April Ethanol Producer Magazine

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Spotlight on Sorghum INSIDE: CORN-ETHANOL’S ONGOING STORY OF SUCCESS ALSO A New View on Cogeneration Page 42 www.ethanolproducer.com Drought, EPA Put Crop on Pathway To Advanced Fuels Page 34 APRIL 2013

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April Ethanol Producer Magazine

Transcript of April Ethanol Producer Magazine

Page 1: April Ethanol Producer Magazine

Spotlight on Sorghum

INSIDE: CORN-ETHANOL’S ONGOING STORY OF SUCCESS

ALSO A New View on

Cogeneration Page 42

www.ethanolproducer.com

Drought, EPA Put Crop on Pathway To Advanced FuelsPage 34

april 2013

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GEN-00412_EP_AsianWorkers_FINAL.pdf 1 2/22/13 11:23 AM

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april issue 2013 VOl. 19 issue 4

contents

fEAturESDEPARTMENTS

6 Editor’s Note The Conference Built Around Your Ideas By TOM BRyAN

7 Ad Index

10 the Way I See It Converting Grasslands to Cashlands By MIKE BRyAN

11 Events Calendar Upcoming Conferences & Trade Shows

12 View from the Hill DOE Study: RFS Boosts US Economy By BOB dINNEEN

14 Drive What is Big Oil Afraid of? Competition? By TOM BUIS

16 Grassroots Voice Lies, More Lies, and Then There's CRC Studies By RON LAMBERTy

18 Europe Calling A Longer-term Perspective Needed By ROB VIERhOUT

20 Business Matters Design Around Patents to Avoid Liability, Reduce Risk By ANdREw MccOy

22 Business Briefs

24 Commodities report

26 National Ethanol Conference in Photos

28 Distilled

52 Marketplace

48 infrastructureEthanol tanks—Have they Been Inspected Lately?Accurate information is needed to extend life span of aging infrastructureBY ERIkA HENDERSON

CONtrIButIONS

ON tHE COVErpHOtO: W. rOBert JOnes, natiOnal sOrGHuM prODucers

Ethanol Producer Magazine: (usps no. 023-974) april 2013, Vol. 19, issue 4. Ethanol Producer Magazine is published monthly by BBi international. Principal Office: 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. Periodicals Postage Paid at Grand Forks, North Dakota and additional mailing offices. POSTMASTER: Send address changes to Ethanol Producer Magazine/Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, North Dakota 58203.

32 Q & a Corn Story takes the CakeNCERC director John Caupert ispassionate about corn ethanolBY TIM PORTz

34 feeDstOcKSorghum readies to Advance Milo gains D5 RIN statusvia new EPA pathway BY SUSANNE RETkA SCHILL

42 pOWer feeling the HeatThe EPA shows continued interest in CHP BY HOLLY JESSEN

32

34

42

Spotlight on Sorghum

INSIDE: CORN-ETHANOL’S ONGOING STORY OF SUCCESS

ALSO A New View on

Cogeneration Page 42

www.ethanolproducer.com

Drought, EPA Put Crop on Pathway To Advanced FuelsPage 34

APRIL 2013

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editor’s note

Tom Bryan, PrESIDEnT & EDITor In [email protected]

tHE CONfErENCE BuILt ArOuND YOur IDEAS

FOR INDUSTRY NEWS: WWW.EtHANOLPrODuCEr.COM OR FOLLOW US: tWIttEr.COM/EtHANOLMAGAzINE

as we wrapped this issue of Ethanol Producer Magazine, the BBI International content managers were nose down in spreadsheets creating panels for the 2013 International Fuel Ethanol Workshop & Expo. building the agenda for the world’s largest, longest-running ethanol conference is a task our team accepts with earnest diligence. We’re thankful for the responsibility and we don’t carry it alone.

The FEW is built around content, which means speakers—or more specifically, speaker ideas—are the lifeblood of the event. our agenda-building process begins with a worldwide call for presentation ideas six months before the event takes place. this year’s FeW, in its 29th year, will happen June 10-13 at the america’s center in St. louis, mo., where nearly 2,000 industry professionals will gather. our quest for presentation pitches began quietly last fall and progressively gathered momentum up until the mid-February deadline. When the dust settled, more than 200 presentation ideas were submitted from all over the world. each abstract was judiciously reviewed, annotated and rated, typically by four or five qualified industry professionals. To our 33 evaluators (you know who you are), thank you.

at press time, our content managers were engaged in the fastidious process of matching the highest-rated abstracts with similar presentation ideas inside of four distinct tracks that cover production, financial management, coproducts and advanced ethanol. On March 1, I took a sneak peak at the preliminary panels. The groupings look terrific. by the time this issue lands on your desk, the FeW agenda will be complete and online. i hope you appreciate the content and make plans to attend, just as more than 500 ethanol plant personnel and 1,500 other industry professionals did last year. early-bird registration ends april 29.

as always, the 2013 FeW will be a fusion of education, networking and what i call “extra stuff ” before and after the show. before the FeW begins, the annual FeW golf outing will take place monday, June 10, at the distinctive Gateway national Golf links. and after the proceedings conclude, bbi will facilitate a tour that will include a return visit to the National Corn-to-Ethanol Research Center, which will officially celebrate its 10-year anniversary with attendees thursday, June 13. to learn more about the center’s decade of collaborative research, check out our page-32 Q&a with ncrec Director John caupert.

the FeW is still taking shape, and all the details—panels, awards, tours and special activities—will be featured in next month’s issue of ePm. Until then, please visit www.FuelethanolWorkshop.com for more information about registration and lodging, as well as remaining opportunities for sponsors and exhibitors.

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TM

EDItOrIALPRESIDENT & EDITOR IN CHIEF

tom Bryan [email protected]

VICE PRESIDENT OF CONTENT & EXECUTIVE EDITOR tim Portz [email protected]

CONTRIBUTIONS EDITOR Susanne retka Schill [email protected]

MANAGING EDITOR Holly Jessen [email protected]

NEWS EDITOR Erin Voegele [email protected]

COPY EDITOR Jan tellmann [email protected]

ArtART DIRECTOR

Jaci Satterlund [email protected]

PuBLISHINGCHAIRMAN

Mike Bryan [email protected]

CEO Joe Bryan [email protected]

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

EXECUTIVE ACCOUNT MANAGER Howard Brockhouse [email protected]

ACCOUNT MANAGERSMarty Steen [email protected]

Andrea Anderson [email protected] Brorby [email protected]

tami Pearson [email protected]

CIRCULATION MANAGER Jessica Beaudry [email protected]

ADVERTISING COORDINATOR Marla Defoe [email protected]

SENIOR MARkETING MANAGER John Nelson [email protected]

EDItOrIAL BOArDMike Jerke, Chippewa Valley Ethanol Co. LLLP

Jeremy Wilhelm, Cilion Inc.Mick Henderson, Commonwealth Agri-Energy LLC

Keith Kor, Pinal Energy LLCWalter Wendland, Golden Grain Energy LLC

Neal Jakel Illinois River Energy LLCEric Mosebey Lincolnland Agri-Energy LLCSteve roe Little Sioux Corn Processors LP

Customer Service Please call 1-866-746-8385 or email us at [email protected]. Subscriptions to Ethanol Producer Magazine are free of charge to everyone with the exception of a shipping and handling charge of $49.95 for any country outside the United States, Canada and Mexico. To subscribe, visit www.EthanolProducer.com or you can send your mailing address and payment (checks made out to BBI International) to: Ethanol Producer Magazine Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. You can also fax a subscription form to 701-746-5367. Back Issues, Reprints and Permissions Select back issues are available for $3.95 each, plus shipping. Article reprints are also available for a fee. For more information, contact us at 866-746-8385 or [email protected]. Advertising Ethanol Producer Magazine provides a specific topic delivered to a highly targeted audience. We are committed to editorial excellence and high-quality print production. To find out more about Ethanol Producer Magazine advertising opportunities, please contact us at 866-746-8385 or [email protected]. Letters to the Editor We welcome letters to the editor. Send to Ethanol Producer Magazine Letters to the Editor, 308 2nd Ave. N., Suite 304, Grand Forks, ND 58203 or email to [email protected]. Please include your name, address and phone number. Letters may be edited for clarity and/or space.

COPYRIGHT © 2013 by BBI International

Please recycle this magazine and remove inserts or samples before recycling

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Page 8: April Ethanol Producer Magazine

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Page 10: April Ethanol Producer Magazine

10 | Ethanol Producer Magazine | APRIL 2013

the way i see it

Converting Grasslands to CashlandsBy Mike Bryan

A recent study by South dakota State University concluded that “U.S. farmers converted more than 1.3 million acres of grassland into corn and soybean fields between 2006 and 2011, driven by high crop prices and biofuel mandates. in states like Iowa and South Dakota, some 5 percent of pasture is turning into cropland each year.”

a number of the study’s conclusions relating to biofuels are fundamentally flawed for several reasons. First, there have been very few ethanol plants built in the u.s. since late 2006. so it seems unlikely that farmers would be rushing to produce more crops for a flat-lined biofuels market. The implication that the biofuels mandate drives up corn prices and thus encourages farmers to bring marginal grasslands into production flies in the face of a recent study by a major U.S. agricultural company, Growmark, that concluded the current rise in crop prices is driven far more by market speculators than the production of biofuels. finally, it is unreasonable to compare the destruction of the rain forests with the short-term conversion of a small percentage of grasslands to agricultural crops. Grasslands can be grasslands again within a few years; the destruction of the rainforest is measured in centuries.

In the Midwest, grasslands act as a carbon sink only as long as they are not covered in snow. Crop covering provides a carbon sink for nearly the same amount of time each year as grasslands would. Once

the snows come, the carbon sink properties of the plant matter are negligible.

As the saying goes: “Nothing cures high prices, like high prices.” As normal weather patterns return to the corn-growing regions of the Midwest and more normal corn production ensues, the price will come down. farmers will only farm more marginal land, and incur the increased expense of doing so, as long as the price of corn and soybeans remain high enough to make it profitable and it is within the scope of existing farm and environmental policy.

While ethanol has taken the brunt of the blame for high corn prices, I'm sure few will heap any praise on the ethanol industry when grain prices return to a more normal level, but rather will find something new to hang on the yoke of this energy workhorse.

So while I greatly respect our friends at SDSU, I would beg to differ with their conclusions that blame ethanol and biodiesel (at least in part) for the destruction of America’s grasslands. Any modest swings in the conversion of grasslands to croplands are nothing more than temporary aberrations of a program the government set in motion over 100 years ago when it opened up the vast prairies of the Midwest to agriculture.

that’s the way i see it.

Author: Mike Bryanchairman, BBi international

[email protected]

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APRIL 2013 | Ethanol Producer Magazine | 11

eVents caLendar

International Biomass Conference & ExpoApril 8 -10, 2013Minneapolis Convention CenterMinneapolis, MinnesotaBuilding on InnovationOrganized by BBI International and coproduced by Biomass Magazine, the international Biomass Conference & Expo program will include 30-plus panels and more than 100 speakers, including 90 technical presentations on topics ranging from anaerobic digestion and gasification to pyrolysis and combined heat and power. This dynamic event unites industry professionals from all sectors of the world’s interconnected biomass utilization industries—biobased power, thermal energy, fuels and chemicals. 866-746-8385 | www.biomassconference.com

International fuel Ethanol Workshop & ExpoJune 10 -13, 2013America’s CenterSt. Louis, Missouriwhere Producers Meet From it’s inception in 1985, the mission of the event has remained constant: The FEW delivers timely presentations with a strong focus on commercial-scale ethanol production – from quality control and yield maximization to regulatory compliance and fiscal management. The FEW is also the ethanol industry’s premier forum for unveiling new technologies and research findings. The program extensively covers cellulosic ethanol while remaining committed to optimizing existing grain ethanol operations. Register by April 29 and save $200 with early-bird rates.866-746-8385 | www.fuelethanolworkshop.com

Algae Biomass SummitSeptember 30 - October 3, 2013Hilton OrlandoOrlando, FloridaThis dynamic event unites professionals from all sectors of the world’s algae utilization industry including, but not limited to, financing, algal ecology, genetic systems, carbon partitioning, engineering and analysis, biofuels, animal feeds, fertilizers, bioplastics, supplements and foods. Organized by the Algae Biomass Organization and coproduced by BBI International, this event brings current and future producers of biobased products and energy together with algae crop growers, municipal leaders, technology providers, equipment manufacturers, project developers, investors and policy makers. 866-746-8385 | www.algaebiomasssummit.org

National Ethanol ConferenceFebruary 17-19, 2014JW Marriott Orlando Grande LakesOrlando, Floridasince 1996, the renewable fuel association’s national Ethanol Conference has been recognized as the preeminent conference for delivering accurate, timely information on marketing, legislative and regulatory issues facing the ethanol industry. With numerous networking opportunities, more business meetings are conducted and contacts made at this conference than any other ethanol conference.866-497-1232 | www..nationalethanolconference.com

Possibilities. . . that’s where we put our energy.

Taking an idea from concept to full implementation

is not always easy without the proper

resources. That’s why John and the rest of

our research and development team can help

you bring your concept to reality. From our

state-of-the-art research and pilot facility,

we are able to work with you to build new

possibilities. That’s where we put our energy.

John MResearch & DevelopmentSt. Joseph, MO

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View from the hiLL

DOE Study: RFS Boosts US EconomyBy Bob Dinneen

As congress and the country debate the renewable fuel standard (RFS), Big Oil and Big Food are flooding the zone with bought-and-paid-for “studies” seeking to discredit American ethanol and the public policies that promote its production and use.

fortunately, a recent research article about the rfs’s economic impact provides what’s needed to inform the debate: independently funded, scientifically based, bias-free findings. Published in the academic journal Biofuels and authored by researchers at the U.S. DOE’s Oak Ridge National Laboratory, the article, “Global economic effects of u.s. biofuel policy and the potential contribution from advanced biofuels,” is a must-read.

the researchers’ conclusion: the RFS is producing positive economic effects for the United States, and the benefits will increase by 2022, when the RFS requires that 36 billion gallons of renewable fuels be blended into the nation’s transportation fuels.

The RFS is increasing the gross domestic product, reducing oil prices and

decreasing oil imports. For all the talk about food versus fuel and indirect land use change, the RFS has only minimal impacts on global food markets and land use.

When it comes to growing the gross domestic product, the rfs will contribute to a projected 0.8 percent increase by 2022. (For context, 0.8 percent of the current GDP is $121 billion.) As the researchers report, “The economic benefits of conventional and advanced biofuels are primarily from their effects in reducing the import and use of oil.” About half the economic benefits come from the RFS’ conventional biofuel requirements, with the remainder from advanced biofuels.

In a major economic benefit, the study shows that ethanol helps to hold down motor fuel prices. Looking forward to the full implementation of the rfs targets, the researchers find that increased use of renewable fuels will reduce motor fuel prices by 3 percent in 2015 and approximately 7 percent by 2022.

Why is ethanol so good for the economy? an important reason is that ethanol reduces america’s reliance on imported oil. From 2005 through 2012, as ethanol increased from 1 to 10 percent of the gasoline supply, U.S. dependence on imported petroleum products declined from 60 to 41 percent.

What if america meets the rfs’ advanced biofuels requirements with

imported sugarcane ethanol rather than domestically produced renewable fuels? There would be fewer benefits for American families. As the researchers write: “a greater reliance on [biofuel] imports could reduce the benefits of advanced biofuels significantly,” because “imported biofuels displace domestic production and, as with oil, increase payments for fuel to the [rest of the world].”

as for food prices and land use, the researchers report that ethanol’s impact is minimal. If the RFS’ goals are achieved, the study finds that prices for livestock, poultry and dairy prices will “remain stable or even decrease in some years” through 2030, while prices for food commodities and coarse grains will rise by less than 1 percent. Meanwhile, there will be “… a slight [net] reduction in global land use for agriculture.”

the bottom line: the rfs is an american success story.

That’s why it’s time to tell Congress: Don’t mess with the rfs!

Author: Bob Dinneenpresident and ceO,

renewable fuels association202-289-3835

Page 13: April Ethanol Producer Magazine

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Page 14: April Ethanol Producer Magazine

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driVe

What is Big Oil Afraid of?Competition?By Tom Buis

It didn’t take long after the beginning of the 113th congress for Big Oil to turn up the rhetoric and attacks on biofuels. the american petroleum institute, the american fuel and petro chemical Manufacturers and the Coordinating Research Council, an oil-funded group that is paid to produce the results its funders ask for, wasted no time in pushing for a repeal of the renewable fuel standard (rfs) and to restrict consumers from a choice at the pump of a homegrown, renewable, less expensive and better-performing fuel. And, just over a month ago, API announced it would appeal to the Supreme Court on E15, even after it has lost this challenge twice in the District of columbia court of appeals.

Oil companies fear the inevitable breakthrough of the blend wall, increasing the amount of biofuels in the marketplace and therefore reducing their market share, breaking their record profits and hurting their bottom line. Oil companies have had a monopoly for nearly a century, receiving hefty government subsidies and tax breaks the entire time. Competition is what makes the free market work, it always has and the monopolies of the past have shown they do not benefit the consumer at all.

We continue to see needless legislative proposals to repeal the RFS and midlevel ethanol blends such as E15. One-sided committee hearings shut out biofuels

stakeholders, placing the heavy hand of the government on the scales in favor of one industry over another. American motorists should have the ability to choose their fuel based on price and performance, not a monopoly at the pump. Many lawmakers, however, succumb to special interests and their actions deny consumers the voluntary choice of a less-expensive, cleaner, higher-performing fuel.

History has a way of repeating itself, and just like the Chicken Council in the past, the american automobile association has no legitimacy in testifying on Capitol Hill about the science and performance of midlevel ethanol blends. Frankly, the Chicken Council has as much business testifying on E15 as Colonel Sanders would have on nuclear nonproliferation.

the reality is oil’s endless money can continue to fund its foolish attempts to prevent biofuels from entering the marketplace. This fight is far from over, and while our opponents have deep pockets, they do not have the facts on their side.

E15 is not mandatory, rather it is a voluntary choice for both the retailer to sell and the consumer to buy. There is no logical reason that the most-tested fuel in history should be blocked from the commercial marketplace. E15 provides consumers with a choice and welcome savings in this time of exorbitant gas prices. Our industry must continue to drive this message if we are to be successful in fending off our critics. Increased blends of biofuels do make a difference when it comes to consumer savings. A recent Louisiana State University study found that the U.S. production of 13.8 billion gallons of

ethanol in 2011 saved U.S. drivers roughly 83 cents a gallon in 2011, totaling $111.22 billion in savings.

The bottom line is that E15 is a homegrown, American renewable fuel that creates jobs that cannot be outsourced, it is better for our environment and the air we breathe and E15 will reduce our dependence on foreign oil and provides consumers a choice and savings. This fuel really is a win-win for america and no consumer should be denied the voluntary choice of a less-expensive fuel.

it is time we all reach out to our elected officials and ask them why, when gas prices continue to rise, would they want to deny consumers and retailers the voluntary choice of a less-expensive, higher-performing and cleaner renewable fuel? You can help today by contacting your legislators and asking them to defend the RFS and to stand firm against frequent Big Oil attacks. Call the capitol switchboard at 202-224-3121 or email your elected representatives. If you have any questions on who or how to contact, our staff in D.c. is ready to help and can be reached at 202-545-4000.

Big Oil’s monopoly will come to an end, and it will be the american farmer and those in the biofuel industry who will ultimately drive the change that will end the oil company’s monopoly, helping to transition to homegrown, American fuel that is better for our environment, our economy and our energy security.

Author: tom BuisCEO, Growth Energy

[email protected]

Page 15: April Ethanol Producer Magazine

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Grassroots Voice

Lies, More Lies, And Then There’s CRC Studies By Ron Lamberty

I’m not a scientist, but I think I could put together a good sample group for a study. that’s just math. i’m not a mathematician either, but I know that a statistically sound study needs to test an unbiased group made up of a cross section of the stuff one would find in the “real” world.

For example, if we were studying E15’s effect on cars and trucks from model year 2001 to the present day, we would start with a list of the top-selling cars during the time period and put together a cross section for our sample group. Ford F150 and Chevy Silverado, have been No. 1 and No. 2 overall forever, Toyota Camry and Corolla and Honda Accord and Civic are always top-selling cars. Dodge has the Ram pickup, Chrysler sold a lot of minivans, and I would probably have an Impala, a Taurus, something from Nissan, maybe a small pickup.

Actually that looks a little bit like the group of cars the U.S. EPA and U.S. DOE picked when they tested and approved E15. We would not do what was done in the Coordinating Research Council study, crc project number cM-136-09-1, which is widely used by E15 opponents to “prove” E15 isn’t safe.

The oil industry is pushing legislation that would prevent E15 from even being offered in retail fuel stations across the country, based on results from that test. Big Oil says the CRC test proves E15

will put “millions of vehicles at risk,” yet there weren’t even a million of the tested vehicles sold. The vehicle models used in CRC Project CM-136-09-1 make up about one-half of one percent of the total vehicle pool approved to use E15. The eight vehicles represent less than 1 million of the 180 million cars and light trucks sold in the united states in model years 2001 and newer.

Only one of the eight vehicles tested, the 2007 Dodge Ram, was among the top 10 vehicles sold in the United States since 2001, no F150 or Silverado, and none of the other cars and trucks mentioned above. Normally, a nonrepresentative sample like that would raise a red flag among scientists and elected officials. Or maybe it would raise an eyebrow of at least one member of the media. Yet, crc and oil industry representatives have been practically unchallenged in their characterization of crc project cM-136-09-1 as a test representative of the vehicle fleet in general.

In fact, the request for proposals for the study states clearly that the objective of the test was to determine engine durability on engines that “are deemed to be sensitive to the effects of E20.” They certainly got engines that were sensitive. But they were sensitive to any fuel, and had been long before E15. The vehicles chosen for the test—the 2001 Honda CR-V, 2002 VW Jetta, 2004 Scion xA, 2005 Chevrolet Colorado, 2007 Ford Edge, 2007 Dodge Ram, 2009 Dodge Caliber, and 2009 Chevy Aveo—were selected because they had a well-documented history of the type of

failure the test purported to be looking for, regardless of the fuel used in them.

Over 300 technical service bulletins (tsB) were issued by the manufacturers of the eight tested vehicles, many which described the exact problems that caused a “fail” grade in the CRC test. The Honda CR-V had TSBs showing rough idle, hard starting, poor engine performance, malfunction indicator lamps, evaporative emissions system issues and internal leaks. Scion xA had a TSB on clogged fuel injectors. Volkswagen issued TSBs on the 2002 Jetta for fuel system trouble codes, bad fuel mixtures, rough idle, significant loss of power or stalling and reduced performance. The Aveo had TSBs for reduced power and a check engine light, and the 2005 Chevy Colorado had a large number of the previously mentioned problems plus valve and valve seat problems and combustion leakage. GM even sent a letter to every Colorado owner telling them about the valve and leakage problems and the company extended its warranty to cover the likely repair.

it is clear that crc selected the vehicles and the test protocol because they knew there was a high likelihood of failure. The books were cooked and it’s in writing, easy to find. What is not clear is why the media and Congress seem to be cooperating with Big Oil in this obvious misrepresentation.

Author: ron lambertysenior Vice president,

american coalition for ethanol605-334-3381

[email protected]

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europe caLLinG

A Longer-term Perspective NeededBy Robert Vierhout

Bureaucratic organizations can be strange animals. i suppose that in every country on this planet, government departments often fight or ignore one another, whereas the principle should be to pursue synergy by working together.

In the many years I have worked in the Brussels regulatory environment, I have often noticed that the various directorates of the European Commission were fighting or working against each other as if they were warring tribes. One is not surprised when a directorate issues a statement or pursues an agenda that runs counter to what another directorate is doing or trying to accomplish. I can give many examples of these inconsistencies, but the most striking for me was the following series of events.

On Oct. 17, the european commission published a legislative proposal making a u-turn in its biofuel policy. the core of the proposal is to limit the use of conventional biofuels to 5 percent of the biofuels market. If this were to become a reality, conventional ethanol use by 2020 would be around 7 billion litres (1.8 billion gallons) at best.

One day earlier, the european Commission published a statement saying that by 2022 there would be a conventional fuel ethanol market of 14 billion liters.

And one week earlier, on Oct. 10, the Commission announced new targets for the eu to counter the decline of europe’s industrial base. I quote from the press release: “The market for biochemical products could be worth €40 billion ($52 billion) and provide more than 90,000 jobs by 2020.”

All this, within a week. As one of my colleagues said, “Should we laugh or cry?”

Government officials are no different from normal human beings, so inconsistencies will happen; especially if there are different services involved that are not fully aware, apparently, of what their colleagues are doing. Within a directorate one would expect more consistency, but this is not guaranteed either. Still, it’s difficult to understand why, less then three years after the publication of the Renewable Energy Directive, a bomb has now been put under investments requested by the Commission. And, already the Commission is working on a new energy and climate policy framework for 2030.

a document prepared for an orientation debate at the highest level of the Commission reveals that Europe still has to import 90 percent of its energy needs, one-third of which comes from russia. the transport sector is still the largest consumer of energy and biggest greenhouse gas emitter and its share of consumption is rising. Another remarkable fact presented in this document is that, to date, the netherlands and the u.K. show the lowest share of renewables in their energy mix. These two nations are at the forefront of demanding the highest possible

environmental standards for biofuels, but their relative share of fossil fuel is among the highest in the EU. It is ironic to read statements such as: “certainty about the long-term regulatory framework is needed,” “new opportunities for jobs and growth,” “investors need certainty and reduced regulatory risk.” We have seen this kind of language before, in documents previously drafted to justify targets for biofuels, yet now it no longer seems to apply to the biofuel sector.

Even so, it would not be wise to be cynical about this initiative and to discard it. After all, the present renewable energy law will cease to exist as of 2020, by which time many investments will still have not yet been repaid. Nor can we expect substantial volumes of competitive advanced biofuels in the market. Knowing that conventional ethanol is a building block to achieve cellulosic ethanol, from an agricultural point of view, the ethanol industry needs to lobby for post-2020 targets.

The Commission is planning to release a major policy paper or possibly even a bill by the end of this year, which means that our lobbying agenda has obtained a new dimension. Besides the fight to maintain a reasonable target until 2020, we also need to prepare the ground for what should happen beyond 2020. A long-term perspective on this is absolutely necessary. Without it the eu ethanol sector is doomed.

Author: robert VierhoutSecretary-general, ePURE

[email protected]

Page 19: April Ethanol Producer Magazine

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Page 20: April Ethanol Producer Magazine

20 | Ethanol Producer Magazine | APRIL 2013

business matters

Design Around PatentsTo Avoid Liability, Reduce RiskBy Andrew McCoy

you just received a letter from a technology provider, competitor or patent troll, demanding that you immediately stop production of your new ethanol processing methods and products or else face a patent infringement lawsuit. now what do you do? One available option is to design around a patent, with two goals in mind: to modify your product in a manner that avoids infringement liability altogether; and at the very least, to remove the risk of an enhanced damages award if it is later determined that your product infringes the patent.

A design-around analysis is always unique to the particular patent and product at issue. However, the following steps can be taken in any design-around effort:

1. Provide your intellectual property (ip) attorneys with a sample of the accused product and have them meet with the appropriate employees of your company to fully understand the accused product and how it works.

2. For any patent to be infringed, each and every element of at least one independent claim must be present in the accused device. Therefore, the most important aspect of any design-around

analysis is to thoroughly study the patent, the claims and the prosecution history to determine the meaning and scope of the patent claims and whether the inventors made a deal with the patent office to obtain their patent (a deal on which they cannot later renege).

3. say the patent claim refers to elements a, B, c and D. the most successful design-around is one that eliminates an element. If you cannot remove a part corresponding to one of those elements, you need to decide how to modify your current device to avoid infringement. the prosecution history of the patent can be highly relevant when modifying your product. For example, if the inventors have argued in court that their invention is novel because it includes element D, substantial modification to element D in your accused product could have a high likelihood of reducing infringement liability.

4. finally, your ip attorneys should ensure that the design modifications do not result in your product covering prior patents owned, perhaps, by another of your competitors.

The benefits of having a new design that avoids infringement are apparent. However, because the above analysis is conducted prior to a court decision on the meaning and scope of the patent claims, there is always a chance that your design-around efforts may still result in infringement.

But even under this worst-case scenario, evidence of your reasonable efforts to design around the patent can be enough to avoid enhanced damages.

Enhanced damages in patent litigation are appropriate when there is evidence that the infringement was willful, which is the case when there was an objectively high likelihood of infringement that was known, or so obvious that it should have been known, by the alleged infringer. Since you knew of the patent, your ability to rebut arguments that you willfully infringed will strongly turn on your evidence of your design-around efforts. Even if your design-around efforts ultimately are unable to avoid infringement, if done properly, they can significantly reduce the risk that you will be liable for any enhanced damages.

Designing around a patent is just one of many options available for reducing the risk of infringement liability and maintaining a competitive product on the market. Having competent, experienced IP counsel and ensuring they understand your product are keys to any successful design-around.

Author: andrew MccoyAssociate, Faegre Baker Daniels LLP

[email protected]

Page 21: April Ethanol Producer Magazine

Learn how getting the right product on the right acre can mean increased pro ts for you.www.pioneer.com/biofuels www.dppgraindesk.com

Page 22: April Ethanol Producer Magazine

22 | Ethanol Producer Magazine | APRIL 2013

People, Partnerships & Deals

BuSINESS BRIEFS

Critical Path Management LLC, a pro-vider of process consulting and construction management services for the ethanol and pro-cess industries, has added Peter Schrandt to its team. as project manager for the full range of cPm clients and services, Schrandt will ini-tially focus on business development activities with Arisdyne Systems Inc.’s controlled flow cavitation technology. cPm has been working with the company since 2009, introducing cli-ents to controlled flow cavitation systems for enhanced yield. Schrandt has worked at several ethanol plants, including Didion ethanol and United Wisconsin Grain Producers.

Edeniq Inc. has added Dan Michalo-poulos to its core tech-nology team. He brings more than 20 years of experience in both business and academia across chemical tech-nology and alternative fuel sectors to his new position. as a member of the technology team, michalopoulos will assume a pivotal role in the continued development and deployment of edeniq’s enzyme strategies. michalopoulos previously served as director of technology at ineos bio, where he was responsible for lead-ing a multidisciplinary team of engineers and scientists in designing an ethanol production process that couples biomass gasification with anaerobic fermentation.

Novozymes has announced an agree-ment to acquire Iogen Bio-Products, the industrial enzyme business of ottawa-based iogen corp. for $67.5 million, along with po-tential earn-out payments of up to $12.5 mil-lion. the deal provides novozymes with all commercial rights to iogen bio-Products’ ex-isting product portfolio, pipeline, facilities, and know-how. While novozymes will acquire all

of iogen’s industrial enzyme business through the deal, the acquisition does not include the purchase of assets that relate to iogen’s bio-energy process technologies. the transaction was expected to close in late February.

Proterro Inc. has added David Austgen as its first chief busi-ness development of-ficer. Austgen was pre-viously employed by luca technologies, a clean energy company. as chief development officer of the company, he headed the develop-ment of global partner-ships and acquisitions and divestitures in the U.S. austgen has also held a variety of positions within the Shell family of companies, including senior busi-ness and joint venture manager of alternative energy and biofuels at Shell Downstream inc., where he led biofuel business development in brazil during 2008.

israel-based Rosetta Green has entered into an agreement to sell most of its assets to Monsanto Co. for $35 million, including its intellectual property. rosetta Green’s core technology centers on micrornas, which are short rna molecules that regulate gene expression. the company uses its technology to develop plants with improved traits, such as drought tolerance and increased oil content. regarding biofuels, the company has several projects and collaborations, including those related to the development of corn, sorghum, castor bean, jatropha and soybean feedstocks.

brazil-based ETH Bioenergy, a com-pany of the odebrecht Group that produces ethanol, sugar and biopower, and Inbicon, a Danish company owned by DonG energy

Michalopoulos has a track record of bringing products and processes to market

Austgen has more than 25 years of experience in the chemical and energy industries.

Page 23: April Ethanol Producer Magazine

APRIL 2013 | Ethanol Producer Magazine | 23

Sponsored by

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

that has developed a cellulosic ethanol pro-duction process, have announced an agree-ment to bring second-generation ethanol to the brazilian market. the partnership will combine the industrial and commercial exper-tise of etH with the technology and know-how of inbicon to accelerate the development of technologies to produce ethanol and other products from lignocellulosic raw materials, including sugarcane bagasse. The first phase of the cooperation agreement covers, among other activities, joint research on the feasibility of ethanol production from sugarcane waste.

Valero Energy Corp. resumed opera-tions at its 120 mmgy ethanol plant in albion, Neb., during the first week of February, cit-ing improved margins. the facility was idled in mid-2012 for economic reasons. it is now operating at near nameplate capacity.

the RSB Ser-vices Foundation, the implementing entity of the roundtable on Sustainable biofuels, a global sustainability standard and certifica-tion system for biofuel production, has named Richard Palmer as a board member. Palmer is president and ceo of Global clean energy Holdings inc., multi-national biofuels and re-newable chemicals feedstock provider. He also serves as trustee and president of the center for Sustainable energy Farming. Palmer has more than 30 years of senior-level manage-ment experience.

Praj Industries has received an order

for an ethanol plant from Riopaila Castilla SA. the facility will be installed at the com-pany’s sugar plant at la Paila in the Valle del

cauca region of colombia. the order, worth $20 million, includes a state-of-the-art pro-cess plant to produce 400,000 liters (105,669 gallons) per day of ethanol from sugarcane juice and molasses feedstocks. the facility will feature Praj’s vacuum distillation and thermal integration with vinasse evaporation technolo-gies.

Guardian Energy Heron Lake LLC has signed an agreement to acquire the etha-nol production assets of Heron Lake Bio-Energy LLC, a 50 mmgy ethanol plant lo-cated in Heron lake, minn. the transaction also includes a 73 percent ownership interest in Heron lake bioenergy’s subsidiary agri-natural Gas llc, a pipeline company formed to construct, own and operate a pipeline to supply natural gas to the ethanol plant through a connection with the pipeline facilities of northern border Pipeline co. the facility be-came operational in 2007 and has 35 full-time employees. Guardian energy Heron lake is a wholly owned subsidiary of Guardian energy Heron lake Holdings llc, which is owned by al-corn clean Fuel cooperative, chippe-wa Valley ethanol co., Heartland corn Prod-ucts and KaaPa ethanol llc.

Global Partners LP has announced the acquisition of the Columbia Pacific Bio-Re-finery in clatskanie, ore., along with an onsite rail transloading facility serviced by the bnSF railway, 200,000 barrels of storage capacity, a deepwater marine terminal and a 1,200 food dock. Columbia Pacific Bio-Refinery is an idled 110 mmgy ethanol plant previously purchased by cascade Kelly Holdings llc, a subsidiary of JH Kelly Holdings llc, one of the con-tractors that built the Delta-t-designed plant. the former cascade Grain Products ethanol plant operated for approximately six months in 2008 before idling. The company filed for chapter 11 bankruptcy in 2009, and later changed to chapter 7.

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Page 24: April Ethanol Producer Magazine

24 | Ethanol Producer Magazine | APRIL 2013

Feb. 25—natural gas demand exploded last summer as low prices caused electric utilities to swap base load coal units for base load natural gas units. as the chart shows, the demand jumped by 38 percent in april 2012 compared to 2011. natural gas prices were at a 10-year low a year ago, creating fertile ground for price-induced demand. in may, demand was up by 40 percent compared to april 2011. even during the peak months of July and august, year-over-year demand was up by 10 to 15 percent. clearly, electric generation demand helped address inventory issues last summer and put the market in a relatively balanced position going into winter 2012-’13.

Will demand continue to increase this year or will we fall back to more normal levels? From 2008-’11, natural gas electric generation increased 4 percent per year on average, but grew by 21 percent be-tween 2011 and 2012. i don’t believe we will have another 20 percent bump in demand. i expect demand to drop somewhat, since i believe a fair amount of summer 2012 demand was tied to low gas prices and the heat across much of the U.S. Prices aren’t likely to drop below $2 per million btu as they did last spring since storage inventories are lower. in fact, natural gas prices are 22 percent higher today than last

year at this time. Without lower prices, it may not be economic for natural gas to displace coal. With respect to weather, i won’t even venture a guess!

Natural Gas Report

Corn Report

Normal summer natural gas demand expected this year BY CASEY WHELAN

Corn market factors push and pull, creating volatility BY JASON SAGEBIEL

COMMODItIES REPORT

Feb. 25—February brought volatility. corn traded in a 60-cent range as weather improved in argentina, exports waned and the in-vestment community shifted money away from commodities and into equities. Scattered rain showers brought minor relief to argentina’s corn crop. in February, the USDa lowered argentina’s corn produc-tion estimate from 28 million metric tons (mmt) to 27 mmt; though it is still above last year’s 21 mmt. the USDa increased brazil’s corn production by 1.5 mmt to 72.5 mmt. overall world ending stocks have increased to 118.04 mmt from last month’s 115.99. corn for export continues to decline, leading to an increase in the U.S. car-ryout. export demand dropped by 50 million bushels to 900 million bushels, compared to the past two years at 1.543 billion and 1.834 billion bushels. corn for ethanol demand remains unchanged at 4.5 billion bushels. Domestic demand continues to trump the market and should offer support until the new crop. the cash market remains firm on continued demand for corn for the feed and ethanol sectors, reflected in the cash market and the inversion of the corn spreads. In addition, the U.S. dollar index continues an uptrend, impacting corn. the market will be looking to the march 28 planting intentions for

prospects of new crop potential. in the meantime, old crop supplies will continue to be perceived as tight, supporting the market, though as mentioned, managed money has been in liquidation mode since november.

Page 25: April Ethanol Producer Magazine

APRIL 2013 | Ethanol Producer Magazine | 25

DDGS Report

Ethanol Report

DDGS demand strong, value relative to corn stays high BY SEAN BrODErICK

Ethanol prices soften despite gasoline rally BY rICK KMENt

COMMODItIES REPORT

DDGS Prices ($/ton)

LOCAtION APr 2013 MAr 2013 APr 2012

Minnesota 260 260 195

Chicago 285 282 215

Buffalo, n.Y. 267 275 230

central calif. 315 325 260

central fla. 309 309 228sOurce: cHs inc.

Natural Gas Prices ($/MMBtu)

LOCAtION fEB 22, 2013 fEB 1, 2013 fEB 1, 2012

nYMeX 3.28 3.23 2.68

nnG Ventura 3.40 3.57 2.34

CA Citygate 3.59 3.62 2.73SOURCE: U.S. Energy Services Inc.

regional Ethanol Prices ($/gallon) Front Month Futures (AC) $2.363

rEGION SPOt rACK

West coast 2.520 2.600

Midwest 2.350 2.650

east coast 2.480 2.841sOurce: Dtn

regional Gasoline Prices ($/gallon) Front Month Futures Price (RBOB) $3.080

rEGION SPOt rACK

West coast 3.358 3.455

Midwest 3.132 3.234

east coast 3.051 3.216sOurce: Dtn

Corn futures Prices (May Futures, $/bushel)

DAtE HIGH LOW CLOSE

feB 22, 2013 6.91 6.83 1/2 6.84 1/4

Jan 22, 2013 7.36 7.28 1/4 7.30 1/4

feB 22, 2013 6.42 3/4 6.30 3.41 1/4sOurce: fcstone

Cash Sorghum Prices ($/bushel)

LOCAtION fEB 22, 2013

fEB 22, 2013

fEB 17,2012

superior, neb. 6.68 6.68 6.07

Beatrice, neb. 6.58 6.58 6.12

sublette, Kan. 6.72 6.72 6.15

salina, Kan. 6.65 6.65 6.14

Triangle, Texas 6.63 6.63 6.34

Gulf, Texas 7.13 7.13 6.75

SOURCE: Sorghum Synergies

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

PEr DAY MONtH END StOCKS

Dec 2012 838 25,971 20,677

nOV 2012 840 25,189 20,174

Dec 2011 959 29,718 18,238SOURCE: U.S. Energy Information Administration

Feb. 25—the month of February was characterized by a strong surge in gasoline price levels. Gasoline prices in some areas of the country were near-ing $4 per gallon, with expected spring and summer demand spiking additional interest in the market. With this trend, prices surged over 50 cents per gal-lon since posting the seasonal low in December. at the same time, ethanol futures prices remained flat. Typically, gasoline prices do not rise this quickly nor see spikes this early in the year. ag-gressive buying activity in gasoline mar-kets came as overall inventory levels ran well above last year’s levels.

in most of the market, however, the focus was on aggressive demand

support through the next couple of months. even though the market is still showing signs of strong seasonal price shifts, the most recent moves in the market have put prices under pressure as concerns grow that the higher pric-es may squelch demand. any demand losses will not only be damaging for the rbob gasoline market through the rest of the spring and summer, but will also create additional challenges for the ethanol market. ethanol stocks still re-main strong, but have been aggressively reducing the glut seen over the past year. Strong gasoline demand through the spring and summer is needed to keep the ethanol market firm.

Feb. 25—February was a high-vol-ume trading month for DDGS, as etha-nol plants had pretty good windows of margin lockups. With corn futures drop-ping, and distillers grains prices steady, the percentage of corn value that DDGS achieved stayed at the very upper edge of the historical range. Demand has been very strong domestically, particularly in the southeast markets that are having difficulty sourcing enough corn. Cattle demand has been very robust, particu-larly in the southern plains. most of the meat producers are at least at break-even, if not better, margins. asian demand has also been very strong, manifested as high prices for chicago containers. DDGS barge demand in the U.S. Gulf has lan-

guished since november, but is now picking up. the opening of the river in march will create additional nearby de-mand, especially since river levels are not as alarming as they were in December and January.

ethanol plants are seeing oppor-tunities in the october and november markets. there is more deferred DDGS traded for fall than in the past couple of years, trading at levels higher than 100 percent the value of corn. it seems those trades are only limited by the amount of corn the plant can lock up.

looking ahead, corn volatility will affect prices for april forward. a lot of the tonnage produced in march was trad-ed well before.

Page 26: April Ethanol Producer Magazine

26 | Ethanol Producer Magazine | april 2013

event

1

7

3 4

Page 27: April Ethanol Producer Magazine

april 2013 | Ethanol Producer Magazine | 27

event

National Ethanol Conference 2013More than 1,100 people attended the National Ethanol Conference held Feb. 5-7 in las Vegas.

PH

OTO

: RFA

/DO

ME

STI

CFU

EL.

CO

M

1 Bob Dinneen, president and CEO of the Renewable Fuels Association, left, moderates the Washington Legislative Roundtable panel.

2 Shell representative John Reese says Shell doesn’t believe the RFS should be repealed but does have serious concerns about the blend wall.

3 Scott Zaremba, owner of seven gas stations offering E15, accepts the Industry Award from RFA’s Bob Dinneen.

4 Shane Chrapko of Himark bioGas talks shop at his company’s booth.

5 NEC attendees gather at a networking reception in an outside area of the Wynn Las Vegas.

6 Radio’s Car Clinic host Bobby Likis fields automotive questions. He wears the “Don’t Mess with the RFS” button handed out to attendees and worn by many.

7Geoff Cooper, RFA vice president of research and analysis, leads a panel discussion on the future of the RFS.

8 Tom Vilsack, secretary of agriculture, speaks about the entrepreneurship and innovation of the biofuels industry.

5

8

2

6

Page 28: April Ethanol Producer Magazine

distillEd Ethanol News & Trends

Bob Dinneen, president and CEO of the Renewable Fuels Association, opened this year’s National Ethanol Conference by stress-ing that although times are tough, the industry is tougher. The industry faced one of its most challenging years in history during 2012. Mov-ing into this year, Dinneen noted that ethanol producers will face fierce battles in defending E15 and the renewable fuel standard (RFS).

“Together, we remain resolute,” he said. “Together, we will see E15 commercialized. Together, we will open new markets here and

abroad. And, together, we will make sure the RFS is preserved—because we will never, ever let them mess with the RFS!”

Despite the attacks being waged on etha-nol by Big Oil and food manufacturers, nation-al polling commissioned by the RFA clearly demonstrates that an overwhelming majority of Americans support the RFS. Kinda DiVall, president of American Viewpoint, presented the results of the poll, which was conducted by her company, during the annual event.

industry faces E15, RFs battles in 2013

Vilsack reaffirms support for ethanol

Agriculture Secretary Tom Vilsack reiter-ated his support for the ethanol industry and renewable fuel standard (RFS) at the Renewable Fuels Association’s 2013 National Ethanol Con-ference, “Our position is that we are strong sup-porters of the RFS,” he said. “It’s working, it’s doing what it’s supposed to, and it has helped to build this industry.”

Vilsack pointed to 2012 grain-ethanol production numbers, as well as progress in the advanced biofuels industry, as it ramps up to commercial production. “[The RFS is] is work-ing and we would hope that Congress would continue to let it work,” he said.

The cellulosic biofuel industry is also poised for significant growth this year. “I think we are at that tipping point where we are actually going to see results and I think that’s going to take some pressure off,” he said, noting that 10 to 14 million gallons of cellulosic biofuel is set to be produced this year.

©2012 Buckman Laboratories International, Inc.

Scaling back costs.How a U.S. ethanol plant cut acid usage and evaporator cleaning frequency by switching to Bulab® 8301 scale control from Buckman.

The challenge.A Midwestern ethanol plant relied heavily on sulfuric acid to lower pH. Unfortunately, acid availability was tight, driving costs up significantly.

The solution.Buckman applied FDA-allowed Bulab® 8301 just ahead of the first evaporator resulting in outstanding scale control and process pH control.

The savings.

optimize water balance and backset usage.

Find out more.®

contact your local Buckman representative. Let us give you a story worth telling.

Favor Oppose Don't know

Do you favor or oppose the RFS? 64% 25% 10%

Do you favor or oppose government incentives for cellulsoic ethanol? 64% 24% 11%

Do you favor or oppose tax incentives for oil companies? 25% 63% 11%

Do you favor or oppose requiring auto manufacturers to build cars that will run on sources other than oil?

76% 20% 4%

SOuRce: Renewable FuelS aSSOciatiOn

Page 29: April Ethanol Producer Magazine

april 2013 | Ethanol Producer Magazine | 29

distilled

Proposed Nd plant gains EPA approval

Dakota Spirit AgEnergy has earned renew-able fuel standard (RFS) certification from the U.S. EPA for its proposed 65 MMgy facility at the Spiritwood Energy Park near Jamestown, N.D. Groundbreaking for the biorefinery is scheduled for mid-year.

Under the RFS, corn ethanol facilities built after 2007 are required to produce fuel with a life cycle carbon intensity 20 percent lower than con-ventional gasoline in order to generate renewable identification numbers.

Dakota Spirit AgEnergy is a wholly owned subsidiary of Great River Energy. The ethanol plant will be constructed adjacent to Great River Energy’s Spiritwood Station, a combined-heat-and-power plant that will provide heat and power to the ethanol facility.

Future growth opportunities for the etha-nol plant are also being explored with emerging technologies, including cellulsoic, isobutanol and other biofuel processes.

Although the ethanol industry faced major challenges in 2012, producers met those challenges by producing an estimat-ed 13.3 billion gallons of ethanol, employing more than 383,000 people directly and indirectly, and con-tributing $43.4 billion to the U.S. gross do-mestic product.

“Despite the weather and declining gaso-line consumption, our domestic, homegrown industry kept up production, continued to im-prove the environment and helped reduce our dependence on foreign oil,” said Bob Dinneen, president and CEO of the Renewable Fuels Association in a statement.

The RFA has published a 30-page indus-try outlook, titled “Battling for the Barrel,” that features annual statistics related to production capacity, ethanol production, coproduct value, exports, greenhouse gas emissions, advanced biofuels, and a variety of other factors. The statics clearly demonstrate the progress made by the industry in recent years.

Report highlights ethanol industry’s resilience

©2012 Buckman Laboratories International, Inc.

Scaling back costs.How a U.S. ethanol plant cut acid usage and evaporator cleaning frequency by switching to Bulab® 8301 scale control from Buckman.

The challenge.A Midwestern ethanol plant relied heavily on sulfuric acid to lower pH. Unfortunately, acid availability was tight, driving costs up significantly.

The solution.Buckman applied FDA-allowed Bulab® 8301 just ahead of the first evaporator resulting in outstanding scale control and process pH control.

The savings.

optimize water balance and backset usage.

Find out more.®

contact your local Buckman representative. Let us give you a story worth telling.

RFA highlights growth of ethanol in outlook report

Page 30: April Ethanol Producer Magazine

The U.S. Grains Council has issued its 2012 Annual Report, showcasing data and success stories from 2012. One achievement highlighted by the council is its successful work with Algeria and Morocco to remove the value-added tax and custom tax from all feed imports. According to the USGC, those taxes put a damper on U.S. exports of distillers dried grains with solubles (DDGS), corn and corn gluten feed.

The USGC also responded to a trade-dis-rupting issue in Vietnam last year that involved a shipment of DDGS that contained insects on its quarantine list by ensuring trade rules were followed and educating import inspectors about DDGS. Additional success stories cited by the council include China terminating its anti-dumping investigation against U.S. DDGS and Canada agreeing to delay grain import re-quirements.

distilled

Report highlights ddGs export data

Energy alternatives company NEAtech re-cently received a patent for its process, which con-verts distillers grains and spent brewers grains into ethanol and other commercial products, such as pelletized fuel, biogas, fertilizer and livestock feed.

The process has been tested at laboratory- and bench-scale with the assistance of Novo-zymes, Danisco and the National Renewable Energy Laboratory. The company’s next step is to demonstrate the technology at the pilot-scale. Pending financing, that work could be completed at the National Corn-to-Ethanol Research Center.

The goal is to confirm the yields already demonstrated at bench scale and complete final engineering. NEAtech then intends to license the process to existing corn-ethanol producers that are interested in adding a bolt-on system to pro-duce cellulosic ethanol. Wet distillers grains fed into the process could produce 10 to 12 percent additional ethanol, resulting in a higher protein animal feed.

ddGs-to-cellulosic ethanol process wins patentTop DDGS Customers

country Metric tons Percent

china 2,233,038 29.50%

Mexico 1,534,214 20.30%

canada 644,980 8.50%

Vietnam 455,934 6.00%

Korea 339,962 4.50%

Japan 337,553 4.50%

taiwan 239,895 3.20%

indonesia 179,627 2.40%

thailand 178,627 2.40%

Philippines 145,981 1.90%

Others 1,256,560 16.70%SOURCE: U.S. GRAINS COUNCIL

Page 31: April Ethanol Producer Magazine

april 2013 | Ethanol Producer Magazine | 31

The U.S. EPA has published renewable identification number (RIN) data for all 12 months of 2012. A total of 20,069 cellulosic biofuel (D3) RINs were generated last year, all in April. Ethanol producers also generated nearly 588 million advanced biofuel (D5) RINs in 2012, in addition to more than 12.97 billion renewable fuel (D6) RINs.

According to the EPA, all 20,069 cel-lulosic biofuel RINs were generated domes-tically, as were the more than 12.91 billion renewable fuel RINs. Only 50.82 million ad-vanced biofuel RINs were generated domes-tically, with more than 559.98 million gener-ated for imported fuel. That figure includes both all biofuels categorized as advanced bio-fuels, including ethanol and biodiesel.

As of the end of the year, the EPA reported that nearly 12.19 billion separated renewable fuel RINs and more than 686.08 million assigned renewable fuel RINs were available.

distilled

In early February, the U.S. EPA approved a new pump configuration for the sale of E15 and E10. The configuration, submitted by the Renewable Fuels Association, is applicable to re-tail stations that wish to dispense E15 and E10 from a blender pump with a common hose and nozzle.

EPA previously approved an industry-sub-mitted configuration that required a minimum purchase of 4 gallons of fuel from a blender pump supplying both fuels. The 4-gallon mini-mum was set to ensure that residual fuel from prior E15 fueling left in the hose didn’t cause inadvertent misfueling of vehicles not covered by the partial waiver for E15.

The new configuration overcomes the is-sue of the 4-gallon minimum by providing a dedicated pump that offers only fuel with 10 percent or less ethanol. Signage posted by the retailer would alert customers to availability of a dedicated pump. In addition, labels on the E15 dispensers would specify the fuel is for use in passenger vehicles only.

EPA approves new E15 fueling configuration

EPA publishes 2012 RiN data

Biofuel production in 2012

Fuel type Gallons

cellulosic biofuel 20,069

biomass-based diesel 1.14 billion

advanced biofuel 602.55 million

Renewable fuel 12.97 billion

cellulosic biofuel 1,024SOURCE: U.S. EPA MODERATED TRANSACTION SySTEM INFORMATIONAL DATA

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When the National Corn-to-Ethanol Research Center was established on the campus of the University of Southern Illinois in 2003, the industry had not yet grown to 100 plants and the renewable fuels standard was still a concept being formulated by industry policy wonks. Four short years later, the Energy Independence and Security Act of 2007 laid a gauntlet at the feet of the industry and NCERC, calling for 36 billion gallons of biofuels in the transportation fuels market by 2022, the majority of required gallons coming from production pathways not yet deployed at commercial scale. Today, John Caupert, director of NCERC, and his team are working to improve existing production techniques while also working with private partners to test and perfect cellulosic and advanced ethanol production pathways. He’s confident the processes being developed by his team in collaboration with private clients will one day yield the advanced biofuels gallons the industry has been called to deliver.

You grew up on a grain farm in southern illinois. How did that experience shape you personally and professionally?

Growing up on a farm made me the person I am. From a very young age, I learned the importance and value of dedication, discipline and hard work. I learned to not expect a reward or an entitlement simply because you exerted physical effort. During the 1980s, when I was a teenager, I watched my parents paying interest rates of 20 percent on money borrowed for operating loans and other items of necessity to the farming operation. So, I not only learned the value of a dollar, I learned to appreciate the value of a dollar. When thousands of farmers across the

country were going out of business, through no fault of their own, my parents not only held onto the farm, they put me and my two sisters through college at the same time. So, in addition to all those other learned values, I was able to recognize the importance and value of an education, regardless of economic or socio-economic status.

What is the best argument for continued and robust research in corn ethanol production?

I feel there is no argument necessary. Far too often, particularly as of late, it

seems like the corn ethanol industry has been forced to defend itself. Defend

itself for what? We have nothing to be defensive about. Our industry should always be on the offensive.

Why? We have the best story anyone could possibly tell. We have a story of

job creation. We have a story of being the economic engine driving rural America. We have a story of reducing dependence on foreign oil. We have a story of enhancing our national security. I have something much better than an argument—I have an ongoing story of success.

What role does NCErC play in the continued advancements being made in this industry?

NCERC is a living testimonial that public/private partnerships can work. While the taxpayer built the NCERC, it was built to be utilized by the private sector, which we are doing. More than 50 technologies, now in the commercial marketplace, passed through the doors of our facility in the first 10 years of our existence.

As policy has evolved, and industry has evolved, the NCERC has evolved. We have conducted 15 contractual advanced biofuels client projects in a

Corn Story Takes the CakeJohn Caupert pilots the National Corn-to-Ethanol research Center, now in its 10th year as an industry research partner.

iNtERViEw by tiM PoRtz

Q & A

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row, complimented by our own in-house cellulosic research on corn bran conversion to ethanol. We are proud to no longer be the best kept secret in the biofuels industry, as we are now known as one of the most capable assets to the biofuels industry.

How has NCErC’s research in corn bran-to-ethanol progressed recently?

The research has been going very well. We have repeatedly been called upon by the private sector, as well as the public sector, to discuss our efforts in this area of research. We have repeatedly met with members of President Obama’s administration to discuss the successes of the corn bran-to-ethanol research.

Corn bran is the most common, but often the most forgotten, form of cellulose. Corn bran is present at every corn ethanol plant in operation. A major benefit of corn bran is that it requires no special methods of harvest, it requires no special methods of handling and it requires no special methods of transport. Corn bran is already there. For the cellulosic feedstock community, we feel that with successful conversion of corn bran to ethanol the floodgates of opportunity will be opened for numerous other sources of cellulose.

if bran-derived ethanol could be classified as an advanced biofuel and this technology were perfected and deployed across the existing production platform, we’d be looking at hundreds of millions of gallons of cellulosic ethanol. are you hopeful the Epa will amend its position on not allowing the advanced biofuels classification for corn-derived ethanol gallons?

We feel that if corn as a feedstock can compete, it should be allowed to compete. Yes, we would like to see the EPA classify this ethanol as an advanced biofuel. Technologies such as fractionation, anaerobic digestion, conversion of corn bran to ethanol and numerous others have proven to not only compete, but are in some cases better than the standards that have been set. It is time for the playing field to be level, it is time for corn to have an equal opportunity to compete as a feedstock.

recognizing that some of the ongoing research at NCErC is for private clients and protected by nondisclosure agreement, what are some of your current efforts that you and your team are really excited about?

If only we could directly answer that question. We are very proud of the non-disclosure agreements we have in place with every one of our private sector clients. This is evidenced by the fact that today more than 93 percent of our revenue is generated via contractual research we conduct for the private sector. I guess you could say, we are doing a great job for our clients and we are doing a great job of keeping our mouths shut about our clients. That being said, we are very excited about the contractual work we have been doing in the advanced biofuels and specialty chemicals market space. There are numerous technologies that are marketready today. These technologies are simply waiting for market-entry opportunity.

How does the corn ethanol industry guarantee itself a spot at the table for the eventual cellulosic ethanol buildout?

We have to stay united, we have to stay focused and we have to stay committed. There

are opponents to our cause and our efforts, but generally, their story is old and tired, while ours is not. As an industry, we may be small in numbers, yet we are giants in the impact we are having on the well-being of this nation. All 300 million Americans are benefiting from our nation’s biofuels production and utilization. At times, we may be called upon to inform others that, if not for corn ethanol, there wouldn’t be a cellulosic ethanol industry.

At NCERC, we are confident we are leading the campaign to commercialize cellulosic ethanol, and we are 100 percent confident this will be accomplished by beginning with the purest form of cellulose that exists—corn bran.

Crystal ball time. When NCErC celebrates 20 years in 2023, what role will it be playing in an industry that by then will be asked to deliver 36 billion gallons of ethanol to the U.S. fuel market?

As the industry continues to evolve, as it will in order to reach the 2022 requirements of the RFS, NCERC will continue to be on the forefront as the recognized source for third-party, proof-of-concept technology testing and validation. Our contractual work, with the private sector, will be complimented by our in-house research unit, leading the way in cellulosic ethanol and advanced biofuels discovery. By 2022, the industry will, perhaps, be in a state of evaluating means by which to maximize efficiencies of production of advanced biofuels. NCERC has always been perfectly positioned to evaluate, consult and test methods to maximize production efficiency, and we will continue to be positioned in this manner for decades to come.

Q & A

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sorghum

PHOTO: UNITED SORGHUM CHECkOFF PROGRAM

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sorghum

Drought and the U.S. Epa have given the underdog crop a big boost.by susANNE REtkA sChill

Sorghum Readies to Advance

Sorghum’s natural mech-anisms to resist drought shone through last year in the High Plains, reigniting interest in the well-known crop. The bigger news in sorghum circles, though, is the U.S. EPA’s deter-mination that grain sorghum, in tandem with specified greenhouse gas (GHG) reducing technologies, qualifies as an advanced biofuel, earning the coveted D5 renewable identification number (RIN).

Western Plains Energy LLC, of Oakley, Kan., is the first ethanol pro-ducer poised to capture the D5 RINs for grain sorghum-based ethanol. The company received its letter of determi-nation from the EPA in late December just days before it started up its new $40 million anaerobic digester, fed by manure from nearby feedlots and other

biomass. It takes several weeks for the digester to produce enough biogas to switch the boilers over and turn off the natural gas, so the company didn’t expected to register for D5 RINs in March.

The story behind sorghum’s ad-vanced biofuel pathway reveals much about the ethanol industry’s evolving relationship with the EPA. Sorghum growers were part of the discussions when the renewable fuels standard (RFS) was revised in 2007, explains Tim Lust, CEO of the National Sorghum Producers. In the end, getting the corn and soybean life-cycle analyses and in-direct land use change impacts figured out took priority and the EPA pub-lished its rule without sorghum. “We’ll handle this in a supplement,” Lust says the EPA told the sorghum producers. “It ended up being a very long process.

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sorghum

Fuel Type Grain Sorghum EthanolProduced in plants that use only biogas (from landfills, waste treatment plants, and waste digesters) for process energy and on-site electricity production, except for 0.15 kwh of electricity from the grid per gallon of ethanol produced and 100% dry DG

Western Plains Ethanol Pathway RFS 2005 Gasoline Baseline

net agriculture (w/o land use change), Domestic and international

12,698 12,522

land use change, Mean (low/high), Domestic and international

27,620 (16,196/41,903) 27,317( 16,/41,445)

Fuel Production 1,612 5,211 19,200

Fuel and Feedstock transport 4,276 3,614 *

tailpipe emissions 880 880 79,004

total emissions, Mean (low/high) 47,086 (35,662/61,369) 49,545 (38,246/63,672) 98,204

Midpoint life-cycle GHG Percent Reduction compared to Petroleum baseline

52% 50%

*emissions included in fuel production stage.

sourCe: u.s. ePA letter of determination, Western Plains ethanol Pathway, 2022

Life-cycle GHG Emissions for Western Plains Ethanol Pathway, 2022(gram cO2 equivalent per mmbtu)

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sorghum

And, like corn and soybeans, most of our challenges came down to the indirect land use component,” he adds. Sorghum’s carbon foot-print on the domestic side was very good, he continues, but, at one point, the international land use change component for sorghum was twice that of corn. “We were able to work with EPA and with different scientists to work through the process,” Lust says.

EPA published its final determination on a pathway for grain sorghum in December, not long before Western Plains’ separate pathway was approved. The two-year-plus wait, however, between the EPA publishing its first set of rules for RFS2 in 2010 and com-pleting the sorghum pathway, was not a huge problem for existing producers who were grandfathered in just as corn ethanol produc-ers were. The newly published pathways mean new dry mill facili-ties fired with natural gas and using grain sorghum will meet the 20 percent GHG reduction threshold to qualify as renewable fuel in the RFS. The real excitement was generated by the ruling that grain sorghum ethanol achieves a 50 percent reduction in GHG emis-sions to qualify as an advanced biofuel when production facilities use only biogas for process energy, utilize mostly on-site electricity production and dry 100 percent of the distillers grains.

Western Plains joined other sorghum-ethanol producers and the National Sorghum Producers to get the EPA pathway estab-lished. With the knowledge of what would be required by the EPA

for the advanced pathway, and with no plans for adding combined heat and power (CHP), Western Plains petitioned for its own path-way in September 2011.

“We’re virtually totally wet distillers,” explains CEO Steve Mc-Ninch, which provides significant energy savings compared to the main pathway. Western Plains also collected data from a pilot-scale digester to use in its petition as construction on the Himark bioGas system proceeded. The data documented the GHG efficiencies gained both from co-location and minimal biogas cleanup involv-ing the removal of just water and hydrogen sulfide. Western Plains uses it essentially raw in specialized burners able to compensate for gas quality and variability. McNinch explains the system eliminates several energy-intensive steps required for biogases, such as landfill gas, that must have gases other than methane removed, meet a Btu content regulation and be compressed for delivery by pipeline.

While providing its own process data, Western Plains didn’t have to start from scratch. In its letter of determination, EPA ex-plained the Western Plains pathway built upon the feedstock mod-eling that was done as part of the sorghum rule along with the emissions impact modeling used as part of the March 2010 RFS rule. Modifications to the pathway were based on Western Plains’ conversion efficiency as well as mass and energy balances. The plant’s data, supplied with a confidentiality agreement, was used

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Sweet Progress Mick Henderson has gotten a good look at how sweet

sorghum juice might be integrated into the corn ethanol process. coming in at about 12 percent bRiX (a measure of sugar content), an 80,000-pound truckload displaced about a third of a truckload of corn in the process at commonwealth agri-energy llc, a 33 MMgy plant in Hopkinsville, Ky. Sweet sorghum sugars are fermentable as is, but with the concern that bacteria or wild yeast may come in with the juice, the plant’s general manager says they added it at the liquefaction phase to sanitize. the juice performed as expected, Henderson adds, with close attention paid to both sugar content and water balance. He’s ready to try more. “i said, ‘next year, get me 30 truckloads in 30 days or less.’”

commonwealth’s partner in the experiment, Delta bioRenewables llc, of Memphis, tenn., is aiming to diversify the region’s agriculture base and create new businesses in the mid-South. creating a new industry is no easy task. Delta bioRenewables is simultaneously working on sweet sorghum variety trials, agronomics and processing technology as well as providing samples to potential end users. the company’s model is to recruit enough farmers to grow between 2,500 and 5,000 acres in proximity to facilities manufacturing renewable fuels, biobased products or specialty foods. the company has potential partners in seven states, says Pete nelson, director of business development.

as the manager of a farmer-owned cooperative, Henderson says, “i’m not out to displace corn acreage, but we have marginal acres where the sweet sorghum crop might work out well for the farmer.” He can envision sweet sorghum processing being co-located with the ethanol plant, with sweet sorghum juice providing both sugars and water for the facility. “i’ve only talked 5 MMgy [ethanol from sweet sorghum] for a plant our size,” he says. “that’s like 2,500 acres and that’s a good place to start with the farmers.”

Just how quickly sweet sorghum could take off will depend upon whether it achieves an advanced biofuel designation from the u.S. ePa. the united Sorghum checkoff Program expects to complete the ePa petition by late spring. while it would appear easily analogous

to brazilian sugarcane, an already designated advanced biofuel, sweet sorghum has unique issues. Sugarcane’s rating depends partly upon the burning of the bagasse for power and heat. the target market for sweet sorghum bagasse is feed, which requires documenting its feed value and the displacement of other crops for the lifecycle analysis. Sweet sorghum currently yields about 20 tons per acre on nonirrigated land, nelson says, and university analyses indicate it should yield about 500 gallons of ethanol per acre. He adds that new varieties in development are boosting yield expectations closer to 30 tons per acre.

Delta bioRenewables isn’t the only one working on sweet sorghum-to-ethanol. in Florida, Southeast Renewable Fuels llc is expecting to break ground this spring on a long-planned 20 MMgy plant in clewiston, Fla. the company had hoped to break ground in 2009 on the first of three plants in the region with a goal of 100 MMgy of capacity.

sorghum

Prototype Showing CaseIH demonstrates its prototype sweet sorghum harvestor at Delta BioRenewable's research farm near Memphis, Tenn.

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Source: IcM

sorghum

in the EPA’s modeling to determine Western Plains’ GHG impact achieves a 50 percent reduction compared to the baseline gasoline emissions. The EPA letter of determination and supporting com-ments explains that Western Plain’s better-than-average ethanol yield “results in 1 percent more Btus of fuel produced for the same amount of grain sorghum feedstock,” and goes on to de-scribe the ripple effect in being able to scale back not only the ag-ricultural sector impacts for feedstock production, but direct and indirect emissions.

With the EPA approval, Western Plains has additional daily reporting requirements to verify compliance as it applies for RINs on its production. The payback for the Kansas producer comes in the added value for D5 RINs. “Last year [the RIN value] was as high as 90 cents a gallon and its low point was 30 cents a gallon,” McNinch says. The payback time for the company’s substantial investment in the anaerobic digester will depend on just where those RINs credits average out. “From pure gas alone, it will be a seven- to eight-year payback,” he adds.

McNinch says apprehensions about working with the EPA are misguided. “The EPA has been very helpful and a willing partner. They want the industry to be successful,” he says. “Whatever fears [many in the ethanol industry] have of the EPA, I think they can set them aside. If you’re willing to be a partner with them, they’re willing to sit down and discuss what needs to be done. They were very helpful with the process.”

More CandidatesWhile the Kansas-based ethanol producer is the first, it won’t

be the only grain sorghum ethanol producer of advanced biofu-els for long. Like Western Plains, Aemetis Advanced Fuels Keyes Inc. in California’s Central Valley sells only wet distillers grains.

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Feedstock Alternative Ethanol plants in the High Plains have long used drought-tolerant grain sorghum (also called milo), including Diamond Ethanol LLC in Levelland, Texas.

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sorghum

Mule vs. Quarter HorseSorghum’s performance in high heat

and drought has many taking a second look, explains ismail Dweikat, sorghum geneticist at the university of nebraska-lincoln. Sorghum goes into dormancy under severe drought and has several mechanisms to conserve moisture while waiting for rain. it will generate more roots in dry conditions to enhance the plant’s ability to search for water. it has wax on its leaves and stems to reduce moisture loss, as well as narrow leaves and the ability to fold the leaves in on themselves—all strategies to conserve moisture in both heat and drought stress. Sorghum has other positives, including a seed cost at a fraction of corn’s and its low water requirement, a plus in places where water for irrigation is costly or scarce. “if you classified crops like animals, corn would be like a quarter horse that would run and run until it runs out of water, then die,” says Steve Mcninch, ceO of western Plains energy llc, which has used grain sorghum for years. “Milo is more like a mule. it will actually sit and wait for moisture. it has to rain for it to finish but it not only likes heat but it needs heat.”

the Kansas corn crop was devastated by high heat during the critical pollination period last year—temperatures topped 117 degrees Fahrenheit, Mcninch says. Heat isn’t

an issue for sorghum. “On a really wet year, sorghum isn’t going to yield like corn. but on a normal year or below average year, sorghum is going to perform better than corn.” in Kansas, the starch levels in locally grown corn are not as high as in the heart of the corn belt, Mcninch explains, and given sorghum’s usual discount to corn, it is a cost-effective feedstock. Sorghum and corn perform the same in the ethanol process, he adds, with the main difference being the addition of a third enzyme, a protease to treat tannins. “we’ve never been able to measure a difference in conversion rate,” he says, adding that there is a slight difference in the protein levels of the resulting distillers grains. the two grains are so similar, in fact, that western Plains stores them in the same bin.

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biofuels at its 60 MMgy Stockton, Calif., plant, but expects it will take more time than its neighbor in the Central Valley. “There are some hurdles to overcome,” reports Paul Koehler, vice president of corporate devel-opment. The company expects to gain yield and energy efficiencies when Edeniq Cel-lunator technology is brought online mid-year, but it will also need to consider CHP and biogas. “There are a number of dairies in the region that would provide manure for biogas,” he says. “And we feed a lot of those cows.”

In the plains, Chris Standlee, executive vice president, reports Abengoa Bioenergy is evaluating the possibility of producing ad-vanced biofuel. Its plants in Colwich, Kan., and Portales, N.M., have long histories of using grain sorghum almost exclusively, he

says, and other facilities are being evaluated as well.

Twelve to 17 U.S. plants routinely use sorghum, says Lust, of the National Sor-ghum Producers. Of those, Kansas Ethanol LLC, Nesika Energy LLC and Conestoga Energy Partners LLC, which has three plants in Kansas and Texas, are some examples of those seriously considering pursuing the ad-vanced biofuels pathway. “Each plant is go-ing to have to look at the pathway and break the numbers down and see what the value is,” he adds.

Author: Susanne Retka SchillContributions Editor, Ethanol Producer Magazine

[email protected]

sorghum

Unlike Western Plains, which invested in a digester for renewable power, the Praj-designed plant built in 2008 does have CHP installed. Andy Foster, president and chief operating officer, says the com-pany expects to register for D5 RINs by midyear, initially under the EPA rule for grain sorghum as a petition for a separate pathway is prepared.

Aemetis did a successful trial run us-ing sorghum this past year and is working to source feedstock both internationally and domestically. The company is nego-tiating a supply agreement for landfill gas to power the steam turbine that gener-ates electricity and process heat for the 55 MMgy plant. And, it is in discussions with EPA regarding other pathway re-quirements.

“It may require some additional en-gineering studies,” Foster says. “We have CHP and how much electricity that we take off the grid is important in the EPA rule.” In the rule, the amount of electric-ity purchased from the grid is limited to no more than 0.15 kilowatts of electric-ity per gallon of ethanol produced. Fos-ter explains that due to the sheer cost of a steam turbine, the plant doesn’t have the built-in redundancy typical for other plant systems. Thus, whenever they do routine maintenance, the plant switches to the grid.

An engineering study to document the plant’s actual performance is under way, Foster adds. Aemetis’ long-term goal is to use the study to achieve a lower carbon intensity score for the California low carbon fuel standard and a separate pathway with the U.S. EPA. While landfill gas is available, he explains, it is expen-sive and the company anticipates other efficiencies, once documented, will per-mit a much lower percentage of biogas usage. Aemetis is considering other tech-nologies further down the road, such as using a biomass boiler.

Pacific Ethanol Inc. also used grain sorghum for the first time in 2012 and is aiming towards producing advanced

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PoWer

In Action The CHP system at Adkins Energy LLC includes, from left to right, a natural gas-fired boiler, the diverter belt and the turbine. Inset, Southwest Iowa Renewable Energy LLC is co-located with a power plant, back left.

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power

recent developments could spark renewed interest in CHp technology.By Holly JEssEn

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In 2008, when the U.S. ethanol in-dustry was in the midst of its build-out phase, the U.S. EPA identified it as one of four strategic markets well-suited for combined heat and power (CHP). “Given the massive construction activity in this sector, the time is right to integrate CHP into new and expanding dry mill ethanol facilities and to ensure that CHP is part of the base design for future cellulosic ethanol biorefiner-ies,” the EPA said.

The reality today, however, is that only a small percentage of U.S. ethanol plants have implemented the technology, also known as cogeneration. ICM Inc., which designed and built a large percentage of the ex-isting plants, lists 10 ICM facilities with CHP in place, including Adkins Energy LLC and Southwest Iowa Re-newable Energy LLC, as two examples. In addition, Poet LLC, the largest dry mill ethanol producer in the U.S., utilizes CHP at four of its 27 facilities. Ethanol facilities utilizing CHP have configured the systems in a variety of ways, including on-site CHP or capturing waste heat from an adjacent industrial facility.

Page 44: April Ethanol Producer Magazine

44 | Ethanol Producer Magazine | april 2013

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CHP is an integrated energy system that: • is located at or near a facility • generates electrical and/or mechanical power • recovers waste heat for heating, cooling, dehumidification • can utilize a variety of technologies and fuels • is also referred to as cogeneration SOURCE: U.S. DOE

In December, the spotlight was on CHP again, when the EPA published its final determination on a pathway for grain sorghum-to-ethanol. Natural gas-fired sorghum ethanol plants earned a renewable fuel designation by meeting the 20 percent greenhouse gas (GHG) emission reduction threshold, compared to petroleum fuels. Of even more interest is that it also includes a pathway to advanced biofuels production for sorghum-ethanol plants utilizing CHP and anaerobic di-gestion. (See “Sorghum Readies to Advance” in this issue for more information.)

Sorghum ethanol-plants aren’t the only ones interested in CHP. Great River Energy, a not-for-profit electric coopera-tive, has linked CHP with a proposed ethanol plant project in Spiritwood, N.D. The company first built Spiritwood Station, a CHP power plant that will produce electricity to power homes and businesses as well as steam, intending to provide power to Dakota Spirit AgEnergy as well as an adjacent Cargill malt plant. Although construction is complete on the CHP facility, it’s currently on stand-by mode, says Lyndon Anderson, North Da-kota communications supervisor for Great River Energy. “Once that load would come online, it would help improve the econom-ics for the plant,” he says.

Plans for Dakota Spirit AgEnergy start with a 65 MMgy corn-ethanol plant with the possibility of adding a 10 MMgy bolt on cellulosic ethanol sys-tem to the plant down the road. Great River Energy is currently working to obtain financing so it can begin construction on phase one of the project, which is tentatively planned for this summer. In February, it was announced that the corn-ethanol plant project received certification from the EPA as a renew-able fuel producer, meeting the same 20 percent GHG reduc-tion threshold as sorghum ethanol. The fact that the plant would get its electricity and steam from a CHP facility was a primary reason it received the EPA certification, Anderson said. “Most of the coal-based power plants in western North Dakota are 30 to 35 percent,” he adds. “This is a newer tech-nology CHP plant and if all the steam and all the electricity is fully utilized from the plant, it can reach up to 66 percent energy efficiency.”

Great River Energy isn’t a newcomer to CHP. The com-pany’s Coal Creek Station, a coal-fired power plant located

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april 2013 | Ethanol Producer Magazine | 45

near Underwood, N.D., provides a small amount of waste steam to Blue Flint Etha-nol LLC. Although both would be consid-ered CHP power for the ethanol plants, Spiritwood Station was built to provide both electricity and steam as primary prod-ucts, Anderson says.

On-site CHPIn Lena, Ill., Adkins Energy has an on-

site CHP system that was installed in 2002, when the plant started up. It consists of a natural gas-fired boiler and a turbine large enough to supply all the ethanol plant’s electrical needs, says Jason Townsend, plant manager. The waste heat from the turbine is captured to supply up to 30 per-cent of the plant’s steam needs.

CHP has multiple benefits for the fa-cility, says Ray Baker, general manager, in-cluding increasing energy efficiency and the opportunity for financial savings. On the electrical side, the company evaluates daily market pricing to determine if it should generate it on-site or purchase it from the local power grid. “Over the course of sev-eral years, we have been able to save quite a bit, just based on that point alone,” he says, referring to it as a risk management tool.

It also means increased power reli-ability, limiting power outages. “If there is severe weather approaching or if the util-ity has any repairs that they need to make on their side, we can isolate ourselves from the grid to prevent any shut downs,” Townsend says. Even if an unexpected power outage occurs, the plant can start up its turbine, allowing it to be more self-reliant and avoid potential problems such as freeze ups in the winter. Then there’s the ability to participate in the utility com-pany’s demand curtailment program, Baker points out. On peak electrical demand days the ethanol plant receives payment for gen-erating its own electrical power.

Currently, because electrical prices are economical, Adkins energy utilizes its tur-bine for electrical generation only about 25 percent of the time. However, that number rises to 50 to 75 percent usage in warmer weather. “During the summer months, we typically see the higher prices of electricity and we’re on the turbine more frequently,” Townsend says.

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Installing a CHP system at an ethanol plant today would be a challenge due to lower energy costs, Baker and Townsend agree. Still, Adkins Energy has gotten its money’s worth out of its system, which cost $3 million to in-stall. “Our payback was a lot faster early on, because of [high electricity prices],” Baker adds. “Now I think it would give us a payback, but the payback would not be as fast.”

Waste Heat CHPThe CHP system installed at Southwest

Iowa Renewable Energy came online in

2009, when the plant started up. The com-pany negotiated with MidAmerican Energy to build a coal-fired power plant next door. At first, it wasn’t an easy sell. The question was, “Why would a power facility want to do this with an ethanol plant,” says Dan Wych,

ON THE WEB

For additional information about CHp, see the online version of this story at http://www.ethanolproducer.com.

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plant manager. “What’s in it for them?” In the end, it worked because SIRE owned a large parcel of land and was able to sell some of it to the power plant. Another fac-tor was the fact that SIRE installed a turbine to generate electricity, which today provides a large portion of the power needed to run the MidAmerican plant. In exchange, SIRE receives its electricity from the power com-pany for a very low rate. It cost $20 million to install the turbine and steam line due to inflated stainless steel prices at the time.

SIRE has a steam exchange system with MidAmerican’s co-located coal-steam electric plant. High-pressure steam taken from a reheat loop from MidAmerican’s boiler is “desuperheated” to a lower tem-perature and pressure, Wych explains. The steam then travels through 6,600 feet of pipe to the SIRE steam exchange building, where four shell and tube heat exchangers, or deboilers, use the steam to heat SIRE’s boiler feed water, producing steam for the plant. It’s a closed loop system, meaning

SIRE and MidAmerican steam never mix, and steam condensate from MidAmerican steam travels back to the power plant via a second pipe. “This steam exchange sys-tem is a very efficient way to produce the steam requirements for our plant,” he says. “We calculate nearly 92 percent energy-to-steam efficiency.” That compares to effi-ciency in the mid-80 percent range for the company’s natural gas boilers.

The SIRE CHP system allows it to take 100 percent of its steam needs from the MidAmerican plant. Offering flexibil-ity, the company can also utilize its two traditional natural gas-fired boilers or run the two steam systems simultaneously. “We have the luxury to run either MidAm-erican steam line, or natural gas boilers, based on the price of each,” he says, add-ing that the cost of steam is fixed. “If the price of natural gas is less than $4 an MCF [1,000 cubic feet] we’ll run on the natural gas boilers,” he says. “Right now, it’s pretty much break even.” (About $4.50 MCF.)

power

Showcase Jason Townsend, plant manager, stands in front of the Adkins Energy CHP system.

PHO

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april 2013 | Ethanol Producer Magazine | 47

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power

For SIRE, the biggest advantage of its CHP system is in-creased uptime thanks to having two energy sources. Unlike many plants, which must shut down during repairs or maintenance to its dryers or boilers, SIRE was designed with a standalone boiler package. The facility also has two steam tube dryers, meaning, if needed, it can shut down one dryer, produce wet cake and keep the plant running. “So I can do a lot of my repairs and mainte-nance, without shutting the plant down,” he says. “Our downtime is very minimal compared to most plants.”

Another big advantage is the energy savings offered by CHP. Although a typical ethanol plant can use up to 10,000 MCF of natural gas daily, when running on the MidAmerican steam line SIRE only uses about 100 MCF of natural gas to power the re-generative thermal oxidizers. “Our system, we feel is clean,” he says, acknowledging that coal power can have negative conno-tations while pointing out that SIRE is harnessing waste steam, reducing its natural gas use.

Author: Holly JessenManaging Editor, Ethanol Producer Magazine

701-738-4946 [email protected]

Steam Highway Steam travels from the power plant to SIRE, allowing the facility to meet 100 percent of its steam needs from waste heat, natural gas boilers or a combination, depending on the plant’s need and the price.

PHO

TO: S

IRE

Page 48: April Ethanol Producer Magazine

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CONTRIBUTION

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

Ethanol Tanks—Have They Been inspected lately?aging infrastructure, in particular, needs complete, thorough examination. By Erika HEndErson

infrastructure

As the ethanol industry ma-tures, new ethanol tanks are being constructed daily, but concerns are growing about older tanks, par-ticularly those constructed in the early years of the ethanol build-out. Most have not been inspected regularly, and some have never been inspected.

Knowledge must continue to grow and de-velop to help prolong the life of these tanks. The American Petroleum Institute provides standards for the safe storage of petroleum products in API 650, 651 and 653. These standards, designed to protect employees, the public and the environ-ment, are the tank owner’s responsibility to imple-ment. Tank inspections will help with obtaining accurate information needed for constructing,

repairing and prolonging the life span of tanks in the ethanol industry.

Before inspection, it is important to know the characteristics of the product stored to avoid serious injury or even death. A good place to start is with the material safety data sheets. Ethanol for example, reacts violently and explodes with several products. It is incompatible with platinum and sodium, and cannot be mixed or stored with certain fuels. Proper precautions must be taken when inspecting a tank with potentially explosive and hazardous contents. This is why it is so im-portant to have a reputable company perform the inspections, one that is committed to the proper training in safety and first aid. Medical evalua-tions, pulmonary function and respirator fit tests must be performed on employees before enter-ing the tanks. It is also important for tank owners

to have a properly equipped and trained rescue team available that is no more than 15 minutes away.

Inspection ListSeveral features of an ethanol tank need to

be inspected regularly, and a written report should be provided to the owner after the inspection. The report should include a detailed evaluation with photographs, recommendations of needed and emergency repairs, code updates and a de-tailed cost estimate for each item. All aspects of the tank should be inspected for structural, safety and coating conditions in accordance with API standards. Vents, screens, manways, overflows, ladders and drain valves should also be inspected to prevent unauthorized access. The tank foun-dation, soil and settlement conditions should be

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april 2013 | Ethanol Producer Magazine | 51

infrastructure

monitored. Any tank distortions and all operat-ing conditions such as filling and emptying rates need to be noted. All visual maintenance checks should be documented along with corrosion monitoring and the leak detection system used, which can include double-bottom liners or liners under tank bottoms with leak-detection pipes. The type of cathodic protection, stress levels and ultrasonic thickness (UT) readings from previous inspections can help access present conditions.

Other documents obtained during con-struction should remain with the tank owner for the life of the tank, including tank design, load-ings, metal characteristics, weld testing and loca-tion of the tank. Such information provides the inspector with a complete picture to assess the life of the tank.

Levels of InspectionThree main types of inspections should be

performed regularly. Routine in-service inspec-tions can be performed by a facility employee on a frequent and routine basis. With a check sheet in hand, each part of the tank should be visibly in-spected, the general foundation condition should be noted along with any signs of settlement and any evidence of leaks, corrosion or damage should be listed and reported. Drains, secondary containment, plates, shell, roof, nozzles, attach-

ments, ladders stairs and platforms should all be inspected and the overall condition of the tank noted. These routine in-service inspections help determine the scope of the formal inspections.

The second type is a formal external in-service inspection that should be performed by an authorized inspector at least every five years, as stated in API 653 6.3.2. The checklist includes looking for corrosion, distortions, leaks and dam-age. Corrosion can also occur under the insula-tion and on the underside of floor plates. Noz-zles attached to the roof, shell and floor should also be included in this corrosion search. External UT measurements of the shell should be taken to help determine the integrity of the shell and a rate of corrosion. Creating a matrix chart to identify and record tests of specific areas can provide a more accurate picture than random testing.

The third type, a formal out-of-service inter-nal inspection, requires draining and cleaning the tank to achieve a safe working environment for accurate readings. The internal visual inspection requires the inspector to do more extensive inves-tigations for corrosion, erosion, thinning, crack-ing, and other damage that may have occurred to the tank. The floor of the tank is given a detailed inspection including UT floor readings.

A risk analysis may also need to be per-formed to decide tank inspection frequencies—

even annual or biannual. The analysis considers the tank’s age and whether it has secondary con-tainment or cathodic protection. Knowing the tank history and typical corrosion concerns will help decide the extent of UT data needed to ac-curately determine a safe timeline for inspections. A tank may be experiencing higher-than- normal corrosion rates, that often occur when a tank is not adequately protected or standing water and debris remains for an extended period. Tank bot-toms are another area where deterioration is first spotted. Therefore, the structure and condition of bottoms must be monitored carefully to pre-vent the risk of leakage—a catastrophic environ-mental disaster and potentially great financial loss.

Inspections do require a significant amount of time and discipline to perform correctly. Some inventive companies are creating robots that may make inspections more efficient and less time consuming, while seeking to eliminate the need to drain the tank. Robots have been used for in-ternal inspections of water tanks for years now, but robot designs that can safely withstand the hazardous conditions of an ethanol tank are just beginning to get under way.

Authors: Erika HendersonDirector of Research

Pittsburg Tank & Tower270-826-9000

[email protected]

Page 52: April Ethanol Producer Magazine

52 | Ethanol Producer Magazine | april 2013

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april 2013 | Ethanol Producer Magazine | 53

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Page 56: April Ethanol Producer Magazine

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