July 2014 Ethanol Producer Magazine

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www.EthanolProducer.com INSIDE: TRAIN DELAYS CAUSE LOGISTICAL NIGHTMARE Eye On Aquaculture Coproducts Reel In Booming Market Page 32 Plus FDA Proposed Rules Suggest Changes Ahead Page 38 Creative Product Placement Page 54 Study Reveals Benefit To Low-Oil DDGS Page 48 JULY 2014

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Transcript of July 2014 Ethanol Producer Magazine

  • www.EthanolProducer.com

    INSIDE: TRAIN DELAYS CAUSE LOGISTICAL NIGHTMARE

    Eye On Aquaculture Coproducts Reel In Booming Market Page 32

    PlusFDA Proposed Rules

    Suggest Changes Ahead Page 38

    Creative Product Placement

    Page 54

    Study Reveals Benefi t To Low-Oil DDGS

    Page 48

    JULY 2014

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    JULY 2014 VOLUME 20 ISSUE 7CONTENTS

    DEPARTMENTS

    6 EDITOR'S NOTE Aquaculture Ready To Net DDGS

    By Tom Bryan

    7 AD INDEX

    10 THE WAY I SEE IT Time For An

    Environmental Rethink By Mike Bryan

    11 EVENTS CALENDAR

    12 VIEW FROM THE HILLTrade Focus: China

    By Bob Dinneen

    14 DRIVELets Declare Independence

    From Big Oil By Tom Buis

    16 GRASSROOTS VOICE Ethanols Power by People

    By Brian Jennings

    18 EUROPE CALLING Paradigm Shift Needed

    By Robert Vierhout

    20 BUSINESS BRIEFS

    22 COMMODITIES

    26 DISTILLED

    62 TALKING POINT Byproduct Evolves Into

    Preferred Feed Ingredient By Kurt Rosentrater

    64 BUSINESS MATTERS Beware Wage And Hour

    Law Traps By Megan E. Moritz

    66 MARKETPLACE

    Ethanol Producer Magazine: (USPS No. 023-974) July 2014, Vol. 20, Issue 7. Ethanol Producer Magazine is published monthly by BBI International. Principal Office: 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. Periodicals Postage Paid at Grand Forks, North Dakota and additional mailing offices. POSTMASTER: Send address changes to Ethanol Producer Magazine/Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, North Dakota 58203.

    NEW MARKETS Fishing For Profit Ethanol coproducts show promise as part of aquaculture ration By Holly Jessen

    REGULATION Beyond Feed Producers face new set of recordkeeping and manufacturing requirements By Susanne Retka Schill

    VALUE-ADDEDComplementary Strategies For Success Distillers grains product manufacturers collaborate By Chris Hanson

    Q&A Doctor DDGS Low-oil DDGS shows benefits in study of growing-finishing pigs By Ron Kotrba

    32 38

    44 48

    FEATURES

    ON THE COVER

    Prairie AquaTech staff, left to right, Tim Bruce, Jason Bootsma and Mary Beth Fishback stand in the South Dakota facility.

    PHOTO: JAY FISHBACK

    TRANSPORTATION Stuck At The Station Slow rail traffic causes issues for producers, marketers By Chris Hanson

    50

    CONTRIBUTIONSEXPORTSThe Customer Calls The Shots Ethanol producers get help in meeting requirements to ship DDGS to China By Tom Sleight

    56

    ENGINEERING Industrial Facilities Turn To HDS For Retrofits, ExpansionNew high-definition technology speeds up surveying By Mike Hoffman

    60

    CORRECTION: A column in the June issue of the magazine contained an incorrect calculation. Based on projections of 13 billion bushels for the 2014 corn crop, ethanol will consume 29.2 percent of the U.S. corn crop, when the contribution of distillers grains is included.

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    FOR INDUSTRY NEWS: WWW.ETHANOLPRODUCER.COM OR FOLLOW US: TWITTER.COM/ETHANOLMAGAZINE

    Discerning anglers will tell you those small yellow perch in the hands of the folks on our cover arent keepers by Minnesota fi shing standards, but the aquaculture industry that grows them may soon be hooked on distillers grains. Weve all heard about DDGS as a fi sh feed, but its always been a novel market most of us have brushed off. No longer, says

    the University of Minnesotas Jerry Shurson, who appears in our lead story and also in this

    months Q&A. In Fishing For Profi t, on page 32, Shurson tells us that aquaculture could

    be the next big thing for corn ethanols principal coproduct. Its one of the little known stories about future markets that really has not been developed to its fullest extent, he says.

    Managing Editor Holly Jessen reports that the growth of aquaculture, globally, is

    expected to drive up the demand for plant-based protein substitutes for fi sh meal. We learn,

    for example, about one producer thats virtually tailored its DDGS for fi sh. The worldwide

    aquaculture market, now 70 million metric tons per year, is attracting the attention of feed

    product manufacturers, including one pursuing microbial adaptations of DDGS and others

    that are introducing entirely new aquaculture products like yeast protein concentrate and

    bacterial biomass. As Jessen reports, the demand for new fi sh feed ingredients is virtually a

    sure bet. In Beyond Feed, on page 38, we turn our attention to the looming regulatory issues

    that producers of distillers grains will soon face. Senior Editor Susanne Retka Schill reports that, under the forthcoming Food Safety Modernization Act, the ethanol industry is not just

    facing new recordkeeping and manufacturing requirements, but the watchful eye of the U.S.

    Food and Drug Administration. The feed industry disagrees with the assertion that animal

    feed needs to be produced under the same hygienic standards as human food, but industry

    veterans like Purinas Harold Tilstra and Gavilons Randy Ives say its best to embrace the

    standards and accept that distillers grains is being considered part of the human food chain by the FDA.

    Also this month, we look at how two distillers grains product manufacturers are

    collaborating. In Complementary Strategies For Success, on page 44, we look at SweetPros

    effort to incorporate biodegradable materials into its DDGS blocks. The feed company is

    working with Laurel BioComposite LLC to make DDGS-based containers for its products. The product is sustainable, strong and price competitive with traditional petroleum-based

    resin containers. Finally, we examine the logistical challenges producers faced this past winter with delays

    caused by severe winter weather and increased rail traffi c. In Stuck At The Station, on page

    50, we report that product shipments that normally take a couple of days to get moving

    were taking up to 10 days this winter. Delays caused by congestion from increased North

    American crude oil production is yet another row in the strained relationship between U.S. ethanol producers and their Big Oil customers. The degree to which movement on the rails

    this summer eases will be telling.

    EDITOR'S NOTE

    Aquaculture Ready To Net DDGS

    Tom BryanPresident & Editor in [email protected]

  • JULY 2014 | Ethanol Producer Magazine | 7

    FOR INDUSTRY NEWS: WWW.ETHANOLPRODUCER.COM OR FOLLOW US: TWITTER.COM/ETHANOLMAGAZINE TM

    EDITORIALPresident & Editor in Chief

    Tom Bryan [email protected] President of Content & Executive Editor

    Tim Portz [email protected] Editor

    Holly Jessen [email protected] Senior Editior

    Susanne Retka Schill [email protected] Editor

    Erin Voegele [email protected]

    Staff WriterChris Hanson [email protected]

    Copy EditorJan Tellmann [email protected]

    ARTArt Director

    Jaci Satterlund [email protected] Designer

    Raquel Boushee [email protected]

    PUBLISHINGChairman

    Mike Bryan [email protected]

    Joe Bryan [email protected]

    SALES

    Vice President of OperationsMatthew Spoor [email protected]

    Business Development DirectorHoward Brockhouse [email protected]

    Senior Account ManagerChip Shereck [email protected]

    Marketing DirectorJohn Nelson [email protected]

    Circulation ManagerJessica Beaudry [email protected]

    Traffic & Marketing CoordinatorMarla DeFoe [email protected]

    Customer Service Please call 1-866-746-8385 or email us at [email protected]. Subscriptions to Ethanol Producer Magazine are free of charge to everyone with the exception of a shipping andhandling charge of $49.95 for anyone outside the United States. 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. Back Issues, Reprints and Permissions Select back issues are available for $3.95 each, plus shipping. Article reprints are also available for a fee. For more information, contact us at 866-746-8385 or [email protected]. Advertising Ethanol Producer Magazine provides a specific topic delivered to a highly targeted audience. We are committed to editorial excellence and high-quality print production. To find out more about Ethanol Producer Magazine advertising opportunities, please contact us at 866-746-8385 or [email protected]. Letters to the Editor We welcome letters to the editor. Send to Ethanol Producer Magazine Letters to the Edi-tor, 308 2nd Ave. N., Suite 304, Grand Forks, ND 58203 or email to [email protected]. Please include your name, address and phone number. Letters may be edited for clarity and/or space.

    COPYRIGHT 2014 by BBI InternationalPlease recycle this magazine and remove inserts or samples before recycling

    VOLUME 20 ISSUE 7

    ADVERTISER INDEX

    Ashland Water Technologies 82014 National Advanced Biofuels Conference 632015 Fuel Ethanol Workshop & Expo 67BBI Project Development 47BetaTec Hop Products 9Buckman 26Burns & McDonnell 27Cloud/Sellers Cleaning Systems 46DuPont Industrial Biosciences 68Fagen Inc. 3Fluid Quip Process Technologies, LLC 43GreenShift Corporation 20Growth Energy 2Hydro-Klean LLC 21ICM, Inc. 11Inbicon 24-25Interra Global Corporation 41INTL FCStone Inc. 42Iowa Economic Development Authority 5Jatrodiesel, Inc. 36Lallemand Biofuels & Distilled Spirits 13Magnetec Inspection, Inc. 34Mist Chemical & Supply Company 52Mole Master Services Corporation 55Nalco, an Ecolab Company 54Natwick Associates Appraisal 58Phibro Ethanol Performance Group 19POET-DSM Advanced Biofuels 15Premium Plant Services, Inc. 37Protectoseal Company, The 29Renewable Fuels Association 30RPMG, Inc. 61Syngenta: Enogen 17Tower Performance, Inc. 40Trinity Rail Group 65U.S. Water Services 59Verenium 31Vogelbusch USA, Inc 53Wabash Power Equipment 57West Agro Executive Brands 28WINBCO 35

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  • 10 | Ethanol Producer Magazine | JULY 2014

    On occasion, I update folks on whats going on in Australia (Down Under, as they say). First, because I live here and, second, because Australia, an ultra-

    modern, first world country, is of interest to many on a global

    scale.Last September, the Liberal Party (similar to U.S.

    Republicans) won in a landslide victory over the Labor Party

    (similar to U.S. Democrats). Now I will be the last to say that

    the Labor Party, which had been in office for six years, was

    an environmental giant, but since the election, the country

    has rapidly begun the process of negating almost all of the environmental programs that were in place.

    The carbon tax, designed to reduce carbon emissions

    from the countrys biggest emitters, is set to be repealed in July

    of this year. The government has called for the abolishment

    of the Clean Energy Council, an organization established

    to oversee the establishment of clean energy programs. Additionally, they have said that they will cut funding to the

    Clean Energy Finance Corporation. The CEFC had billions

    of dollars allocated to it to help develop, with private industry,

    renewable energy projects.

    The Treasurer of Australia, Joe Hockey has openly stated

    that the few wind farms that he sees on his drive to Parliament are obnoxious and offensive and funding for such development should be terminated. Over 70,000 hectares (nearly 173,000

    acres) of natural forest in the State of Tasmania has been

    taken off the list of protected areas and the government will allow large areas of it to be harvested. The tax credits for

    renewable fuels like ethanol and biodiesel are on the hit list for elimination. At the same time, coal is being used in record

    amounts because its plentiful and cheap. This is in a country

    that has so many natural renewable feedstocks available to it that it boggles the imagination.

    Australia has more sunshine than almost any country in the world, yet industrial-size solar projects struggle to get built.

    Wind is another major source of potential renewable energy

    with millions of hectares of open space, yet there is very little

    assistance from government to develop it and, in fact, as I

    stated earlier, some in government find it repugnant.

    Australia is surrounded by oceans. There is enough energy

    in tidal and wave power to generate enough electricity to completely power the country of 23 million people. Enormous

    sources of biomass exist in forest trimmings, field residue,

    and municipal solid waste. Geothermal power could provide a significant energy source in numerous parts of the country.

    If I sound like I am trashing Australia, Im not. Australia

    is a beautiful country with great people, a strong economy and

    a wonderful environment. Perhaps thats part of the problem. The air here is clean and so the urgency to act does not seem

    very pressing. Yet, Australia thumps its chest and boasts of

    its clean air while exporting millions of metric tons of coal to China to pollute its environment. Its time for a major

    rethink of the strategies that drive the environmental agenda of Australia. The chance, however, of that happening under

    the current government is negligible.Thats the way I see it!

    Time for An Environmental Rethink By Mike Bryan

    Author: Mike BryanChairman, BBI International

    [email protected]

    THE WAY I SEE IT

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  • 12 | Ethanol Producer Magazine | JULY 2014

    China is a country with limitless potential and ever-increasing possibilities.According to the U.S. State Department, trade between the U.S. and China has grown from $33 billion in 1992 to $538 billion in 2012. That is a 1,530 percent increase in just 20 years. That is why the Renewable Fuels Association recently joined a trip to China led by USDA Under Secretary Michael Scuse. The group, including the RFAs Kelly Davis and Growth Energys Jim Miller, visited the lesser-traveled northeast region of China, home to 110 million people, to reinforce our current relationships in the region and develop additional markets for U.S. agricultural products including ethanol and dried distillers grains with solubles (DDGS).

    The trade mission observed a rapidly growing economy in northeastern China while visiting the city of Dalian, home to 4.5 million residents. Signs of growth are everywhere, from new high-rise apartments forming a new skyline to the shift from street markets to grocery stores over the past 10 years. Families in Chinas expanding middle class are eager to buy their first cars. Twenty million vehicles were purchased in China last year, compared to the approximately 14 million vehicles U.S. consumers will buy this year. Continued urbanization and rise in vehicle demand has led to an increased demand for gasoline.

    The mission began with a focus on expanding agriculture markets in China. It included a visit to Huishan Dairy and the Chinese beef company Haoyue. Both were found both to be modern, fully integrated facilities utilizing DDGS. China is the leading importer of American DDGS. It clearly sees the benefit of the high-protein, lightweight, easy-to-ship feedstock. In March, China purchased more than half of all American

    exported DDGS, with Mexico and South Korea topping off the top three. March set the monthly record for U.S. DDGS exports. If the U.S. continues at the pace were going, we will break all previous records for DDGS exports.

    The focus then shifted to expanding ethanol markets as the group toured the Sinopec fuel ethanol plant in Chanchun and traveled to Jilin to visit a 175 MMgy corn ethanol plant. Today, a large portion of Chinas gasoline is actually blended with MTBE and low-level methanol blends. Ethanol is currently blended in only six Chinese provinces and accounts for less than one percent of the fuel supply. There is tremendous room for growth, but China currently bans the import of food-based ethanol. However, these restrictions might be removable at the provincial level, making it possible to find a location willing to change policy or start a new program that allows imports.

    In addition to combatting the food myth, the delegation detailed the economic and environmental benefits of U.S. produced high-octane, low-cost ethanol to the National Energy Administration and state-owned oil companies in an effort to open Chinas gasoline market to more ethanol.

    RFA planted the seeds for American exports. Now we must tend the field and watch them grow.

    Trade Focus: China By Bob Dinneen

    Author: Bob DinneenPresident and CEO,

    Renewable Fuels Association202-289-3835

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  • 14 | Ethanol Producer Magazine | JULY 2014

    This year we celebrate the 238th anniversary of the Declaration of Independence. On the Fourth of July our founding fathers began the arduous task of establishing a new nation outside the grasp of tyranny. Today we face a new tyranny, not from a far off ruler trying to impose taxes, but from a variety of kingdoms and oppressive groups attacking our economic and energy independence.

    Luckily, we have the ability to again declare our freedom from this oppression. Foreign oil threatens our security, our economic strength and takes our hard-earned dollars outside our borders. Ethanol is our renewed declaration of energy independence.

    The ethanol industry has created nearly 400,000 jobs, with the opportunity for up to 136,000 more, if we move to E15. These jobs are here at home and cannot be sent overseas. Americans produce the corn and other renewable fuel feedstock to produce the ethanol that Americans and many others around the world use as fuel, returning dollars into our domestic economy. The jobs created at home stimulate the economy further by creating jobs for grocers, service providers and others within the community who rely on the ability of the ethanol workforce and farmers to be able to support their families.

    Our citizens outside of the ethanol industry and our rural communities also benefit from this revolutionary fuel. Emissions are reduced, providing cleaner air for us and our children. Cleaner burning ethanol provides measurable reductions in the amount of greenhouse gas emissions, equivalent to removing 8 million cars from the road each year. The renewable fuel standard (RFS) alone has the ability to reduce greenhouse gas emissions to equate to 27 million cars off the roads by 2022.

    Higher blends such as E15 will only increase our ability to preserve our environment while revitalizing our economy. By

    reducing greenhouse gases by 59 percent, E15 represents the best currently approved fuel choice we have in the fight against climate change.

    All of these benefits come with consumers freedom to choose their own fuel. And while ethanol already reduces the price to fill up by as much as $1.09 per gallon, higher blends have the ability to further reduce costs to consumers. We want to expand their choice to save money, utilize a cleaner fuel and help improve our environment.

    It is no surprise that when faced with possible loss of market share, the oil industry fights so vehemently to keep us out of consumers gas tanks, reducing available options to their consumers. But we have fought back. Growth Energy is actively fighting to preserve the RFS and we are continuing to lead the charge to expand consumer choice and options for fuel.

    But these benefits and freedoms can only truly be realized if we can further break Big Oils grip on the fuel market. Despite the best efforts of the oil industry to keep their monopoly, we have succeeded in pushing back. Today, retailers are expanding E15 across the country. We are winning. Now is the time to declare our energy independence. Continue to contact your leaders and share the benefits of ethanol with your neighbors. Americans deserve the ability to choose their fuel, bolster our rural economies, keep our money within our own country and help mitigate climate change for future generations.

    Author: Tom BuisCEO, Growth Energy

    [email protected]

    DRIVE

    Lets Declare Independence From Big Oil By Tom Buis

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  • 16 | Ethanol Producer Magazine | JULY 2014

    Ethanols Power By People By Brian Jennings

    The American Coalition for Ethanol recently launched a new campaign built upon the personal stories, authenticity and persuasiveness of our members and other people in the business of ethanol. Our campaign, "Power by People", compliments the industry-wide effort, through Fuels America, to defend the renewable fuel standard and higher blends by going on offense and being positive about the human good ethanol delivers.

    It will feature a more engaging experience at www.ethanol.org, social media friendly videos and infographics that are easily sharable, and some paid advertising.

    Were doing this to turn the tables on opponents who are trying to scare people by saying things like E15 will ruin your engine, the RFS drives up food prices and high RIN prices mean high pump prices. Opponents are also playing to peoples emotions by stereotyping the RFS as a heavy-handed U.S. EPA mandate.

    While ethanol opponents are appealing to peoples fears, weve been fi ghting fear with facts. A common refrain within our industry is, the facts are on our side, we just need to get the facts out there. We just need to tell our story.

    ACE has concluded that we cant keep pouring all our trust, hard work and money into publicizing just the factsreams of studies, detailed spreadsheet and bullet points supported by footnotesin response to attacks with the hope that well win over more political and public support for ethanol.

    In other words, we cant keep doing things the way weve been doing them and hope for a better result.

    For most people, desire doesnt come from data. We need to have the sophistication to appreciate that emotions are part of every decision people make. Theres an old adage about winning the hearts and minds, a recognition that facts alone do little to captivate peoples attention and that we need to strike a smarter balance between data and emotion.

    ACE believes ethanol is fi rst and foremost about people. A profi le in courage about ordinary people who joined forces,

    without any template or precedent to guide them, to commit their own money and time to rescue their families, neighbors and communities by building locally owned businesses in their towns. Jobs were created and profi ts stayed at home.

    For far too long, the people of ethanoland their storieshave been overlooked.

    Surveys confi rm that people are most likely to be convinced by other people with whom they can relate. If we tap into the sincerity and authenticity of the grassrootswhy they make ethanol, why they care about ethanol and why ethanol is good no matter who you are or where you are fromwe can capitalize on that emotional and human domain to show and tell the stories behind the facts. So ACE is challenging the status quo by trying to connect with people on a deeper level, an emotional level.

    This is not to say we should abandon the facts. The facts are absolutely on ethanols side, and we absolutely need to get the facts out there. But were going to try to deliver those facts in a more interesting wrapper, to make rational arguments about ethanol by appealing to peoples hearts and minds.

    ACE is uniquely positioned to do this because we are the grassroots voice of ethanol. ACE members represent the heart and soul, the sharpest minds of the industry and come from various walks of life. They have experiences that can help us convey that ethanol shouldnt merely be valued by the barrels of foreign oil and the tons of greenhouse gas emissions it displaces, it should also be measured based on the human good it delivers.

    And we dont have to be dishonest or scare people. Because when the people of ethanol are showing and telling our story, it is a positive story. Ethanol has power by people.

    Author: Brian JenningsExecutive Vice President

    American Coalition for Ethanol605-334-3381

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    GRASSROOTS VOICE

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    Group Creative Director: Jeff TresidderArt Director: Lisa MableyCopywriter: Steve AldrichPrint Production Manager: Sandra ChuteAccount Managers: HolmesResponse Planner: Melissa PryseProject Manager: Meredith PaulCreative Tech: Lisa Mabley

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    11CR2084_P1_0125_R.indd

  • 18 | Ethanol Producer Magazine | JULY 2014

    Paradigm Shift NeededBy Robert Vierhout

    Different jurisdictions can have different reasons for promoting renewable fuels. When Brazil started its pro-alcohol program in the 70s, it was mainly to find a domestic replacement for much-too-expensive foreign oil. In the U.S., it was very much an agricultural driver, providing corn growers with a new market and, later, reducing imports of oil from politically unstable countries, a pretty important issue too.

    In Europe, the discussion on renewables has always, and too much, been dominated by the environmental effects. What originally in Europe started as an instrument of energy policy is now strongly influenced and managed by environmental policymakers. In that sense, there is an interesting parallel between the U.S. and the European Union. In the United States too, the U.S. EPA is very much calling the shots nowadays.

    Does it make sense to put so much emphasis on the environmental benefits?

    Certainly, environmental performance is important. But I have the feeling that in Europe we have turned a blind eye to all the other benefits renewable fuels can bring. For example, using domestic sources to produce part of our energy needs.

    The time seems to be right to shift gears in the debate on biofuels and there are some pretty good reasons to do this. Here are a few.

    At present, 85 percent of Europes oil is imported and forecasts indicate that this share of oil imports will likely increase even further by 2030.

    In the EU transport sector, 94 percent of the fuels used are fossil-based.

    The EU's oil bill currently stands at 1 billion euros($1.3 billion) a day.

    Europe needs to import 20 percent of its diesel needs; most of

    it is coming from Russia.And whether we like it or not, we are running out of oil.

    We can speculate long about when "peak of oil" will happen but someday it will (or maybe it has already happened).

    These are ample reasons to put more emphasis on why biofuels are also needed: reducing our dependency on fossil fuels and the security of our energy supply.

    Slowly, a shift seems to be happening. Security of energy supply is getting higher on the political agenda, mainly caused by the recent turmoil in the Ukraine. Even though the concerns are mainly about gas for heating and electricity production, one cannot exclude that one of these days diesel flows will be curtailed.

    We better not wait for that day. Lets start thinking about how we can increase domestic fuel production to hedge against such a scenario and use biofuels in a smarter way at the same time.

    We don't need to reinvent the wheel to accomplish the latter. The EU has legislation that forces every member state to maintain a strategic storage of crude to cope with unforeseen circumstances. Why wouldn't we add a provision that member states should also maintain a strategic storage of biofuels?

    Hopefully, the debate on cheaper energy that is now taking place in Europe will widen to securing energy supply. Biofuels can play a part in this. It is time for a shift in thinking about biofuels and what these fuels can deliver for society in securing part of our energy needs.

    Author: Robert VierhoutSecretary-general, ePURE

    [email protected]

    EUROPE CALLING

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  • 20 | Ethanol Producer Magazine | JULY 2014

    Superior Industries has appointed Kevin Krieger as territory sales manager throughout the Mountain and North-west regions of the U.S. He most recently served as a territory manager for Fenner Dunlop. e company has also appointed Bill Humphrey as territory sales manag-er throughout the Great Lakes and Ohio River Valley regions. He was most recently employed by Aggregates Manufacturing International. Krieger and Humphrey will work closely with dealers in their respec-tive regions to bring innovative conveying equipment to bulk materials producers.

    CSX has announced winners of its 20th annual Chemical Safety Excellence Award, which recognizes customers for their commitment to safe transportation of hazardous materials by rail. is years

    winners include Archer Daniels Midland Co., Bunge Corp., Cardinal Ethanol LLC, Cargill, POET Biorening and Valero.

    Hasan Atiyeh, assistant professor in biosytems and agri-cultural engineering at Oklahoma State University, recently received a South Central Sun Grant Award to advance the development of

    a new hybrid gasica-tion-syngas fermentation technology.

    Premium Plant Services Inc. has an-nounced a new service center in Dubuque, Iowa. e new location will service plants in Iowa, Wisconsin, Illinois, Indiana and Ohio. e company also has service cen-ters in Hibbing, Minn., and Tracy, Minn.

    ree Rivers Energy LLC has joined Growth Energy. ree Rivers Energy is a 50 MMgy facility located in Coshocton, Ohio.

    e National Corn-to-Ethanol Research Center at Southern Illinois University Edwards-ville has added Parisa Fallahi to its research team. She is a post-doctoral fellow spe-cializing in ethanol

    coproducts research. Fallahi received her masters degree in chemical engineering from Azad University,Tehran, Iran, and a doctorate in biological sciences and agri-culture and biosystems engineering from South Dakota State University.

    Syngenta has announced an agree-ment with Cellulosic Ethanol Technolo-gies LLC, a wholly owned subsidiary of Quad County Corn Processors, to license its Adding Cellulosic Ethanol technology.

    Poet BioreningPreston has an-nounced Chris Hanson as its new general manager. Hanson was previously employed as technical manager of the plant. He will now be responsible for overseeing the 46 MMgy facility.

    BUSINESS BRIEFS People, Partnerships & Deals

    Krieger FallahiHumphrey

    Atiyeh

  • JULY 2014 | Ethanol Producer Magazine | 21

    Purdue Uni-versity researchers are launching Spero Energy Inc. to de-velop technology that can make high-value chemical products from lignin with si-multaneous produc-

    tion of lignin-free cellu-lose in one step using a catalytic process. e technology portfolio is based on research eorts at Purdues Center for Direct Catalytic Con-version of Biomass to Biofuels (C3Bio). e company will be led by Mahdi Abu-Omar, the R.B. Wetherill Professor of chemistry and chemical engineering and associate director of C3Bio.

    Siouxland Energy and Livestock Co-operative has changed its name to Sioux-land Energy Cooperative. e change aligns the company name with its mission of returning value to members corn through the best cost production in the renewable fu-els industry.

    Anna Wilde-man, an attorney at Michael Best & Friedrich LLP, has been named one of Super Lawyers Maga-zines 2014 Wash-ington, D.C., Rising Stars. She is a member of Michael Bests En-

    ergy Practice Group and Agribusiness, Food Processing & Distribu-tion Group.

    U.S. Water Services Inc. has announced the acquisition of Water Chemical Service Inc. (Waterchem). e acquisition includes Waterchems corporate headquarters and production facility in Aberdeen, Md., and surrounding sales territories. e acquisition is expected to increase U.S. Waters presence on the East Coast and adds to its pathogen control capabilities nationally.

    Purthanol Resources Ltd. has com-pleted negotiations with Dorax Investment Co. Ltd. to nance the acquisition of 60 ethanol modules for a total of $39 million. e modules will be used to demonstrate the Purthanol process, which produces sorghum ethanol.

    Tae Seok Moon, an assistant professor of energy, environ-mental and chemical engineering at Wash-ington University in St. Louis, has received a prestigious Faculty Early Career Devel-opment Award from the National Science Foundation for his

    project, titled Engineering Biological Ro-bustness rough Synthetic Control. Moon received a ve-year $400,000 grant to under-stand the principles of biological robustness by using synthetic DNA in basic bacteria cells. e research could have implications for biofuel production and several other in-dustries.

    Abu-Omar Wildeman Moon

    9LVLW+\GUR.OHDQFRPWRYLHZRXUSURMHFWOLEUDU\DQGOHDUQPRUHDERXWWKHYDOXDEOHVHUYLFHVZHKDYHWRRIIHU)RXU0LGZHVWORFDWLRQVWR6HUYH

  • 22 | Ethanol Producer Magazine | JULY 2014

    May 16While April confounded forecasting models, May could be the antidote. Where April was consistently colder than nor-mal, May has been more or less in line with historical temperature norms. Combined with the fact that May is typically one of the low-est demand months, it will provide a chance to get a clearer picture regarding the overall supply, demand balance of the market.

    The early returns are perhaps best described as guardedly en-couraging. While April saw anemic growth in domestic production, May has seen a slight uptick, reaching as high as 68 billion cubic feet (Bcf) per day. While power demand continues to remain sticky and higher than analysts might expect, given a relatively elevated price compared to 2013, industrial demand has been a pleasant surprise, coming in almost 1 Bcf per day lower than the April 2014 level and contributing solidly to injections that have met or exceeded analyst expectations over the first few weeks of the month. In the big pic-ture, May will not make or break end-of-season inventory levels, but it does provide some insight into whether there will be a comfort-able amount of natural gas stored for the upcoming winter. It looks like the market will be able to scrape by getting inventories back to

    roughly 3,500 Bcf on higher production levels. That should be suf-ficient, if not comfortable for the upcoming winter.

    Natural Gas Report

    Corn Report

    May 16Producers got 59 percent of the corn crop planted in ear-ly May. Unfortunately, emergence may slow with cold and wet weather. Despite bullish data figures on USDAs May report, funds were sellers in the third week of May. July corn futures traded as high as $5.2225 on the day of the report release and by the next Friday, July corn had traded down to $4.8025. The funds had reached a long position in mid-May, leading to corn sales often reaching $5 cash prices.

    Since December the carryout of the current crop has declined from 1.792 billion bushels to 1.146 billion bushels, justifying the rally. Overall demand continues its increasing pace as ethanol production is projected to consume 5.050 billion bushels. The bigger demand growth has in 1.90 billion bushels of exports, 14 percent of the corn demand compared to 6 percent a year ago. Overall, feed demand is 5.30 billion bushels as compared to 4.33 billion bushels a year ago.

    USDAs projected yield in May was just above trend line at 165.3 bushels per acre, resulting in production being 13.935 billion bushels. Demand was calculated with feed using 5.25 billion bushels; exports 1.70 billion bushels, ethanol 5.050 billion bushels and other industries using 1.385 billion bushels. Overall demand is at 13.385 billion bushels versus 13.635 billion in the current marketing year. Therefore, ending stocks

    are projected at 1.726 billion bushels or 580 million bushels higher than the current projection. At face value, that should weigh on prices.

    Wet, cold April confounds forecasting models by Ben Straus

    Fund-led rally leads to $5 cash prices by Jason Sagebiel

    COMMODITIES Prices & Market Analyses

  • JULY 2014 | Ethanol Producer Magazine | 23

    DDGS Report

    Ethanol Report

    May 16It appears ethanol and gaso-line markets will be contained in a mod-erate trading range through the end of May, with traders focusing on uncertainty about summer demand support. Choppy movement in the stock market and other economic factors seen this spring have led to a cautious attitude among traders trying to project just how strong summer driving demand will be.

    Typically the gasoline market peaks right around Memorial Day weekend, but it may be that spring market peak was es-tablished in the middle of April. There is growing focus on ethanol supply and

    production growth through the first two weeks of May. The concern is that if de-mand for ethanol and gasoline does not significantly improve during and after the Memorial Day weekend, commercial buy-ers may quickly liquidate short-term posi-tions and erode current prices.

    June ethanol futures were trading at $2.24 per gallon in mid-May and may con-tinue to trade in an extremely wide range between $2 and $2.40 per gallon. This could add even more volatility to the mar-ket through early summer.

    May 16As Memorial Day ap-proached, all eyes were on planting prog-ress. DDGS prices have been falling lately in conjunction with corn, as pastures start to green up and cattle start to leave the feed-lot. Ethanol margins look pretty rosy for the next couple of quarters, so distillers grain production does not look as though it will be an issue. But demand could.

    On a domestic basis, demand overall looks good. Meat and milk producers have a pretty good profitability curve and should be looking at locking in some margins. We have not seen a full-scale adoption of that process but feeders have been cutting their inbound commodity pipeline pretty close lately, which will be a hard habit to change. It has been a while since feeding margins have been present in the quarter ahead.

    In the export market, China is the one to watch. There were almost a million tons exported there in March and any noticeable drops so far for April and May have not been felt. There is still the MIR 162 elephant in the room (China denied U.S. corn in No-vember 2013 after finding corn with this un-approved trait) but there has not been any news out of Beijing lately as to whether a nonapproved genetically modified organism ban will be enforced in DDGS. Obviously, any move like that will take a lot of steam out of prices.

    Looking ahead, China and corn plant-ing will be the focus to determine pricing. The logistical issues that tightened the mar-ket all winter are abating but still not back to normal. In the end, though, the political climate in China is going to affect the mar-ket the most.

    Regional Ethanol Prices ($/gallon)Front Month Futures (AC) $2.9735Region Spot RackWest Coast 3.095 3.185Midwest 3.007 3.095East Coast 2.827 3.182

    SOURCE: DTN

    Regional Gasoline Prices ($/gallon)Front Month Futures Price (RBOB) $3.054Region Spot RackWest Coast 3.165 3.342Midwest 3.107 3.639East Coast 2.920 3.182

    SOURCE: DTN

    DDGS Prices ($/ton)Location Jul 2014 Jun 2014 Jul 2013Minnesota 210 225 225Chicago 233 255 255Buffalo, N.Y. 255 270 230Central Calif. 270 318 277Central Fla. 261 280 264

    SOURCE: CHS Inc.

    Corn Futures Prices (May Futures, $/bushel)Date High Low CloseMay 16, 2014 4.87 4.80 1/4 4.83 1/2Apr 16, 2014 5.10 3/4 5.01 5.03 1/2May 16, 2013 6.52 6.40 1/4 6.41 1/2

    SOURCE: FCStone

    Cash Sorghum ($/bushel)Location May 31,

    2013April 17,

    2014May 15,

    2014Superior, Neb. 6.67 4.65 4.48Beatrice, Neb. 6.82 4.50 4.39Sublette, Kan. 6.53 4.77 4.59Salina, Kan. 6.82 4.55 4.59Triangle, Texas 6.67 4.93 4.76Gulf, Texas 6.22 5.95 5.57

    SOURCE: Sorghum Synergies

    Natural Gas Prices ($/MMBtu)Location May 23,

    2014March 31,

    2014May 23,

    2013NYMEX 4.37 4.37 4.26NNG Ventura 4.50 4.52 4.11CA Citygate 4.86 4.81 4.39

    SOURCE: U.S. Energy Services Inc.

    U.S. Ethanol Production (1,000 barrels)Per Day Month End Stocks

    FEB 2014 907 25,401 16,834JAN 2014 914 28,344 17,086FEB 2013 809 22,645 19,580

    SOURCE: U.S. Energy Information Administration

    Chinas political climate biggest impact on DDGS pricing by Sean Broderick

    Ethanol supplies, prices prepare for summer demand by Rick Kment

  • Power your old ethanol plantwith New Ethanol production.

    PPPPPower your old eeeeethanol plantwwwwwwith New Ethanol ppppproduction.

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    ,QELFRQ%LRPDVV5HQHU\&HOOXORVLFVROXWLRQVIRUVXVWDLQDEOHVXFFHVV*LSS\SVZPJL[OHUVSWYVQLJ[Z\ZPUNV\Y0UIPJVU)PVTHZZ9LULY`[LJOUVSVN`JHUZ\YWHZZL]LU*HSPMVYUPHZZ[YPUNLU[SV^JHYIVUZ[HUKHYKZ3PRLTHU`L[OHUVSWYVK\JLYZ`V\TPNO[IL^LPNOPUNOV^[VHKKJLSS\SVZPJL[OHUVSWYVK\J[PVU[V`V\YJ\YYLU[VWLYH[PVUZ5V^`V\KVU[OH]L[VZHJYPJLHILZ[VMJSHZZJHYIVUZJVYL[VNL[[OLSH[LZ[HK]HUJLZPUTP_LKZ\NHYMLYTLU[H[PVU*OVVZL0UIPJVUHZ`V\YJLSS\SVZPJ[LJOUVSVN `HUK`V\HSZVNL[HYLSPHISLWHY[ULY^P[O+65.,ULYN `VULVM[OLSLHKPUNLULYN`NYV\WZPU5VY[OLYU,\YVWL>LWPVULLYLKNYLLUWV^LYNLULYH[PVU\ZPUNIPVTHZZHUK[VKH`^LYLZ[YVUNS`JVTTP[[LK[VYLUL^HISLHUKZ\Z[HPUHISLLULYN`WYVK\J[PVU6\YJVTTP[TLU[[V0UIPJVUJVU]LYZPVU[LJOUVSVN`NVLZIHJRHSTVZ[`LHYZ :PUJL ^L]LWYV]LUP[PUOV\YZVMVWLYH[PVUH[V\Y0UIPJVU)PVTHZZ9LULY`H[2HS\UKIVYN+LUTHYR>LYLYLHK`[VZ[HY[^VYRPUN^P[O`V\[VKH`WSHUUPUNLP[OLY[OLPU[LNYH[PVUVYJVSVJH[PVUVM[OL0UIPJVU[LJOUVSVN `>LJHUL]HS\H[L[OLVW[PVUZ[OH[^PSSNP]L`V\[OLILZ[I\ZPULZZJHZLMVY`V\YPUKP]PK\HSVWLYH[PVU(UKVWLUHMHZ[YHJR[VWYVQLJ[KL]LSVWTLU[HUKJVUZ[Y\J[PVU[OH[JHUOH]L`V\WYVK\JPUN;OL5L^,[OHUVSPU[VTVU[OZKLWLUKPUNVU[OLWSH[MVYT7SLHZL]PZP[^^ ^PUIPJVUJVTVYJVU[HJ[V\Y5VY[O(TLYPJHUTHYRL[PUNWHY[ULY3LPMTHYRH[VYLTHPSPUMV'SLPMTHYRJVT0UIPJVU2YHM[]YRZ]LQ:RYIR-YLKLYPJPH;LS ;OL5L^,[OHUVSHUK0UIPJVU)PVTHZZ9LULY`HYL[YHKLTHYRZVM0UIPJVU(:HUK+65.,ULYN`(: 3LPMTHYRPZHUPUKLWLUKLU[0UIPJVUWHY[ULYH\[OVYPaLK[VTHYRL[0UIPJVU)PVTHZZ9LULY`[LJOUVSVN`PU5VY[O(TLYPJH^^ ^PUIPJVUJVT

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    ,QELFRQ%LRPDVV5HQHU\&HOOXORVLFVROXWLRQVIRUVXVWDLQDEOHVXFFHVV*LSS\SVZPJL[OHUVSWYVQLJ[Z\ZPUNV\Y0UIPJVU)PVTHZZ9LULY`[LJOUVSVN`JHUZ\YWHZZL]LU*HSPMVYUPHZZ[YPUNLU[SV^JHYIVUZ[HUKHYKZ3PRLTHU`L[OHUVSWYVK\JLYZ`V\TPNO[IL^LPNOPUNOV^[VHKKJLSS\SVZPJL[OHUVSWYVK\J[PVU[V`V\YJ\YYLU[VWLYH[PVUZ5V^`V\KVU[OH]L[VZHJYPJLHILZ[VMJSHZZJHYIVUZJVYL[VNL[[OLSH[LZ[HK]HUJLZPUTP_LKZ\NHYMLYTLU[H[PVU*OVVZL0UIPJVUHZ`V\YJLSS\SVZPJ[LJOUVSVN `HUK`V\HSZVNL[HYLSPHISLWHY[ULY^P[O+65.,ULYN `VULVM[OLSLHKPUNLULYN`NYV\WZPU5VY[OLYU,\YVWL>LWPVULLYLKNYLLUWV^LYNLULYH[PVU\ZPUNIPVTHZZHUK[VKH`^LYLZ[YVUNS`JVTTP[[LK[VYLUL^HISLHUKZ\Z[HPUHISLLULYN`WYVK\J[PVU6\YJVTTP[TLU[[V0UIPJVUJVU]LYZPVU[LJOUVSVN`NVLZIHJRHSTVZ[`LHYZ :PUJL ^L]LWYV]LUP[PUOV\YZVMVWLYH[PVUH[V\Y0UIPJVU)PVTHZZ9LULY`H[2HS\UKIVYN+LUTHYR>LYLYLHK`[VZ[HY[^VYRPUN^P[O`V\[VKH`WSHUUPUNLP[OLY[OLPU[LNYH[PVUVYJVSVJH[PVUVM[OL0UIPJVU[LJOUVSVN `>LJHUL]HS\H[L[OLVW[PVUZ[OH[^PSSNP]L`V\[OLILZ[I\ZPULZZJHZLMVY`V\YPUKP]PK\HSVWLYH[PVU(UKVWLUHMHZ[YHJR[VWYVQLJ[KL]LSVWTLU[HUKJVUZ[Y\J[PVU[OH[JHUOH]L`V\WYVK\JPUN;OL5L^,[OHUVSPU[VTVU[OZKLWLUKPUNVU[OLWSH[MVYT7SLHZL]PZP[^^ ^PUIPJVUJVTVYJVU[HJ[V\Y5VY[O(TLYPJHUTHYRL[PUNWHY[ULY3LPMTHYRH[VYLTHPSPUMV'SLPMTHYRJVT0UIPJVU2YHM[]YRZ]LQ:RYIR-YLKLYPJPH;LS ;OL5L^,[OHUVSHUK0UIPJVU)PVTHZZ9LULY`HYL[YHKLTHYRZVM0UIPJVU(:HUK+65.,ULYN`(: 3LPMTHYRPZHUPUKLWLUKLU[0UIPJVUWHY[ULYH\[OVYPaLK[VTHYRL[0UIPJVU)PVTHZZ9LULY`[LJOUVSVN`PU5VY[O(TLYPJH^^ ^PUIPJVUJVT

  • 26 | Ethanol Producer Magazine | JULY 2014

    DISTILLED Ethanol News & Trends

    Fuels America has released an economic impact study that demonstrates the economic benefi ts of biofuels on a state-by-state basis. The analysis, completed by John Dunham & Associates, accounts for the entire renewable fuel supply chain and quantifi es the impact on the economy.

    The renewable fuels industry now sup-ports more than $184 billion of economic out-put. It supports more than 852,000 jobs in over $56 billion in wages and it generates about $14.5

    billion in local and state tax revenue every year, said Jon Doggett, vice president of public pol-icy at the National Corn Growers Association, during an event to announce the study. The im-pact of biofuels, however, goes far beyond the numbers, he continued. Doggett explained that biofuels and the renewable fuel standard have helped support family farming in the U.S., as better economic conditions have allowed more children to join their family farming operations.

    Study shows economic benefi ts of biofuels

    Prairie Horizon Agri-Energy has formed a partnership with WB Services LLC to integrate a 3 MMGy renewable diesel production facility into the companys existing 40 MMgy ethanol plant in Phillipsburg, Kan.

    Under the partnership, WB Services will design, construct and operate the renewable diesel plant, which will utilize patented renew-able diesel process technology. Once complete, the facility will produce denaturant, fuel gas and steam, in addition to renewable diesel. Design work on the project is already underway, with construction scheduled to begin midyear.

    This plant will be the fi rst of its kindthe fi rst renewable diesel plant to fully integrate into an existing ethanol operation, said Ron Beemiller, president and CEO of WB Services. This is a very exciting time for both Prairie Horizon Agri-Energy and WB Services.

    Prairie Horizon Agri-Energy also has a signifi cant investment in renewable and bio-diesel plants under construction by Green En-ergy Products in Sedgwick, Kan.

    Kansas ethanol plant to add renewable diesel production

    US impact of the RFS

    Direct impactAgriculture Manufacturing

    W Wholesale RetailTotal direct impactTotal induced imapctTotal impact

    238,98923,8735,650

    23,654292,166226,098852,056

    Jobs Wages(in billions)

    $9.92 $3.27 $0.49 $0.89

    $14.58$11.65$46.20

    $31.88$43.64$1.24 $1.80

    $78.56$35.79

    $184.47

    Output(in billions)

    SOURCE: FUELS AMERICA

    Some chemical companies focus only on process. Some focus solely on water treatment. Buckman takes a comprehensive approach and looks at the bigger picture return on investment and environment. We look at every aspect of your plants operation,

    tailoring chemistries to boost production and increase profitability from evaporator efficiency to corn oil recovery to water treatment issues. To find out more or to schedule a system audit, contact your Buckman representative or email [email protected].

    2014 Buckman Laboratories International, Inc. All rights reserved.

    Some chemical companies focus on this or that .

    Buckman takes a wider view.

  • EPA reduces 2013 cellulosic requirement The U.S. EPA is revising the cellulos-

    ic requirement of the 2013 renewable fuel standard (RFS) to refl ect actual produc-tion. On April 23, the agency published prepublication versions of a notice of proposed rulemaking and a direct fi nal rule to reduce the 2013 cellulosic RFS requirement to 810,185 ethanol-equiva-lent gallons. On a percentage basis, that equates to approximately 0.0005 percent of U.S. transportation fuel.

    The EPAs action stemmed from petitions fi led last year by the American Fuel and Petrochemicals Manufacturers

    and the American Petroleum Institute re-questing reconsideration of the cellulosic requirements. Those petitions cited a re-duced cellulosic fuel production forecast made by a cellulosic biofuel producer af-ter the 2013 RFS rulemaking process was complete.

    The direct fi nal rule will become ef-fective 60 days after its offi cial publication in the Federal Register unless the EPA re-ceives relevant adverse comment within 30 days, in which case it will proceed with the parallel proposed rule.

    DISTILLED

    In late April, the Canadian government announced a plan to improve rail safety. Ef-fectively immediately, the least crash-resistant DOT-111 railcars are being removed from dan-gerous goods service. These cars include those not equipped with continuous bottom rein-forcement. An estimated 5,000 North American railcars will be affected.

    The Canadian government is also requiring DOT-111 tank cars used to transport crude oil and ethanol that do not meet certain standards to be phased out or retrofi tted within three years. The referenced standards include thicker steel and additional top fi tting and heat shield protection.

    Additional new requirements include emer-gency response assistance plans for crude oil, gasoline, diesel, aviation fuel and ethanol. A task force will aim to strengthen emergency response capacity across the nation. Railway companies are also required to reduce the speeds of cer-tain trains and implement other key operating practices.

    Canada takes action on railcar safety

    WE SEE BIOFUELS.WE SEE BIOFUELS.In our dreams. AwakAwakAw e.ake.ak All the timeAll the time. EverAll the time. EverAll the time ywher. Everywher. Ever e.ywhere.ywher

    E n g i n e e r i n g ,E n g i n e e r i n g , A r c h i t e c t u r e ,A r c h i t e c t u r e , C o n s t r u c t i o n ,E n v i r o n m e n t a l a n d C o n s u l t i n g S o l u t i o n sE n v i r o n m e n t a l a n d C o n s u l t i n g S o l u t i o n sE n v i r o n m e n t a l a n d C o n s u l t i n g S o l u t i o n s

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    RFS Cellulosic Requirements

    Statutory 2013 Cellulosic RFy 2013 Cellulosic RFS2013 Cellulosic RFS, as Established by RulemakingRevised 2013 Cellulosic RFS, Proposed in New Rulemaking

    1 billion6 million 810,185

    Gallons

    2013 D3 Cellulosic Biofuel2013 D7 Cellulosic Diesel RINs Total 2013 Cellulosic RINsTotal 2013 Cellulosic RINsT

    422,740387,445810,185

    RINS

    SOURCE: U.S. EPA

  • DISTILLED

    Sales of ethanol blends increase in Iowa The Iowa Department of Revenues

    2013 Retailers Motor Fuel Gallons Annual Report shows the state experienced signifi-cant growth in the use of higher-level etha-nol blends last year. According to informa-tion released by the Iowa Renewable Fuels Association, the report shows the sale of ethanol blends ranging from E15 to E69 increased by 158 percent, reaching 5.4 mil-lion gallons sold. Sales of E85 also hit an all-time high in the state, with more than 11.1 million gallons sold. That is an 18 percent increase over 2012 E85 sales.

    Across the board increases in the use of ethanol blends above E10 prove, de-spite the petroleum industrys well-funded scare campaign, consumers prefer low-cost, homegrown ethanol, said IRFA Executive Director Monte Shaw. The EPAs proposal to slash 2014 targets under the Renewable Fuel Standard would be detrimental to the great progress weve made improving air quality and increasing our energy security through domestically produced, less expen-sive ethanol and biodiesel blends.

    Ethanol in Iowa, 2013

    E10E15/E20E85Total

    2,01683

    2062,034

    Locations Gallons

    1.18 billion5.42 million

    11.15 million1.2 billion

    118.23 million0.81 million8.81 million

    127.85 million

    Pure Biofuel Gallons

    Alberta-based Syngar Technologies Inc. has announced two joint venture projects that aim to help make hemp-based cellulosic ethanol a reality. The company had previously licensed Pulsed Low Ultra Sound Wave (PLUSWave) technology, which uses ultrasound frequencies to stimulate the fermentation growth of algae, bacterial, fungus or yeast microorganisms.

    In late April, Syngar formed Cellunol Inc. with ANW Inc., a South African com-pany with a cellulosic pretreatment technology called Oxy-Hydro Fragmentation. The second joint venture was formed in May with Dis-covery Minerals Ltd. That project will include pilot-scale testing of on-farm production of cellulosic ethanol using waste hemp materials as feedstock. According to Syngar, ANW and Discovery Minerals will contribute funding to establish a pilot plant where the pretreatment and PLUSWave technology will be used to convert hemp and other cellulosic materials to cellulosic ethanol.

    Canadian company pursues hemp-based ethanol production

    SOURCE: IOWA DEPARTMENT OF REVENUE

    Your plant needs are unique...your process treatment options should be just as unique!

    West Agro Executive Brands releases DeLasan CMT a patent pending process treatment used to control bacteria during fermentation. In addition to micro-biological control, benefits of a

    DeLasan CMT program can include:

    Improved ethanol production: DeLasan CMT helps control lactic and acetic bacteria and reduces glycerol production. The result can be higher ethanol production per bushel of corn.

    Alternative to antibiotic treatments: DeLasan CMT controls bacteria during the initial fill stage of the fermenter. As a result, no other products are needed to control bacteria.

    Cost effective: Because DeLasan CMT is effective at very low dosage rates, the program cost is normally less than the cost of antibiotic treatments.

    Benefits distillers grains: DeLasan CMT has a short half life and breaks down into food ingredients. Unlike other products used to control bacteria, DeLasan CMT contains no non-food components that can carry through into distiller grains or other food by-products.

    Easy to feed and test for: DeLasan CMT is added directly into the corn mash. No premixing is required. The control test is a modified total chlorine test already in common use.

    Complete consumption: Unlike some treatment products, DeLasan CMT is completely consumed in the fermenter. It contributes no sodium, chloride, or sulfate to the backset. It does not harm yeast when used at recommended levels.

    GRAS status: DeLasan CMT is Generally Recognized As Safe for distillers grains.

    No need to rotate antibiotics: Bacteria do not develop resistance to DeLasan CMT. As a result, bacteria resistance concerns are reduced.

    Contact your Executive Brands West Agro representative for more information.

    WestAgroExecutive Brandsa division of DeLaval Inc.11100 North Congress AvenueKansas City, MO 64153-1296Phone: 816-891-1530Fax: 816-891-1505 www.WestAgroExecutiveBrands.com

  • California-based biofuel company Byogy Renewables Inc. and the its airline partner Avi-anca Brasil have launched an initiative to sup-port advanced testing to accelerate ASTM ap-proval for Byogy alcohol-to-jet (ATJ).

    "Our goalis to first support the approv-al of the ATJ suite of process technologies in accordance with current regulations that limit blending to 50 percent, and then, after gaining appropriate experience testing data, work with the ASTM stakeholders to study the potential use of higher blend ratios that will in turn drive the highest level of carbon reduction possible of any renewable fuel," said Kevin Weiss, CEO of Byogy.

    Byogys technology leverages the existing global feedstock of ethanol and is not depen-dent on a novel biological organism. Rather, the company employs a petrochemical process to convert ethanol into biobased jet or gaso-line.

    Byogy, Avianca Brasil partner to advancealcohol-to-jet fuel

    Report highlights economic impact in UKThe U.K.-based Renewable Energy Asso-

    ciation has published a report that breaks down the economic impact of the biofuels industry and other renewable energy sectors on the U.K.s economy. According to the report, the liquid bio-fuels sector employed 3,510 people in the U.S. dur-ing 2012-'13, with approximately 200 companies taking part in the liquid biofuel supply chain. The sector has an economic impact of 530 million ($888.86 million) during that time.

    Jobs in the sector include those in design and development, manufacturing, construction and

    installation, feedstock production, operations and maintenance, and distribution. Overall, the report estimates the U.K. could consume 4.205 million tons of oil equivalent (toe) of liquid biofuels by 2020, up from an estimated 2.153 million toe in 2014.

    According to the REA, biofuel consump-tion increased by an average of 3.8 percent per year from 2009 through 2013. However, without an improved policy framework, it seems unlikely the U.K.s legally binding 2020 sub-target of 10 percent renewable transport will be achieved.

    DISTILLED

    UK Biofuel Consumption (in ktoe)

    20052006200720082009

    331693478861,044

    Ethanol Biodiesel

    8595153206320

    2010201120122013

    1045925631766

    Ethanol Biodiesel

    631652774819

    SOURCE: RENEWABLE ENERGY ASSOCIATION

    Your plant needs are unique...your process treatment options should be just as unique!

    West Agro Executive Brands releases DeLasan CMT a patent pending process treatment used to control bacteria during fermentation. In addition to micro-biological control, benefits of a

    DeLasan CMT program can include:

    Improved ethanol production: DeLasan CMT helps control lactic and acetic bacteria and reduces glycerol production. The result can be higher ethanol production per bushel of corn.

    Alternative to antibiotic treatments: DeLasan CMT controls bacteria during the initial fill stage of the fermenter. As a result, no other products are needed to control bacteria.

    Cost effective: Because DeLasan CMT is effective at very low dosage rates, the program cost is normally less than the cost of antibiotic treatments.

    Benefits distillers grains: DeLasan CMT has a short half life and breaks down into food ingredients. Unlike other products used to control bacteria, DeLasan CMT contains no non-food components that can carry through into distiller grains or other food by-products.

    Easy to feed and test for: DeLasan CMT is added directly into the corn mash. No premixing is required. The control test is a modified total chlorine test already in common use.

    Complete consumption: Unlike some treatment products, DeLasan CMT is completely consumed in the fermenter. It contributes no sodium, chloride, or sulfate to the backset. It does not harm yeast when used at recommended levels.

    GRAS status: DeLasan CMT is Generally Recognized As Safe for distillers grains.

    No need to rotate antibiotics: Bacteria do not develop resistance to DeLasan CMT. As a result, bacteria resistance concerns are reduced.

    Contact your Executive Brands West Agro representative for more information.

    WestAgroExecutive Brandsa division of DeLaval Inc.11100 North Congress AvenueKansas City, MO 64153-1296Phone: 816-891-1530Fax: 816-891-1505 www.WestAgroExecutiveBrands.com

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  • 32 | Ethanol Producer Magazine | JULY 2014

    NEW MARKETS

    A FISH IN HAND: Prairie AquaTech currently does testing with yellow perch in 30 tanks of 30 gallons each. PHOTO: JAY FISHBACK

  • JULY 2014 | Ethanol Producer Magazine | 33

    Distillers grains and other new coproducts of ethanol production show potential in replacing fishmeal, the holy grail ingredient in aquaculture feed rations.By Holly Jessen

    NEW MARKETS

    Ethanol producers looking for the next big market for distillers grains may want to seriously consider aquaculture feed. For a variety of reasons, were just at beginning phases of seeing the potential for a significant amount of DDGS use in fish diets around the world, says distillers grains expert Jerry Shurson, a professor at the University of Min-nesota.

    Fishmeal, part of the aquaculture ration, is expensive and grow-ing more so all the time. There are also questions about the long-term sustainability of harvesting wild-caught marine fish from the ocean. It has put a lot of pressure on the aquaculture industry, globally, to look for alternative protein sources to replace some, if not all the fishmeal, he says.

    FishingFor Profit

  • 34 | Ethanol Producer Magazine | JULY 2014

    EUROPEAN SCENE: Along with gluten, the 80 MMgy wheat-ethanol plant produces condensed distillers solubles marketed as liquid protein animal feed and DDGS.

    PHOTO: BIOWANZE SA

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    That, plus rapid growth in the farmed-fish industry, has opened up a huge poten-tial for plant-based protein substitutes, in-cluding distillers grains. Testing has shown that ethanol coproducts contain very at-tractive nutritional components for fish. Its one of the little-known stories about future markets that really have not been developed to its fullest extent, Shurson says, adding that he expects to see more as ethanol plants evolve into true biorefiner-ies. In fact, Badger State Ethanol LLC is currently using Fluid Quip Inc. technology to break into this and other markets. They are producing a very high-quality, high-protein, high-amino acid coproduct, which has features that are very, very attractive for aquaculture feed, as well as for pig diets and poultry, he says.

    In Belgium, BioWanze SA, a 300,000 cubic meter (80 MMgy) wheat-to-ethanol plant produces 55,000 metric tons a year of gluten. Besides going into the pet food and baked goods market, the companys pelletized gluten is a popular replacement for imported fishmeal or high protein soy concentrate, says Andr Tonneaux, direc-tor of BioWanze SA.

    These two ethanol producers arent the only ones with their eye on the fish food prize. In South Dakota, Prairie AquaTech is perfecting a microbial process to con-

    vert soybean meal or distillers grains into a high-protein, low-fiber aquaculture feed. It involves inoculating the plant-based feed ingredient with a microbe that consumes carbohydrates in a process similar to fer-mentation, says Jason Bootsma, the com-panys chief technology officer.

    Although the company has been work-ing with soybean meal longer, researchers have already discovered that distillers grains has a few advantages. Besides a lower price, distillers grains has fewer anti-nutritional properties than soy, he says. On the other hand, soy starts out with a higher protein level than distillers grains, a key factor in identifying an ideal fishmeal replacement. Fishmeal, which runs about $2,000 a ton, is 65 percent protein. Prairie AquaTech has successfully used its process to produce a soybean meal feed that can replace 100 percent of fishmeal in aquaculture ration. We havent quite got to that level yet with distillers grains, he says. Were still work-ing on that.

    Investigating The Possibilities

    Shurson was part of a study of distill-ers grains used in aquaculture diet that was conducted in Norway, which compared the effects of including distillers grains without

    NEW MARKETS

  • JULY 2014 | Ethanol Producer Magazine | 35

    NEW MARKETS

    distillers corn oil separation and reduced-oil distillers grains. Although it was assumed low-oil distillers grains would be better for aquaculture feed due to a higher protein con-tent, that didnt turn out to be correct, he says. Both types of distillers grains worked well in aquaculture diets and show potential but reduced-oil distillers grains was slightly less attractive.

    In this study, rainbow trout were fed a diet in which distillers grains were used as a partial replacement for other plant based proteins, such as canola meal, sunflower meal and field peas. The fish that were fed high-oil distillers grains had better feed conversion, weight gain and other benefits. Those that got low-oil but higher protein distillers grains actually experienced lower protein digestibility but better phosphorus retention and digestibility.

    Peter Williams, the biofuels business development manager for Associated Brit-ish Agriculture, spoke last year at the Inter-national Fuel Ethanol Workshop & Expo about a potential new ethanol coproduct

    A STEP UP: Jason Bootsma of Prairie AquaTech stands in the companys current testing facility. A new building is currently under construction where the company plans to produce commercial-scale volumes of fishmeal replacement from processed soybean meal and distillers grains.

    PHOTO: JAY FISHBACK

  • 36 | Ethanol Producer Magazine | JULY 2014

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    he calls yeast protein concentrate (YPC,) which is a good replacement for fishmeal in aquaculture diets. In fish feeding trials YPC was used at up to a 15 percent inclusion rate with good results. Not only was it able to replace the fish meal, but we got some very important increase in growth when we put this product in, he says, adding that yeast is a known immune stimulant that contains valuable components such as nucleotides.

    Williams work in this area got started when he wondered how much yeast went through the ethanol production process. No one could answer that question. We found its a lot more than was first real-ized, he says, adding that the amount of yeast increases during fermentation. As-sociated British Agriculture is in the pro-cess of patenting the technology to recover yeast and working to license it with ethanol producers in the U.S. and overseas.

    Dennis Evers, chief technology of-ficer for Meridian Biotech, will speak on this topic at this years FEW. The company has developed a process to grow bacterial biomass on waste products, such as ethanol

    FISH FEED OPTIONS: BioWanze SA, a European ethanol plant produces pelletized gluten, left, while Fluid Quips technology offers ethanol producers the option to produce a high protein stream from whole stillage.

    NEW MARKETS

    PHOTO: BIOWANZE SA PHOTO: FLUID QUIP

  • JULY 2014 | Ethanol Producer Magazine | 37

    stillage. The biomass, a single-cell protein, doubles in volume rapidly and can gener-ate about 10 tons a day. An ethanol plant could potentially go from a 12-cent per gallon profit on the ethanol it produces to a 28-cent per gallon profit, just by adding production of this new coproduct, he says. Another benefit is that the methane gener-ated during the process can be captured to supply all the facilities energy needs.

    Testing conducted in Australia on prawns revealed phenomenal results, in-cluding a faster growth rate. They liked it so much they were virtually jumping out of the water, he says. They just loved the stuff.

    Meridian Biotech is currently working on joint ventures with U.S. ethanol produc-ers, including companies that own multiple ethanol plants. Evers has had 40 years to work the teething problems out of the pro-cess, he says, which is ultimately very sim-ple. This is what people cant understand. It has so many benefits, yet it is so simple. In fact, its too bloody simple, actually, he says with a laugh. I should make it look a bit more complicated.

    Big Potential Adel Yusupov, regional director for

    Southeast Asia for the U.S. Grains Council says worldwide aquaculture feed produc-tion is estimated at 70 million metric tons yearly. Seventy percent of that is produced in China, 18 percent in Southeast Asia and 6 percent in India. Globally, wild catch has been trending down, while aquafarming is on uptrend, he says. It is not a matter of if, but when, that the aquaculture industry will have to move feeding from fish-based (fishmeal, trash fish) toward plant-based protein feed ingredients such as soybean meal, distillers grains and corn gluten meal.

    USGC has done some feeding trial work, promoting distillers grains and corn gluten meal in aquaculture diets. There is a potential market for U.S. ethanol producers

    in the Asian aquaculture market, he says. It is still small-niche usage area, compared to bigger poultry and swine markets, but of-fers strong growth potential, he says.

    Michael Franko, technical projects manager for Fluid Quip, confirms its a market with huge opportunity. Everybody wants to be in aqua, he says. Besides the technology in operation at Badger State since 2009, Fluid Quip is working with two international plant projects, currently in the detailed engineering phase, which aim to produce the same high-protein coproduct. In addition, in early May, the company was issued a notice of allowance for its patent application.

    Producing a new ethanol coproduct like the ones described by Evers, Franko and Williams does change the composi-tion of the distillers grains produced. Spe-

    cifically, the Fluid Quip process results in about 3 to 4 fewer pounds per bushel of distillers grains, on a dry basis, Franko says. However, besides a second, high-value co-product, the process can also result in more distillers corn oil. And, its tunable, with the ethanol producer having the ability to adjust the concentration percentages of the yeast, gluten or protein, which can go to concen-trations as high as 55 percent.

    Author: Holly JessenManaging Editor, Ethanol Producer Magazine

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  • 38 | Ethanol Producer Magazine | JULY 2014

    REGULATION

    SOURCE: 2013 DATA FROM THE RENEWABLE FUELS ASSOCIATION

  • JULY 2014 | Ethanol Producer Magazine | 39

    REGULATION

    Proposed FDA regulations raise compliance questions among ethanol producers.By Susanne Retka Schill

    Beyond Feed

    Under the Food Safety Modernization Act, the eth-anol industry is facing another set of recordkeeping re-quirements, new good manufacturing practices (GMP) and a new agency looking over its shoulder, the Food and Drug Administration. Exactly what those FSMA rules will require isnt known yetthe deadline for the final rule to be published isnt until next summer, and it appears most in the industry will have a couple of years to comply once they are promulgated.

    Though compliance with FSMA is not imminent, many are wondering just how much change lies ahead for distillers grains producers. The ethanol industry will get a second look at the proposed rules later this summer, when revisions to several sections are reopened for comment. The two of most interest to the ethanol industry include GMPs for the production of animal food and preventive controls. Long in place for human food manu-facturing, GMPs will be a new requirement for the animal feed industry. Hazard analysis and preventive controls will be new to both human and animal food manufacturers.

    The first reworking of food safety rules in many years, FSMA reflects the growing need to move away from reaction to prevention, says Daniel McChesney, director of the office of surveillance and compliance at the FDA Center for Veterinary Medicine. The change in focus found in the FSMA legislation was supported by consumers, Congress, industry and the agency, he says. It was driven by a lot of things, one, the globalization of the food and feed supply.

  • McChesney says a 2007 incident played a big role in the adoption of FSMA. There was concern over food safety and people were talking about moving towards prevention, McChesney recalls. Then we ended up with melamine in pet food and FDA got 18,000 consumer calls about sick and dying pets. It was the most calls the agency had gotten ever, or since. Pet food was the snowball that started roll-ing down the mountainside. Things really picked up quickly after that and moved to-ward prevention. FDAs role in ensuring food safety has been expanded and within FDA, the Center for Veterinary Medicine is expanding its role, from overseeing the manufacturing of medicated feeds, to en-suring GMPs and preventive controls are in place among feed manufacturers and suppliers of feed ingredients.

    The timeline between the act becom-ing law in 2011 and the deadline for pub-lication of proposed rules was tight. On the animal feed GMP side, McChesney says, we looked at the time frame, we looked at writing GMPs and we said were going to take the human GMPs, modify them slightly, put that out as our proposal and ask industry, are these practical?

    Industry ReactionThe feed industry found multiple

    problems. From an animal feed stand-point, we do not think that good manu-facturing requirements need to be as strin-gent for animal feed as they need to for human food, says David Fairfield, vice president, feed services for the National Grain and Feed Association. There are ob-vious reasons, he points out, when, where and how animals are raised is compared to how humans live. The idea that ani-mal feed needs to be produced under the same hygienic standards and conditions as human food is not realistic, he says. We commented extensively to FDA. Indeed, NGFA submitted more than 100 pages of comments. Our view is that the preventive control requirements are way too onerous as well, he adds. While he expects modifications to the language, he does not expect the recent calls for an exemption or special treatment of spent brewers grains in the regulation to be ex-tended to the fuel ethanol industrys co-product.

    McChesney confirms that, explaining that the issue is broader than just spent brewers grains. When we put out new

    REGULATION

    Hazard Analysis and Risk-Based Preventive Controls

    Reco

    rdkeep

    ing

    Hazard Analysis

    Preventative

    Controls

    Moni

    toring

    Proc

    ed

    ures

    Corrective Actions

    Verification

    12

    345

    6

    1. Hazard analysis identifies or evaluates known or reasonably foreseeable hazards 2. Preventive controls depend on which, if any, hazards are reasonably likely to occur 3. Monitoring procedures - provide assurance that preventive controls are consistently performed and documents the monitoring required 4. Corrective actions - to be used if preventive controls are not properly implemented 5. Verification 6. Recordkeeping

    SOURCE: FDA OVERVIEW PROPOSED RULE FOR PREVENTATIVE CONTROLS FOR ANIMAL FOOD

    6HUYLQJWKH&RROLQJ7RZHU$IWHUPDUNHW12:672&.,1*$PDULOOR*HDU5HGXFHUVZZZ&RROLQJ7RZHU&RPSRQHQWVFRPMIULW]#WSLW[FRP)LHOG6HUYLFHV,QFOXGH5HSDLU2YHUKDXO6FKHGXOHG0DLQWHQDQFH,QVSHFWLRQ(YDOXDWLRQV(PHUJHQF\6HUYLFH&22/,1*72:(563(&,$/,67672:(53(5)250$1&(,1&&RPSHWLWLYH3ULFLQJDQG4XDQWLW\'LVFRXQWVRQDOO&RROLQJ7RZHU&RPSRQHQWV

  • JULY 2014 | Ethanol Producer Magazine | 41

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    language, it will be addressing all the human food manufacturing coproducts going to animal feed, and not just the spent grains, though admittedly, the spent grains brewers were the most vo-cal. Though the end product, distillers grains, is the same, the two industries are in very different categories, he says. The