services is fa-miliar with the site-specifi c water challenges all ethanol plants face, and the company is contin-uously creating and refi ning technologies and services to meet any plant’s needs.

Texas-Sized Problem“When an ethanol plant in Texas (name

withheld), serviced by U.S. Water Services, started experiencing problems with its reverse osmosis (RO) system, conventional, on-site methods of cleaning membranes failed, and the reason soon became clear,” Mowbray says. When the city changed the fl ow of the water to accommodate the ethanol plant, it stirred up red clay that had settled in the distribution piping. The fi ne clay silt, so fi ne it could pass through a 1 micron fi lter, found its way to the ethanol plant’s RO system and fouled the mem-branes.

Mowbray says attempts were made to clean out the red clay using the same methods as those used to remove organic compounds, but only limited success was achieved.

With conventional methods failing at ev-ery turn, unconventional methods had to be considered, Mowbray says. Replacing the 180 membranes would be too expensive, especially if the situation persisted.

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The Texas plant turned to U.S. Water Services’ RO cleaning sta-tion in Cambridge, Minn. This RO station is unique in the water services industry, Mowbray says, utilizing a variable frequency drive, along with complex valve and control schemes, allowing water to fl ow through the membrane in either direction, adjusting the pressure over a wide range in order to achieve the best results. “Membranes, by design, allow water to fl ow in a single direction,” Mowbray says. “Reversing the water fl ow can provide enough force to kick a majority of the debris free from the membrane, something that is impossible to do on-site, and is rarely seen in other off-line cleaning systems.”

Finally, U.S. Water Services’ membrane cleaning station has the abil-ity to test the performance of each cleaned membrane at actual opera-tional fl ux rates to ensure that the membrane meets industry specifi ca-tions before being sent back to the customer.

On its fi rst test run, the RO cleaning station proved successful, Mowbray says. The red clay silt was removed from a substantial number of the membranes. The performance was verifi ed, and the membranes were sent back to the customer, ready to reinstall.

“The U.S. Water Services membrane cleaning station is the newest and most sophisticated system in the industry,” Mowbray says. “It was designed and built by our engineering group using knowledge gained from extensive experience with our customers’ reverse osmosis applica-tions. Not every plant will need to clean membranes off-site. However, considering the critical nature of a properly functioning water treatment plant, and the cost of replacing membranes, it is good to have the option of enhanced cleaning when needed.”

More SolutionsBoiler water treatment: The heat recovery steam generators

(HRSG) built into most new ethanol plants are designed to convert the waste heat coming out of the thermal oxidizers (TO) into steam instead of burning oil or gas in a fi re box. In order for the HRSG to be effective, according to U.S. Water Services engineers, it must be built to maximize the capture of heat energy from the waste gas stream. This leads to de-signs with small diameter steam tubes that are packed very tightly in the steam generating section. Some of the tubes have fi ns on the fi re side in order to increase heat transfer as much as possible.

The modern HRSG is like a sports car, Mowbray says. “It packs a lot of performance in a small package, but it demands respect and atten-tion to get the most out of it.”

From a water treatment point of view, Mowbray says, the steam generator is prone to scale and deposits. As a result, it is critical that the highest quality water is used for make-up to these systems. This requires either a good demineralizer system or a RO unit followed by polishing softeners.

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RO or softened water alone typically does not provide the level of water quality needed in the HRSG, Mowbray says. Once water of the proper quality is available, it is equally important to treat the water with corrosion inhibitors and a dispersant poly-mer program. “The use of older style precipitating chemistries will not provide the level of boiler tube cleanliness needed in a HRSG,” he says. “Lastly, this high-tech chemistry should be controlled with auto-mated chemical and blowdown controllers.”

Since the steam generating tubes are narrow, and the heat fl ux is high, scale forming in the hot section of the system can quickly plug and blow tubes, Mowbray says. This will lead to the shutting down or de-rating of a plant to repair the prob-lem. The design of many HRSG systems makes repair a diffi cult undertaking. Plugging or replacing individual tubes is virtually impossible. The only re-course is to replace the entire generating bank.

Another reason to pay such close attention

to boiler water treatment is simple economics, Mowbray says. Waterside tube scale is an insulator that blocks the effi cient transfer of heat from the thermal oxidizer waste gas to the boiler water. As little as a sixty-fourth of an inch (thinner than an eggshell) of calcium carbonate or iron oxide scale will reduce heat transfer effi ciency by as much as 15 percent. Scaling in HRSG tubes can result in increased energy costs that directly affect plant profi tability. Good water treatment is cheap insur-ance, he says.

Unfortunately, make-up water is not the only water source that can cause problems in your ethanol plant boiler. As with any production facil-ity, contaminants can, and usually do, come back into the steam generator through the return con-densate. In an ethanol plant, the contaminant is typically mash. When mash is in the boiler wa-ter, conductivity goes up, the water turns black, and the boiler foams and causes the drum level to bounce. The boiler water will also carry over into the steam due to the foaming. This has been known to plug steam control valves, eventually shutting down the plant.

Cooling water treatment: The cooling wa-ter system requires the largest amount of water in

Engineers at U.S. Water Services in Cambridge, Minn., examine a portion of the RO cleaning station used to remove stubborn debris from membranes.

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an ethanol plant’s subsystems. A typical 40 MMgy to 50 MMgy ethanol plant has to remove 100 million to 120 million British thermal units per hour, according to U.S. Water Services. Just as in the steam generating system, a small amount of scale on heat exchanger surfaces will signifi cantly reduce heat transfer effi ciency, possibly resulting in having to run chillers more often. If serious enough, it can affect a plant’s ability to produce the maximum amount of ethanol.

The quality of incoming water will be the major factor in cooling tower management. A cooling tower releases heat to the atmosphere by evaporating water. The dissolved solids from the well water are left behind in the cooling water. As more well water is added, and more cooling water is evaporated, the dissolved solids become more concentrated. The various constituents in the well water each have their own limits of solubil-ity. Eventually, the cooling water will cycle up to a point where some of the dissolved solids will precipitate. Typically, they will do this fi rst at the point of highest temperature in the cooling sys-tem, the heat transfer surface of the hottest heat exchanger.

There are various methods used to increase

the cycles of concentration in a cooling system. The fi rst, as with the boilers, is to take the dis-solved solids out of the cooling tower make-up water before adding it to the system. According to Mowbray, many plants use extra RO treated wa-ter to supplement well water to the tower. “This is not a free fi x, however, as the RO also has to be treated to prevent it from scaling, and there are signifi cant operating costs,” he says. “However, depending on the initial plant water quality, this may be the best option.”

The other method is to treat the cooling water with chemicals that will prevent scale from forming at higher concentrations of dissolved sol-ids than would normally be possible.

Cooling systems are also treated to prevent corrosion and bacteria growth. Serious corrosion can cause equipment failure. Even minor corro-sion can cause problems, since the rust will move with the water fl ow until it comes to an area of slower fl ow. Then the rust particles can settle out and cause plugging.

Bacteria can cause corrosion and system plugging as well, Mowbray says. But the biggest concern with bacteria is health related. Legion-naire’s disease still pops up occasionally in industrial

facilities, and cooling towers need to be treated to prevent them from becoming a breeding ground for this dangerous bacterium, he says. A variety of biocides are available to the industry. The choice of which to use depends on the system being treated, and on local discharge restrictions. The Occupational Safety and Health Administration and the Cooling Tower Institute recommend a combination of continuously fed oxidizing bio-cide (usually chlorine gas or sodium hypochlorite bleach, fed with sodium bromide) and a nonoxi-dizing biocide slug fed on a weekly basis.

“Water quality and water treatment can have a huge impact on the profi tability of a plant,” Mowbray says. “It is important to get a compe-tent water treatment professional involved with your plant early in the design process. Waiting until a couple of weeks before start-up to choose a water treatment chemical supplier is a recipe for trouble.” EP

Frank Zaworski is an Ethanol Producer Magazine freelance writer. Reach him at [email protected].

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Irrigation MitigationThe amount of irrigation needed to grow feedstock for ethanol depends on what is being grown—and where.

By Ryan C. Christiansen


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During the past year, both inter-national and domestic organi-zations have raised concerns about whether the irrigation of

crops for energy production will lead to water shortages. In some countries, these concerns are driving policies for certifying that ethanol and other biofuels are produced without im-pacting water supplies.

During the Washington International Renewable Energy Conference held in March in Washington, D.C., U.S. Department of the Interior Secretary Dirk Kempthorne said that crops used for ethanol take an enormous amount of water. “To reach our ethanol pro-duction target of 7.5 billion gallons per year by 2012 will require 30 billion gallons of water a year to process,” he said, “or the amount of the annual water needs of Minneapolis, Minn. And if just 25 percent of the new corn crop requires irrigation, ethanol will demand more water than the combined annual usage of all cities in Ari-zona, Colorado, Idaho and Nevada. As we in-crease ethanol production, we must have a ho-listic approach that takes into account its impact on water supply.”

During World Water Week, an interna-tional meeting held in Stockholm, Sweden, in August, the Stockholm International Water In-stitute concluded that bioenergy demands are diverting water from food production and that by 2050, the amount of water used to grow and process feedstocks for energy in the world will equal the amount of water used to grow crops to feed the world.

Also in August, the Roundtable on Sus-tainable Biofuels, a Switzerland-based think tank that is helping the European Commission to defi ne sustainability criteria for biofuels in the European Union, released the fi rst version of its criteria. The group said that water used for irrigation must not be withdrawn beyond the replenishment capacity of the water table and that water-intensive energy crops must not be established in water-stressed areas. Crops that fi t local conditions must be used for the most effi cient use of water, the criteria said.

In September, with support and advice from the World Wildlife Fund and Natural Resources Defense Council, members of the international airline industry—including Air France, Air New Zealand, All Nippon Airways, Cargolux, Gulf Air, Japan Airlines, KLM, SAS

and Virgin Atlantic Airways—formed the Sus-tainable Aviation Fuel Users Group, demand-ing that the cultivation of jet fuel plant sources should not jeopardize drinking water supplies. While ethanol is not a source of jet fuel, it is clear that both government and industry around the world are concerned that the irriga-tion of crops for energy production might lead to water shortages.

Ethanol and Water UseUsing corn ethanol to power a vehicle

consumes more water than using petroleum gasoline. In a report titled “Water Intensity of Transportation” published in the November 2008 edition of the journal Environmental Sci-ence & Technology, researchers in the Bureau of Economic Geology and also the Center for In-ternational Energy and Environmental Policy in the Jackson School of Geosciences at the University of Texas in Austin, Texas, report that driving a petroleum gasoline-fueled light-duty vehicle—which includes cars, trucks and sport utility vehicles—typically consumes between 9 and 18 ounces of water per mile. However, driving an E85 ethanol-fueled light-duty vehicle can consume between 1 and 62 gallons of water (28 gallons of water on average) per mile—up to 882 times as much as petroleum gasoline—if the ethanol in the E85 blend is processed from corn grain that is harvested from irrigated fi elds, depending on where the corn is grown. In fact, the amount of water used to irrigate the corn crop has the greatest impact on how much water is used per mile.

Approximately 50 million acres of land worldwide is used for the production of bio-fuels and about 11.6 trillion gallons of water is used throughout the world annually to irrigate energy crops, according to a report entitled “Biofuels and Implications for Agricultural Water Use: Blue Impacts of Green Energy” published by the International Water Manage-ment Institute. However, the global impact of irrigating crops for biofuel production is minor, the IWMI said, and the amount of water that is needed to irrigate energy crops varies widely, depending on which crops are being grown and where.

Individual countries and regions need to assess the local impact of energy crop irrigation, the IWMI said. For example, both China and India might not have enough water resources

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to grow energy crops for ethanol if they use traditional crops such as corn or sugarcane. China withdraws approximately 2,400 gallons of water for irrigation to grow enough corn to produce 1 gallon of ethanol. India withdraws approximately 3,500 gallons of water for irriga-tion to grow enough sugarcane to produce 1 gallon of ethanol.

Meanwhile, very little irrigation is used in Brazil to grow sugarcane. According to an IWMI report entitled “Water Use and Impacts Due to Ethanol Production in Brazil,” the total rainfall in the savannahs of Brazil is enough to grow crops there without irrigation. Meanwhile in the United States, only 3 percent of all irriga-tion is used to grow corn for ethanol, the report said. Overall in the United States, approximately 17 percent of U.S. corn for grain or seed is ir-rigated, based on the latest available USDA data from 2002, according to Carey King, co-author of the UT study and a research associate at the school.

The IWMI said if all national targets for biofuels production are to be met worldwide, an additional 74 million acres of land and 47.5 trillion gallons of water for irrigation will be needed. Meanwhile, water constraints will limit the potential for growth in the production of energy crops in some parts of the world. Ac-cording to a report entitled “The State of Food and Agriculture 2008-Biofuels: Prospects, Risks, and Opportunities” published by the Food and Agriculture Organization of the United Na-tions, the most potential for expansion is in Latin America and sub-Saharan Africa.

U.S. Energy Crop IrrigationWhen ethanol is processed from corn

grown in nonirrigated fi elds, driving an E85 ethanol-fueled light-duty vehicle consumes only between 19 and 45 ounces of water per mile—or eight times as much as petroleum gasoline—compared with an average of 28 gallons of water per mile for irrigated corn, the UT study said.

According to the USDA’s Natural Re-sources Conservation Service Resource Eco-nomics and Social Sciences Division, the majority of producing ethanol plants in the United States—and those that are planned or in construction—are located in the heart of the Corn Belt where little irrigation is needed to grow corn. For example in 2002, between 500

and 1,000 gallons of water was used on average to grow one bushel of irrigated corn in Iowa (when the corn was irrigated at all). Between 1,000 and 2,000 gallons of water per bushel were used in Minnesota, South Dakota, Wis-consin and Illinois.

However, as you move to the outer edges and away from the center of the Corn Belt, the irrigation requirement for corn starts to increase. For example, in Nebraska and Kansas, the av-erage irrigation needed per bushel of corn is between 2,000 and 3,000 gallons of water. The National Research Council cited the Ogallala aquifer, which runs through Kansas and Ne-braska, as a resource under stress. According to Daniel O’Brien, an extension agricultural economist at Kansas State University, Ogallala aquifer groundwater supplies have been declin-ing since irrigation began in the 1960s. He said increased demand for corn for ethanol might result in more corn acreage and more intensive irrigation, which might accelerate the decline of the aquifer.

Kansas farmers planted 4.1 million acres of corn in 2008, a 5 percent increase over 2007 and the largest planting in the state since 1936, according to the Kansas Corn Growers As-sociation. Nebraska farmers planted 9 million acres of corn in 2008, a 4 percent decrease from the highest-ever planting of 9.4 million acres in 2007, according to the Nebraska Corn Board. The University of Nebraska-Lincoln Extension Institute of Agriculture and Natural Resources reports the consumption of water by irrigated crops is the biggest user of water in Nebraska. Nebraska has 22 ethanol plants in production and four under construction; Kan-sas has 13 plants in production and one under construction, according to BBI International’s U.S. & Canada Fuel Ethanol Plant Map.

According to King, only Kansas and Ne-braska are above average in the 10 Corn Belt states in terms of the amount of water that is used to irrigate corn. “The average for the 10 corn states is similar to the average for the en-tire U.S.,” King said, “but heavily weighted by Kansas and Nebraska, which have over half of the total irrigation for corn in gallons of water. They dominate the irrigation.”

The 2002 USDA irrigation census data in-dicates that the 10 major corn states used 3,812 billion gallons of water for the irrigation of corn for grain or seed, with Nebraska using 1,800 bil-

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lion gallons and Kansas 560 billion gallons. King said a light-duty vehicle powered by E85 ethanol from irrigated Kansas corn consumes 52 gallons of water per mile; the same vehicle powered by E85 ethanol from irrigated Nebraska corn con-sumes 43 gallons per mile. King’s calculations are based on 2002 USDA census data, he said, and would not refl ect the impact that the 2005 renew-able fuels standard might have had on the amount of water used to irrigate corn in those states. The USDA 2007 census data is scheduled to be re-leased in February.

The push to grow corn outside of the Corn Belt is a cause for concern, according to a report by the NRC entitled “Water Implications of Bio-fuels Production in the United States.” The NRC found that shifting agricultural land from other crops to grow corn or expanding corn produc-tion into regions with little agriculture, especially dry areas, might greatly increase pressure on water resources in those regions. The amount of wa-ter that goes through the corn plant and into the atmosphere as transpiration is directly related to corn grain yields, according to the Nebraska ex-tension service.

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Percentage of U.S. Irrigation for Corn—Nebraska and Kansas

Total gallons of water used for irrigat-ing corn for grain or seed = (1.2 acre-feet/year/acre)(9,749,748 acres)(325851.4 gal-lons/acre-feet) = 3,812 billion gallons

Total irrigation used in Kansas and Nebraska for corn for grain or seed = Ne-braska + Kansas = [(1.2 acre-feet/year/acre)(4,605,499 acres) + (1.4 acre-feet/year/acre)(1,231,918 acres)](325851.4 gallon/acre-feet) = 1,800 + 562 = 2,362 billion gallons

Thus, Nebraska and Kansas account for 62 percent of the total U.S. irrigation for corn for grain or seed.

SOURCE: CAREY KING, UNIVERSITY OF TEXAS AND USDA NATIONAL AGRICULTURAL STATISTICS SERVICE “FARM AND RANCH IRRIGATION SURVEY (2003)” (Vol. 3, Pt. 1, Table 28, p. 90).

soils and water quality researcher at the Uni-versity of Arkansas.

“Immediately, it wouldn’t have a major impact,” Sharpley says. “But long-term, over several years, you would be removing a lot of organic matter from that soil that would [normally] get recycled back in. If you’re harvesting it continuously and removing it, then the organic matter in the soil tends to slowly decline. One of the major benefi ts of organic matter is that it increases the water-holding capacity and potential of soils.”

Policies to promote the production of cellulosic ethanol using nonfood crops, such as switchgrass and native grasses, should be expanded, the NRC said, because the large-scale production of those feedstocks could be irrigated with wastewater that otherwise would be unsuitable for irrigating food crops. EP

Ryan C. Christiansen is an Ethanol Pro-ducer Magazine staff writer. Reach him at [email protected] or (701) 373-8042.

Because irrigation is such a large factor in the amount of water used to produce ethanol, there is a “tremendous amount of need” for proper water resource planning, said the UT researchers. Historically, using petroleum-based fuels has had a small overall impact on U.S. wa-ter resources, they said, and the United States must consider the supply of water needed for irrigating existing and future energy crops. They said comparing the amount of water supplied by rainfall to the amount supplied by irrigation provides a measure for sustainability.

Future Ethanol and Water UseIf corn continues to expand to the edges

and outside of the Corn Belt, water conserva-tion, erosion prevention, and the effi cient use of fertilizer can help to mitigate the impact of water use for growing energy crops, the NRC said. No-till planting practices, where crops are planted into the previous year’s crop residues, might be employed. The corn stover from these areas is less likely to be available for the production of cellulosic ethanol in the future, the NRC said.

The UT study also looked at the impact on water usage if cellulosic ethanol made from corn stover is used in a light-duty vehicle. If the ethanol is processed from corn stover from irrigated fi elds, driving an ethanol-fueled light-duty vehicle consumes between 3 and 46 gallons (an average of 19 gallons) of water per mile, depending on where the corn is grown, which is generally less than ethanol processed from corn grain-only that is harvested from ir-rigated fi elds. Meanwhile, driving a vehicle us-ing ethanol processed from corn stover from non-irrigated fi elds consumes about 32 ounces of water per mile.

If the entire corn plant is used to make ethanol, the UT report said, a light-duty vehicle will consume between 2 and 38 gallons of water per mile for irrigated corn and between 28 and 49 ounces of water per mile for non-irrigated corn, depending on where the corn is grown.

However, because crop residues on the soil surface absorb water from rainfall and snow and also reduce the evaporation of water from the underlying soil, using corn stover for the production of cellu-losic ethanol might also have an impact on the amount of irrigation needed to grow corn, according to Andrew Sharpley, a

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a world of potential

Experts at the 4th World Biofuels Symposium offered their impressions of the global potential for ethanol, biodiesel and beyond.

By Travis Hochard


More than 200 people attended the 4th World Biofuels Symposium held Oct. 19-21 in Beijing. The symposium, which was organized by BBI International and Tsinghua University, featured

48 speakers from biofuel associations, technology companies and research institutions from countries around the world including Brazil, China, Scotland, Thailand, Italy, Republic of Ghana, Swe-den, United Kingdom and the United States.

The common thread throughout the conference was that sustainability must be a top priority in the expansion of biofu-els worldwide. While many speakers found this path in second-generation ethanol and other advanced biofuels, Marcos Jank, president and chief executive offi cer of the Brazilian Sugarcane Industry Association (UNICA) said that he considered Brazilian ethanol from sugarcane to be a sustainable biofuel based on the greenhouse gas emissions reductions achieved and low percent-age of arable land used.

Jank said in Brazil, the equivalent of 25.8 million tons of carbon dioxide was avoided in 2007, thanks to the use of ethanol. He also said that food versus fuel is not an issue for the country. “Sugarcane for ethanol accounts for only 1 percent of the arable land in Brazil, reducing our gasoline consumption by 50 percent,” Jank said. “This is in a country where gasoline is considered the alternative fuel.”

Brazil produced 23 billion liters (6.08 billion gallons) of etha-nol in 2007, and the domestic sales of E100 were 1 billion liters (264 million gallons), according to Jank. “This demand is driven by consumer choice—90 percent of new cars sold in Brazil are fl ex fuel—representing more than 25 percent of the fl eet,” Jank said, adding that another driver of Brazil’s success is the mandato-ry blending of 20 percent to 25 percent of ethanol into gasoline.

Projections for Brazilian ethanol from sugarcane show tre-mendous potential with 47 billion liters (12.42 billion gallons) by 2016 and 65 billion liters (17.17 billion gallons) by 2021. Most of this expanded production would be exported—an unpredictable market for Brazil. This is why Jank is in favor of making ethanol a globally traded energy commodity by lifting all tariff and non-tariff barriers. “Sugarcane is the most competitive raw material for the production of ethanol—competitive with any gasoline obtained from a U.S. $70 barrel of crude—and has very positive energy and environmental balances,” Jank said, adding that Brazil does not intend to supply ethanol for the rest of the world. “We are part of the solution, not the solution,” he said.

While Brazil is a net exporter of ethanol, China will have to look to next-generation technologies for ethanol and other bio-fuels to become a signifi cant part of its fuel supply, according to information provided by Xiaohui Wang, director and senior ana-lyst of the Market Monitoring Division of the China Grains and Oils Information Center, a government think tank researching grain and oilseed supply and demand. Wang’s analysis of Chinese agriculture and food supply revealed the country’s limitations for grain-based ethanol expansion. “Chinese agricultural products will continue to increase yields and effi ciency, but the lack of wa-

EVENT

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ter and arable land will limit China’s future in grain output,” Wang said. “With a ris-ing population and increased standard of living we must ask who will feed Chinese people in the future.”

Wang explained that to expand agri-cultural production the Chinese govern-ment has implemented policies that will improve crop yields, increase storage and restrict uses for arable land, but he stressed that food will remain the priority for Chi-nese agriculture.

It is for this reason that China’s largest food manufacturer and ethanol producer is focusing its research and development efforts on cellulosic ethanol. The China National Cereals, Oils, & Foodstuffs Corp. (COFCO) produces 820,000 tons (275 million gallons) of ethanol in China an-nually, which is half the country’s total ca-pacity. “Our demand for cellulose is more than in the United States,” Guojun Yue, assistant president of COFCO told the audience during the general session. “With the development of biomass technologies we have a goal to produce 2 million tons (670 million gallons) of biomass ethanol by 2010 and 10 million tons (3.3 billion gallons) by 2020.” However, Yue did not dismiss the production of grain-based ethanol altogether. He explained that corn and wheat are laying down the foundation for nongrain ethanol in China, and the second stage will include sweet potato and

sweet sorghum—which is still considered a grain. “This will provide a transition pe-riod, but the future of ethanol in China lies in cellulose.”

A U.S. company that is trying to fi nd a way to supply the Chinese biofuels market is Coskata Inc., a cutting-edge technology fi rm that is commercializing a proprietary process for the production of fuel-grade ethanol. Wes Bolsen, chief marketing of-fi cer and vice president of business de-velopment for Coskata, discussed China’s rising potential for second-generation bio-fuels and outlined his company’s solution to its food-versus-fuel dilemma. Bolsen’s fi gures showed that Chinese grain-based ethanol production has grown from 100 million gallons in 2004 to about 500 mil-lion in 2008. He attributed this increase to E10 mandates in several Chinese prov-inces and cities, but cautioned that “high food demand limits the further growth of fi rst-generation ethanol in China.” He added that corn ethanol is not economical without subsidies in China, and said that cellulosic ethanol from the Coskata pro-cess costs less than half the current cost of producing grain-based ethanol.

Bolsen told participants that cellulosic ethanol can tap into a wealth of nonfood resources and help make China energy self-suffi cient. He said that China’s cur-rent annual biomass resources can displace the equivalent of 1.2 billion barrels of im-

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A lack of water and arable land limits China’s ability to use food crops to produce ethanol, so the country is focusing its efforts on nonfood crops such as this cassava root.

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ported oil, and that additional potential exists from dedicated energy crops, garbage, steel off-gasses and fossil sources. “Using Coskata’s hybrid gasifi cation plus fermentation technology combines the best

of both routes and allows the use of a wide variety of feedstocks,” Bolsen said. “This could provide important economic development in China—not only in rural areas—but outside major cities using things like tires, municipal solid waste and plastic bottles.”

General Motors Corp., a premier sponsor of the symposium, supports Coskata’s process and the second-generation ethanol move-ment. The automaker has announced alliances with Coskata and Boston-based Mascoma Corp., another cellulosic ethanol start-up based in the United States. “GM is committed to the rapid commer-cialization of the next generation of ethanol,” said Andreas Lippert, director for Global Energy Systems in General Motor’s Research and Development and Strategic Planning Department. “This is why we started a strategic alliance with the two leading cellulosic ethanol companies that together cover the biothermal and biochemical spec-trum in advanced biofuel technology.”

The United States is also looking at cellulosic ethanol and other advanced biofuels to meet its goals for alternative transportation fuels, according to Dale Gardner, associate director for Renewable Fuels Science and Technology at the National Renewable Energy Laboratory in Golden, Colo. Gardner presented an overview of the biofuels industry in the United States and pointed out the limitations of grain feedstocks.

The United States has 162 commercial ethanol plants with a to-tal capacity of 9.4 billion gallons per year and another 4.2 billion gallons per year planned, Gardner explained. There are an additional 13 cellulosic ethanol demonstration plants funded by the U.S. DOE

Participants of the World Biofuels Symposium toured Guangxi COFCO Bio-energy Co. Ltd., a cassava ethanol plant in Beihai, China, the fi rst fuel-ethanol plant based on a nongrain feedstock in China.

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with a projected capacity of 250 million gallons per year for 2008.Gardner listed three government programs designed to increase

the capacity of alternative transportation fuels in the United States

including President George W. Bush’s 20-in-’10 target of 35 billion gallons of alternative transportation fuels by 2017, the renewable fu-els standard legislation that requires the use of 36 billion gallons of renewable fuels by 2022, and the DOE’s 30x’30 goal of 60 billion gal-lons of ethanol (30 percent of today’s gasoline consumption of 140 billion gallons per year) by 2030. “A major goal of the DOE is to re-duce the cost of cellulosic ethanol,” Gardner said. “We are currently funding projects using various technologies including biochemical, thermochemical and integrated processes.” In addition to technical barriers for commercially viable production, Gardner explained that another challenge is collecting the feedstock. “We have done exten-sive resource assessments so we know where it is … the challenge is how to get it.”

Symposium participants toured the National Stadium (bird’s nest) and the National Aquatics Center (water cube), which are attractions from the 2008 Beijing Olympics and draw people from all over the world. The tour was sponsored by the Minnesota Department of Agriculture.

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‘Regardless of what path we take we cannot assume that land use, water, soil and other environmental factors are not part of the equation. We must put together a comprehensive sustainability analysis that considers environmental, social and economic impacts.’

The U.S. biodiesel industry will also re-quire technological breakthroughs to meet these goals. Gardner said that while the pro-duction capacity for the 171 biodiesel plants in the United States is currently 2.2 billion gallons per year—only 450 million gallons were produced in 2007. “Lack of feedstock is a factor for our biodiesel industry,” Gardner said, adding that its future will rely on what he called third-generation technologies, which includes the use of microalgae. “We see algae as a promising new feedstock with potential to produce 10 to 50 times more lipids per

acre than other terrestrial plants,” Gardner said. “Other benefi ts of algae cultivation are that it can utilize marginal, nonarable land, sa-line or brackish water, and can provide large waste carbon dioxide vent resources such as absorbing fl ue gases from coal plants.”

According to Gardner, the DOE also has plans to start an advanced biofuels pro-gram. “What we mean by this is beyond etha-nol and biodiesel,” Gardner explained, using the term fourth-generation technologies—converting higher energy density molecules directly from organisms into gasoline, diesel

and jet fuel. “Regardless of what path we take, we cannot assume that land use, wa-ter, soil and other environmental factors are not part of the equation,” Gardner said. “We must put together a compre-hensive sustainability analysis that consid-ers environmental, social and economic impacts.”

Most experts agree that a compre-hensive life-cycle assessment of future biofuels is needed, and to understand that not all biofuels are created equal. Ausilio Bauen, director of E4tech, a European sustainable energy consultancy, gave an overview of international developments in carbon and sustainability policy for bio-fuels. He said that the recent rapid growth of biofuels led by strong policy support in the United States, European Union and Brazil has led to carbon and sustainability concerns. “Life-cycle greenhouse gas sav-ings vary depending on the biofuel type and how it is produced,” Bauen said. “Di-rect change of land use to grow biofuels increases these emissions signifi cantly—in some cases negating the benefi ts of using biofuels.” This has led to a variety of poli-cy responses worldwide such as in Germa-ny where biofuels laws require a minimum greenhouse gas savings of 30 percent, rising to 40 percent in 2011. In addition there are mandatory requirements on agriculture and habitats. The EU, United Kingdom and the Netherlands have simi-lar laws in place. They all use a life-cycle approach to assess biofuel’s carbon inten-sity. “It is essential to consider all of the policy goals when designing low-carbon fuels policy,” Bauen explained, adding that greenhouse gas emissions savings may be the key driver, but other goals must also be considered and prioritized including energy security, macroeconomic impact, rural development, social responsibility and the potential for innovation. “Regard-less of the model, policy must be made in an international context and it must be fl exible and adaptable to new technolo-gies.” EP

Travis Hochard attended the World Biofu-els Symposium held in October in Beijing.

EVENT


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FRACTIONATION

A Renewed Future As ethanol producers search for ways to ease the pain of economic asperity, fractionation could be the answer. Renew Energy LLC implemented Cereal Process Technologies LLC’s dry-fractionation system at its 130 MMgy ethanol plant in Jefferson, Wis., now the world’s largest corn dry-milling operation. EPM investigates the benefi ts of installing this system.

By Anna Austin


FRACTIONATION


im Giguere’s work on corn fractionation technol-ogy didn’t stop when his process was fi rst being used in the 1980s, or when he secured the fi nal patents in 1994. The chemical engineer continued to refi ne the process and make it more effi cient long after he retired. Today his endeavors are being employed by

Cereal Process Technologies LLC, who introduced it to the ethanol industry.

Its fi rst commercial application in the world of ethanol came in January 2008, when Renew Energy LLC commenced operations at its 130 MMgy ethanol plant in Jefferson, Wis. Renew’s ethanol plant was built on the site of what was once the largest malting plant in the world, which the company pur-chased from Cargill Inc. in 2006. Using the existing resources such as the storage units and water and electric utilities, its metamorphosis from malting plant to ethanol facility was smooth, despite the fact that the developers were attempting to build more than a typical ethanol plant. “We were looking for a way to build a facility that would have added value and not be the traditional commodity-based ethanol plant,” says Scott Busch, Renew Energy product merchandising and mar-keting manager. “We wanted to differentiate ourselves by hav-ing different feed products.”

After researching different fractionation options, Renew decided that the CPT system was its best choice. “First, be-cause dry fractionation is more economical than wet,” he says. “And the horsepower required for this system—the cost of running it and overall capital costs—was less than other sys-tems.”

Today the facility can process 50 million bushels of corn annually, which is about one-third of the corn dry-milled in the United States. The technology has also provided Renew with a value-added feed product, allowing the company to serve ad-ditional markets.

Dissecting the ProcessThe CPT corn dry fractionation process differs from the

typical ethanol plant corn processing method, says Reg Ank-rom, director of market development for CPT. “Conventional ethanol plants, which hammer mill whole corn, don’t separate nonfermentable germ and bran from the starch component,” he says. “That means lower effi ciency and higher-cost ethanol production, and the loss of valuable coproducts.”

The CPT process separates the corn kernel’s endosperm, or starch, from the germ and bran, which are not used to make ethanol. “A few ethanol plants use a wet-milling process, which requires steeping the corn in a heated solution to achieve sepa-ration of the corn’s constituents,” Ankrom says.

In the CPT process, once the corn is cleaned of stones, dust and other foreign matter, it is tempered as necessary, and held for 24 hours in tanks to attain proper moisture content to prepare for fractionation. The corn is then passed through a degerminator, a patented process that separates the corn germ, Ankrom says. The resulting corn pieces are passed through two roller mills and then sifted. The larger pieces are returned to the roller mill to be further reduced.

J

Aspirators separate the lighter bran from the germ and endosperm streams and a bran fi nisher is used to remove about 1 percent more of the endosperm from the bran. “The resulting high-purity DDC (de-

germed, debranned corn) stream can then be conveyed directly to the ethanol plant or to temporary storage,” Ankrom says. “CPT fractionation is built in modules, which more closely relates capital cost to plant size.

Modular systems permit maintenance without shutting down the entire fraction-ation or ethanol plant, Ankrom says. A sin-gle module can be shut down and repaired separately. If necessary, the entire system can be slowed down to process only 5 bush-els an hour.

Each module typically processes about 650 bushels of corn per hour, and is capable of processing up to 750 to 800, if an opera-tor needs to catch up after a dry spell. “The sweet spot is about 650 though,” he says.

CPT’s Fractionation Advantages The benefi ts of installing CPT’s frac-

tionation system go beyond what typically come to mind when considering fraction-ation, Ankrom says. Of the DDC stream, no less than 80 percent by mass of the incoming whole corn will be contained in the collected stream, and a minimum of 91 percent of the starch in the incoming whole corn will be contained in the DDC stream to the ethanol plant. “When compared with available starch in the whole kernel—not chemically bound in the corn germ or bran,

In an initial step, destoners like these at Renew Energy in Jefferson, Wis., clean rocks and other ex-traneous materials from the corn.

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and therefore, not separable—the DDC fractionation captured by CPT’s technol-ogy amounts to approximately 95 percent of starch available for separation,” Ankrom says. A minimum of 65 percent of the crude fat, or oil, from the incoming whole corn will be contained in the collected corn germ stream. Of the oil available for separation, not bound in the bran or endosperm, CPT’s process typically yields 86 percent of the oil available in the germ portion, he says.

Ankrom tells EPM that the CPT frac-tionation system reduces about 17 percent of the corn’s nonfermentable materials, in turn leading to a reduction in energy pro-portional to the level of the inert materials.

A 35 percent reduction in the drying requirement can also be achieved. “This is a result of the removal of the nonfermentable solids, and is a signifi cant portion of the to-tal plant energy savings,” Ankrom says, add-ing that the CPT system can drive down the cost of ethanol production to about 22,000 British thermal units per gallon.

Other energy savings include the elimi-nation of approximately 1.2 megawatts in

the hammer mill load typically required for a 100 MMgy ethanol plant, and only two megawatts of totally connected load for the fractionation plant, Ankrom says. “This is considerably less connected energy than

most dry-fractionation systems,” he says. The CPT system at Renew uses 2,700 con-nected horsepower. “We understand that is about half the horsepower required at a typ-ical corn-milling operation,” Ankrom says.

With corn germ separated, the corn kernel’s fractions fl ow through roller mills like these in CPT’s patented process to perfect separation without damaging the corn-oil-rich germ.

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In addition, Renew’s water require-ment has been reduced to about 2.7 gal-lons per gallon of ethanol, a 33 percent savings. “At Renew, wastewater has been reduced by 50 percent,” Ankrom says. “They’ve done a great job doing this by recapturing and reusing.”

Ethanol and Then SomeThe fractionation process separates

the corn germ, which is the living part of the seed that contains growth elements and oil, and the bran, the tough, fi brous outer layer.

The oil in the corn germ can be ex-tracted and refi ned in a separate process for use in food-grade products. The de-oiled corn germ resulting from the frac-tionation can be used for feed, or mixed with the bran and the syrup from ethanol production to create a form of corn glu-ten feed. “The bran can be used as a feed source,” Ankrom says. “Including provid-

ing a medium for carrying the syrup, and, at more than 8,100 Btus per pound, it also can be used as a fuel source.”

The low oil and bran content of the DDC stream results in a high-protein meal, he adds. Renew’s feed product con-tains crude protein of about 40 percent, which reduces the need for supplemen-tal protein sources when used in animal feed.

Renew’s patented, high-protein Re-new Meal, which is produced using Car-gill Animal Nutrition’s Reveal technology, can be used as a substitute for soybean meal.

CPT’s equipment is unique because the operator can change the makeup and tailor the feed to the client’s needs. “The operator can vary the streams,” Ankrom says. “For example, normally the high-protein meal comes out the back end and has a lot less oil. If a client asks for slightly more oil for energy for swine, the process

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Renew Energy LLC utilizes Car-gill Animal Nutrition’s Reveal system to identify and manage the nutrient profi le of its animal feed products.

In 2007, Cargill released the sys-tem, which uses near-infrared refl ec-tance spectrometer (NIRS). Larry Holy, Cargill biotechnology and renewable energy consultant, says NIRS is an in-frared light that refl ects off of the bonds of the material being scanned. The light measurement is transformed into a method of statistical analysis to inter-pret what it sees, such as carbon bonds, oxygen or hydrogen. “It develops a pat-tern, or fi ngerprint, and it matches those that correlate to soybean meal or DDG (distillers dried grains),” he says. “You can use it to measure many different things. It’s used in other applications, such as chemical and food analyses, but animal feed is our specialty.”

The Reveal system allows the user to evaluate a product’s nutrients and ingredients. “It delivers the correct amount of nutrition to the animal, with-out over-feeding it and wasting money,” Holy says. “It ensures that you are de-

livering the correct nutritional load to the animal. By capturing the value dif-ferences, due to the variation of ingre-dients, it allows a company to put more money toward its bottom line.”

The system provides the producer and the customer with a certifi cate of analysis and a quantifi cation of ingredi-ents. “The concept of this, in a nutshell, is real-time nutrient analysis,” Holy says. “After the analysis is run, and the scan is made through the NIRS system, it generates a paper document, which can also be electronic. In DDG it evalu-ates protein, fat, ADF (acid detergent fi -ber), NDF (neutral detergent fi ber), ash, moisture and sulfur.”

The Reveal system is used by cli-ents worldwide, but Renew is the fi rst ethanol plant to utilize the system, and is currently the only ethanol plant using it, Holy says. “No one else is produc-ing the unique products that Renew is,” he says. Although economic constraints have slowed interest in the United States, Cargill expects a renewed in-terest in the future when conditions im-prove, he says.

Cargill’s Revealing Technology

“We’re in a paradigm shift,” Ankrom says. “Ethanol is not as glamorous as it was just a few years ago, but it’s still important to the nation today as a path to a cleaner en-vironment and reduced dependency on for-eign oil. Farmers are enjoying higher corn prices—a good thing—but ethanol values have not matched the increase in oil prices. The result is squeezed ethanol margins. The challenge for producers is to keep ethanol healthy in a more challenging market.”

By taking advantage of the value in the corn feedstock, which in most cases is al-

ready paid for, ethanol producers who make fractionation part of their business model can produce their primary product more economically and add new revenue streams from the higher-value coproducts. “Frac-tionation adds up to higher profi tability and sustainability,” Ankrom says. EP

Anna Austin is an Ethanol Producer Mag-azine staff writer. Reach her at [email protected] or (701) 738-4968.

can easily be varied to do this.”Renew also sells liquid carbon diox-

ide, a byproduct of ethanol production. After it’s collected and cleaned of im-purities, the company sells it to the food industry as a refrigerant, carbonator for soft drinks or dry ice.

Cost and Payback As with any project, different vari-

ables can affect the cost and how long it will take to pay for the technology. “Site condition and requirements, such as the fractionation plant’s proximity to the eth-anol plant, conveyance and incoming and outgoing loading facilities, among others, impact cost,” Ankrom says.

Ankrom estimates that it costs $30 million for a nine-module system, such as the one serving Renew. “Payback is subject to many variables, including corn costs, ethanol values, coproduct values, transportation costs and so on,” he says. “Given these considerations, our calcula-tions show a payback within two years.”

CPT’s technology can add more than 20 cents per gallon to the producer’s net income when built in or added to an ethanol plant, Ankrom says

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FINANCE


FINANCE

Surviving the Economic StormThe ethanol industry isn’t immune to the economic downturn and some wonder if consolidation is imminent. But, how would fi nancially distressed plants be valued?

By Bryan Sims


Declining ethanol and oil prices, a tightening credit market and volatile corn prices have thrown some ethanol companies for a

loop. “These issues that ethanol plants have been facing started happening well before the credit crunch, and the tight credit market has just added more fuel to the fi re,” says Michael Masterovsky, director and renewable energy team leader for SJH & Co., a Boston-based fi rm that provides independent, third-party consulting services to project developers and fi nancial institutions operating in the ethanol, biodiesel and biomass sectors.

Corn and natural gas prices have fl uctu-ated wildly the past year along with prices for ethanol and distillers dried grains. Analysts and fi nanciers agree that all commodity price fl uc-tuations within the industry are interrelated and that some are more sensitive than others, according to Cory Garcia, senior alternative energy research analyst for Raymond James & Associates. “It’s still going to be a bumpy ride for the next two to three years,” he says. “The margins right now are still very, very thin. What you’re probably going to see are a

couple smaller companies that just won’t have enough access to capital to continue. There will be more bankruptcies, but it will depend on how long this downturn in ethanol lasts.”

Not even VeraSun Energy Corp., one of the largest publicly traded ethanol producers in the country, was able to fend off instability in the marketplace. Its inability to obtain capi-tal coupled with unprecedented moves in the corn market forced the Brookings, S.D.-based company to fi le for Chapter 11 bankruptcy protection in late October 2008.

The seven-year-old company said it locked in hedging agreements to buy corn when prices were high. In the six months end-ing June 30, corn costs represented 67.3 per-cent of VeraSun’s total costs of goods sold. In July, VeraSun decided to exit some of its short positions and lock in the current cost of corn. As corn prices sank to $4 per bushel in the fall, VeraSun said it faced a loss of millions of dollars.

The company ran headlong into the credit crunch, just as it needed cash to sustain operations. As a result, VeraSun was tempo-rarily removed from trading on the New York

Stock Exchange. It later reappeared on the NYSE after receiving interim debtor-in-pos-session funds (DIP).

At press time, the U.S. Bankruptcy Court of Delaware gave VeraSun approximately $215 million in DIP fi nancing to pay its bills, $40 million of which was interim fi nancing, and grants access to cash collateral for im-mediate use. In the company’s Chapter 11 fi ling, VeraSun offi cials confi rmed it would continue producing ethanol at its 16 plants in eight states while the company attempts to reorganize.

“Most plants were trying to secure the cheapest corn they could and the market was moving higher so they were trying to get as much coverage as they could in a reasonable manner,” says Tom Wapp, commodity price risk manager for United Bio Energy, which provides consulting and market advisory ser-vices for ethanol producers. “Now, what you see is less of trying to take a position on any one particular commodity and more of just trying to manage both commodities to lock in some sort of margin when they have that opportunity.”

FINANCE


As the industry struggles to fi nd fi nancial equilibrium amid diffi cult economic times, it’s likely only a matter of time until consolidations start to occur. If that happens, what would these fi nancially distressed ethanol plants or assets be worth to a potential buyer?

Assessing ValueDespite its fi nancial position, VeraSun

would be an attractive purchase because it still has effi cient operating assets with the ability to produce about 1.64 billion gallons of ethanol, which accounts for about 15 percent of the domestic supply, says Kyle Althoff, project an-alyst for BBI International’s engineering and consulting division. Whether a buyer would be willing to acquire VeraSun in pieces or in aggregate, they would have to evaluate if the operating assets could provide solid returns. In addition, a potential buyer would have to consider the risk of inheriting the company’s debt, which is more than $1.5 billion; much of which it obtained after acquiring etha-nol plants from rival US BioEnergy Corp. in March 2008 and ASAlliances Biofuels LLC in 2007. “If you look at VeraSun, and its debt

FINANCE

Wapp’s Tips for Weathering the Storm

Two words: capital preservation. As the saying goes, the best offense is a good defense. Protect yourself with safe investments to help stay afl oat in tough times.

Target acceptable margin levels that the plant wants to achieve and be prepared to act to lock those margins in when available. Be realistic as the current environment will not allow much in the way of a margin.

Understand that just because you might be able to lock in a mar-gin on paper doesn’t mean you are guaranteed that margin at the end of the month. Locking in the board price for corn and/or ethanol doesn’t lock in the basis that the plant will pay or receive for the cash commodity.

Do not underestimate the market’s ability to surprise even the smartest trader. No one can outguess the markets so don’t try. Instead, fi nd a way to hedge against negative circumstances you can’t control—weather, policy and subsidy changes, factors that affect demand for inputs and so on.

Be prepared to react to a surprise that changes the market’s dynamics. Quickly acknowledge and analyze changing circumstances to judge whether they require a change in your hedging plan.

Wapp


commitments totaling 96 cents per gallon, it has one of the lower debt per gallon ratios of publicly traded ethanol companies Althoff says. “From a debt versus total production capacity standpoint, VeraSun looks attractive.”

One method used to determine the value of an ethanol company is to calculate the enterprise value. The formula for fi guring out the en-terprise value is adding a company’s total debt level and market capital-ization then dividing that by the total production capacity held by that company, which provides a value per gallon of ethanol produced.

According to Althoff, VeraSun’s enterprise value was calculated at about $1 per gallon before its suspension on the New York Stock Ex-change at the end of October. Just prior to delisting, the company was trading at about 28 cents per share and had 157 million shares; multiply-ing the two equals out to a market capitalization—or value—of $44 mil-lion. The value of VeraSun’s stock fell sharply as its fi nancial problems mounted. Over the past year, its stock price—which had traded as high as $18 per share in January 2008 with a market value of $2.8 billion—had fallen 98 percent before trading was suspended due to its bankruptcy.

“VeraSun’s core assets can still make ethanol and they’re some of the most effi cient assets in the industry, so you just need someone to come in with the right amount of capital to make sure those assets can main-tain operations over the next two to three years,” Althoff says. “A large potential buyer could probably acquire those assets with only a moderate capital infusion given the current credit cycle in the United States.”

VeraSun isn’t the only publicly traded ethanol company that’s seen its stock price plummet. Others such as Pacifi c Ethanol Inc. and Aven-tine Renewable Energy Inc. have faced marginal to negative net prof-its. According to Althoff, the average publicly traded Midwest ethanol company was trading in mid-November at a total enterprise valuation of under $1.15 per gallon, much less than it took to build the original facili-ties over the past two years.

“Enterprise valuations are composed of the debt and equity por-tions of the calculation─the drop in ethanol stock prices over the past few years has signifi cantly reduced the valuation for these companies,” Althoff says. “The valuation is correlated with the expected earnings that each company is expected to produce on each gallon of ethanol─as the industry gross margin has declined, the valuation of the stocks has fol-lowed suit. These stocks are an attractive buy in today’s market if the gross margins improve.”

If consolidation is in the ethanol industry’s future, it’s not certain yet who would be willing and able to acquire fi nancially distressed etha-nol plants, and at what cost pursuant to the valuation. Likely candidates could be agri-business giants such as Archer Daniels Midland Co. and Cargill Inc. Both companies would also be better positioned to mitigate the price risk in commodities as they manage much of the grain supply chain in the United States for other food-based products.

“Asset values across the board—public or private—are very cheap right now,” Garcia says. “It’s hard to take any valuation stance on a com-pany, and you might not see that until merger and acquisition activity starts to pick up.” EP

Bryan Sims is the Ethanol Producer Magazine staff writer and plant list manager. Reach him at [email protected] or (701) 738-4950.

FINANCE

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Biomass Magazine is a trade journal serving companies that use and/or produce power, fuels and chemical feedstocks derived from biomass. Collectively, these biomass utilization industries are positioned to replace nearly every product made from fossil fuels with those derived from plant or waste material. The publication covers a wide array of issues on the leading edge of biomass utilization technologies, from biorefining, dedicated energy crops and cellulosic ethanol to decentralized power, anaerobic digestion and gasification. It’s all here.

www.BiomassMagazine.com

For additional informationplease contact us at (701) 746-8385 or at [email protected]


BIOREFINING

Danish Company Provides Technology, Innovations for Cellulose BiorefiningBy Roger Moore

n the Brothers Grimm fairy tale, Rumpelstiltskin spins straw into gold to save the miller’s daughter. In energy-thrifty and eco-sensitive

Denmark, biomass conversion company Inbicon has been spinning straw into eth-anol since 2003, using a patented process company offi cials say could help save the United States $700 billion per year spent on foreign oil.

Inbicon, along with its parent compa-ny Dong Energy, has been at the leading edge of energy innovation in Denmark. The country is a net energy exporter, and now the biorefi nery concept could fur-ther enhance that status.

Niels Henriksen, Inbicon’s president and chief executive offi cer, outlines the thrust of his company’s global market-ing strategy for Ethanol Producer Maga-zine. “Our fi rst step is to enable owners of grain-fed plants in the United States and Canada to add biomass-to-ethanol production to their existing operations,” Henriksen says.

While other perhaps more well-

known companies such as Poet LLC and DuPont Danisco Cellulosic Ethanol LLC are developing biomass-to-ethanol pro-cesses, Inbicon hopes to make its mark soon. The company says it has taken a unique approach to developing a biomass refi nery. “We’ve taken a road less traveled with our process technology,” Henriksen says. “Instead of focusing on making eth-anol, we’ve concentrated on adding value to biomass by converting it into other forms of energy and products. Because we don’t insist that all the sugar in the bio-mass ends up as ethanol, we keep produc-tion costs low.”

Inbicon’s process produces four high-value end products: ethanol, a pow-dered biomass-based fuel that can be burned to generate additional process energy, a bacteria inhibitor that can be substituted for antibiotics or hops in fer-mentation processes, and molasses syrup used as livestock feed. “By integrating the powered biofuel into a co-gen conversion, you reduce the plant’s use of fossil fuels to zero,” says Tom Corle, the long-time

ethanol marketing executive and G-Team founder that Henriksen has enlisted to rollout the technology.

The company’s patented innovations came from focusing on the front end of the second-generation biorefi nery process, breaking down wheat and barley straw, corn stover, or other agri-cultural residues into liquefi ed sugars ready for fermentation into ethanol. “Handling millions of tons of straw is tricky, but Dong Energy has more than a decade of practical experience working out the lo-gistics of the infrastructure, and coordi-nating all the transportation, storage and handling of huge volumes of biomass,” Corle says. “This expertise in developing the workable infrastructure has put Inbi-con several years ahead in its ability to do commercial-scale straw conversion.”

Synergies with electric power genera-

The claims and statements made in this article belong exclusively to the author(s) and do not necessarily refl ect the views of Ethanol Producer Magazine or its advertisers. All questions pertaining to this article should be directed to the author(s).

I

Morgen

tion are another key the company plans to demonstrate at its demonstration project located at Denmark’s port city of

Kalundborg. “Waste heat from the pow-er plant next door will help process the straw, and the powdered biofuel byprod-uct from ethanol production will replace some of the coal burned by the power plant,” Henriksen says.

An Innovation in TechnologyInbicon, a biotechnology spin-off

of Dong Energy A/S, has its roots in its parent company’s quest for alternative uses of biomass. Dong Energy’s prede-cessor companies played an important role in shifting Denmark’s near total de-pendence on Middle Eastern oil in 1973 to today’s energy independence (see side-bar on page 100). The company began developing its biomass expertise in the mid-1990s.

Denmark’s farmers raise a consider-able amount of wheat, and the disposal of wheat straw provides an energy op-portunity. Dong Energy initially burned straw with coal in its power plants, but Inbicon offi cials considered other uses for it. “We’re engineers,” explains Chris-tian Morgen, Inbicon engineer and mar-keting director. “We like practical solu-tions. We reasoned that the straw could

be converted to higher-value products if we could discover a way to separate the cellulose so it could be converted to sug-ars. But it had to be a simple, effi cient and inexpensive way.”

By 2003, Inbicon had designed and built a pilot plant that continues to con-vert biomass to ethanol, according to Henriksen. Now the company looks to prove its process with a larger facility. “In September [2008], we celebrated the groundbreaking for our new larger-scale biomass refi nery at the Kalundborg port in Denmark,” Henriksen says.

The Kalundborg facility is slated to produce 1.4 MMgy of ethanol by De-cember 2009, which will coincide with the United Nations Climate Change Conference to be held in Copenhagen.

Inbicon’s biomass refi nery tech-nology is a patent-protected sequence combining mechanical preparation, hy-drothermal treatment and enzymatic hy-drolysis. Developing it “wasn’t rocket sci-ence,” Morgen says. The straw is cooked with steam under high pressure with little water. In the cooker, the heat and pres-sure break down the straw fi ber, expos-ing the cellulose molecules. “By using

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BIOREFINING

Dong Energy’s Impact on DenmarkWhen the Arab oil embargo struck in 1973, it hobbled

the economies of the United States, Japan and most of Europe. Denmark, a small and vulnerable nation depen-dent on foreign oil for nearly all of its energy, was hit par-ticularly hard.

However, unlike most countries, Denmark didn’t suf-fer from embargo amnesia once the crisis passed. As Thomas Friedman wrote in a New York Times column ti-tled “Flush With Energy,” Denmark “responded … in such a sustained, focused and systematic way that today it is energy independent.”

Denmark’s economic, social and political miracle is that it’s become a net energy exporter over the past 25 years. It imported no Middle East oil in 2008. The trans-formation required far-sighted government policies and strong public support.

It also took power industry cooperation and innova-tion. The six energy companies that united to form Dong Energy in 2006 have been instrumental in the process.

Today, the company earns nearly $9 billion in annual

revenue and employs approximately 5,100 people. Dong Energy generates and distributes electricity to 1 million Danish customers. It explores for and produces oil and natural gas from North Sea wells, and operates oil and gas pipelines and distribution systems.

Denmark’s electricity was generated from oil-fi red plants until the oil embargo, after which the country switched to coal and supplemented it with biomass such as wheat straw.

The future belongs to continued innovations in renew-able energy, and that technology is one of the country’s fastest-growing exports. Denmark generates 20 percent of its power from wind turbines. Dong Energy has built six of the 10 largest offshore wind farms in the world, accord-ing to the company.

In the past decade, Dong Energy’s explorations into renewable fuels have led it into biomass conversion and the recent formation of Inbicon, which specializes in con-verting cellulose such as wheat straw into ethanol.

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less water, the savings ripple throughout the plant,” Morgen says. “You can use smaller equipment, smaller diameter pip-ing [and] smaller valves. [The plant will] use less energy for heating water because there’s less water to heat, and reduce or eliminate wastewater and its handling sys-tems and treatment.”

After the cook step, the treated fi -ber is tumbled for several hours with a minimal amount of enzymes in a lique-faction stage. During this step, the en-zymes convert the cellulose into a sugar slurry. “Our hydrothermal treatment al-lows us to avoid lots of expensive, exotic enzymes in the hydrolysis stage,” Morgen

says. “[It’s] a big savings. Our special mix-ing equipment is designed to accelerate the conversion to sugar, requiring fewer enzymes for a shorter period, so we save not only enzyme expenses but energy costs. Both Genencor and Novoyzmes are pre-qualifi ed to supply the enzymes to our process.”


BIOREFINING

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Niels Henriksen, left, with Denmark Minister of Climate and Energy Connie Hedegaard at the Kalundborg groundbreaking ceremony.

SOU

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The liquefi ed fi ber that is turned into sugar is then fermented with yeast and distilled into ethanol. The powdered bio-fuel and livestock feed are captured along the way. “By not separating the lignin (un-til) after the distillation we avoid losses of sugar or ethanol,” Morgen says.

Inbicon’s pretreatment yields a high-er concentration of sugar in the liquid go-ing to fermentation, resulting in beer, or alcohol concentration, at least double the normal percentage in cellulosic ethanol processing, according to the company.

Partnering for ProgressInbicon is making use of several

ethanol industry partnerships to further its process. Vienna, Austria-based tech-nology provider Vogelbusch is slated to provide the Kalundborg plant’s ethanol plant technology, starting after Inbicon’s pretreatment and continuing through de-hydration.

Corle says the Kalundborg facility is expected to showcase the energy inte-gration capabilities possible by using the excess energy provided by Inbicon’s pro-cess as a green energy source for power manufacturing. The Inbicon process pro-vides biomass to replace a portion of a power plant’s coal. It will also produce a liquid fraction containing high levels of C5 sugars, salts and inhibitors. Inbicon’s fi rst demonstration plant will use the

fraction as a molasses feed for domestic animals. By feeding the molasses to live-stock, nutrients are returned to the soil through the animal’s manure. “Again, it’s all part of nature’s recycling plan,” Mor-gen says.

The company has lofty goals, plan-ning to use its technology to reach 10 billion gallons per year of biomass-based ethanol production capacity. Additional companies, including Siemens, Alfa Laval and Atlas-Stord, are helping the com-pany in pursuit of its goal. Atlas-Stord is a Denmark-based company providing thermal drying, evaporation and mechan-ical dewatering equipment.

Henriksen also touts the synergies between his company’s conversion tech-nology and the starch-based ethanol plants that comprise the current industry. “We’d welcome talks with most any agri-business using soft lignocellulosic mate-rial that’s both plentiful and inexpensive,” he says.

With the current energy and eco-nomic issues surrounding the globe, its likely opportunities will sprout. Govern-ments worldwide seek energy indepen-dence without sacrifi cing clean air and lower greenhouse gas emissions. The implications are huge. “Given the eco-nomic woes cascading around the world, independence from foreign oil becomes more critical every day,” Corle says. “In-

bicon can play a role in helping the Unit-ed States and Canada shift to lower-cost, cleaner renewable fuels such as ethanol—especially ethanol made from agricultural leftovers such as wheat straw and corn stover. EP

Roger Moore is freelance writer located in Lancaster, Pa. Reach him at (717) 653-5700 or [email protected].

EVENTSCALENDAR

Carbon Markets North America

Jan. 15-16, 2009Miami

Carbon emission regulations will be part of the renewable fuels standard that will regulate fu-ture advanced biofuel use in the United States. Therefore, a leading panel of carbon market experts will inform attendees how to prepare for a carbon-constrained economy at this second event. Agenda topics will detail how current emis-sions trading systems are creating business op-portunities, fostering innovation and infl uencing global fi nance.

+ 44 20 7251 9151www.environmental-fi nance.com/

conferences/2009/Miami09/intro.htm

National Ethanol ConferenceFeb. 23-25, 2009

San Antonio Convention CenterSan Antonio

In addition to Renewable Fuels Association President Bob Dinneen’s State of the Industry Address, panel discussions at this 14th annual event will focus on midlevel ethanol blends and cellulosic ethanol commercialization, and include the annual Washington Insiders’ Roundtable. Other topics will include life cycle greenhouse gas emissions, infrastructure, retailing and an in-ternational outlook, among many others.

(202) 289-3835www.ethanolrfa.org

Renewable Energy Technology Conference

& ExhibitionFeb. 25-27, 2009Las Vegas Convention Center

Las Vegas

This event will include a business conference, trade show and several side events. The busi-ness conference will address the status and out-look of renewable energy. One breakout session in particular will focus on biomass and biofuels. Other sessions will address sustainability, feed-stocks, fi nancing, ethanol production technology, a global market outlook, engines and fueling sta-tions, and next-generation facilities.

(805) 290-1338www.retech2009.com

The Future of BiofuelsApril 4-8, 2009

Snowbird ResortSnowbird, Utah

The goal of this meeting will be to share a broad perspective defi ning the critical needs for biofu-els, and to highlight cutting-edge research and development efforts that are defi ning the next generation of biofuel product and process ad-vances. The event will bring together a broad spectrum of core experts to help better enable and advance biofuel research efforts globally.

(800) 253-0685www.keystonesymposia.org

Alternative Fuels & Vehicles National Conference + Expo

April 19-22, 2009Walt Disney World Swan and Dolphin Resort

Orlando, Fla.

This 14th annual event will represent all fuels, ve-hicles and technologies that provide an alterna-tive to petroleum, including ethanol. Information will be disseminated via preconference sessions, a general session and concurrent breakout ses-sions. There will also be a ride-and-drive event, industry tours and niche market workshops. A more detailed agenda will be available as the event approaches.

(702) 254-4180www.afv2009.com

Advanced Biofuels Development Summit

April 20-21, 2009Marriott at Metro Center

Washington, D.C.

This event will bring together leaders of scien-tifi c innovations in advanced biofuels develop-ment from feedstock alternatives to processing technologies and methods. Topics will include advanced biofuels feedstocks, including energy crops and waste residues; advanced fuel pro-cessing methodologies and refi ning technolo-gies; market dynamics; collaborations; fi nancing; and public policy. More information will be avail-able as the event approaches.

(781) 972-1346www.biofuels-summit.com


Canadian Renewable Energy WorkshopMarch 10-12, 2009

Regina Inn Hotel and Conference CenterRegina, Saskatchewan

This second conference facilitates the continued development of Canada’s renewable energy in-dustry. More information will be available as the event approaches.

(888) 501-0224www.crew2009.com

World Biofuels MarketsMarch 16-18, 2009

Brussels Expo CentreBrussels, Belgium

This is one of the largest biofuels events in Eu-rope and a key meeting place for industry experts looking to share best practices and attract new clients. Agenda topics will include conventional and cellulosic ethanol; international ethanol mar-kets such as Asia, Brazil and Africa; infrastruc-ture; and use.

+44 20 7099 0600www.worldbiofuelsmarkets.com

African BiofuelsMarch 30-April 2, 2009

Vodaworld Event CenterJohannesburg, South Africa

This fourth annual conference will focus on vari-ous biofuels, including ethanol, and the technol-ogy and movement toward second-generation biofuels. The event will showcase more than 40 speakers, panel and open fl oor discussions, mini workshops, and 16 case studies. A more detailed agenda will be available as the event approach-es.

(011) 771-7000www.africanbiofuels.co.za

International Biomass Conference & Trade Show

April 28-30, 2009 Oregon Convention Center

Portland, Ore.

This event, sponsored by BBI International Inc., will address the latest technologies and business considerations for bioenergy projects, including biofuels. Breakout session topics will include cel-lulosic ethanol; feedstocks such as ag residues, wood waste and municipal solid waste; project fi nance; and permitting and project implementa-tion. Attendees will also be able to tour the Cor-nelius Summit Foods ethanol plant.

(701) 746-8385www.biomassconference.com

International Fuel Ethanol Workshop & ExpoJune 15-18, 2009

Denver Convention CenterDenver

This will mark the 25th anniversary of the world’s largest ethanol conference, which was recently recognized by Trade Show Week magazine as one of the fastest-growing events in the United States for the second consecutive year. Abstract presentations will be accepted until Jan. 9. The event will address conventional ethanol, next-generation ethanol and biomass. More informa-tion will be available as the event approaches.

(701) 746-8385www.2009few.com

Ethanol Conference & Trade Show

Aug. 11-13, 2009Milwaukee

The American Coalition for Ethanol’s 22nd annual conference will highlight public policy, technology and education in regard to the ethanol industry, among many other topics. More information will be available as the event approaches.

(605) 334-3381www.ethanol.org



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Hydro-Klean, Inc.515-283-0500 www.hydro-klean.com

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Macomber Welding & Fabricating, Inc.616-698-0819 www.macomberwelding.com

W. Soule & Company1-877-976-8531 www.wsoule.com

Insulation

Stabilized Liquid Yeast,Thermosacc,® Superstart™


EPM MARKETPLACE

Miller Insulation Co, Inc.701-258-4323 www.millerinsulation.com

Mechanical

Mid-States Mechanical Services, Inc.800-950-0279 www.mid-statesmechanical.com

Plant Construction

CYC Construction402-333-1652 www.cycconstruction.com

Railroad Tracks

R & R Contracting, Inc.800-872-5975 www.rrcontracting.net

Railworks913-888-4091 www.railworks.com

ConsultingEnvironmental

Air Resource Specialists,Inc.970-484-7941 www.air-resource.com


Plant Optimization

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

EducationIowa BioDevelopment641-969-4167 www.iabiodevelopment.com

Iowa Biofuels Training International641-969-4167 www.biofuelstraining.org

Iowa Lakes Community College800-242-5108 www.iowalakes.edu

EmploymentRecruiting

The Richmond Group USA - BioEnergy Search Division804-285-2071 www.trgbioenergy.com

EngineeringControl Systems

Control System Integrators, Inc.319-377-6538 x19 www.csystemi.com

EngineeringProcess Design

Vogelbusch USA, Inc.713-461-7374 www.vogelbusch.com

Equipment & ServicesAgitation Equipment

ProQuip, Inc.330-468-1850 www.proquipinc.com

Analytical Instruments

Perten Instruments, Inc.801-936-8165 www.perten.com

Boiler Systems

Rentech Boiler Systems, Inc.325-794-5701 www.rentechboilers.com

Centrifuge Repair

Centrifuges

Cooper Equipment281-494-7400 www.coopequip.com

JIC JOULÉ Industrial Contractors

OVER 40 YEARS OF PROVIDING QUALITY COST EFFECTIVE SOLUTIONS TO THE INDUSTRIAL INDUSTRY.

We provide:• Experienced Supervision• Multi-craft Staff• Logistical SupportFor:• Plant Outages• Plant Construction and Expansion• Relocations• Capital Projects• On and off site pipe FabricationTo:• Ethanol and Alternative Fuel Plants• Pharmaceutical Manufacturers• Food Plants• Building Material Facilities

Toll Free: (800) [email protected]

JIC

EPM MARKETPLACE

With all contact information placed in

one convenient location, Ethanol Pro-

ducer Magazine not only contains top

editorial content but also a useful di-

rectory in each publication. Whether

a fi rst-time advertiser wanting to raise

awareness of your business or a

frequent display advertiser looking for

added exposure, EPM Marketplace is

the perfect solution.


EPM MARKETPLACE

Combustion Equipment

Eclipse.Inc.815-637-7213 www.eclipsenet.com

Compressors

FlaktWoods716-845-0900 www.fl aktwoods.com

Computer Software

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

Control Systems

FeedForward, Inc.770-426-4422 www.feedforward.com

SoftPLC Corporation512-264-8390 www.softplc.com

Control Systems-Distributed

Control System Integrators, Inc.319-377-6538 x19 www.csystemi.com

Cooling Towers

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

Dryers─Fluid Bed

Littleford Day, Inc.859-525-7600 www.littleford.com

Dryers─Ring

Barr-Rosin,Inc630-659-3980 www.barr-rosin.com

Dryers─Rotary Drum

Barr-Rosin,Inc.630-659-3980 www.barr-rosin.com

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

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

Emission Monitoring Systems

MonitorTech Corp.866-682-6771 www.monitortechgrp.com

Fermentation Monitoring

ETS Laboratories707-963-4806 www.etslabs.com

Filtration Equipment

Fluid Engineering814-453-5014 www.fl uideng.com

Fractionation─Corn

Buhler Inc.763-847-9900 www.buhlergroup.com/us

Cereal Process Technologies217-779-2595 www.cerealprocess.com

FWS Technologies204-487-2500 www.fwsgroup.com

Sturtevant Inc.781-829-6501 www.sturtevantinc.com

Heat Exchangers

Custom Metalcraft Inc.417-862-0707 www.custom-metalcraft.com

Munters - Des Champs Products540-291-1111 www.deschamps.com

Instrumentation

Endress+Hauser317-535-2174 www.us.endress.com

Process Sensors Corp.508-473-9901 www.processsensors.com


WIKA Instrument Corporation888-945-2872, x5127 www.wika.com

Insulator

Industrial Construction & Engineering636-970-1650 www.ic-e.cc

Jet Cookers

ProSonix Corporation800-849-1130, x. 801 www.pro-sonix.com

Laboratory─Equipment


Laboratory─Outsourcing

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

Laboratory─Supplies

Midland Scientifi c, Inc.800-642-5263 www.midlandsci.com

Laboratory─Testing Services

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

Romer Labs, Inc.636-583-8600 www.romerlabs.com

SGS North America, Inc.281-478-8234 www.sgs.com/alternativefuels

Trilogy Analytical Laboratory636-239-1521 www.trilogylab.com

Loading Equipment

Hemco Industries, Inc.877-347-7106 www.hemcocpm.com

SafeRack866-761-7225 www.saferack.com

Maintenance Services

Joule’ Industrial [email protected] www.jouleinc.com

Maintenance Software

Mapcon Technologies, Inc.800-922-4336 www.mapcon.com

Mills─Hammer

CPM/Roskamp Champion800-366-2563 www.cpmroskamp.com

Mixers

KINEMATICA, INC.631-750-6653 www.kinematica-inc.com

Moisture Analyzers

CEM Corporation704-821-7015 www.cem.com


Sartorius Mechatronies-Omnimark800-835-3211 www.sartorius-omnimark.com

Continuous Emissions Monitoring SystemsEasiest installation, operation and maintenance

Meet or exceeds EPA requirementsNOx, O2, CO, SO2 and others

Turnkey systems for under $100,000.00P.O. Box 9271, Columbus, Oh 43209

866-682-6771 [email protected]


EPM MARKETPLACE

Molecular Sieves

Vaperma, Inc.418-839-6989 www.vaperma.com

Zeochem, LLC502-634-7600 www.zeochem.com

Paint & Protective Coatings

Mongan / Bockman 260-748-7655 www.monganbockman.com

Pipe

Robert-James Sales, Inc.800-666-0088 www.rjsales.com

Pipe─Fittings


Pipe-Flanges


Pressure & Temperature

WIKA Instrument Corporation888-945-2872, x5127 www.wika.com

Pumps

ITT Industries Goulds Pumps315-568-2811 www.gouldspumps.com

Watson-Marlow Bredel Pumps800-282-8823 www.watson-marlow.com

QA Test Products


Resource Recovery

Eco-Tec, Inc.905-427-0077 www.eco-tec.com

Seals

Aesseal Inc.865-531-0192 www.aesseal.com

Utex Industries, Inc.432-333-4151/800-873-0946 www.utexind.com

Separation Equipment


Storage─DDGS

Laidig Systems, Inc.574-256-0204 www.laidig.com

Structural Fabrication

Cherokee Steel Fabricators, Inc.903-759-3844 www.cherokeesteelfabricators.com

Tanks

CMC Letco Industries417-831-1528 www.cmc-letco.com

Federal Equipment Company800-652-2466 www.fedequip.com

Paragon Trailer Sales800-471-8769 www.paragontrailer.com

Thermal Energy

American Waste Removal505-417-9933 www.americanwasteremoval.com

Thermal Oxidizers

Valves

North American Safety Valve800-800-8882 www.nasvi.com

Wastewater Treatment Services

Biothane Corporation856-541-3500x501 www.biothane.com


Water Treatment

Aquatech International Corporation724-746-5300 www.aquatech.com


Ethanol ProductionExisting Producers

Louis Dreyfus Commodities402-844-2680 LDCommodities.com

POET LLC605-965-2200 www.poetenergy.com

FinanceAccounting

Kennedy and Coe, LLC800-303-3241 www.kcoe.com

Equity Procurement

Jordan, Knauff & Company312-254-5900 www.jordanknauff.com

Insurance

ERI Solutions, Inc.316-927-4294 erisolutions.com

Mergers & Acquisitions

Kent Group, Inc.715-358-7528 www.kentgroupinc.com

Risk Management

First Capitol Risk Management800-884-8290 www.fi rstcapitolrm.com

R.J. O’Brien800-621-0757 www.rjobrien.com

[email protected]

PROVENRELIABILITYfor VOC, CO & PM

ABATEMENT

EISENMANN CorporationCrystal Lake, Illinois

Reach your customers

Your Solution. Advertise Today.

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GovernmentState

Legal ServicesAttorneys

BrownWinick Law Firm515-242-2400 www.biofuellawyers.com

Faegre & Benson, LLP612-766-6930 www.faegre.com

Stoel Rives LLP612-373-8800 www.stoel.com/biofuels

MarketingFuel Ethanol

Atlas Renewable Energy, LLC800-884-8290 www.atlasenergyllc.com

TransportationRail Ties

Thompson Industries, Inc.317-859-8725 www.thompsonindustries.net

Railcar Moving

Shuttlewagon, Inc.816-767-0300 www.shuttlewagon.com

UtilitiesUtility

Integrys Energy Services608-235-2547 www.integrysenergy.com

Biomass Magazine is a trade journal serving companies that use and/or produce power, fuels and chemical feedstocks derived from biomass. Collectively, these biomass utilization industries are positioned to replace nearly every product made from fossil fuels with those derived from plant or waste material. The publication covers a wide array of issues on the leading edge of biomass utilization technologies, from biorefining, dedicated energy crops and cellulosic ethanol to decentralized power, anaerobic digestion and gasification. It’s all here.

www.BiomassMagazine.com

For additional informationplease contact us at (701) 746-8385 or at

[email protected].

Reach your customers


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Your Ad HERE


EPM MARKETPLACE

EPM MARKETPLACE

With all contact information placed

in one convenient location, Ethanol

Producer Magazine not only con-

tains top editorial content but also

a useful directory in each publica-

tion. Whether a fi rst-time adver-

tiser wanting to raise awareness

of your business or a frequent dis-

play advertiser looking for added

exposure, EPM Marketplace is the

perfect solution.

www.rjsales.com

Buffalo, NY 800-666-0088Cleveland, OH 800-777-0820Cincinnati, OH 800-777-2260Chicago, IL 800-777-2008Cranbury, NJ 800-777-1858

Indianapolis, IN 800-777-0510Minneapolis, MN 800-777-1355Raleigh, NC 866-493-8834Tavernier, FL 305-852-1694

Robert-James Sales is your #1 source for stainless PIPE, FITTINGSand FLANGES up to 36" in Sch 5,10 and 40. We also carry 2205 duplex through 24".

Free Product CDContact the Robert-James Sales location nearest you and ask for a free copy of ourcomprehensive, up-to-date CD. It outlinesour stainless product line including referencecharts, graphs and tables to help you calculate what your processing plant needs.

poet.com

January 2009 Ethanol Producer Magazine

Documents

Transcript of January 2009 Ethanol Producer Magazine