September 2009 Ethanol Producer Magazine

SEPTEMBER 2009

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ETHANOL PRODUCER MAGAZINE September 2009 2

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58

vol. 15 no. 9

44 RINSRewriting the Book on RINs Th e U.S. EPA has proposed ways to improve and streamline the renewable identifi cation number (RIN) system as part of the second stage of the renewable fuel standard. –By Erin Voegele

58 SAFETYThe First Line of Defense Maintaining training for fi rst responders is a vital part of the overall safety and success of the ethanol industry.–By Kris Bevill

66 BYPRODUCTSCreative Byproduct Possibilities From pest control to deer attractants and biocomposite materials, an Arizona company is developing a range of products to utilize an ethanol production byproduct.–By Hope Deutscher

features

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ETHANOL PRODUCER MAGAZINE September 2009

contributions

Ethanol Producer Magazine: (USPS No. 023-974) September 2009, Vol. 15, Issue 9. Ethanol Producer Magazine is published monthly. Principal Of-fi ce: 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. Periodicals Postage Paid at Grand Forks, North Dakota and additional mailing offi ces. POSTMASTER: Send address changes to Ethanol Producer Magazine/Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, North Dakota 58203. BPA Worldwide Membership Applied for October 2006

9 Advertiser Index

12 The Way I See It Harvesting Straw Men By Mike Bryan

18 Business & People

20 Commodities

22 View From the Hill Time to Infl uence Climate Legislation By Bob Dinneen

23 RFA Update

24 BIObytes

26 Industry News

38 Drive Increased Corn Yields: Another Reason to Increase Blends By Tom Buis

40 Legal Perspectives Federal Grants Spur Electricity Production By Hamang B. Patel and Porter J. Martin

42 eBIO Insider Europe’s take on ILUC By Robert Vierhout

82 Events Calendar

84 Marketplace

departments

contents

74

78

80

7

74 BRAZIL Brazil’s Ethanol-Enhanced HistoryTh e “Pró-Álcool” program, key to the development of Brazil’s ethanol industry, was created by the country’s military regime during the tumultuous 1970s.–By Pedro G. Seraphim

78 QUALITY Higher Blends Require Higher Quality EthanolAlong with the benefi ts that would come from increasing the amount of ethanol blended into gasoline will come increased product quality requirements for producers.–By Tom Slunecka

80 CARBON Greenhouse Gas Regulation ImpactsEthanol producers will be among the regulated emitters if a proposed mandatory greenhouse gas emissions reduction program becomes law, making it vital for producers to know their options for reducing or selling carbon dioxide.–By Sam A. Rushing

AdIndex

56

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8

48

52

81

77

73

64 & 89

46

33

28

10

75

34

60

71

72 & 90

65

55

30

31

3

13

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16

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14 & 15

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61 & 76

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EDITORIAL

Kris Bevill [email protected]

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The Way I See It

Harvesting Straw Men As I write this, our country is celebrating the 40th an-

niversary of Neil Armstrong’s historic walk on the moon. Right up until the moment that Armstrong took that fi rst memorable step, many said it couldn’t be done — that going to the moon would cost too much and wouldn’t be meaning-ful. The naysayers were eventually proven wrong and what we know today is that all of that hard work — the innova-tion and creativity of the scientists and the dedication of all those involved in the mission — has made us a more pros-perous and secure country.

Today we are faced with an even greater challenge — producing enough energy to sustain the world. Right now we have a negative mandate that dictates 90 percent of the fuel we use must come from fossil sources. We need to change this harmful policy, and the fi rst step is to increase the amount of ethanol that can be blended into gasoline to 15 percent.

Predictably, this increase in sustainability and energy independence is unnerving to those who profi t from the status quo. When the U.S. EPA’s commentary period on the E15 waiver opened up, participants lined up to take their turn at the podium. Those against the increase consisted of a “who’s who” of traditional anti-ethanol groups — poultry and cattle producers, food manufacturers and Big Oil. Small engine and off-road engine industry groups complained that an increase in ethanol would be disastrous for their engines and they would have no choice in using E15. The Associa-tion of International Automobile Manufacturers came out with a strongly worded comment in which they pointed to a lack of testing, lessened drivability and increased evapora-tive emissions — the same tired arguments they trotted out against the mandate for E10.

All of these arguments are straw men. I will say this as bluntly as possible: E15 has no harmful impact on perfor-

mance, maintenance or emis-sions. Increasing our reliance on domestic sources of fuel can only strengthen our economy at a time when creating jobs is exactly what we need. The etha-nol industry currently supports more than half a million jobs and increasing ethanol’s blend in gasoline to 15 percent would create an additional 130,000 jobs.

AIAM has a point when it says testing needs to be done to ensure that modern engines are capable of handling E15 blends. It errs, however, in assuming that this testing can take the place of substantive change that makes a difference in the lives of average consumers eager for more sustainable fuels. Small engine manufacturers complain that every retail station in the country will sell E15 if allowed. But if con-sumers request gasoline with less than 15 percent ethanol or if, for some reason, ethanol-blended fuel costs the retailer more than straight gasoline, the retailer can choose not to sell it.

Perhaps the best alternative of all is the Open Fuel Standard which requires that 50 percent of new cars be fl exible fuel vehicles by 2012. These vehicles would be war-ranted to operate on gasoline, ethanol or methanol. They would create real competition in the marketplace and would give consumers the choice they demand. Given the chance, ethanol will create more domestic jobs, a sustainable energy economy and a better environment. It’s a win-win-win situ-ation.

That’s the way I see it.

Mike BryanPublisher & CEO

[email protected]


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Royal Dutch Shell plc announced on June 10 it would be providing cellulosic E10 at one of its Ottawa service sta-tions for one month, during which regular gasoline pur-chased at the station contained 10 percent cellulosic ethanol produced by Iogen Corp. using wheat and barley.

“We are leading the pack in cellulosic ethanol produc-tion technology and, with this event, showing what is possible in the future,” said Dr. Graeme Sweeney, Shell’s executive vice president of future fuels and carbon dioxide.

Shell also blended the fuel into the company’s Shell V-Pow-er race fuel at the 24 Hours of LeMans Race in France.

The National Ethanol Vehicle Coalition (NEVC) has joined Growth Energy as the industry group’s market devel-opment branch. As part of its new role, the NEVC will con-tinue to maintain its mission to increase availability of higher ethanol blends and fl exible fuel vehicles.

Phil Lampert, who served as the executive director of the NEVC, will now hold the posi-tion of vice president of market development at Growth En-ergy.

This is the second ethanol association to become part of Growth Energy. The Ethanol Promotion and Information Council joined Growth Energy a year ago.

A United Nations cli-mate change conference to be held in December in Copenha-gen will focus on the commer-cialization of cellulosic ethanol. A group of international com-panies, including cellulosic etha-nol technology developer In-bicon A/S, Novozymes A/S, and Genencor, a division of Danisco, will provide wheat straw-derived E85 for use in vehicles at the conference. Den-mark oil supplier Statoil A/S will distribute the ethanol.

“As host nation Denmark makes an effort to secure a green and climate-friendly con-ference in December, it also wants to showcase to the con-ference delegates some of the new technologies that could

contribute to solving the climate challenge,” Svend Olling, Den-mark’s foreign secretary, said.

V e r e -nium Corp., a cellulosic etha-nol and spe-cialty enzyme producer, and British Petroleum plc have en-tered the due diligence phase of the U.S. DOE’s loan guarantee program for their jointly-owned cellulosic ethanol project. The project, located in Highlands County, Fla., is scheduled for groundbreaking in 2010.

The DOE program awards loan guarantees to qualifi ed clean energy projects believed to accelerate commercial use of innovative technologies that will help sustain economic growth, yield environmental benefi ts, and produce a more stable and secure energy supply.

Verenium President and CEO Carlos Riva said this type of government support is critical to enable the growth of emerg-ing, high impact industries such as cellulosic ethanol.

Edgar Hicks has joined Omaha, Neb.-based CFO Sys-tems LLC as part of the CFO outsourcing specialist team. CFO Systems is a provider of chief fi -nancial offi cers and controllers

to the Midwest. At CFO, Hicks will support the company’s renewable fu-els and com-modity-related clients in risk m a n a g e m e n t efforts. His experience includes a history in the grain industry throughout the Midwest, includ-ing work at FCStone, Pillsbury, Cargill Inc., Farmers Co-op, and the Chicago Board of Trade.

Enerkem, a waste-to-biofuels and green chemicals technology company, has joined the City of Edmonton, Alberta, and the Alberta Energy Research Institute to form an advanced energy research center. The cen-ter is part of a comprehensive waste-to-biofuels initiative that is scheduled to be completed the fi rst quarter of 2010. The center will focus on the development and demonstration of novel catalytic conversion processes to produce advanced biofuels from non-hazardous industrial and municipal waste.

Daniel Anderson has been named vice president of corporate operations services for Ohio-based The Ander-sons Inc. Anderson is replacing Dale Fallat, who recently retired.

&Business PeopleEthanol Industry Briefs

Hicks

ETHANOL PRODUCER MAGAZINE • September 2009 19

Sponsored by

Anderson will continue to serve as presi-dent of the company’s re-tail group and will oversee retail opera-tions, corpo-

rate engineering, safety, sourcing and procurement, continuous improvement and facility servic-es. Anderson has been employed at The Andersons since 1979 and has served as retail group president since 1996.

Pure Energy Corp. has launched the fi rst national radio show dedicated to the business of renewable energy. The show, hosted by American Biofuels Council Executive Director Sean O’Hanlon, airs Mondays from 6 to 7 p.m. EDT on WZAB in Miami, Fla., and at www.pureen-ergyshow.com. The program fo-cuses on the latest energy news from around the world and cov-ers topics ranging from energy policy and petroleum concerns to renewable energy and biofuels technologies.

Syngenta Biotechnol-ogy Inc. has entered into a license agreement with Chro-

matin Inc. for the use of Chro-matin’s proprietary gene stack-ing technology in sugar cane. The agreement gives Syngenta exclusive rights to use Chroma-tin’s technology, which uses the plant’s DNA for trait genes in members of the genus Saccha-rum, including sugar cane and energy cane. Syngenta offers crop protection products for sugar cane growers and is in the process of developing planting technology that will reduce pro-duction costs.

“Chromatin is pleased to continue our work with Syn-genta,” said Chromatin Presi-dent and CEO Daphne Preuss. “The broad Syngenta pipeline and crop production programs make them an ideal partner for us in applying Chromatin’s gene stacking technology in sugar cane worldwide.”

Genencor, a division of Danisco, has announced the promotion of Mark Oos-tendorp to director of global sales for grain processing. For the past two years, Oostendorp has served as director of sales for Genecor’s European, Mid-dle Eastern and African regions. Prior to joining Genencor, Oostendorp worked for Quest Communications International Inc. in commercial roles, includ-ing director of business process improvement.

Anne Steckel has joined Growth Energy as director of government affairs and Ted Monoson has been appointed as the group’s director of legislative affairs. Their roles at Growth En-ergy will include advancing policy priorities, including increasing the blend of ethanol in U.S. fuel sup-ply to 15 percent.

Steckel previously served as legislative director for former Rep. David Phelps (D-Ill.), and also worked as legislative assistant to the majority whip of the U.S. Senate, Sen. Dick Durbin (D-Ill.).

Monoson worked as an agriculture reporter and senior legislative assistant for Rep. John Boehner (R-Ohio) prior to join-ing Growth Energy.

Biomass energy provider Frontline BioEnergy Inc. has completed a Series A eq-uity transaction with Chippewa Valley Ethanol Co. The invest-ment increases CVEC’s owner-ship and governance position in Frontline. The partners are working together on a commer-cial gasifi cation system and have advanced their understanding of system dynamics and feedstock processing.

Through the partnership, a new management team has also been created. CVEC General Manager Bill Lee has accepted the position of Frontline CEO and will work directly with the Frontline team. Dr. Thomas

Paskach has been promoted to manager of business devel-opment for Frontline. Paskach will lead the company’s sales and marketing efforts and will work with Lee and company founders to shape Frontline’s strategic di-rection.

Kristy Moore, direc-tor of technical services for the Renewable Fuels Asso-ciation, re-cently received the award of appreciation from ASTM International’s C o m m i t t e e DO2 on Petroleum Products and Lubricants in recognition of her diligent work in fuel regula-tions and specifi cation on behalf of America’s ethanol producers.

Moore’s work at the RFA focuses on technical and safety issues important to the etha-nol industry. She also oversees the association’s technical com-mittee, which is responsible for increasing market share for ethanol, including opening new markets for ethanol. EP

Anderson

Moore

SHARE YOUR INDUSTRY BRIEFS To be included in Business & People, send infor-mation (including photos or illustrations if available) to: Industry Briefs, Ethanol Pro-ducer Magazine, 4650 38th Ave. S. Suite 160, Fargo, ND 58104. You may also fax information to (701) 373-0638, or e-mail it to [email protected]. Please in-clude your name and telephone number in all correspondence.


COMMODITIES REPORT

Natural Gas Report

Corn Report

By Brad Smith, U.S. Energy Services Inc.

By Jason Sagebiel, FCStone

July 16 — In the second quarter of 2009, the macroeconomic reasoning creating an interest in owning commodities (particularly energy commodities) revolved around an anticipated economic re-covery. In June, speculators in futures and exchange traded funds bid up the natural gas futures market during a time of record oversupply. A reversal in sentiment and reduction in bullish speculators has driv-en natural gas prices down 24 percent from the July contract highs to the current August contract lows. Interestingly, the U.S. Natural Gas Fund (UNG) has not seen drastic withdrawals. In fact, withdrawals were modest in the latter half of June and the UNG has seen such signifi cant infl ows in July that it has run out of available shares.

Because UNG has grown so substantially during a time when fundamentals have pushed prices back down to 2002 levels, many commercial hedgers are unaware of its existence. UNG is an ex-change traded fund that attempts to replicate the percentage return of holding the front month natural gas futures contract. For the buyer or seller of the fund, it trades very similarly to a stock. The fund has grown from $700 million to over $4 billion year-to-date and holds approximately 18.5 percent of the open interest in the Nymex August natural gas futures contract.

The fact that UNG investors bring a new risk profi le and invest-ing horizon to the natural gas futures market will inevitably create periods of increased or unanticipated price volatility. In the short term, what is the potential consequence of UNG not being able to issue new shares? If UNG is halted from additional share issuance,

it will remove one of the biggest buyers of natural gas futures from the market. It could create signifi cant downward price pressure. Con-versely, if UNG is approved for 1 billion new shares traders who are short and see continued buying coming to the market through UNG may cover and bid the market up. EP

Brad Smith, price risk manager, can be contacted at [email protected].

July 20 — In June, the market was fl ooded with USDA reports. At mid-month, the supply and demand report was released and, at the end of the month, the acreage and stocks report was revealed. Nearby corn had a whopping $1.12 1/4 trade range in the month of June. The high of $4.50 was tested roughly three times, offering ample opportunity for the producer to make sales. However, the extreme bearish month-end acreage report sent corn futures plum-meting 30 cents, the limit move.

The June 30th acreage report was very surprising as the USDA projected corn plantings at 87.035 million acres, up from 85 million acres in March and up 1.053 million acres from last year. This was a shock to the market because the new data fi gure was even greater than the top end of analysts’ estimates. The end result was that corn and soybean total acreage was 3.5 million acres greater than fi rst reported in June. Corn plantings increased in Iowa, Nebraska, South Dakota, Illinois, Minnesota, Missouri and Ohio. Notably, North Dakota acres were decreased by 400,000 acres.

Quarterly corn stocks on June 1 totaled 4.27 billion bushels, up 6 percent from a year ago. This indicated that the March-May disappearance was 2.69 billion bushels versus 2.83 billion bushels a year ago.

The accompanying graph illustrates current corn values versus the past fi ve years. With a big corn carry-out projected — 1.55 billion bushels and growing — the next marketing year will be an interesting one for corn price levels. EP

Natural gas fund remains strong

Volatile market results in rally


COMMODITIES REPORT

DDGS Report

Ethanol Report

By Sean Broderick, CHS Inc.

By Rick Kment, DTN Biofuels Analyst

Distillers grains ride the price rollercoaster

Slow demand weakens energy prices

July 21 — July has been a roller-coaster ride for DDGS prices. After lurching up at the end of May and slowly coming back down in the fi rst half of June, prices ratcheted up and down again near the 4th of July. Some of the move was infl uenced by dra-matic soymeal and corn futures drops, but other parts of it were seasonal and physical issues.

Animals eat less as the weather gets warmer and cattle are also general-ly put out to pasture and/or marketed. This has always led to a big drop in the wet and modifi ed distillers demand, and plants start to place dry feed into the rail market, pushing prices down for rail destinations — notably in the California, Pacifi c Northwest, and Texas/New Mexico markets. This year, the Mississippi River and Gulf

of Mexico have been more viable op-tions than in years past. The river has been pulling in feed from as far away as western Nebraska and South Da-kota which highlights the weakness of destination markets in the Southwest and West Coast. The phenomenon is already losing steam with the onset of later season barge freight, which gets more expensive before harvest.

Domestic demand does not tradi-tionally pick up until October. Given the distinct value in rations versus most other commodities, most feed-ers have inclusion rates at a maximum. Stagnant demand, along with the po-tential for increases, does not lend it-self to higher price expectations. The only things that are going to pull up DDGS prices are futures prices and exports. EP

July 20 — Weaker overall summer driving demand, combined with a lack of speculative buying following a re-cent sell-off, have continued to erode gasoline prices. Prices are nearly half of what they were last summer but most consumers continue to spend conservatively. This has affected over-all energy prices and taken a signifi cant toll on industries that typically benefi t from summer travel.

Overall buying by traders looking to step into the market is down due to uncertainty of the potential for higher prices. The continued weak economy and lackluster consumer buying pat-terns are adding fuel to the downward moving market. Gasoline prices have fallen 20 cents to 30 cents over the past month.

Ethanol prices have weakened

signifi cantly through the fi rst half of summer as the combination of lower gasoline prices and weaker corn prices have created a downward push on overall markets. Although prices slipped signifi cantly from mid-June to mid-July, plants’ profi tability lev-els have improved due to lower corn costs. Ethanol prices are trading at a signifi cant discount to the gasoline markets, which is boosting demand by stimulating additional blending activity in many parts of the country. Trade activity has remained light in the ethanol market with overall fu-tures markets moving in a relatively narrow range over the past couple of weeks. However, pressure is expected to increase as overall energy usage is expected to remain light through the remainder of the summer. EP

Regional Ethanol Prices ($/gallon as of July 20)

Regional Gasoline Prices ($/gallon as of July 20)

DDGS Prices ($/ton)

Corn Futures Prices (Sept 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

DATEJuly 20, 2009

June 22, 2009

July 21, 2008

NYMEX

N. Ventura

Calif. Border

March 2009

February 2009

March 2008

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

SPOT

1.680

1.640

1.690

SPOT

1.7749

1.8265

1.7470

JULY 200990

124

116

110

114

HIGH3.25

4.07 3/4

6.05

JULY 20093.949

3.36

3.27

641,000

640,000

562,000

JULY 17, 20092.722.742.332.722.433.47

RACK

1.910

1.850

1.980

RACK

1.9988

1.8007

1.8297

JUNE 2009130

174

145

159

159

LOW3.18 1/4

3.88 1/4

5.84

JUNE 20093.538

3.05

3.02

JUNE 17, 20093.583.483.193.533.204.00

JULY 2008165

202

155

163

195

CLOSE3.18 1/4

3.93 1/2

5.89 1/4

JULY 200813.105

11.85

12.28

JULY 18, 20085.075.1253.275.125.395.16

SOURCE: DTN

SOURCE: DTN

SOURCE: CHS Inc.

SOURCE: FCStone

SOURCE: Sorghum Synergies

SOURCE: U.S. Energy Services Inc.

SOURCE: U.S. Energy Information Administration


VIEW FROM THE HILL

Time to Infl uence Climate LegislationIn just eight short months, the fi nancial crisis

that threatened to cripple the nation has been re-placed in the spotlight by health care reform and climate change legislation. Congress is poised to pass climate change legislation this year. However, as is often the case, the devil is in the details — and the details of climate change legislation have yet to be written.

The legislation that passed the U.S. House and is being negotiated in the U.S. Senate has the poten-tial to greatly infl uence how America’s ethanol indus-try grows in the future. As I write this column, Con-gress is preparing for its August recess. The House has already passed its version of climate change legislation and Sen. Barbara Boxer (D-Calif.), the lead author of the Senate version, has promised a bill sometime during the fi rst full week of Septem-ber. While the fi nal details of Boxer’s proposal are not yet known, we do have a sense of what is being discussed. Thanks to the leadership of House Ag-riculture Committee Chairman Collin Peterson (D-Minn.), agriculture and biofuels were given the fair treatment they deserve in climate change discus-sions. The House bill calls for a necessary time-out from the U.S. EPA’s inclusion of international indirect land use change (ILUC) calculations in its green-house gas profi le for ethanol and requires fi ve years of desperately needed additional scientifi c research. The notion of ILUC is so complex and lacking con-sensus that implementing such a penalty against biofuels alone is putting the policy cart in front of the scientifi c horse.

While the bill in the Senate is far from complete, Senate Agriculture Committee Chairman Tom Harkin (D-Iowa) has pledged to include all of the language included by Peterson and expand upon it if possible. Even Senate Majority Leader Harry Reid (D-Nev.) recognizes the importance of this issue and has in-structed Boxer to include Harkin and other members of the Ag Committee in crafting the bill.

Members of Congress from agricultural and rural areas are unifi ed in their support of common sense policies and preventing distortion of this leg-islation at the expense of rural America. But the bill is a long way from the fi nish line. A fi nal Senate ver-sion is still needed and a conference committee to reconcile differences in the bill is likely to be conten-tious. In addition, a coalition of well-funded and de-termined groups has organized to stop any policies they see as benefi cial to ethanol. Big Oil, giant food processors and environmental groups are united to maintain the status quo at all costs.

The complex and confusing nature of this bill and its march through Congress underscores the importance of vigilance and awareness of the legis-lative vehicles moving through all levels of govern-ment that will infl uence the future of this industry.

The RFA will continue to engage with legisla-tors’ offi ces on a daily basis. We will ensure that those crafting the legislation are aware of the facts and pitfalls that an overreaching and not-ready-for-prime-time policy present. And we will be sure that you have all the information you need to be effective advocates for this industry.

Dinneen

Bob DinneenPresident and CEO



RFA UPDATEwww.ethanolRFA.org

Fourth edition of gasoline manual now availableIncreasing availability of renewable fuels is changing

the composition of the fuels offered to American drivers. Ethanol blends such as E10 as well as ethanol alterna-tives such as E85 are becoming more the norm than the exception.

With these changes in mind, the Renewable Fuels Foundation has released its defi nitive resource on gas-oline quality, “Changes in Gasoline Manual IV.” This is the fourth update to the manual, which has more than 500,000 copies in circulation and has become the defi ni-tive reference source for information on gasoline quality and its relationship to vehicle performance for auto ser-vice professionals.

The manual focuses on changes in gasoline compo-sition resulting from the passage of the Energy Policy Act of 2005 and the Energy Independence and Security Act of 2007, as well as fl uctuating fuel prices leading to greater interest in renewable fuels. It provides important updates in fuel quality ratings, octane ratings, ethanol fuel for non-automotive uses, and a new feature on E85 and fl exible fuel vehicles designed to run on higher ethanol blends.

“With old requirements for oxygenates and other fuel additives gone and new mandates for renewable fuel use in place, it was clear the changing fuel landscape need-ed to be addressed,” said Robert Reynolds, president of Downstream Alternatives and lead author of the manu-al. “This manual addresses all the concerns from vapor pressures to octane ratings to drivability standards for all ethanol-blended fuels, including E85. It also focuses on the use of ethanol-blended fuels in non-automotive appli-cations, a growing area of unnecessary concern for con-sumers. Simply put, ethanol fuels are safe and effective for use.”

A copy of the “Changes in Gasoline Manual IV” can be downloaded for free at www.ethanolrfa.org.

The case for E12 Currently, the U.S. EPA is considering a formal waiver

request from the ethanol industry to allow for the blending of up to 15 percent ethanol in a gallon of gasoline. The RFA strongly believes that both the science and existing statute compel EPA to approve this waiver.

Under the law, however, EPA has 270 days to consid-er the request. The clock is running and a decision is due on Dec. 1. In the meantime and regardless of its decision, EPA can immediately take steps to increase ethanol use in America safely and responsibly.

EPA has authority to defi ne E12 blends as “substan-tially similar” to fuels used in certifi ed motor vehicles. The basis for this conclusion is that the weight percentage of oxygen that EPA allows in oxygenated gasoline actually equates to an oxygen percentage that would be present in 12 percent ethanol blends. Ethanol as a fuel additive is an oxygenate. Including ethanol raises the oxygen content of gasoline, causing for a cleaner, more complete combus-tion of gasoline.

Much of the concern being raised has to do with the amount of oxygen in gasoline as a result of increased eth-anol use and increased combustion temperatures. How-ever, it is likely that fuels containing oxygen levels equal to those in E12 have been in the marketplace since the early 1990s.

Considering this and the authority given to the EPA in the Clean Air Act, the EPA should acknowledge that it has already permitted E12 blends in terms of equivalent oxygen content and that, such blends are “substantially similar” to certifi cation fuels under its interpretation.

“We need not wait until EPA decides on the formal E15 waiver request to increase the amount of ethanol we use,” RFA President Bob Dinneen said. “This interim and legally supported step of approving E12 blends would provide an immediate boost to America’s ethanol producers and pro-vide gasoline marketers the fl exibility they need to meet the requirements of the renewable fuels standard and capitalize on the cost savings associated with increased ethanol blending.”


The U.S. EPA has extended the com-ment period by 60 days for its pro-posed rule for the implementation of the second stage of the renewable fuel standard (RFS2). The extension, granted in response to several requests sub-mitted to the EPA, was originally scheduled to end July 27 but will now end Sept. 25. The EPA said a 60-day extension should allow adequate time for the public to provide comment on the pro-

posal while also allowing the agency enough

time to implement new standards in a timely manner. The proposed implementat ion

for RFS2, which addresses life-cycle

greenhouse gas modeling among other changes to the cur-rent RFS, was released May 5, with public commentary begin-ning May 26th.

Comments can be submitted at http://www.epa.gov/otaq/renewablefuels/index.htm.

A new report from Pike Research forecasted combined sales from the biodiesel and ethanol markets to reach $247 billion by 2020, despite industry challenges. This represents a $76 billion growth from predicted sales for 2010. The report states challenges facing the biofuels market as limited availability of inexpensive feedstocks, the food

verses fuel debate, petroleum price volality and overcapacity of production. The report, “Biofu-els Markets and Technologies,” examines technologies that will drive the future of the industry, and includes profi les of key play-ers and comprehensive forecasts for biodiesel and ethanol broken down by country and region.

The University of Ten-nessee has contracted with 38 farmers to grow 1,901 acres of switchgrass for its incentive pro-gram as part of its partnership with DuPont-Danisco Cellulosic Ethanol LLC. This is the second growing season in the program — 12 farmers participated last season. Farmers are being paid $450 per acre to plant the ener-

gy crop on their own land. The university provided seed and as-sistance with planting. Farmers will assume full responsibility for harvesting and baling the crop. The switchgrass will be used as feedstock at DuPont-Danisco’s demonstration-scale cellulosic ethanol biorefi nery in Vonore, Tenn.

Report: Biofuels market growth expected despite challenges

University of Tennessee expands switchgrass program

BIObytes Ethanol News Briefs

BBI International has re-leased a technical report titled “Technoeconomic Analysis of Biomass CHP at Illinois Corn Ethanol Plants.” The report investigates the impact that biomass powered com-bined heat and power (CHP) plants could have on Illinois’ renewable portfolio standard, which requires 25 percent of the state’s energy to be derived

from renewable power by 2025. The report also details biomass combustion system effi cien-cies, estimated harvest costs for woody biomass residues, biomass feedstocks available in Illinois, CHP unit sizes, and fi -nancial modeling and sensitivity analyses for several CHP plant sizes. The report is available for purchase at http://store.bbiinternational.com.

Demand for U.S. distill-ers dried grains with solubles (DDGS) has grown in Canada due to poor crop conditions of barley, cattle producers’ main feedstock. Rycom Trading Ltd., the country’s largest distillers grains importer, recently pur-chased approximately 31,500 metric tons of U.S. DDGS. Canada imported 772,000 tons of U.S. DDGS in 2008, up

453,000 tons from 2007, mak-ing it the second largest market for U.S. DDGS.

Ryan Slozka, senior trader at Rycom, said they will wait to see if crop conditions improve, “but as long as cattle feeders continue to see good results with feeding U.S. corn DDGS, we anticipate this upward trend in demand to continue.”

Poor crop conditions lead to US DDGS demand

BBI International releases CHP technical report

EPA extends RFS2 comment periodU.S. distillers grains demand continues to grow in Canada due to poor crop conditions for cattle producers.


On June 23, Cornell Uni-versity held a ribbon-cutting ceremony to celebrate the opening of its Biofuels Re-search Laboratory. The $6 million, 11,000-square-foot facility will serve as the hub of Cornell’s research and de-velopment of sustainable and economical biofuels derived from nonfood crops.

Susan Henry, Cornell’s Ronald P. Lynch dean of agri-

culture and life sciences, said the new lab will catapult Cor-nell to the forefront of re-newable energy research and will be the centerpiece of the university’s work on cellulosic biofuel and bioproducts. Ac-cording to Henry, the goal of the laboratory is to develop renewable energy sources that will stimulate opportunities for New York agriculture.

In June, Ind. Lt. Gov. Becky Skillman presented the Indiana State Department of Agricul-ture an agriculture roadmap to serve as a guide in growing the state’s agriculture industry over the next four years. State lead-ers want Indiana to become a global leader in innovation and commercialization of food, fuel and fi ber production and plan to

accomplish that by focusing on advocacy, economic opportunity and environmental stewardship, as highlighted in the guide.

“We believe that the pos-sibilities for Indiana agriculture are endless — and with those possibilities comes progress in the form of jobs, capital invest-ment and wealth for rural Indi-ana,” Skillman said.

Spain-based process tech-nology provider HRS Spiratube has announced the development of a new process for the con-tinuous thermal pretreatment of citrus peels to produce ethanol. The technique, which can be used to convert half of the peel’s

organic matter into ethanol, was developed through a research collaboration with the Univer-sity of Cartagena. The company intends to use the technology in a commercial-scale citrus peel-to-ethanol facility in the Murcia region of Spain by 2010.

Indiana presents agriculture roadmap

Company develops novel citrus peel-to-ethanol process

CHS Inc., an energy, grains and foods company, held a grand opening for its new ethanol distribution ven-ture in Birmingham, Ala., on June 9. According to CHS Renewable Fuels Marketing Director John Litterio, the exclusive transload terminal

will allow ethanol to move more quickly and effi ciently to blender customers in the Southeastern U.S. He said the terminal will not only improve the fl ow of ethanol from plant to buyer but also reduce dependence on foreign oil and add value for grain producers.

CHS opens Alabama ethanol terminal

Cornell University opens biofuels research lab

Professor Larry Walker, second from left, and researchers in the Bio-fuels Research Laboratory

Mansfi eld Oil Co. has ac-quired ethanol marketer C&N Companies. C&N represents 500 MMgy of ethanol produc-tion capacity and 150 MMgy of biodiesel production capac-ity. Mansfi eld Oil, which oper-ates 650 bulk terminals and 900 supply points in 48 states, plans to immediately market C&N products to refi ners and blend-

ers. According to Mansfi eld Oil executives, the acquisition rep-resents a substantial investment by Mansfi eld into the renewable fuels and ethanol industries. Mansfi eld Oil Executive Vice President Doug Haugh said he expects the acquisition to con-tinue growth in ethanol and biodiesel sales.

Mansfi eld Oil acquires C&N Companies

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The U.S. EPA’s proposed rule for the second stage of the renewable fuel standard (RFS2) states that renewable identifi cation numbers can only be generated for renew-able fuel that is produced from feedstock which meets the defi nition of renewable biomass. This limits the participation of feedstocks in the program according to the management practices of the land they are produced on. In the case of crops and crop residues, these feedstocks must be harvest-ed from agricultural lands cleared and cul-tivated prior to Dec. 19, 2009. In addition, the land used to produce them must be ac-tively managed or fallow, and non-forested.

To ensure compliance with this aspect of the proposed rule, the EPA is proposing to require renewable fuel producers to pro-vide a demonstration of the type of land used to produce the feedstocks they use at their facilities. One way this could be ac-complished would be to require renewable fuel producers to obtain documentation from their feedstock suppliers and include that information in production reports sub-

mitted to the EPA. According to the EPA, the agency expects this type of requirement would result in renewable fuel producers amending their contracts and altering their supply chain interactions to ensure they re-ceive documented assurance and proof of their feedstock’s origin.

In a comment submitted to the EPA regarding the RFS2 rulemaking, Adam Dunlop, Blue Flint Ethanol LLC’s director of health, safety and environment, states that his company is very concerned about the defi nition of renewable biomass and the land use restrictions provided in the proposed rule. “The rule appears to place an impossible burden of tracking feed-stocks on renewable fuel producers,” said Dunlop in the comment. “Furthermore, we believe that this burden serves little purpose as the multiple use nature of feedstocks for renewable fuel may allow feedstock produc-ers to circumvent the intent of the rule…The proposed recordkeeping requirements for production facilities and producers to comply with the ‘existing land’ require-

ments appear to be applying a signifi cantly larger fi nancial and regulatory burden than necessary.”

In the proposed rule, the EPA also de-scribes a variety of alternatives that could be used to comply with this aspect of the RFS2. One alternative would be to estab-lish a chain-of-custody tracking system that could ensure land use data followed the feedstock throughout the supply chain. Alternatively, the EPA could require renew-able fuel producers to set up and adminis-ter a quality assurance program. Similarly, the agency would require that renewable fuel producers and renewable fuel feed-stock producers and suppliers develop an industry-wide quality assurance program modeled after the Reformulated Gasoline Survey Association. An additional option includes using existing satellite and aerial imagery to develop a mapping Web site that could assist regulated parties in identifying where their feedstocks are produced.

—Erin Voegele

RFS2 could require biofuel producers to track feedstock

If passed as proposed by the U.S. EPA, the second stage of the renewable fuel standard will require renewable fuel producers to track their feedstocks to ensure that they meet the defi nition of renewable biomass.


Algae producers are turning to the etha-nol industry in an effort to create ethanol and use its byproducts.

The focus of most algae producers is drop-in replacements, such as renewable die-sel or renewable gasoline, said Todd Taylor, lead attorney in biofuels and biomass at Fre-drikson & Byron PA. “The algae people that are looking at ethanol are doing it because there’s an immediate market for it,” he said. “Algenol Biofuels has been far and away the company that has been focused on this.”

Algenol Biofuels Inc. was formed in March 2006 as a company dedicated to the utilization and commercialization of algae for ethanol production. In June, Algenol and Dow Chemical Co. announced plans to build and operate a pilot-scale, algae-based inte-grated biorefi nery that will convert carbon dioxide into ethanol on 24 acres at Dow’s Freeport, Texas, site.

Growing algae for biodiesel and etha-nol may look similar, however, Paul Woods, co-founder and CEO of Algenol Biofuels, said the two processes are very different. Al-genol grows different algae species, cultivates and harvests the product differently. “From our perspective, ethanol is an evaporative

product. So we have a closed and sealed bio-reactor where we introduce carbon dioxide into it. The algae, sunlight and seawater form ethanol, which enters the culture but very quickly evaporates into the headspace. We collect off and purify the headspace.”

According to Woods, based on an acre-age basis, Algenol’s technology could pro-duce 6,000 gallons of algae per year per acre. The fi rst of its kind pilot-scale technology biorefi nery will have the potential to produce more than 100,000 gallons of ethanol per year, while consuming two dry tons of car-bon dioxide obtained from industrial emis-sions daily.

In June, Algenol submitted a formal re-quest to the U.S. DOE to obtain a grant for fi nancial support to successfully conduct the pilot project. Upon approval of the grant, Algenol, Dow and other collaborators will work to demonstrate the technology at a lev-el to suffi ciently prove that it can be imple-mented on a commercial scale.

The biggest potential for algae and etha-nol is probably more on the coproducts side, according to Taylor. For example, one of Fredrikson & Byron’s clients is working with other algae companies to use the high carbo-

hydrate algae biomass left after oil extraction to add it back into the fermentation tanks with corn to create more ethanol. Another client is using the dead algae bodies to create an algae bio-coal that can be fed into the en-ergy system of a facility just like natural gas.

“I don’t think you’ll start seeing [design/build companies] offering algae-to-ethanol conversion kits any time soon, but I do think that you’ll see a whole lot of algae compa-nies approaching ethanol companies saying, ‘Can I partner with you to take the fermenta-tion carbon dioxide and grow algae?’” Taylor said, adding that costs to install such technol-ogy could be a prohibitive factor.

Recently, the U.S. DOE announced that up to $85 million from the American Re-covery and Reinvestment Act has been set aside to develop algae-based biofuels and ad-vanced, infrastructure-compatible biofuels. The DOE expects to select two to three part-nerships and fund projects over three years. The announcement targets two crucial areas: algal biofuels research and development and advanced, infrastructure-compatible biofuels research and development.

—Hope Deutscher

Algae and ethanol partnerships grow

Algenol Biofuels Inc. has demonstrated the growth of algae to produce ethanol at its test facility in Florida.

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The U.S. EPA is currently reviewing thousands of comments received in response to a waiver request submitted earlier this year by Growth Energy and dozens of other industry groups, asking the agency to increase the allowable ethanol content of gasoline to 15 percent. The public commentary period, initially set to expire May 27, was extended by the EPA to July 20 following a National Corn Growers Association request to allow Midwest farmers a fair chance to participate in the commentary process. The EPA is set to issue its fi nal decision by Dec. 1.

Interested parties took advantage of the extension and fi led last-minute comments, both for and against the ethanol increase. The Alli-ance for a Safe Alternative Fuels Environment (AllSAFE), a small en-gine lobby group, fi led a 47-page comment in which the group claimed Growth Energy failed to provide any test data or studies to support

U.S. EPA reviews E15 waiver request comments

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The U.S. EPA is considering a waiver request to increase the allowable blend of ethanol in gasoline to 15 percent. The agency could also approve a smaller increase of ethanol blend rates, specifi cally E12.


its waiver request. “Growth Energy has presented very limited data on an unrepresentative and incomplete group of non-road engines, vehicles and equipment,” the group stated. The limited scientifi c evidence that was supplied by Growth Energy was fl awed, accord-ing to AllSAFE, and should not be considered by the EPA.

The Renewable Fuels Association submitted multiple studies in support of the ethanol increase on the fi nal day of the comment period. The RFA stated that, while the original request contained substantial data to support the waiver request, additional data had become available and served to support the request. The group urged the EPA to also consider ongoing project results as they be-come available prior to the agency’s deadline for a decision.

The Brazilian Sugarcane Industry Association commented that its extensive experience with various blends of ethanol validated its recommendation that the EPA allow the ethanol increase. “Nearly a century of Brazilian experience with ethanol blended fuels at 15 percent and higher demonstrates that such fuels can lead to sig-nifi cant environmental and greenhouse gas benefi ts without envi-ronmental concerns or technology modifi cations that differ from those of E10,” the group stated.

Proponents of the waiver are hopeful that even if the E15 waiver is not approved, the request will open the door to lesser

ethanol rates — perhaps E12. The RFA said the EPA already has the authority to approve E12 if it defi nes the blend as being “sub-stantially similar” to E10.

Dave Vander Griend, president and CEO of ICM Inc. and founding member of Growth Energy, said the approval of eth-anol blends greater than 10 percent is essential to the successful implementation of the second stage of the renewable fuel stan-dard and to assist in improving the U.S. economy. Vander Griend commented that if the allowable blend rate were to remain at the “current stagnant rate,” the development of advanced biofuels will be restricted. “Since its inception in 1995, ICM’s mission has been to sustain agriculture through innovation, and along with other in-dustry leaders, we’ve proven our ability to do just that by produc-ing a clean, affordable and renewable means to reduce imports of foreign sources of oil,” he said. “It is incumbent for all stakeholders involved to collaborate and provide continued leadership and seek well-informed policy decisions that will ensure the 36 billion gallon goal is reached, and that a greener, more secure energy future is within reach for all Americans.”

—Kris Bevill

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Climate change bill advances

The American Clean Energy and Security Act of 2009 (ACES) passed the U.S. House of Representatives on June 26 by a vote of 219 to 212 and is now being addressed by the U.S. Senate. The House version of ACES includes a provision regarding internation-al indirect land use change, which could change how the U.S. EPA considers international indirect land use change in its proposed rule for the second stage of the renewable fuel standard.

The provision, spearheaded by House Agriculture Committee Chairman Collin Peterson (D-Minn.), would ensure that widespread scientifi c agreement linking biofuels to indirect land use change be-fore the EPA could impose a greenhouse gas penalty on biofuels. Under the agreement, an entity such as the National Academy of Sciences would conduct a fi ve-year study to determine a possible link between biofuels and tropical deforestation. In the meantime, the EPA would be prevented from imposing an indirect land use penalty on biofuels. At the end of the study, the EPA, U.S. DOE, and the USDA would need to agree that such a link is present and

Legislation that could change how the U.S. EPA considers indirect land use change is being debated in the U.S. Senate.


can be accurately predicted. At that time, Congress would have one year to review the issue before the EPA could move forward.

According to David Crass, a partner at Michael Best & Friedrich LLP, the Senate is expected to address the bill on Sept. 28. How-ever, by mid-July it remained unclear whether the Senate would be able to harmonize the various climate change bills or if legislation would be moved to a conference committee. “I do believe that it is Congress’s overall goal to get one omnibus provision sent up to the White House in advance of the climate change conference in Co-penhagen in December,” Crass said. “I think President Obama has made very clear that in order to have credibility walking into those discussions, he needs something from Congress on this.”

Crass noted that initial comments made by Sen. Tom Harkin (D-Iowa) indicate he will make similar political manuevers as Pe-terson did in the House to ensure that key agriculture and forestry-friendly compromises are secured in the Senate bill.

While the indirect land use change provision of ACES would be benefi cial to ethanol producers, cap-and-trade provisions will also affect the industry. “I think unquestionably [ethanol produc-ers] will be a segment of the economy that will be regulated,” Crass said. “The key question is how.”

Crass is encouraging his clients to take action in four areas. First, he recommends they stay engaged in the debate of this bill via active participation in an industry trade group.

Second, Crass recommends his clients continue to defend the renewable fuel standard (RFS). He said some entities have stated that if the implementation of indirect land use change is post-poned, the whole RFS program should be postponed as well. “I don’t think that will happen, but it’s a dangerous argument…and the industry needs to continue to defend the RFS and push it for-ward,” Crass said.

Third, Crass encourages his clients to pursue opportunities to establish their climate change footprint and explore ways to reduce that carbon footprint. “What I mean by that is taking a look at fuel switching projects and explore opportunities to reduce natural gas use,” he said. “A biomass fuel switch…may gain them eligibility for some early action credits that they could sell in an offset market that develops as a result of the bill.”

Finally, Crass said many of his clients are looking at opportuni-ties to pursue a cooperative model for the purposes of aggregation and collection of biomass. “That biomass either can be used for market opportunities that will be developed by the bill for selling biomass as a feedstock into the electricity market [or for] their own combined heat and power projects they may be adopting or devel-oping to minimize their carbon footprint.”

—Erin Voegele

31


In response to a request by President Barack Obama to expe-dite the implementation of programs to assist the development of biofuels, the USDA has moved forward with several 2008 Farm Bill provisions that could serve to benefi t ethanol producers.

The Repowering Assistance Program provides $35 million in fi scal year 2009, and authorized $15 million of that funding for fi s-cal years 2009 through 2012, to provide payments to biorefi neries to replace fossil fuel-derived heat and power with renewable biomass systems. To receive funds, a biorefi nery must have been in existence at the time the 2008 Farm Bill was passed. The USDA is accepting applications for the competitive program until Nov. 1.

Recipients of loan guarantees via the Loan Guarantees for Biore-fi neries Program are expected to be named Sept. 15. Guarantees will

USDA programs help biofuels producers

The 2008 Farm Bill provides a number of programs that will benefi t biofuels producers and feedstock suppliers.


be awarded to applicants using second- and third-generation biofuels technologies to produce a variety of renewable fuels, including cel-lulosic ethanol and methane gas.

The USDA has also agreed to spend $30 million to pay eligible agriculture producers to support and expand production of ad-vanced biofuels as part of its plan to encourage production of next-generation biofuels.

Through the Rural Energy for America Program, the USDA will accept applications for renewable fuel energy systems and effi ciency improvement feasibility studies, loan guarantees and grants, as well as applications for conducting energy audits on behalf of agriculture producers and rural small businesses.

The Biomass Crop Assistance Program will provide fi nancial as-sistance to producers or entities that deliver eligible biomass material to designated biomass conversion facilities for use as heat, power, biobased products or biofuels. Initially, assistance will be given for the collection, harvest, storage and transportation costs associated with the delivery of eligible materials. According to the USDA, for up to two years producers or entities will be eligible for up to a dollar per dollar match, up to $45 per dry ton, for the value of the biomass delivered to a designated biomass conversion facility.

Recently, BCAP’s implementation was expedited and the pro-

gram start date was moved up to 2010. The USDA’s Farm Service Agency will move forward on fully implementing BCAP later this year. As the program grows, FSA county offi ces will educate and assist producers and facilities on how to participate. It is not known how many project sites will be chosen.

On June 25, the Minnesota Project hosted a webinar focused on BCAP. Presenter Joel Tallaksen, who is also the gasifi cation proj-ect coordinator at the University of Minnesota-Morris, said one of BCAP’s major benefi ts is that it promotes sustainable land use. In ad-dition, Tallaksen said the program also can help the biomass market grow, providing stable revenue sources and reasonably priced bio-mass for consumers. “One of the biggest things we’ll have to do is form a biomass market,” he said. “It’s hard to get new facilities to start up, unless they know there’s a market out there.”

The USDA is working on some technical assistance issues and developing regulations relating to the issuance of producer contracts and BCAP project areas, said Kelly Novak, program analyst for the USDA Farm Service Agency. The agency is also conducting an en-vironmental impact study; however, she said everything should be completed by the 2010 start date.

—Hope Deutscher


Increased corn acreage benefi ts ethanol

In the past few months, reports have shown that corn acreage has increased by 3 percent, forcing prices to fall, but boosting corn-based ethanol producer profi tability. According to the USDA National Ag-ricultural Statistics Service crop acreage report released June 30, 2009, corn acreage is estimated at 87 million acres, making it the second-largest planted acreage since 1946, behind 2007.

The July 10 World Agricultural Supply and Demand Estimate re-port projected the 2009-‘10 marketing year average farm price for corn to be $3.35 to $4.15 per bushel, down 55 cents on both ends of the range. On July 13, the CME Group reported that ethanol prices had dropped sharply, but corn prices had dropped even further, resulting in a July ethanol-corn crush margin that was showing improvement. On July 13, it was moderately below the record 7.5 month high of 34.7 cents per gallon.

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In the past few months, corn acreage has increased and prices have dropped, benefi ting ethanol producers across the country.

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“I think corn prices should be relatively stable because we’ve got a decent supply,” said Richard Asplund, research director for Com-modity Research Bureau. “On the other hand, oil prices have some potential to go up over the next year as the global economy starts to re-cover, which hopefully it will in the second half of this year. It appears that there is some room for oil and gasoline prices to go higher over the next six months and into next year, whereas corn prices should be relatively stable. So that’s a good outlook for ethanol producers. That should help their margins even more.”

Volatility in the commodity markets continues to dominate the scene, said Nathan Fields, director of biotechnology and economic analysis for the National Corn Growers Association. “I think what the markets are probably doing is that with the price of oil, price of ethanol, price of corn, there looks to be some weakness in demand categories and that’s eroding away at the price of corn. There’s a lot of uncertainty around some of the ethanol plants out there. If oil price goes up, you’re probably going to see corn demand increase; if you see any indication from the U.S. EPA that they are going to release the 10 percent blend limit on ethanol, you may see corn prices be supported a little bit, but with corn prices going down, we keep getting indications that supply is going up. That’s fundamentally not an odd occurrence to happen.”

Fields said the market is cyclical — high corn prices lead to farm-

ers planting more acres, which leads to lower corn prices and reduced acreage.

“Corn producers are a bit concerned,” Fields said. “They are still engaging in a lot of hedging practices to maintain the viability and profi tability of their operation. Really, for them, the volatility that we have seen in the past few years has been a heck of a rollercoaster ride but they are happy to be in the area of non-$2 corn because we’re still up operating at a price point area where we’re not relying so heavily on that government safety net.”

Fields expects ethanol plant profi tability to begin to turn around and more facilities to produce more ethanol – if they can feed it into the market.

“The USDA reported the acreage bumping up. I think that’s a pretty clear indication that corn is still one of the best value proposi-tions out there and we’re going to see strong demand, even through some of this price volatility,” Fields said. “The report also shows that there is plenty of supply out there to address any concerns that those who oppose biofuels may have. There’s plenty of corn to go around, plenty to meet all of our market needs, we’re not sacrifi cing one market for the other; we’re serving all markets and serving all markets very, very well.”

—Hope Deutscher

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Myriant Technologies plans pilot-scale cellulosic biorefi nery

BioEnergy International LLC, a privately held biotech developer and manufacturer of next-generation renewable biochemicals and biofuels, recently announced the formation of Myriant Technologies LLC, which will incorporate its biobased chemicals business and in-tellectual property. BioEnergy International and Myriant Technolo-gies will operate as separate entities.

BioEnergy International will continue its pursuit of biofuels op-portunities, including the development of a Clearfi eld, Penn.-based ethanol plant that is expected to begin operations in January 2010. Myriant Technologies is partnering with the University of Florida on a pilot-scale biorefi nery facility that will produce cellulosic ethanol and biobased chemicals.

“The university was awarded $20 million by the state of Florida to develop what we feel is the fi rst true integrated biorefi nery that will take advanced cellulosic feedstock and then produce a multiple of products, including biofuels and biochemicals,” said Samuel McCon-

Clay Beathea, Buckeye Technologies wood cellulose sustainability manager (left); Lonnie Ingram, a professor with the University of Florida’s Department of Microbiology and Cell Science and director of the Florida Center for Renewable Chemicals and Fuels; and Howard Drew, Buckeye Technolo-gies vice president of wood cellulose manufacturing, pictured at the future site of the University of Florida’s pilot-scale biorefi nery.

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nell, who serves as the senior vice president of corporate develop-ment for both Myriant Technologies and BioEnergy International.

According to Kevin Heinicka, the University of Florida’s direc-tor of facilities planning and operations, the pilot-scale biorefi nery project will employ two technologies developed by the university: a cellulosic ethanol technology that has been licensed to Verenium Corp., and a biochemicals technology that has been licensed to Myri-ant Technologies. Myriant Technologies will co-operate the facility with the university. Verenium is not expected to be actively involved in the project.

The point of the facility, said Heinicka, is to further develop the two technologies and experiment with different feedstock sources. The company has scheduled a groundbreaking ceremony for the new facility to take place in October. Heinicka estimated that construc-tion will begin during the fi rst quarter of 2010, with the facility being operational by the end of year.

According to McConnell, the project is currently in the design phase and a site has been identifi ed adjacent to Buckeye Technolo-gies Inc.’s wood processing plant in Perry, Fla. Buckeye will supply a portion of the feedstock used by the facility, including slash pine that is processed by the company and the waste streams coming out of its production process. A variety of other feedstocks will be utilized by the pilot biorefi nery, including energy cane, sugarcane bagasse, pop-

lar, sweet sorghum, wood waste, and waste-based biomass materials. According to McConnell, Buckeye also has access to signifi cant acre-age immediately adjacent to the site, which could be used to grow a wide variety of organic feedstocks that will be employed by the pilot facility.

Once complete, the pilot-scale biorefi nery is expected to have the capacity to process approximately 5 dry tons-per-day of cellulosic biomass material. The facility will be capable of producing more than 140,000 gallons of ethanol or 1,000 tons of biobased chemicals an-nually.

BioEnergy International began commercial production of its D(-) lactic acid product in 2008 for use in polylactic acid. D(-) lactic acid solves polylactic acid’s thermal stability problem, unlocking its potential and expanding its applications to engineering and high per-formance plastics. Myriant is currently working to develop biobased succinic acid, which can be used as a building block for plastics and as a replacement for petroleum-based chemicals. “We see this [pi-lot-scale biorefi nery] as an ideal weapon for us in acclimating our technology for each chemical to waste-based feedstocks,” McConnell said.

—Erin Voegele


ith this year’s corn harvest just around the corner, it’s worth recalling the USDA’s crop report and its yield report released earlier this year. Both reports indicate that once again the American farmer can produce

enough corn to both feed and fuel our country. Our critics continue to say otherwise, but time and again, we prove them wrong.

Based on the USDA’s reports, American farmers are expected to produce 12.3 billion bushels of corn, the sec-ond largest U.S. crop in history. At the same time, 2009 corn acreage is 7 percent below 2007, and it is the second-largest planted acreage since 1946, behind 2007. And after estimating all of the uses of corn, the USDA projects an excess corn supply of 1.6 billion bushels.

These record-breaking statistics are good news for many reasons. First, they dismiss the claims from our crit-ics who say ethanol production drives up the cost of food. Indeed, we’re producing more ethanol than ever and corn prices are less than half of what they were last summer. The fact is, American farmers continue to be the most pro-ductive in the world and can grow enough corn for food, fuel, feed and exports, and still have excess supply that is carried over to the next year. Farmers continue to pro-duce more corn on less land, further hurting the credibility of those who argue that ethanol production leads to global land use changes. And as technologies continue to ad-vance, our farming techniques and abilities will only get better and increase yields even more.

The truth is, it’s our critics who have yet to address the issue of high food prices. For almost a year, we have been calling on big food manufacturers, especially the Gro-cery Manufacturers Association, to halt their misinformation campaign about ethanol and lower food prices. While food

prices have gone down slightly, they remain at levels much higher than where they should be. The price increases that big food makers adopted last year have stuck and many food companies are seeing increased profi ts. Companies like General Mills and Kraft all had higher than expected profi ts in the fi rst half of 2009 due, in part, to higher food prices.

The USDA reports also demonstrate we have the capacity to increase the blend rate from 10 percent to 15 percent without affecting the food supply. Current govern-ment regulations, which date back to the 1970s, placed an arbitrary 10 percent limit on the amount of ethanol that can be blended with gasoline. Ethanol producers have hit that cap, producing more ethanol than can be used under cur-rent restrictions. This prevents future compliance with the renewable fuel standard and threatens to block research and development into cellulosic and future generations of biofuels. Not to mention, an increase to a 15 percent blend will grow our economy and create jobs. As the unemploy-ment rate rises, job creation is more important than ever. According to a report released by Growth Energy earlier this year, more than 136,000 new green collar jobs will be created nationwide by moving to a 15 percent blend.

While the comment period for Growth Energy’s 15 percent blend green jobs waiver closed in July, it is still important for you to show your support for increasing the blend of ethanol in our gasoline. Contact your member of Congress and remind him or her that the science is behind an increase to E15, and that it will create domestic jobs and new markets to boost our economy.

Tom Buis is the CEO of Growth Energy. Reach him at [email protected] or (402) 932-0567.

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Federal Grants Spur Electricity ProductionBy Hamang B. Patel and Porter J. Martin

thanol producers who are considering expanding their facilities to be able to produce electricity can get a jolt to their efforts from the federal govern-ment. The American Recovery and Reinvestment Act of 2009 (known as the Stimulus Bill) created a

program where the U.S. Department of the Treasury will is-sue grants to help offset the cost of constructing projects that produce electricity from various renewable energy sources, including biomass, wind power and solar power. The Trea-sury outlined the terms of this program in guidance published on July 9, 2009.

Biomass to ElectricityThis federal program is most relevant to an ethanol

producer as a way to fund part of the cost of constructing a facility to burn waste biomass material to generate electric-ity. Although the biomass material that will typically be most readily available for an ethanol producer is stillage, a variety of other biomass materials are also eligible for the program – including various forest-related resources, solid wood waste materials, orchard tree crops, grains, legumes, sugar and other crop byproducts or residues.

The electricity generated by the facility can be used by the ethanol plant, sold to a utility or a combination of the two. It should be noted that the grant will not be available for con-structing a co-fi red facility that burns fossil fuels beyond the fossil fuels required for startup and fl ame stabilization.

Amount and Payment of the GrantThe amount of the grant is generally equal to 30 percent

of the tax basis of tangible property used in the facility, ex-cluding any cost of constructing a building or “soft costs” such as engineering and installation fees. The grant will be paid in one lump-sum payment shortly after the facility starts gener-ating electricity. An ethanol producer would typically need to obtain fi nancing of the entire cost of the facility and use the grant to pay down a portion of the fi nancing when the facility becomes operational.

DeadlinesTo be eligible for the grant, the facility must become

operational by the end of 2010. Alternatively, if construction of the facility starts before the end of 2010, the facility need not become operational until Dec. 31, 2013. Construction is treated as starting in 2010 only if physical work of a signifi cant nature has begun. A safe harbor allows this test to be met if more than 5 percent of the total cost of the facility is incurred (or in the case of a cash method taxpayer, paid) before Dec. 31, 2010. The cost of the land and preliminary activities (such as planning, designing, securing fi nancing, exploring or re-searching) are excluded in calculating the total cost of the facility.

The application for the grant must be fi led on or before Oct. 11, 2011. If the facility is not operational by the time the application is fi led, documents showing that construction has begun must be submitted. By claiming the grant, the taxpayer cannot also apply for the investment tax credit or production tax credit. However, there is no such restriction to couple this grant with other federal incentives (including federal new market tax credit fi nancing and various federal loan guaran-tee programs).

The creation of this grant program should cause an eth-anol producer to re-evaluate how it disposes of waste materi-als. To the extent that burning the waste to generate electric-ity can produce a better fi nancial return than other uses of the waste, an ethanol producer may be well served to learn more about this program.

Hamang B. Patel and Porter J. Martin are partners at Mi-chael Best & Friedrich LLP, a full-service law fi rm serving the renewable energy industry. Hamang can be reached at (608) 283-2278 or [email protected]. Porter can be reached at (608) 283-0116 or [email protected].

E

PatelMartin

LEGAL PERSPECTIVES


Europe’s take on ILUCuropean regulators have caught indirect land use change (ILUC) fever. A recently adopted EU law states that the European Commission must complete a review of the impact of ILUC on greenhouse gas (GHG) emissions and address ways to minimize that

impact by Dec. 31, 2010. Interestingly, the law does not mention biofuels at all. Some might argue that ILUC occurs because of biofuels, so mentioning it explicitly is not necessary. However, one could also argue that by not mentioning biofuels, the legisla-tor acknowledges that the causes of LUC (direct and indirect) and deforestation are multiple, complex and interlinked. To single out one human activity, such as the production of biofuels, is an oversimplifi cation of reality. And this is the bone of contention: Is it possible to agree on a macro-economic model that can deliver proof as to what extent ILUC is caused by biofuels?

Several European Commission services — Transport and Energy, Environment, Agriculture, Trade and the Joint Research Centre — have different views on the role of biofuels and their effect on ILUC. Four of the groups decided to do modelling work either by themselves or through external researchers. The re-sults will be presented this month for critique.

In advance of the modelling results, the Commission has called upon stakeholders and EU Member States to refl ect on a document that contains, as they call it, “possible elements of a policy approach on ILUC.” In its document, the Commission pre-sented seven policy elements. Five elements are biofuel-specifi c and are to be considered as part of policy measures if model-ing shows a “satisfactory understanding” of ILUC emissions and how they vary by biofuel has been reached.

This approach is somewhat messy. How can one discuss policy options if we do not know yet if a satisfactory understand-ing is possible at all? And what is meant by “satisfactory un-derstanding?” Is it the understanding of the politician that often equals “better safe than sorry” or “minimize risk rather than being accurate” or is it the understanding of the scientist that “analytical

work should be verifi able, rigorous and robust at the same time and should stand the test of falsifi cation?”

Anticipating the verdict, European bioethanol fuel producers have put forth eight principles that we believe should be respect-ed when accounting for GHG emissions from ILUC:

1. The data and methodology must be fully transparent and publicly available so that the results can be replicated and meth-odology peer reviewed.

2. Accounting must be done on the basis of marginal land use changes caused by increased biofuel use, according to crop and fuel type.

3. The “biofuel scenarios” and the “reference scenario” must be a set of equal amounts of equivalent products.

4. Account must be taken of changes in trade fl ows and bio-mass supply across regions to identify where ILUC is likely to occur.

5. Land area changes as a result of biofuel coproducts must be fully accounted for by applying a substitution approach, ac-cording to coproduct use.

6. Account must be taken of changes in biomass yield growth with increased demand growth for food, feed and fuel.

7. Account must be taken of the target biofuel trajectory with time.

8. Account must be taken of the type of land where ILUC is likely to occur and the carbon stocks associated with that land.

And I believe a 9th principle should be added:9. The prevention of LUC arising from the oil supply chain

must be fully accounted for by applying a substitution approach. We are still at the beginning of a debate that will take a year

or more if European regulators and politicians decide to follow what seems to be the U.S. approach — take the time to be ac-curate on ILUC.

Robert Vierhout is the secretary-general of eBIO, the European Bioethanol Fuel Association. Reach him at [email protected].

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RINS


Rewriting the Book on

RINsThe renewable identifi cation number system was designed to serve as a framework to help ensure that mandates required by the renewable fuel standard (RFS) program are met. As the U.S. EPA works to implement the second stage of the RFS program (RFS2), the agency has proposed ways to improve and streamline the system in order to address problems that emerged under RFS1 and ensure that the additional complexities of RFS2 can be effectively managed.

By Erin Voegele


RINS

The U.S. EPA released its pro-posed rule for the second stage of the renewable fuel stan-dard (RFS2) program in May.

The rulemaking is designed to implement changes to the current renewable fuel stan-dard (RFS1) program, as required by the Energy Independence and Security Act of 2007 (EISA). A 60-day public comment period on the proposed rule, originally scheduled to end July 27, was extended to Sept. 25.

EISA requires several changes to be made to the RFS program. Most sig-nifi cantly, the act increased the renewable fuel mandate from 7.5 billion gallons by 2012 to 36 billion gallons by 2022. Other alterations to the program include the es-tablishment of four unique categories of renewable fuel, baseline carbon reduction thresholds for each of those categories, changes in the defi nition of renewable bio-mass, new registration requirements, and the inclusion of diesel and non-road fuels in the program.

In addition to these changes, EPA’s proposed rule for the RFS2 program makes several changes to the renewable identifi ca-tion number (RIN) system. According to the EPA’s preamble to the proposed rule, the current RIN system, established to im-plement RFS1, was designed to be straight-forward and maximize fl exibility. The

agency says it was ultimately intended to ensure that the required volume of renew-able fuel is produced and blended into U.S. transportation fuel, and that the volumes of renewable fuel are verifi able and allow the existing system of fuel distribution and blending to be maintained.

In its proposed rule for the RFS2, the EPA essentially proposes to continue using the existing RIN framework, but with cer-tain modifi cations that will allow the sys-tem to implement the provisions required by EISA and address new complexities in the RFS program.

Complicated ChangesThe establishment of four separate

categories of renewable fuel is one of the most signifi cant changes, says Clay-ton McMartin, president of Clean Fuels Clearinghouse, which owns and operates the RINSTAR Renewable Fuels Registry. The new categories are cellulosic biofuel, biomass-based diesel, advanced biofuel and renewable fuel. “The fact that there are four different categories increases the complexity of the program,” McMartin says.

“The other really unprecedented change is the fact that the [EPA] Admin-istrator has authority and responsibility to assess market conditions on an annual ba-sis and make adjustments to the mandates

or to the standard year over year,” McMar-tin says. “That is huge. Never before has EPA had that level of au-thority.”

Under RFS1, re-newable fuel produc-ers generated RINs by virtue of producing re-newable fuel. “The way things are done right now [under RFS1], producers produce the ethanol, they assign the RINs, they sell the etha-nol and , at that point, their role in the sup-ply chain is effectively complete and they can do their quarterly and annual reporting," says David Bennett, a certi-fi ed public accountant and owner of Renew-able Energy Compliance and Advisory Services. “RFS2, in terms of accountability and responsibility, fl ips that upside down. Now there is a lot more responsibility that rests on their shoulders.”

New responsibilities include additional registration requirements, the completion of third-party engineering reviews and the

RINS

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David Bennettowner, Renewable Energy Compliance and Advisory Services

Continued on page 49

RINS

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Renewable fuel: Fuel that is produced from renewable biomass and that is used to replace or reduce the quantity of fossil fuel present in a transportation fuel.

Renewable biomass:Planted crops and crop residue harvested from agricultural

land cleared or cultivated at any time prior to the enactment of EISA that is either actively managed or fallow, and nonfor-ested.

Planted trees and tree residue from actively managed tree plantations on non-federal land cleared at any time prior to en-actment of EISA, including land belonging to an Indian tribe or an Indian individual that is held in trust by the United States or subject to a restriction against alienation imposed by the United States.

Animal waste material and animal byproductsSlash and pre-commercial thinning that are from non-federal

forestlands, including forestlands belonging to an Indian tribe or an Indian individual, that are held in trust by the United States or subject to a restriction against alienation imposed by the United States, but not forests or forestlands that are ecological com-munities with a global or state ranking of critically imperiled, im-periled, or rare pursuant to a State Natural Heritage Program, old growth forest, or late successional forest.

Biomass obtained from the immediate vicinity of buildings and other areas regularly occupied by people, or of public infrastruc-ture, at risk from wildfi re

AlgaeSeparated yard waste or food waste, including recycled cook-

ing and trap grease

Advanced biofuel: Renewable fuel other than ethanol derived from corn starch that has life-cycle greenhouse gas (GHG) emissions that are at least 50 percent less than baseline life-cycle GHG emissions. Advanced biofuel may include ethanol derived from cellulose, hemi-cellulose or lignin; ethanol derived from sugar or starch other than corn starch; ethanol derived from waste material, including crop residue, other vegetative waste material, animal waste, and food waste and yard waste; biomass-based diesel; biogas including landfi ll gas and sewage waste treatment gas produced through the conversion of or-ganic matter from renewable biomass; butanol or other alcohols produced through the conversion of organic matter from renew-able biomass; or other fuel derived from cellulosic biomass.

Biomass-based diesel: Renewable fuel that is biodiesel as de-fi ned by the Energy Policy Act of 1992 that has life-cycle GHG emissions that are at least 50 percent less than the baseline lifecycle GHG emissions.

Cellulosic biofuel: Renewable fuel derived from any cellulose, hemi-cellulose or lignin that is derived from renewable biomass and that has life-cycle GHG emissions that are at least 60 per-cent less than the baseline life-cycle GHG emissions.

Baseline life-cycle GHG emissions: The average life-cycle GHG emissions for gasoline or diesel sold or distributed as transportation fuel in 2005.

*Information sourced from the Energy Independence and Secu-rity Act of 2007

Selected EISA defi nitions

RINS


The D Code

RIN: KYYYYCCCCFFFFFBBBBBRRDSSSSSSSSEEEEEEEE

K = Code distinguishing assigned RINs from separated RINsYYYY = Calendar year of production or importCCCC = Company IDFFFFF = Facility IDBBBBB = Batch numberRR = Code identifying the Equivalence ValueD = Code identifying the renewable fuel categorySSSSSSSS = Start of RIN blockEEEEEEEE = End of RIN block

In the event the RFS2 program is implemented mid-year 2010, some RINs gen-erated during the year would be applicable for the RFS1 standard, while others would be applicable for the RFS2 standard. Because the meaning of the D Code in RFS2 RINs will differ from the meaning of the D Code in RFS1 RINs, one op-tion would be to assign D Codes that don’t overlap between the two standards. The U.S. EPA’s alternative approach for this situation is presented in the following chart.

Proposed Change to D Code D value meaning under RFS1 Meaning under RFS2

1 Cellulosic biomass ethanol Cellulosic biofuel2 Any renewable fuel that is not Biomass-based diesel cellulosic biomass ethanol 3 Not applicable Advanced biofuel4 Not applicable Renewable fuel

*Chart sourced from page 44 of the U.S. EPA's preamble to the proposed rule for the RFS2

Alternative D Code Definitions D value meaning under RFS1 Meaning under RFS2

1 Cellulosic biomass ethanol Not applicable2 Any renewable fuel that is not Not applicable cellulosic biomass ethanol 3 Not applicable Cellulosic biofuel 4 Not applicable Biomass-based diesel5 Not applicable Advanced biofuel6 Not applicable Renewable fuel *Chart sourced from page 45 of the U.S. EPA's preamble to the proposed rule for the RFS2

ability to track and verify feedstocks used in the fuel production process.

Under the proposed rule for RFS2, to generate a RIN, the renewable fuel producer must be able to verify that the feedstock used to produce the fuel meets the defi nition of renewable biomass. Alternatively, to produce fuel without generating a RIN, the producer must be able to prove that the feedstock does not meet the defi nition. According to the EPA’s preamble to the proposed rule-making, this requirement has been in-cluded to prevent eligible renewable fuel producers from opting out of the pro-gram by simply choosing not to evaluate feedstock and generate RINs. In other words, the EPA is proposing to require a demonstration of the type of land used to produce any feedstock used in the

production of renewable fuel. It further proposes requiring RINs to be generated for fuel that is produced from qualifying feedstocks.

Another signifi cant change applies to the RFS1 provision that requires RINs assigned to fuel blended into heat-ing oil or jet fuel to be retired. Under the proposed RFS2 rule, RINs assigned to fuel used for these purposes would be allowed to remain valid for compli-ance purposes. During 2009, these RINs would continue to be retired. However, those retired RINs would be eligible for reinstatement by the retiring party in 2010 and would be valid for compliance with the 2010 RFS mandates.

In the proposed rule, the two-year valid life of RINs is maintained, which means that excess 2009 RINs will still be

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In some cases, more than one fuel pathway may apply to a facility within a compli-ance period. In the event these pathways have been assigned different D codes, it must be determined which D code to use when generating RINs. EPA’s proposed approach for accomplishing this can be found in the following chart.

Proposed Approach to Assigning Multiple D Codes for Multiple Applicable Pathways Case Description Proposed Approach

*Chart sourced from page 108 of the U.S. EPA's preamble to the proposed rule for the RFS2.

1

2

3

The pathway applicable to a facility changes on a specific date, such that one single pathway applies before the date and another single pathway applies on and after the date.

One facility produces two or more different types of renewable fuel at the same time.

One facility uses two or more different feedstocks at the same time to produce a single type of renewable fuel.

The applicable D code used in generating RINs must change on the data that the fuel produced changes pathways.

The volumes of the different types of renewable fuel should be measured separately, with different D codes applied to the separate volumes.

For any given batch of renewable fuel, the producer should assign the applicable D codes using a ratio…defined by the amount of each type of feedstock used.

Continued from page 46

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eligible to meet the 2010 RFS standard. Although the 60 percent greenhouse gas reduction threshold for cellulosic biofuel will not have been verifi ed for 2009 RINs generated for cellulosic biomass ethanol, the EPA is proposing that those RINs be eligible for compliance purposes to meet the 2010 cellulosic biofuel standard.

Although the EPA proposes to maintain the system by which RINs move throughout the supply chain, it is also taking comment on two options that involve removing the RFS1 restric-tion that requires RINs to be assigned to and transferred with batches of renew-able fuel. The fi rst option would allow renewable fuel producers to sell RINs to any party separately from the volumes of renewable fuel; the second would al-low renewable fuel producers to sell un-assigned RINs only to obligated parties. McMartin says that restricting the sale of RINs to obligated parties would result in less market effi ciency. “A closed system would probably not be in the best inter-est of the producer — or anybody mid-stream in the supply chain,” he says.

In its proposed rule, the EPA has also created an opportunity to generate RINs for renewable electricity, natural gas and propane that is used as transpor-tation fuel. According to the preamble to the proposed rule, this approach is consistent with EISA’s requirement that all transportation fuels be included in the RFS2. However, RINs could only be generated for these fuels under limited conditions. The fuel would need to be produced from feedstock meeting the defi nition of renewable biomass, and the party generating the RINs would be required to identify the specifi c quantity

of the fuel that was actually used as a transportation fuel.

As established in EISA, the pro-posed rule for RFS2 also eliminates the RFS1 2.5-to-1 credit for cellulosic bio-mass ethanol and waste-derived ethanol. Under the RFS2 rulemaking, these fuels would have an equivalence value of 1, which is consistent with all other forms of ethanol.

Although several details of the RFS program in relation to RINs have been altered under EISA and the RFS2 rule-making, the EPA is also proposing to leave many of the RFS1 regulatory re-quirements of the RIN system largely – or in some cases – entirely unchanged. Some provisions expected to remain largely intact are the way RINs are dis-tributed, separated and used to demon-strate compliance by obligated parties; the provisions for exporters; the record-keeping and reporting requirements; the defi cit carryover; the two-year valid life for RINs; and the 20 percent rollover cap.

As in RFS1, the EPA is proposing that each RIN continues to represent one gallon of renewable fuel, and that each RIN continues to be represented by a 38-digit number. Most of the codes contained within the RIN will also con-tinue to have the same meaning, with one exception. The D code will now be used to identify each of the four cate-gories of renewable fuel established by EISA, rather than the two categories of renewable fuel that are applicable under RFS1. Producers will be able to identify the proper D code for their fuel using an EPA-provided look-up table that will identify the specifi c fuel pathway

RINS


The EPA acknowledges that, through the implementation of RFS1, it has found that RINs have proven confusing for many and that various errors have occurred though the generation and use of RINs. Once an error is made with a RIN, it often propagates throughout the entire distribution system.

Continued from page 49

for each combination of renewable fuel type, feedstock used and production process.

In order for the RFS2 program to be implemented, the EPA intends to require that all parties who gener-ate, own, transfer and/or use RINs re-register with the agency. As part of this re-registration, renewable fuel producers would be required to provide informa-tion about their feedstocks, facilities and products. This information would be used by the EPA to verify the validity of RINs as well as their proper categoriza-tion into one of the four renewable fuel categories.

Moderated Transaction SystemIn the RFS2 rulemaking, the EPA

also proposes to change the 2010 report-ing schedule. Under the current schedule, obligated parties, renewable fuel export-ers, renewable fuel producers, renewable fuel importers and any party who owns RINs must submit certain information to the EPA on a quarterly and/or annual basis. In 2010, the agency is proposing that these quarterly reports would be required to be submitted on a monthly basis. According to the EPA’s preamble to the proposed rule, this new schedule would help minimize problems associ-ated with invalid RINs while the agency develops the EPA-Moderated Transac-tion System (EMTS). Once the EMTS system is operational in 2011, batch and RIN transaction reporting could be sub-mitted in real time.

Real-time reporting means that re-portable events, such as the generation of a RIN or a RIN transaction, would be submitted to the EPA through the EMTS within three business days. The EPA-managed system, which is current-ly under development, would be a closed system. EMTS would essentially provide a mechanism for EPA to screen RINs as well as an environment for conduct-ing RIN transactions. Using the EMTS system, the screening and assignment of RINs would be executed as the RINs are generated.

The EPA believes the screening sys-tem will help ensure market confi dence that each RIN is genuine and valid, and will greatly reduce RIN-related errors while effi ciently and accurately manag-ing the RINS.

“I think the EPA’s Moderated Transaction System will minimize — but won’t eliminate completely — the number of invalid RINs in the market-place,” McMartin says. “And, certainly the [RIN] market needs a higher level of confi dence.”

The EPA acknowledges that, through the implementation of RFS1, it has found that RINs have proven con-fusing for many and that various errors have occurred though the generation and use of RINs. Once an error is made with a RIN, it often propagates through-out the entire distribution system. Due to the fact that RFS1 reporting for RIN transactions has only been required on a quarterly basis, RIN errors may remain undetected for months. Once they are discovered, correcting an error often re-quires signifi cant time and resources to complete.

The added complexity of RFS2 cre-ates an environment where these errors could become more common. According to the preamble of the proposed rule, the best way to avoid problems with RIN va-lidity in the future is to screen RINs and conduct RIN-based transactions though the EMTS.

Using the EMTS, a renewable fuel producer would electronically submit a batch report for the volume of renew-able fuel that has been produced in ad-dition to a list of RINs that were gen-erated and assigned to that fuel. The EMTS would then automatically screen each batch and either reject the RINs, or allow them to be posted to the genera-tor’s account.

In an example of how an EMTS RIN transaction could work, a seller could log into his or her account and post a sale of 100 RINs to a buyer. The seller’s applicable RIN account would be reduced by the same number of RINs —

RINS

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in this case 100. The buyer would then log into his or her account and see the pend-ing transaction. In the event the buyer ac-cepts the transaction, his or her applicable RIN account would be increased by 100 RINs. Once the transaction is complete, the EMTS would notify both parties. Ac-cording to information published by the EPA, it is expected that the EMTS would always require the seller to initiate a trans-action. In addition, transactions would be limited to the available RINs in the seller’s account.

While the EMTS is not expected to be fully operational until 2011, the EPA is expected to allow interested parties to opt into the system as it is developed. This op-tion would allow obligated parties to be-come familiar with the system and allow the EPA to effectively test EMTS before it becomes fully operational.

The EPA is also proposing to add two additional requirements to RIN transaction reporting. For reports of RINs assigned to volumes of renewable fuel, the agency seeks to require that volumes of renewable fuel be reported. In addition, the agency also proposes that RIN price information be submitted with transactions involving both separated RINs and assigned RINs. According to the EPA, this data would be helpful in setting future mandates and would provide additional insight into the market when assessing potential waivers to the RFS program. Parties who retire RINs would also be required to explain why those RINs were retired.

The EMTS is expected to be managed through the EPA’s Central Data Exchange. In its preamble to the proposed rule, the agency states that parties would be required to establish an EMTS account by Oct. 1,

2010, or 60 days prior to engaging in any transaction involving RINs — whichever is later.

McMartin says it’s important to note that the EMTS is not going to offer a to-tal solution to a company’s recordkeeping needs. “Many people think the EPA is going to provide a system for companies to keep all their records and handle all of their re-porting and so forth,” he says. “That’s not true. The notion that EPA is going to build a system that could serve as an in-house en-terprise system for companies is not going to happen.” Rather, these parties are either going to have to maintain internal record-keeping systems or outsource those services to third-party entities.

Bennett says it’s hard to say exactly what kind of impact the EMTS will have. “On the one hand, the benefi t is that it requires RINs to be validated to a certain extent up front,” he says. However, the system could create its own problems. “[The EMTS] could eas-ily create a timing issue for parties receiving their RINs,” Bennett says. In order for the transaction to be complete, the EMTS has to validate the RIN and the buyer has to accept the transaction. “That could result in a de-lay of the transfer of the actual RIN, which would result in a delay for the purchasing party…being able to trade those RINs,” he says. “Since RINs are a commodity subject to daily fl uctuations in price, it could poten-

RINS

'The RIN market is going to continue to be volatile as long as there is uncertainty. That’s one thing I know for sure. Until things settle down and the RFS2 is fi nally promulgated and issues like indirect land use are fi nalized, the market is going to be pretty thin and there is going to be uncertainty.'

Clayton McMartin, president, Clean Fuels Clearinghouse

tially cost traders a lot of money and a loss of the element of control over the ability to move this commodity quickly.”

Bennett also says the EMTS could be a slippery slope in terms of how the EPA interacts with the system and the parties in-volved. “There are going to be situations where the EPA is going to have to decide…how to resolve…issues with invalid RINs,” he says. “In some of these cases, it may be viewed that the EPA is bordering on being involved in a commercial transaction as op-posed to just moderating it.”

Foreign ProducersIn the proposed rulemaking, the EPA

subjects foreign renewable fuel producers importing fuel to the U.S. to the same re-quirements as domestic producers. This means that foreign renewable fuel produc-ers who export product to the U.S. would face the same feedstock recordkeeping requirements as domestic producers. Ac-cording to the EPA’s preamble to the pro-posed rule, an importer would be required to obtain documentation from a foreign producer proving whether or not the feed-stock used to produce the fuel meets the defi nition of renewable biomass.

This involvement of foreign produc-ers in the RIN market represents a poten-tial challenge. “Foreign producers under RFS1 don’t really participate in the RFS

program,” McMartin says. “Instead, the importer of record that brings that prod-uct into the United States, deals with RINs and is responsible for assigning the RINs for that product.” The RFS2 feedstock requirements mean the importer won’t be able to serve in this role in the future, he says. Instead, the foreign producer would likely be responsible for assigning RINs to volumes of fuel.

Bennett says he thinks it’s diffi cult to say how foreign producers will ultimately participate in RFS2. “The laws and regula-tions that those countries have within their own infrastructure may not be conducive to the rules and regulations the U.S. has within our infrastructure,” he continues. “This means they may have diffi culty meet-ing [the EPA’s proposed] requirements.” Bennett says the ability or willingness of foreign producers to be able to meet the stringent regulations proposed by the EPA is questionable at this time.

The Future of the RIN Market“The RIN market is going to continue

to be volatile as long as there is uncertainty,” McMartin says. “That’s one thing I know for sure. Until things settle down and the RFS2 is fi nally promulgated and issues like indirect land use are fi nalized, the market is going to be pretty thin and there is going to be un-certainty.”

Bennett says the content of the fi nal rule and the timing for RFS2 implementa-tion will have a signifi cant impact on the market, especially in light of the extension to the public comment period. “We don’t know if that will provide enough time for EPA to put RFS2 into effect by Jan.1,” he says. One option may be for the EPA to put part of the RFS2 program into effect on that date, and implement the rest of the program at a later date. Another option would be to se-lect a later implementation date. “There has been a lot of talk of putting RFS2 into effect mid-year, which I think would be a major dif-fi culty,” Bennett says. “I think it would be a mistake.” He says this is because a mid-year implementation date would add even more complexity to an already complex transition period.

Even so, Bennett says he thinks that the future of the RIN market will be lucra-tive. “I think it will continue to drive the re-newable fuel standard and activity,” he says. “There are companies that are entering the marketplace that are not involved with physi-cal product and are only focused on trading RINs. This could potentially have a positive impact on the marketplace.” EP

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

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SAFETY

The First Line of

DefenseEmergency responders carry the burden of knowing how to accurately battle many different emergency situations, but ethanol bears a unique challenge that many departments have only recently become familiar with. Maintaining training for fi rst responders will be a vital part of the overall safety and success of the ethanol industry.

By Kris Bevill



SAFETY

A tragic railroad derailment near Rockford, Ill., June 19 that re-sulted in the explosion of 12 ethanol-fi lled tank cars and

the death of one eyewitness served as a re-minder to ethanol industry members that the safe transport of ethanol and ethanol-specifi c training for fi rst responders should be a top priority. Ethanol producers have long been aware of their fuel’s hazardous potential and take every safety measure pos-sible when handling and loading ethanol at the plant. However, the increasing amounts

of ethanol being used in the U.S. fuel supply means that ethanol is be-ing transported by truck or rail through commu-nities that may not be familiar with it.

Last year, ethanol surpassed liquid petro-leum gases to become the No. 1 hazardous ma-terial by volume hauled by rail in the United States. Kristy Moore,

technical services director for the Renew-able Fuels Association, estimates that 7 bil-lion gallons of ethanol will be hauled by rail in 2009 and says the frequent transport of ethanol throughout the U.S. makes training fi rst responders an essential part of etha-

nol safety. “Despite all efforts to prevent accidents, there is the possibility of one happening, and it is essential that the fi rst responders act immediately to the ethanol emergency incident and are as fully pre-pared as possible to deal with the situation,” she says.

More than 20 fi re departments re-sponded to the Rockford fi re call. Fire chiefs on the scene opted to let the fi re burn itself out while monitoring the situation from hundreds of feet away so as not to risk fi re-fi ghters’ lives. While the loss of one life was a tragic occurrence, the incident could have

SAFETY


Kristy Mooretechnical services director, Renewable Fuels Association

Firefi ghters receive ethanol safety training at a TransCAER training session.

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been much worse if fi rst responders had not been familiar with ethanol fi res. Moore credits the state’s long history with ethanol as a major factor in the fi re departments’ ability to make quick decisions when fi ght-ing the fi re. “Illinois has had prolifi c etha-nol blending for more than 20 years,” she says. “The resources that were available for the Rockford incident can be attributed to the fact that Illinois emergency responders have been preparing for ethanol incidents for years.”

TransCAEREthanol-specifi c fi rst responder train-

ing is not diffi cult to come by. Several na-tionwide programs have offered ethanol training courses for years. The TransCAER (Transportation Community Awareness and Emergency Response) program was found-ed by Union-Pacifi c Corp. and the Dow Chemical Co. in 1986 to provide training for fi rst responders to prepare for a poten-tial hazardous materials incident. The RFA took notice of the program’s potential to provide ethanol-specifi c training and joined the non-profi t group in 1997. Moore says TransCAER helped to fulfi ll the associa-tion’s desire to defi ne an avenue for getting fi rst response information into the hands of those who need it. “We think that we can link to the emergency response com-munity perfectly through the TransCAER

program,” she says, adding that the group expects to reach over 15,000 emergency re-sponse providers this year.

A major benefi t of the TransCAER program, as related to ethanol training, is the ability for fi rst responders to receive hands-on training. At a recent regional train-ing course held in Fargo, N.D., members of local fi re departments had the opportunity to attend a classroom-like training session which covered everything from the chemical make-up of ethanol to the specifi c types of foam that are best used to suppress ethanol fi res before practicing fi refi ghting techniques on an ethanol tank car and a specialized TransCAER rail car. Fargo Fire Department Captain and hazmat team coordinator Chris Rasmussen says it was the fi rst time ethanol-specifi c training has been offered in Fargo and attendees found the information quite valuable. “It was brought to our attention in the past couple of years that [ethanol] was going to start coming through, and research and a little bit of training was done, but never a hands-on incident like this,” he says. “Anytime we can get a live prop out there to use, it’s more realistic training. We can simu-late things all we want, but when you actu-ally have the ethanol car or the TransCAER car there…they were very nice for letting us crawl around on it and do some training. To actually get to see an ethanol car up close be-fore we have to deal with it is fantastic.”

The TransCAER rail car is equipped with all of the various release valves, tops and pressure systems that fi re fi ghters might encounter when responding to a rail car in-cident. Rasmussen says his hazmat team has responded to four ethanol incidents in the past year or so and all of them were valve is-sues resulting from human error, so having the opportunity to train new department members on the specifi cs of valve control is extremely valuable.

According to Moore, there is no short-age of communities seeking out ethanol-specifi c training. TransCAER organizers plan approximately four major events each year which include multiple weeks, locations and sponsors. Moore says it takes months to plan each event and locations are chosen based on the number of requests for train-ing received by TransCAER. “Requests are a combination of private, government and community,” Moore says. “Either commu-nities are noticing an increase in ethanol or industries know they will be introducing the product to the area and request training.”

EERCAnother training option for fi rst re-

sponders is a program created by the RFA in collaboration with the International As-sociation of Fire Chiefs and several other groups that specifi cally addresses the haz-ards associated with the transport and han-

SAFETY


dling of ethanol. The Ethanol Emergency Response Coalition has been distributing ethanol emergency response training guides annually since 2007 and adds new items of information each year. The latest version of its “Complete Train-ing Guide for Ethanol Emergency Re-sponse” includes videos, an instructor’s guide and interactive workshops focusing on specifi c areas of ethanol emergency response and can be acquired at no cost at www.ethanolresponse.com.

Moore says the EERC was created to build a library of information that could be used by fi rst responders nation-wide. “We built a program that talks the fi refi ghters’ language,” she says. “What do they need to know? What are the core issues for them and what do they need to know to respond effectively and safely to an ethanol incident?” For example, Moore says there was some confusion as to what type of fi refi ghting foam is ap-propriate for ethanol fi res. So, the EERC created a video - “Responding to Etha-nol Incidents” - to address that specifi c issue.

Chief Tim Butters, chairman of the IAFC’s hazmat committee, says the fi re association recognized that increased shipments of E99 for blending purposes meant that there would also be an in-creased need for fi re department train-ing so it became an active member of the EERC. “One of the most important aspects is that, because of the signifi cant increase in production and use of etha-nol, there’s a lot more of it being trans-ported, both by tank rail and truck,” he says. “So, if you’ve got a rail line in your community you need to plan for the risk. You need to be prepared to deal with a derailment should it occur.”

SAFETY

Community InvolvementFortunately for cash-strapped local

fi re departments, TransCAER training sessions and EERC training materials are provided at no charge to the department. “I have to hand it up to the railroads,” Moore says. “They have done an excellent job of coordinating, funding and hosting TransCAER training tours. They have really risen to the cause and put tons of resources into the training stops.” Moore adds that the RFA and various other ethanol industry members also provide resources, such as railcars and transport trucks, for training sessions. “Typically, the fi rst responders don’t have any funds,” she says. “If they do have funds, they will spend it to pay their folks to come to the training. We want it to be absolutely free of charge so that all they’re providing is their time.”

Butters says there are some grants available to provide funds for depart-ments to attend training sessions, but they vary from state to state. He recom-mends local fi re departments work with ethanol producers to partner for training. “My view is that if you have an ethanol facility in your community, striking a dia-

logue with that plant, owner and manager to make them understand that we need to have this capability, is an important con-versation to have. The plant brings the risk to the community so, to me, there is an obligation to help prepare that depart-ment to deal with it. The important thing is, the better we understand the hazards out there and can train to deal with those incidents, the better the outcome is going to be. To me, that’s where the industry is a critical player, because they’re the ones that manufacture and ship this stuff. They understand these products and how they behave [so] they are in the best position to provide assistance.”

Moore agrees that the ethanol com-munity should take part in practicing preventative training measures to reduce the risk should an ethanol incident occur. “The ethanol producers bring a lot to the community as far as resources, jobs and economic advantages, but ethanol is a hazardous material and we’ve got to take that responsibility seriously.” EP

Kris Bevill is the editor of Ethanol Pro-ducer Magazine. Reach her at (701) 373-8044 or [email protected].

SAFETY

ETHANOL PRODUCER MAGAZINE September 2009

The TransCAER training program relies on contributions from ethanol industry members, including the use of ethanol tank cars, to supply ethanol-specifi c training to fi re departments at no cost.

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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]

BYPRODUCTS

Creative Byproduct PossibilitiesFrom pest control to deer attractants and biocomposite materials, an Arizona company is developing a range of products to utilize an ethanol production byproduct.

By Hope Deutscher

A pulse combustion spray dryer is used to convert condensed distillers solubles into a variety of products.PHOTO: J. JIREH HOLDINGS LLC



BYPRODUCTS

For the past 30 years, Jeffrey Tate has carried a packet of tan pow-der, showing it off to research-ers and business people while

describing its value and opportunities. De-pending on what Tate puts into the front-end process that he’s working on, that tan powder can be a number of things. These days that tan powder is his company’s trade-marked Dried Distillers Solubles (DDS), a valuable and stable form of condensed dis-tillers solubles (CDS) that J. Jireh Holdings LLC has found useful in feed and industrial applications.

J. Jireh Holdings, a technology and manu-facturing company, was started in the early 1990s by James Rehkoft. He worked for an engineer-ing company that devel-oped a pulse combustion drying technology to op-erate more effi ciently and quietly than a standard pulse combustor. The pulse combustion dryer handles and dries materi-als with high solids and

viscosity, as well as handling abrasive and caustic materials, while using low “piece temperature” to preserve the integrity of heat sensitive materials. When the engineer-

ing company dissolved, Rehkoft acquired the pulse combustor patents and formed J. Jireh Holdings.

Meanwhile, Tate was the associate direc-tor of the Biotechnology Institute at the Uni-versity of Minnesota, which was focused on various aspects of energy fermentations and ethanol fermentation. The institute bought a combustion dryer to dry fragile biological products, so Tate began exploring what one could do with a pulse combustion dryer and all the possible products that could be cre-ated using it. Today, he is the executive vice president for business development at J. Jireh Holdings.

J. Jireh Holdings consists of three dis-tinct businesses. Pulse Combustion Systems includes the sale, fabrication and installation of pulse dryers, and develops new pulse-dried products. J. Jireh Products develops and sells premium-quality foods that take advantage of pulse-dried products, including pulse-dried in-stant coffee, an Agave sweetener, a Trehalose sweetener, and a uniquely bio-available fl ax product. The third company, Cana BioProd-ucts, exploits the pulse dryer’s unique ability to dry CDS and thereby make it usable for three mid- to high-value applications: “green” ther-moplastics substitutes, organic sustained release carrier systems, and high-value animal feed.

BYPRODUCTS

THE ROAD TO SUCCESS IS FILLED WITH TWISTS AND TURNS. FORTUNATELY, WE ALREADY KNOW THE WAY.

The biofuels industry’s accounting, tax and various consulting

needs can be nearly as complicated as the refi ning process itself.

Which is why Kennedy and Coe’s knowledge and experience

in the industry can help you identify and capitalize on many

opportunities that can signifi cantly impact your organization’s

cash fl ow. Our expertise can help you navigate even the most

confusing paths, so you can make the most of your operation’s

potential.

Call Jesse McCurry at 800-303-3241 or visit us at www.kcoe.com.

Not your average accountants.SM

KAC.10862_EPM_Wnd_7.5x3.375.indd 1 3/19/09 11:26:14 AMETHANOL PRODUCER MAGAZINE September 2009 68

Jeffrey Tateexecutive vice president for business development, J. Jireh Holdings LLC

A pulse combustion dryer system is used for process development and medium-scale manufacturing.

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Using J. Jireh’s pulse dryer technology, an ethanol facility can continually and ef-fi ciently convert a high volume of CDS to DDS. With a consistency of butterscotch pudding, CDS is a rich mixture that contains oligo-peptides, free amino acids, organic ac-ids and lipids. In its liquid state, CDS has a short shelf life and can be challenging to dry using conventional drying methods, such as a carrier or spray dryer. However, using the pulse dryer technology, several value-added products have been developed from DDS.

“What we discovered was that, with a little adjustment, we could take a pulse com-bustion dryer and basically dry anything that comes out the back end of an ethanol plant,” Tate says. “One thing we found is that we can take the chunky whole stillage that comes out of an ethanol fermentor after the ethanol has been taken out and we can dry it in one step without any centrifuges and produce a dried distillers grains with soluble (DDGS) product that is as high a quality product as is available in a single step. We were pretty excited about that.”

While stillage coming out of the fer-mentation vessel is extremely rich in poten-tially valuable biochemicals, Tate says by the time money is invested in separating those into a pure form to sell them, producers may not even break even. So J. Jireh Holdings began looking at what can be economically separated to produce added profi ts for the

ethanol producer, what was problematic, and what could be addressed using the com-pany’s pulse combustion drying technology. “And looking at it from that perspective is how we developed our DDS process,” Tate says. “The CDS, a concentrated solution, was already being produced at ethanol plants.

This is a product stream that is already sepa-rate. What we found and developed is oper-ating parameters for our pulse combustion dryers that allow us to dry condensed distill-ers syrup. We have looked at material that is anywhere from about 20 percent solids up to 40 percent solids; we’ve looked at material

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J. Jireh Holdings LLC and Ohio State University conducted an effi cacy trial with Brimstone Slug & Snail Control active ingredient. The treated leaf is intact; the untreated leaf is eaten; two slugs are visible in the container.

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that is produced in a conventional dry mill corn ethanol plant with no other extractions; we’ve looked at material from dry mill corn ethanol plants where the corn oil is extracted resulting in a reduced fat condensed distillers product that we have dried; and we’ve also looked at the condensed solubles that come out of a dry mill ethanol plant that’s using milo or grain sorghum as a feedstock. We’ve looked at all of those and have produced a dry DDS product from all of those things.”

Tate also found that by using DDS as a sustained release carrier system, one could

take advantage of the material and chemical properties of the DDS. “When subjected to a little heat and pressure, the dried distillers sol-ubles will polymerize and form a hard dura-ble pellet that’s still biodegradable and breaks down all the time,” Tate says. “Our ability to adjust how hard those pellets are allows us to adjust how quickly they degrade and release material. So we can then put active ingredi-ents with the condensed distillers solubles as a liquid, pulse dry it and have a completely incorporated product, pelletize it, adjust our pelleting to be a harder or softer pellet

or maybe a mix of hard and soft pellets and produce a sustained release lawn and garden pest control product,” Tate says. “We’ve developed sample products using this technology for control of slugs, snails, ants and mosquitoes. We’re also working with a couple of companies in the area of nuisance animal repellent.” The sustained release system can also work well to attract animals, such as deer.

In particular, Tate worked with an extension agent at Ohio State University, who has developed a laboratory bench process for testing slug control products. The active ingredient is organic and on the U.S. EPA's low risk 23B list; the DDS is a sustained release carrier that is organic qualifi ed. “If you spray our active ingredi-ent as a liquid it works great,” he says. “It drives all the slugs out of your garden and off your plants. The fi rst time it rains or you go out there and water your garden, the stuff is washed off. This is the case with many organic pest control products. They have a very short environmental half-life.”

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J. Jireh Holdings LLC has produced pellets that contain dried distillers solubles, which are used as a thermoplastic additive.

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combustion dryer is capable of handling a variety of feeds. And that’s signifi cantly dif-ferent than what goes on at most ethanol plants.”

J. Jireh Holdings is currently in conver-sations with three different ethanol business players, discussing setting up a demonstra-tion project, according to Tate. “Right now we are focused on where the large volume stream of solubles is coming from – and that is really from the dry corn ethanol plants,” he says. “The idea is to install a dryer at an etha-nol facility that has a production capacity of

about 25 tons per day. In the big scheme of things, that’s a fairly small production stream. On the other hand, it is enough so that we can start priming the market and getting this material out there.” EP

Hope Deutscher is an Ethanol Producer Magazine associate editor. Reach her at [email protected] or (701) 373-8046.

Tate says that using DDS as a sus-tained carrier in a biodegradable pellet al-lows the product to hold together longer and release the active ingredient into the environment as the material breaks down.

J. Jireh Holdings has also worked with a partner to develop DDS BioComposite, a biorenewable additive that can be added to thermoplastics and thermoplastic pro-cessing and can act as an effective fi ller. “We have put it in extrusion applications at rates of up to 50 percent, so 50 percent DDS BioComposite and 50 percent some other kind of thermoplastic, and we get some very interesting results. I’m not sure if they are commercially viable but we’ve gotten some very interesting results at those high inclusion rates,” Tate says.

Because of the chemistry and unique formulation of the DDS BioComposite, researchers have found that by adding DDS BioComposite as a processing aid to these kinds of plastic conversions, energy requirements for the plastic processing were reduced as well as the temperature at which the plastic melted and became fl owable.

“We also found that under the right conditions this material will produce a mi-crocellular foam,” Tate says. “It reduces the amount of material required to fi ll a mold and is extremely compatible with a broad-range of thermoplastics.”

Patents are pending on these applica-tions, for which J. Jireh Holdings has de-veloped proof-of-concept demonstration projects. The company is now seeking a marketing partner to work with them in turning these products into commercial reality.

“We have good intellectual property on all of this and have a trademark reg-istered for DDS,” Tate says. “We have a facility in Payson, Ariz., where we have the capacity to produce up to eight tons [of DDS] per week.”

Depending on what is put into the feed tanks, Tate says one can get a variety of products – from a custom-formulat-ed feed, a sustained-release pest control product or a biorenewable thermoplastics processing aid. “I don’t have to set up a separate factory to make each one of those things because of the way our pulse

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Brazil’s Ethanol-Enhanced HistoryTogether, with the appearance of the fl exible fuel vehicles in 2003, the infrastructure and culture that forms the inheritance of Brazil’s 1970s “Pró-Álcool” program is the key for the development of its local ethanol industry, with no strings attached to tax incentives or protective policies.

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).

BRAZIL. BY PEDRO G. SERAPHIM

Contribution

nergy security comes from ener-gy diversity. This phrase sounds very fashionable, but it was the motto that, in the mid-1970s, led

Brazil to create its National Alcohol Pro-gram, better known as the “Pró-Álcool” program. At that time, the world had been hit by two oil price bombs, caused by pro-duction restraints in OPEC countries, and oil prices soared from a few cents per gal-lon to a couple of dollars per gallon. It is almost funny to compare those prices to the ones we have become accustomed to see-ing today, but many people remember how all oil importing countries were affected by

that sudden change, spreading an economic and fi nancial crisis that drove the world into recession (by the way, that also seems to be nothing now).

In those years, Brazil had virtually no production of oil and was totally depen-dent on imports. The impact was terrible, ending a nice period of development with a rise in unemployment, unpayable external debt, and infl ation and recession, all com-bined with the fact that the country was in the midst of a brutal military regime. Life was hard. However, the scars of those times were healed in just a few decades.

Crisis and OpportunityTwo important creative seeds were

sown during that tumultuous time. The fi rst reaction to the oil crisis was for Brazil to task Petrobras S.A., the state-controlled oil com-pany, with the development of new produc-tion capacity. As a result, Brazil has achieved self-suffi ciency in oil with the off-shore fi nd-ings in the Campos basin in the late 1990s and, more recently, with the huge reserves that were found under a deep off-shore salt sediment, Brazil is likely to become a net ex-porter of oil and gas in a few years.

E


The 1970s oil crisis also caused Brazil to turn its attention to the great potential that its agricultural sector had to offer. Brazil realized that there were many fa-vorable factors, including the fuel-produc-tion qualities of sugar cane, existence of unique climate conditions for its growth, great availability of land with such con-ditions. Those factors, together with the high oil price reference and a range of pri-vate investors eager to fi nd new opportu-nities in the crisis environment, led to the birth of the Pró-Álcool program, with the immediate target of creating conditions to make ethanol a viable car fuel, thus reduc-ing Brazil’s exposure to oil imports.

Building the InfrastructureBut making something new and rev-

olutionary is never easy. For instance, to start creating a reasonably sound market for the new fuel, a new generation of ve-hicles equipped with the necessary tech-nology to handle the new fuel had to be created. This was achieved in 1979, when the fi rst Brazilian ethanol car was brought to the market — a Fiat model 147.

Another very important piece of the Pró-Álcool puzzle was the upgrade of the existing gas stations throughout the coun-try, to make available a new independent pump which would serve only ethanol. Fortunately, this requirement was achieved by natural forces as a response to the unde-niable fact that the market for fuel ethanol existed and was growing. No specifi c tax incentive or fi nancing line was created for that. Petrobras played an important role by quickly making its truck-based gasoline distribution network capable of carrying ethanol throughout the country, and soon other distributors joined in. Also, as part of the Pro-Alcool program, the gasoline pumps started to receive a small blend of ethanol.

Soon there were clear signs that the Pró-Álcool was a success. The other auto makers present in Brazil at that time (General Motors Co., Ford Motor Co. and Volkswagen) followed Fiat. The produc-

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tion of ethanol cars increased steadily, and by 1983 exceeded the production of gasoline-fueled cars by almost 8 times. In that same year, the government set up a reduction in taxes for the ethanol cars as an additional incentive for the market. Car manufacturing and yearly licensing carry a heavy tax burden and such reductions saved consumers 4 percent on the pur-chase of an ethanol car versus a gasoline car. Between that fi rst Fiat and the end of the 20th century, more than 5.6 million ethanol cars were produced in Brazil.

However, the ethanol cars had prob-lems. Because fuel ethanol has a small percentage of water, the fi rst ethanol-fueled engines tended to get rusty and, therefore, had a shorter life. Also, the consumption per mile was greater than in a gasoline car, so the consumer’s choice for

The Pró-Álcool program left a significant inheritance in its wake — a working distribution network for ethanol, virtually all gas stations in the country equipped withone pump that served exclusively hydrated ethanol, developed techniques for planting sugar cane, ethanol production capacity and, just as important, a general culture accepting of using ethanol as a fuel.


an ethanol car was very sensitive to ethanol price changes and its comparison to gaso-line prices. These issues were not a real problem until the 1990s, when the general economy recovered, oil prices went to a lower level and gasoline engines gained even more effi ciency. Those who opted for an ethanol car were then stuck with their fuel option; the only escape route being the acquisition of a new car.

In 1990, the production of gasoline

cars suddenly rose and, in the following years, the production of ethanol cars was reduced to a very small number. That re-duction, combined with a corresponding drop in ethanol production, led to the death of the Pró-Álcool program. Ethanol producers struggled to survive that period by directing their sugar cane to the produc-tion of sugar, a product that is certainly less profi table, but with somewhat steady markets. This, together with the 25 percent

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Today, 90 percent of the cars manufactured in Brazil carry flex-fuel technology. GM, Ford, Fiat and Volkswagen, as well as Citroën-Peugeot, Renault, Honda, Toyota , Mitsubishi and Nissan all manufacture flexible-fuel vehicles for use in Brazil. Ethanol currently accounts for more than 50 percent of the whole consumption of light car fuels in the country, which represents the most significant reduction of greenhouse gas emissions in history.

Brazilian motorists are accustomed to having their choice of ethanol percentages when it comes time to fi ll their tank with fuel. General acceptance of ethanol as a fuel is an important step toward achieving fuel independency.


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blend of ethanol into gasoline, kept the heart of the ethanol industry beating.

Pró-Álcool Inheritance and the Green Wave

The Pró-Álcool program left a signifi -cant inheritance in its wake — a working distribution network for ethanol: virtually all gas stations in the country equipped with one pump that served exclusively hy-drated ethanol, developed techniques for planting sugar cane, ethanol production capacity and, just as important, a general culture accepting of using ethanol as a fuel.

Brazil had just started a new era in its economy, after taming infl ation, bringing external debt under control and enhancing its hard currency reserves. But the energy scenario soon changed again. Besides the notorious fl uctuations in oil prices, the lev-el of concern with climate change was sig-nifi cantly raised, especially in connection with the role of fossil fuels in the emission of greenhouse gases. The response given by Brazil for these challenges came again from the ethanol industry.

Actually, the greatest shift happened in 2003, with the appearance of fl exible fuel vehicles (FFVs). These cars have engine systems that are able to run with any mix of gasoline and ethanol. With these FFVs, fuel choice is delayed to the maximum ex-tent possible. Instead of representing one single election at the moment the car is bought, fuel choice can be made each time the car goes to the gas station, depending on price conditions on that very day. From a purely economic perspective, as ethanol is less effi cient, its price must be at least 70 percent below the gasoline price to justify its use. But with a production chain that results in up to 89 percent less greenhouse gas (GHG) emissions, and considering the infrastructure remaining from the Pró-Álcool program, consumers started to ask “Why not buy a fl ex-fuel car?” and the al-most dormant ethanol production indus-try boomed again, but now with a much steadier local market environment.

Today, 90 percent of the cars manu-factured in Brazil carry FFV technology.

GM, Ford, Fiat and Volkswagen, as well as Citroën-Peugeot, Renault, Honda, Toyota, Mitsubishi and Nissan all manufacture FFVs for use in Brazil. Ethanol currently accounts for more than 50 percent of the whole consumption of light car fuels in the country, which represents the most signifi cant reduction of GHG emissions in history.

Based on the unique combination of historical, technological, cultural and fi -nancial aspects summarized above, Brazil has developed a mature domestic market

for ethanol. Thanks to FFVs, this market is likely to grow even more. It is a great scenario, where Brazil is controlling its en-ergy sources in a level never seen before and that few countries have, and where great investment opportunities can be found. EP

Pedro G. Seraphim is a partner in the Energy and Agroenergy Practice Groups of TozziniFreire Advogados, a premier business law fi rm in Brazil. Reach him at [email protected].


Higher Blends Require Higher Quality EthanolIncreasing the amount of ethanol allowed to be blended into gasoline would be benefi cial for the ethanol industry and the United States, but it is important that producers be aware of the product quality requirements that higher blends will demand.


QUALITY. BY TOM SLUNECKA

Contribution

onitoring etha-nol quality is nothing new for the industry, but

producers must all be aware that adding higher percentages of ethanol to gasoline changes the dynamics of the limits of contaminants that can be ac-cepted in the ethanol. Suppli-ers, technology providers, plant managers and wholesalers must remain alert to help the industry reduce the occurrences of out-of-compliance blended prod-uct. The American Society for Testing and Materials (ASTM) and Original Equipment Manu-facturers (OEMs) have set stan-dards for transportation fuel

that may cause concerns in the fuel distribution system.

Unintended Consequences

The ethanol production process has many feedback loops due to living organisms (yeast), bacteria, process chemi-cal additions and the recycle of water streams. This means that chemical or biological additives can lead to unintended conse-quences in other parts of the plant.

The fi rst example of an unintended consequence is the detection of high levels of sili-con. In the past, some refi ners reported denatured ethanol that

contained excessive amounts of silicon. The source of the silicon was traced back to the use of sil-icon-based antifoam used by an ethanol plant. It was determined that the silicon was a breakdown product from polydimethylsi-loxane, an active ingredient in the antifoam formulation. The Renewable Fuels Association was alerted to this and sent a notice to ethanol producers to discontinue the use of any anti-foam containing silicon. Current ASTM specifi cations do not have a limit for silicon. How-ever, section 4.2 from ASTM standard D4806-08A states that customers can hold ethanol pro-ducers to lower limits of impuri-

ties. General Motors Co. has stated that no level of silicon can be tol-erated in automotive fuel because it will cause per manent and irrevers-ible damage to the oxy-gen sensors in an automobile.

Another example of an un-intended consequence is the use of sulfur-based compounds that can contribute to sulfate lev-els in denatured ethanol. These

MTom Sluneckavice president, marketingPhibro Animal Health Corp.


process-based additives include the water source, sulfuric acid, bisulfi tes for air scrub-bers and sulfamic acid/sodium bisulfate for cleaning heat exchangers. There is spec-ulation that the sulfur in these chemicals forms organic sulfur compounds that are volatile in the distillation part of the pro-cess. Over a period of time, these organic sulfur compounds are oxidized to sulfates in the ethanol. Minimizing the use of these sulfur-based compounds will help insure compliance with standards for denatured alcohol and also introduce less sulfur into the distillers grains.

Chlorine dioxide, which could po-tentially contribute to higher levels of chlorides in denatured alcohol, is another example of a process aid that could have unintended consequences. The presence of higher chloride levels in U.S. fuel supply could greatly damage efforts underway to increase the acceptable amount of ethanol blended into fuel. When higher amounts of ethanol are blended, the chloride concen-trations increase, possibly resulting in high-er level blends being out of specifi cation.

Judy LaZonby, an expert in the appli-cation of industrial biocides and chlorine dioxide at The MicroStar Lab in Crystal Lake, Ill., said that when ethanol plants are considering the use of older chlorine diox-ide technology as an antimicrobial in the fermentation phase, they risk contribut-ing unexpected amounts of chloride ions. LaZonby said that generating chlorine di-oxide in the fermentors by using sodium chlorite could open the door to increasing inorganic chlorides in the ethanol. The ad-ditional chlorine dioxide fl ashes overhead with the ethanol distillate and will decom-pose to oxygen and chloride ion within the distillation process.

Dr. Dennis Bayrock, director of Phi-bro’s research and development, said Phi-bro has developed a spreadsheet model that can determine the quantity and poten-tial impact of using chlorine dioxide. The modeling reinforces the belief that the use of chlorine dioxide could be an issue with fuel quality. Using an antimicrobial that is not chlorine-based or carefully testing and

monitoring chlorides with an ASTM meth-od with a one parts per million (ppm) limit of detection could help remedy the issue.

Chloride LimitationsCurrent ASTM specifi cations tightly

regulate the amount of inorganic chlorides permitted in E10 and E85 to one ppm. Regulations on chloride limits in dena-tured fuel alcohol are 10 ppm, thus making all ethanol blends consistent with the one ppm limit in E10, but inconsistent with the E85 limits.

A recent RFA survey shows that while nearly all plants are producing E98 with chloride levels at or below the amount al-lowed to produce E10, nearly 10 percent of the plants are producing a product that is out of compliance with the limits of higher blends.

Ethanol containing excess levels of chlorides may be problematic for OEMs and car manufacturers due to higher war-ranty costs from corrosion failure of fuel pumps and fuel injectors. Chloride concen-trations as low as one ppm can cause fuel system corrosion in high temperature areas near the engine.

Blender pumps that use one source of ethanol to mix with gasoline to dispense dif-ferent grades of ethanol from E10 to E85 should meet the current E85 chloride limit of one ppm. This means that, in practice, the 10 ppm limit on denatured alcohol has been reduced to one ppm and any alcohol with unacceptable levels of chloride will be rejected from use in blender pumps.

The continued future growth of the ethanol industry will require a better under-standing of the use of different process-ing aids and their impact within the etha-nol process. All stakeholders in the future success of the ethanol industry will need to share information on concerns for po-tential contaminants to the ethanol process and prevent the industry from harming its image. EP

Tom Slunecka is the vice president of mar-keting for Phibro Animal Health Corp.’s Ethanol Performance Group. Reach him at [email protected] or (402)

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Greenhouse Gas Regulation ImpactsEthanol producers will be among the list of regulated emitters if a proposed mandatory greenhouse gas emissions reduction program becomes law, making it vital for producers to know their options for reducing or selling carbon dioxide.


CARBON. BY SAM A. RUSHING

Contribution

hether ethanol prices are high or low, there are benefi ts to

be had for producers willing to expand their sale of byproduct. Carbon dioxide (CO2) sales can represent millions of dollars of revenue for a commercial-scale plant selling its raw gas. If the CO2 is liquefi ed and refi ned the product can represent signifi -cantly more value.

Companies that use CO2 in industry are wide in scope. Approximately 70 percent of the developed world market for CO2 is dedicated to the food and beverage-grade markets and up to 50 percent of the total CO2

merchant product used in food processing can offer unique op-portunities for the ethanol in-dustry.

Ethanol producers should understand the full market composition and potential for CO2

in order to determine if a direct-to-market scheme can be profi table or if seeking vendors is the way to go. Understanding the markets before choosing a gas refi ner is essential to yield the best results for the ethanol producer. Also, defi ning current and new markets for CO2 will be useful in the event that green-house gas (GHG) reduction leg-islation efforts become law.

Legislation ImpactsThe U.S. EPA published

a fi nding earlier this year that stated CO2 is a hazardous GHG and a threat to public health. The fi nding was a precursor to the American Clean Energy and Security Act of 2009, otherwise known as the climate change bill, which includes language that would regulate CO2 emis-sions.

One possibility for regulat-ing GHGs is the implementation of a cap-and-trade program. In this program, a cap would be es-tablished concerning a quantity of CO2

allowed to be emitted into the atmosphere. Compa-

nies would be allowed to trade carbon credits and, theoretically, the market would reward those who fi nd ways to produce less CO2. Should there be an excess of credits, the company could sell these credits to other com-panies.

It is well known that the lion’s share of CO2 emissions is derived from coal-fueled elec-tric power plants. However, the EPA’s recent proposed man-datory GHG reporting rule includes any large emitter of GHGs on its list of proposed entities that would be required to report emissions. This would in-clude many ethanol production facilities. Therefore, producers

W

should prepare to become a reg-ulated emitter of GHGs.

It is initially understood that a threshold of 25,000 met-ric tons per year of GHGs will determine what facilities are required to report GHG emis-sions. A cap-and-trade system is intended to reduce industry GHG emissions. Once a cap on emissions is established, the eth-anol producer would be required to fi nd ways to reduce emis-sions and be rewarded via cred-its when less CO2 is produced. Each year, only a certain num-ber of permits or allowances would be provided to emitters. These permits would act as cur-rency and would allow a defi ned level of emissions established at the inception point of cap-and-trade. At the end of the year, if the emissions recorded are less than the start of the year, there

would be a tradable or currency-like value established on a per ton basis – thus an economic reward. If the level of emissions is greater than the beginning of at the year, the result would be a charge against this currency-like system. If an emitter were to purchase CO2, the goal would be to evaluate the net emissions of CO2 not released back into the atmosphere--whetherIf an emitter were to purchase CO2, the goal would be to evaluate the net emissions of CO2 not released back into the atmo-sphere—whether in a primary manner (exhaust from the fer-mentation plant) to a secondary or tertiary application in indus-try (such as certain food and beverage applications)—to de-termine profi t from or cost of the credits.

As to reducing the emis-

sions to the atmosphere, an “over-the-fence,” captive, or niche market which is consum-ing CO2 in the process versus simply displacing the product is a net reduction. The net reduc-tion or consumption of CO2 could be via select applications in industry which combine a chemical process or perhaps a biological process with the car-bon dioxide – thus not returning it to the atmosphere. Markets such as methanol, urea, and so-dium bicarbonate could fi t such defi nitions. Using the product in a wide variety of specifi c appli-cations in industry could repre-sent this reduction in emissions.

In the end, knowledge is es-sential on a plant-by-plant basis for the existing, potential and emerging CO2 markets; par-ticularly seeking possible niche levels where CO2 is actually con-

tained, combined, or consumed; thus representing a net reduc-tion in annual output from an emissions perspective.. The goal is profi ts and protection on the part of the ethanol producer. The so-called currency in the form of CO2 allowances de-fi ned at the beginning and end of each year will represent mon-etary value when all is said and done. Be certain that markets are well known for CO2, and do not blindly accept the opinion of the gas suppliers, but rather independently investigate the markets, exceptions and advan-tages before negotiating with a gas company. EP

Sam A. Rushing is president of Advanced Cryogenics, Ltd, a carbon dioxide consulting fi rm based in Tavernier, Fla. Reach him at [email protected] or (305) 852-2597.

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Contact: Rob Kurtz p (303) 526-5655 or [email protected]

Price: $1500 Available for purchase at http://store.bbiinternational.com

Next Generation Biofuels MarketsSeptember 28-30, 2009 NH Grand Hotel KrasnapolskyAmsterdam, The NetherlandsThe 5th annual event will address the latest develop-ments in creating cost competitive, industrial scale production of next generation biofuels technologies. Topics will include commercial strategies and busi-ness models, how to make sustainable bioenergy a practical solution and advances in cellulosic ethanol and biobutanol.

+44 (0)207 099 0600www2.greenpowerconferences.co.uk/v8-12/Prospectus/Index.php?sEventCode=BF0909NL

Global Sugar Trade & FinanceSeptember 29-30, 2009 Goodwood Park HotelSingaporeThe conference will focus on the uncertain times ahead for the world sugar industry and market-place. Specialists, producers, bankers and traders will share their views on altering the direction of the global sugar market. Session topics will include risk management, political initiatives and price volatility. Attendees will get insights from Brazil, the world’s largest sugar and ethanol producing country, and hear key industry members explore the dynamics of the sugar-ethanol equation.

(65) 6345 7322www.cmtevents.com/aboutevent.aspx?ev=090937&

From Crude Oil to Biofuels: A U.S. – Brazil Energy RelationshipSeptember 9-10, 2009 Hotel Sofi telRio de Janeiro, BrazilSession topics will include the future of ethanol in the Brazilian and global markets, biofuels sustain-ability, fuels market outlook, Western Hemisphere ethanol policy and new technology developments. (703) 891-4804www.hartenergyconferences.com/index.php?area=details&confID=124

The Alcohol SchoolSeptember 13-18, 2009MontrealThis course will educate fuel-ethanol and distilled beverage producers in the science of alcohol pro-duction. The program will cover the ethanol pro-duction process from milling and mash prepara-tion through fermentation and distillation. Enzyme usage, yeast biology, bacterial contamination and control will also be discussed, along with other is-sues currently affecting both industries. Registra-tion is limited, with preference given to fuel-ethanol and distilled beverage producers.

(800) 583-6484 www.ethanoltech.com

EVENTS CALENDAR

Biofuels Supply Chain Summit 2009September 15-17, 2009Ghent, BelgiumAll major issues within the biofuels industry will be discussed at this summit. Leading authorities from Europe and Brazil will showcase their experiences. Discussions will cover the latest EU policies, legis-lations and economic effects, and the current de-velopments and future initiatives for the transpor-tation and logistics of biofuels. Attendees can also take part in 3 interactive panel sessions on: crucial evolution and recent developments of custom tax-es and its impact on the European import/export market, current and future outlook of EU’s biofuels market, and exploring current country legislations and their infl uence on the future of biofuels trading, transportation and sustainability.

+44 (0)20 7753 4268www.vibenergy-events.com/biofuels/programme.htm

World Bioenergy – Clean Vehicles & Fuels September 16-18, 2009 Stockholmsmässan Stockholm, Sweden This conference will focus on the practical imple-mentation of bioenergy and sustainable transport systems. A variety of commercial examples from Sweden will be highlighted. Topics will include so-cio-economic drivers, impact of international trade in biofuels, emergence of bio-refi neries, coproduc-tion of fuels, chemicals, power and materials, and the development of markets for clean vehicles and fuels. Attendees will include delegates, offi cials, re-searchers, and visitors from Europe and beyond.

+46 (0)18-67 38 03www.wbcvf2009.se

Sept

82 ETHANOL PRODUCER MAGAZINE September 2009

World Ethanol 2009November 2-5, 2009Le Meridien Montparnasse HotelParisIndustry experts, including senior representatives from the oil and automotive industry, will assess the outlook for agricultural commodities and non-food feedstocks. Attendees will include senior execu-tives from all sectors in the value chain.

+44 (0)20 7017 7500www.agra-net.com/worldethanol

Biofuels 2009October 27-29, 2009Budapest, HungaryIndustry leaders from more than 50 countries and fi ve continents are expected to attend this event, hosted by the World Refi ning Association. Session topics will include a global overview on the biofuels industry, strategies of refi neries within the biofuels fi eld, new supplies and processing for feedstocks, and a bioethanol market outlook.

+44 (0) 20 7067 1800www.wraconferences.com/2/4/articles/57.php

Oct


Bioenergy Engineering 2009October 11-14Hyatt RegencyBellevue, Wash.The conference, hosted by the American Society of Agricultural and Biological Engineers, the American Society of Civil Engineers and 25 x ’25, will provide professional education for all aspects of engineer-ing in the biofuels and bioenergy systems from genetics through production, distribution and use. Topics to be discussed include the future of biofu-els production, bioenergy policy and advances in bioenergy engineering research and technology development.

(972) 355-5128www.bioenergyengineering2009.com

Biomass & WtE: Waste to EnergyOctober 28-29, 2009Shanghai, ChinaAttendees will include producers of biomass, biodie-sel, ethanol and cellulosic ethanol; local, municipal and provincial government representatives; en-zymes and catalyst providers; and other industry experts. The conference will focus on power gener-ations, cellulosic ethanol and biotechnology for fuels & chemicals, dedicated energy crops, agricultural residues, and energy from municipal solid waste.

(65) 6345 7322www.cmtevents.com/aboutevent.aspx?ev=091035&

Air Quality VIIOctober 26-29, 2009Crystal Gateway MarriottArlington, VirginiaThis event will be a forum for reviewing the current state of science and policy in conjunc-tion with air quality, particularly as it relates to the energy industry. The focus will be on related air quality impacts regarding policy; markets;health and ecosystems; measurement methods; separation, capture, and storage; emission control and prevention; and atmospheric reactions and modeling.

(701) 777-5000www.undeerc.org/AQ7

Nov


EPM MARKETPLACE

Ag Products & ServicesEquipment

Hybrid Corn

Pioneer Hi-Bred International, Inc.800-247-6803 www.pioneer.com

Associations/OrganizationsEPPIC Environmental Index334-277-1364 www.eppicenv.com

Trade

API Credit Exchange202-682-8192 www.api.org/ace

ChemicalsPhibroChem 800-223-0434 www.lactrol.com

Anti-Microbial

Bio-Cide International.Inc405-329-5556 www.bio-cide.com

Ferm Solutions859-402-8707 www.ferm-solutions.com

PhibroChem 800-223-0434 www.lactrol.com

Resonant BioSciences, LLC.866-933-0408 www.puremash.com

Enzymes

Genencor585-256-5249 www.genencor.com

Novozymes919-494-3101 www.novozymes.com

Water Treatment

Buckman Laboratories, Inc.901-278-0330 www.buckman.com

Yeast

Ferm Solutions859-402-8707 www.ferm-solutions.com

Fermentis-Division of SI Lesaffre800-558-7279 www.fermentis.com

Lallemand Ethanol Technology800-583-6484 www.ethanoltech.com

CleaningDryer Systems

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

Seneca Companies800-369-5500 www.senecaco.com

Ductwork


Emergency Spill Response



Evaporators


Fans


Filter Media

BWF America, Inc.800-733-2043 www.bwf-america.com


Heat Exchanger



Hydro-Blasting


Premium Plant Services, Inc.218-929-2166 www.premiumplantservices.com

Plate-Frame


Railcar Spill Response


Railcars


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

Stabilized Liquid Yeast,Thermosacc,® Superstart™


EPM MARKETPLACE

Smoke Stack


Tank Cleaning Equipment

Spraying Systems Co.630-665-5000 www.spray.com

Tank Cleaning Services



ConstructionBuildings-Modular

HOFFMANN,INC.563-263-4733 www.hoffmanninc.com

Concrete Silos


Fabrication

Agra Industries, Inc.715-536-9584 www.agraind.com

Andy J.Egan Co.616-791-9952 www.andyegan.com


VAL-FAB Inc.877-482-5322 www.valfab.com

Foundations


Insulation

Petrochem Insulation707-644-7455 www.petrocheminc.com

Management

Marcus Construction Company800-367-3424 www.marcusconstruction.com

Mechanical

Plant Construction


Lipten800-860-0790 www.lipten.com

Reimer Welding Inc.218-773-0886 www.reimerwelding.com

Railroad Tracks

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

Railworks913-888-4091 www.railworks.com

Tanks


ATEC Steel620-856-3488 www.atecsteel.com

Caldwell Tanks502-964-3361 www.caldwelltanks.com

WINBCO Tank Company641-683-1855 www.winbco.com

ConsultingCentral Energy Plant


Environmental

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

Aquaterra Environmental Solutions, Inc.877-913-8200 www.aquaterra-env.com

ICM, Inc.877-456-8588 www.icminc.com

Natural Resource Group, LLC.612-347-6789 www.nrg-llc.com

Pinnacle Engineering Inc.507-280-5966 www.pineng.com


Weaver Boos Consultants888-645-5240 www.weaverboos.com


EPM MARKETPLACE

Feasibility Studies

Harris Group Inc.206-494-9422 www.harrisgroup.com

Management Services

Greenway Consulting,LLC320-589-3085 www.greenwayconsulting.net

Plant Optimization

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




Project Development


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

EmploymentRecruiting

McDermott & Bull-Energy Practice415-722-8966 www.mbsearch.net

SearchPath of Chicago815-261-4403 www.searchpath.com/chicago

EngineeringBiomass Energy


Design/Build


Process Design


Process Engineering Associates, LLC865-220-8722 www.processengr.com

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

Equipment & ServicesAgitation Equipment

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

Air Pollution/Odor Control

Ceco Abatement Systems, Inc.630-493-0624 www.cecoenviro.com/Abatement

Analytical Instruments

Gusmer Enterprises, Inc.847-277-9785 www.gusmerbiorefi ning.com

Blowers & Fans

Robinson Fans, Inc.724-452-6121 www.robinsonfans.com

Boiler Systems

Hurst Boiler & Welding Co., Inc.800-666-6414 www.hurstboiler.com

Boilers-Reboilers

Wabash Power Equipment CO.847-541-5600 www.wabashpower.com

Combustion Equipment

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

Computer Software

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

Encore Business Solutions204-989-4330 www.encorebusiness.com

Control Systems


Revere Control Systems800-536-2525 www.reverecontrol.com

Conveyors–Mechanical

U.S. Tsubaki847-459-9500 www.ustsubaki.com

Conveyors–Pneumatic

MAC Equipment, Inc.816-891-9300 www.macequipment.com

Alaqua Inc.Evaporators, Crystallizers, Distillation, Columns, Solvent

Recovery, Heat-Exchangers, Process Engineering

7004 Boulevard East, Ste.28A Guttenberg, NJ 07093 USATel: 201.758.1577 Fax: 201.758.1522

[email protected]

www.alaquainc.com

Ethanol Effi ciency. Integrated business management system for purchase/sales contracting, risk management, plant production and material usage data collection, and automated receiving and loadout.

800.518.0472JohnDeereAgriServices.com

You produce fuel. We fuel your success.

© 2009 John Deere Agri Services, Inc.


EPM MARKETPLACE

Cooling Towers

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

Corn Oil Recovery


Distillation Equipment

SRS Engineering Corporation800-497-5841 www.srsbiodiesel.com

Dryers-Fluid Bed

Aeroglide Corporation919-851-2000 www.aeroglide.com

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

Dryers-Rotary Steam Tube


Dust Control Systems

MAC Equipment, Inc.816-891-9300 www.macequipment.com

Emission Monitoring Systems

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

Fermentation Monitoring

ETS Laboratories707-963-4806 www.etslabs.com

Fermentors



Filtration Equipment

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

Fire Suppression

FLAMEX Inc.336-299-2933 fl [email protected]

Fractionation-Corn

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

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

Crown Iron Works651-639-8900 www.crowniron.com


MOR Technology, LLC618-522-8324 www.mortechnology.com

Grain Handling & Storage


McC, Inc.763-477-4774 www.mccormickconstruction.com

Heat Exchangers

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

Insulator

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

Laboratory-Outsourcing

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

Laboratory-Supplies

CHATA Biosystems877-246-2428 [email protected]

Phenomenex310-212-0555 www.phenomenex.com

Laboratory-Testing Services

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

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

Loading Equipment

Carbis, Inc.800-845-2387 www.carbis.net

SafeRack866-761-7225 www.saferack.com

Maintenance Services

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

Mechanical Solutions, LLC515-332-7035 www.mecsol.com

Maintenance Software


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

Mills-Hammer

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

Millwright


Moisture Analyzers

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

Molecular Sieve Desiccant

3 Angstrom630-980-5205 www.3Angstrom.com

Molecular Sieves


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

Motors

Trico TCWind, Incorporated320-693-6200 www.tricotcwind.com

Paint & Protective Coatings

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

Parts & Services


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

Pipe

ISCO Industries800-345-4726 www.isco-pipe.com

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

Pipe-Fittings


Pipe-Flanges


Pressure Vessels


Process Control


VFTechnical Services, LLC423-794-6747 www.vftechserv.com

Pumps

PeopleFlo Manufacturing847-929-4774 www.peoplefl o.com

Valley Equipment Co. Inc.423-753-3541 www.valleyequipment.com

Resource Recovery

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

Scales-Software

John Deere Agri Services800-518-0472 www.johndeereagriservices.com

Scales-Truck

Weigh-Tec Inc.1-800-461-4153 www.truck-scales.com

Seals

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

Separation Equipment


Puritan Magnetics, Inc.248-628-3808 www.puritanmagnetics.com

Size Reduction-Shredders

DuraTech Industries / Haybuster701-252-4601 www.haybuster.com

Storage-DDGS

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

Structural Fabrication


Tanks



Brown Tank LLC651-747-0100 www.browntank-mn.com

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

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


Thermal Oxidizers

Pro-Environmental, Inc.909-989-3010 www.pro-env.com

Used Equipment

Valves

Check-All Valve Mfg. Co.515-224-2301 www.checkall.com

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

Wastewater Treatment Services

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



UEM, Inc.561-385-7515 www.uemgroup.com

Water Treatment

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


[email protected]

PROVENRELIABILITYfor VOC, CO & PM

ABATEMENT

EISENMANN CorporationCrystal Lake, Illinois


EPM MARKETPLACE

Yield Enhancement

EdneiQ, Inc.310-592-4158 www.EdeniQ.com

Ethanol ProductionExisting Producers

Louis Dreyfus Commodities402-844-2680 LDCommodities.com

POET LLC605-965-2200 www.poetenergy.com

FinanceAccounting

Christianson & Associates PLLP320-235-5937 www.christiansoncpa.com

Eide Bailly LLC605-977-2703 www.eidebailly.com

Appraisals

Natwick Associates Appraisal Services800-279-4757 www.natwick.com

Due Diligence


Insurance

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

Mergers & Acquisitions

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

Risk Management

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

Software-Accounting

Encore Business Solutions204-989-4330 www.encorebusiness.com

Software-Commodity

John Deere Agri Services800-518-0472 www.johndeereagriservices.com

Legal ServicesAttorneys

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

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

MarketingDistillers Grains

CGB Feed Ingredients985-867-3554 www.cgb.com

Fuel Ethanol

Gavilon402-595-5678 www.gavilon.com

Miscellaneous

Nelson Ink Promotional Products218-222-3831 www.nelsonink.com

TransportationMarine

Evolution Markets, Inc.914-323-0259 www.evomarkets.com

Rail

Ameritrack RailRoad Contractors, Inc.765-659-2111 www.ameritrackrailroad.com

Railcar Moving

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

Railcar Parts

Salco Products, Inc.630-783-2570 www.salcoproducts.com

Terminals & DSP

ERS Rail Transload205-322-8312 www.ersrail.net

Utilities

Utility

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

Reach your customers

Your Solution. Advertise Today.

EPM MARKETPLACE

Your Ad HERE

Your Solution. Advertise Today.

EPM MARKETPLACE

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

www.BiomassMagazine.com

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

[email protected].

poet.com

September 2009 Ethanol Producer Magazine

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Transcript of September 2009 Ethanol Producer Magazine