August 2008 Ethanol Producer Magazine

INSIDE: DEVELOPMENTS IN THE SEARCH FOR THE PERFECT CATALYSTS

WWW.ETHANOLPRODUCER.COM

AUGUST 2008

2008 FEW ReviewShowcasing New Technologies to Meet Food and Fuel Needs

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features

insideAUGUST 2008 . VOLUME 14 . ISSUE 8

160 CATALYSTS Breaking the Catalytic Barrier to Biofuels

Finding finely tuned catalysts is the key to the success of the biofuels industry.

Fortunately, scientists today have tools that can speed the identification and

development of new catalysts for biomass conversion, and modify existing

catalysts. By Jessica Ebert

168 CORN Embracing the Carbohydrate Economy

The 2008 Corn Utilization and Technology Conference featured research efforts

to improve the corn-to-ethanol production process and new developments that

take corn beyond fuel-grade ethanol. By Susanne Retka Schill

176 EQUIPMENT Connecting the Pipes

Thousands of feet of pipes snake through a typical ethanol plant, making plant design

a challenge. EPM examines the four main types of piping in ethanol plants, and details

their benefits and drawbacks. By Jessica Sobolik

184 FEEDSTOCK In Pursuit of Fruit

Researchers are looking at watermelon as a potential ethanol feedstock.

Although the conversion process should be relatively simple, there are issues

such as economics and logistics that must be addressed before it’s a viable

option. By Bryan Sims

192 PROCESS Beating Back Bad Bugs

Resonant Biosciences LLC developed a system that reduces bacterial

contamination in ethanol plants without leaving antibiotic residues in the distillers

grains. By Jerry W. Kram

200 PRODUCTION The Hand That Turns the Wrench

At the Biofuels Automation University, ethanol plant technicians sharpen their

skills in ways that can make a difference to their company’s bottom line.

By Timothy Charles Holmseth

208 EUROPE GM Crops and Biofuels

Genetically modified crops have helped U.S. producers increase yields by 30

percent over the past 10 years. In many European countries, however, GM

crops are banned, leading some to wonder if that disadvantages farmers and

biofuels producers there. By Jon Evans

216 SWEDEN FFVs Flourish in Sweden

The number of flexible-fuel vehicles and E85 stations in Sweden has risen

dramatically since the country decided to reduce its use of fossil fuels in

passenger cars and lessen the effects of climate change. By Eric Kroh

74 EVENT The Truth About Food and Fuel

The 24th annual International Fuel Ethanol Workshop & Expo brought

industry representatives from around the world to Nashville, Tenn.

By Ron Kotrba, Kris Bevill, Jessica Sobolik, Dave Nilles, Hope Deutscher

and Rona Johnson

104 QUALITY Indy’s Super Fuel

As Indy Racing League race car drivers test ethanol’s mettle on the track

during the Milwaukee Mile, the fuel is further tested using PerkinElmer Inc.’s

gas chromatography. By Craig A. Johnson

112 RESEARCH Microbial Tricks for the

Cellulosic Ethanol Trade

EPM details two projects where researchers

tinker with microbes. One focuses on finding

cellulose-producing microbes that can produce

ethanol more efficiently, and the other involves the

engineering of corn to be a better biofuels

feedstock. By Jessica Ebert

120 MARKETING The Value of Branding

Brand strategists from Sioux Falls, S.D.-based Elements help renewable

energy companies define who they are and what they do best, so they can

take that message to their customers and enjoy preferred status in the

marketplace. By Rona Johnson

128 INDUSTRY Building the Next Generation

Ethanol design/build companies are using their expertise in the corn-based

ethanol industry to transition to cellulose. By Bryan Sims

136 USE Where in the Northeast is E85?

Drivers of flexible-fuel vehicles in the Midwest have the option to purchase

cheaper ethanol blends, but finding filling stations that sell E85 in the Northeast

can be a daunting task. By Kris Bevill

144 CONSTRUCTION The Mystery of Modularizing

Roeslein & Associates Inc. and Integrated Manufacturing Technologies are

offering their modularizing, unitizing and pre-assembly expertise to the

biofuels industry. Find out why BlueFire Ethanol Inc. chose the companies to

build its first commercial-scale waste-to-ethanol production plant.

By Anna Austin

152 COPRODUCT The Role of DDGS in the Food-Versus-Fuel Debate

Distillers grains are often overlooked when ethanol is being blamed for taking

food from people’s mouths and causing prices to rise. The reality is that for

every 100 tons of corn used to produce ethanol, 33 tons are turned into

animal feed for livestock producers. By Ron Kotrba

Page 104 Page 176

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departments

contributors224 CONTROL

Simple Advanced Controls in the Distributed Control SystemEasy to understand and quick to implement, a variety of advanced process controls provide plant operators with more plant control. Four ethanol-specific examples—three control and one optimization—allow their application in a plant to be visualized. By Greg Martin

228 SUSTAINABILITY

Beating the Environmental Enforcement SqueezeWith government agencies predicting a significant increase in future energy demand and consumption,developing the next generation of ethanol production is imperative. Corn-based ethanol production isclearly the foundation from which to build upon. By Bill Eby

232 OUTLOOK

Energy Security Obtainable with Biofuels Made in the AmericasInvestment and open borders are keys for allowing the Americas to realize the full potential of biofuelsproduction. Improving sustainability and collaboration are the first steps to alleviating the hurdles. By George Philippidis

236 MANAGEMENT

Overcoming Challenges in the BoardroomIn today’s ever-changing market, a board of directors must be strong and united in order to lead a business. Aboard chairman faces many challenges that must be overcome to provide a proactive workenvironment. By Tracy Houston and Cindy Knutson

240 RISK

Fuel for Thought: Protecting an Ethanol Production BusinessMarket fluctuations, variable production costs and volatile fuel prices are just a few of the factors impacting ethanol producers. Insurance policies need to account for the unique risks that the industry’s producers face. By Scott Helmer

244 EMISSIONS

Treating Digester Off-Gas from Wet-Mill Ethanol ProductionA unique process for removing hydrogen sulfide gas from wet-mill production may conserve energywhile boosting removal efficiency. The process is capable of treating aerobic and anaerobic gas streamswhile producing innocuous products and byproducts. By Kenneth D. Jones, Steve Black and Tony Barnette

248 EFFICIENCY

Plant Expansion Through Membrane IntegrationMolecular sieves and distillation have long been the industry’s primary means of removing excess waterfrom fuel ethanol. However, an innovative advanced membrane separation technology is gaining interest and providing results for a Canadian producer. By Christian Roy

252 PUMPS

Pump Technologies Provide Greater EfficienciesAs ethanol expands its reach throughout U.S. distribution infrastructure, compatible equipment is needed to move it. Aunique pump technology offers an efficient solution for the challengesof operating a petroleum bulk plant in today’s marketplace. By Tom Stone

256 POLICY

The Farm Bill: Planting Seeds of Renewable EnergyThe latest farm bill contains volumes of information related to ethanol and biorefinery development. Adetailed look at the bill reveals that progress will be made one step at a time. By Matthew E. Ross

insideAUGUST 2008 . VOLUME 14 . ISSUE 8

11 Advertiser Index

14 The Way I See ItBy Mike Bryan

IFEW Sends Posit ive Message

20 Business & People

26 Commodities

28 A View from the HillBy Bob Dinneen

The Power of One

29 RFA Update

34 Industry News & BIObytes

48 Plant Construction List

58 Our PlantBy Kris Bevil l

New Life

60 In the FieldBy Susanne Retka Schil l

Twin Approach to Corn

62 Up FrontBy Kris Bevil l

From Behind-the-Scenes to Center Stage

64 Flex FactorBy Timothy Charles Holmseth

Numbers Don’t Lie

66 BusinessBy Bryan Sims

Are Reverse Mergers

Gaining Credibility in the Industry?

68 FinanceBy Jack Mount

Make Accounting Software Investment Pay Off

70 Legal PerspectivesBy Leanna D. Whipple

Natural Gas from the Ground to the Ethanol Plant

260 Events Calendar

262 EPM Marketplace

Ethanol Producer Magazine: (USPS No. 023-974) August 2008, Vol.14, Issue 8. Ethanol Producer Magazine is published monthly.Principal Office: 308 Second Ave. N., Suite 304, Grand Forks, ND58203. Periodicals Postage Paid at Grand Forks, North Dakota andadditional mailing offices. POSTMASTER: Send address changes toEthanol Producer Magazine/Subscriptions, 308 Second Ave. N.,Suite 304, Grand Forks, North Dakota 58203.

BPA Worldwide Membership Applied for October 2006

on the webEthanolProducer.com’s most-read Web exclusive news stories for June 2008

1. Bill Gates sells more Pacific Ethanol stock

2. Brazil’s president slams U.S. corn-based ethanol at U.N. event

3. Louisiana Green Fuels ramps up construction

4. Alico discontinues cellulosic ethanol efforts

5. FEW: Takeovers concern producers

6. Beverage-waste-based ethanol to fuel DNC

7. CUTC: USDA official defends corn-based ethanol

8. FEW: Frontline teams with Fagen

9. CUTC: Researchers continue to study corn utilization

10.The Andersons, Marathon dedicate Greenville ethanol plant

2009 International

Fuel Ethanol Workshop & Expo

ABENCS

Adams Building Contractors

ADI Systems Inc.

Advanced Trailer Industries

Aeroglide Corp.

Afton Chemical Corp.

Agra Industries Corp.

Agri-Systems

Air Resource Specialists Inc.

Alfa Laval Inc.

American Railcar Industries Inc.

American Stainless & Supply

Anhydro Inc.

Ansul - Fire Solutions

Antioch International Inc.

Apache Stainless Equipment Corp.

Aqua Power Inc.

Aquatech International Corp.

Barr-Rosin Inc.

BBI International Community

Initiative to Improve Energy

Sustainability (CITIES)

BBI Project Development

Best Energies Inc.

BetaTec Hop Products Inc.

Biodiesel & Ethanol 101 DVDs

Biofuels AustralasiaBiofuels CanadaBiofuels Recruiting

Biomass MagazineBoulay, Heutmaker, Zibell & Co.

Brock Grain Systems

Brown, Winick, Graves, Gross,

Baskerville & Schoenebaum

Buckman Laboratories Inc.

Buhler Inc.

Burns & McDonnell

Calbrandt

Cashco Inc.

Central Power Products Inc.

Centrisys Corp.

Cereal Process Technologies LLC

Check-All Valve Co.

Chief Industries Inc.—

Agri-Industrial Division

Christianson & Associates PLLP

Clifton Gunderson LLP

Cloud/Sellers Cleaning Systems

Coverall Building Systems

Crown Iron Works

Crown Iron Works/

Harburg Freudenberger

Davenport Dryer LLC

dbc SMARTsoftware Inc.

Dedini Export

Delta-T Corp.

Distillers Grains Quarterly

Dresser-Rand

DuPont Chemical Solutions Enterprise

Duratech Industries International Inc.

72

140

37

146

108

109

92

162

96

221

166

4

154

6

183

91

80

83

258

33

30, 93

102, 175, 190, 198

100

155

182

274

73, 95

50, 94 & 127

82, 118 & 215

123

103

180

110

71

5

163

131

132

254

165

77

231

178

98

164

126

194

170

111

69

195

16 & 17

135, 196,

222 & 273

35

61

226

Ad Index

Durr Systems Inc.

Eclipse Inc.

Eisenmann Corp.

Ekato Corp.

Encore Business Solutions Inc.

ethanol-jobs.com

ETS Laboratories

Faegre & Benson LLP

Fagen Inc.

Farms Technology LLC

FBA Consulting

FCStone LLC

Federal Equipment Co.

Fermentis

Flottweg Separation Technology Inc.

FWS Technologies

Gamajet Cleaning Systems Inc.

GATX Corp.

Gavilon

Genencor International Inc.

Gordon Technologies

GreenShift Corp.

Hurst Boiler & Welding Co. Inc.

Hydro-Klean Inc.

ICM Inc.

Indeck Power Equipment Co.

International Distillers Grains

Conference and Trade Show 2008

International Process Plants

Interstates Cos.

Intersystems Inc.

ISCO Industries LLC

John Deere Agri Services

John Zink Co. LLC

Kahler Automation Corp.

Kaltron Absorbents

Kennedy & Coe LLC

Koppers Inc.

Laidig Systems Inc.

Lallemand Ethanol Technology

MAC Equipment

Management Recruiters of Atlanta

Mapcon Technologies Inc.

Marcus Construction

Marley/SPX Cooling Technologies

McC Inc.

Mechanical Supply Co.

Metso Automation

Mettler Toledo

Midwest Towers Inc.

Ministry of Enterprise and Innovation,

Government of Saskatchewan

Moyno Inc.

Munters Corp.-Des Champs Products

Nalco Co.

National Corn-to-Ethanol

Research Center

Natural Resource Group Inc.

Natwick Associates Appraisal Services

Nebraska Public Power District

Nestec Inc.

New York Blower Co.


227

134

99

212

242

22, 84, 142,

206 & 272

138

143

3

243

38

86

133

150

171

241

114

167

19

158

172

56 & 57

189

46 & 47

2

18

119 & 151

159

179

188

156

187

10

197

202

39

55

41

85

12

40

54

181

253

51

87

65

199

203

247

76

173

45

230

101

106

116

88

23

Nexen Marketing USA Inc.

North American Bioproducts Corp.

Novozymes

Ortman Ethanol Water Resources

Outokumpu Stainless Inc.

Papailias Inc.

Paragon Enterprises LLC

Paul Mueller Co.

Perten Instruments Inc.

Peters Machine

Petroleum Equipment Institute

PhibroChem

Pioneer Hi-Bred International Inc.

Poet LLC

Praj Industries Ltd.

Primafuel Inc.

Pro-Enviornmental Inc.

R&R Contracting Inc.

R.J. O’Brien and Associates LLC

RailWorks Track Systems Inc.

Reimer Welding Inc./Granatus Consulting

Resonant BioSciences LLC

Renewable Fuels Association

Rev Tech LC

Robert-James Sales Inc.

Roeslein & Associates Inc.

Romer Labs Inc.

Ronning Engineering Co. Inc.

Roskamp Champion

SafeRack LLC

Salco Products Inc.

Seneca Waste Solutions

SGS North America Inc.

Smar International Corp.

SSOE Inc.

Strongform Nationwide Industrial Builders

Sturtevant Inc.

Sukup Manufacturing Co.

Sulzer Chemtech USA Inc.

Summit Software Inc.

Swanson Flo-Systems Co.

Symaga

Syngenta

TDC Dryers

Tranter Phe

Trico TCWind Inc.

Tri-Mer Corp.

U.S. Energy Services Inc.

U.S. Water Services

UTEX Industries Inc.

Val-Fab Inc.

Vaperma Inc.

Veolia Water Solutions & Technologies

Verenium Corp.

Victory Energy Operations LLC

Vogelbusch USA Inc.

Volkmann Railroad Builders Inc.

W. Soule & Co.

Watson-Marlow Bredel Pumps

WIKA Instruments Corp.

WINBCO

Yellow Springs Instruments Inc.

186

147

8

205

81

115

36

157

124

234

117

24

63

276

79 & 107

78

44

191

235

42

52

89

174

139

275

122

246

257

97

229

218

237

43

225

255

233

141

67

148 &149

259

213

204

31

238

214

90

239

211

130

210

53

207

32

25

250

219

249

220

125

245

251

223

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EDITORIAL

Jessica Sobolik Managing [email protected]

Dave Nilles Contributions [email protected]

Rona Johnson Features [email protected]

Ron Kotrba Senior Staff [email protected]

Jerry W. Kram Staff [email protected]

Susanne Retka Schill Staff [email protected]

Bryan Sims Staff [email protected]

Kris Bevill Staff [email protected]

Timothy Charles Holmseth Staff [email protected]

Erin Voegele Staff [email protected]

Anna Austin Staff [email protected]

Hope Deutscher Online [email protected]

Jan Tellmann Copy [email protected]

Craig A. Johnson Plant List & Construction [email protected]

Amber Armstrong Administrative [email protected]

ART

Jaci Satterlund Art [email protected]

Sam Melquist Graphic [email protected]

Elizabeth Slavens Graphic [email protected]

Jack Sitter Graphic [email protected]

PUBLISHING & SALES

Kathy Bryan Publisher & [email protected]

Mike Bryan Publisher & [email protected]

Joe Bryan Vice President of Media & [email protected]

Tom Bryan Vice President of [email protected]

Matthew Spoor Sales [email protected]

Howard Brockhouse Senior Account [email protected]

Clay Moore Account [email protected]

Jeremy Hanson Account [email protected]

Chip Shereck Account [email protected]

Tim Charles Account [email protected]

Chad Ekanger Account [email protected]

Marty Steen Account [email protected]

Marla DeFoe Advertising [email protected]

Jessica Beaudry Subscriptions [email protected]

Jason Smith Subscriber Aquisition [email protected]

Erika Wishart Administrative [email protected]

Christie Anderson Administrative [email protected]

Nicole Zambo [email protected]

HOW TO REACH US

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

Ethanol Producer Magazine Letters, 308 Second Ave. N.,

Suite 304, Grand Forks, ND 58203 or e-mail to [email protected].

Letters should include the writer’s full name, address

and telephone number, and may be edited for purposes of clarity and space.

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

a shipping and handling charge of $49.95 for any country outside the United States, Canada and Mexico.

To subscribe, visit www.EthanolProducer.com or you can send your mailing address and payment

(checks made out to BBI International) to:

Ethanol Producer Magazine Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203.

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

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

Ethanol Producer Magazine, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203.

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

or [email protected]. Article reprints are also available for a fee. For more information, contact Christie

Anderson at (701) 746-8385 or [email protected].

ADVERTISINGFor advertising rates and our editorial calendar, visit www.EthanolProducer.com or call (866) 746-8385.

COPYRIGHT © 2008 by BBI International


ETHANOL PRODUCER MAGAZINE AUGUST 200814

he 2008 International Fuel Ethanol Workshop & Expo was perhaps one of the mostinspiring in its 24-year history. This was because in a year of misguided media cover-age, high feedstock costs, reduced profits and political uncertainty, the spirit and deter-

mination of those attending has never been greater.They came with a fighting spirit that says, “We’re damn mad, and we are not going to take

it anymore. We’re tired of the negative press that ignores $140-a-barrel oil and instead focuseson biofuels. We’re tired of farmers—after generations of working the land—being vilified foractually being able to make a profit like any other business. We’re tired of the ethanol industrybeing treated as if it was the root cause of world hunger.”

This industry has been built on fighting the odds, taking on giants and winning. Negative press has been a part of lifefor the ethanol industry since its inception. However, this time it’s different. It's different in the sense that the very successthat we have been building toward for more than 25 years is now being portrayed by the media as a failure.

Even in the face of this adverse attention, the spirit of this year's IFEW was clearly not one of acquiescence. Rather,it was one of standing our ground, drawing a line in the sand, and standing up for our industry and what we have workedso hard to achieve.

Bob Dinneen of the Renewable Fuels Association said in his presentation, “Never before in our history has there beena greater need to develop a vibrant renewable energy industry. Rest assured, the ethanol industry will never waiver, nor willwe falter in our commitment to help meet the world’s growing energy demand.”

Dr. Robert Zubrin, author of Energy Victory, talked about the difference between industries that “take” energy andindustries that “make” energy. Industries that take energy are dependent on the finite amount of resources available and thepolitical stability of the region from where the energy is derived. The ethanol industry, on the other hand, makes energy andin doing so, Zubrin pointed out, has a far more stable and sustainable future.

Ethanol is part of the next generation of fuels that will power the world. While not perfect, it is a cleaner, safer andmore peaceful alternative to oil. So, as embattled as we may be from time to time, we can never waiver from our commit-ment to build an industry that repels those who are against change and those who would chose to let the perfect becomethe enemy of the good.

That’s the way I see it!

The Way I See It

IFEW Sends Positive Message

Mike BryanPublisher & CEO

[email protected]

T

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VeraSun closes on credit lineVeraSun Energy Corp. in Brookings,

S.D., reached an agreement with USBInvestment Bank for a new revolving creditfacility. The facility will allow revolving bor-rowings up to a maximum of $125 million,including letters of credit up to a total of$40 million. The new credit facility is avail-able until May 30, 2011, and replaces anexisting $30 million secured revolving cred-it facility. “As previously announced, thiscredit facility will provide additional liquidi-ty sources to support our acceleratedgrowth,” said VeraSun President and ChiefExecutive Officer Danny Heron. EP

Business

Business&PeopleEthanol Industry Briefs

BUSINESS&PEOPLE

The Andersons, Aventinepost first-quarter losses

The Andersons Inc. and AventineRenewable Energy Holdings Inc. recentlyreleased separate first-quarter earnings state-ments, but neither was good news for therespective companies. The Andersons Grain& Ethanol Group reported an operatingincome of $2.2 million, an $8 million dropfrom last year. Meanwhile, Aventine posted aloss of $10.8 million versus a gain of $14.9million during the same quarter last year.Despite a 34 percent revenue increase due tohigher volumes of ethanol sold and higherethanol prices, Aventine said its revenue con-tinued to offset more than 40 percent of itscorn costs. EP

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

Share your Industry Briefs

Gates’ investment firm cutsstake in Pacific Ethanol

This spring, Cascade Investment LLC,the investment firm of Microsoft Corp.Founder and Chairman Bill Gates, pared itsinvestment in Sacramento, Calif.-basedethanol producer Pacific Ethanol Inc. Inearly May, it unloaded 9.5 million out of41.8 million outstanding shares. Again, inJune, it sold 1 million shares, according to astatement of changes in beneficial owner-ship filed through the U.S. Securities andExchange Commission. In all, CascadeInvestment has unloaded more than one-fifth of its original investment in PacificEthanol, which equaled approximately 20percent control of the company. It origi-nally invested $84 million in PacificEthanol in 2005. EP

Thermal oxidizer performs well in preliminary tests

California-based Pro-Environmental Inc.said preliminary tests conducted by a thirdparty showed excellent performance by aregenerative thermal oxidizer (RTO) that thecompany designed and built for Otter Tail AgEnterprises LLC, a 55 MMgy ethanol plant inFergus Falls, Minn. Pro-Environmentalreported the three-canister RTO downstreamof the rotary dryer showed nitrogen oxideemissions that amounted to 20 percent ofpermit levels, and volatile organic compoundemissions at almost zero. The air-pollution-control installation still has to undergo formaltesting by the Minnesota Pollution ControlAgency. Otter Tail Ag Enterprises began pro-duction in March. EP

New Web site indicates FFVs

A new Web site has been developedfor those in search of flexible-fuel vehicles(FFVs). At www.ffvfinder.com, visitors willfind FFV dealerships, fuel stations andcommunity forums. If consumers are try-ing to buy or sell a used vehicle, listings canbe posted there, as well. “Buyers, you havefound your one-stop shop for your nextvehicle,” said Abbie Vanderwist, owner ofwww.ffvfinder.com. She said the purposeof the site is to educate consumers anddealers about alternative fuels. “This site isdesigned is to help those trying to find theirnext car, truck, SUV or van, and to helpthose sellers find the right buyer for theirFFV,” she said. EP


BUSINESS&PEOPLE

Sponsored by

Business

GPRE to merge with VBV Omaha, Neb.-based ethanol producer

Green Plains Renewable Energy Inc. andDelaware-based VBV LLC, along with its sub-sidiaries, have entered into a definitive mergeragreement. The merger, anticipated to close bylate summer or early fall, will place VBV underthe GPRE name, and is subject to shareholderand equity holder approvals, as well as custom-ary lender and regulatory consents. VBV wasoriginally called Virgin Bioverda, a joint venturebetween Virgin Group, Wilon Holdings SA andIreland-based NTR PLC. It owns two ethanolplants currently under construction: IndianaBio-Energy LLC in Bluffton, Ind., and EthanolGrain Processors LLC in Obion, Tenn.

Upon closing, the combined company isexpected to have a production capacity of 330MMgy. Immediate goals of the new entity willinclude bringing GPRE’s Superior Ethanol LLCin Superior, Iowa, on line and completing con-struction of the two VBV plants. EP

CVEC to collect greenhouse gas credits

Chippewa Valley Ethanol Co. LLLP, a47 MMgy ethanol plant in Benson, Minn.,has entered into an agreement with CarbonGreen LLC and Environmental CreditCorp., which will develop greenhouse gascredits stemming from CVEC’s renewableenergy use and ethanol production. In addi-tion to ethanol, CVEC recently installed abiomass gasifier, which provides thermalenergy for its facility and will save naturalgas usage by 90 percent. Ethanol producerCorn Plus LLLP in Winnebago, Minn.,began a similar project in March when itjoined the Chicago Climate Exchange withthe help of Carbon Green andEnvironmental Credit. EP

Entrepreneur Magazinenames Hot 100

Victory Energy, amanufacturer ofheat recoverysteam generatorsand water-tubepackage boilerswas named No. 15in EntrepreneurMagazine’s Hot 100 for2008. The magazine’s Hot 100 ranksAmerica’s fastest-growing businesses basedon company sales, positive job growth andsales growth, among other criteria. In addi-tion, ethanol producer Glacial LakesEnergy LLC was named No. 63. “In 2007,Glacial Lakes Energy was named a Hot 500company by Entrepreneur Magazine, so toreceive a similar award two years in a row isincredible,” said Glacial Lakes Energy ChiefExecutive Officer Tom Branhan. The Hot100 list was printed in the magazine’s Mayissue and can be viewed at www.entrepreneur.com/hot100. EP

Praj to supply technology in Central America

G u a t e m a l a - b a s e dPantaleon has chosen PrajIndustries Ltd. tosupply technolo-gy and equip-ment for twoethanol plants in Guatemala and Nicaragua.Pantaleon, one of Central America’s oldest andlargest sugar groups, is proposing a 27 MMgyfacility in Nicaragua, and will manage a second40 MMgy plant under development by BioEtanol in Guatemala. Praj will supply the tech-nology for fermentation, vacuum distillationusing very low-pressure exhaust steam, molec-ular sieve dehydration and evaporation ofvinasse (the residue left after distillation of fer-mented sugarcane). The Central Americanplants will be the first in the region to use Prajtechnology to concentrate vinasse for use asliquid fertilizer. EP

Poet hires general managers Poet LLC

announced the hiringof two general man-agers for its northernOhio ethanol plantscurrently under con-struction. Jeff Henklewill lead PoetBiorefining-Fostoriain Fostoria, Ohio. Hehas a Bachelor ofScience degree inmechanical engineer-ing and a Master ofScience degree innuclear engineeringfrom Ohio StateUniversity. Scott Casewill join PoetBiorefining-Marion inMarion, Ohio. He hasmore than 20 years of operational andmanagerial experience in chemical manu-facturing environments. He received aBachelor of Science degree in chemicalengineering from California StatePolytechnic University at Pomona. EP

People

Case

Henkel

Range Fuels appoints board of directors member

Range Fuels Inc. has appointed DottyHayes to its board of directors. She is vicepresident of internal audit at Intuit Inc., atop provider of business and personalfinance software. She previously served asthe company’s vice president and corporatecontroller, responsible for the design, imple-mentation and operation of control systems,including financial consolidation, externalreporting, Sarbanes-Oxley compliance andrevenue recognition. EP


VeraSun announces personnel moves

VeraSun Energy Corp. has announcedseveral new personnel appointments. TimmHoffman has been named the company’s vicepresident of information technology. He willbe responsible for the strategic planning,development, and execution of informationtechnology infrastructure and initiatives.Roderick Arnold has been named the compa-ny’s director of transportation. He will beresponsible for VeraSun’s railcar fleet. TroyShaner has been appointed director ofprocess improvement. Previously, he was theplant manager at VeraSun’s ethanol plant inFort Dodge, Iowa. In his new role, he will beresponsible for leading and directing theprocess improvement group. Andy Roberts,Gabe Corey, Kent Holzer and Pat Hoganhave each been promoted from their previ-ous positions as VeraSun operations man-agers to plant managers. Roberts will be sta-tioned at VeraSun’s ethanol plant in Albion,Neb.; Corey will be located in Woodbury,Mich.; Holzer will be in Janesville, Minn., andHogan will be in Dyersville, Iowa. EP

People

SunEthanol hires CEOAmherst, Mass.-based cellulosic ethanol

company SunEthanol Inc. has hired biofuelsleader William Frey as its new chief executiveofficer. Previously, he spent 28 years withDuPont, leading the efforts to commercializeadvanced biofuels and develop cellulosicprocess technologies. He replaced outgoingCEO Jef Sharp on June 23. EP

CPT names market development director

Bridgeton, Mo.-based Cereal ProcessTechnologies LLC recently named RegAnkrom as its director of market develop-ment. He joins the company after managingEnNova LLC, an Illinois-based companywhere he assisted groups in developingethanol projects. Prior to that, Ankrom heldmanagement positions at Ameren, an electricand natural gas utility. Cereal ProcessTechnologies provides patented corn frac-tionation technology, and the company’sequipment is being used at Renew Energy’s130 MMgy plant in Jefferson, Wis. EP

www.ethanol-jobs.com www.ethanol-jobs.com www.ethanol-jobs.com www.ethanol-jobs.co

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600

900

1200

1500

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Visco

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Competitor A (20 MWU)Fuelzyme LF (10 MWU)

Competitor B (20 MWU)

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185(85)

195(91)

205(96)

212(100)

225(107)

Fuelzyme™-LF

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Temperature ˚F (˚C)

Operating RangeInactive

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COMMODITIES REPORT

June 19—Natural gas prices continue to steadily move up.Since the beginning of February, market prices have occasionallypulled back but then quickly rallied to new highs. Amazingly, fromFeb. 1 through June 19 the market has made 18 new “highs” and15 “higher lows.”

Trends of this nature often indicate that a market is experienc-ing excessive and increasing demand or has mounting problemswith supply. This isn’t necessarily the case with the natural gas mar-

ket. Demand has been increasing but no more than usual orexpected. The supply side has increasing domestic production andthe capability to import more liquefied natural gas. Finally, whilestorage inventories are below those of 2007 (a historically highlevel), they are in line with five-year averages. Natural gas funda-mentals can not and do not explain the recent strength in naturalgas prices.

Natural gas prices are caught up in the market euphoria sur-rounding most commodities. Buying and holding commodities hasbeen a good investment over at least the past year. Attractivereturns are likely drawing more money into commodity markets,fueling even higher prices. While this type of rally cannot go onforever, there still seems to be significant interest in being in“long” commodities.

Our recommendation is to buy on dips for a relatively shortforward period and be ready to purchase for a long period whenthe market significantly corrects. EP

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

The bull rally continues

Natural Gas Report By Casey Whelan, U.S. Energy Services Inc.

Yield trends the focus of summer

Corn Report By Jason Sagebiel, FCStone

June 20—The floods in early June contributed to volatility as cornsoared more than $1.40 per bushel in one week. Too much rain, at leastat this stage, does not make grain. The market was in a panic mode astraders and end-users scrambled for corn needs or unwound shortpositions. However, what happens to demand as rationing comes intoplay due to high-priced corn? At the current values demand rationinghas occurred.

The June USDA supply and demand report leaves much debateon the demand side as well as planted acreage and yield. First, the yieldwas slashed by five bushels to 148.9 bushels per acre, thus cutting pro-duction by 340 million bushels. Feed demand for the next marketingyear was cut by 150 million bushels, estimated at 5.15 billion bushelsversus 6.15 billion bushels one year ago. Corn demand into the ethanolsector is projected at 4 billion bushels versus 3 billion bushels one yearago. However, with current ethanol crush conditions these actual pro-jections will ultimately be lower. Ethanol margin conditions will deter-mine this corn usage as the market looks forward. The end-result asdetermined by the USDA is a 673 million bushel carry-out in the newmarketing year, or a 5.4 percent carry-out-to-use ratio in the 2008-‘09marketing year.

From a world perspective, corn carry-out increased by 4.26 millionmetric tons versus the previous estimate. That compares to 121.09 mil-lion metric tons one year ago and 110.16 million metric tons in 2006-‘07. The caveat in the global picture is China, which will produce 153

million metric tons of corn, use 157 million metric tons and export amere 0.5 million metric tons. China is using more corn domestically andholding onto inventory despite higher prices. The graph illustratesChina’s production versus usage. An out forward curve can lead to cornusage outpacing production. Ultimately the carry-out shrinks withtoday’s current production/usage ratio.

Prices will stay supportive from a fundamental viewpoint. Anypressure will come from the “fund money” liquidation. EP


COMMODITIES REPORT

DDGS Report By Sean Broderick, CHS Inc.

Ethanol Report By Spencer Kelly, OPIS

June 20—Ethanol spot prices head-ed into summer in a sharp upswing asmarkets that were already starting to tilthigher got a boost from disastrous flood-ing in the Midwest that snarled logisticsand even shut down a couple key plants.

Chicago spot ethanol traded up intothe lower $2.90s per gallon by mid-Junefor material available in the second halfof the month. That represented a 50 centor so boost in prices since the end ofMay. Flooded highway bridges, embar-goed rail lines, and washouts and closureson long stretches of the rain-swollenMississippi River played havoc withethanol logistics.

While some plants with bottled-uprail transport did dump some cheap truckvolume, most Midwest rack postings forethanol also moved up. Iowa racks, aver-aging $2.75 per gallon for splash-blendsales late in the month were up 7.5 centssince the start of June.

The big spike came in markets out-side the Midwest that rely on the region’sethanol production for supply. New YorkHarbor spot ethanol traded up to $3.15per gallon for dead-prompt material withany-June barges topping $3.10 per gallon.That had harbor ethanol surging morethan 70 cents on the month before pricescooled back to around $3 per gallon.

Reports of delayed imports fromBrazil that had been expected in latterJune also boosted harbor ethanol. It alsoleft July appearing much better supplied.

Meanwhile, the slowdown in railcarsout of Iowa and elsewhere also had WestCoast prices hopping into the $3-$3.10per gallon range for prompt shipments.EP

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

Ethanol prices jump in June

Source: OPIS

Source: U.S. Energy Services Inc.

*Central Valley Source: CHS Inc.

June 25—As the Fourth of Julyapproached, margins were what everyplant, buyer, seller and shipper was talkingabout. Plants were, and are, focused onthem for the obvious reasons. Buyers,many of whom have been sitting on thefence waiting for new plants and theirDDGS production to come on stream and“flood the market,” are rethinking theirstrategy. Sellers, scared that plants may ormay not run (an event which literally canchange multiple times in the course of aweek), do not want to sell out past the fol-lowing week. Shippers, trying to line upfreight, have to battle fuel surcharges, roadand bridge closings, river shutdowns anderratic car supplies.

Those doing the actual feeding of theanimals are looking at long-term negativemargins. Relatively speaking, DDGS is one

of the better values available on a protein,energy or even phosphorous basis. DDGSis at less than 65 percent the value of corn,which has never been sustained before. It isnot unusual to be there at some time duringthe summer, but it is when one is looking atJuly, August and September quotes.

The export business has remainedbrisk. The worldwide price of wheat isgoing to play a part in determining the via-bility of all middle proteins in the rations,which looks to potentially temper some ofthe demand. Bulk vessels are being bookedthat include holds of DDGS, which hadpreviously been done only via containers.Distillers grains is finding its way deep intomany rations, particularly for hogs, in somecases comprising up to 50 percent of theentire diet. EP

Source: FCStone

Margins are the primary focus

REGION

West Coast

Midwest

East Coast

SPOT

362.844

330.082

326.394

RACK

352.83

335.869

337.163

RETAIL

418.278

393.107

396.067

March 2008

February 2008

March 2007

561,000*

513,000

384,000

REGION

West Coast

Midwest

East Coast

SPOT

265.534

254.602

256.614

BULK TRUCK (rack)

259.53

253.44

- - - -

SPLASH/TOP OFF (rack)

276.161

269.686

302.838

DATE

June 20, 2008

May 20, 2008

June 20, 2007

CLOSE

7.35 1/2

6.02 1/4

4.04 1/4

LOW

7.31 3/4

5.99

3.99 1/2

HIGH

7.52

6.15 1/2

4.10

LOCATION

Minnesota

California*

Chicago, Ill.

Buffalo, N.Y.

Central Florida

AUG. 2008

175

230

165

170

205

JULY 2008

106

200

155

160

195

AUG. 2007

95

137

105

115

133

Source: OPIS

NYMEX

N. Ventura

Calif. Border

JUNE 19, 2007

7.69

7.01

7.24

JUNE 16, 2008

12.87

11.67

12.36

MAY 16, 2008

11.07

10.27

10.80

Regional Ethanol Prices (Monthly averages in cents per gallon)

Regional Gasoline Prices (Monthly averages in cents per gallon)

DDGS Prices ($/ton)

Corn Futures Prices (September corn, $/bushel)

Cash Sorghum Prices ($/bushel)

Source: Sorghum Synergies

Natural Gas Prices ($/MMBtu)

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

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

Superior, Neb.

Beatrice, Neb.

Sublette, Kan.

Salina, Kan.

Triangle, Texas

Gulf, Texas

JUNE 12, 20086.19

6.44

6.39

6.44

6.61

6.77

MAY 16, 20085.24

5.31

5.31

5.41

5.51

6.07

MAY 30, 20073.01

2.92

2.89

3.13

3.12

3.40


Whether it is a true love and appreciation for our political process, or indeed a sick-

ness, we are entering the holiday season for those who enjoy the game of politics. This

season promises to be one of the most exciting and historical in recent memory.

From the top of the ticket down to the local city council elections, energy will be a

central theme for all candidates. No doubt, they all will claim to have the greenest, most

reliable, least expensive, readily available solutions to meet this nation’s energy goals.

Some of them very well may, but that determination and responsibility falls directly on

American voters.

Given the recent deluge of misinformation and contrived attacks America’s biofuel

producers are enduring, this election will be a pivotal moment in the future of this indus-

try. Ethanol producers are being blamed for every ill befalling mankind today, and some

politicians, often a fickle crowd, seem willing and, in the case of some candidates for

higher office, eager to abandon America’s biofuels industry.

They seek to start by weakening public policy by taking advantage of provisions

designed to prevent severe economic harm to Americans. Some seek to force American

taxpayers to subsidize Brazilian ethanol production. Others would get rid of any public

policy supporting a domestic renewable fuels industry in favor of greater reliance on ever-shrinking supplies of oil.

Other candidates appreciate the future American biofuel producers are trying to achieve. They recognize that our

dependence on oil comes with very real and costly consequences. They understand that everyone (or most everyone

outside Houston) wants to move to that next generation of biofuel technology but recognize that only happens on the

back of a strong industry being developed today.

Many candidates fully comprehend that a plethora of solutions will have to be employed to ensure a secure ener-

gy future, but understand that ethanol and biofuels must play a critical role. They also recognize that action must be taken

now. Lip service and pie-in-the-sky plans that ignore the realities of today’s energy markets are not what these candi-

dates seek.

These descriptions describe candidates from both parties and all parts of the country. They describe individuals

rather than a party dogma and candidates for every elected office in the land.

As America watches the national political conventions and truly begins to dissect every candidate and every posi-

tion, it is imperative that we as the American biofuel industry do the same.

The importance of this election to our industry and the energy and agricultural future of this country cannot be over-

stated. We must do our homework. Understand where the candidates stand and make an informed decision that will

ensure American biofuels are allowed to reach their full potential.

We have seen the impact just a single vote can have. Our nation has fought legal battles and seen elections swing

by just one vote per precinct.

Make sure that your voice is heard and the rest will take care of itself.

Bob DinneenPresident and CEO

Renewable Fuels Association

VIEWFROMTHEHHIILLLL

The Power of One


Dinneen

RFAUPDATE

Cooper, Hubbard join RFAThe Renewable Fuels Association has hired Geoff Cooper, who will become its new director of research.

For the past five years, Cooper served as director of ethanol and business development programs for the National

Corn Growers Association.

“Geoff’s qualifications and expertise in this field will be invaluable as ethanol plays an ever-increasing role in

America’s future energy sustainability,” said RFA President Bob Dinneen. “It is with great pride that I welcome

Geoff to the RFA family.”

Cooper will work out of RFA’s newly acquired offices in St. Louis, Mo.

The RFA has also hired Edward Hubbard Jr., Esq., to serve as its director of Tax and Trade. He joins the

RFA from a position as legislative director with Maryland Rep. Albert Wynn. Hubbard is a member of the Los

Angeles County Bar Association and worked for Culver City, Calif.-based law firm Willoughby & Associates before

joining the RFA.

Hubbard will work out of RFA's office in Washingon, D.C.

RFA responds to Texas’ RFS waiver requestIn late June the RFA submitted comments to the U.S. EPA regarding Texas’ request for a waiver of 50 per-

cent of the Clean Air Act’s renewable fuels standard. The RFA said the waiver request is incomplete, legally insuf-

ficient and factually misdirected.

The Texas request also doesn’t show severe harm to the economy of Texas. In fact, it is projected that a 50

percent reduction in the RFS would increase gasoline prices by more than 31 percent from the $3.997 per gal-

lon price Texans paid at press time. The resulting $1.24 per gallon increase in gasoline prices, if the requested

waiver is granted, could cause Texans to pay an additional $15.7 billion for gasoline, the RFA said.

Also, even if the RFS were reduced by 50 percent, it would not reduce corn prices in any meaningful way,

which the Texas request proposed it would.

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Merrill Lynch report confirms ethanol benefitsMerrill Lynch’s June 6 edition of “Global Energy Weekly” concluded that biofuels were helping to reduce

gasoline prices for the average American. The authors of the report estimated that retail gasoline prices would be

$21 per barrel higher without the incremental biofuel supply. Based on the fact that the average U.S. household

uses 1,052 gallons of gasoline per year, biofuels are saving the typical American household $526 per year.

“By keeping gasoline prices lower than they otherwise would be, ethanol is helping the average American

family save about $500 per year, even after accounting for the slight increase in food prices due to higher prices

for corn,” Dinneen said.

As a world leader in agriculture and plant science, Syngenta is

uniquely positioned to help the renewable-fuels industry reach

its full potential. Today, our leading portfolio of crop protection,

traits and germplasm products puts Syngenta at the forefront

of maximizing yield to meet the needs of all corn end users.

Meanwhile, as pioneers in plant expression of enzymes, we’re

developing innovations that will increase the effi ciency of the existing

corn ethanol industry and create a platform for breakthroughs in

biomass conversion. The next critical step is to apply that skill and

knowledge to make cellulosic ethanol a sustainable, cost-effective

reality. Syngenta is taking that next step. Now.

© 2008 Syngenta, Inc. The Syngenta logo is a registered trademark of a Syngenta Group Company.

We’re on the right path.

BI002_Ethanol_Producer_vend.indd 1 3/28/08 6:31:51 AM

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> Reduced natural gas usage decreasesemissions to allow more ethanolproduced for given air permit

> Modular system for simplifiedintegration into existing plants,expansions or new facilities

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BIObytesEthanol News Briefs

Ethanol from beer waste to fuel DNCMolson Coors Brewing Co. and its U.S.subsidiary Coors Brewing Co. will be theofficial E85 ethanol producer for the 2008Democratic National Convention inDenver. Molson Coors is donating all theclean-burning ethanol fuel for the fleet ofGeneral Motors flexible-fuel vehicles to beused for convention transportation needs.Coors' ethanol is made from waste beergenerated at its brewery in Golden, Colo., atan adjacent 3 MMgy ethanol plant ownedby Merrick & Co. and operated by Coors.Using waste beer to produce ethanol lowersthe emissions of volatile organic com-pounds from the Coors brewery by approx-imately 70 tons per year.

Osage plans barley-to-ethanol plantOsage Bio Energy LLC hopes to breakground in September on a 55 MMgyethanol plant in Hopewell, Va. The land issecured, along with local approval and a$300 million financing commitment fromFirst Reserve Corp. for a total of fourplants. The rest of the Hopewell financingpackage was under development and thepermitting process was underway in lateJune, according to John Warren, Osageinvestor relations manager. JacobsEngineering completed design work for theproject, and Katzen International Inc. isproviding the process technology. Osageplans to use winter barley for a feedstock,creating a new market for the crop that willprovide environmental benefits as a wintercover and won’t compete with food crops.

Athena Biotechnologiesreceives SBIR grantAthena Biotechnologies Inc., a Newark,Del.-based biotechnology companyfocused on cultivating new bacteria, haswon a $100,000 U.S. DOE Small BusinessInnovation Research grant. The award,issued in May, is being used to discover newmicrobes that can reduce the cost ofethanol production, targeting microbes thatproduce ethanol at high temperatures. If

�continued on page 36

INDUSTRYNEWS


A coalition of industrial food producers andother special interest groups has launched a cam-paign to discredit the ethanol industry. The effort,spearheaded by the Grocery ManufacturersAssociation, and a media campaign proposed byGlover Park Group was made public by U.S. Sen.Chuck Grassley, R-Iowa.

The GMA represents more than 300 food,beverage and household goods companies in theUnited States. Other groups backing the effortinclude the American Bakers Association, theAmerican Meat Institute, EnvironmentalWorking Group, the National Cattlemen's BeefAssociation, the National Chicken Council, theNational Council of Chain Restaurants, theNational Pork Producers Council, Pilgrim's Prideand the Snack Food Association, among others.

This coalition was formed after the GMArequested a public relations campaign to combatthe Energy Independence & Security Act of2007. The request stated that rising food prices,food shortages overseas and environmental con-cerns had created a window of opportunity tochange public perceptions about the benefits ofbiofuels, and overturn biofuels provisions in the2007 energy bill.

Glover Park Group responded to theGMA’s request by laying out a strategy to under-mine the ethanol industry over the next sixmonths. It establishes two fundamental goals:“First, we must obliterate whatever intellectualjustification might still exist for corn-basedethanol among policy elites. … Second, we mustdemonstrate to policymakers at the state and fed-eral level that there is a political price to allowingethanol policy to drive up the cost of food.”

The proposal continued to expand on itstactics to accomplish these goals: “It is worth not-ing at the outset that the recommendation to takethis fight beyond the confines of the Beltway andpolicy elites is relatively rare. ... That does not holdtrue here. Average voters understand perfectlywell what increased food prices mean and withthe right messaging are fully capable of drawingthe connection to corn-based ethanol.”

The Glover Park Group charged the GMAa $50,000-per-month retainer fee for six monthsto run the campaign.

To combat the disinformation campaign, sixU.S. senators held a press conference inWashington D.C., on May 22: Sens. Grassley; KitBond, R-Mo.; Byron Dorgan, D-N.D.; JohnThune, R-S.D.; Ben Nelson, D-Neb.; and KenSalazar, D-Colo. “The Grocery ManufacturersAssociation has an obvious self-interest inlaunching this campaign,” Grassley said. “Theyneed to blame someone for high grocery bills, butthey’ve aimed their fire at a false target.” He laterrequested a meeting with 15 chief executive offi-cers of GMA member-companies but subse-quently canceled the meeting when only oneCEO was willing to defend the group’s actions.

Brian Jennings, executive vice president forthe American Coalition for Ethanol, said theGMA campaign reinforces what ACE had sus-pected for some time. “It’s as close to a smokinggun as we’ve been able to discover,” he said.

The campaign is operating anti-ethanol Websites including www.foodbeforefuel.org andwww.foodb4fuel.org. It’s also working with theCoalition for Balanced Food and Fuel, which has aWeb site at www.balancedfoodandfuel.org. TheRenewable Fuels Association has a response to theGMA posted at http://renewablefuelsassociation.cmail1.com/e/433465/l. ACE’s food-versus-fuelWeb site can be found at www.ethanol.org/index.php?id=83.

—Jerry W. Kram

GMA launches campaignCommodity and Food Price Impacts

The Coalition for Balanced Food and Fuel uses charts

such as this one to back its argument about ethanol’s

impact on food prices.SOURCE: EMERGING BIOFUELS: OUTLOOK OF EFFECTS ON U.S. GRAIN,

OILSEED AND LIVESTOCK MARKETS IOWA STATE UNIVERSITY, MAY 2007


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INDUSTRYNEWS

The United Nations Foodand Agricultural Organization’sHigh-Level Conference onWorld Food Security: theChallenges of Climate Changeand Bioenergy was held June 3-5at the organization’s headquartersin Rome. The summit broughttogether heads of state and gov-ernment leaders from around theworld to discuss the global food situationand climate change with an emphasis onhow it’s affecting agriculture.

U.S. Agriculture Secretary Ed Schaferled the U.S. delegation to the summit. Hewas asked many questions regarding thenation’s biofuels programs and the effectthat biofuels polices are having on the glob-al food market. “We at the [USDA] haveplotted the long-term trends of price, yield,availability and consumption, and as we'velooked at those long-term trends, we areanticipating this year an over 40 percentincrease in food price inflation globally,” hesaid. “Of that, we can identify 2 [percent]to 3 percent of that price increase that isdriven by biofuels.”

Schafer stated that the major factor infood price increases is higher energy costs,with rising demand contributing an almostequal percentage.

A declaration calling on the interna-tional community to increase assistance fordeveloping countries was adopted. On theissue of biofuels, the declaration said, “It isessential to address the challenges andopportunities posed by biofuels in view ofthe world’s food security, energy and sus-tainable development needs. We are con-vinced that in-depth studies are necessaryto ensure that production and use of biofu-els is sustainable in accordance with thethree pillars of sustainable development,and take into account the need to achieveand maintain global food security. We callupon relevant intergovernmental organiza-

tions, including FAO, within theirmandates and areas of expert-ise—with the involvement ofnational governments, partner-ships, the private sector and civilsociety—to foster a coherent,effective and results-orientedinternational dialogue on biofuelsin the context of food securityand sustainable development

needs.”Emergency activities began during the

conference with $17 million being used tofight historically high food prices thatthreaten to leave the globe’s 862 millionpeople afflicted by hunger in an even worsesituation. “The high prices are a burden forall of us,” said FAO Assistant Director-General Jose Maria Sumpsi. “No one willbe immune. Prices have been steadily risingfor some time, but the sudden sharp jumpthis year is just one small symptom of anillness caused by years of neglect of worldagriculture.”

During sessions, delegates to theRome Food Security Summit announcedtheir increased commitment to the fightagainst hunger and for agricultural devel-opment. Although not a pledging confer-ence, many donors announced firm finan-cial contributions. Donors included (in U.S.dollars): United States, $5 billion (2008-’09); African Development Bank, $1 bil-lion; France, $1.5 billion (over five years);Japan, $150 million; the International Fundfor Agricultural Development, $200 mil-lion; Islamic Development Bank, $1.5 bil-lion (over five years); Kuwait, $100 million;Netherlands, $75 million; New Zealand,$7.5 million; Spain, $773 million (over fouryears); United Nations Central EmergencyResponse Fund, $100 million; UnitedKingdom, $590 million; Venezuela, $100million; World Bank, $1.2 billion.

—Timothy Charles Holmseth

UN reviews impact of biofuels on food sector

Schafer

�continued from page 34



Phase One milestones are met for the SBIRgrant, the company expects to apply foradditional funding of up to $750,000 tocontinue fine-tuning microbes that will pro-duce more ethanol, are tolerant to high lev-els of ethanol, degrade five-carbon sugarsand digest cellulose.

ISU team receives award for fungal researchA team of Iowa State University researcherswon the 2008 grand prize for universityresearch from the American Academy ofEnvironmental Engineers. AnthonyPometto, Hans van Leeuwen, MaryRasmussen and Samir Khanal were recog-nized for their research in developing a fun-gal process that improves the corn-to-ethanol production process. The researchersidentified and applied a particular fungus,called Rhizopus microsporus, to the thin stillagethat’s left after distillation. They said the useof this fungus reduces the energy costsrequired by current evaporation technolo-gies. Besides facilitating the recycling of theenzymes and water in the stillage, the funguscan be harvested as a high-protein feed sup-plement.

INDUSTRYNEWS

Industry assesses flooding impactThe floodwaters have subsided in Iowa, the

nation’s No. 1 corn- and ethanol-producing state,but the water continues to flow south. Manyhomes and businesses have been affected,including cornfields and ethanol plants. In manyareas, the damage is being assessed, and for theethanol industry, it is still too early to tell whatimpact Mother Nature has had.

On June 27, Monte Shaw of the IowaRenewable Fuels Association reported that nomore than 10 million to 15 million gallons ofproduction was lost in Iowa due to flooding..Only three ethanol plants were directly affected,but one—Penford Products Co.—had just com-pleted construction and was about to come online. Therefore, current production capacity waslost. Archer Daniels Midland Co. had to shutdown its plant for a short time due to a disrup-tion in water service. At press time, it was run-ning at partial capacity. A third unnamed plantreduced but didn’t halt production because therewas no available rail service to ship the productfrom the plant. The plant instead shipped itsproduct via truck. “I don’t want to diminishwhat’s going on right now,” Shaw told EPM.“The floods were devastating. It’ll be years, notmonths, before things are back to normal. I’veheard some people say this is the ‘HurricaneKatrina of Iowa.’ However, when it comes tofuel production, not all ethanol plants are in

Iowa, unlike the oil refineries in Houston. Notthat much ethanol production will be affected.”

Shaw said the real story in this time oftragedy is how ethanol was still able to be deliv-ered to customers via rail, truck or barge. “Yes,there was an embargo in Chicago, and shippershad to go around the closed Union Pacific line,”he said. “It wasn’t easy to do it. I have to tip myhat to the logistics guys in this industry. Theyreally worked hard and utilized the flexibility ofthe system. That’s something the oil industrycan’t do.”

The USDA’s National Agricultural StatisticsService released its annual acreage report asscheduled June 30, despite having to reinterviewfarmers after the floods hit. The report conclud-ed that U.S. farmers intend to harvest 90.4 per-cent of their planted corn acres, down from 92.4percent before the floods. NASS acknowledgedthat accurate data might not have been availableby the June 30 deadline, so it plans to conduct amore extensive update of planted and harvestedacreage in impacted areas in July. That informa-tion will be available in the USDA’s CropProduction report to be released Aug. 12. Areview of the acreage report can be found underthe Web exclusives section of www.ethanolpro-ducer.com.

—Jessica Sobolik


INDUSTRYNEWS

Obligated parties submit RIN reportsThe U.S. EPA is review-

ing the first round of annualreports summarizing recordedrenewable identification num-bers (RINs) under the renew-able fuels standard of theEnergy Independence &Security Act of 2007. An esti-mated 1,000 companies filedtheir first yearly summaries,called attest engagements, bythe May 31 deadline.

Not all companies filed,however. EPA spokeswoman Roxanne Smithexplained that the regulations contain a provi-sion that allows certain parties to file their2007 attest reports along with their 2008reports due May 31, 2009.

The EPA has yet to review the attestengagement reports, she told EPM at presstime. “We heard from a number of [certifiedpublic accountants] that the attest engage-ments identified and helped correct problemswith tracking and reporting RINs for manycompanies,” she said. David Bennett, certifiedpublic accountant for RIN Attest andAdvisory Services in Connecticut, has con-ducted approximately 30 attestations for vari-ous RIN-holding companies in the UnitedStates since March. He told EPM that there

were quite a few companies that experiencedproblems when compiling data for filing. Hesaid the main problem was that not all compa-nies have efficient ways of tracking their data.“For a lot of small companies that don’t havesophisticated, dedicated software … they’reusing [Microsoft] Excel [to track RIN move-ment],” he said. “For companies that have theresources and abilities, they can build and buya system that has those templates built into itso that hopefully at the end of the quarter allthey have to do is push a button, and all thedata is compiled and the appropriate reportsare output.”

Bennett said companies that don’t usespecific software have to rely on the manualinput of numbers, resulting in a large margin

for human error. The EPA isaware of this problem and, as aresult, mandates an annual certi-fied public accountant audit torectify any errors that may haveoccurred throughout the com-pany’s yearly record-keeping.

Lack of knowledge onhow to properly keep track ofRINs has been another problemfor companies, according toBennett. “The EPA tells what todo, not how to do it,” he said,

adding the agency is aware of the problem. Inan attempt to better inform companies thatdeal with RINs, the EPA has begun issuingquestion-and-answer documents on its Website every few months.

Bennett suggests that obligated ethanolcompanies appoint a person to become famil-iar with RIN regulations and how they applyto the company. This should be the person’ssole focus, he suggested, as it is intensive work.

More information on the requirementscan be found at www.epa.gov/otaq/regs/fuels/attestengage.htm.

—Susanne Retka Schill

RIN Code Format

KYYYYCCCCFFFFFBBBBBRRDSSSSSSSSEEEEEEEE

K = RIN assignment code (1=assigned, 2=unassigned)

YYYY = Year batch is produced/imported (when it leaves the facility)

CCCC = Company registration ID

FFFFF = Facility registration ID

BBBBB = Producer assigned batch number

RR = Equivalence Value for the renewable fuel

D = Renewable type code (1=cellulosic; 2=noncellulosic)

SSSSSSSS = RIN Block Starting Number

EEEEEEEE = RIN Block Ending Number

The 30-day public comment peri-od for the Texas renewable fuels stan-dard (RFS) waiver ended June 23, dur-ing which time the U.S. EPA receivednearly 15,000 comments.

The EPA requested public com-ments on the issue after receiving a let-ter from Texas Gov. Rick Perry’s officeApril 25 that requested a 50 percentwaiver. Contradictory to a study recently releasedby Perry’s alma mater Texas A&M University,Perry stated, “This request is based upon datademonstrating that implementation of the man-date is unnecessarily having a negative impact onTexas’ otherwise strong economy, while drivingup global food prices.”

In the letter, Perry also said the Texas live-stock industry is facing great harm due to rocket-ing corn prices because of the RFS.

In response to an inquiry from U.S.Committee on Energy & Natural ResourcesChairman Jeff Bingaman, which posed multiplequestions regarding the issues in debate, Secretaryof Energy Samuel Bodman and Secretary ofAgriculture Ed Shafer provided their take on thesituation in a letter sent June 11. “It is clear thatbiofuels are already moderating gasoline prices,”they said. “Our preliminary analysis further sug-gests that current biofuels-related feedstock

demand plays only a small role in glob-al and food-supply pricing.”

In response to the EPA’s com-ment request, the National CornGrowers Association submitted a let-ter June 17, strongly urging a denial ofthe waiver. “The strong renewable fuelpolicies in the United States have notonly created local, rural and economic

growth, but have increasingly prompted develop-ment and prosperity among third-world farmers,”the letter stated. The NCGA also said Perry’sclaims failed to consider the many benefits thatethanol and other renewable fuels bring to Texasand the nation.”

On the other side of the argument, theNational Chicken Council filed comments withthe EPA on June 13 in support of a national waiv-er, saying the use of ethanol as a supplement togasoline may have been well-intended as aresponse to U.S. energy needs but has had nega-tive, unintended consequences. “The program hasimposed, and continues to impose, heavy costsand severe harm on chicken producer/processorsand their customers,” the council wrote.

At press time, the EPA had until July 23 tomake a ruling.

—Anna Austin




Georgia explores Brazilian ethanol industry According to a report released by GeorgiaTech’s Strategic Energy Institute, Georgiahas reached its goal of conveying toBrazilian business and academic leaders theadvantages that the country and U.S. statecould gain from cooperative projects in theethanol industry, particularly cellulosicethanol. In early May, Georgia Lt. Gov.Casey Cagle led a mission trip to Brazil toexplore the country’s ethanol industry andmeet with representatives from Brazil’slargest biofuels companies. Benefits, suchas Georgia’s vast amounts of existing tim-ber feedstock and Brazil’s experience inproducing and transporting ethanol, werepart of the discussion.

Swedish company to market sustainable ethanolBy early August, Swedish ethanol producerand distributor SEKAB Group expects tobe supplying the world’s first verified, sus-tainable ethanol to its Swedish customers.The company has developed requirementsfor sustainability with its Brazilian sugar-cane ethanol suppliers that include environ-

INDUSTRYNEWS

RFS waiver request debate continues


Perry


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INDUSTRYNEWS

Verenium opens cellulosic ethanol demo plant Cambridge, Mass.-based Verenium

Corp. hosted the grand opening of its1.4 MMgy demonstration-scale cellulosicethanol plant May 29 in Jennings, La.Approximately 100 people attended theevent, including industry professionals,local and state government officials, U.S.DOE representatives, and local farmers.Attendees heard from several speakersand toured the facility, which had justbegun transferring sugarcane bagasseinto the plant for its commissioningphase.

Verenium President and ChiefExecutive Officer Carlos Riva said theevent was a “truly momentous” occasionnot just for the company but for the entire cel-lulosic ethanol industry. “We look forward torealizing the vision of making cellulosicethanol a reality,” he said.

Verenium’s plan, according to Riva, is tovalidate its technology during the commis-sioning phase before moving immediately intothe construction of its first commercial-scalefacility. Riva said commercial sites are beingdeveloped in Texas, Louisiana and Florida. It’spossible the first commercial plant could becolocated with the demonstration facility, butother sites will also be considered becauseVerenium plans to construct a “fleet” of com-

mercial-scale facilities—all operating between30 MMgy and 60 MMgy.

Sugarcane and energy cane bagasse arethe feedstocks currently being used at thedemonstration facility. At the grand opening,there were 9,000 pounds of bagasse ready tobe fed into the plant. Local sugar cooperativeCajun Sugar Co-op is providing Vereniumwith all of its feedstock supply. Cooperativemember and lifelong farmer Joe Judice toldEPM that he expects Verenium’s plant to helpthe local sugar growers at a time when theindustry is struggling. He is one of several areafarmers who have been experimenting with

energy cane, at Verenium’s request, andsaid he hopes it works well for the com-pany because it’s easy and cheaper for thefarmer to grow.

According to Verenium, experimen-tation is also being done on sorghum andswitchgrass to potentially diversify thecompany’s feedstock choices. Vereniumwould also like to use wood chips but willperfect its bagasse technique before mov-ing on to other options.

Verenium’s advantage so far in thecellulosic ethanol industry has been theend-to-end capabilities the company pos-sesses, including the ability to produce itsown enzymes. The demonstration facility

includes a lab on the third floor of the plantthat will allow scientists to work in real timewith enzymes being used at the plant.However, Riva cautioned that much morework still needs to be done to advance cellu-losic ethanol. “We (the industry) also need tofocus on the agronomics of crop production;the economics of collecting, transporting andstoring large quantities of biomass; and thetransportation, storage, blending and market-ing of the fuel itself,” he said.

—Kris Bevill

Members of Verenium’s corporate team wait for President and

Chief Executive Officer Carlos Riva to cut the ceremonial ribbon

at the company’s demonstration-scale plant grand opening in

Jennings, La.

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mental criteria, as well as labor conditionsand wages. The criteria call for a reduction incarbon dioxide emissions of at least 85 per-cent compared with fossil fuels. AndersFredriksson, vice president of SEKABBioFuels and Chemicals, said the criteria willbe synchronized with European Union reg-ulations as they are developed. A long-timeSwedish ethanol producer using black liquorfrom paper mills, SEKAB is moving its newcellulosic technology from the pilot todemonstration phase.

Group promotes bioenergy on world stageThe World Bioenergy Association, anorganization for the fast-growing bioenergysector, was launched at the World Bioenergy2008 conference in Jönköping, Sweden. Theorganization will promote the use of bioen-ergy in a sustainable and economically effi-cient way, and will help develop certificationsystems to document fuels produced in anenvironmentally sustainable way. The organ-ization is open to national and regionalbioenergy associations, and bioenergy com-panies. Swedish Bioenergy Association(Svebio) helped to create the organization toadvocate for bioenergy businesses interna-tionally. For more information about theWorld Bioenergy Association, visit

INDUSTRYNEWS

Canadian government passes renewable fuels standard

On June 26, the Canadian Senate passed BillC-33, which will require the use of 5 percentrenewable content in gasoline by 2010 and 2 per-cent renewable content in diesel fuel by no laterthan 2012.

Canada’s House of Commons passed the billin late May. After the Senate passed the bill,Canada’s Government General Michaëlle Jeansigned it, making it official.

“This is huge in terms of giving the federalgovernment the authority to regulate fuel blendingon a national basis,” said Gord Quaiattini, presi-dent of the Canadian Renewable FuelsAssociation. “In the past, it’s been up to eachprovince, particularly in regard to biofuels. Thislegislation builds on the leadership that thoseprovinces had, giving the federal government thecapacity to move forward on these current targetsand go beyond that.” Ontario, Manitoba andSaskatchewan have currently enacted RFS man-dates, and British Columbia and Quebec will con-tinue to move forward with similar mandates.

The CRFA said it expects the creation of 20new biofuels facilities to meet this requirement.“We have some plants that are already built, someunder construction and some that were at variouslevels of planning, financing and development,”Quaiattini said. “This [legislation] provides marketcertainty.”

Suncor Energy didn’t anticipate the passageof Bill C-33, but it certainly came at an opportunetime. On June 12, it announced plans to proceedwith a CAN$120 million expansion of its St. ClairEthanol Plant in Sarnia, Ontario. The plant cur-rently produces 200 MMly (53 MMgy) and willdouble its production to 400 MMly (106 MMgy).According to Suncor spokesman Jason Vaillant,the expansion was planned as soon as the facilitybegan initial production in 2006. “We didn’t havethe crystal ball to see this was going to happen, butwe’re certainly glad it did,” he said.

There is also the environmental benefit thatwill result from this legislation. According toNatural Resources Canada’s GHGenius life cyclemodel, the RFS outlined in Bill C-33 will result ina 4.2 megatonne (4 million tons) reduction ingreenhouse gas emissions annually, which is theequivalent of removing more than 1 million carsfrom Canadian roads ever year.

Not only would Canadian producers be ableto meet domestic demand, but Quaiattini pointedout that they could also look south to help meetthe RFS enacted in the United States. “It also pro-vides opportunities for the United States to pro-vide for Canada,” he said. “The bottom line is, ithelps to grow the North American market.”

—Jessica Sobolik�continued on page 42


INDUSTRYNEWS

Distillers grains energy value varies Beef cattle fed a percentage of

distillers grains in Nebraska per-formed differently than cattle fedthe same percentage of distillersgrains in Kansas.

This finding has drivenresearchers to investigate the phe-nomenon further, and at least twomajor regional differences in feed-ing practices have been pinpointedas the bases for these variations inbeef cattle performance. The nutri-tional composition of distillersgrains between different corn-based ethanol plants can vary, too,so when recent research at TexasA&M University, Texas Tech Universityand elsewhere concluded that the energyvalue of distillers grains is dependent onthe ethanol feedstock used, it confirmedwhat some already believed.

Jim MacDonald, a beef nutritionistwith Texas AgriLife Research in Amarillo,Texas, said two years of feeding trials onfinishing beef cattle confirmed that dis-tillers grains from sorghum has a 25 per-cent lower energy value than distillersgrains from corn because the energy valueof the grains differs. Sorghum, used as anethanol feedstock with corn or in rare

instances as a lone feedstock, makes uponly 6 percent of total U.S. ethanol produc-tion. The grain is grown in southern Plainsstates such as Kansas, Oklahoma andTexas. Furthermore, there is the major dif-ference in how cattle feeders treat feed cornas a base in which distillers grains may beadded prior to cattle consumption.“Researchers in the northern Plains tend touse dry-rolled corn, and in the southernPlains, they use steam-flaked, corn-baseddiets,” MacDonald said.

According to Terry Klopfenstein, aresearch professor of ruminant nutrition

with the University of Nebraska, thedifferences in base-feed treatmentare marked and have much to dowith how cattle respond to the samedistillers grains incorporated intothe two differently treated base cornfeeds. “What we know is that thecattle perform differently to dis-tillers grains when they’re fed steam-flaked corn than when they’re feddry corn,” he said. “We don’t knowwhy, but that’s clear. The data fromKansas State University, OklahomaState University, Texas TechUniversity and Texas A&MUniversity suggest the cattle

respond differently. When I say ‘perform-ance,’ I’m talking about rates of gain, effi-ciencies of gain and [maybe] differences incarcass quality.”

Dry-rolled corn is gently rolled tobreak up the kernel for easier digestion bythe rumen, whereas steam-flaked corn issteamed in a stainless steel chest forapproximately 20 minutes to moisten andheat the corn up, after which it enters aroller to make thin flakes.

—Ron Kotrba

Many researchers have found that beef cattle perform differently when

fed with distillers grains originating from different feedstocks.

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www.worldbioenergy.org or contactSvebio’s Kjell Andersson at +46 (0)70-4417192.

Süd-Chemie, Linde plan cellulosic ethanol productionTwo major European companies, Süd-Chemie AG and Linde Group, have formeda partnership to develop and market plansfor the production of second-generationbiofuels. The partnership will involve usinga biotechnological process to produce cellu-losic ethanol from plant matter, includingwheat and maize straw, grasses, and wood.Süd-Chemie will provide its knowledge inthe biocatalysis and bioprocess engineeringsectors, while Linde’s subsidiary companyLinde-KCA-Dresden will provide the engi-neering expertise. The partnership is cur-rently working on a pilot plant at Süd-Chemie’s research and development site inMunich, Germany, and is in talks with itsfirst potential customers for commercialplants.

Castle Rock Renewable Fuelsjoins Wisconsin Ethanol CoalitionCastle Rock Renewable Fuels LLC hasjoined the Wisconsin Ethanol Coalition, adiverse group of businesses, environmental

DOE, Harvard aid SunEthanolAnother U.S. DOE grant and a collaborative

agreement with Harvard University are helping topave the way for a cellulosic ethanol company todevelop a unique biomass-to-ethanol process.Amherst, Mass.-based SunEthanol Inc. received a$100,000 research grant from the DOE to helpdevelop a process that converts biomass intoethanol in one step, compared with the currentprocess that hydrolyzes and ferments pretreatedcellulose. The grant was the DOE’s third toSunEthanol in the past year.

The latest grant is a nine-month, phase oneSmall Business Innovation Research project con-sisting of a collaboration effort betweenSunEthanol, Texas A&M University and theUniversity of Massachusetts. It’s expected to aid inSunEthanol’s quest to develop a one-step “consol-idated bioprocessing” system to produce ethanol.

On June 12, the company and Harvard’sOffice of Technology Development announced acollaborative research agreement, in whichHarvard University will research and produce newgenetically modified strains of SunEthanol’spatented “Q Microbe,” a naturally occurringanaerobic microbe.

John Gorham, SunEthanol’s cofounder andmanager of business development, told EPM thatthe latest DOE grant and the Harvard researchcollaboration are aimed at manipulating the molec-ular genetics of the microbe. The projects are par-allel to SunEthanol’s research in finding more

effective native strains of the microbe.The research will be conducted in the labora-

tory of George Church, Harvard professor ofgenetics and director of the school’s Center forComputational Genetics. His laboratory will applyits expertise in DNA synthesis and genome engi-neering to create modified strains that will be test-ed by scientists at SunEthanol to improve biomassconversion and ethanol production. SunEthanolwill have an option to license any of the strains cre-ated under the partnership. “Teaming with aMassachusetts leader in alternative energy illus-trates the broad impact that Harvard’s expertise ingenetic engineering may have well beyond its tradi-tional applications in medicine,” said IsaacKohlber, Harvard chief technology developmentofficer.

—Dave Nilles


INDUSTRYNEWS

Khursheed Karim works on the Q microbe in

SunEthanol's laboratory in Amherst, Mass.

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GETTING ANSWERSFROM FIELD TO FUELALTERNATIVE FUEL SERVICESCUSTOMIZED SOLUTIONS FOR INVESTORS, PRODUCERS, MANUFACTURERS, SUPPLIERS AND TRADERS

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Alico withdraws from cellulosic ethanol projectLaBelle, Fla.-based Alico Inc., a land management company,

announced in early June that it will no longer explore the construc-tion of a cellulosic ethanol production facility in Florida. In light ofAlico’s move, New Planet Energy LLC has assumed full ownershipof the project.

Alico was slated to receive up to $33 million in grants and loanassistance from the U.S. DOE, and another $2.5 million from thestate of Florida to partially offset the costs of a proposed cellulosicethanol venture. Alico said it will no longer pursue those grants. Inaddition, Alico will have no further financial commitment or liabil-ity to NPE, the DOE or the state of Florida in regard to the proj-ect.

During the past year, Alico had been working with NPE onthe project, according to Craig Evans, project consultant for NPEFlorida LLC. He served as an independent consultant to Alico andhandled the day-to-day operations for the project, along with thegrant and loan guarantees. “There’s been a relationship [betweenAlico and NPE] for a long time, and it has just grown over time tothe point where now, as Alico made this decision, it’s actually justa transition,” he said. “NPE was already taking on a large role inthe project.”

Before the transition, Alico was planning to usegasification/fermentation process technology patented and pro-vided by BRI Inc. The technology can produce cellulosic ethanolfrom virtually any hydrocarbon and/or organic waste material.NPE will continue working with that company. Seattle-basedHarris Group Inc. will function as the lead designer and engineer-ing firm for NPE, as well, Evans said.

According to Evans, NPE will initially install two separatemodules, each consisting of a gasifier, a synthesis gas conditioner,a bioreactor and distillation equipment that can produce 4 MMgyof ethanol each for a total of 8 MMgy. NPE intends to operate atan 8 MMgy capacity for at least six months before expanding to 20MMgy and eventually 100 MMgy, Evans said.

The company has selected a 2,000-acre site in central Florida,Evens said, adding he couldn’t divulge any additional details. Theplant will be capable of processing feedstocks such as animalmanure, unrecyclable paper, untreated lumber from constructionand demolition sites, various vegetative wastes, agricultural residuesfrom the citrus industry, seaweed such as kelp, plastics, old tires,and cardboard. Untreated lumber, paper waste and various agricul-tural wastes will be the initial feedstocks, according to Evans. “Wethink [we have] the best technology to produce ethanol because ofthe multiple feedstocks it can take in and obviously the economicsassociated with it,” he said.

According to Alico, the impetus behind its decision to with-draw the partnership with NPE simply boiled down to the risks.“In reaching this decision, [the company] will continue to focus onour core operations of real estate management, including agricul-ture and development opportunities, to provide returns for ourshareholders,” said John Alexander, chairman and chief executiveofficer of Alico.

—Bryan Sims

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DuPont, Genencor to develop cellulosic ethanol company

DuPont and Genencor, a division ofDanisco AS, announced an agreement in mid-May to form DuPont Danisco Cellulosic EthanolLLC, a joint venture to develop and commercial-ize technology for the production of cellulosicethanol. The effort is part of the two companies’commitment to produce biofuel from nonfoodsources.

The initial investment calls for $140 million,which will target corn stover and sugarcanebagasse. Future objectives include multiple ligno-cellulosic feedstocks including wheat straw, ener-gy crops and other biomass sources.

“With food and gas prices surging at double-digit rates, there is an imperative for sustainablebiofuels technologies,” said DuPont Chairmanand Chief Executive Officer Charles Holliday Jr.“This joint venture addresses this issue head on.By integrating our companies’ strengths andexpertise in this new venture, we are significantlyincreasing the potential to make cellulosic ethanolfrom multiple nonfood sources an economic real-ity around the world.”

Scientists from both companies will begin anaccelerated effort to integrate unique cellulosicprocessing capabilities. “By combining the world-class capabilities of DuPont and Danisco, ourjoint venture will offer the technology standardfor cellulosic ethanol production,” said Danisco

CEO Tom Knutzen. “This joint venture will be apowerhouse of discovery, development and engi-neering. It represents a major step forward inDanisco’s new strategic intent to be a leadingforce in the field of industrial biotechnology.”

Jennifer Hutchins, spokeswoman forGenencor, said a site has yet to be finalized for thepilot or commercial facilities. A start-up date forthe plant is slated for 2009. A commercial-scalefacility will follow within three years.

Hutchins stressed that Genencor won’t dis-continue its current enzyme work in light of thenew collaboration. “This is huge for us, but itwon’t stop us from continuing to offer our mer-chant enzyme services for both first- and second-generation ethanol,” she said.

The parent companies will license their com-bined existing intellectual property and patentsrelated to cellulosic ethanol. The goal is to maxi-mize efficiency and lower the overall system costto produce a gallon of ethanol from cellulosicmaterials by optimizing the process steps into asingle integrated technology solution.

The joint venture will be headquartered inthe United States and will be formed afterrequired regulatory approvals are received.

—Craig Johnson



entities, statewide groups and local organiza-tions that are building public and legislativeawareness of ethanol issues in Wisconsin.Castle Rock Renewable Fuels employs 37people at its 50 MMgy ethanol plant inNecedah, Wis. General Manager BernieHoffman said the plant is pleased to be apart of the coalition.

Raven Biofuels, Spectrum Energyto convert softwood into fuelNew Jersey-based Raven BiofuelsInternational Corp. announced a partner-ship with British Columbia-based SpectrumEnergy Inc. to develop cellulosic ethanolplants in the province that will use infestedwood and other biomass as feedstocks. Thepine beetle has created a major problem inCanada, and according to the BritishColumbia government, if infestation trendscontinue, approximately 75 percent of the1.35 billion cubic meters of merchantablepine will be killed. Currently, the affectedarea is sizeable to the state of Texas and hasthe potential to produce more than 1 billiongallons of ethanol. Spectrum Energy andRaven Biofuels International have submit-ted a proposal to British Columbia’sInnovative Clean Energy Fund to help withfinancing. EP


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Ethanol rail terminals offer alternative to trucking

New ethanol terminals opening alongmajor rail lines are giving producers,wholesalers and retailers an affordable wayto receive shipments, compared with themore common method of trucking, whichmay be especially welcome as the cost ofdiesel fuel continues to climb.

“The decision to carry and offerethanol-blended fuels has really been cen-tered on the cost,” said Robert White,deputy director of the Ethanol Promotionand Information Council. “There is nodoubt that there are markets where wewould see more adoption if transportationcosts dropped.”

Safe Handling Inc., a bulk producttransportation and toll processing compa-ny, has opened western Pennsylvania’s firstrail-to-truck ethanol transloading terminalin Mount Pleasant, Pa. The new terminal islocated on three Class I railroad systems,including CSX Transportation, CanadianNational and Norfolk Southern railroads,giving wholesalers the opportunity to pur-chase ethanol from a wide range of pro-ducers and choose a rail line based on thelowest offered rates. The terminal canreceive up to 30 tanker cars at a time, eachholding approximately 29,000 gallons ofethanol. The facility has the capacity totransload 180,000 gallons per day and hasprivate siding capable of accommodating145 railcars.

An industry leader in ethanol handlingand distribution terminals, U.S.Development Group LLC has opened anew state-of-the-art facility in Arlington,Texas. Served by the Union PacificRailroad, Dallas Fort Worth Rail TerminalLLC consists of a rail terminal, pipelineoperation, truck load operation and massstorage facility. The terminal has an 84-rail-car high-speed offloading facility, and out-bound truck and pipeline capabilities. It

also features 130,000 barrels of dedicatedstorage capacity.

Provista Renewable Fuels MarketingLLC, with SHS Inc. as its single member,has signed a letter of intent to partner withTrans Load Ltd. Inc. and Blendstar LLC toconstruct and operate an ethanol distribu-tion center in Birmingham, Ala. Provistawill be the exclusive supplier of fuel to theterminal. Trans Load Ltd. and itsBirmingham warehousing and transloadinglocation, served by the BurlingtonNorthern Santa Fe railroad, will be respon-sible for the placement and off-loading ofrailcars. Blendstar will handle engineering,construction and back-office accountingof the new storage facility.

Other ethanol rail terminals aroundthe country are in the planning and con-struction phases. This increase in the num-ber of terminals should help create a morecoherent system of ethanol distribution,bringing biofuel products to previouslyunderserved markets.

—Erin Voegele

Ethanol is transferred from a railcar into a truck at

Safe Handling’s rail terminal in Mt. Pleasant, Pa.

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INDUSTRYEXPANSION COMPLETEPLANT EXPANSIONPROJECT COMPLETENEW PROJECT

Ethanol Plant Construction

t the end of June, most of the ethanol industry was moving

forward with an eye fixed on the skies. Flooding in the

Midwest has affected a few plants. At press time, Archer

Daniels Midland Co.’s facility in Cedar Rapids, Iowa, was

running at a diminished rate due to a disruption in water

service, for example.

According to Jerry Gidel of North America Risk Management

Services, as much as 8 percent of Iowa’s corn acreage may have to be

replanted due to rain. This news is driving corn for December delivery

to record highs. At the end of June, corn was trading at $7.55 per

bushel at the Chicago Board of Trade. Soaring costs may be good for

farmers, but for plants under construction, the price increase will cer-

tainly affect bottom lines.

The Iowa Renewable Fuels Association reported June 27 that the

floods have halted as much as 10 million to 15 million gallons of

ethanol production in the state. However, production was expected to

be back to normal by the end of June.

For plants under construction, most of the challenges have been

confined to getting materials to the sites. For the most part, no plants

reported significant delays or disruptions in construction. “We knew

floods in the Midwest could affect a plant since the last big flood in

1993,” said one project board member. “We chose [our] site with that

in the backs of our minds and built above the 100-year flood plain.”

For plants outside the affected areas, construction is still “busi-

ness as usual.” A serious concern for all is the rising cost of energy and

the way in which those costs are passed on to consumers. For exam-

ple, since May 2007, the cost of steel products has increased 17 per-

cent, asphalt has gone up 30 percent and domestic crude oil has

increased 51 percent. Time will tell if these costs will slow new plant

construction.

In the past month, two plants under construction announced com-

pletion. Superior Ethanol LLC in Superior, Iowa, will use Delta-T Corp.

technology to produce 50 MMgy of ethanol. Calgren Renewable Fuels

LLC will produce 52 MMgy in Pixley, Calif.

Since the beginning of 2008, 35 plants have finished construction

and begun production, bringing a total annual capacity of nearly 2.5 bil-

lion gallons on line. The number of plants coming on line peaked in

May when nearly 1 billion gallons of annual production capacity was

added to the industry.

—Craig A. Johnson

Flooding Hits Midwest Cornfields, Ethanol Plants

A


1. Our good faith attempts to contact project representatives go

unanswered for three straight months.

2. Through exhaustive means, we are unable to verify the contin-

ued advancement of a project.

3. The Renewable Fuels Association, as well as project represen-

tatives, are notified and given a reasonable amount of time to ver-

ify the project’s current status.

To provide updates to this list, contact Craig A. Johnson at (701) 746-

8385 or [email protected].

EPM will remove seemingly inactive projects from this list if:

Superior Ethanol LLC

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Construction Represents 3.69 Billion Gallons Annually


Bridgeport Ethanol LLC

Location Bridgeport, Nebraska Ethanol marketer undeclared

Design/builder ICM Inc. Distillers grains marketer Colorado Ag Services

Process technology ICM Inc. Carbon dioxide marketer undeclared

Capacity 50 MMgy Broke ground September 2007

Feedstock corn Target start-up date September 2008

Synopsis of progress

Road construction is being completed. All buildings are erected, and most work is confined to electrical and

piping.

Archer Daniels Midland Co.

Location Cedar Rapids, Iowa Ethanol marketer Archer Daniels Midland

General contractor undeclared Distillers grains marketer undeclared

Process technology undeclared Carbon dioxide marketer undeclared

Capacity 275 MMgy Broke ground June 2007

Feedstock corn Target start-up date first quarter 2010


Because of local flooding, this site’s existing ethanol plant was temporarily shut down and is now operating

at partial capacity. ADM still considers the construction site active, but construction has been nearly halted.

The target start-up date, which was originally the third quarter of 2009, has been delayed.

Archer Daniels Midland Co.

Location Columbus, Nebraska Ethanol marketer Archer Daniels Midland

General contractor undeclared Distillers grains marketer undeclared

Process technology undeclared Carbon dioxide marketer undeclared

Capacity 275 MMgy Broke ground July 2007

Feedstock corn Target start-up date third quarter 2009


The time line for this project has been delayed. Start-up was previously slated for the fourth quarter of 2008.

Calgren Renewable Fuels LLC

Location Pixley, California Ethanol marketer Calgren Renewable Fuels

General contractor W.M. Lyles Co. Distillers grains marketer J.D. Heiskell & Co.

Process technology Lurgi Inc. Carbon dioxide marketer N/A

Capacity 52 MMgy Broke ground March 2007

Feedstock corn Start-up date May 2008


Testing was being completed in late June. Congratulations Calgren Renewable Fuels LLC!

Project Complete

Cardinal Ethanol LLC

Location Union City, Indiana Ethanol marketer Murex

Design/builder Fagen Inc. Distillers grains marketer CHS Inc.

Process technology ICM Inc. Carbon dioxide marketer N/A

Capacity 100 MMgy Broke ground February 2007

Feedstock corn Target start-up date fall 2008


Siding is nearly complete on all of the buildings. Construction is underway on the pipe rack. The water treat-

ment building is mostly complete. Yeast tanks are being installed.

Cilion Ethanol LLC

Location Keyes, California Ethanol marketer undeclared

General contractor Harris Construction Distillers grains marketer undeclared

Process technology Praj Industries Ltd. Carbon dioxide marketer N/A




All major structural work is complete, and most construction work is focused on piping and electrical.

Cilion Ethanol LLC

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Aventine Renewable Energy-Aurora West LLC

Location Aurora, Nebraska Ethanol marketer Aventine Renewable Energy

General Contractor Kiewit Energy Co. Distillers grains marketer Aventine Renewable Energy

Process technology Delta-T Corp. Carbon dioxide marketer N/A




The project is on schedule. No further information was available at press time.

Aventine Renewable Energy-Mt. Vernon LLC

Location Mt. Vernon, Indiana Ethanol marketer Aventine Renewable Energy

General Contractor Kiewit Energy Co. Distillers grains marketer Aventine/Consolidated Grain and Barge





The project is on schedule. No further information was available at press time.


First United Ethanol LLC

Location Camilla, Georgia Ethanol marketer Eco-Energy

Design/builder Fagen Inc. Distillers grains marketer First United Ethanol


Capacity 100 MMgy Broke ground January 2007

Feedstock corn Target start-up date summer 2008


Dryers are being installed. The grain-handling area is 55 percent complete. The grain-receiving building is

complete, and grain transport equipment is being installed. All major equipment in the fermentation area has

been installed, and piping, electrical and instrumentation work is approximately 85 percent complete there.

Piping, electrical and instrumentation for the process equipment is approximately 75 percent complete.

GreenField Ethanol

Location Johnstown, Ontario Ethanol marketer Commercial Alcohols

General contractor SNC-Lavalin Group Distillers grains marketer Commercial Alcohols


Capacity 200 MMly (53 MMgy) Broke ground October 2006

Feedstock corn Target start-up date fourth quarter 2008


N/AFirst United Ethanol LLC

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First United Ethanol LLC

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Clean Burn Fuels LLC

Location Raeford, North Carolina Ethanol marketer undeclared

General contractor Biofuels Design/Clean Burn Fuels Distillers grains marketer undeclared

Process technology Katzen International Carbon dioxide marketer N/A


Feedstock corn Target start-up date June 2009


All major dirt work for the site is complete, and foundation work has begun.

Ethanol Grain Processors LLC

Location Obion, Tennessee Ethanol marketer Aventine Renewable Energy



Capacity 100 MMgy Broke ground December 2006

Feedstock corn Target start-up date October 2008


Construction continues. No further information was available at press time.


Holt County Ethanol LLC

Location O'Neill, Nebraska Ethanol marketer undeclared

General contractor Adams Construction Distillers grains marketer undeclared

Process technology Vogelbusch Carbon dioxide marketer N/A


Feedstock corn Target completion date late 2008


N/A

Hawkeye Renewables

Location Menlo, Iowa Ethanol marketer Eco-Energy

Designer/builder Fagen Inc. Distillers grains marketer undeclared






Hawkeye Renewables

Location Shell Rock, Iowa Ethanol marketer Eco-Energy

Designer/builder Fagen Inc. Distillers grains marketer undeclared





N/A

Highwater Ethanol LLC

Location Lamberton, Minnesota Ethanol marketer undeclared

Design/builder Fagen Inc. Distillers grains marketer undeclared


Capacity 50 MMgy Broke ground November 2007

Feedstock corn Target start-up date spring 2009


Work has begun on the beer well and fermentation tanks. Dirt work for the distillers grains building and grain-

receiving area is underway.

Indiana Bio-Energy LLC

Location Bluffton, Indiana Ethanol marketer Aventine Renewable Energy




Feedstock corn Target start-up date August 2008


The rail loop has been completed, and only minor roadwork remains. Crews are painting the tanks and put-

ting the finishing touches on the facility. Activity at the site is now largely focused on electrical and piping work.

Homeland Energy Solutions

Location Lawler, Iowa Ethanol marketer undeclared

Design/builder ICM Inc. Distillers grains marketer undeclared


Capacity 100 MMgy Broke ground May 2007

Feedstock corn Target start-up date January 2009


N/A

Kawartha Ethanol Inc.

Location Havelock, Ontario Ethanol marketer undeclared

Design/builder Profab International Distillers grains marketer Thompson's Ltd

Process technology Delta-T Carbon dioxide marketer undeclared

Capacity 80 MMly (21 MMgy) Broke ground October 2007

Feedstock corn Target start-up date December 2008


N/A

Louisiana Green Fuels LLC

Location Lacassine, Louisiana Ethanol marketer undeclared

Design/builder Praj Industries Ltd. Distillers grains marketer N/A

Process technology Louisiana Green Fuels Carbon dioxide marketer N/A

Capacity 25 MMgy Broke ground April 2008

Feedstock sweet sorghum Target start-up date June 2009


Dirt and foundation work is underway.

New Project


Pacific Ethanol Stockton LLC

Location Stockton, California Ethanol marketer Kinergy Marketing

General contractor W.M. Lyles Co. Distillers grains marketer Pacific Ag Products LLC

Process technology Delta-T Corp. Carbon dioxide marketer undeclared

Capacity 50 MMgy Broke ground April 2007




Platinum Ethanol LLC

Location Arthur, Iowa Ethanol marketer Provista

Design/builder Fagen Inc. Distillers grains marketer UBE Ingredients





N/A

Patriot Renewable Fuels LLC

Location Annawan, Illinois Ethanol marketer Murex

Design/builder Fagen Inc. Distillers grains marketer undeclared


Capacity 100 MMgy Broke ground February 2007

Feedstock corn Target start-up date 2008


N/A

One Earth Energy LLC

Location Gibson City, Illinois Ethanol marketer Eco-Energy

Design/builder Fagen Inc. Distillers grains marketer Ag Motion Inc.


Capacity 100 MMgy Broke ground October 2007

Feedstock corn Target start-up date second quarter 2009


Fermentation tanks and grain silos are complete. Slip form work on the distillers grains silos has begun, and

storage tanks are 30 percent complete.

Northeast Biofuels LLC

Location Volney, New York Ethanol marketer Noble Americas Corp.

General contractor Lurgi Inc. Distillers grains marketer Perdue Farms

Process technology Lurgi Inc. Carbon dioxide marketer BOC Gases




N/A

Northwest Renewable LLC

Location Longview, Washington Ethanol marketer U.S. Ethanol LLC

General contractor Makad Construction Corp. Distillers grains marketer Lansing Trade Group

Process technology Lurgi Inc. Carbon dioxide marketer undeclared




N/A

Nexsun Ethanol LLC

Location Ulysses, Kansas Ethanol marketer undeclared

Design/builder ICM Inc. Distillers grains marketer undeclared


Capacity 40 MMgy Broke ground August 2007

Feedstock corn/milo Target start-up date late 2008


N/A

NEDAK Ethanol LLC

Location Atkinson, Nebraska Ethanol marketer Eco-Energy

General contractor Delta-T Corp. Distillers grains marketer Frahm and Deitloff



Feedstock corn Target start-up date second quarter 2008


N/A


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ASME Certified “U” & “R” ISO 9001:2000

Poet Biorefining-Fostoria

Location Fostoria, Ohio Ethanol marketer Poet Ethanol Products

Design/builder Poet Design & Construction Distillers grains marketer Poet Nutrition

Process technology Poet Design & Construction Carbon dioxide marketer N/A




Construction continues. Hiring is underway, but no further information was available at press time.

Poet Biorefining-Marion

Location Marion, Ohio Ethanol marketer Poet Ethanol Products



Capacity 65 MMgy Broke ground May 2007




Route 66 Ethanol LLC

Location Tucumcari, New Mexico Ethanol marketer undeclared

General contractor APS/United Stainless Process Technology Distillers grains marketer undeclared

Process technology United Stainless Process Technology Carbon dioxide marketer N/A


Feedstock corn/milo Target start-up date 2008


N/A

Poet Biorefining-North Manchester

Location North Manchester, Indiana Ethanol marketer Poet Ethanol Products



Capacity 65 MMgy Broke ground third quarter 2007




Southwest Iowa Renewable Energy LLC

Location Council Bluffs, Iowa Ethanol marketer Lansing Ethanol Group

Design/builder ICM Inc. Distillers grains marketer Bunge





Overall construction is 70 percent complete. All six steam dryers have been set. Construction of the steam

line, which will connect the ethanol facility to a neighboring power plant, is underway. The ethanol plant will

use some of the excess steam created by the power plant for energy.


Location Superior, Iowa Ethanol marketer RPMG

General contractor Agra Industries Distillers grains marketer undeclared



Feedstock corn Start-up date June 2008


Construction is complete, and the plant has begun grinding corn. Congratulations Superior Ethanol LLC!

Project Complete


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“In my eyes, maintenance is equal to maximizing production.”

-Dwayne Braun(General Manager-US Bio Platte Valley)

Mature Maintenance Management Software for the Growing Ethanol Industry

800.922.4336www.mapcon.com [email protected]

LDAR Inspections

Preventative Maintenance

Asset Management

Inventory Management

Work Order Management

Project Management

For over 25 years, MAPCON has been

producing high-yield results in facilities like Platte Valley

(left) as well as many other ethanol plants.

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VeraSun Hartley LLC

Location Hartley, Iowa Ethanol marketer VeraSun Energy

Design/builder Fagen Inc. Distillers grains marketer VeraSun Energy





The company has decided to delay start-up of this facility until market conditions improve.

VeraSun Hankinson

Location Hankinson, North Dakota Ethanol marketer Provista







VeraSun Dyersville

Location Dyersville, Iowa Ethanol marketer Provista






According to the company Web site, construction continues. No further information was available at press

time.

VeraSun Janesville

Location Janesville, Minnesota Ethanol marketer Provista






According to the company Web site, construction continues. No further information was available at press

time.

VeraSun Welcome LLC

Location Welcome, Minnesota Ethanol marketer VeraSun Energy

Design/builder Fagen Inc. Distillers grains marketer VeraSun Energy






White Energy Plainview LLC

Location Plainview, Texas Ethanol marketer Murex

Design/builder Fagen Inc. Distillers grains marketer The Scoular Co.



Feedstock corn/milo Target start-up date 2008


N/A

Terra Grain Fuels Inc.

Location Belle Plaine, Saskatchewan Ethanol marketer undeclared

General contractor EllisDon/VCM Contractors & Engineers Distillers grains marketer undeclared

Process technology Delta-T Corp. Carbon dioxide marketer undeclared

Capacity 150 MMly (40 MMgy) Broke ground September 2006

Feedstock wheat Target start-up date 2008


N/A

Tharaldson Ethanol LLC

Location Casselton, North Dakota Ethanol marketer undeclared

General contractor Wanzek/Valley Engineering Distillers grains marketer undeclared

Process technology Vogelbusch Carbon dioxide marketer N/A




N/A

GreenShift is the original inventor and industry pioneer of Corn Oil Extraction technology.With over 40,000 hours of operational run time on our systems and years of know howintegrating extraction technology into corn ethanol plants, GreenShift has established itstechnology leadership and proven its reliability.

Participating in GreenShift’s corn oil extraction program is guaranteed to bring you the highestreturn, on the shortest lead time, at the lowest risk, and for the least amount of capital deployed.

Take advantage of GreenShift’s turn-key Corn Oil Extraction and Biodiesel Productioncapabilities and chose between extracting oil for conversion at our new fully operational biodiesel

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Generate over $8 million in additional income for a 50 million gallon per year facilityand over $12 million for a 100 million gallon per year facility.

Capitalize by purchasing our Corn Oil Extraction System and Co-located Biodiesel Production toreceive the greatest return on investment while increasing your renewable fuel production.

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enhance the marketability of your remaining DDG.

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Alexandria, Ind., is a typical

Midwestern small town. Approximately 55

miles northeast of Indianapolis, this town

of 6,000 wanted more to boast about than

its high school and quality of life in order to

keep its young people from relocating

elsewhere. For Alexandrians, their last

large employer to help that cause was a

Ford Motor Co. plant, and it closed in the

late 1970s. Then, Poet came to town.

It was a happy day for the communi-

ty of 6,000 when Poet began building its

$115 million, 65 MMgy ethanol plant just

outside of Alexandria in late 2006. One

year later, community leaders’ hopes that

a new industry would breathe life into their

small town were realized. Poet

Biorefining-Alexandria hosted more than

1,000 people at a grand opening celebra-

tion at the facility April 17.

The state-of-the-art plant is the 23rd

ethanol facility to be constructed and

operated by Poet, the world’s largest

ethanol production company that began

doing business as Broin Cos. two

decades ago. The facility sits on 235

acres in the midst of northern Indiana’s

corn-growing region. In order to produce

at full capacity, the plant will need to take

in 21 million bushels of corn annually at a

total selling price between $3 million and

$6 million per year for area farmers.

The plant is equipped with Poet’s

Broin Project X technology. The patent-

pending process uses a raw starch

hydrolysis to convert starch to sugar,

which is then fermented to ethanol without

the use of heat. The process is unique to

Poet facilities and saves the company an

New Life

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untold amount of money in operating

costs each year.

Poet Chief Executive Officer Jeff

Broin is focusing on keeping his com-

pany on the leading edge of ethanol

production, saying the plant in

Alexandria could easily be expanded to

produce cellulosic ethanol once the

process has been perfected. Poet is

currently working to commercialize cel-

lulosic ethanol at its research facility in

Scotland, S.D.

Each Poet facility is an independ-

ent limited liability company, so it isn’t

dependent on local farmers for feed-

stocks, but it still reaps the benefits of

buying and selling to any interested

farmer in the area. A portion of each

plant is made available for sale by

shares, so farmers can still own a piece

of the plant, but they can also shop

around for the best price for their crop.

Poet Biorefining-Alexandria General

Manager Dave Hudak says farmers

have been extremely supportive so far

and actually held on to some of their

corn in order to sell it to Poet’s facility in

Alexandria.

Another benefit to farmers and

ranchers in the Alexandria area will be

the availability of distillers dried grains.

The plant will produce 178,000 tons (or

35 railcars) of Poet’s Dakota Gold

Brand distillers grains annually. Plant

officials say they will export some of

the distillers grains and also sell it local-

ly. Guests at the grand opening were

told it would be as easy as calling the

administration office and ordering a

truckload for feed, then driving over and

filling up their trucks.

While some of the plant’s employ-

ees are company executives who

transferred in from other areas of the

country, at least 80 percent of Poet

Biorefining-Alexandria’s 42 employees

are local residents. The annual payroll

and benefits from the plant will inject up

to $2 million into the local economy.

Local residents couldn’t be happi-

er to provide a home for Poet’s ethanol

production. Now they just need to

improve the local ethanol market. A

guest at the grand opening asked how

far behind Indiana is from the rest of the

country when it comes to the use of

ethanol—and it’s true that the state is a

latecomer to ethanol. There are

approximately 1,000 retail filling sta-

tions in Indiana, and only 100 offer E85.

The closest E85 station to Alexandria is

20 miles east in Muncie, Ind. However,

ethanol proponents are determined to

get the Hoosier State caught up in the

ethanol game. Poet is planning to open

its third facility in Indiana later this year

in North Manchester, and the sudden

presence of ethanol production facili-

ties in the state may bring new interest

in retail ethanol sales.

During her speech at the grand

opening, Indiana Lt. Gov. Becky

Skillman announced recent progresses

made by her state. “Thanks to the

investment of this company, our state

now boasts seven operational plants

with seven more to come,” she said. “In

the past three years, this industry has

contributed 750 new jobs (in the state),

more than $2.1 billion in capital invest-

ment and more than $26 million in the

pockets of Hoosier farmers. We owe a

huge debt of gratitude to Poet and all of

the corn growers in Indiana.”

—Kris Bevill

POET BIOREFINING-ALEXANDRIA LLC

LOCATION Alexandria, Ind.

DESIGN/BUILDER Poet Design & Construction

PROCESS TECHNOLOGY Poet Design & Construction

CAPACITY 65 MMgy

FEEDSTOCK corn

ETHANOL MARKETER Poet Ethanol Products

DISTILLERS GRAINS MARKETER Poet Nutrition

CARBON DIOXIDE MARKETER N/A

BROKE GROUND December 2006

START-UP DATE April 2008


:INT

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Twin brothers Gene and Dean

Carstens of Minden, Neb., are the type of

farmers who use academic research as

the launching pad for their own. In the

Carstens’ case, it was work done in the

1970s by a Rutgers University researcher

who achieved 400-bushel-per-acre corn

yields through attention to spatial availabil-

ity—the precise spacing of corn plants.

The Carstens used that research, plus

what they learned from others and on-farm

experience, to design their own corn

planter. Besides the farm and a fertilizer

business called FirstAg, the brothers have

been building corn planters as part of

another business of theirs, called Twin

Diamond Industries LLC. The most recent

version of their corn planter is being kept

undercover while the patent process pro-

ceeds.

The Twin Diamond twin-row, strip-till

corn planter will space each corn plant in a

precise diamond-shaped pattern. Strip

tillage is a relatively new concept seeking

to overcome some of the limitations of no-

till systems. Farmers, particularly in the

West, have adopted no-till practices

because the method reduces soil erosion,

improves moisture retention and soil quali-

ty, and reduces energy use by eliminating

several trips through the field. On the

downside, leaving large quantities of

residue in the field can depress early-sea-

son plant emergence and development.

The new Twin Diamond planter solves the

challenge of managing high crop residues

by clearing an eight- to 10-inch path

through the waste to plant twin rows of

corn spaced eight inches apart with the

paired rows spaced 30 or 36 inches apart.

“We wanted to be able to use a conven-

tional header to harvest,” Gene Carstens

explains. The planter clears the seeding

zone, allowing for better root development

and water penetration while incorporating

some organic matter deeper into the soil

profile, and allowing better fertilizer place-

ment. One of the weaknesses of the no-till

system is that the surface application of

nutrients keeps root development in the

top two to three inches, he says. Placing

the nutrients below the germinating plant

encourages deeper root development,

plus it requires 30 percent less nitrogen

and 25 percent to 40 percent less phos-

phate. The system can be adapted to use

liquid or dry formulations, as well as anhy-

drous ammonia.

There’s much more to the Carstens’

vision than just a new planter design. The

Carstens advocate a systems approach

that combines precise plant and fertilizer

placement in the strip-till system with opti-

mal plant populations and proper variety

selection. “The majority of people are

going in the wrong direction on plant popu-

lation in my opinion,” Gene Carstens says

of the dominant trend toward higher plant

populations. “It takes so much water and

so much fertility to maintain that.” To main-

tain yields with a lower plant population, he

recommends using a flex-hybrid. Under

lower plant population and good growing

conditions, the indeterminate flex-hybrids

will set and fill a second ear, which will con-

tinue to grow larger as long as conditions

are right. Using a common yield estimation

system, multiplying a 23,000-plant popula-

tion (with two cobs on each plant) with

1,200 kernels per cob and dividing that by

90,000 kernels per bushels suggests that a

300-bushel crop is possible. “That’s

unheard of,” Gene Carstens admits, but he

acknowledges that farmers working with

this systems approach are seeing a 50- to

60-bushel-per-acre improvement in yields

on both dryland and irrigated fields. “Plants

have to be spaced correctly,” he says.

“We’ve learned that it does make a differ-

ence.”

Producing bigger yields with less

water and fertilizer while improving envi-

ronmental performance is increasingly

important, not only for the bottom line but in

the public eye. “We need a balance

between food demand and ethanol

demand,” Gene Carstens says. “We’ll be

dead if we can’t do this.”

—Susanne Retka Schill

Twin Approach to Corn


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When his name was

announced as the recipient of the 2008

High Octane Award at the International

Fuel Ethanol Workshop & Expo in

Nashville, Tenn., on June 17, David

Kolsrud humbly took the stage to accept.

The award, referred to as the “People’s

Choice Award,” is handed out every year

to whomever receives the most nomina-

tions from his or her peers in the ethanol

industry. Nominations for Kolsrud noted

his commitment and dedication to the

industry. When he presented Kolsrud

with the award, BBI International Inc.

Chief Executive Officer Mike Bryan said

he couldn’t think of a more deserving

person.

Q: Dave, tell our readers how you

first got into the ethanol business.

A: In 1995, local farmers were contacted

by Luverne, Minn., Mayor Bill Weber to

build an ethanol plant. I was chosen to

spearhead the local effort. We put

together a steering committee and board

of directors, and worked with Broin &

Associates (now Poet) to raise the equi-

ty. Because of high corn prices ($5-plus),

our fund drive struggled. In early 1997,

farmers, Broin Cos., Fagen Inc., the city

of Luverne and an investment group

called Corn Energy Investors completed

financing and built Agri-Energy LLC. I

stayed on as co-op coordinator.

Q: How has the industry evolved in

the time since you first became

involved with it?

A: It started out with a few farmer-owned

plants in Minnesota and has expanded

to hundreds of plants nationwide. The

industry is now composed of several

types of investor models instead of just

farmer-owned. We’ve witnessed plants

getting larger and technology improving

considerably. One of the things I’m the

proudest of is the fact that farmers who

relied on the government for subsidies

for three generations are now tax-paying

citizens, thanks to the ethanol industry.

Q: Where do you see the ethanol

industry in five years?

A: I see the emergence of the cellulose-

to-ethanol industry. Believe it or not, I see

farmers expanding their roles in ethanol

ownership because it’s a natural hedge

against high fuel prices and low corn

prices. With the technology to make both

food and fuel products out of the same

plant, farmers will be more secure with

their investments.

Q: Where do you see the ethanol

industry in 20 years?

A: In 20 years, I see synergies of various

renewable energy industries comingled

in the same location. An example would

be having food and fuel-ethanol plants

located alongside wind towers and

biodiesel plants.

Q: What did it mean to you to

receive the High Octane Award at

this year's FEW?

A: I want to thank BBI for creating such

an award and Kevin Tenpas of Heartland

Business Bank for nominating me. It is

truly humbling to be selected by my

peers for this award. This award signifies

the faith that I and thousands of other

investors have had in the future of the

ethanol industry.

Q: What else do you want EPM read-

ers to know about yourself and your

business?

A: It isn’t just about me. It’s about the love

and support I’ve received from my fami-

ly. In addition, this industry has allowed

me to make thousands of friends and

business partners, all of whom I value

highly. DAK Renewable Energy believes

strongly in the industry, and that there is

a right way and wrong way to do busi-

ness. We feel that we have the best

interest in mind for all of our clients as we

make business decisions together.

—Kris Bevill

From Behind-the-Scenes to Center Stage

NameDavid Kolsrud

TitlePresident

CompanyDAK Renewable Energy

EducationUniversity of Minnesota, AgricultureEducation

CareerUnited States Army, Berlin, Germany1970-1972

Farmer, Beaver Creek, Minn.1973-Present

Agri-Energy LLC, Luverne, Minn., Co-op Coordinator1995-Present

DAK Renewable Energy, Founder andPresident2006-Present

Mike Bryan, chief executive officer of BBI International, presents

David Kolsrud with the High Octane Award at the 2008

International Fuel Ethanol Workshop & Expo in Nashville, Tenn.

PHOTO: KRIS BEVILL, BBI INTERNATIONAL INC.

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are trademarks or registered trademarks of DuPont or its affiliates.

On June 12, the average price of gasoline at the

pump was $4 per gallon.

Many Americans understand the age-old adage that “noth-

ing is so bad that it couldn’t get worse.” So although $4 gas is bad

news, the prices could be higher and the situation worse.

According to the U.S. DOE, the price of gas could be as much as

$4.35 per gallon under different circumstances.

So what’s keeping the extra 35 cents off each gallon of gas

at the pump? According to the DOE, it’s biofuels. The department

says that without biofuels—ethanol in particular—gasoline prices

would be 20 to 35 cents higher.

In a letter sent to U.S. Sen. Jeff Bingaman, D-N.M., chair-

man of the Senate Committee on Energy and Natural

Resources, by Secretary of Energy Samuel Bodman and

Secretary of Agriculture Ed Schafer, the secretaries concurred

that biofuels are moderating gasoline prices. Statistics from the

DOE reveal that for a typical household, the average savings

being realized annually is $150 to $300. The overall significance

of biofuels to the United States is laid out in the letter’s statistics

that say the country has seen a $28 billion to $49 billion savings

based on an annual gasoline consumption of roughly 140 billion

gallons.

A study conducted by Xiaodong Du, research assistant at

the Center for Agricultural and Rural Development at Iowa State

University, and Dermot Hayes, professor at ISU’s Department of

Economics, shows similar numbers compared with those quoted

by the DOE. “Estimation results show that over the period of 1995

to 2007, ethanol production had a significant negative effect of 29

to 40 cents per gallon on retail gasoline prices,” the study sum-

mary says. “The results suggest that this reduction in gasoline

prices came at the expense of refiners’ profits. These results are

statistically significant across a range of model specifications and

across all regions.”

The study also states, “The availability of ethanol essential-

ly increased the capacity of the U.S. refinery industry and in doing

so prevented some of the dramatic price increases often associ-

ated with an industry operating at close to capacity.”

The ISU study concluded: “Had we not had ethanol, it

seems likely that the crude-oil refining industry would be slightly

larger today than it actually is, and in the absence of this addition-

al crude oil refining capacity, the impact of eliminating ethanol

would be extreme.” The ISU study can be viewed at

www.card.iastate.edu/publications/DBS/PDFFiles/08wp467.pdf.

The “E” stickers on gas nozzles at many gas stations nation-

wide indicate the percentage of ethanol mixed with the gasoline

(i.e., E10, E85). Everyone in the ethanol industry knows that if you

remove that percentage of ethanol from the gasoline, more gaso-

line is required.

It could just as well stand for Easy-to-understand.

—Timothy Charles Holmseth

:FLE

XFA

CT

OR

Numbers Don’t Lie


Gasoline Consumption Reduction

Attributed to Ethanol Use

Gasoline Displacement

Thousand Barrels/Day

Billion Gallons/Year

2007

357

5.5

2008 (estimated)

472

7.2

SOURCE: U.S. DOE

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:BU

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S

From a business standpoint,

the idea sounds like a match made in

heaven: A small, private ethanol com-

pany that’s hungry for capital and

eager to become publicly traded tar-

gets a public company devoid of

assets and operation but desperate to

create some value for its sharehold-

ers.

In today’s current volatile ethanol

market, many privately owned ethanol

firms may be exploring more creative

and aggressive business strategies

for capital formation. As a means to

grow by acquisition, a reverse merger

tactic could serve as a viable alterna-

tive to the typical initial public offering

(IPO) process. Reverse mergers are

less burdensome, less time-consum-

ing and in some cases equally lucra-

tive if done right.

Essentially, a reverse merger—

sometimes referred to as a shell

merger—is a transaction in which a

privately held company merges with a

dormant publicly listed company (the

shell company), which may have had

a broken business model, obsolete

business plan, or underperforming

assets and liabilities. Although sever-

al publicly traded ethanol companies

have found success after undertaking

a reverse merger strategy, such as

Pacific Ethanol Inc., a reverse merger

tactic shouldn’t be considered “the

preferred option if you’re looking for

liquidity,” according to Gregory Lynch,

partner with Michael Best & Friedrich

LLP. “I think there are other transac-

tions that may be more beneficial,”

says Lynch, who is also cochairman

of the firm’s business practice group

and renewable energy industry group.

“If you’re looking for pure liquidity of

sale, I think that would be a viable

option, but if you’re looking for some

type of roll-up transaction or consoli-

dation [and not] some short-term liq-

uidity, I think a reverse merger would

be a viable option.”

Precarious in nature, with an

unsavory past of being handled by

illegitimate players in similar emerg-

ing markets in the 1980s,

reverse mergers could be

gaining more credibility

across all industries, espe-

cially since the U.S.

Securities and Exchange

Commission’s ruling to

improve disclosure and

legitimacy in such transac-

tions. Plus, the IPO market

is relatively inactive right

now. According to David

Feldman, founder and

managing partner of Feldman,

Weinstein & Smith LLP, more legiti-

mate players have used reverse

merger tactics, including some in the

ethanol industry. “The average market

value of a reverse merger last year

was about $55 million, so these aren’t

tiny little start-ups,” he says. “In the

alternative energy space, it’s been a

very popular method of going public.

Whatever is hot on Wall Street is hot

in reverse mergers.”

Like all business strategies,

there are advantages and disadvan-

tages to reverse mergers that must be

closely examined during the due dili-

gence period. Some of the overarch-

ing benefits of a reverse merger ver-

sus an IPO are that it’s less expensive

and less time-consuming. Plus, less

dilution is involved, meaning earnings

per share of common stock are

reduced. Additionally, there is no pub-

lic disclosure of financial statements

in a reverse merger, whereas a

prospectus is required for an IPO

through the SEC. “The problem with

an IPO is that you have to get your

prospectus approved by the SEC, and

that’s just unpredictable, whereas in a

reverse merger, there is no involve-

ment with the regulatory authorities

prior to closing,” Feldman says. “It’s

all about how fast you can

get the deal done.”

However, IPOs gener-

ally raise more money. The

IPO process also makes it

easier to create market

support for the once pri-

vate company seeking to

increase its value on Wall

Street. “I think one of the

challenges is that there are

a lot of biofuel companies,

especially ethanol compa-

nies, that are subject to the public

reporting requirements [through the

SEC],” Lynch says. “They don’t have

the benefits of liquid public trading in

their stock, and those types of compa-

nies are well-suited for either a

reverse merger or some type of other

similar liquidity event.” He adds that

having the backing of a good sponsor

and a good investment bank for pri-

vate investment in public equity is cru-

cial for “selling worth” to Wall Street

from the bulletin board in an attempt

to get on higher exchanges such as

NASDAQ. “That’s going to be the key

to a lot of the success of the reverse

merger for private ethanol companies

looking to go public,” he says. “How

quickly are you able to create the liq-

uidity for that stock? That’s the

biggest question.”

—Bryan Sims

Are Reverse Mergers Gaining

Credibility in the Industry?

66 ETHANOL PRODUCER MAGAZINE AUGUST 2008

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:F

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E

Accounting software is

one of the most critical components

to a plant’s success, but it can also

be one of the most frustrating. Every

day, thousands of records impacting

assets and liabilities are entered in

the computer. Operators may pay lit-

tle attention to where the information

flows, and if the software is incor-

rectly set up, or users have had lim-

ited training and the work flow and

output is not understood, financial

analysis and decisions based on the

information become a guess at best.

Sometimes a new employee

under-appreciates or misunder-

stands the function or power of the

software, which can result in confu-

sion, wasted time and money, and

an affected bottom line.

In other cases, a system may

be in place and the set-up is sound,

but help is needed in reviewing and

understanding the document work

flow. If that is an issue, consultants

can help.

A client may not realize their

accounting firm can serve in a con-

sulting role, but we have helped

many of our biofuel clients attain

additional value. For example, close

tracking and monitoring of “closing”

is important. That information leads

to a discussion on the key perform-

ance indicators and what

key components are

needed that fit the current

environment. A recom-

mendation is then made to

manage the implementa-

tion of the software pro-

gram. Some of the key

indicators include where

the points are to gather

information, how to cor-

rectly capture the critical

information, and identification of

areas where functionality can be

improved.

Clients need to understand that

not all software may work for their

environment or size of operation.

Software is not the savior of the

business but a valuable tool to man-

age the work flow properly and suc-

cessfully. With programs in the mar-

ketplace such as SAP, PeopleSoft,

QuickBooks, Microsoft Dynamics

NAV, Microsoft Dynamics GP and

MAS 500, clients need to under-

stand they all have similar functions

with different depths of information.

The size of the company, amount of

detail required and the amount one

is willing to spend will help deter-

mine which system will best create

the information necessary to help

the company succeed.

Accounting systems will never

create great information. Only the

people and the process will create

great information. If the system cre-

ates, a new accounting system will

only add to the disaster. Items such

as where the business get its infor-

mation, the capture points, and what

kind of integration is needed to com-

bine the existing accounting system

into the new platform with minimal

brain damage to the organization

are key to this process.

Another key point is

not allowing the software

company to manage the

implementation. While it

may do a nice job of

installing the software,

specific outside training is

needed by another

resource provider to

direct the implementa-

tion. This allows the client

to have a person who

understands the daily challenges

and work flow to manage the imple-

mentation correctly and efficiently.

While each client is different,

the four key points of a successful

accounting system are: 1) under-

standing current information sys-

tems, 2) implementation of the exist-

ing systems in the new software, 3)

refining new system inefficiencies

and 4) creating an optimal system

for the company. By managing the

project effectively and in a sched-

uled manner through careful track-

ing, the investment will be more than

worth it to address the company’s

needs.

Jack Mount is a manager in the agri-

culture group at Kennedy and Coe

LLC. Reach him at jmount@kcoe

.com or (970) 330-8860.

Make Accounting Software Investment Pay Off By Jack Mount

Mount

www.dbcsmartsoftware.com

A NEW ERA OF OPPORTUNITY

Copyright © 2007 dbc SMARTsoftware inc. All rights reserved. dbcSMARTsoftware, the dbc SMARTsoftware logo and dbcSMARTsoft logo are trademarks of dbc SMARTsoftware inc. All other company and product names are trademarks or service marks of their respective owners

www.dbcsmartsoftware.com

800.361.2114

dbcSMARTsoft® unites all of your physical and

financial transactions for Biofuels into a single,

integrated platform. The system’s trading, scheduling

& logistics, settlement, financial accounting and risk

management solutions give you world-class

competitive power and agility.

dbcSMARTsoft helps you gain business intelligence for

better decision making, streamlined operations,

renewable fuel (RIN) compliance, audit control, the

ability to measure & manage market risk, as well as

evaluate performance.

Contact us to find out why dbcSMARTsoft has been

the choice of the largest Commodity and Biofuel

companies for over a decade.

Enterprise Software forCommodities

Biofuels&


:LE

GA

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SP

EC

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ES

hile new technologies

for alternative energy

sources to natural gas

are being studied, a

majority of ethanol

plants in the United States continue to

use natural gas as their pri-

mary energy source. This

article follows the journey of

natural gas from the ground

to the plant and the various

players involved.

The first step is to find

and extract the natural gas.

This process alone requires

significant resources to

secure the permits and

rights necessary from regu-

latory bodies and private

landowners for the exploration and

extraction of the natural gas. Once the

natural gas has been extracted, it is

transported through low-pressure

gathering pipelines to a processing

plant where any oil, carbon dioxide or

water, among other items, is removed.

Once processed, the natural gas

enters the interstate pipeline system.

The Federal Energy Regulatory

Commission (FERC) provides regula-

tory oversight of interstate pipeline

companies (IPCs). IPCs are consid-

ered natural monopolies, as one IPC

will likely service an entire regional

area, without duplication of pipelines

from other IPCs. Thus, the FERC

ensures that this monopolistic struc-

ture is not abused and customers are

protected from unreason-

able rates.

Historically, IPCs pur-

chased natural gas from the

producer and then re-sold it

to local distribution compa-

nies (LDCs) or end-users.

However, in 1992, the FERC

ordered IPCs to “unbundle”

their services and separate

their sales of transportation

services from their sales of

natural gas. As a result,

marketers and even end-users now

have open access to purchase natural

gas directly from the producers, and

the IPCs are required to provide trans-

portation services equal in quality

whether the natural gas is purchased

from the IPC or from a producer or

marketer.

Once the natural gas reaches the

region of a plant via an interstate

pipeline, a connecting pipeline must

be constructed either to the interstate

pipeline itself, or to a pipeline owned

by a LDC or local utility. An ethanol

plant can either connect directly to the

interstate pipeline through a privately-

owned interconnection line, or a local

utility or LDC may construct, own and

operate the connection line. The costs

of both options must be weighed on an

individual basis. Either way, it is bene-

ficial for ethanol plants to locate their

plants in close proximity to an inter-

state pipeline to minimize construction

costs and reduce the number of

landowners from whom easements

must be secured. In addition, the con-

struction of the interconnection

pipeline generally requires regulatory

approval from the state utilities regula-

tory commission.

In today’s open access model, an

ethanol plant can negotiate directly

with the producers of the natural gas.

However, due to the current volatility in

natural gas prices, marketers can play

a key role in procurement. Marketers

enjoy minimal regulation by the FERC

or state utilities commissions and can

provide a wide range of services, such

as negotiating with IPCs for their trans-

portation services and connection to

their pipelines, natural gas procure-

ment, risk management through hedg-

ing programs and pipeline construc-

tion.

Once the connecting pipeline is

constructed and tapped into an inter-

state or LDC pipeline, and a supply of

natural gas has been procured and is

flowing through pipelines, the ethanol

plant can flip its switch and begin pro-

duction.

Leanna D. Whipple practices primarily in

the areas of securities and corporate

transactions, as well as environmental

and public utilities law at BrownWinick, a

Des Moines, Iowa-based law firm serving

the renewable fuels industry. Reach her

at [email protected] or (515)

242-2433.

Natural Gas from the Ground to the Ethanol PlantBy Leanna D. Whipple

This article is only a general summary for information purposes and does not

constitute legal advice. Consult a qualified and experienced legal advisor for your

specific situation or particular questions.

W

Whipple

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EVENT

At the 24th annual International Fuel Ethanol Workshop & Expo, Bryan, right, chief executive officer of BBI International,

presented RFA President Dinneen with a plaque recognizing his 20 years of service to the renewable fuels industry.

PHOTO: BBI INTERNATIONAL


EVENT

The Truth About Food and FuelThe 24th International Fuel Ethanol Workshop & Expo was held June 16-19 in

Nashville, Tenn., in the midst of record-busting energy prices and serious charges

against the industry posed by Big Oil and “Big Food.”

By Ron Kotrba, Dave Nilles, Kris Bevill, Jessica Sobolik, Hope Deutscher and Rona Johnson

EVENT

he celebration at the 24th annu-al International Fuel EthanolWorkshop & Expo general ses-sion was bittersweet as the

ethanol industry pioneer who hand-craft-ed the world’s most renowned ethanolconference nearly a quarter-century ago—Kathy Bryan, president of BBIInternational—was absent for the firsttime since the show’s inception due to herbattle with cancer. “The industry wouldn’tbe what it is today were it not for Kathy,”said Bob Dinneen, president of theRenewable Fuels Association. A womanwith “indomitable spirit,” in the words ofDinneen, Bryan received a heartfelt stand-ing ovation from the audience and warmwishes for a speedy recovery.

Opening remarks were given by MikeBryan, chief executive officer of BBIInternational. “It’s been a year of successand tremendous abuse for the industry,”he said, referring to the relentless attack oncorn-based ethanol from all sides. “Whatbothers me the most is the abuse that agri-culture is taking,” he said, adding that the

ethanol industry can’t allow the continuedvilification of the American farmer forraising the price of food.

Farmers in Tennessee know all aboutthe utility of corn and adding value to its

state crops. Tennessee Commissioner ofAgriculture Ken Givens told the audiencein Nashville, “We have a long history inTennessee of adding value to corn prod-ucts,” referring to the state’s rich history of

T

Valesco of the Brazilian Sugar Cane Industry Association, said only 1 percent of arable Brazilian land is

used to grow sugarcane for ethanol, the same percentage of arable land used globally to grow feedstock

for ethanol.

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EVENT

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Not only do ethanol producers need to worry about

corn prices at $8 a bushel, they also need to be con-

cerned about hostile takeovers. And the two worry lines

are closely linked.

Kirk Martin, managing partner at Ascendant

Partners Inc., said it’s natural for a rapid buildup of an

industry followed by crashing of margins to lead to an

increase in mergers and acquisitions, which is happen-

ing in the ethanol industry today. According to Martin,

there were three reported mergers and acquisitions

between 2004 and 2006 at a total cost of $220 million.

There have been 12 mergers and acquisitions in the

past year-and-a-half at a cost of more than $2 billion. He

expects the trend to continue.

Martin spoke about business considerations during

a breakout session at the International Fuel Ethanol

Workshop & Expo.

Companies interested in merging with or acquiring

other companies are driven by four main factors. The

first is the desire to increase the company’s scale and

diversity. For instance, an ethanol company looking to

acquire a plant located closer to the feedstock than its

current facility, would fall into this category.

The second reason to merge or acquire a company

is that it’s a way for a business to enter the market. An

increasing number of international companies are look-

ing to get into the U.S. biofuels market, and acquiring a

plant that is already in operation allows them a way to

do so. The third reason is a strategic move—vertical

integration. And finally, the desire to gain more technol-

ogy is a driving force for a company to merge or seek to

acquire another company. Martin expects this factor to

increase substantially as the commercial development

of cellulosic ethanol production technologies gets closer

to reality.

It’s a proven fact that most mergers fail to achieve

their anticipated value. In fact, up to 80 percent of merg-

ers fail. However, Martin said that as margins continue

to drop in the ethanol industry the “bottom feeders” will

move in and acquire the weaker companies, either in a

friendly merger or in a hostile takeover. “The falling tide

exposes the less efficient,” Martin said. And, he added,

there are plenty of businesses out there waiting to

swoop in and take advantage of the situation.

Merger and Acquisition Activity Increases

EVENT

Ethanol 101: Class is in Session

As a precursor to the official start of the 2008

International Fuel Ethanol Workshop & Expo, attendees

had the option of taking in the Ethanol 101 seminar.

Approximately 200 people attended and heard from a

variety of speakers.

The seminar began with an overview of the precon-

struction aspects of ethanol plant development, deliv-

ered by Todd Mestepey, senior project manager of con-

struction for ICM Inc. His most important tip to audience

members was be sure to establish a well-defined scope

that clearly identifies the duties of all parties involved in

the preconstruction process.

Casey Whelan, vice president of strategic initiatives

at U.S. Energy Services Inc., commented during his

presentation that he was pleasantly surprised to see so

many people at the seminar despite all the recent bad

press that ethanol has been receiving. A show of hands,

however, confirmed that almost all of the people in

attendance were associated with companies already

servicing ethanol plants, as opposed to constructing

new facilities.

The most popular presentation of the day was deliv-

ered just after lunch by Mark Holtzapple, a Texas A&M

University professor. His presentation, titled

“Carboxylate Platform: The MixAlco Process,” might

have seemed a bit advanced for an audience presumed

to be new to the industry, but the line for questions after

he left the stage proved that people were interested in

Approximately 200 people attended the daylong ethanol seminar that was

offered as a precursor to the International Fuel Ethanol Workshop & Expo.

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EVENT

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starting from pre-order engineering to post-delivery. Our expertise

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hearing more about the process. The MixAlco Process

consists of building a large pile of biomass, pretreating

it with a combination of lime and air to remove the

lignins, and then utilizing a carboxylate method to pro-

duce fuel. The fuel produced in this case is gasoline,

rather than ethanol. According to Holtzapple, research

on the process began in 1991. Currently, a semi-works

plant is under construction in Bryan, Texas, and should

be operational in September. The plant will be capable

of producing 300 to 400 gallons of gasoline per day.

Holtzapple told the audience that “you can talk about it

and talk about it, but until you build the plant to prove it

works, no one will believe you.”

The price of corn was not overlooked during the

seminar. Several speakers addressed the growing con-

cern of high-priced corn and recent bad weather in the

Midwest as prime examples of the volatility of the

ethanol market. Risk management was a popular topic

because of those factors. Jason Sagebiel, risk manage-

ment consultant at FCStone, announced that corn trad-

ed for $8 per bushel June 15, and he continued to stress

that the biggest risk in ethanol production is margins. He

said the huge swings in profits and losses are typical in

the ethanol industry.

Kenneth Ayers, managing director at Aon

Environmental Services Group, presented the environ-

mental risks that need to be considered when planning

a biofuels plant, as well as environmental insurance.

Two types of new environmental insurance he men-

tioned were project efficacy insurance and carbon cred-

its/offsets insurance. Project efficacy insurance is a pol-

icy that will pay for a company to tweak its process in the

beginning phase to help insure an actual start-up.

Carbon credits/offsets insurance protects a policyholder

if carbon credits are either not produced or not delivered

by the seller as promised.

Other speakers at the seminar included Kent

Herbst, ethanol team leader for U.S. Water Services;

Angela Ronayne, project manager for Natural Resource

Group; Kyle Althoff, project analyst for BBI International;

James Broghammer, president of Pacesetter

Management Group; James Heath, head of U.S.

research and development at EcoSecurities LLC; Mark

Yancey, vice president of project development for BBI

International; and Neal Jakel, DST program manager of

Delta-T Corp.

EVENT

whiskey distilleries. Despite this history,fuel ethanol is something relatively newfor Tennessee, but the state is movingforward quickly to develop an environ-ment conducive to renewable fuels pro-duction and use. Givens mentioned the$72 million state investment in a switch-grass-to-ethanol pilot plant developedby Mascoma Corp. in partnership withthe University of Tennessee. The com-missioner also said the state is workingon the creation of green corridorswhere motorists can find ethanol- andbiodiesel-blended fuels.

Motorists in Brazil don’t have prob-lems finding ethanol since 90 percent ofall new vehicles sold in the SouthAmerican country are now flexible-fuelvehicles, according to Joel Valesco ofthe Brazilian Sugar Cane IndustryAssociation, who presented an updateon Brazilian ethanol to the general ses-sion audience. The basis of Braziliancane producers’ new mode of produc-tion is a triple-product platform consist-ing of sugar, ethanol and power. TheSouth American country will produce 6billion gallons of ethanol this year andsell more than 3,000 megawatts ofrenewable electricity generated fromcane byproducts back to its grid. Valescosaid Brazil only uses 1 percent of itsarable land to displace 50 percent of itsgasoline; in a country where gasolinecontains 25 percent ethanol. He saidethanol made in Brazil enjoys a 9.3 to 1


Preparations Underway for 2009 FEW

The 25th Annual International Fuel Ethanol Workshop &

Expo will be held June 15-18, 2009 in Denver. The 2009

FEW will celebrate its silver anniversary at the Denver

Convention Center.

According to Lisa DeYoung and Dave Blazer with media

and Events at BBI International, the ethanol industry has

developed significantly in the past 25 years and the FEW has

kept up with the pace—providing unmatched business devel-

opment and networking opportunities, the largest and most

widely attended expo, and an industry-leading educational

forum.

As part of the 25th anniversary, BBI International has

updated its FEW logo design. DeYoung said the design pro-

vides a progressive look for the exciting next stage of this

conference and the industry.

Booth sales and sponsorship opportunities are already

available. For more information on sponsoring an event at

the FEW in Denver e-mail [email protected].

For more information on reserving a booth at the 2009 FEW,

visit www.fuelethanolworkshop.com.

The FEW workshops are developed through a steering

committee. The call for abstracts will open this fall.

� continued from page 76


EVENT

energy balance. While Brazil only uses 1percent of its arable land for ethanolproduction, Valesco said only 1 percentof global arable land is used to growcrops for ethanol production, includingU.S. land used to grow corn for the bio-fuel. The “villain” is that guy who wantsto eat better in China, not biofuels,Valesco said tongue in cheek.

No Mincing of Words HereWith his powerful presence,

Dinneen told the audience that inJanuary he thought his speech at thisyear’s FEW would be a “victory lap”after the Energy Independence &Security Act of 2007 was passed, butsince then, the vicious assaults on corn-based ethanol ramped up exponentially.According to Dinneen, the oil compa-nies are behind it all. He said with thepassing of the 36 billion-gallon renew-able fuels standard, the oil barons sawone-third of their market share slippingaway and concocted an enormous cam-paign against renewables. “They sit oneditorial boards of every major newspa-per,” he said, adding that Big Oil“bought themselves some studies” andteamed up with major food companiesto create a giant smokescreen. “Theyneed to stop us now, but they won’t,” hesaid, adding that rising food prices aredue in part to demand from developingcountries like China and India, andchanging diets of people around the

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As corn prices continue to rise, spurred recently by flooding in

the Midwest, producers and investors are eager to learn about alter-

native feedstocks. One of the breakout sessions at the International

Fuel Ethanol Workshop & Expo addressed that very topic. More

than 100 people attended the session in order to learn more about

some of the intriguing options now becoming available for U.S.

ethanol production in the United States.

Jonathan Mielenz, biomass program manager for Oak Ridge

National Laboratory, delivered an insightful look into the possibility of

using soybean hulls as a feedstock. He has been experimenting with

this feedstock in the laboratory and has come to the conclusion that

soybean hulls can be used to produce ethanol and at the same time

still be used as a high-protein animal feed.

Soybean hulls have historically been destined for animal feed.

Mielenz used a simultaneous scarification and fermentation process

in his experiments, and discovered that pretreatment doesn’t make

a difference in production levels, thereby potentially saving the pro-

ducer 18 percent in production costs. Mielenz assured session atten-

dees that the fermentation portion of production is simple, and the

end result is both ethanol and a high-protein, low-lignin animal feed.

Mielenz has determined that by utilizing his method and if soy-

bean hulls were put into production as a feedstock nationwide, the

United States could produce an additional 300 million gallons of

ethanol each year and 1.4 million tons of animal feed.

Soybean Hulls Potential Ethanol Feedstock


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EVENT

world. “Now people want a pork chopwith their rice,” he said. Of course, theprice of oil is paramount to this entiredebate, and Dinneen hit home this mes-sage by saying, “We can’t produce $2.50corn with $4.50 diesel.”

Speaking of oil, the morning’skeynote speaker Robert Zubrin, authorof “Energy Victory: Winning the War onTerror by Breaking Free of Oil,” gave acompelling account of the Organizationof the Petroleum Exporting Countriesstrategic will to power through the con-striction of global oil supplies. In 1972,the United States spent $4 billion on oilimports, or 4.5 percent of the U.S.defense budget. In comparison, 35 yearslater, the United States is spending $650billion on imported oil. As Zubrin put it,“$650 billion isn’t just money, it’s power.”What’s bad for wealthy countries like theUnited States is crushing for developingcountries such as Kenya, he said.OPEC’s “slow choke” on oil supplies issmarter than a complete shutoff due tothe military consequences the UnitedStates would exact on such a move. Tohammer home Dinneen’s point about oilinterests controlling the editorial contentof major media outlets, Zubrin said theSaudis partially own the Wall StreetJournal. The paper should be renamedthe Wahhabi Street Journal, he quipped.“OPEC is taxing the industrial world intodepression,” he continued. The UnitedStates could open up the Arctic NationalWildlife Refuge, but it would do littlegood. “That’s a desperation card,”Zubrin said. “It’s not the way to go. Oil istrump right now, so how do we changethe trump suit?” His answer is mandatingall vehicles sold in the United States beflex-fueled, giving consumers a fuelchoice. A flexible-fuel vehicle mandatewould end the chicken and egg dilemma,and would make E85 pumps appear rap-idly across the country. “This wouldcrash the oil price to $50 a barrel,” hetold the crowd. “This is how you smashOPEC,” he said. Once the U.S. farmers

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FEW Award Winners

Businesses and individuals

were honored for their achieve-

ments in the ethanol industry dur-

ing the International Fuel Ethanol

Workshop & Expo general ses-

sion.

DAK Renewable Energy

Chief Executive Officer Dave

Kolsrud of Brandon, S.D.,

received the 2008 BBI

International High Octane Award,

which acknowledges by people’s

choice a person who has helped

the ethanol industry mature and

progress over the years.

According to BBI Chief Executive

Officer Mike Bryan, Kolsrud “was

doing ethanol before ethanol was

cool.”

The 2008 Award of

Excellence was given to Jay

Shetty of Palo Alto, Calif., who is

senior director of global applica-

tions and grain processing at

Genencor, a division of Danisco.

The Award of Excellence recog-

nizes an individual who has pub-

lished papers and/or made signif-

icant research, technical adviso-

ry and development contributions

in the industry.

Three students interested in

ethanol industry careers each

received $5,000 scholarships,

sponsored by American Stainless

& Supply. The 2008 scholarship

program winners were: Nancy

Bawa of Saskatoon,

Saskatchewan, who is attending

the University of Saskatchewan

to acquire a master’s degree in

applied science; Colin Sorenson

of Missoula, Mont., who is

attending the University of

Montana where he is conducting

research on the food-versus-fuel

debate and is earning a master’s

degree in economics; and Hugh

Howe of Chariton, Iowa, who is

attending Indian Hills Community

College and will transfer to

William Penn University to earn a

master’s degree in biology.

Also during the FEW awards

ceremony, Poet LLC and East

Kansas Agri-Energy LLC

received the Energy Star Award,

which was presented by the U.S.

EPA. The award recognizes com-

mercial projects that reduce

emissions and use 5 percent less

fuel through combined-heat-and-

power (CHP) generation.

Poet was the second plant in

the United States to install a CHP

system at its ethanol plant in

Ashton, Iowa. The 56 MMgy

ethanol facility generates up to

7.2 megawatts of electricity and

uses 16 percent less fuel than a

conventional process. As a

result, Poet saves almost 19,000

tons of carbon dioxide emissions

per year.

Garnett, Kan.-based East

Kansas Agri-Energy uses a CHP

system designed by ICM Inc. that

recovers heat from oxidizers.

FEW student scholarship winners accept

checks from American Stainless & Supply.

Pictured are, left to right, Rick Rafferty, senior

sales representative/ethanol industry team leader

of American Stainless & Supply; Howe of

Chariton, Iowa; Bawa of Saskatoon,

Saskatchewan; Sorenson of Missoula, Mont.;

Gary Bulloch, president and chief executive

officer of American Stainless & Supply.

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Bryan, right, presents BBI International’s High

Octane Award to Kolsrud at the International

Fuel Ethanol Workshop & Expo.

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EVENT

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Despite some of the recent misguided accusations lobbed at

the ethanol industry, corn remains the foundation for current and

near-term production. According to several industry experts, it could

help the industry move beyond ethanol and distillers grains as end

products.

The biorefinery concept continues to gain momentum in the

ethanol industry. While consumption of at least 36 billion gallons of

ethanol per year is required by 2022 under the Energy

Independence & Security Act of 2007, the industry holds the poten-

tial to move well past that and also provide a bevy of specialty chem-

icals, according to speakers at the International Fuel Ethanol

Workshop & Expo. “The biotech and ethanol industries will be the

industry framework for the future development of chemicals,” said

Mark Stowers, Poet LLC vice president of research and develop-

ment.

Poet is at the leading edge of rolling out the biorefinery concept,

which essentially models itself after the petroleum and petrochemical

industry. In this instance, corn and other renewable agricultural

residues replace crude oil as a feedstock. The South Dakota-based

company continues to develop its Project Liberty, which is being

implemented at its ethanol plant in Emmetsburg, Iowa. The 50 MMgy

facility is being expanded to 125 MMgy, with 25 MMgy from corn fiber

and cobs. By adding cellulosic production to an existing corn-based

ethanol plant, Poet will be able to produce 11 percent more ethanol

from a bushel of corn, 27 percent more from an acre of corn and

almost completely eliminate fossil fuel consumption, while decreas-

ing water usage by 24 percent, the company said.

Stowers said biorefineries open the possibility of creating spe-

cialty chemicals such as benzene, organic acids/alcohols and pro-

tein-based biomaterials. Benzene can be produced from “green” glu-

cose out of a biorefinery, Stowers said. “This is a real potential,” he

added. “It’s there. The technology is clearly in place. Having a strong

corn (base) to the ethanol industry is critical not only for the footprint

of cellulosic ethanol, but also for the biorefinery of the future.”

Aspen Technology consultant Mike Mendez echoed Stowers’

comments. Mendez said the ethanol industry is well-positioned in

biochemical and computational knowledge to make an impact on the

broad specialty chemical market in the next 20 years. He said the tril-

lions of dollars spent on existing infrastructure to create products from

crude oil will be capable of handling inputs from the ethanol industry.

Mendez specifically mentioned the production of ethylene from

ethanol. Ethylene is the most important building block in the petro-

chemical industry, he said. The production of ethylene from naphtha,

which is any of various volatile liquid hydrocarbon mixtures used

chiefly as solvents and dilutents, is three to five times more compli-

cated than ethanol in terms of equipment and process steps,

Mendez said. It was just one of many examples of products that can

be derived from the corn-based ethanol industry.

“The chemical industry will not collapse with the inevitable

decline of petroleum reserves,” Mendez said.

Biorefinery Future Looks Bright

EVENT

As the 24th annual International Fuel Ethanol Workshop & Expo

kicked off at the expo grand opening, distinguished chemical engi-

neer and longtime industry consultant Raphael Katzen and his wife

Selma eagerly awaited entrance to the tradeshow floor. After the cer-

emonial ribbon-cutting, Katzen, now well into his 90s, made his way

up and down the aisles of the expo floor, shaking hands with all the

people he has met over the years.

Katzen, a previous recipient of the FEW’s Award of Excellence,

began working with cellulosic ethanol technologies in the 1940s. In

the 1970s, when the U.S. DOE was interested in helping to develop

a fuel ethanol industry in the United States based on corn, the depart-

ment turned to Katzen and his company Raphael Katzen Associates

International for his acumen and breadth of experience. In 1997,

Katzen and his wife sold their interest in his company, now called

Katzen International, and started a small but active consulting com-

pany in Bonita Springs, Fla., where he works today.

Katzen is retained as a consultant by Abengoa Bioenergy, for

which he provided the design for its cellulosic pilot plant in York, Neb.

Katzen also consulted for Alico Inc., one of six companies to receive

a DOE grant for commercial-scale cellulosic projects. Alico has since

pulled out of the project. At the 30th Symposium on Biotechnology for

Fuels and Chemicals, which was held this year in New Orleans,

Katzen was honored by being given the inaugural Raphael Katzen

Award, which recognizes outstanding individuals who have greatly

contributed to the commercialization of biotechnology to produce

fuels and chemicals.

When asked how many of the FEW events he’s been to over

the years, Katzen responded, “How many have there been?” Then

he smiled and nodded, intimating that he’s been to them all.

FEW Faithful Return

Katzen awaits his chance to speak at the microphone during the question and

answer portion of a technical breakout session.

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EVENT

Efficiently Driving Plant Profits

Fuel ethanol producers continue to tweak production

processes to maximize efficiency and boost the bottom line. While

the industry has always done so, it now has a choice of special-

ized optimization techniques, including software programs and

technology. Several industry experts discussed the importance

“data visibility” plays in the industry at the International Fuel

Ethanol Workshop & Expo.

Data drives financial performance, according to Brandon

Henning, global industry manager of biodiesel for GE Fanuc. “It’s

critical in today’s space,” he said. Henning was one of four speak-

ers in a workshop panel aimed at improving production efficien-

cies. The panel’s goal was to discuss how the smart usage of data

impacts the plant from management to operations to controls.

Maina Macharia, manager of project engineering for Pavilion

Technologies, provided a step-by-step glimpse into how a

Colorado ethanol producer implemented a plant-wide optimization

program based on advanced process control (for more informa-

tion, see www.ethanolproducer.com/article.jsp?article_id=4277).

Sterling Ethanol is a 42 MMgy plant that started in November

2005. Macharia said the facility was an early adopter of advanced

process control, and the benefits are proving it was worth the

move. The plant’s goals include improving yield, throughput and

quality, while reducing operating costs. “It’s a balance game,”

Macharia said. “You’re trying to run the plant hard while watching

your constraints and making sure the fermentors don’t run too

long.”

Macharia said a properly executed control system allows

plant managers to view near-real-time operating margins. This

also allows managers to view and define specific impacts to oper-

ating margins. Then they can assign a dollar value to events in the

production process. Making operators aware of these events

allows such things to be alleviated or eliminated.

Macharia said it’s critical to make sure the plant’s instruments

are taking repeatable readings prior to implementing a system.

Instrument error ranges must also be defined for accuracy.

Sterling’s control system reduced overall batch time by two hours

and added 18 percent increase in throughput.

Henning summed up the industry challenges as maximizing

plant efficiency to meet increased demand while best utilizing a

facility’s equipment and energy inputs. He said that a survey of

more than 200 manufacturers across a wide swath of industries

showed great value in installing production management software

to provide real-time visibility into operations. Overall equipment

effectiveness increased 10 percent. The average unscheduled

downtime decreased 4 percent to 6 percent. The average sched-

uled downtime decreased 2 percent to 4 percent, and the average

waste rate declined 4 percent to 8 percent, resulting in significant

improvements for ethanol producers. Henning said a 1 percent

increase in fermentation yield generates $1 million in incremental

revenues at a 50 MMgy plant.

Production management software and process control sys-

tems are the “Rolls-Royce” of data collection tools, according to

Jesper Frickman, customer solutions and biofuels scientist with

Novozymes North America. However, other data-tracking options

are available that don’t require extensive research and costs.

Regardless of how data is collected, Frickman said baseline infor-

mation should be accumulated when the plant is running well.

From there, the producer can set accurate control limits for

process variables. It also helps to determine why a plant is running

well or poorly. “If your ethanol [throughput] is going up and a month

later it is going down, and you have no idea why it was going so

well, it’s still something that should be investigated,” Frickman said.


EVENT

have produced all the ethanol they can, trade barriers should beabolished, beginning the importation of ethanol from friends inLatin America and elsewhere to help them reap the prosperitynow enjoyed by OPEC countries, Zubrin said. “It would be a ter-rific financial engine for world development,” he said. “Instead ofselling Citibank to Saudi princes, we can be selling tractors toAfrica. … We cannot afford to leave this power in the hands ofthe enemies of freedom.”

Midlevel Blends PanelThe last leg of the general session was a panel on midlevel

blends moderated by the general manager of CommonwealthAgri-Energy LLC, Mick Henderson. In Kentucky, whereCommonwealth Agri-Energy is located, E10 is a new option forstate motorists as of December, a time when ethanol marketerswere busting into the virgin territory of the Southeast. Panelistsincluded Robert White of the Ethanol Promotion andInformation Council; Ralph Groshen, senior marketing specialistwith the Minnesota Department of Agriculture; and Ron Graves,director of the fuels, engines and emissions research center at theOak Ridge National Laboratory in Oak Ridge, Tenn.

White promoted his organization’s new blender pump pro-gram campaign happening in South Dakota, where only 1,100refueling stations exist in the entire state. EPIC launched theeffort on May 1 with hopes to get 100 new blender pumps estab-lished in a year. There’s a $5,000 incentive for approved applicantsto use toward installation, and White said 29 stations applied in thefirst 45 days since the beginning of the program.

There has been some question recently as to the legality ofselling midlevel ethanol blends, but White made it clear thatblender pumps must be designated for flex-fuel vehicles only andcannot target legacy (gas only) vehicles. “The program can talk tothe research but [station owners or signage] cannot advise cus-

tomers to use midlevel blends in legacy cars,” White said, addingthat inside sources say EPA will begin strict enforcement of theFFV rule. Nevertheless it was mentioned that station owners can’tstop people from using midlevel ethanol blends in their gas-onlycars. “It’s just like we can’t stop people from putting diesel in theirgas tanks,” White said.

White also said 60 percent of the gas pumps currently on themarket are indeed blender pumps of a sort; they blend premiumgasoline and regular gasoline to make a mid-grade product, andover the next decade as more and more stations upgrade, 75 per-cent of all dispensers in the United States will be replaced, whichwould be a good opportunity to develop an ethanol blender-pump infrastructure, White said.

“At some point blender pumps have got to be certified,”Groschen said. He spoke of Minnesota’s E20 law and how it

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Author Zubrin said OPEC’s power would slowly wither if the.

government mandated that all vehicles sold into U.S. markets be

E85-capable.

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EVENT

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Life-Cycle Analysis

and the Ethanol

Industry

Life-cycle analysis is a process

that is constantly evolving as new

issues come to the forefront such

as indirect land-use change, the

value of ethanol coproducts and

the impact of higher corn yields.

The life-cycle analysis session at

the International Fuel Ethanol

Workshop & Expo addressed some

of those issues although the pan-

elists admitted that a lot of work

needs to be done to determine the

impact of indirect land-use changes

on life-cycle greenhouse gas

(GHG) emissions and just what

should go into those calculations.

“Certainly life-cycle analysis is

not a new concept or a new prac-

tice when it comes to biofuels. The

[U.S.] Department of Energy and

others have been looking at the

greenhouse gas and energy life-

cycle of biofuels essentially since

the industries began,” said Jeff

Cooper, director of research at the

Renewable Fuels Association and

moderator of the panel. “It seems

like up until now it has been quietly

under the radar that this has been

happening, but certainly under-

standing life-cycle analysis for bio-

fuels has probably never been

more important than it is now.”

That’s because policy regimes,

such as the Energy Independence

& Security Act of 2007, are being

developed that feature life-cycle

analysis as regulatory mechanisms

requiring several GHG thresholds

be met for various classes of fuels

to qualify for the renewable fuels

standard (RFS). Also, California is

developing a low-carbon fuel stan-

dard to reduce GHG emissions 10

percent by 2020 which relies heav-

ily on life-cycle analysis for regula-

tion of the standard.

Cooper pointed out that the


EVENT

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life-cycle analysis of biofuels is an

evolving field and many questions have

recently emerged about the impact of

indirect land-use changes, the impact

of higher corn yields and how to allo-

cate coproduct credits. “We at the RFA

are advocating for sound science and

not to rush to judgment on these

issues,” he said.

The researchers who developed

the Biofuel Energy Systems Simulator

Model have modified their product as

questions are posed concerning life-

cycle GHG emissions. “Last year, I

spoke about the model at this meeting

and it was during the release of the first

version,” said Adam Liska, a postdoc-

toral research associate at the

University of Nebraska, Lincoln. “Since

then we’ve gone through three revi-

sions based on external comments

from interested users. There have been

more than 400 downloads of the

model, of which 50 percent are within

the ethanol industry, about 25 percent

in academia and some governments

who are interested in using the model

as well.”

Liska started his presentation with

the definition of life-cycle GHG emis-

sions from the EISA, which is “the

aggregate quantity of GHG emissions

(including direct emissions and signifi-

cant indirect emissions such as from

land-use changes), related to the full

fuel life cycle, including all stages of

fuel and feedstock production and dis-

tribution.” Compared with gasoline, the

EISA requires that corn ethanol must

reduce GHG emissions by 20 percent,

cellulosic ethanol must reduce GHG by

60 percent and other advanced biofu-

els must reduce it by 50 percent.

Analysis produced using the BESS

model indicates that ethanol plants

reduce GHG emissions by 50 percent

to 62 percent, compared with gasoline.

Liska says that is quite startling, as

other assessments show only a 20 per-

cent reduction. “We’re getting ready to

publish this data and we hope that it will

stick, and that people will recognize

that the industry is actually reducing

greenhouse gas emissions more than

some other models would suggest,” he

said.

One important component of the

model is the emissions inventory where

all of a plant’s emissions from all the

life-cycle inputs and emissions from

those inputs can be clearly assessed.

For example, Liska pointed to one

ethanol plant scenario where a quarter

of the plant’s life-cycle GHG emissions

could be attributed to nitrous oxide from

crop production. The assessments of

emissions from nitrous oxide are made

using nine parameters from the

Intergovernmental Panel on Climate

Change’s “2006 IPCC Guidelines for

National Greenhouse Gas Inventories.”

So how does the BESS model

compare with other models? Liska

believes that the BESS model better

represents the industry than others cur-

rently available because it uses updat-

ed values based on the latest informa-

tion available for the parameters. Liska

went on to describe the BESS model

for life-cycle analysis and pointed out

that it’s an analysis of individual biore-

fineries and crop production zones,

assuming an ethanol plant is supported

by the crop zone surrounding it. The

model has three main input/output

components: crop production, the

ethanol biorefinery and a cattle feedlot

for feeding the distillers grains coprod-

uct. “There are three types of analysis

in this model,” he said. “There’s the

energy analysis, which is the life-cycle

net energy yield and efficiency. There’s

a greenhouse gas emissions analysis,

which is carbon dioxide and other trace

emissions—methane and nitrous

oxide—and the global warming poten-

tial of those three combined.” And then

there are the metrics for resource

requirements—such as crop produc-

tion, grain, water and fossil fuels—that

are needed to support the ethanol

plant. The model doesn’t yet include

land-use change. “We will assume that

land-use change will be one parameter

which will be applied to all ethanol

plants,” he said. “This analysis is for

EVENT

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looking at an individual plant not an aggregate for the

whole industry.”

To give producers an idea of the serious conse-

quences of using the calculations that were presented

to determine the land-use change impacts in a Sciencemagazine article, which was recently published and

harshly criticized by the ethanol industry, Liska plugged

the land-use change number from Tim Searchinger of

Princeton University into his calculations. As anticipat-

ed, it significantly raised the GHG emissions levels for

ethanol plants. Including this parameter value nearly

doubled the GHG emissions compared with gasoline,

making ethanol more GHG intense than the 20 percent

reduction required by EISA. However, Liska and others

believe that the number is far too high, and he cau-

tioned that a lot of work still needs to be done to deter-

mine the value of land-use change. He also urged the

industry to be actively involved in the discussions

regarding land-use change, and scrutinize the

assumptions that underpin the calculations.

The U.S. EPA and the California Air Resources

Board are currently developing methods and models to

determine life-cycle GHG emissions for biorefineries

that should be done by next year. In fact, Zia Haq, a

chemical engineer for the DOE’s Office of the Biomass

Program and one of the session panelists, said a

notice of proposed rule making will be published in

September followed by a public comment period. He

urged those in attendance who are interested in the

rule making to make sure they comment.

While researchers are looking for ways to deter-

mine the life-cycle emissions for biorefineries, Keith

Kor, general manager of Corn Plus LLLP, has been

actively reducing the GHG emissions and fossil fuel

use at the Winnebago, Minn., plant. By installing a fluid

bed boiler to burn the corn syrup from the ethanol

process, Kor has been able to reduce the plants natu-

ral gas consumption by 52 percent. That generates

40,000 carbon credits, which are sold on the Chicago

Climate Exchange. The plant has also added another

revenue stream by pelletizing it’s ash into “prills” and

selling it to farmers for fertilizer. The addition of two 2.1

megawatt wind turbines produces half the electrical

power requirements for the plant.

Kor pointed out, however, that with September

corn at $7.63 per bushel and natural gas prices at

$13.05 per million British thermal units as of June 18,

the industry has to do more to become low-cost pro-

ducers.


EVENT

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Environmental Systems

The Beauty of Raw Starch

Hydrolysis and Sorghum

More than three years ago, Genencor Inc., which is now a

Danisco company, released its new Stargen enzyme for raw

starch hydrolysis applications in corn-based ethanol plants.

Raw starch hydrolysis allows plants to skip the cooking step,

saving them time and energy. Recently, the company conduct-

ed research on these same enzymes to be used in noncook

applications in sorghum-based ethanol plants. Gang Duan, a

company director, presented Genencor’s findings in a breakout

session focusing on enzyme technology at the 2008

International Fuel Ethanol Workshop & Expo.

Duan first acknowledged that sorghum isn’t a widely used

ethanol feedstock. He said approximately 5 percent of U.S.

ethanol is made from the grain at eight different ethanol plants,

and it’s mostly used in tandem with corn in the south-central

part of the United States. However, he pointed out that sorghum

is more price competitive than corn in certain areas. It also

requires less process water than corn in ethanol production.

Furthermore, sorghum-based distillers grains are of equal value

to corn-based distillers grains.

When cooking corn in the ethanol production process, the

slurry needs to be heated to approximately 100 degrees

Celsius. Sorghum must be heated to approximately 130

degrees. For that reason, producers should consider a noncook

system that would simply bypass the jet cooker, liquefaction

and saccharification processes, Duan said. The noncook sys-

tem could bring sorghum fermentation efficiency to 95 percent,

versus less than 90 percent using a cooking method. Less

cooking means less unit operation, and less energy consumed

to heat and cool the slurry. Furthermore, components of

sorghum that are difficult to break down after using a cooking

method, such as tannins and protein, are easier to break down

if not cooked. “When sorghum is heated up, it reacts with amino

acids or protein, and forms chemicals that may be interesting …

but not to ethanol producers,” Duan said.

When it comes to the resulting distillers grains, protein

digestibility is improved in a noncook process. The phytic acid

and free phosphate contents are lower. Phosphate disposal,

which is an environmental concern, is thus reduced. By

installing a noncook system, new facilities don’t spend as much

in capital investments, and construction is completed more

quickly. Duan said the system could easily be adopted in exist-

ing facilities by simply installing equipment that bypasses the

cook steps.

“Hopefully after my talk, you feel a little more comfortable

using sorghum,” Duan concluded.


EVENT

The impact of environmental regulations on the ethanol

industry was the topic of a session at the International Fuel

Ethanol Workshop & Expo.

“Environmental regulations are just one segment of a long

list of compliance issues that the industry must stay on top of,”

said Stephanie Regagnon, director of commercialization for the

National Corn-to-Ethanol Research Center and moderator of

the environmental regulations session. “In today’s world where

the industry is constantly under attack in the media—in terms

of food versus fuel—it is critical that we stay informed of our

environmental responsibilities.”

Jessica Karras-Bailey, senior environmental scientist for

RTP Environmental Associates Inc., said the scrutiny that

ethanol is facing in the public and in the media, combined with

the growing number of plants, could increase the chance of an

agency inspection. She gave producers a few tips to make the

air quality inspection process easier. “You need to know what

to expect, be proactive, maintain your records, correct deficien-

cies and—I think something that’s very important and some-

times lacking—develop an employee understanding not just in

management but all the way down to shift supervisors—any-

body who’s working at the facility,” she said.

Howard Gebhart, manager of environmental compliance

at Air Resource Specialists Inc., addressed the impact of the

U.S. EPA’s decision to raise the emissions limit for a newly con-

structed ethanol plant from 100 tons per year to 250 tons per

year, before the plant needs to install federal emissions con-

trols. “The 250-ton rule is basically what the major emissions

source threshold is for a new source construction permit under

the EPA rules,” Gebhart said. “So under the federal [Prevention

of Significant Deterioration/New Source Review] rules, if you

belong to one of 28 listed source categories in that rule, you

have a 100-ton per year [emissions] threshold for determining

whether or not your facility is or isn’t a major source. If you are

not one of those listed source categories, the threshold for

major source is 250 tons.”

Gebhart explained that ethanol plants were originally cov-

ered in the chemical processing plant category, but the EPA

changed the definition of what a chemical processing plant is

and specifically excluded ethanol production by natural fermen-

tation. “That moved ethanol production out of the listed source

categories where the 100-ton rule applied and moved it into the

250-ton category,” he said. Also, fugitive emissions such as

leaking pipes would no longer count toward the applicability of

a major source.

Although it’s important for ethanol producers to know about

the rule change, it’s also critical that they understand what the

new rule didn’t change. “If you were worried about being a

major source based on emissions of hazardous air pollutants,

the threshold has not changed for hazardous air pollutants,” he

said. Also, for plants in or near nonattainment areas, the 100-

ton threshold may still apply. “So if you are in or near these

nonattainment areas, the 250-ton rule has basically done noth-

ing for you, Gebhart said.

Brian Wanzenried, senior associate for Terracon, and Todd

Potas, principal with the Natural Resources Group Inc., round-

ed out the environmental regulations panel. Wanzenried dis-

cussed new issues, common problems and misinterpretations

of environmental and chemical regulatory compliance, and

Potas talked about environmental issues concerning biomass

gasification.

EPA’s 250-Ton Rule Impact

EVENT

would be nullified if the state’s fuel consumption by de facto con-stitutes 20 percent ethanol. Groschen also talked about the resultsof the 80-vehicle test the state conducted—40 pairs of identicalvehicles, half run on E20 and half on E10, the state’s “regular”gasoline, which to this point analyses has concluded no materialcompatibility or operability issues were encountered. Groschenalso wondered if health effects testing, required for any new fuel,could consist of extrapolation from results on E10 done years ago.

Graves told the audience that the U.S. DOE has issued $14million to look at E15 and E20 blends in legacy vehicles and smallengines. He says credible studies already on the books show nitrousoxide increases from emissions of legacy cars using E20, and thepotential for premature catalyst degradation along with drivability

problems for older vehicles. Graves said 11 or 12 vehicle tasks onthis issue are to be performed, and some are already underway.Early results showed if in theory E20 were to lose 7 percent fuelefficiency, it only lost 5 percent, which is good news. He also saidearly indications are that no drivability concerns were detected inbumping up from E10 to E20 in vehicles tested so far. Some three-way catalytic converters got hotter than they should have, indicat-ing that the engine did not run rich enough with E20. “We’re onthe brink of initiating an 80-vehicle study,” he said, which will taketwo years to complete. Graves said EPA was concerned aboutsmall engines and midlevel ethanol blends, which is why the agencyasked him and his team to look at them first. Increased tempera-tures and idling speeds were noted as side effects of running E20in small engines, but he also noted that the variability in these typesof engines was so wide, and problems with temperature and idlespeed were problems most noted with lower cost engines.

During the question and answer period, Groschen mentionedBrazil and its success in decreasing petroleum consumption. “[Ifautomakers want to sell engines here, tell them] to get with it,” hesaid. “Sometimes the right thing to do is mandate it.” EP

Ron Kotrba is the senior writer and Rona Johnson is the features

editor for Ethanol Producer Magazine. Reach them at

[email protected] and [email protected] or (701)

738-4962. Kris Bevill is a staff writer, Dave Nilles is the contribu-

tions editor, Hope Deutscher is the online editor and Jessica

Sobolik is the managing editor for Ethanol Producer Magazine. Reach them at [email protected],

[email protected], [email protected] and

[email protected] or (701) 373-0636.

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A panel on midlevel blends included, left to right, moderator Henderson,

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National Laboratory.

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Since 2006, Indy Racing League competitors have been using ethanol to fuel

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creaming around the track atmore than 160 miles per hour, anIndy racing car skims a razor’sedge between success and chaos.

For the 50,000 fans in the grandstands, earprotection is not an option, but a necessity.At the Milwaukee Mile, a “small oval” byIndy standards, 27 race teams convergedrecently to risk their reputations for achance at victory.

The last Saturday in May is qualifyingday and crowds swarm pit road eager tocatch a glimpse of their favorite driver.Some of the biggest names in racing arehere. Favorites such as Marco Andretti andA.J. Foyt converse with newer stars likeDanica Patrick, Tony Kanaan and HelioCastroneves, who appeared on ABC televi-sion’s “Dancing with the Stars” and won.

Fans are understandably excited bythe approachability of these icons. And thecars are no less famous. They are as sleekand muscular as jungle cats. Nothing onthese vehicles is overlooked as every ounceof material supports the dual emphases ofsafety and speed.

Tolerances in Indy racing are incredi-bly thin, a function of the environmentthey inhabit. In the five closest Indy RacingLeague races, the combined margin of victo-ry was .0275 seconds. That’s about one-fifth of the time it takes to blink once. Eachpiston travels more than a mile up anddown in its cylinder each minute. The windforce put on the car at top speed wouldallow the cars to race upside down. It is tothis dance that ethanol was invited.

A Brief History of Racing FuelIn 2005, the IRL used 100 percent

methanol in their tanks. The fuel workedwell and was more efficient than straightgasoline, but IRL officials believed therewas room for improvement. In 2006, theymoved to a 10 percent blend of ethanoland methanol, which was then changed to100 percent ethanol for the 2007 season.

The desire to use only ethanol aside,100 percent ethanol is nearly impossible toobtain, and is illegal to keep without payinghefty taxes that date back to prohibition.The actual fuel used by the IRL is a blend

of about 98 percent ethanol and 2 percentdenaturant. The exact compositionincludes a small amount of high-octaneracing fuel. The fuel for today’s Indy carshas an octane rating of 113, compared withmethanol’s 107. This means a significant

S

An Indy Racing League official fills a tank with

racing-grade ethanol.


QUALITY

reduction in pre-ignition, or knocking andpinging.

In addition, many of the people whohandle the fuel, say it smells like tequila.This quality may seem insignificant, butsmell is actually one of ethanol’s benefitswhen compared with methanol. Pit crews

noticed the switch to ethanol immediately,reporting fewer coughing fits and less eyeirritation before any other modificationswere made to accommodate it.

According to Dennis Vervynckt, man-ager of hospitality services and an IRL offi-cial, in 2006, the first year the IRL began

using ethanol, teams saw a reduction inefficiency of about 10 percent. “That’sbecause we put straight ethanol into thetanks,” he says. “The teams initially didn’tmake any—or very many—adjustments totheir engines. After a few months, they kepttweaking and by the end of the season theywere back up to 100 percent efficiency.”

Vervynckt points out that there was aminor loss of power. “When they firststarted using ethanol, teams saw a slightdrop in horsepower,” he says. “As theteams got used to the fuel, they were ableto get more horsepower from ethanol oncethey again reached maximum efficiency.”

The switch to ethanol also allowed theracers to carry less fuel and make fewer pitstops, thereby increasing efficiency evenmore. “When the cars ran on methanoltanks had to hold 30 gallons to accommo-date the fuel requirements of the cars,”Vervynckt says. “After getting the enginesto perform at their full potential, there wasa significant gain in mileage. Indy cars nowhave 22-gallon tanks. When a driver pulls into change out his tires, he can fill up. Teams

Ryan Hunter-Reay’s crew rolls the ethanol car in to be tested.

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QUALITY

were able to match their tire and fuel stops exactly, instead of stop-ping for tires only, or fuel only.”

That efficiency translates into much less fuel being used by thesport. Lifeline Foods LLC, which supplies fuel for the IRL, willproduce 120,000 gallons of ethanol for the 2008 season. Andthough this may seem like a lot, it’s 20,000 gallons less than wasused the previous seasons.

The switch from methanol-based fuel to ethanol has amazedalmost everyone in the league. Drivers, the direct users of the fuel,voice their approval in glowing terms. “[Ethanol] is an Americanfuel that is good for the country and the environment,” says RyanHunter-Reay, of Rahal Letterman Racing and driver of the ethanolcar. Standing beside his crew as they make last-minute adjustmentsto the car, he is more than happy to discuss the benefits of theIRL’s switch to ethanol. “It’s been great for Indy racing—the fueleconomy, emissions—there’s nothing we don’t like. We love it.”

PerkinElmer’s Testing Procedure During Saturday’s qualifying round cars must make a date with

IRL race official Kevin “Rocket” Blanch. All day teams roll theircars from their setup areas in the infield to the testing center forinspection.

The cars come in order—no exceptions. As teams push themtoward the testing area, Blanch makes sure they know who’s incharge. “Go! Go! Go!” he yells to a team that’s taking a little toolong to get their front wing set before rolling underneath the whiteawning that’s popping in the strong wind off Lake Michigan.

Outside the tent, two men in red shirts dash from car to cartaking small samples of fuel. Gerry Kennedy, a senior customersupport engineer for PerkinElmer Inc., handles a syringe with along tube. After taking a bit of fuel, he turns to PerkinElmer fieldservice engineer Saleh Abdeljalil, who stands ready with a small

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Blanch, center, keeps the testing area running smoothly.


QUALITY

sample jar. Abdeljalil makes a note of thesample number and then places it, in order,in a piece of wood that holds the samplejars. As Abdeljalil finishes, Kennedy isalready headed for the next car.

Fuel testing takes place before andafter qualifying. “We test the fuel from themain tanker truck and then from all thecars,” Kennedy says. “After the qualifyinground, the top five teams will have to comeback and we’ll do a follow-up test.”

Of course, stiff penalties await anyteam that might attempt to cheat, but theidea might be more apocryphal than realis-tic. “There’s not much they can put in thetank that would give them an advantage,”Abdeljalil says. Still, the fuel needs to bechecked, and if a sample deviates too muchfrom the mean, further testing will be done.

PerkinElmer partnered with the IRLin 1996 to begin testing fuel for the leagueusing gas chromatography. Before thenIRL fuel was tested using ultraviolet-visiblespectroscopy (UV-VIS). Analyzing theabsorption of light passing through thesample, UV-VIS is a fairly easy test to per-form. The test is accurate to a point, butgas chromatography is preferred for itsability to identify the actual composition ofthe elements and particles present in thesample. A UV-VIS test can tell if fuel hasimpurities in it, but it can’t necessarily tellwhat all of those impurities are. Conversely,a gas chromatograph can tell exactly whatimpurities are in the fuel based on theirchemical signature.

After the cars are through the check-point and given the green light to qualify,they are rolled to pit road for any last-minute preparations before the driversarrive. The samples taken by Kennedy andAbdeljalil are brought inside the IRL sta-tion and tested using PerkinElmer’s gaschromatograph (GC). As the qualifyinground commences, most Indy officialsbegin to turn their attention to the televi-sion screens. Everyone is a race fanwhether they are directly involved with theIRL or the racers, or not.

In the meantime, PerkinElmer’s scien-

tists still have a job to do making sure eachof the 27 samples is accounted for and willbe checked accurately. Abdeljalil andKennedy are oblivious to the cars still audi-ble zooming around the track.

“Samples go into the GC unit and areheated,” Kennedy says. “They start atabout 45 degrees Celsius (113 degreesFahrenheit), increasing by 20 degrees eachminute up to about 160 degrees C (320degrees F). Each sample takes five to sevenminutes, so once we start the samples willtake a few hours to process.”

The next day, when all the sampleshave been processed, and assuming allcomes out well for the teams, Kennedy andAbdeljalil will only need to test the top fivefinishers. “The only problem is that some-times they forget to bring their car by so wecan test it,” Kennedy says. “That means wemay have to track them down quick and getthe sample.” Because the fuel is pumpedout of the cars before they travel, the senseof urgency is real. “There have been a fewtimes I’ve had to stick my arm way down inthe tank just to feel for any moisture what-soever,” Kennedy says. “Luckily we don’tneed much for the GC.”

Ethanol in Indy’s FuturePerkinElmer is one of many players

who make the IRL the powerhouse it is inAmerican racing. From the technologicallyadvanced tires that Firestone produces forthe league, to the engines—all identicalfrom the factory and leased by Honda—Indy racing brings a powerful image to any-one affiliated with the sport.

The fact that the IRL switched toethanol should signal to observers thatleague officials spent a lot of time and ener-gy making sure they were getting the bestfuel available. Their ringing endorsement isan indication that they plan to continue therelationship for a long time to come. EP

Craig A. Johnson is the Ethanol ProducerMagazine plant list and construction editor.

Reach him at [email protected]

or (701) 738-4962.

Raleigh, NC USA +1 919 851 2000Philadelphia, PA USA +1 215 464 6070

England +44 1780 767 007China +86-21-5132-1880

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RESEARCH


PHOTO: UNIVERSITY OF TEXAS, AUSTIN

Pictured are flasks of cyano bacteria growing in a liquid media.

RESEARCH

In two recently reported research projects, scientists describe how they

have taken cues from microbes that may ultimately lead to more efficient

and cost-competitive production of biofuels.

By Jessica Ebert


MICROBIAL TRICKS FOR THECELLULOSIC ETHANOL TRADE

RESEARCH

alcolm Brown Jr. and David Nobles Jr.,molecular geneticists and microbiologists atthe University of Texas, Austin, liken theirapproach to scientific exploration to the way

the “Car Talk” brothers on National Public Radio seem toapproach mechanical maladies, with quick wit, good humorand an expansive knowledge of their respective subjects.Although the puzzles may be different—“Click and Clack”may try to solve a mysterious “clunk” that rings out each timesomeone tries to make a left turn in their ’99 Jeep Cherokeewhile Brown and Nobles tinker with the genetics of bacteriato make the organisms produce cellulose—the objective is thesame: increased efficiency and security, and reduced costs.

For Brown, the search for the solution to the cellulosebiosynthesis puzzle has been ongoing for 40 years. “I’ve usedmany different living organisms as test organisms from cottonto trees to algae to even bacteria,” he explains. The most pro-lific cellulose producer that Brown’s team has ever workedwith is the bacterium, Acetobacter xylinum, more commonlyknown as the vinegar bacterium because it’s used to makevinegar. “It has given us probably the most information onhow cellulose is made by any living organism,” Brown says.The potential of the vinegar bacterium as a new source of cel-lulose was only made more attractive by the fact that the cel-lulose secreted by the organism is a pure form of the mole-cule minus hemicellulose and lignin, which makes the biomassof wood and other plants so difficult to initially break down.However, a challenge to the large-scale production of cellu-lose by A. xylinum is that the bacterium requires a sugar suchas glucose as an energy source to grow and subsequently makethe molecule.

One way to overcome this challenge would be to colocatewith a sugar mill, which could provide a rich supply of sugarto the microbes. This wasn’t an option for Brown’s team sothey chose to search for other microbes that could grow andproduce cellulose without being fed sugar. Photosynthesizers,or organisms that get their energy from the sun, were theobvious choice. “That’s when I turned to David Nobles, whowas then my graduate student and I said, ‘could you check andsee if there is cellulose in the cyanobacteria,’” Brown explains.

Cyanobacteria can be found in diverse habitats rangingfrom deserts to the oceans. They can survive exposure to highlevels of radiation and can fix nitrogen from the atmosphere.Cyanobacteria are often referred to as blue-green algae butunlike their eukaryotic namesakes, these microbes multiplymuch more quickly.

In 2001, the Brown team published a paper in the journalPlant Physiology based on Nobles’ work that described themachinery for cellulose production that certain species ofcyanobacteria carried in their genes. “Until that time no onehad any really good evidence that cyanobacteria could pro-duce cellulose,” Brown explains. “This study validated the factthat they make cellulose.”

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RESEARCH

It turns out that the cellulose pro-duced by cyanobacteria is incorporatedinto a gooey protective shell that encap-sulates the cells. Unfortunately for Brownand Nobles, this naturally produced cellu-lose has some drawbacks including it’scrystalline structure, which is difficult tobreak apart, the other polysaccharidesthat incorporate with the cellulose, andthe small amounts of the molecule thatthe bacteria are able to make. Instead oftrying to improve the outcome of cellu-lose production in cyanobacteria by mod-ifiying the genome, Nobles took a strainof cyanobacterium that doesn’t naturallyproduce cellulose and inserted the genesfor cellulose production from A. xylinum.

At first, Brown and Nobles were dis-appointed in the results because the gel-like cellulose produced by the cyanobac-terium didn’t look like the molecule madeby the vinegar bacterium. That’s when theteam had a “eureka” moment; the non-crystalline, low-molecular weight cellulosewas easier to break down into glucosethan the typical crystalline product madeby A. xylinum. “That’s when we startedthinking about this source of cellulose asa feedstock for biofuel,” Brown says.

Under the right growth conditions,the transgenic cyanobacterium alsomakes glucose and sucrose, two sugarsthat can be used directly to make ethanol.These molecules, along with the cellulose,

are released directly into the liquid brothor medium used to grow the cells and canbe easily separated from the microbialcells themselves. “What’s exciting aboutthis is that it can be done nondestructive-ly. We don’t have to kill the cells to get theproducts,” Nobles explains. “It eliminatesthe need for harvesting the cells, it elimi-nates the need for extracting a product,and in the case of the sugars, it eliminatesthe need for any digestion or treatment toget the sugars. The idea is that some ofthe most costly steps in the production ofbiofuels from conventional crops or evenfrom algae can be circumvented.”

Brown and Nobles are currentlyworking on moving this research out ofthe lab and into small-scale outdoorexperiments. The two have formed acompany called Phykotek Inc. and aim tocommercialize the process on many dif-ferent scales, Brown says. Ultimately, thecyanobacteria will be raised in large, salt-water ponds. “If you can use salt waterand nonarable land, then it’s a noncom-petitive issue with food and water,”Nobles explains. In addition, sincecyanobacteria can take nitrogen from theair and convert it into a form that themicrobe can use to grow, there’s no needfor fertilization.

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115

Flasks of cyanobacteria are growing in liquid media and on plates of solid agar.

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in a place where it’s never been done before. What better ideacan one have?” Brown says. He and Nobles are initially planningon being a feedstock provider for the ethanol industry since theinfrastructure is in place. “If we can get ethanol producers tostart thinking about other sources and how to integrate those, Ithink that’ll be a win-win situation,” Brown says. “There will bemany avenues to become completely energy independent, andwe want to be part of the overall effort.”

Concentrating on Corn Spearheading a second avenue of discovery within that

portfolio of approaches is a team of scientists from MichiganState University. While the Texas researchers pioneer the effortto find new sources of cellulose, the MSU researchers are engi-neering corn to be a better biofuels feedstock. Led by MariamSticklen, a crop scientist and molecular geneticist, the scientistsrecently reported the development of a line of corn that harborsmicrobial enzymes for converting plant cellulose into simplesugars for ethanol production.

Only in the past few years has Sticklen focused her energyon this type of research. “Because the cost of gasoline was notas high as it is now, it was more basic research,” she explains.“Could one produce these materials from microbes in plantswhile maintaining the function of the enzyme? In 2000, we real-ized this is something we should take seriously, so we dropped

some of our other projects to focus on this research.”Since that time, the team has developed two corn varieties,

dubbed Spartan I and Spartan II. Each line carries a gene thatdirects the production of an enzyme for breaking down cellu-lose. The Spartan I variety, for instance, expresses an endoglu-canase, which was isolated from a bacterium found living in ahot spring. The enzyme cuts long chains of cellulose into short-er fragments. In Spartan II, an exoglucanase isolated from a soilfungus was inserted into the corn genome. This moleculedegrades the shorter fragments of cellulose into dimers, whichcontain two glucose units. The newest generation of Spartancorn, Spartan III, carries the genes that code for the enzymes inSpartan I and Spartan II and an enzyme that breaks dimers intosimple sugars.

“The third [line] I consider the most interesting,” Sticklensays. The third enzyme in this line came from a microbe thatresides in the rumen of African cows. “We selected a cow fromAfrica because they only eat grass and must have a good systemfor the conversion of cellulose to energy,” she explains.

The researchers made numerous modifications to the genesequence of this microbial enzyme, which is called cellobiase, soit could be expressed in corn and perform its dimer-degradingfunction. “It’s similar to an electrician wiring a house for heatingor cooling or for electricity,” Sticklen explains. “You have a lotof wiring. You have to synthesize switches. It even has zoning.



RESEARCH

There are different elements that control this gene at a level thatcan be produced by plants.”

In addition, the genes are engineered so that each enzyme

is stored in a different part of the plant cell. The cellobiase, forexample, can be found in a specialized compartment of the cellsin the leaves and stalks of the plant. “We didn’t want the enzymeproduced in the pollen or roots so we developed this system,and specifically made the enzyme only inside the leaves andstalks,” Sticklen explains. The special compartment within thecells of these plant parts is called the vacuole and serves as thegarbage can for the cell. “Whatever the cell doesn’t need itdumps into the vacuole,” she explains.

The cellobiase collects in the vacuole as the corn grows anddevelops. It can be extracted along with the other two enzymeswhen the plant is harvested and ground. At that point, theenzymes can be separated from the fibrous parts of the plantand can be applied to pretreated biomass to break it down intosimple sugars for ethanol production.

Sticklen says that MSU is getting close to finalizing a dealwith a seed company for the Spartan varieties. Meanwhile, herteam continues to work on new Spartan lines engineered withbetter enzymes and reduced pretreatment requirements. “Thework we’re doing in my laboratory is to bring down the cost ofbiofuels,” she says. “That’s the whole idea.” EP

Jessica Ebert is an Ethanol Producer Magazine freelance writer.

Reach her at [email protected].

Sticklen stands among rows of Spartan III corn, which has been engineered to

express three enzymes for the degradation of cellulose into simple sugars.

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I N T E R N A T I O N A L

DISTILLERS GR AINSCONFERENCE & TRADE SHOW

www.distillersgrainsconference.com

a BBI International event

October 19 – 21, 2008Indianapolis Marriott Downtown

Indianapolis, Indiana, USA

MARKETING


Elements created this booth for Davenport Dryer LLC based on its branding

process and the messages that were developed during that process.

SOURCE: ELEMENTS

MARKETING

In a growing industry having preferred status with customers is

essential. A Sioux Falls, S.D., company has developed a way to

help renewable energy companies define their brands and

distinguish themselves among their competitors.

By Rona Johnson


BrandingValue ofThe

MARKETING

hat’s it worth to a com-pany or a product tohave preferred status?For example, when

most people think of jewelry, Tiffany’scomes to mind. And if those peoplehad a choice they would purchase jewel-ry from Tiffany’s as opposed to“Ralph’s” or some other name thatthey’ve never heard of.

“What if you decide you want toget into the jewelry businessand you have an opportunityto buy the Tiffany’s brand,but all you get are rights to thename and their famous bluebox—no jewelry and nostores?” asks Tim Kubista,chief executive officer andbrand strategist for Elements,a Sioux Falls, S.D., companythat specializes in helping companiesdevelop brands. “The market values it at$5 billion but that’s not the point.”

The point is having preferred statusis priceless.

“Companies with a well-definedbrand will find that they have increasedmarket share, preferred status with cus-tomers, increased valuations, reducedemployee turnover and often a verywell-defined culture with employees

aligned around a common purpose,”Kubista says.

You may not have heard ofElements because the company has only

been in the renewable energybusiness for a few years, butyou may have heard of someof their clients such asDavenport Dryer LLC,Reznick Group, a nationalpublic accounting firm, USBioEnergy Corp., whichmerged with VeraSun EnergyCorp. in March and Outland

Energy, a wind services company.Kubista decided to focus on renew-

able energy because it’s an industrythat’s growing fast, and that’s wherehaving preferred status really makes adifference. “If it was 20 years ago and Iwas an ethanol producer I would havebeen one of only a handful and therewould be no need to really pay attentionto your brand because everybody who isanybody in ethanol knows who every-

body is,” he says. “But today everybodyis clamoring for attention. There aremore ethanol producers, more tradeshows and conferences. So how does acompany stand out among all of thenoise, all of the clutter that’s going on?”And, like many in the renewable energybusiness, Kubista wants to make theworld a better place to live. “When weasked ourselves what we could do that isgoing to have some meaning in 20 or 30years that led to renewable energy,” hesays.

The ProcessBranding is more than just coming

up with a catchy name and then splash-ing it all over the airwaves and in print.It’s a process that starts with having awell-defined brand and ultimately leadsto preferred status. To become well-defined, a company has to know whothey are, what they stand for and whypeople want to do business with them.

Branding works because most buy-

W

Kubista

‘Oftentimes many of the companies we work for, sure theywant to make money, but they really believe they are goingto make a difference in how things are done with regards toenergy production in America.’

MARKETING

ing decisions are based on emotions notfacts. “When you talk about a brand youare talking about the emotional quali-ties,” Kubista says. “Think of the carthat you drive. Did you buy that carbecause of the wheel base or the size ofthe engine or any of the features or ben-efits? You probably bought it for somenonrational reasons. You might have feltgood in it. You might have imaginedthat, ‘Hey, I look good in this car.’”

The first step that Elements takesin working with a company to define itsbrand is to visit with senior leadership.Then they do what Kubista defines as a“deep dive” into their business in what’scalled brand essence discovery. This iswhere they find out the organization’strue purpose. “Oftentimes many of thecompanies we work for, sure they wantto make money, but they really believethey are going to make a difference inhow things are done with regards toenergy production in America,” he says.

The next step is talking with thecompany’s various audiences, which isdifferent for every company and couldinvolve customers, vendors, employees,the government, a community or otherstakeholders. “We can interview peopleand learn how they tick and how theymake decisions, and we can build a

brand and messaging around that inways that are very appealing to them,”he says.

In doing this, Elements tries toascertain if there are any gaps betweenwhat the company thinks it does bestand what everyone else thinks it doesbest. “Let’s say we meet with company

senior executives and they insist thatwhat is so great about their company istheir technology,” Kubista says. “Thenwe go talk to their customers and wefind out that the reason they buy fromthem is because they ship on time. Yousee there is a gap. What they are reallygood at is delivering on their promises

This Web site was designed by Elements for Reznick Group, a national public accounting firm.

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MARKETING

and that’s what their potential customersexpect, so that’s what our messages aregoing to revolve around.”

When Kubista talks about messageshe’s not just referring to advertising.These are messages that have to perme-ate within the whole company beforethey can be broadcast outside of thecompany. “I don’t care if it’s five employ-ees or 500, everyone needs to understandwhat the company’s core competenciesare,” he says. “What’s the essence of thebusiness? What’s the core truth? If peo-

ple who work for the company don’tunderstand what the company’s corecompetencies are, there’s no way they canconnect with the outside world and com-municate those messages.”

Throughout the process peoplewithin the company will begin to under-stand their own decision-makingprocesses, determine what threats theyface and identify opportunities. “Oncethat’s done it’s time to talk to the outsideworld,” Kubista says. “The company willhave a guiding strategy that it can align its

business with, and it will be crystalclear how they can communicate theirvisual, verbal and what we call theirauditory identity.”

Finding a PurposeKubista readily admits that

Elements developed its brandingprocess by accident. “I would love totell you it was some stroke of bril-liance but it wasn’t,” he says. “We juststumbled on it. We probably put our-selves through our own process anddidn’t even know we had it. In otherwords we just asked ourselves, ‘What’sour purpose? Why are we even doingthis?’”

With its unique branding processand its ability to attract clientele,Elements seems to have found ahome in the renewable fuels industry.A little persistence also pays off.“Their business development manag-er was pretty persistent that we givethem a shot at doing some brandingfor us,” says Robert Nixon, presidentof Davenport Dryer LLC, which sup-plies steam tube dryers to ethanolproducers. “We’d seen them at theshows several times. They knew we

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Elements designed these brochures for US

BioEnergy, one of its first clients in the renewable

energy industry.

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MARKETING

“A great brand not only drives sales, itadds material value to the business.Brand is as much an asset as employees,facilities or computer networks.According to estimates, the average mar-ket value of well-branded companies isabout 70 percent greater than the valueof their tangible assets.”

If Elements is successful in commu-nicating its message to the renewableenergy industry it will have preferred sta-tus. “The whole topic of brand commu-nications is something I’m very passion-

ate about, and it’s my desire that morepeople understand it,” Kubista says.“Hopefully over time the industry cansee the potential.” EP

Rona Johnson is the features editor for

Ethanol Producer Magazine. Reach her at

[email protected] or (701) 738-

4962.

were real and they gave us a proposalthat made a lot of sense to us. Muchof our advertising and branding hasbeen pretty consistent with everybodyelse in the industry and their creden-tials were good.”

Nixon says his company wasinterested in distinguishing itselffrom other dryer manufacturers andtheir message is that they are leadersin what they do and that their dryerscan make dramatic difference to anethanol producer’s bottom line. “Oneof the first plants that we were in—and you will see that in advertise-ments—they are saving $10 million inenergy over a direct-fired dryer sys-tem,” Nixon says. The ad, whichappears in the July EPM, features atestimonial by Brad Davis, generalmanager of Corn LP a 55 MMgyethanol plant in Goldfield, Iowa.

“Now that the ethanol industry ismaturing and the plants are gettingmuch more sophisticated, and withnatural gas prices rising, there was afairly dramatic shift in interest and wewant to be at the forefront of that,”Nixon says. “Branding can help put usthere and Tim’s efforts have beenpretty good to date.”

Although their advertisementsare already running, Davenport Dryerisn’t finished with the brandingprocess. Nixon says they are in themiddle of the process and he expectsthey could spend another 12 to 18months making sure their message isconsistent.

Every client that Elements workswith has different needs and thus theprocess they go through will differ.“Sometimes we get hired, we getthem launched and they are on theirown,” Kubista says. “We have otherclients who we stay with and helpthem out.”

So what is the value of branding?Simply put by Elements’ principal andbrand strategist Carmen Swartz in apaper called “Brand: What It Is andHow It Can Give You an Advantage:”

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INDUSTRY


Building the Next With the advent of cellulosic ethanol, design/build teams are gearing up for

the commercialization of the next generation of biofuels, and at the same

time are continuing to be involved in corn-based ethanol, where they built

their reputations. EPM talked with some of the big names in the industry to

get their view on this challenging transitional period.

By Bryan Sims

Generation

INDUSTRY


he ethanol industry seems to have reached aplateau after the heady days of breakneckgrowth in 2006 and 2007. According to datacompiled by EPM, the last corn-based

ethanol plant to break ground was Bridgeport Ethanol,a 50 MMgy plant located in Bridgeport, Neb. Sincethen, not one corn-based ethanol plant has brokenground for construction.

That doesn’t mean the industry is at a standstill.Plants that were under construction are coming on lineand others, mostly featuring cellulosic feedstocks, are inthe planning and development stages. Some have bro-ken ground on pilot facilities. However, until cellulosicethanol can sucessfully be produced commercially, theUnited States will rely on corn to produce ethanol.According to the USDA, corn-based ethanol is expect-ed to be the primary biofuel in the United States for thenext several years, noting that corn use for ethanol was2.1 billion bushels in 2006-’07, the equivalent of 5.7 bil-lion gallons of ethanol. This marketing year, an esti-mated 3.2 billion bushels of corn will be used to pro-duce approximately 8.6 billion gallons of ethanol. In2008-’09, expected plant capacities suggest that 4.1 bil-lion bushels of corn will be used for ethanol produc-tion. The USDA says U.S. farmers planted about 90million acres of corn this spring, down less than 4 per-cent from 2007.

Volatile market conditions continue to squeezeoperating margins for corn-based ethanol plants. Twoof the predominant issues that producers andwould–be producers face are high corn prices andcommercial banks are not as eager to lend to tradition-al corn-based plants as they were before. As a result,the nation’s process technology providers and buildersare approaching the industry with a sundry of businessstrategies to expedite the leap to cellulosic ethanol pro-duction.

Those strategies got a boost from the EnergyIndependence & Security Act of 2007, which wasenacted into law in December. The new RFS requiresthat 36 billion gallons of ethanol be consumed by2022, and that 21 billion gallons of the overall mandatebe advanced biofuels. Of those 21 billion gallons ofadvanced biofuels, 16 billion gallons must be cellulosicbiofuels. Additionally, 6 billion gallons of cellulosic bio-fuels must enter the market for consumption by next

year. To meet the mandate, 12 cellulosic ethanol facili-ties each producing 50 MMgy would have to be underconstruction now and be operational next year. Onecan only ponder whether this is feasible.

With that in mind, the presumption that some ofthe industry’s prominent process technology providersand ethanol constructors could be wrapping up corn-based ethanol projects in preparation for the transitionto cellulosic ethanol production is understandable.However, Granite Falls, Minn.-based Fagen Inc., one ofthe country’s leading ethanol plant engineering, designand construction firms, doesn’t see the corn-basedethanol market fading away. Instead, Fagen is shiftingits focus by being more selective of the projects itengages in while still servicing its corn-based clients.

“We’re not necessarily wrapping up the corn grain-based ethanol projects,” says Larry Murdoch, regionalmanager for Fagen’s southeast operations in Greenville,S.C. Murdoch is charged with finding new technologiesthat provide engineering and construction opportuni-ties for the company. “We’re continuing design andconstruction at a greatly reduced pace, obviously, andwe plan to continue at a certain level whether it’s newplants or improvements to existing plants. We plan tokeep a strong base of knowledge and resources toserve the current industry, but at the same time havesome people to develop the know-how and expertise inthe cellulosic area,” he says.

Process technology firms such as ICM Inc. arealso not prepared to turn their backs on the corn-basedethanol market. The Colwich, Kan.-based companyremains adamant that the corn-based ethanol industrywill continue to serve as a viable base for achieving asuccessful transition into cellulosic ethanol. For exam-ple, ICM is engaged in the development of novel pro-duction methods such as fractionation technologies.Through combined enzymatic and fermentationprocesses, the company is refining and tailoring thetechnology to meet the needs of existing corn-to-ethanol producers looking to curb operating costs,enhance overall production and to produce value-added commodities, according to Doug Rivers, directorof research and development for ICM. “We believethere is more value in a kernel of corn from an ethanolperspective [as well as] the energy and cellulosic side ofthe equation,” Rivers tells EPM. Founded in 1995,

T

INDUSTRY

ICM has designed andengineered more than75 dry-mill ethanolplants in the UnitedStates and Canada.There are 25 plants cur-rently under construc-tion which are usingICM’s ethanol processtechnology. “We seeourselves as a technology and servicesprovider,” Rivers says. “One of the thingsthat is incumbent upon us is to be outthere beating the bushes looking for newtechnologies that have the potential toconvert natural resources, whatever theymight be, into value-added products,”Rivers says, adding that ICM’s involve-ment in technologies like this in no waymakes their current corn-based ethanolcustomers obsolete.

Fagen takes a similar stance. Together,the two have assisted in the developmentand construction of more than 150ethanol plants across the country. LikeICM, Fagen is mindful of grain-basedethanol’s importance in the transition tocellulosic ethanol. “We are positive interms of not only the grain-to-ethanolindustry continuing to be a viable and crit-ical industry for our country, but also ofthe cellulosic industry that’s emerging,”Murdoch says. As grain-to-ethanol in engi-neering and construction projectsdecrease, Fagen is redeploying personneland efforts into other industries it hasserved in the past as well as developingrelationships with some of the cellulosictechnology companies to be prepared toserve that industry in a major way whenthe commercial-scale plants come on line,he says.

Forward-Thinking

Technology in ActionBecause cellulosic ethanol is essential-

ly in the embryonic state, companies suchas ICM are refining their technologies tobetter utilize nonfood-based cellulosicfeedstocks for conversion to cellulosicethanol. Such optimization efforts wouldfit existing corn-based ethanol producers

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looking to explore add-on on-site technologies to convertwhat would otherwise be disposed of into a valued revenuestream. “There are great opportunities for these cellulosicplants to be colocated and integrated with existing cornplants, which we believe are going to provide some nice syn-ergies and efficiencies of operations between the two,”Rivers says.

In January, ICM was one of four companies to receivefunding from the U.S. DOE to develop a small-scale cellu-losic ethanol plant. Preliminary plans call for the pilot-scalecellulosic facility to be built adjacent to LifeLine Foods LLC,a 50 MMgy corn-based ethanol facility in St. Joseph, Mo. The$30 million project calls for the utilization of various feed-stocks including corn fiber, switchgrass, corn stover andsorghum. The intent is to integrate biochemical processingpathways and to demonstrate viable energy recycling meth-ods within a biorefinery.

ICM is working with a team of companies and researchinstitutions to develop cellulosic ethanol projects, includingCeres Inc., Edenspace Systems Corp., South Dakota StateUniversity, AGCO Corp., the National Renewable EnergyLaboratory, the National Center for Agricultural UtilizationResearch, Novosymes, VeraSun Energy Corp. andSunEthanol Inc. In February, Junction City, Kan.-basedEdenspace announced it had joined the team as a provider offeedstocks. Edenspace’s primary role will be to provide corn,sorghum and switchgrass bioengineered to reduce the post-harvest costs of producing cellulosic ethanol. In May, ICMtapped Thousand Oaks, Calif.-based Ceres to sow thousandsof acres of switchgrass, high-biomass sorghum and otherenergy crops over the next three years in the St. Joseph area.

In addition to building its own pilot-scale cellulosic facil-ity, ICM has formed an alliance to design and build CoskataInc.’s first commercial-scale ethanol plant, which will use var-ious biomass and waste produces as feedstocks. The Coskataplant, which has not been sited yet, will produce between 50MMgy and 100 MMgy, using Coskata’s biological fermenta-tion technology, which can convert most organic matter intofuel at a cost of about $1 per gallon (see “AnaerobicOrganisms Key to Coskata’s Rapid Rise” in the July 2008EPM).

“We believe it’s important to stay on top of all theseareas so that we’re able to contribute to the success whichev-er way things go,” Rivers says. “There are a number of chem-icals out there that the DOE has identified that are importantin the scheme of being produced by renewable resourcesthat are today produced from petroleum chemicals.”

Rivers adds that ICM is collaborating with companieslooking to develop unique microbial strains that are capableof enhancing the fermentation process. One strategy is tolook at organisms that can ferment both C5 (hemicellulose)and C6 (glucose) sugars simultaneously in the fermentation

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process. Organisms used today can only break down glucosesugars, Rivers says. “We’re working to develop strains that willdo both forms of sugar, thus we’ll be able to get more alcoholout of a given weight unit than we otherwise would be able to,”he says.

Taking that a step further, ICM is partnering with compa-nies to develop a consolidated bioprocessing organism wheremicrobes would be able to degrade both hemicellulose and glu-cose sugars and simultaneously ferment alcohol. “It would be acomplete processing package in and of itself,” Rivers says.“That’s sort of the Holy Grail in terms of being able to convertcellulosic materials to ethanol and/or other value-added fuelsand chemicals.”

Scaling Up to Commercial Although design/build teams such as ICM and Fagen have

their footprints forever stamped into the corn-based ethanolindustry, others have contributed and are moving on to make asignificant impact in the cellulosic space.

One of those companies actively involved in cellulosic andother nonfood-based related ethanol production is Merrick &Co. The Aurora, Colo.-based engineering, design and construc-tion company has been tapped to build Range Fuels’ 100 MMgycellulosic ethanol facility near Soperton, Ga. Once operational,the facility would be the first commercial-scale cellulosic ethanolplant of its kind in the nation. The plant will use Georgia pinecollected from various forest products recycling centers in the

region. Range Fuels and several other companies are in theprocess of constructing commercial cellulosic ethanol plantsacross the country.

Merrick also owns and operates a waste beer collection,recycling and processing plant colocated with a Coors breweryin Golden, Colo. The 3 MMgy facility processes off-spec beerfrom the brewery and converts it into fuel-grade ethanol.

These are just a smattering of projects the company isinvolved in, in the renewable energy and fuels space, accordingto Steve Wagner, vice president of energy process systems forMerrick. Wagner agrees that the corn-based ethanol industry hashit a construction plateau. He believes that minor optimizationefforts to the operating equipment of corn ethanol plants areshort-term solutions until the gap between corn and cellulosicethanol is fully bridged. “There will continue to be some capac-ity expansions and that kind of thing,” Wagner says. “It alldepends on the debt structure of a particular project. There aresome synergies to processing the ethanol that come off the cel-lulosic process. You’ve got the back end of your plant for mak-ing fuel-grade ethanol from the beer well backwards throughdistillation and dehydration. That would mean that you’d reallyunload the evaporators and of course you wouldn’t have thedryers at all.”

According to Murdoch, this is a feasible step toward cellu-losic ethanol production since many of the corn-based ethanolprocessing methods in use today are compatible for cellulosic.“The cellulosic process has some distinct differences and it has

INDUSTRY

some unit operations that are similar to the grain-to-ethanolprojects,” he says. “Certainly, a lot of the know-how, design andequipment used are adaptable from the corn-based to the cellu-losic, although there are a lot of new equipment and changestoo. As far as being able to utilize certain materials and equip-ment that will be possible.”

Considering CostWhile cellulosic ethanol is in its demonstration state and sci-

entists, universities and other research entities continue to assessits commercial viability; the cost at which these technologies canbe deployed presents a challenge.

The ability to attract funding to develop innovative cellu-losic technologies and scale that up to commercial size won’t beeasy. “It’s not that there aren’t projects out there; it’s not thatthere aren’t feedstocks available to go into these plants,” Riverssays. “It’s that the financial institutions got themselves in a bindto the point where they’re ultra conservative.”

Financiers and others involved in the industry believe thatthere is also limited funding available because of the gold rushmentality that permeated the ethanol industry in the past fewyears. And, it’s always been difficult to obtain loans for technolo-gies that are complex and unproven. Unless an ethanol projectcan differentiate itself from the traditional “greenfield” cornethanol plants, lenders aren’t apt to consider looking at it. Eventhen, differentiation doesn’t come without a cost. “What we’vefound is that lenders are no longer looking for good deals,

they’re looking for great deals,” says Alan Goodnight, director ofmarketing for ICM.

Lenders are more selective to whom they provide fundingfor in the cellulosic ethanol industry and in other applicabletechnologies intended to optimize existing corn-based technol-ogy, according to Mark Baratta, vice president and manager ofFirst National Bank of Omaha’s renewable fuels group.

“As ethanol plants get more complex intheir design and technology more capital isrequired and it’s hard to come by today,” hesays. “The build-out of the corn-ethanol busi-ness is nearing its maturity. The move towardcellulosic won’t necessarily make corn-basedethanol plants obsolete, and they will potential-ly have the opportunity to re-engineer them-selves or retrofit to be cellulosic compatible.”

The journey to transition from corn-basedto cellulosic ethanol won’t come easy, or cheap. However,design/build teams assert that progress would not be possiblewithout the establishment of the corn-based ethanol industry asa solid foundation to build from. “It’s hard to see past any ofthese additional products without corn-based ethanol as thestarting point,” Goodnight says. EP

Bryan Sims is an Ethanol Producer Magazine staff writer. Reach

him at [email protected] or (701) 738-4962.

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One can easily drive through the U.S. Midwest and run

across an E85 station before it’s time to refuel. There

may even be a couple different stations to choose from.

Ethanol marketers in the Northeast can only dream

about that kind of distribution, but they’re working hard to

make it a reality.

By Kris Bevill

Where in theNortheast is

PHOTO: SAM MELQUIST, BBI INTERNATIONAL

E85?

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here are 345 gas stations inMinnesota that provide E85,according to the NationalEthanol Vehicle Coalition.

Minnesota leads the nation in the numberof E85 stations per state. Many otherMidwest states have invested the time andenergy to install E85 pumps for their flex-ible-fuel vehicle (FFV) driving customers,including Iowa with 90 E85 stations,South Dakota with 70 locations and evenoil-rich Texas with 38. But there are otherstates where E85 pumps are not as abun-dant. If one took a drive out to theNortheast and tried to fill their tank withE85, a GPS system would come in handy.Once one got to Pennsylvania, with only15 E85 stations, a person would have todo a little searching to find a station.From there, one would want to reset theirGPS system and head east or north untilthey reached the coast where they wouldhave a choice of 31 stations to purchaseE85 throughout 11 states. That meansthe odds of finding an E85 pump with-out GPS before the FFV’s gas gauge hitsthe empty mark are not good.

That’s not a good situation for theFFV driving public because as gas pricescontinue to rise, the spread between thecost of regular unleaded and E85 is alsoincreasing, making E85 a better bargainthan regular gasoline. So what’s the hold-up in the Northeast? “We can’t assumethat because we’ve heard of ethanol andthat because our political leadership haspromoted ethanol for people here in theMidwest, where people have been usingethanol for the past 20 years, that theknowledge of others around the countryis as accurate as ours,” says NEVCExecutive Director Phil Lampert.

A lack of education is one reasonwhy the Northeast lags behind theMidwest in its use of E85. It’s a long-term process to change opinions,Lampert says. “It takes awhile to increaseeducation and awareness on these prod-ucts. It’s not going to happen overnight,”he says.

The NEVC has been advocatingethanol use in all parts of the country foryears and continues its efforts on a daily

basis. Lampert knowswhat it takes to estab-lish a market for E85anywhere, but some-times it requires morethan educating the pub-lic and station ownersto get E85 stationsinstalled. Often thebiggest hurdle to overcome is the federaland state governments.

Blame CaliforniaAccording to Lampert, problems for

gas station owners interested in installingequipment for and selling E85 can betraced back to 2006 when theUnderwriters Laboratory Inc. rescindedits certification for E85 pump equipment,which made little sense. “We had neverhad a leak, a failure of an E85 pump orany indication of exorbitant corrosion ofan E85 pump, but nevertheless the ULrescinded the certification,” he says. Thatmove by the UL eliminated the possibili-ty of federal regulations for E85 equip-ment, leaving it up to individual states todecide. Lampert says interested partieshave been able, for the most part, toeffectively deal with local weights andmeasures divisions and fire departmentsin order to acquire waivers for the instal-lation of E85 pumps and storage equip-ment. Work at the local level has led manystates to allow the sale of E85 today. Andthen there’s California.

Established by the state legislature in1967, the California Air Resources Boardgoverns all things related to emissionsand vehicle standards in the state.According to its Web site, CARB wasestablished to attain and maintain healthyair quality, conduct research into the caus-es of and solutions to air pollution, andsystematically attack the serious problemscaused by motor vehicles. It all soundsgood, but well-meaning legislation canoften have unintended consequences.“There are more flex-fuel vehicles on theroad in California, than in any other state,and [California] has only 10 E85 fuelingstations,” Lampert says.

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requires the use of stage 2 vapor recoveryequipment. Stage 2 vapor recovery equip-ment is a sleeve on the outside of thepump nozzle designed to catch vaporsthat escape from the vehicle’s gas tank.For gas station owners required to installthe equipment, the expense can take quitea chunk out of their bottom line. TheNEVC has been arguing that stage 2vapor recovery systems are not really nec-essary because all vehicles manufacturedin the United States since 2000 comeequipped with onboard vapor recoverysystems. And nearly all FFVs were manu-factured after 2000. This is importantbecause 12 other states have adoptedCalifornia’s emission standards, includingalmost every northern state on theEastern seaboard. Connecticut, Maine,Maryland, Massachusetts, New York,New Jersey, Rhode Island, Vermont andPennsylvania follow CARB rules, as doNew Mexico, Oregon and Washington.

In February, CARB declared thatstage 2 vapor recovery equipment was nolonger necessary for E85 fueling stations.However, an executive order needs to beissued to rescind current regulationsbefore the 12 other states can make thechange. It remains to be seen whether thatis all that’s needed to jump-start the E85movement in the Northeast. In early June,

CARB spokesman DimitriStanich told EPM that anexecutive order was in theworks and could be final-ized any day, after whichparticipatory states wouldhave the opportunity toaccept it as is or interpret itfor their own best interests.

New York:

The E85 BeaconPerhaps the one shin-

ing example for theNortheast is a state thatalready sets the trends forthe region. According toLampert, New York hasdone wonders improving itsbiofuels programs and mak-

ing alternative fuels available for the con-sumer. “They have bought into this,”Lampert says. “They support it. They’renot letting the bureaucracy get in the wayof it. They’ve got millions of dollars thatthey’re making available for grants andthey’ve eliminated taxes on E85 for anumber of years. New York is second tonone in the country, as far as what theyhave done to promote E85.”

The New York State EnergyResearch and Development Authorityimplements the states’ biofuels programs.So far, public response to the increasedavailability of biofuels has been “wellbeyond our expectations,” says SeniorProject Manager Patrick Bolton. In hisopinion, California emission standardshave not significantly impactedNYSERDA’s work to make biofuelsincentives available.

Among the programs being imple-mented by NYSERDA is the BiofuelStation Initiative. The objective is toincrease the number of E85 and biodieselstations throughout the state by reimburs-ing 50 percent of station-owners’ costs,up to $50,000 for each station, for theinstallation of biofuels dispensing equip-ment, storage tanks and associated pipingequipment. Bolton says the program hasbeen operating for about a year and has

139

Pennsylvania (15)

New York (20)

Maine (0)

New Hampshire (0)

Vermont (0)

Massachusetts (1)

Rhode Island (0)Connecticut (0)

New Jersey (0)

Delaware (1)

Maryland (6)

District of Columbia (3)

This map shows the number of E85 stations in the Northeast as of May

2008.SOURCE: NEVC


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collected 73 applicants. Applicationprocesses are in various stages of comple-tion. “Our hope is to do approximately300 stations in the state with the fundingthat we have available,” Bolton says. It isan open-enrollment program and hasbeen renewed until May 2009.

NYSERDA also provides an incen-tive for terminal operators by supplyingup to 50 percent of the cost for equip-ment to distribute E85 or biodiesel toretail stations and fleets across the state.Each terminal that applies can secure upto $150,000 to cover those costs.

For producers, the state offers a 15-cent-per-gallon tax credit for every gallonover 40,000 gallons of ethanol andbiodiesel produced in the state. Also, thereis no state tax on ethanol. The only taxthat is applied is the federal excise tax onthe sale of the fuel.

Bolton attributes the state’s recentpush to make E85 available to amplefunding and forward-looking legislators.He says the governor’s leadership hasbeen important to not only set up theinfrastructure for biofuels but also to setthe stage for second-generation biofuels.

The success of the NYSERDA’swork can easily be measured. Accordingto Bolton, E85 stations in New York sellanywhere from 700 to 10,000 gallons ofethanol per day. “They are some of thetop performing E85 stations in the coun-try,” he says. And consumers are seeingthe economic benefits of using biofuels.In early June, an E85 station nearNYSERDA’s office was selling E85 for$2.99 per gallon, compared with $4.15 pergallon for regular unleaded, Bolton says.

“That saves the consumer $10 on a 20-gallon fill up, so there’s been significantinterest by consumers, who are saving realdollars by using it,” he says.

The Granite IslandNew Hampshire is the lone

Northeast state to refrain from adoptingCalifornia emissions standards. Onewould assume that would make it easier tosell E85, but Liberty Energy LLC co-founders Scott Maltzie and ThomasMann have found that’s not the case.

Maltzie and Mann founded LibertyEnergy in 2004 with the hopes of becom-ing a renewable fuels marketing company,and to help alleviate the United States’dependence on foreign oil, create domes-tic jobs and improve the environment. In2006, the duo attempted to marketethanol in the southern half of NewHampshire and northern Massachusetts.To date, they’ve managed to increase theirpersonal knowledge on the difficulties ofpassing E85 legislation. However, theirdesire to keep trying to make E85 avail-able to consumers in their part of thecountry hasn’t waned. But there are stillno E85 stations.

“It’s been a kind of good news, badnews situation,” says Maltzie, who servesas the company’s chief operations officerand chief financial officer. Since they

It’s fairly common for drivers in the Midwest to have

access to E85 pumps to fuel their flex-fuel vehicles,

and the cost savings is becoming quite noticeable.

A gas station in North Dakota was recently selling

E85 for $2.99 per gallon, compared to the national

average of almost $4 per gallon for regular

unleaded. Interestingly, the cost of E85 was equal

to the cost of bottled water that day.

PH

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: K

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amount on gas sales than they have in thepast so independent owners just don’t havethe money to invest in new equipment.Furthermore, corporate stations are afraid toinstall pumps at their locations because oflawsuits over the potential misuse of E85.

Another hurdle for E85 in NewHampshire is that many FFV owners don’teven realize they can use E85 in their tanks.According to Mann there are 18,500 FFVsin New Hampshire. It is assumed that noneare currently being fueled with E85.

Mann says they get frustrated at timesbecause it often feels they are alone on anisland trying to make changes to NewHampshire’s fuel regulations. After severalphone calls and e-mails they eventuallyfound people willing to help and offer someadvice, but ongoing education and a mentor-ing system would be useful in the future,Maltzie says. They also feel that ethanol pro-moters have simply forgotten about NewHampshire. “We’re a different place than themiddle of Iowa,” Maltzie says.

Maltzie and Mann will continue todevelop a market for E85 in NewHampshire as long as it is feasible. Theyhope to win a grant from the state’s cleancities program that will help provide finan-cial assistance to station owners who wouldlike to sell E85. If they get the grant, Maltziesays their goal is to help fund 10 to 15 gasstation ethanol projects. “We’re also workingto get a group of first adopters who are will-ing to boldly go where stations haven’t gonebefore in the state of New Hampshire,” hesays. “Our primary focus has been to getthose stations identified and to figure outwhat needs to happen to get those stationsconverted.” EP

Kris Bevill is an Ethanol ProducerMagazine staff writer. Reach her at


0636.

began focusing on acquiring and mar-keting E85, he and Mann have beenpleasantly surprised at the supply ofethanol in the area. It contradictedtheir original thought that acquiring areliable supply would be the hard partabout marketing ethanol. So the goodnews is that ethanol is there and readyto be used. However, because there isa lack of E85 stations, Mann saysmost of the local producers end upshipping much of their product to theSoutheast, where ethanol has experi-enced a recent surge in demand.

The bad news for Maltzie andMann has been state regulations—ora lack thereof. Ethanol hasn’t beenaddressed in New Hampshire regula-tions at all, forcing officials to treat itessentially the same as gasoline. It’sbaffling to Mann who, as senior vicepresident of business development,spends much of his time talking tostation owners and state representa-tives. “It’s like they apparently didn’tever see this coming,” he says.

Maltzie says the state hasexpressed interest in making regulato-ry changes, but the New Hampshiregovernment is chronically shortstaffed and under budgeted so it takesa while for things to get done. NewHampshire is also historically conser-vative and leans more toward peoplehelping themselves than heavily fund-ing any one project. “People are notintentionally trying to stonewall us,but the end result is it makes thismore difficult,” Maltzie adds.

Maltzie and Mann say someowners have expressed a willingnessto try E85, but they don’t want tohave to invest their own money toinstall equipment. At least not untilthere is proof that people will buy it.The closest E85 station to LibertyEnergy is approximately four hoursaway in Albany, N.Y. “It’s not like inthe Midwest where a four-hour drivecan be the norm,” Maltzie says. “Forpeople here, a day spent driving tocheck something out is not reallyappealing.” Mann adds that stationowners are currently making half the POWDER PROCESSING TECHNOLOGY: THE STURTEVANT SOLUTION.

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CONSTRUCTION


odularizing is not a new concept—but it isevolving. The process, which mainly entails theconstruction and pre-assembling of equipment,machine components and modules indoors to

later be transported to a final destination, is a technique thatmany companies have embraced.

Roeslein & Associates Inc., a full consulting, engineeringand construction management firm, specializes in modularizing,

unitizing and pre-assembly. The company, headquartered in St.Louis and with branches in Denver and Birmingham, U.K., hasbeen recognized as one of the leading modularizing firms in theworld.

Integrated Manufacturing Technologies, located just out-side of St. Louis in Red Bud, is a wholly-owned subsidiary ofRoeslein. The facility, consisting of an impressive 236,000square feet—swallowing up 17 acres of land—provides cus-

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A top modularizing firm, Roeslein & Associates Inc., has formed

a partnership with BlueFire Ethanol Inc. to integrate its concepts

into the construction of a new ethanol biorefinery. They have

now opened a door into the world of renewable energy—serving

as a short cut to the market.

By Anna Austin

The Mystery of Modularizing


tomers with complete process systems constructed under IMT’sroof, according to their wants and needs. This includes paint,steel and pipe fabrication, equipment, electrical panels,cable/ladder tray, lighting, and power and control wiring.

IMT is divided into four shops of different sizes, eachdesigned for a specific purpose. Approximately 35,000 squarefeet are designated for fabrication processes; a smaller portionof that space is isolated for the sole purpose of stainless steel

production to prevent cross-contamination. Painting proce-dures account for 29,000 square feet, and up to 35,000 squarefeet is used for shipping, receiving and storage. A large amountof modern office space is also available to provide IMT suffi-cient space to handle company needs, and segregated areas forcustomers to use for on-site project management.

Upon completion, the structure, system or unit is testedin the 115,000-square-foot pre-assembly shop to ensure

CONSTRUCTION

desired capabilities, safety and accuracy. Then, it is partially dis-assembled. Whether it be by rail, truck or barge, each unit isthen carefully transported in large sections—all of the bracedand packaged pieces, which may include piping, electrical com-ponents and ductwork—to arrive intact and ready to be easilyre-assembled. To hasten the process, each piece is speciallymarked or bar coded.

Having provided service to customers for more than 30years, Roeslein has completed work in more than 16 countrieson nearly every continent, with several projects currently under-way. In the past, the company mainly specialized in modulariz-ing units for can manufacturing and packaging plants, but nowit’s working with clients in the corn ethanol and biomass indus-tries. “We do agree that this has been a step forward for renew-

able energy facilities, as well as ourselves,” saysTerry Leebolt, director of engineering forRoeslein.

Befriending BlueFireRecently, Roeslein has attracted a new cus-

tomer. BlueFire Ethanol Inc., which intends touse its patented Arkenol process to convertwood wastes, urban trash, rice and wheatstraws, and other agricultural residue into ethanol. The compa-ny has strived to partner with landfill owners and municipalitiesamong others to build its plants at waste disposal sites.

In 2007, BlueFire was selected as a recipient of a $40 mil-lion grant from the U.S. DOE and is using the funding to buildits first commercial-scale waste-to-ethanol production biorefin-ery. The facility will be in northern Los Angeles County nearLancaster, Calif. To test the efficacy of the new technology, thecompany has constructed and operated a pilot plant near itssouthern California offices for the past several years. In an Aprilpress release, BlueFire announced the company had selectedRoeslein and IMT to help develop the plant using unitizing,modularizing and pre-assembling concepts.

"Prefabrication and modular construction has proven itselftime and again to be the best method for maintaining quality,controlling costs and creating the fastest to-market time for thedeployment of complex facilities,” says Arnold Klann, presi-

Integrated Manufacturing Technologies consists of 236,000 square feet and is

located in Red Bud, Ill.

Leebolt

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dent and chief executive officer of BlueFireEthanol. “Roeslein came highly recommendedto us.” Having found modular concepts to beefficient in the construction of power andwater treatment plants, Klann points out thatthis is the first time BlueFire will utilize themodularization for an ethanol plant. “This isn’ta new concept,” he adds. “But the way inwhich it is being deployed is significant. It is

greatly reducing cost and completion time for us. We are work-ing with very good teams of people working diligently to getthings accomplished.”

According to Klann, BlueFire is “knee-deep” in engineer-ing issues for the Lancaster facility. “We’ve just started drillingwells,” he says. “But by this time next year (June) we should beproducing ethanol. Modularizing is really giving us a leg up.”

The Lancaster plant will convert post-sorted green wasteand other cellulosic materials, taken from landfills in southernCalifornia, into roughly 3.1 MMgy of fuel-grade ethanol.Process Automation Concepts Ltd., MECS and Brinderson arealso members of the engineering team. Klann says that the sizeof the Lancaster facility will better suit and assist the capabili-ties of developing countries that are unable to produce massamounts of useable feedstock. “[Modularizing] also allows usto potentially sell our facilities as a turn-key manufactured prod-uct, leveraging our capabilities and expanding our market reach

several fold,” he says. “The Lancaster facilitywill bring a new dimension of thinking toBlueFire, one which combines cost-effectivemodules for rapid deployment to meet theburgeoning demand for renewable fuels.”Klann believes that the design of the facility is“right-sized” to seize market opportunities forlandfill sites of any size.

The Upsides in DetailCutting costs is the most obvious benefit to modularizing.

However, as the economic scale has grown, some companieshave mistakenly abandoned modular concepts. “A lot of facili-ties think they’ve gotten too big,” says Steve Comeau, IMTmanager of business development. “Really, everything is stillmanageable and can be modularized to a certain point. We aretrying to re-educate owners and engineers that even a largeplant can still modularize. Granted, it limits us in how big theequipment is—but if we can break 50,000 components downto 100 pieces by modularizing, the savings are still tremendous.”

“We encourage our clients to get us involved right away inthe first part of the project to better identify which parts of thefacility lend themselves to modular concepts,” says JohnDeMoulin, Roeslein manager of business development.

Other cost savings include minimizing change orders andcontract growth, controlled shop fabrication, which reduces

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CONSTRUCTION

field labor, a lower hourly rate andincreased productivity. “The bottom lineis there is a much faster recovery of com-mitted capital and financing costs,”DeMoulin points out.

Since modularizing brings the num-ber of facility components to a mini-mum, there is a substantial reduction ofon-site installation scheduling and man-

power. “We work parallel with, or evenahead of on-site infrastructure,”DeMoulin says. “There doesn’t have tobe any waiting for ground breaking.” Insimple terms, prefabricating facility com-ponents saves time since the process ofinstalling these components is not affect-ed by building construction. Typically,without modularizing installation is slow-

er as one part must becompleted before workon another can begin.

Another issueaffecting project com-pletion may be a short-age of availableresources in a geograph-ical area—for example,professional welders or electricians—types of work that can be moved fromthe field and into the shop.

Depending on the project andwhere it is located, Roeslein provides on-site assembly aids as well. Typically, aninstallation supervisor who was largelyinvolved in the pre-assembly process, butmore recently, installation crews, havebeen sent. “It all depends on the owner’spreference,” Comeau says. “It certainly isto the customers’ advantage, as weunderstand the complexity and design ofthe project.”

Weather, such as extreme tempera-tures or storms, is another matter that

Pictured is a preview of BlueFire’s Lancaster plant.

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DeMoulin

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may affect on-site construction; bringingwork indoors may prevent loss ofprogress.

Enhanced overall project safetyallowing for a more productive workenvironment, is yet another benefit tomodular concepts. This includes reduc-ing site congestion—equipment andlifts—and people. Stacking of trades isalso minimized by shifting pipe andstructural fabrication and erection laborhours from the field to a controlled shopenvironment. The need for structuresthat are potentially dangerous, such astemporary scaffolding, are lessened ormay not be necessary, and jobs that entailworkers hanging from the sides of tanks,doing electrical or mechanical work, canalso be eliminated. Safety issues relatedto extreme temperatures that pose a dan-ger to individuals working on the site arelessened.

The Four-Phase ApproachCustomers who select Roeslein for

their project at the beginning will be

introduced to four different phases—preliminary engineering, detailed design/engineering, procurement/prefabrica-tion, and installation/start up.

Comeau reiterates that gettingRoeslein and IMT involved in the prelim-inary stages, which determine the feasi-bility of modularizing, associated costs,project schedule and other applicableinformation, is a decision that greatlyreduces the final price tag. “This is themost important item when modularizingrenewable energy facilities,” he says.“With more than 20 years of experience,we really have an eye for recognizingmodular potential. It is much easier andmore cost effective to plan a modularfacility in the preplanning stages ratherthan later on in the design.”

The second stage of this approachinvolves equipment specifications,mechanical/electrical design packagesand bid documents, design reviews withthe client’s suppliers and contractors, andbuilding design coordination. In the lasttwo stages, all of the modularizing, unit-

izing and preassembly is done. The finalstep is running tests to ensure a quality,customer-desired product. This includesstart-up support and may involve train-ing and ongoing technical/operationssupport to educate and familiarize cus-tomers and staff with systems and equip-ment.

“Really, in the end, it is like an erec-tor set,” Leebolt says. As Roeslein con-tinues to provide services to returningcustomers, the company is optimisticabout breaking into this new industry.

“We have now successfully workedwith every branch of the biofuels indus-try—ethanol, biomass, cellulosic—youname it,” Leebolt says. “We’ve got ourfingers in every piece of the pie rightnow.” EP

Anna Austin is an Ethanol ProducerMagazine staff writer. Reach her at


4962.

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The Role of DDGS in the Food-Versus-Fuel DebateAs mainstream media continues its tirade against biofuels in the food-versus-fuel debate,

many aren’t aware of or ignore distillers grains and how it fits into the picture.

By Ron Kotrba

COPRODUCT


tanding inside the distillers grains building of anethanol plant as tons of coproduct pile up, it’s difficultto comprehend how the mainstream media couldoverlook such an important and large part of the

food-versus-fuel debate. To many people, the notion of pittingfood against fuel is only that—a debate. “Everyone is in agree-ment that there’s a food-versus-fuel debate,” says John Caupert,director of the National Corn-to-Ethanol Research Center.“However, I am firmly convinced there is not a food-versus-fuel issue. A debate is one thing but whether there’s an issue—that’s something else.”

Dan Keefe, manager of international operations for theU.S. Grains Council, tells EPM he can’t recall ever reading anarticle on the topic of food versus fuel in which it is stated thatfor every 100 tons of corn used for ethanol production thereare 33 tons of quality, high-protein animal feed sold back tolivestock producers. “It’s been grossly understated in the gener-al media,” Keefe says. According to him, the world will neverbe satisfied with American agricultural policy.

“The reality is, historically, the United Nations has blamedthe U.S. for artificially keeping crop prices too low so [world]

f a r m e r scould not afford togrow [their own crops],”Keefe asserts. “Now that prices arehigh, they blame us for using up all the foodfor fuel. Apparently in some of these other coun-tries with these high prices they still can’t figure out how togrow something—or their governments won’t let them. Sowhat’s the answer? Being dependent entirely on foreign oil andhaving low crop prices so Argentina and countries in Africa cancomplain about the low prices again? I don’t know, but I don’tthink there’s anything we can do to make the world perfectlyhappy.”

There is no question that the rise of U.S. corn-ethanolproduction has brought about unprecedented changes in agri-culture, domestically and internationally. But the fact is, despitethe growing demand on corn from ethanol producers,American corn farmers are meeting the needs of their domes-tic and international customers. The USDA’s WorldAgricultural Supply and Demand Estimates says this year theUnited States is exporting 69 million metric tons (76 million

S


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tons) of corn—the most recorded in history—up from about58 million metric tons (64 million tons) last year. Informationfrom the USDA states that the current breakdown of U.S. cornallocation goes like this: 47 percent is purchased by U.S. live-stock producers for feed; 24 percent is bought by ethanol pro-ducers to make fuel; 19 percent is bound for export markets;and 10 percent for other uses such as corn oil, starch, plastics,etc. The 24 percent of the U.S. corn crop going to ethanol pro-duction will result in 24 million metric tons (26 million tons) ofdistillers grains, which the mainstream media seems to ignore.

“Part of the problem is distillers grains is an untold story,”said Charlie Staff, executive director and chief executive officerof the Distillers Grains Technology Council, at the organiza-tion’s 2008 symposium in Kansas City, Mo. “Ethanol and dis-tillers grains are hooked to the hip together, so if ethanol is tak-ing a hit then we too are taking a hit. Critics say that the UnitedStates has started something that’s immoral—taking food andmaking ethanol. It’s emotional. We don’t like to see starvingpeople, and governments are upset too. All of us have compas-sion about famine.” But as heavily populated countries likeChina and India continue to modernize, an increasing demandfor meat, and grains like corn to feed finishing beef cattle, swineand poultry, will remain a constant in this ever-developingworld. As the saying goes, more money, more problems.

Boosting Distillers Grains’ Feeding Efficiency

Clearly as resources around the globe become scarcer, oras with U.S. corn’s case more abundant yet significantly higherpriced than before, there is greater need to use those resourcesmore efficiently. One of the biggest drawbacks of distillersgrains, according to some, is the lack of uniform product stan-dards and consistency, which inevitably leads to use of theproduct in a manner that is not as efficient as it could be.

24,490,68032%

27,889,20037%

23,812,50031%

76 million metric tons of corn for ethanol =DDGS Ethanol CO2

It would behoove the mainstream media to learn that approximately only

one-third of the corn coming into an ethanol plant, the starch, actually

becomes ethanol, while another third becomes carbon dioxide and the

remaining third is sold back to the livestock industry as protein rich distillers

grains.


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“Because margins are so tight in the live-stock industry, the nutritionists need to bevery precise in their formulation,” saysTroy Lorhman, vice president of QualityTechnology International, a global grainand coproducts marketing company. QTIis also part of a joint-venture limited-lia-bility company, Corn Value Products,which is promoting its fractionation tech-nology called Hydromilling. “So if live-stock producers have an ingredient they’reusing a lot of in the ration, but are notsure of the nutrient composition of thatingredient, they have to put safety or dis-count factors on the nutrient composi-tion.” What this means is the feedersunderestimate the actual nutritional value.“They only do that to be safe, so whenthey discount the nutrient analysis, thatmeans they have to pay less for it becausethey are consuming less nutrients,”Lorhman tells EPM. “So when they canbe assured of a product’s nutrient analysis,they’ll give it a higher valuation in theirformula and then in turn they can paymore compared with other ingredients.”Keefe says it’s important that livestockproducers know what the protein, fat andfiber content of distillers grains is, so theycan put a full value on it in their least-costformulation.

At the 2008 DGTC symposium,Larry Berger, a University of Illinois pro-fessor, was asked after his presentationhow much distillers grains could be incor-porated into cattle diets if sulfur levelsand the resulting potential of polioweren’t concerns. Berger’s response wasthat while protein at levels that are toohigh might be a problem, 60 percent to 70percent inclusion rates could be possibleif it weren’t for sulfur. “Some feedlots aredoing that now with additional manage-ment,” Berger said. At the same event aresearch scientist with JBS United Inc.,Joel Spencer, said with the high grainprices today the swine industry is in “sur-vival mode.” He made mention of vari-ous limitations swine producers find indistillers grains utility in hog rations,including high iodine and phosphorus

levels, which are of concern especially forgrow/finish operations; mycotoxin sensi-tivity of young pigs; depressed litter sizefor sows, meaning that, while the savingsof approximately $11 a ton per year insow rations appears beneficial to largeswine producers, a reduction of one pigper litter overshadows any rations savingsgained over the course of a year; andamino acid variability from plant toplant—especially lysine. Spencer told theswine producers in attendance, if theydesire to incorporate DDGS into pigrations, to make sure to purchase thecoproduct from only one or two plants.“Know your plant because lysine contentvaries tremendously,” Spencer said, rec-ommending ethanol producers step upquality assurance and real-time reportingof the amino acid profiles in theircoproduct streams. If ethanol plantscould offer real-time daily or even weeklyamino acid reporting on its coproducts,the value of that service would be worthapproximately $3 a ton to the ethanolplant. Moreover, it would optimize thefeed efficiency of distillers grains to con-tribute even more to the global agricultur-al community, and help satisfy food andfuel requirements domestically andabroad.

Keefe says it’s unfair to single out dis-tillers grains and the lack of amino acidsreporting from ethanol producers,because feeders don’t get that kind ofinformation from other feed mills. “It’sjust not that common,” he says. “To sayDDGS is a bad product because of thevariability and because you don’t give methe digestible lysine content just isn’t con-sistent with what’s going on in the indus-try, whether it’s with corn, soybean mealor whatever. You don’t get that kind ofdata from other sources, so why it has tobe applied to distillers grains I just don’tget.”

DDGS’ Role in the Debate Aided by NCERC

Research being conducted on dis-tillers grains at NCERC is helping to

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relieve pressure on mounting feed costs forlivestock producers. “We have two projectsthat are directly contributing to that,”Caupert tells EPM. One is NCERC’snational distillers grains library, and theother is a coproducts’ nutrient compositionproject. While the two projects sound simi-lar, they are not.

The national distillers grains libraryproject has been underway for about a yearnow, and it is a physical library of samplesobtained on a quarterly basis from “everydry-grind ethanol plant we can get to partic-ipate in the project,” Caupert says. Roughly30 percent of all U.S. dry-mill ethanol plantsare involved. “It’s a good cross-section and

representation of what’s out there,” he says.The information is kept private and is usedby NCERC as leverage for competitivegrants. “To our knowledge that database isthe single-most comprehensive one of itskind in the world,” Caupert says.

NCERC’s other project, which is sim-ilar in nature, is completely public and is notexclusive to dry-grind ethanol plant coprod-ucts, but rather the center solicits coproductsamples—including corn gluten feed, corngluten meal, distillers grains, wet gluten,corn kernel fiber, corn bran, etc.—fromevery corn processor in Illinois, westernIndiana, southern Wisconsin and easternIowa. The national library project collectssamples quarterly while the other projectcollects samples on a monthly basis. “In thisproject we run moisture, protein, fiber andfat analyses, and to do that we use the meth-ods recommended by the American FeedIndustry Association,” Caupert says. Theresults are forwarded to the Illinois RuralAffairs Institute and the information is on aWeb site (www.valueadded.org). “You

Caupert, director of NCERC, tells EPM the second phase of the DDGS national library project will

survey producers about parameters of their process with hopes to link their particular operational techniques

with specific characteristics of their distillers grains.

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might be a swine feeder in southern Illinoisor a poultry feeder in Indonesia, but you’llbe able to log onto this Web site and findvarious products and their compositions,and over time you can see each individual

plant and corresponding analyses,” he says.The good news coming out of the

national distillers grains library is the con-sistency seen in distillers grains samples.“While we see some variation across theindustry—we see protein levels that mayberange from 25 percent to 32 percent—within a particular plant we don’t see thevariation and inconsistency that some areclaiming is there,” Caupert tells EPM.“From a plant located in Iowa to one inArizona, you may see some differences inmoisture and protein, but within a singleplant it’s been pretty doggone consistent—at least the variation wouldn’t be statistical-ly significant—and that’s really encourag-ing.”

While the mainstream media neglectsto report that one-third of the corn used inethanol production is returned back to thelivestock community as high-protein feed,it is fair to wonder if the ethanol industryplaces too much value on the role distillersgrains plays in the mix. Caupert doesn’tthink so. “If anything I think it’s the polar

opposite,” he says. “As an industry, I thinkdistillers grains marketers and ethanol pro-ducers undervalue its role, and here’s why.We take corn, it comes into an ethanolplant at between 8 percent and 10 percentprotein, and at the back of the plant it’scoming out at 26 percent to 30 percentprotein. Whenever we put a pound of dis-tillers grains in feeding rations for cattle,swine or poultry, we’re not only replacing acertain portion of the energy of the diet,which would probably come from corn,but we’re also replacing a high percentageof their protein in that ration—be it soy-bean meal or something else. So I actuallythink we’re undervaluing our products, butwith the information we are gathering atNCERC I think the situation is gettingmuch better.” EP

Ron Kotrba is an Ethanol ProducerMagazine senior writer. Reach him at


4962.

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About 30 percent of U.S. ethanol plants submit

DDGS samples to NCERC for the national library

project.

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CATALYSTS


Breaking the Catalytic Barrier to BiofuelsWhether it’s enzymes for degrading cellulose, microbes for fermenting

sugars into ethanol or solid particles for the reforming of syngas to

ethanol, the development of highly active and selective catalysts for

biofuels production will be key to the success of the industry.

By Jessica Ebert

PHOTO: UNIVERSITY OF MASSACHUSETTS

Scott Auerbach, white shirt, and students Rachel Shirron, blue shirt, and Vishal Agarwal, black shirt, work

on a research project involving biofuels and zeolites. This summer, the basic question that Shirron is

trying to answer is: What biomass-derived feedstock molecules can actually fit into the pores of zeolites?

CATALYSTS


CATALYSTS

iorefineries of the future will likely take many les-sons from the efficient refineries of today, whichpump crude oil in and separate it into the compo-nents that are ultimately used to make a portfolio of

chemicals and fuels including natural gas, propane, gasoline,asphalt, diesel and jet fuel. The key to the plethora of processesthat make the petrochemical industry such an efficient, integratedmachine is several decades of research and development, much ofwhich has been devoted to the design and modification of thefinely-tuned catalysts that possess just the right kind of chemistryfor turning “lead into gold.”

“In the world of fuels, the lead is either crude oil or biomassof some sort,” explains Scott Auerbach, a professor of chemistryand chemical engineering at the University of Massachusetts,Amherst. “The gold is either high-octane gasoline, diesel, ethanol,butanol, biodiesel, [or some other biofuel].” Although the para-digm for the production of this symbolic gold is shifting frommillennia-old oil pumped from the ground, to biomass harvestedfrom the surface of the Earth, the catalysts for making the transi-tion to biobased refineries are still being developed and optimized.

“There’s a very rich history of catalyst research and under-standing as it applies to petroleum and petrochemicals,” says JohnHolladay, a senior research scientist in the Chemical and BiologicalProcesses Development Group at Pacific Northwest NationalLaboratory. “Those catalysts are very effective for the feedstocksthey use, unfortunately, they’re not for biomass feedstocks. Wedon’t want to take another 80 years to get to the same point.”

To the biofuel industry’s benefit, scientists are now armedwith modern tools that speed the identification and developmentof new catalysts suited for biomass conversion as well as the mod-ification of existing catalysts.

Catalyst BasicsCatalysts by definition are facilitators of chemical reac-

tions. Their chemical composition doesn’t change during thereaction so they’re not considered to be direct participants inthe reaction. However, they do allow the reaction to proceedunder milder conditions. Catalysts typically don’t impact theyield of a reaction or how much of the reactant is converted toproduct. Most commonly, catalysts change the mechanism of agiven reaction and impact both reaction rates and selectivities.By speeding up the formation of certain products and slowingdown the formation of others, catalysts effectively steer a reac-tion to a subset of possible products. In the refinement of bio-mass-to-fuel, catalysts can steer reactions to the most valuable

B Gasoline from cellulose by catalytic fast pyrolysis with zeolite-based catalysts in a

single reactor

CelluloseCellulose

Glucose in ZSM-5Glucose in ZSM-5Pyrolysis tosugars and other products,adsorption intocatalyst Gasoline,

CO2, waterCatalyticconversion

These two images show the structure of cellulose and a picture of a zeolite with

a glucose molecule in its pore.

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CATALYSTS

biofuels and bioproducts thereby minimizing costs associatedwith product separation and feedstock recycling. “This is thereal magic and promise of catalysis,” Auerbach says.

Catalysts come in two main forms: there are biocatalysts,also known as enzymes, which can come from a single cell suchas a microbe or from an entire organism such as a plant. Inaddition, there are chemical catalysts, which are not associatedwith living organisms and often are produced synthetically.

Chemical catalysts can be divided into two types: homoge-neous catalysts, which are in the same phase—typically liquid—as the reactants in the reaction they catalyze, and heterogeneouscatalysts, which are generally solids and out-of-phase with thereaction reactants.

Christopher Jones, a chemical engineer at Georgia Instituteof Technology, works from a number of different angles whenit comes to biofuels research. The common thread to his team’sprojects, however, is that they all focus on lignocellulosic feed-stocks, mainly pine and switchgrass, as opposed to ediblestarches. One of their ongoing projects is gathering data on thebehavior of mineral acids such as sulfuric acid in the pretreat-ment of biomass. “It’s not a particularly interesting or sexy cat-alytic process,” Jones says. “Mineral acids have been used for anumber of years to break down biomass but there are onlysmall, isolated studies in the literature.” Jones’ team is taking asingle biomass and systematically studying the effect of certaintypes of acids and reaction temperatures to gain a greaterunderstanding of how these catalysts act.

In addition, this fall, Jones will embark on a new projectwith Range Fuels of Soperton, Ga., to develop and improve theheterogeneous catalysts used for transforming syngas into cel-lulosic ethanol. It’s this line of discovery that seems to captivatea significant number of biofuels researchers.

Superior Solid CatalystsHeterogenous catalysts typically consist of tiny particles of

precious metals such as platinum which are embedded in somekind of support such as silica or alumina. In addition to identi-fying the right metal and the right amount of that metal to cat-alyze a particular reaction, optimizing a solid catalyst alsoinvolves fine-tuning its support so that the latter is stable, andis porous to allow for the best possible flow of reactants andproducts, Auerbach explains. One of the most important class-es of solid catalysts in oil refining are the zeolites. These solidsare naturally occurring but can also be made in the laboratory.They are crystalline aluminosilicates that act as molecule-sizedreactors, playing the role of supports and catalysts at the sametime.

“Since we know so much about zeolites, we should be ableto take that knowledge and apply it to the biorefinery of thefuture to make a portfolio of biobased fuels and products,”Auerbach says. “The problem is that the zeolites used in thepetroleum industry are by their very nature strong acids.” Thisis a stumbling block for the production of biofuels because thebasic reaction for creating these fuels takes simple sugars orgases and converts them into longer-chain alcohols or higherhydrocarbons. Strong acids catalyze the cracking of moleculesnot their lengthening, but this is a challenge that Auerbach andcolleagues, including George Huber and Curt Conner, areworking to overcome by changing the composition of a zeoliteto make it more strongly basic. To do this, the team is restruc-turing the zeolite by removing oxygen and adding nitrogen.“Nitrogen-substituted zeolites are generally about twice asbasic,” Auerbach explains.

Whereas Auerbach and colleagues work to adjust knowncatalysts to make them more efficient in reactions involving


CATALYSTS

biomass feedstocks, other researchgroups are working to identify and devel-op new solid catalysts. Brent Shanks, achemical engineer at Iowa StateUniversity, first gains an understanding ofthe characteristics of a reaction and thendesigns catalysts around that. He callsthis “rational design.” His approach isone of bio-inspiration in that it aims totake certain characteristics of enzymesand build them into chemical catalysts.“Enyzmes are beautiful catalysts but theyhave some issues such as sometimes

they’re too specific, too selective, andalso you can’t go to high temperatureswith them,” he explains. “With chemi-cal catalysts you can go to higher tem-peratures but they’re not nearly as spe-cific as enzymes.”

Advancements in materials chem-istry over the past decade or so providenew opportunities to structure materi-als at the nano-scale. “We can nowdesign at the molecular level, chemicalcatalysts,” Shanks says. “The catalyticsite of an enzyme is exquisitely definedat the molecular level. The reactantinteracts with the catalyst in a very spe-cific way. We don’t have that in chemi-cal catalysts so the question is can webuild that same level of molecularspecificity into chemical catalysts?”

To that end, Shanks’ team is tryingto build acid/base functionality into achemical catalyst. This is based on theknowledge that unlike chemical cata-lysts, whose function is carried out bymetals and enzymes, such as those thatbreak the bonds between molecules ofglucose, use organic acids and bases todo the chemistry. “We’re interested inmarrying the two,” Shanks explains.“We want to put organic acids andorganic bases on metal oxide materi-als.”

In a different approach, the teamat PNNL, which Holladay is a part of,uses high-throughput screening to testmultiple catalysts at a time and toincrease the number of experiments

Miriam Garcia, an undergraduate student in Shanks’ lab, takes a sample from a reactor while performing

experiments on monosaccharide degradation kinetics.

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improve such things as the interactionsbetween the metals and their supports.“It’s kind of a balance of both approach-es,” Holladay explains. “We start with thediscovery phase and then move into thefundamental stage with the overall goalbeing to develop this industry quickly.” EP

Jessica Ebert is an Ethanol ProducerMagazine freelance writer. Reach her at

[email protected].

they can do over a given period oftime. This method for identifying newcatalysts is carried out at PNNL’sCombinatorial Catalysis Lab. Initially,robotic equipment is used to formeach catalyst to be tested. Solids han-dling robots weigh and add an appro-priate amount of solid support to asmall well on a microtiter plate. Eachplate holds 96 wells, so up to 96 cata-lysts can be developed and testedtogether. Liquids handling robots thenadd a salt solution of metals, which fillthe pore spaces of the support. Theliquid is evaporated leaving the metalsembedded in the support. Once thecatalyst is treated to set the metals inthe active state, the plate is moved to areactor system where the biomass tobe tested is applied to each well. Thereaction is carried out in a second reac-tor and then another set of roboticsystems draws samples from each wellfor analysis, Holladay explains.

“We’ll take the ones that showactivity and do further experimenta-tion on them,” he says. It’s these exper-iments that provide a fundamentalunderstanding of how the catalystworks. Using tools such as gas chro-matography, high- pressure liquidchromatography and microscopy tech-niques that weren’t available 20 yearsago, new catalysts can be discoveredand the surface chemistry can be stud-ied to understand and ultimately

High pressure reactor

Fill with gas

Seal

Heat & stir

Sample analysis

Robotics catalyst

prep and activation

Reagent addition

Sample prep

Informatics

Combinatorial Catalysis Lab Work Flow

SOURCE: PNNL

This schematic shows the basic steps used to create and test catalysts for high-throughput

screening at PNNL’s Combinatorial Catalysis Lab.

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CORN


Embracing the Carbohydrate Economy Industry and academic research leaders share new research leads and emerging technologies

for corn use at the 2008 Corn Utilization and Technology Conference.

By Susanne Retka Schill

he carbohydrate economy is taking shape as thecheap oil economy is showing signs of decline.“There is an agricultural and economic revolu-tion underway in the United States and the

world,” USDA Undersecretary Thomas Dorr told the indus-try and academic researchers assembled at the CornUtilization and Technology Conference in early June inKansas City. In his keynote address, Dorr reiterated theUSDA’s defense of corn ethanol, saying a re-examination ofthe numbers by the department’s economists conclude thatethanol is responsible for only 3 percent of the world’sincrease in food prices. He commended the National CornGrowers Association for its leadership in addressing theissues that arise regarding corn and for supporting the basicscience, genetic research and progressive product develop-

ment. “The carbohydrate economy is only limited by ourimagination,” he said.

The last couple of conferences sponsored by theNCGA have included more sessions on dry milling andethanol technology and fewer on the wet milling technologythat dominated the conferences in the past. Product devel-opment, new research leads and emerging new technologiescomprised the core of the two-day conference, along withsessions covering research related to current issues.

Improving the Ethanol ProcessVijay Singh, associate professor in the Department of

Agricultural and Biological Engineering at the University ofIllinois, described recent research on technologies toimprove the ethanol process. Since the start of ethanol pro-

T

CREDIT: NCGA

USDA Undersecretary Thomas Dorr, far left, visits the NCGA booth after delivering

his keynote address at the Corn Utilization and Technology Conference.

CORN



CORN

duction in the 1980s, dry-grind technologies haveimproved with the combination of saccharifica-tion and fermentation, Singh said, with the per-centage of ethanol conversion improving as yeastnutrients are better balanced. New technologiesare working toward simultaneous liquefaction,saccharification and fermentation in order to sim-plify the process and in turn, eliminate the man-agement required to maintain two different tem-peratures and pHs when the processes are sepa-rated. The new enzymes developed for the com-bined process are known by several names—nocook, cold hydrolysis, raw starch enzymes, lowtemperature hydrolysis enzymes or granularstarch hydrolyzing enzymes.

Two companies are leading the developmentof the new enzymes, which are commercially

available. Genecor International has trademarked its product asStargen and Novozymes’ technology has been licensed by PoetLLC under the BPX brand. Poet’s chief science officer Steve Lewissaid they have applied the BPX technology in 22 of the company’sdry mills since the technology was introduced in 2002. The tradi-tional jet cooking process kills much of the biology which can becapitalized upon in the BPX process, he said. “BPX ethanol con-versions are approaching 3 gallons per bushel,” he added. Energycosts at Poet plants are now concentrated on drying distillers grains,

he said. The BPX process shows other benefitsincluding improved flowability of distillers driedgrains (DDG), minimization of feedstock varia-tion and improved fermentation consistency.“Contamination is almost nonexistent,” he said.

Novozymes scientist Randall Deinhammersaid the company’s large culture collection ofenzymes has benefited its enzyme developments.Besides the raw starch hydrolyzing enzyme usedby Poet, the company has developed a morerobust glucoamylase enzyme it calls SpirizymeUltra. The enzyme used for saccharificationimproves the efficiency of the starch conversion,results in higher ethanol yields and faster fermen-tation and improves the solid separation at theback end of the process. Novozymes has a cellu-losic biomass kit available for lab testing on cellu-losic ethanol conversions, which contains fiveenzyme complexes developed by the company, Deinhammeradded.

David Johnston, lead scientist at the USDA AgriculturalResearch Service’s Eastern Regional Research Center, describedanother promising new technology called E-Mill. The process usesprotease enzymes in a short soak prior to fractionation and theaddition of granular starch hydrolyzing enzymes. Johnston said theprocess yields a clean germ and bran, the product ferments more

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A NEW DIMENSION OF MECHANICAL PRESSING.

Johnston

Deinhammer

Lewis

Singh

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quickly resulting in a higher final ethanol yield, plus a greater num-ber of coproducts and better nutrient content in the DDG compa-rable to soy meal and corn gluten meal. The process has been com-mercialized in a small modified wet mill in Malaysia, and he hopesto see it adopted in the United States soon. Genecor has licensedthe technology.

Singh described other research designed to optimize the dry-grind saccharification and fermentation process through thedynamic control of process parameters. In the conventional dry-grind process, he explained, only three process parameters are mon-itored: pH, temperature and glucoamylase dose. The settings forthese process parameters are based on compromises between theoptimum conditions for enzymatic hydrolysis and yeast metabo-lism, he explained. Using dynamic controls that adjusted the pH,temperature and enzymes during the process resulted in a 50 per-cent reduction in glucoamylase with the final ethanol concentra-tions being similar to conventional treatments. A pilot test of thedynamic controller in a Midwestern commercial dry-grind ethanolplant resulted in a 35 percent reduction in enzymes used.

Johnston said other research is looking at new applicationsusing enzymes during different stages to help in water removal toreduce energy costs in evaporation, enzymes to help with sacchari-fication control to get higher ethanol yields and to push the yeast tocomplete fermentation. Also, using enzymes in dry fractionationcan improve the process, he said. Yet another promising technolo-gy described by Singh is still being developed on a bench scale using

a vacuum combined with the new enzyme technologies that allowsimultaneous liquefaction, saccharification, fermentation and distil-lation. In the process, fermentation is done under a vacuum whereethanol distills at 32 degrees Celsius (90 degrees Fahrenheit) and iscontinuously removed. In addition to permitting higher solid con-tent (around 45 percent compared with 28 percent to 36 percentsolids in traditional processes), the process eliminates the yeast inhi-bition caused by concentrated ethanol. The distillers grains comeout of the process with the consistency of wet cake.

Beyond EthanolSeveral speakers covered new developments in coproducts and

new products, both from the wet-milling perspective and forethanol plants. The University of Illinois has been cooperating withArcher Daniels Midland Co. in developing a corn replacement pel-let. In a different twist on utilizing cellulose, Kyle Beery, ADM’s sen-ior processing engineer, said they see a number of crop residuesincluding corn fiber, corn stover, soy hulls and other fibrous mate-rials being combined with distillers grains. “We see a logistical move-ment ahead to process cellulose components at feed mills or eleva-tors,” he said.

The next speaker went into details of the work involved in cre-ating a highly digestible feed from crop residues and distillers grainsthat approach the value of corn. University of Illinois-UrbanaChampaign researcher Larry Berger said a pelleted feed containing25 percent DDG and 75 percent crop residues performed favor-


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ably in feedlot trials for digestibility andrates of gain. Cattle ate the feed readily, andfecal samples showed the corn replacementpellets (CRP) were 60 percent digestedcompared with 66 percent on the corn diet.“Feed efficiency was best for corn, but notbad for the CRP,” Berger said.

When corn was $2.50 a bushel, therewas little incentive to collect residues forsuch a process, but Berger suggested that at$5 and higher, the ratio of corn price toresidue price makes it more favorable. Bytaking some of the corn residue, combin-ing it with distillers grains, “we can getethanol and feed from the same acre,” hesaid.

Berger predicted cattle will be the firstto be weaned from heavy corn feedingsince the 5:1 corn-to-gain ratio for cattle ismuch less efficient than the rate of gainthat pork and poultry feeders experience.

DDG and corn stover show promisefor the development of other new prod-ucts, according to Rawle Hollingsworth,director of the Center for RenewableResources at Michigan Sate University.“There are fibers in corn stover andDDGS that provide high-quality fibrilsused in paper production,” he said. Theresearchers are taking a second look atother chemicals such as glycolic acidsformed from the sugars in cellulose.“We’ve been throwing them away becausethey have such low value,” he said. Otherchemicals derived from corn, such as thecholesterol lowering drug Crestor canresult in extremely high-value chemicalsnetting $250,000 per ton, albeit using verysmall quantities.

Researchers reported on other com-pounds derived from corn that showpromise in replacing petroleum-basedchemicals in the $3 billion plastics market.Many of the chemicals used in the petrole-um industry come from eight platformchemicals, said Carl Lira, assistant professorof chemical engineering at Michigan StateUniversity. In 2004, researchers looked at300 molecules found in corn sugars and

ethanol and identifiedthe top 12 candidates forevaluation. Organicacids recovered from thefermentation broth haveapplications in solvents,polymers, polymer plas-ticizers and cosmetics.While it may requirediverting a portion ofthe product stream awayfrom ethanol to producea compound like ethyllactate, that alternativeproduct may provide anew revenue stream foran ethanol plant.

Similarly, the NewJersey Institute ofTechnology has beenpartnering with theIowa Corn GrowersAssociation to studynew uses for chemicalsbased on isosorbidemolecules found in cornsugars. “Isosorbide is a ubiquitous buildingblock used in polymers and personal care,”said NJIT spokesman Mike Jaffe. “Afterthree or four years we’re beginning tounderstand these molecules and how tomake compounds to do what we wantthem to do.” One promising area is usingthe isosorbides as the building blocks forsunscreens that could go into cosmetics orbe used in plastic manufacturing for ultra-violet stabilization. Other uses may be tomake brittle plastics more flexible or tomanufacture epoxy resins.

New HorizonsNot all presentations dug into the

conversion process or the chemistry ofcorn compounds. Several speakersaddressed issues surrounding the emergingcellulosic ethanol technology and issuesthat are becoming more important to thepublic. Two of the speakers provided anoverview of work being done on global

Hollingsworth

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warming issues. The University of Illinois-Chicago and the Institute for TechnologyDevelopment in Illinois have collaboratedto conduct a study on land-use changesaround the Illinois River Energy LLCethanol plant, said John Fridgen, projectmanager at ITDI. The project correlatedsatellite imagery and farmer surveys in astudy of land-use changes with the goal ofdetermining carbon sequestration impacts.

Nobilis of Falls Church, Va., is devel-oping a model for life-cycle analysis for bio-fuels. Darryl Banks, a fellow at the nonprof-it center, said the initial work focused on theproduction of greenhouse gases and waterused throughout the ethanol supply chainfrom raising the crop through distributionof the end product. Intended for policymakers, the model will allow the inputtingof variable corn acreages, corn yields andethanol plant capacity, to allow analysis ofdifferent scenarios.

As China is the second-largest produc-er of corn in the world, Scott Rozelle, sen-ior fellow with the Institute of InternationalStudies at Stanford University, describeddevelopments which are transforming thatcountry from being an exporter of corn tovery quickly becoming an importer. China’sdisappearance from the export market wascaused when the country banned corn

exports. It has alsobanned further expansionof corn ethanol, turningto other feedstocks as itcontinues to hold theposition of third-largestethanol producer in theworld behind the UnitedStates and Brazil. As thepopulation expands and

agriculture develops to meet demandthrough improved productivity, mechaniza-tion and larger farm size, Rozelle predictedChina will meet 90 percent of its cornneeds in the future but will still need toimport 1 billion bushels.

Future ideas and issues for cellulosicethanol were also discussed at the confer-

ence. Bill Rooney,plant scientist atTexas A&M,described his workin developing a highyielding biomasssorghum which hebelieves will fit wellinto agriculture inthe Southeast withits long growing sea-son and adequaterains. Jacob Barney,weed scientist at theUniversity ofCalifornia-Davis,warned that thesame characteristics that make a crop anideal biomass producer may also indicate apotentially invasive weed. Strategies to pre-vent invasiveness and plan ahead with erad-ication methods need to be built into bio-mass development research, he said.

Maurice Hladik, director of marketingfor Iogen Corp., described the challenge ofdeveloping a biomass-based biofuels indus-try in his presentation. “To meet 16 billiongallons [of advanced biofuels] by 2022 willrequire 266 biorefineries in 14 years, averag-ing 80 MMgy each year,” he said. He esti-mates that will require 200,000 growers.“200,000 growers in the nation earningextra income could really benefit the ageconomy,” he said. The logistics of han-dling huge volumes of biomass to feedthose biorefineries will require high yieldingbiomass feedstocks. Hladik thanked thecorn ethanol industry for blazing the trailfor cellulosic ethanol. “We would be dead inthe water,” he said, “without the workaccomplished by the corn ethanol industryto educate consumers, automakers and theoil industry.” EP

Susanne Retka Schill is an EthanolProducer Magazine staff writer. Reach her

at [email protected] or (701)

738-4962.

Banks

Hladik

Rozelle











ethanol questions.




EQUIPMENT


PHOTO: ICM INC.

Miscellaneous process piping in the cook area, primarily welded/flanged alloy piping

typical 100 MMgy ethanol plant couldrequire as much as 95,000 linear feet ofpiping, depending on the plant design.Fitting all of these pipes together is no

easy task. Certain areas of the plant call for differenttypes of piping, mainly welded, threaded, flanged orcoupled. Depending on the type of piping, laborcould be intense and safety may be a factor. For alltypes, however, maintenance is necessary, and educat-ing plant owners and operators is the key to keepingpiping systems trouble free. EPM looks at the fourmain types of piping, along with their benefits andchallenges.

OptionsThere are many different ways to connect pipes,

and several are used throughout an ethanol plant.

One method is welding. This could include simplebutt welding (touching two pieces together withoutoverlap and welding the seam), or it could involvewelding the ends of flanged pipes together. It’s usu-ally a strong bond and the most common withinethanol plants, but there are a couple drawbacks. Forone, a welded pipe is hard to take apart. In instanceswhere maintenance is necessary or a part was simplywelded incorrectly, it would take additional labor andmore time to fix. Furthermore, welders are in scarcesupply these days. Still, it’s necessary in many applica-tions and is preferred by process technologyproviders such as Colwich, Kan.-based ICM Inc. andMemphis, Tenn.-based Lurgi Inc.

Threaded piping is cut at the ends so that it canbe screwed onto another piece. Mike Kroeker, direc-tor of design services for ICM, says it’s used mostly

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EQUIPMENT


Connecting the Pipes

Ethanol plants may vary in design, but they all

need one thing: piping. There are different types

of piping that connect the many processes within

the facility, and each offers its own advantages.

Although this equipment is essential it isn’t

without its challenges when it comes to labor,

maintenance, safety, education and cost.

By Jessica Sobolik


EQUIPMENT

around a plant’s instrumentation and to transfer air throughout theplant. For regular maintenance, this type of piping is easier to discon-nect than welded pieces.

Flanged piping can be connected at the ends via welding, orwith eight to 12 bolts and a gasket in the middle, according to TomSheeler, vice president and chief operating officer of Cheraw, S.C.-based American Stainless & Supply, which produces this type of pip-ing. ICM uses flanged piping around instruments and valves. If it’sbolted and not welded, it can be taken apart after removing the bolts.In areas of ethanol plants that require regular maintenance or clean-ing, this type of piping is ideal. Kroeker says flanged pipes are morerugged and easier for maintenance crews to work with. However, healso acknowledges that they are more expensive, especially for thelarger-diameter piping.

Coupled piping connects the ends of pipes with only two boltsand is used almost exclusively in fire suppression systems, accordingto Kroeker. Mark Aldrich, industrial business development managerfor Easton, Pa.-based Victaulic Co., which produces this type of pip-

ing, says his company’s products have also been used for coolingwater, air and reverse osmosis systems, distillation, drying, decanting,and distillers grains handling. He points out that coupled piping canbe assembled and disassembled quicker than flanges, thus savingtime and labor costs. He also points out that coupling doesn’t requirewelding, which improves plant safety. “We don’t require flame on ajob site,” he says. “The possibility of fires is reduced.” This meansimproved maintainability for ethanol plant operators and owners.

Another benefit of coupled piping is the compressive loadcapabilities on the gaskets in between connections, according toAldrich. He says coupled piping has a c-shaped, cross-section sealthat is durable and can handle significant compressive and cyclicalloading. In other words, operators can pressure and depressurize asystem repeatedly for many years without fatiguing the rubber. Therubber seal also accommodates vibrations felt throughout the plant,along with the expansion and contraction that naturally happens inall piping systems. In contrast, Aldrich says welded or flanged pipingsystems may have rubber bellows or braided flexible hose, whichtend to wear out over time and require replacement. Still, Kroekercalls flanges “a slam dunk.”

In addition to piping, there is a similar option for connectingprocesses: welded tubing, which has thinner gauge (wall thickness)compared with piping and is typically used in heat exchangers,according to John Robb, president of Beloit, Wis.-based UnitedIndustries Inc., which makes this kind of connection. Kroeker saysICM uses tubing to connect air lines to instruments and control linesbecause it’s flexible.

From Creation to InstallationCompanies such as American Stainless & Supply, United

Industries and Victaulic produce various pieces of pipes in theirshops, but how does the equipment get to ethanol plants across theUnited States? Piping can range in diameter from two inches to 12

Victaulic Depend-O-Lok coupling for stainless steel systems

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feet or more, making transport a challenge. Therefore, AmericanStainless & Supply ships its stainless steel and carbon steel piping—mostly welded and flanged—in pieces to fabricators such as GraniteFalls, Minn.-based Fagen Inc. Fagen has a fabrication facility inWisconsin, where workers assemble the various pieces of pipesbefore putting them on trucks and shipping them to ethanol plantsites. United Industries has shipped its stainless steel products to fab-ricators such as ICM, Poet LLC, Delta-T Corp., Archer DanielsMidland Co. and Wisconsin-based Apache Stainless EquipmentCorp. Victaulic has sent its steel pipes to process technologyproviders Lurgi, Delta-T and ICM. It has also sent products directlyto engineers such as SSOE Inc., C.J. Schneider Engineering Co.,Ambitech Engineering Corp., Crown Iron Works Co., Burns &McDonnell and JH Kelly. Along with the equipment, it sends repre-sentatives to the plant site to train the workers who assemble its pip-ing.

Pipe suppliers meet with engineers and process technologyproviders often to discuss the benefits of their products. “Oncethey’ve used [the products], then [the engineers] usually continue touse them for the same services,” Aldrich says. “They put us in thespecs, and once we’re in there, we work with contractors whenthey’re bidding a job or negotiating, so we’re sure they understandwhat’s been done by the engineer.”

Typically, once the pipes are installed in an ethanol plant, it’s upto the plant owner or operator to service the equipment. However,process technology providers that design the piping structure, suchas ICM, usually offer an in-depth training program, and parts andservices. “We have a warranty program that would cover materialfailures during a certain period,” Kroeker says. “ICM also has anactive customer-oriented aftermarket support and maintenancegroup that helps plants keep necessary spares and coaches them onwhat they need.” Victaulic also participates in training with the plantowner.

The latest plants to install Victaulic pipes include Cascade GrainProducts LLC in Clatskanie, Ore; E3 BioFuels LLC in Mead, Neb.;and NEDAK Ethanol LLC in Atkinson, Neb.

Aclose-up view of a tube-forming station used to produce welded stainless steel

tubing

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1-800-827-1662 • www.interstates.com

EQUIPMENT

Combating Raw Material CostsPipe fitters and suppliers face many

challenges in this industry, and most recent-ly the largest hurdle—no matter what typeof piping—has been the fluctuating cost ofraw materials. For example, Sheeler says thatalthough stainless steel prices have been sta-

ble and nickel prices have dropped lately, theprices of molybdomen and chrome haveincreased. “So [the cost savings] is offset,”he says. In addition, carbon steel prices havegone up 60 percent since Jan. 1, and addi-tional increases are expected. Sheeler sayscarbon steel price swings were mainlycaused by China importing 50 percent of

the U.S. carbon steel pipe supply, followedby other foreign countries, creating ademand that domestic producers couldn’tmeet. That, combined with the devaluationof the U.S. dollar, has caused some suppliersto export their materials. “The worldwidedemand for steel is very strong,” he says.

Meanwhile, demand for piping in theUnited States has seemingly stagnated. Forexample, because of a slowdown in conven-tional ethanol plant construction, Fagen hasbeen left with a lot of extra equipment on-hand, according to Sheeler. It is currentlytrying to sell back $20 million worth ofequipment at reduced prices, and Sheeleracknowledges that this will hurt his compa-ny’s distributors. “Ethanol was gangbustersfor awhile, and now it’s almost come to ahalt,” he says.

Victaulic, a huge buyer of scrap steel,has also been affected by the fluctuating costof raw materials, according to Aldrich.However, he points out that because hiscompany is reducing necessary labor andmaterials, it can still provide a 25 percent

Evaporator shell sections with tubes installed

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cost savings to its customers. “Using oursystems, we reduce labor by 50 percent to 75percent compared with traditional pipingsystems,” he says. With less manpowerrequired, it also takes less time to install thepiping systems. “If it was going to take 12months to build a plant, you might shave amonth off,” Aldrich says.

Optimizing Plant DesignAs previously mentioned, the amount

of piping in an ethanol plant varies by plantdesign. Carlos Lange, executive vice presi-dent of Lurgi, says his company usesapproximately 51,000 linear feet in a 55MMgy ethanol plant and 95,000 linear feetin a 105 MMgy facility. ICM, on the otherhand, uses approximately 50,000 linear feetin a 50 MMgy ethanol plant and 66,000 lin-ear feet in a 100 MMgy facility, according toKroeker. This number has varied from yearto year as ICM engineers sit down annuallyto review its plant design. “We’re looking formaximum piping economy to make theseplants as affordable to build as possible

without sacrificing safety,” Kroeker says. “Sowe carefully examine any opportunity wehave to minimize the number of pipe fit-tings, which translates into the price of fit-tings and reduces the number of welds.”Lange says Lurgi also optimizes its plantdesigns to reduce piping quantities.

When It Comes to CelluloseThese types of piping work well in

conventional ethanol plants, but suppliershave noticed the recent slowdown in con-struction. However, more cellulosic ethanolplants are on drawing boards nationwide. Isthere a market for the same pipes in thattype of facility? Absolutely, Aldrich says.“We tie together all the pieces of processequipment,” he says.

Kroeker says as long as the various cel-lulosic processes explored thus far don’tchange, piping specifications should stay thesame. “We don’t think there’s going to be alot of radical changes,” he says. “We haven’tfound anything yet that requires exoticmaterials.”

Lange agrees. “In general, I do not seemuch change in the piping requirements aswe move to cellulosic ethanol,” he says.“When cellulose is converted to a starchstream and processed into ethanol, the gen-eral piping requirements stay the same as atypical corn facility.”

In general, pipes require relatively lowmaintenance, Kroeker says. They are used indifferent ways in different areas of a plant—but they are fairly versatile. On another level,Aldrich points out that pipes do more thansimply connect processes. “Honestly, I don’tview us as trying to move couplings,” hesays. “We are really bringing to the industrya faster schedule, less cost and more safety.That’s really the end result.” EP

Jessica Sobolik is the Ethanol ProducerMagazine managing editor. Reach her at


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FEEDSTOCK


In Pursuit of FruitAs the food-versus-fuel debate rages, ethanol producers are searching for nonfood and food-based waste

products to make renewable fuel. This has led researchers to take a closer look at watermelons that don’t

ripen in time for harvest or fail to make the grade for grocery store produce aisles.

By Bryan Sims

PHOTO: USDA, ARS

USDA Agricultural Research Service technician Rick Houser works on a

bench-scale demonstration of the separation of lycopene from watermelon juice.

or growers and laborers, har-vesting watermelons is noquick and easy task. Workersmove through fields, cutting

vines and filling trucks by hand, lookingfor the ripest, most pristine-looking mel-ons. But not all watermelons ripen at thesame time and laborers must return later toretrieve them. Even more watermelonsmight need to be cut later, and after awhile, that is costly. Also, watermelons thataren’t visually perfect, which are referred toas culls, are rejected and left in the fields.That adds up to a lot of watermelons thatnever make it to the produce section at thegrocery store or the Fourth of July picnic.

“Historically, our industry abandons20 [percent] to 25 percent of the crop thatit produces every year because of laborissues, where you can’t afford to goback in the fields for a fourth or fifthtime to harvest what’s left becauseit’s spread all over creation,”

according to Bob Morrissey, executivedirector of the National WatermelonAssociation. With nine chapters across thecountry, the NWA is a consortium ofwatermelon growers, researchers andadvocates organized to support the indus-try.

In 2006, Morrissey met with then U.S.Secretary of Agriculture Mike Johanns andfive of his constituents to gather adviceabout new marketing possibilities forwatermelon growers. For Morrissey, theanswer was obvious. Why notcreate a new revenuestream for

the 800 million pounds of watermelonsabandoned out of the 400 billion pro-duced each year, and somehow convertthem into ethanol or other biofuels?Morrissey’s question is laudable, consider-ing that corn-based ethanol production isexpected to plateau at 15 billion gallons ayear.

“I told them that we have all this fruitthat’s loaded with natural sugar and there’sreally not much opportunity to process itinto juice,” Morrissey says. “There are a lot

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of people out there looking at it, especially with everything that’sbeen coming out of Washington. There’s an energy componentthat has now been put into the new Farm Bill, which should helpus a little bit.”

Looking at the fruit from an ethanol producer’s standpoint,watermelons contain all the organic components amenable forethanol production. Typically, watermelons are comprised ofabout 10 percent sugar and 90 percent water. The three main nat-ural sugars found in watermelons—fructose, sucrose and glu-

cose—are highly fermentable and have been used for centuries tomake a variety of products in the wine and spirit industry, includ-ing the infamous “moonshine.” In addition, the rind and seedsserve as a feed ingredient. Producing ethanol out of these simplesugars isn’t difficult, but there are a few challenges associated withintegrating discarded watermelons into an existing commercial-scale corn-based ethanol plant, particularly in today’s market con-ditions, according to Morrissey.

“It is a viable deal for us,” he says. “The concern we’ve gotright now is just the pure economics of it all. Ethanol producerscan’t afford to give us enough money to cover the farmers’ andpackers’ labor costs.” Those costs have increased in tandem withthe price of fuel. “We can’t afford to ship it and nobody else canafford to ship it anywhere either,” Morrissey says. “So, it’s becomea challenge for us.”

After a national convention hosted by the NWA in February,Morrissey met with biochemists and engineers from the Universityof Georgia to explore strategies that could benefit ethanol produc-ers and watermelon growers.

Researching the FeasibilityUtilizing a watermelon juice waste stream and the watermel-

on itself as a feedstock for ethanol production would provide sim-ple sugars for direct fermentation to ethanol, and at the same timeeliminate a majority of the sewage treatment costs for the wastestream. Like most ethanol feedstocks, these two waste products

National Watermelon Association Executive Director Morrissey scans a

watermelon field in Mexico.

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continued on page 188


FEEDSTOCK

Other Fruitful Feedstocks

Like watermelons grown in the

Southeast, waste from the cranberry and

peach crops are being targeted as potential

feedstock sources for ethanol.

According to Jeffrey LaFleur, executive

director of the Cape Cod Cranberry Growers

Association in East Wareham, Mass., cran-

berry growers leave behind a lot of waste

from harvesting the bogs including leaves,

rotting fruit and twigs. Typically, the waste is

piled up and made into compost. However,

cranberry growers and researchers are hope-

ful that the leftovers from cranberry production

can be turned into cellulosic ethanol; another

source of revenue for the industry.

“There’s an interest in seeing if there

really is potential for using those waste stream

products from the industry and moving it from

a compost into ethanol production,” LaFleur

says. “If there is, it could be a nice alternative.

We’ve met with a few firms that have been

researching it.”

Cranberries, the largest agricultural

commodity in Massachusetts, have garnered

interest mainly because the cranberry juice-

making process leaves behind a “press cake.”

With the country’s largest cranberry handler

and juice maker, Ocean Spray Cranberries

Inc., nearby, both the plant matter and the

press cake could be available for cellulosic

ethanol companies. However, geographic

and logistical challenges might hamper short-

term consideration. “I think the No. one issue

to be resolved is whether an individual farm

would be able to produce the volume neces-

sary to sustain the operations of an ethanol

facility,” LaFleur says. “There may be a need

to pool from a variety of different farms from

the industry into an ethanol facility that would

be easily accessible in the growing region.”

At Clemson University in South Carolina

research is being conducted to determine the

feasibility of converting waste peaches into

ethanol production. According to Terry Walker,

associate professor of Biosystems

Engineering at CU, about 20 million pounds of

peaches are thrown away in South Carolina,

the second leading peach producer behind

California. The research is focused on opti-

mization of ethanol production from dry

peaches. “Right now, we’re doing kinetic type

work and just looking at its feasibility, and how

much of the material actually ferments if we

can get near theoretical maximum yields,”

Walker says. “At this point, it’s been pretty

promising. It’s certainly fermenting well.”

Since the pit acounts for much of the

peaches’ composition, the second stage of

the research aims to break down every com-

ponent and maximize ethanol yield. It’s these

secondary waste materials organically found

in fruits that will be a challenging task for any-

one looking to exploit waste feedstocks for

ethanol production, according to Walker. “It’s

really a matter of just trying to take advantage

of the optimal routes for whatever substrates

are coming in and being able to do that in a

fairly flexible type of system,” he says. “It’s an

interesting challenge in engineering right now

of trying to pull that together into something

that’s organized and practical for the ethanol

industry on a larger scale.”

Workers sift through a cranberry bog in search of

high-quality cranberries in Massachusetts.

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would have to be broken down into simplesugars, either chemically or enzymatically,before being fermented into ethanol.

Last year, the NWA conducted variousresearch projects in conjunction with theUG to determine the feasibility of using dis-carded watermelons as an ethanol feed-stock. So far, the findings are encouraging.

One option would be to build oracquire a separate facility on site with anethanol plant that would extract two of thepredominant antioxidants found in water-melons—lycopene and citrulline. These two

antioxidants could then be shipped forpharmaceutical and/or nutriceutical pur-poses and the liquid absent the antioxidentswould be made into ethanol, according toElliot Altman, director at the Center forMolecular BioEngineering at UG’sDepartment of Biological and AgriculturalEngineering in Athens, Ga. The depart-ment also conducts research on other fruitsfor biofuel production such as peaches andblueberries.

“If you really wanted a process to dothis right you would probably need to

extract the lycopene and citrulline firstand then produce the ethanol,” he says.“What we have found is that watermel-ons don’t have any inhibitors that wouldaffect the [ethanol production] processso that’s feasible.”

The only problem is what to dowith the rind. Altman says he has a wayto circumvent this potential hurdle. “Wehave actually found chemical hydrolysistechniques that are pretty benign, whereyou can actually extract more sugar fromthe rind,” he says. “So, we would suggestincluding that as part of the process.”

Another positive property ofwatermelon juice is that if a producerdoesn’t extract the citrulline and otheramino acids prior to production, thejuice itself is rich in nitrogen, which is acritical component to the propagation ofyeast in the fermentation process,according to Wayne Fish, lead researchchemist with the USDA AgriculturalResearch Service in Lane, Okla. SinceAugust 2007, Fish and his research teamhave been exploring the use of water-melon juice, rind and pulp waste streamsas feedstocks for ethanol production.“We have found by fermenting water-melon juice, or by taking watermelonjuice and adding molasses or sugar to it,those amino acids in the juice have ahigh affinity to the yeast,” Fish says.

As for improvements in productionefficiency of the rind, Fish says that partof the research is ongoing. He says thatif the rind were to be coprocessed withthe watermelon juice, it could add to theamount of ethanol produced per poundof watermelon by 50 percent to 75 per-cent. “We have a process to remove thelycopene that’s industrially scalable, andwe are finishing up the last aspects toremove the amino acids, including cit-rulline, which will also be industriallyscalable,” he says. “We almost havethings in place so that watermelon juicecould be implemented with anotherethanol plant as a source of some sugarsand water, which would be a nice fit.

continued from page 186


FEEDSTOCK

“Clearly, to turn anything that’s notcoming from the food supply chain likewaste watermelon into ethanol is a goodidea,” he says. “But, the economics aretough because when people look at theamount of fruit waste available you’re talk-ing about pretty small-scale plants. That’sthe predominant challenge right now.”

As for Morrissey, the prospect of usingdiscarded watermelons for ethanol produc-tion is at a standstill as growers’ top prioritytoday is food quality and safety. “I think justlooking at watermelon alone it can have a

small impact,” Morrissey says. “If we couldtake the lost production from watermelon,citrus peels and from any other fruit or veg-etable that can be converted into some typeof biofuel, it’s going to help all of us in thelong run. Is it going to be the total answer?No. But every little bit helps.” EP

Bryan Sims is an Ethanol ProducerMagazine staff writer. Reach him at

[email protected] or (701) 738-4962.

This looks like it does have definitepotential.”

Ethanol producers are cautiouslyoptimistic about the economics of usingfruit-based waste feedstocks for ethanolproduction on a commercial scale. “Ifthere are ethanol plants in heavy water-melon growing regions then it doesbecome feasible,” he says. “We’re look-ing at a process or a system whereby thewatermelons could be processed in thefield. So, instead of hauling individualwatermelons, you’re hauling concentrat-ed products, including the juice.”Another possibility is to have the water-melon processing plant next to theethanol plant so the juice can beprocessed on site and pumped into theethanol plant.

One reason ethanol producers shyaway from taking in waste fruit-basedfeedstocks, such as watermelons, isbecause it’s seasonal and would interrupttheir operations, according to Altman.“The problem with watermelons isyou’re probably going to have a three- tofour-month window where that’s avail-able,” he says. “It’s not going to be a 12-month process and you definitely don’twant to let your watermelons lie aroundbefore you use them. They’re just notinterested in something that’s going tointerrupt their operation.”

Boca Raton, Fla.-based CitrusEnergy LLC is locating its ethanol oper-ations adjacent to a fruit-based wastefeedstock. In conjunction with FPLEnergy, Citrus Energy is currentlybreaking ground on a 4 MMgy commer-cial-scale citrus-peel-to-ethanol plant inFlorida where it will utilize its propri-etary processes. FPL specializes in windenergy and operates the two largest solarfields in the world. According to DavidStewart, president and vice president ofengineering, he formed his technologycompany two years ago to focus on con-verting citrus waste to ethanol andreceived a $250,000 grant from Florida’sFarm to Fuel Initiative last year.

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PROCESS


BEATING BACK BAD BUGSBacterial contamination is one of the banes of ethanol production. Producers

spend a considerable amount of money on sanitation and

antibiotics trying to control bacteria in their fermentation tanks. A new system

will not only reduce bacteria in the fermentation tanks, but also prevent

re-infection. As a bonus, the new system leaves distillers grains free from

antibiotic residues.

By Jerry W. Kram

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o make ethanol, producers must create a pleasantenvironment for a living creature, yeast, which doesthe heavy lifting of converting sugars to alcohol.Unfortunately, other organisms also find the inside

of a fermentation tank to be hospitable and compete with yeastand inhibit their growth. That lowers an ethanol producer’s effi-ciency and production. To combat the growth of bacterialinvaders such as Lactobacillus and Acetobacter which produceorganic acids that inhibit ethanol production, plants haveresorted to dosing their tanks with antibiotics.

Different plants have various levels of contaminationproblems depending on their age, design and maintenancepractices. In some large plants more than a half-million dollarscan be spent per year on antibiotics to control infection prob-lems and the resulting organic acid levels. However, this is ashort-term fix that allows tanks to become re-infected andleaves residues in the distillers grains that has made some feed-lot operators uneasy.

A New ApproachPureMash is a system developed by Resonant BioSciences

LLC, which greatly reduces bacterial contamination in ethanolplants without leaving antibiotic residues in the distillers grain,says company President Allen Ziegler. The system is based ona water purification technology that uses chlorine dioxide(ClO2) and hydrogen peroxide to kill bacteria. Yeast turned out

to be resistant to the chemicals’ antiseptic properties. “We cameacross this technology a few years ago when I was working fora major brewer,” Ziegler says. “When they went to asepticbrewing they started having all kinds of infection problems. Wefound that yeast could stand up to the chemicals to a highdegree where the other microbes could not. We also found [thechemicals] can stand up to a high organic matrix.”

The PureMash system is designed to produce ClO2 with-out unwanted byproducts such as chlorine and chlorites. ClO2also attacks biofilms which coat the insides of tanks, pipes andother equipment. “Where we found most of the infectionscoming from in these plants is actually the heat exchangers,”Ziegler says. “A lot of the antibiotics will not get [those infec-tion sources].” Bacteria in the biofilms are more resistant toantibiotics and antiseptics and can be a source of re-infectionin an ethanol fermentation tank. “Because of production rea-sons, ethanol plants don’t go through the levels of cleaning youfind in a brewery, so they wind up leaving lots of biofilm in theheat exchangers,” he continues. “When we directed our tech-nology to the heat exchanger and then the fermentor we wereable to clean up that heat exchanger and a lot of the source ofthe infection.

“What we try to do is not just clean the common areas youtreat but our standard package also goes into the CIP (clean inplace) loop. As we’ve proved in breweries, PureMash does agood job in removing biofilms. What they do now is a caustic

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PROCESS

wash that isn’t very effective against biofilms. But adding oursystem to the final rinse gets to the problem at the source anddoesn’t treat just the symptoms.”

The system is integrated into a plant’s distributed controlsystem allowing full control and monitoring of the process. Italso gives the plant a paper trail to go back and investigate in

case any problems crop up. “It helps you run the plant too,”Ziegler says. “From an engineering and operations standpoint,it really lets you look to see where you have any issues in realtime. So it is really like looking at a whole other way of runningand operating a plant while dealing with unwanted microbiolo-gy.”

The PureMash system is mounted on a pallet-sized skid,which makes it easy to integrate into the water systems of exist-ing plants. The input chemicals are relatively safe and the sys-tem generates the ClO2 on-site, unlike systems using chlorinegas. “You cannot ship or package chlorine dioxide,” Zieglersays. “The chemistry is much like (generating) ozone. Somepeople are concerned because it has chlorine in the name. Eventhough it has chlorine in the name it has nothing to do withchlorine chemistry and doesn’t react like chlorine.”

It is also an improvement on ozone or chlorine as a disin-fectant because it is much more selective. ClO2 doesn’t reactwith organics such as starch and sugar or compounds such asammonia, like pure chlorine does, so it can be used directly inthe fermentation process. “Chlorine dioxide is better becauseozone wants to react with everything,” Ziegler says. “But theyhave similar chemical characteristics. They are both dissolvedgases and are not chlorinating agents.” Ziegler says the compa-ny has also worked closely with engineering firms to confirmthat the ClO2 doesn’t harm stainless steel pipes, tanks and otherequipment.

The PureMash disinfection system is skid mounted for simple installation. The

automated injection point tying the system into the plants’ water system is on

the right of the photo.P

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Because the system is integrated into the regular operation,plants don’t have to go off-line to be disinfected. “You don’thave to break everything down,” Ziegler says. “You don’t get itall right away, but within a week or two you see an effect.”

Successful TestsResonant BioSciences tested the process in a fermentation

laboratory in Montreal. In the summer of 2007, the company

tested the system in plants that had bacterial contaminationproblems. Some of the plants had been having recurring prob-lems for several years. The results were dramatic. “The plant wewent into gave us their worst fermentor,” Ziegler says. “It had[organic acid levels] a good 30 [percent] to 40 percent higherthan the other three fermentors. In a period of just three fer-mentations, we took that fermentor that was notorious over thepast three or four years and got its [organic acids] down to 30percent lower than the other three fermentors. They had spentyears and a lot of money trying to address the problem. Wewere able to do it in one week.”

The company is conducting tests in plants that have mini-mal problems with bacterial contamination to confirm the sys-tem’s ability to increase ethanol production in clean plants.“The first plant we went into had some mild infections and wewere able to demonstrate significant ethanol gains,” Zieglersays. “Even in the lab in experiments with no organic acidspresent we’re seeing an ethanol gain. What we are trying to dois quantify those gains. We have four plants signed up for muchmore indepth studies. Two of the plants are very clean and theother two have some challenges. We know what we can get outof an infected plant, but we’re not sure what we can give youout of a very clean plant.”

The speed of the PureMash system will also be one of itsselling points, according to Ziegler. But the real gains comefrom the higher, more consistent levels of production thatcome from running a consistently clean system. The test plantsusing the PureMash system had more consistent levels ofethanol production even if they didn’t suffer from noticeableinfection problems. “If you have an infection, this will take itout immediately as opposed to antibiotics,” Ziegler says. “Itgives you a way to rid yourself of antibiotics, and it gives you a

Using chlorine dioxide and other chemicals, PureMash attacks biofilms not only

in fermentation tanks but in hard to clean systems such as heat exchangers.

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much better performing plant. You canaddress infections in all areas of theplant, not just where it is obvious. We tryto go to the source of the infection andnot just treat the symptoms all the time.”

With the positive results from thetesting, PureMash received U.S. EPA reg-istration in February and is now com-mercially available to dry-grind ethanolproducers through Ethanol Technologyof Milwaukee, Wis. Ten plants signed upto have the system installed in the firstfew months that it was available. The sys-tem can be purchased through a leasingarrangement with monthly payments,Ziegler says. “It is one monthly fee andfor that fee we take care of the equip-ment, we provide the chemicals and serv-ice, and also provide 24/7 emergencyservice,” he says. “There is no capitalpurchase. We do ask for a three-yearcommitment but we include a perform-ance guarantee. If it doesn’t work forsome reason, we will pull it out.”

Factoring in the increased and morereliable production from the ethanolplants, the cost of the system is compa-rable with using antibiotics to controlbacterial contamination. “The plants weare going into, we are matching theirantibiotic pricing,” he says. “But [theplants] are showing higher ethanol pro-

duction and much less variation inethanol production. They don’t see thewild swings in ethanol production any-more. With a little more history underour belt I think we will be able to put abetter number on the real cost of oursystem. But we should be right in themiddle of what an average plant spendson antibiotics.”

Clean Distillers GrainsAn added benefit of the PureMash

system is the only traces of the chemicalleft in the distillers grain is in the form ofchloride, which is a component of com-mon table salt. The level of chloride leftin the mash is well within the acceptablelimits set by federal regulations. Thatallows companies that use the PureMashsystem to sell their distillers grains asantibiotic free. “That seems to be one ofthe primary drivers of interest in the sys-tem,” he says. “It doesn’t leave a residuein the distillers grains. We have forward-ed all this to the [U.S. Food and DrugAdministration] and [U.S.] EPA and theyare very interested that we can take thebacteria out and still leave natural ororganic grain behind.”

PureMash has been approached bysome ethanol producers not becausethey have production problems, but

because they would like to market theirditillers grains as being free of antibioticresidues. Ziegler says a number of theplants that have installed the PureMashsystem have been able to command a sig-nificant premium for their distillersgrains by marketing them as natural ororganic. “There is a lot more interest inthe system than we expected from themarket looking for an antibiotic alterna-tive,” Ziegler says. “I think they are look-ing for something that is a little better.We are certainly seeing interest from theengineering firms.”

While cutting the use of antibioticsis a definite selling point for PureMash,Ziegler takes a broader view of the sys-tem’s benefits. “Yes you can say you arereplacing antibiotics, but I really don’tlook at it like that,” he says. “It is really abetter systems approach to maintainingand treating your plant like a lot of foodfacilities do now. What we are doing isupdating that technology and bringing itinto the ethanol plant.” EP

Jerry W. Kram is an Ethanol ProducerMagazine staff writer. Reach him at


4962.











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PRODUCTION


The Hand That Turns the Wrench Ethanol plant technicians who are able to avoid unexpected shutdowns are like

money in the bank. Instructors at the Biofuels Automation University in Plymouth,

Minn., believe that with highly trained technicians and the technology available today,

there should be no unscheduled downtime in an ethanol facility.

By Timothy Charles Holmseth

Photos By Howard Pfefer

Ethanol plant technicians, who attend the Biofuels Automation University

in Plymouth, Minn., receive classroom instruction and hands-on training.

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he expression it’s not in thetool that the magic lies, themagic is in the man whoknows which screw to turn,

is not included in the Performance PlusEthanol Maintenance Training literatureat the BioFuels Automation Universityin Plymouth, Minn.

But it should be.The ethanol plant maintenance

technicians who attend the universitycome away with knowledge that sharp-ens their skills in ways that can make adifference to their company’s bottomline.

Hans Alwin, director of businessdevelopment for Biofuels Automation,says that in an industry, where mainte-nance is a profit center, the closer atechnician gets to being a crystal ballinto plant problems, the more moneythat facility makes. “There should be nounscheduled downtime in an ethanolfacility.” Alwin says, sizing up the ulti-mate goal of the training program thatis now in its second year. With the tech-nology available today there is no reasonfor downtime, says Sidney Sondag,Biofuels Automation general manager.“If that piece of equipment workswhen it’s installed, it’s going to keepworking,” he says, noting that most

parts are good for years. Too much timeis spent trying to throw differentdevices at the problem to see if it fixesit, he adds. Students who go through thecourse receive a fuller understanding ofhow to assess automation issues thatmay be problematic, he explains. When

they leave they have a brand new foun-dation to build upon.

The allure of this industry-specifictraining that keeps the registration con-stant at $1,000 per technician is money,Alwin says. The enrollment fee is inex-pensive compared with what a company

T

Students at Biofuels Automation University in Plymouth, Minn., receive industry-specific training in ethanol

plant maintenance. Here they assemble at work stations in the rear of the classroom after receiving

instructions from a power-point presentation.

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gains (or stands to lose) as result of uti-lizing (or not utilizing) the course. Ifenrollment, turnout and repeat atten-dance are indicators, it would appearthat Alwin is correct. “The session isfull,” he says, looking into the trainingroom where 19 men sit attentively fol-lowing a power-point presentation. “Webooked 20, one fellow couldn’t make it,”he says.

For Jon Logterman, the mainte-nance manager for Western WisconsinEnergy LLC, the June 5-6 session is hissecond time around. “We’ve been send-ing two [technicians] for every session,”he says during a quick break betweensessions. “We’re starting to repeatbecause you pick up something newevery time.” Technicians who attend theuniversity sometimes find solutions toproblems they’re experiencing back attheir ethanol plants. “I’ve got a page ofnotes in my notebook as [our plant] hasbeen having some issues,” Logtermanexplains. “Then all of a sudden it’s likethe light bulb goes off when you’re inclass here, and you think, ‘Hey thatmight be our problem.’ so you take thatinformation back to the plant.”

Using the training method of class-room power-point lectures followed byimmediate hands-on training at the

direction of Biofuels AutomationUniversity specialists, the technicians aresystematically introduced to or updatedon everything from temperature meas-urements to valves to communicationprotocols.

Standing over a cylinder during a

break-out session, Logterman is joinedby Todd Selk, a maintenance technicianfrom United Wisconsin GrainProducers LLC in Friesland, Wis., JeffCoots, a maintenance technician atCastle Rock Renewable Fuels LLC inNecedah, Wis., and Aaron Goodell,

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Left to right, Selk, United Wisconsin Grain Producers, Logterman of Western Wisconsin Energy, Coots of

Castle Rock Renewable Energy and Goodell of Corn LP, execute an assignment at a work station during

the June 5-6 session at the BioFuels Automation University in Plymouth, Minn.

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from production resources at Corn LP in Goldfield, Iowa.“We’re setting up transmitters to read levels in a cylinder,”Matt Derosier, a BioFuels Automation service technician, saysas the student technicians observe. As the technicians begin todiscuss and troubleshoot the task, their training takes hold.“Okay, we got our signal back,” Coots says, after a temporaryloss of a reading on the monitor. “Calibrate,” Goodell, says.“Beautiful, she just zeroed out,” Coots says as the men nodtheir heads in agreement.

Jeff Milani, BioFuels Automation’s lead service techni-cian, shows the students what happens when a little bit ofpressure changes because of gases that can exist above the liq-uid. “You can cancel it out if you happen to make a mistake,”he says after showing them the difference it makes.

Alwin says communications among the technicians is aplus because they have the opportunity to exchange informa-tion with their peers. Logterman says he has compared noteswith some technicians from United Wisconsin GrainProducers LLC. “They were [on line] before us, but weexchange information because they’ve seen problems comeup [due to] the age of their plant. We were built a year later sowe share information,” he explains.

The significance of fresh information cannot be overstat-ed, Logterman says. “Yesterday they brought out a new [trans-mitter isolation valve],” he says, adding that it can be appliedto the process in certain applications at his plant where oper-

ational issues sometimes arise. “Up to this point that technol-ogy wasn’t in the industry, so you basically had to shut downto change out the Level Instruments,” he explains. “[Withthis] we can change those out on the fly.”

While the program is designed to educate studentsthrough audio, visual and hands-on learning techniques,Sondag also throws in some real world analogies that the aver-age person will remember. For example, he explains theCoriolis effect to the class in this fashion: “Have you everdriven past the highly sophisticated fake Holstein cow in theyard with its tail made of a hose doing this (whipping his handaround)?” he asks. “That’s the Coriolis effect actually causingthat tail to whip.”

Moving through the lesson plans, Sondag and Alwin usedaily experiences to provide insight into complicated butimportant dynamic fluid properties that relate to ethanolprocess experiences. “If you take a cup of sour cream and tipit upside down it will never come out—it’ll just sit there,”Sondag says, explaining the essence of non-Newtonian liq-uids. “But if you stir it up, it will pour out easily.” The abilityto deliver the latest insights and education didn’t happenovernight. Alwin credits the university’s success to the marketpenetration of its parent company Swanson Flo-Systems Co.Swanson Flo-Systems is an equipment provider handling acomprehensive package of instrumentation, automated andmanual valves and specialty components to measure and con-

PRODUCTION

trol temperature, pressure, flow, level, proof, density, pH, per-cent solids, percent causticity and other analytical variablesfound in ethanol production. Understanding the applicationsand providing this broad scope of products indelibly connectsthe Swanson Flo-Systems and BioFuels Automation compa-nies to these technicians for the life of the plant. “Most ofour brands are major market share leaders,” Alwin says point-ing out that, “Foxboro Instrumentation, Masoneilan ControlValves and Flowseal butterfly valves each enjoy over 75 per-

cent market share in the dry-grind ethanol industry. So thetraining can be pertinent and valuable.”

Doug Diny, who’s involved with project sales activitiesfor Biofuels Automation, says the full classrooms make sensewhen you look at the present state of the ethanol industry,which is being plagued by record-high corn prices. “Plantbuilders today must be more resourceful,” he says. “We canwork the downturn to our advantage.”

Future sessions are scheduled and Logterman says his com-pany will most likely be sending technicians to that those trainingsessions. “There’s always something new,” he says. Alwin agrees,adding that BioFuels Automation University responds to thechanging needs of its clients. “In addition to the quarterlyPerformance Plus Ethanol Maintenance Training Course, whichruns next on Sept. 11-12 and again on Dec. 4-5, several newcourses will be added to the curriculum offerings. The new cours-es will include maintenance sessions covering heat exchangers andpumps, an ethanol operations module, an emissions complianceand safety management course and a module covering advancedcontrol loop tuning.” EP

Timothy Charles Holmseth is an Ethanol Producer Magazine staff

writer. Reach him at [email protected] or (701) 738-

4962.

The June 2008 class at Biofuels Automation University

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GM Crops and BiofuelsAre European biofuels producers being disadvantaged because some countries

won’t allow the production or importation of genetically modified crops?

By Jon Evans

EUROPE


EUROPE

n many ways, genetically modified (GM) crops and biofuelsare made for each other. The enhanced yields available fromthe current generation of GM crops such as corn and soy-beans can help farmers meet the growing feedstock demand

for biofuels while still producing sufficient quantities of food andanimal feed. In the future, GM crops with even higher yields andentirely novel GM varieties of grasses and trees should make biofu-els production even more efficient and inexpensive.

This relationship between GM crops and biofuels has blos-somed most fully in the United States, which isn’t entirely surprisingas it is the largest single market for both GM crops and biofuels. Inparticular, it is GM corn that has encouraged the relationship to blos-som, with GM varieties accounting for 73 percent of all the cornplanted in the United States in 2007 and corn being the main feed-stock for U.S. ethanol production.

According to Brent Erickson, executive vice president, industri-al and environmental section, at the U.S. Biotechnology IndustryOrganization, GM crops have helped U.S. farmers to increase yieldsby 30 percent over the past 10 years. This should provide sufficientfeedstock for the United States to meet its biofuels commitments, asset out in the recent Energy Bill, which requires that biofuels accountfor 36 billion gallons of the U.S. fuel supply by 2022 (up from 9 bil-lion gallons in 2008). “With agricultural biotechnology, farmers cancontinue to increase yields of crops to meet the demands for food,feed and fuel,” Erickson says.

GM Crops Not Welcome in EuropeIn Europe, however, the relationship is essentially forbidden,

with biofuels prevented from fraternizing with GM crops. Part ofthe reason for this is simply because the European biofuels sector isdifferent than the U.S. sector (see the “Vive la Difference” feature inthe May EPM), with many of the crops used as biofuels feedstocksin Europe lacking commercially available GM varieties. This is espe-cially the case for ethanol, which tends to be produced from wheatand sugar beets rather than corn.

More important, however, is the continuing negative percep-tion of GM crops in Europe. This arises from two main concerns:that the foreign genes added to GM crops might escape into wildplants; and that food derived from GM crops could pose a healthrisk to consumers.

Despite the fact that GM crops have been grown and con-sumed around the world for more than 10 years now without caus-ing any major environmental or health problems, some Europeanenvironmental and consumer groups continue to assert that GMcrops pose unacceptable risks. As a result, although the EuropeanCommission introduced a comprehensive regulatory regime for GMcrops in 2003, the vast majority of GM crops still haven’t receivedregulatory approval in Europe.

According to the International Service for the Acquisition ofAgri-biotech Applications, eight EU member states—Spain, France,the Czech Republic, Portugal, Germany, Slovakia, Romania and

I

continued on page 212

EUROPE

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How Genetic Modification Works Genetic modification involves inserting one or

more foreign genes, which can be derived from

numerous different species, into the genome of a host

organism, thereby providing it with a new ability or

trait. Any living organism can be genetically modified,

including humans, but the technique has been most

widely applied to crop plants.

In plants, the foreign genes are first inserted into

individual cells, often by transporting the genes within

a virus or bacterium or blasting the cells with a gene

gun. These plant cells are then encouraged to multi-

ply and grow into proper plants.

But none of these insertion techniques are per-

fect, which means that only a few of the cells will con-

tain successfully inserted genes. To find out which

these are, the genes of interest are usually linked to

another gene that codes for some easily observable

trait, such as resistance to a specific antibiotic. After

insertion of the genes, the plant cells are exposed to

the antibiotic and only those that survive are allowed

to grow into full plants, which can then be cultivated as

normal.

Although scientists have developed a wide variety

of GM plants possessing numerous different traits, the

most popular commercially-available traits for GM

crops are herbicide tolerance and insect resistance.

As the name suggests, herbicide-tolerant GM crops

are able to withstand certain herbicides, usually the

broad-spectrum herbicide glyphosate. This means

that farmers can spray their fields with the herbicide

while the GM crops are growing, affording better weed

protection. Insecticide-resistant crops generate their

own insecticide, having been genetically-modified to

produce a protein that is fatal to many insect pests but

harmless to mammals.

The most popular GM crops are corn, soybeans

and cotton, with GM varieties accounting for more

than 90 percent of the U.S. soybean crop and 87 per-

cent of the U.S. cotton crop in 2007. Increasingly, pro-

ducers of GM crops such as Monsanto are combining

two or more different genetic traits in the same plant,

such as tolerance to a number of different herbicides

and insect resistance, to create so-called “stacked

traits.”


EUROPE

Poland—grew just over 100,000 hectares(247,000 acres) of GM crops in 2007 (sole-ly comprising of insect-resistant corn). Incontrast, farmers in the United States,which has a similar area of arable land to theEU, grew almost 58 million hectares (143million acres) of GM crops.

The question is: Could biofuels offer away to rehabilitate GM crops in Europe?European consumers are most concernedabout the health effects of eating foodproducts derived from GM crops, but therewould be no such concerns with producingbiofuels from GM crops.

Anti-GM campaigners obviously thinkso, with a number recently warning aboutthe danger that biofuels would let GMcrops in through the back door. For exam-ple, in February 2008, the environmentalgroup Friends of the Earth, which prefersthe term agrofuels because they think bio-fuels sounds too environmentally friendly,published a briefing titled “Agrofuels:Fuelling or Fooling Europe?” As the titlesuggests, this report is generally critical ofthe proposed environmental benefits ofbiofuels and had the following to say on therelationship between GM crops and biofu-els. “Proponents of genetic engineeringpromote agrofuels in an attempt to breakworldwide opposition to GM foods, eventhough current GM crops provide noadvantage when producing agrofuels. GMcrops raise unacceptable health and envi-ronmental concerns as well as lead to thefurther intensification of agriculture andincrease corporate control of agriculture. Inaddition, crops engineered with traits specif-ically intended for industrial agrofuel usewill inevitably contaminate food supplies.The use of GM crops and trees should notbe permitted in the production of agrofu-els.”

Losing a Competitive EdgeBut their fears are currently unfound-

ed. Even European proponents of GMcrops admit that, at the moment, there is nospecific need to grow GM crops for biofu-els. According to Dirk Carrez, director of

public policy and indus-trial biotech atEuropaBio, the associa-tion of the Europeanbiotechnology industry,EU member statesshould be able to meetthe target set by theEuropean Commissionfor biofuels to make up 10 percent of trans-port fuel by 2020 without GM crops.

However, GM crops would help tomake the European biofuels sector morecompetitive. “The more that you canincrease your yields, the more competitive itis and the more bioethanol and biodieselyou can produce,” Carrez says. “So is therean advantage with GM crops? Yes, ofcourse, like there is for all other applica-tions.”

Despite what Friends of the Earthclaims, GM crops and food are acceptedand welcomed in many other parts of theworld. According to the ISAAA, GM cropsare now grown on almost 115 millionhectares (284 million acres) in 23 countries,including major agricultural producers suchas Argentina, Brazil, Canada, India andChina.

In Europe, however, not only are mostGM crops not approved, but the producefrom those crops, such as the grain fromGM corn, are not allowed to be imported.This situation is beginning to create realproblems, because it is becoming increas-ingly difficult and expensive to obtain non-GM grain from outside Europe.

This is already impacting Europeanlivestock farming, because it’s becomingmore cost-effective to import meat fromoutside Europe rather than try to purchasenon-GM grain to feed cattle. It is having asimilar impact on the European bioethanolindustry. “We cannot import GM corn toproduce biofuel,” Carrez explains. “So whatsome European companies are doing nowis producing ethanol in Canada and theUnited States and importing it to Europe.This of course consumes more energy andmeans that European ethanol producers are

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Carrez


EUROPE

building production capacity in other parts of the world and not inEurope. That’s a little bit crazy.”

So although Europe doesn’t currently need GM crops to help itmeet the European Commission’s 10 percent target for biofuels, hav-ing access to GM crop-derived biomass would enhance the compet-itiveness of the European biofuels industry, especially the bioethanolindustry. In addition, recent European Commission figures show thatEurope will only meet the 10 percent target if it imports 20 percentof its biomass, and if cellulosic ethanol makes up 25 percent of thebiofuels supply. If that doesn’t happen, Europe will struggle to meetthat target.

Furthermore, future generations of GM crops should offereven more benefits to the European biofuels industry. The globalGM crop market is currently dominated by the U.S. plant sciencecompany Monsanto, with its GM varieties accounting for 87 percentof all the GM crops grown in 2007. It sees the biofuels industry asan increasingly important market for its GM crops.

As such, it is putting a great deal of effort into further increas-ing the yields of crops used for both food and biofuels. This includesdeveloping varieties of corn that can “fix” atmospheric nitrogenrather than requiring fertilizers, and that can tolerate low water sup-plies. “Monsanto is very focused on helping farmers around theworld deliver more yield from the same amount of acres,” saysMonsanto spokesperson Darren Wallis. “This yield can be used forfood, feed and increasingly energy needs.”

The company has also developed a variety of corn known asProcessor Preferred, which contains more starch for fermenting intoethanol, and is looking to develop varieties that can produce evengreater quantities of starch. But Monsanto isn’t just concentrating oncorn. At the end of April 2008, Monsanto announced that it hadsigned a collaborative agreement with a U.S. company, MendelBiotechnology, to develop varieties of perennial grasses as feedstockfor cellulosic ethanol.

This next generation of GM crops will provide more benefits tobiofuels producers and could put European producers at an evengreater disadvantage if they are not able to utilize them. Eventually,this may provide the necessary impetus for the widespread accept-ance of GM crops in Europe, especially GM nonfood crops likegrasses, but Carrez doesn’t think it will happen in the short- to medi-um-term. “We can continue in Europe for a few years to make bio-fuels without GM crops, but in the longer term we have to thinkabout using GM crops if we want to have a competitive biofuelsindustry,” he says.

Until then, it may be problematic for GM crops and biofuelseven to be seen together in Europe, lest the negative perception ofGM crops begins to rub off on biofuels. EP

Jon Evans is a freelance science writer and editor based in

Chichester, U.K.

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SWEDEN


FFVs Flourish in Sweden

PHOTO: SCANIA

An ethanol-powered Scania truck is parked outside an IKEA store.

SWEDEN


The Swedish people take the environment and their need to reduce oil use

seriously. That attitude is reflected in their use of flexible-fuel vehicles,

which has increased from 717 in 2001 to more than 100,000 today.

By Eric Kroh

SWEDEN

hen Kjell Andersson, information director ofthe Swedish Bioenergy Association, is askedwhy Sweden has been so successful in adapt-ing to ethanol, he tells the following story.

In the 1990s, the capital city of Stockholm, working withthe Swedish Flexi-Fuel Buyers’ Consortium, placed an orderfor 2,000 flexible-fuel vehicles (FFVs) for any car companythat could produce them. The idea was to jump-start the FFVindustry by offering guaranteed business to producers. Thetwo big Swedish automobile companies, Volvo Car Corp. andSaab AB, declined the offer, as did other European automo-bile makers. ”It was a hen and egg situation,” Andersson says.“Someone has to start. The car companies say there aren’t anyethanol filling stations, we won’t build cars. The oil companiessay, there aren’t cars, we won’t build filling stations.”

Instead, Ford Motor Co. took them up on the offer, andwas given the go-ahead to begin importing the FFV version ofits Focus model. Ford was the first manufacturer to offerethanol-powered vehicles on the European market. “Theywere alone on the market for many years,” Andersson says.“That was 2001.”

From 2001 to 2005, Ford sold more than 15,000 FFVFocus models in Sweden, commanding 80 percent of the eco-friendly car market, according to Ford. Rather than being seenas a failure on the part of Swedish car companies, though, thesuccess of the Focus was seen as a victory for the people ofSweden, who were willing to do what it takes to reduce theirdependence on oil, even if it meant giving business to a for-eign car company, Andersson says. “It’s better to do the rightthing,” he says.

Since then, FFVs have taken hold in Sweden in a big way.In 2001, 717 FFVs were on the road in Sweden, according to

Sweden’s BioAlcohol Fuel Foundation, an organization ofbiofuels producers and transportation companies. That num-ber passed 100,000 earlier this year.

More FFVs, Means More E85 The number of gas stations offering E85 has also risen

dramatically, from the first pump in 1995 to more than 1,200today, according to BAFF. By comparison, there are about1,500 E85 filling stations in the United States for the 6 millionFFVs on the road, according to the National Ethanol VehicleCoalition.

The European Union has a renewable fuels mandate ofreplacing 5.75 percent of gas and diesel with biofuels by 2010,and has proposed a mandate of 10 percent by 2020.

W

A man fills up a flexible-fuel Volvo V50 with E85 at a filling station in Sweden.

PH

OTO

: S

CA

NIA


SWEDEN

But the Swedish approach to using biofuels to reducedependence on oil relies on using incentives to change thedirection of fuel consumption, rather than setting unattain-able mandates or benchmarks, Andersson says. It is a naturaloutgrowth of Sweden’s familiarity with renewable fuels suchas biomass, which Swedes have long used to heat their homes.

“It’s a long-term strategy,” Anderson says. We haveworked with bioenergy in other fields—for heating, electrici-ty—for a very long period to reduce the use of fossil fuels inother sectors. To be able to go on, we need to do somethingabout transportation It’s a matter of political will, to put in theright incentives for public procurement.”

In 2005, the Swedish government assembled a commis-sion of leaders in government, industry and conservation. Itincluded such dignitaries as Göran Persson, the prime minis-ter of Sweden at the time, and Leif Johansson, the presidentand chief executive officer of Volvo, the renowned Swedishtransportation company based in Gothenburg.

The commission set an ambitious goal for Sweden:Figure out how to dramatically reduce dependence on oil andeliminate oil imports by 2020. To do so, the Commission onOil Independence thought it necessary to reduce the use ofoil for transportation by 40 percent to 50 percent by that year.

A group of aggressive incentives has Sweden well on itsway to achieving that goal, says Per Carstedt, chief executiveofficer of Svensk Etanolkemi AB (Sekab), one of Europe’slargest producers and distributors of ethanol.

Because of tax breaks, E85 fuel at the pump in Swedentypically costs about 30 percent less than gasoline. Since theenergy content of ethanol is less than that of gasoline thatmeans it costs about the same for consumers to drive a cer-tain distance whether they’re powered by E85 or gas.

In addition, the government provides other incentives forFFV owners, including a $1,800 bonus to purchasers ofFFVs; a 20 percent tax reduction for flexible-fuel companycars; lower vehicle insurance; exemption from congestioncharges in Stockholm; and even free parking spaces in all butone of Sweden’s 35 largest cities.

It is because of incentives like these that ethanol has beenable to make such a large headway into Sweden’s fuel supply,Carstedt says. It should be no problem to significantly reducethe use of fossil fuels in passenger cars. “The first threemonths of this year, roughly 25 percent of cars purchased areflex-fuel,” Carstedt says If you stop that trend now, continuehaving 25 percent of new cars be flex-fuel, you reduce rough-ly 30 percent to 35 percent of (overall) gasoline consumption.The more difficult area is heavy traffic.”

Volvo S40 flexible-fuel vehicle

PH

OTO

: S

CA

NIA


SWEDEN

From Cars to TrucksTo meet the goal of reducing overall fossil fuel consump-

tion for transportation, it will be necessary to do for trucksand other heavy vehicles what Sweden has done for passengercars, he says. Sweden already has about 600 buses that run onpure ethanol, Carstedt says. The engine they use is made byStockholm-based Scania AB, the world’s leading producer ofheavy trucks and buses.

Sekab and Scania are working together to make trucksthat have the newest generation of the ethanol engine that hasbeen used in Sweden’s buses for 20 years. A lack of places tofuel up on pure ethanol has impeded the use of the engines inanything other than vehicles that are able to return to thesame place every night, such as buses. It becomes more com-

plicated for trucks and other vehicles that travel long dis-tances, and therefore need filling stations along the way.

But there are plans to have a skeleton system of 10 pureethanol filling stations along major routes in Sweden by 2010.These pumps will feed pure Sekab ethanol to a fleet of Scaniatrucks, which will be sold for the first time later this year.

The ethanol engines operate on the same principle asdiesel engines, says Hans-Ake Danielsson, a spokesman forScania. The main differences are that the combustion pressureis not as high for the ethanol engine, and the ethanol fuelneeds to be blended with an ignition enhancer.

The ethanol engine has the same efficiency as an enginerunning on diesel—up to 44 percent, according to Scania. Butthe ethanol engine offers a reduction of up to 90 percent ofcarbon dioxide emissions compared with diesel when sugar-cane ethanol is used for fuel. The 9-liter engine has an outputof 270 horsepower and a torque of 1,200 newton meters (885foot-pounds), according to Scania.

The ethanol-fueled trucks will be available throughoutEurope, Danielsson says. Scania does not operate in theNorth American market for logistical reasons.

The ethanol that will power these trucks—and Sweden’sother flex-fuel automobiles—will for the most part be import-ed. Sweden only produced about 18.5 million gallons ofethanol in 2007, according to the European Bioethanol FuelAssociation. This is roughly the same amount of ethanol thecountry produced in 2004, and half of what it made in 2006.

But Sweden also consumed nearly 100 million gallons ofethanol in 2007, meaning the country imported about 80 mil-lion gallons of ethanol that year. Most of this ethanol camefrom Brazil. In fact, Sweden is the largest importer ofBrazilian ethanol in Europe.

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Scania will use its 270 horsepower 9-liter ethanol Euro 5 and EEV bus engine

with EGR in its ethanol-fueled trucks.

PH

OTO

: S

CA

NIA


SWEDEN

A low import tariff makes Brazilian ethanol attractive tobuyers. Swedish officials would like to abolish the import tax,but have been met with resistance from the European Union,which would like Sweden to increase tariffs, Andersson says.

On the Production EndSweden is working on developing other sources of

ethanol as well. The country has a substantial paper pulpindustry. Black liquor, a byproduct of pulp production, is apromising source of biofuels. In addition, Sweden is collabo-rating with the African countries of Ghana, Tanzani andMozambique to develop ethanol industries there.

Ghanain company Northern Sugar Resources Ltd.announced it will cooperate with Sweden to grow sugarcaneto supply a 40 MMgy ethanol plant. The plant will be built byBrazilian company Constran S/A, and Skania has committedto buying the first 10 years of the plant’s ethanol production,though it will not operate at full capacity when it begins pro-ducing.

Sweden’s reliance on foreign ethanol could presage what’sin store for the American ethanol industry, says Wally Tyner,agricultural economist at Purdue University. Renewable fuelsmandates passed by Congress last year cap production ofcorn ethanol in the United States at 15 billion gallons per yearby 2020, while requiring 36 billion gallons of renewable fuelsto be produced that year. The most likely contender to fill outmost of the gap is cellulosic ethanol, but the domestic indus-try will likely not be able to fulfill that demand, Tyner says.“Right now we’re doing fine meeting the renewable fuels stan-dard,” he says. “Down the road we won’t be able to unless westart importing more ethanol.”

One way to encourage ethanol imports is to reduce the

import tax, Tyner says. The Farm Bill passed by Congress inMay extends the import duty through 2010, but Tyner thinksCongress will revisit the issue in 2009 and consider reducingthe tax if they are serious about meeting ethanol mandates.

Nobody can accuse Sweden of not being serious aboutaddressing climate change, says Mattias Goldmann,spokesman for the Swedish Association of Green Motorists.Why are Swedes so environmentally conscious? Goldmannsays it is because the effects of climate change are much moreobvious in Sweden than other places. “Here in Stockholm, wetechnically didn’t have a winter at all this year,” he says. “Ourice skates are just rusting. My daughter was complaining thatshe couldn’t go sledding at all. That’s the number one reason.”

Goldmann also says Sweden has something to prove.Swedish car manufacturers, such as Volvo and Saab, have his-torically produced larger cars that guzzle more fuel than otherEuropean models. Sweden has “by far the highest fuel con-sumption at fleet level of any European country,” Goldmannsays. “We have a lot of homework to do.”

This motivation, along with effective financial incentivesand the Swedes’ love for nature, has propelled Sweden to aleadership role in the European Union with regard to renew-able fuels, Goldmann says. “We’re a country of nature-goingpeople who really care about the environment,” he says. “InSweden we’re really starting to learn now.” EP

Eric Kroh is a Chicago-based journalist who writes and creates

multimedia content about biofuels and the environment.

Distillers Grains Quarterly is the first and only publication to exclusively cover the diverse, growing international industry of distillers grains production, marketing and use. This exciting publication provides in-depth feature articles, news, information and analyses targeted toward professionals interested in the principal coproduct of dry grind ethanol production. Distillers Grains Quarterly is distributed free of charge to all Ethanol Producer Magazine subscribers and all distillers grains customers throughout North America.


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The claims and statements made in this article belong exclusively to the author(s) and

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All questions pertaining to this article should be directed to the author(s).

ver the past 30 years severalsimple advanced controlmethodologies have been

invented out of necessity by process con-trol consultants. In the early days theseapplications were implemented in a super-visory computer. Now they can be imple-mented in the distributed control system(DCS). Applications using these method-ologies are easy to understand, quick toimplement and commission, and are virtu-ally maintenance-free. Moreover, they arereadily accepted by management andoperations.

Four examples are provided withapplications in a fuel ethanol plant.

Nonlinear Level ControlNonlinear level control is used when

the flow that is adjusted to control level isthe feed to a downstream process, and it isdesired to maintain the flow as constant aspossible to avoid upsetting the down-stream process.

This method uses a variation of theclassic proportional, integral, derivative

(PID) algorithm. When the controllererror falls outside a designated “gap” thenthe reset tuning parameter is reduced. Theeffect is that level is allowed to wander

inside the gap, with small changes to theflow, and reset action is increased whenev-er the error wanders outside the gap.

An example application of nonlinear

CONTROL

O

Simple AdvancedControls in the DistributedControl SystemBy Greg Martin

DPC versus PID robustness.

Figure 1. DPC, indicated by the top pair of lines in each graph, versus PID robustness


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. CONTROL

level control would be the distillation sec-tion second column bottoms level con-trol, since the bottoms flow that is adjust-ed to control that level is the feed to themolecular sieve section. A more constantfeed to the molecular sieve section makesthat part of the plant easier to manage.

For PID control, when the distur-bance is introduced, the level increasessomewhat and the controller adjusts thebottoms flow to compensate, and bringthe level back to its setpoint. In the simu-lation the bottoms flow is a negative num-ber so an increase in flow appears as adecrease in the plot trend. While the PIDcontrol action is notable, it may be desir-able instead to let the level wander moreaway from the setpoint, and adjust thebottoms flow less. After all, the bottomsflow for this example is the feed to themolecular sieve section.

Another example introduces thesame disturbance and the level graduallyrises, with the bottom flow not beingadjusted much. Finally, when the levelexceeds the high side of the gap, the resetis increased, which is clear in that the levelstarts to turn around, but moreover in

that the bottoms flow is adjusted at anincreased rate. The objective of the non-linear level control is achieved: the bot-toms flow is adjusted less severely and thelevel is allowed to wander more.

Constraint ProjectionConstraint projection is effective

when pushing constraints. It improvesprofits by keeping the process at the mostlimiting of a number of possible con-straints.

Constraint projection applies to a sit-uation where one manipulated variableinfluences more than one potential con-trolled variable (constraint variable). Themethod calculates the manipulated vari-able move to place the most limiting ofthe constraint variables at its constraintlimit.

An example would be molecularsieve gallons as the manipulated variableand inlet temperature and backpressure aspotential constraint variables. The con-straint projection application maximizesgallons to the most limiting of the mini-mum inlet temperature (e.g., 300 degreesFahrenheit) and the maximum back pres-


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sure (e.g., 30 inches of water). Each poten-tial constraint variable is compared with itslimit constraint value, and the correspon-ding manipulated variable move to putthat constraint variable at its constraintvalue is calculated. The minimum of thecalculated gallons moves is the output ofthe constraint projection calculation.

The reason this method is called con-straint projection is that each constraintvariable move is “projected” back onto themanipulated variable using the correspon-ding steady-state gain.

Constraint projection moves arealways based on the most limiting con-straint.

Evolutionary Optimization Evolutionary optimization is applica-

ble when an operating objective can beexpressed as a function that includes themanipulated variable. This method mini-mizes (or maximizes, as desired) the objec-tive by repeatedly making moves to themanipulated variable that improve theobjective function value.

CONTROL

Evolutionary optimization does notuse a complicated optimization algorithm.It simply makes a move to the manipulatedvariable in one direction, waits for theprocess to line-out, and checks to see if theobjective function value improved. If itdid, the method makes another move tothe manipulated variable in the same direc-tion as the first move. If the objective func-tion value did not improve, it reversesdirection and makes a move to the manip-ulated variable in the direction oppositethat of the first move.

The method proceeds in this way untila valley (or peak) is confirmed by objectivefunction values. Evolutionary optimizationthen uses a simple rule to make a finalmove to approximate optimization of theobjective function.

An example objective function wouldinvolve the calculation of slurry solids per-cent based on slurry density, dry milledcorn, water, backset and alpha amylaseenzymes. The function used for evolution-ary optimization is the error-squared of theslurry solids percent setpoint minus the cal-culated slurry solids percent. The manipu-lated variable is dry milled corn. The evolu-tionary optimization application adjustsdry milled corn up or down until the calcu-lated slurry solids percent approximates thesetpoint, thus minimizing the objectivefunction.

The name “evolutionary” comes fromthe fact that the method simply evolves themanipulated variable value by repeatedmoves to find the optimum.

The first move made by evolutionaryoptimization is just a guess—the manipu-lated variable is increased by a specifiedamount, x. The objective function is recal-culated and the error is found to increase.Evolutionary optimization then reversesdirection, and decreases the manipulatedvariable by 2x. The error is found todecrease, and another move is made todecrease the manipulated variable by x.This is followed by a series of moves todecrease the manipulated that results in acontinuous decrease in the objective func-tion. Finally, the minimum of the objectivefunction is passed, and evolutionary opti-


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able result. The PID application, however,is oscillatory. In fact, it borders on instabil-ity, which is definitely an undesirableresult. This demonstrates the robustnessproperty of a DPC application relative toan equivalent PID application.

SummaryFour examples have been provided of

simple advanced control and optimizationapplications: three control and one opti-mization. These applications can be imple-mented in the DCS. They are easy tounderstand and quick to implement and

commission, and are virtually mainte-nance-free. Moreover, they are readilyaccepted by management and opera-tions. EP

Greg Martin is an independent consultant in the

automation industry. Reach him at greg@greg-

martinconsulting.com or (512) 864-3822.

Derek Peine, vice president of Heartland

Ethanol LLC, provided the author with ethanol

industry specific examples.

CONTROL

mization reverses again. This sequence ofmoves adjusted dry milled corn to drive acalculated slurry solids percent to a desiredsetpoint.

Distributed Predictive Control Distributed predictive control (DPC)

is a single variable model predictive con-troller, which is effective for control loopswith significant time delay, like analyzerloops or some temperature control loops.The performance of DPC in these cases isfrom two to four times better than a PIDapplication. DPC can increase profitaccordingly when the application is tomaintain an economically important set-point or push an economically importantconstraint.

DPC is designed specifically for appli-cation in a microprocessor, such as is com-mon in modern DCSs. It uses minimumstorage for the predictions, since allresponse elements and predictions are cal-culated on-line. This gives DPC adaptiveand nonlinear capability.

An example of a suitable applicationfor DPC would be the control of distilla-tion section water in ethanol using analyzerfeedback.

DPC has another advantage over PID,which is called robustness. This means thatthe estimated model used in the DPC canbe significantly different from the actualprocess model without the DPC perform-ance being significantly depreciated. Inother words, the engineer’s estimate of theprocess response need not be as accuratefor DPC as for an equivalent PID applica-tion. This is demonstrated in Figure 1,where the model gain is underestimated bya factor of 2.5. On both sides of Figure 1,the upper plot is DPC, and the lower isPID. On the left the model gain is 1 andboth DPC and PID have been tuned torespond similarly to a step change in thesetpoint. The controlled variable is blue,and the manipulated variable is red. On theright side of Figure 1 the tuning for bothDPC and PID are held constant and theprocess model gain is increased to 2.5. Thisgives the DPC application an oscillationthat damps out after two cycles, an accept-





cientists and researchers say renew-able forms of energy can help giveAmerica a new energy future that is

cleaner, improves national security,strengthens the economy and contributespositively to the quality of life for all.Contributing to the urgency of develop-ing this new energy future is the predic-tion from the Energy InformationAdministration that U.S. energy consump-tion will grow nearly 20 percent by 2030.Global energy consumption, says theEIA, is expected to increase nearly 60 per-cent by 2030.

Authorities in the field also say thatmeeting those pressing demands for ener-gy will require a wide array of resources.“I don’t think we should assume there is aperfect technology,” says ChrisSomerville, director of the EnergyBiosciences Institute at the University ofCalifornia at Berkeley. “What we need is abasket of every conceivable technology,”including wind energy, geothermal, solarpower and biofuels.

Liquid fuels derived from a wide vari-

ety of plant feedstocks make up a keycomponent of a new energy future, sayresearchers. A University of Tennesseestudy commissioned by the 25x’25Alliance concluded that the United Stateshas adequate land resources to secure 25percent of its energy needs from renew-able sources by the year 2025 withoutcompromising the ability of the agricul-tural and forestry sectors to reliably pro-duce safe and abundant food, feed andfiber at reasonable prices.

Specifically, the Tennessee study saysproduction and conversion into energy ofland-based feedstocks from America’sfields, farms and forests, including cellu-losic ethanol after it becomes commercial-ly viable, have the potential to decreasegasoline consumption by nearly 60 billiongallons in 2025, while the production ofenergy from biomass and wind sourceswill offset the growing demand for naturalgas and coal-generated electricity.Additionally, developing these land-based

SUSTAINABILITY

S

Committed to the NextGeneration of BiofuelsBy Bill Eby

‘The enormous progress in understanding basicbiological processes achieved during the past

several decades has not previously been brought to bear in the energy sector, so we

believe that there may be fundamentally new opportunities to reduce the environmental

impacts of energy production and use.’


SUSTAINABILITY

energy resources will generate an addi-tional $700 billion in economic activityannually, and create 5.1 million jobs in2025, most in rural areas.

Biofuels in TransitionThe current use of sustainably pro-

duced biofuels is aiding a growing transi-tion to cleaner and more dependableenergy solutions to meet the ever-growingdemand for electricity and transportationfuels. Bruce Dale, a professor of chemicalengineering at Michigan State University,says that “by any measure, ethanol is bet-ter for the planet than gasoline—and it isgetting better all the time. Today's ethanolmade from corn is priming the market forthe coming generation of alcohol fuelsthat will also be made from wood chips,urban waste and other feedstocks, not justagricultural crops.”

Looking to the future, it will be non-grain crops and materials now consideredwaste that will become the primary feed-stocks for biofuel production, Dale says.Ongoing and growing research is opti-mizing cellulosic feedstocks, includingenergy crops such as switchgrass, hybrid

poplars and other prairie grasses, andresidues such as corn stalks, wheat straw,forest trimmings, sawdust, wood chips,yard waste, municipal solid waste andeven animal wastes.

Ethanol can be made from cellulose,much as it is today from corn, once thetightly bound sugars in the plant fiber arebroken down by enzymes. Thanks tobiotechnology, the cost of these enzymesis dropping rapidly, down 30-fold in thepast five years to 10-18 cents per gallon ofethanol produced. However, that cost“has to be reduced even more to make ita viable technology,” says Joel Cherry,senior director of bioenergy technologyat Novozymes, a company that developsenzymes for industrial solutions.

Our Generation’s ‘Moon Shot’The effort to make the next genera-

tion of biofuels cost competitive “is ourgeneration’s moon shot,” says UCBerkeley Chancellor Robert Birgeneau.Significant private investment is underwayin developing cellulosic ethanol. Forexample, 25x’25 Alliance memberGeneral Motors is partnering with two


technology firms with proprietary cellu-losic conversion processes. The “Big 3”automaker believes the technologies willultimately expand the market for GM flex-ible-fuel vehicles. “We are very excitedabout what this breakthrough will mean tothe viability of biofuels and, more impor-tantly, to our ability to reduce dependenceon petroleum," GM Chairman and ChiefExecutive Officer Rick Wagoner said.

On another front, petroleum giantBritish Petroleum has committed $500

million over 10 years to the consortiumwith UC Berkeley, the Lawrence BerkeleyLaboratory and the University of Illinoisthat created the Energy BiosciencesInstitute to research the application ofbiological sciences to transportation.

Researchers have “embarked on acommitment to develop new solutions toglobal energy needs through the deploy-ment of new technologies based onadvances in knowledge about biologicalprocesses,” says Chris Somerville, Earth

Biosciences Institute director and a plantbiochemist at UC Berkeley. “The enor-mous progress in understanding basic bio-logical processes achieved during the pastseveral decades has not previously beenbrought to bear in the energy sector, so webelieve that there may be fundamentallynew opportunities to reduce the environ-mental impacts of energy production anduse.”

In the public sector, the U.S. DOEover the past year said it is investing $1 bil-

SUSTAINABILITY

In considering the role biofuels will play in America’s energy future,researchers and advocates say that the current corn ethanol

platform is the foundation for a second generation of viable and affordable biofuels that will provide significant economic and

environmental returns.


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tons of carbon, or the equivalent ofapproximately 33 percent of total U.S.emissions.

In considering the role biofuels willplay in America’s energy future,researchers and advocates say that the cur-rent corn ethanol platform is the founda-tion for a second generation of viable andaffordable biofuels that will provide signif-icant economic and environmentalreturns. “But we need to move very quick-ly,” says Dr. Richard Flavell, chief scientif-ic officer with Ceres Inc., an energy crop

company. “Given the commercializationpressures, improved feedstocks must be inthe hands of the industrial sector rapidly.”

Flavell adds, “We know what to doand how, in principle. We simply need todo it.” EP

Bill Eby is with the 25x’25 Alliance. Reach him

at [email protected] or (512) 980-8990.

SUSTAINABILITY

lion in biofuels research and development,including efforts to develop improvedenzymes for breaking down cellulosic bio-mass material into sugars that can then befermented into ethanol. The departmentalso said it is investing $114 million insmall-scale cellulosic refineries, $405 mil-lion in bioenergy centers and $385 millionin commercial-scale cellulosic refineries.The DOE says cellulosic ethanol can beproduced in every region of the countryusing locally grown materials, while pro-ducing a fuel that creates less greenhousegases than corn-based ethanol.

Time to Act is NowPredictions vary as to when the next

generation of biofuels will become viable.However, one firm, KL Process Design,earlier this year brought on line what thecompany calls the first small-scale, waste-wood commercial ethanol facility operatingin the United States. Located in Wyoming,the plant is the result of six years of devel-opment efforts between the firm and theSouth Dakota School of Mines andTechnology. It uses a proprietary enzymat-ic method to break down wood and wastematerials, such as cardboard and paper.Meanwhile, Range Fuels is racing to buildthe first large-scale commercial cellulosicethanol plant in the United States. Phase 1of the 100 MMgy plant in Treutlen County,Ga., is expected to be completed in 2009and have an initial capacity of 20 MMgy,using wood as a feedstock.

Scientists say that produced the rightway, biofuels provide a much-needed andenvironmentally sound alternative to petro-leum fuels. University of Nebraskaresearchers say a five-year study showsswitchgrass can produce 540 percent moreenergy than that required to grow, harvestand turn it into cellulosic ethanol. In addi-tion, say Ohio State researchers, conserva-tion tillage and other agriculture andforestry residue management techniquesused to produce biofuel feedstocks canprovide a constant buildup of soil organiccarbon—practices on croplands, grazinglands and woodlands that can lead to thesequestration of nearly 600 million metric





he escalating price and decliningavailability of oil , combined withincreasing concerns about energy

security and climate change, have promptedthe United States to seriously assess alterna-tive sources of transportation fuels. Corn hasushered the United States into alternativefuels, and cellulosic biomass promises toboost domestic production in the future.Meanwhile, Latin America has tremendouspotential to become a global biofuels leaderand thus contribute to U.S. energy securityand climate stabilization. The availability ofland, a favorable climate, agricultural experi-ence and ethanol know-how are key attributesof that potential. Closer cooperation betweenthe United States and Latin America willenhance U.S. energy security by capitalizingon the continent’s biofuels capabilities.

The high demand for oil has contributedto an unprecedented increase in oil prices and,by extension, in food prices, which threatennational security, the economy, family budgetsand even social order. At the same time, theuse of fossil fuels generates greenhouse gases,which trigger climate change.

Fuel diversification based on biofuels

produced from agriculture constitutes a keycomponent of greater energy security andenvironmental stewardship. Ethanol blendedwith gasoline is already available in severalcountries. However, only in Brazil doesethanol represent a significant portion oftotal fuel consumption (more than 40 per-cent) and is projected to become the domi-nant transportation fuel by 2010. In theUnited States and other countries ethanolaccounts for less than 5 percent of fuel use.

Biofuels possess numerous advantagesover fossil fuels in consumer, environmental,agriculture, economic and national securityaspects. They are renewable, non-toxic,biodegradable, cheaper than gasoline anddiesel, and beneficial to the automobileengine, the environment and the domesticeconomy. Yet, these benefits still remainlargely unknown because the governmentand the industry have failed to educate thepublic. Now that concerns about food versusfuel and biofuel sustainability are in the newson a daily basis, biofuels are facing an uphillbattle.

Sustainability ConcernsThe issue of sustainable biofuels pro-

duction is quickly becoming global as theworld faces dramatic increases in food prices.Although the campaign against biofuels isbased on misinformation, the biofuels indus-try can not afford to ignore this issue. Push-back from social groups is already forcinggovernments around the world to scale backtheir plans for mandatory ethanol blending.

In the United States the corn ethanolindustry needs to seriously invest in technolo-gy improvements to reduce land demand andminimize its carbon footprint. On a life cyclebasis compared to gasoline, corn ethanolresults in 18 percent greenhouse gas emis-sions reduction, compared to the 80 percentrealized with sugarcane ethanol and projectedwith cellulosic ethanol. Similarly, the life cyclenet energy balance (the ratio of renewableenergy output over fossil energy input) ofcorn ethanol is 1.3 compared to 9 or higherfor sugarcane and cellulosic ethanol. Themain reasons are:

� Sugarcane ethanol and projectedcellulosic ethanol yield per acre of land is

OUTLOOK

T

Energy SecurityAchievable with BiofuelsMade in the AmericasBy George Philippidis


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OUTLOOK

twice that of corn ethanol� Sugarcane and cellulosic biomass

require less irrigation and fertilization� Ethanol production from cane and

cellulosic biomass is powered by renewableenergy derived from bagasse or other bio-mass, whereas corn ethanol production reliesmostly on natural gas.

Moreover, from an economic stand-point, the significant agronomic and processimprovements that Brazil has accomplishedduring the past 30 years have made Brazilianethanol cost-competitive with gasoline at just$45 per barrel of oil without governmentsubsidies.

Yet, this does not mean we abandoncorn as a feedstock. Corn ethanol has ush-ered the United States into fuel diversificationand will continue to play a role in the U.S.economy, but there are lessons to be learnedfrom Brazil: a 33 percent increase in cropyield per hectare, an 8 percent increase insugar yield from sugarcane, a 14 percentincrease in sugar conversion to ethanol, and a130 percent increase in fermentation produc-tivity. Today, sugar mills are biorefineries thatco-produce food (sugar), fuel (ethanol) andelectricity in a renewable fashion. This wayBrazilian agricultural productivity has

increased significantly, while the food, fueland energy needs of Brazil are satisfied.

The Future is

Cellulosic BiofuelsCellulosic biomass holds significant

promise for the world’s future fuel needs as itconstitutes an agricultural residue that inmany cases is already collected and inexpen-sive. It has no food or feed value and there-fore no effect on food availability and prices.It is abundant, particularly in the form ofsugarcane bagasse and wood waste through-out the Americas, enabling many countries toproduce biofuels domestically. By nature itcontains significant amounts of water (morethan 50 percent) and has significant caloricvalue as a solid fuel, which could eventuallyrender ethanol production water and energyself-sufficient.

A number of technologies are beingpursued for production of cellulosic ethanoland other fuels, such as butanol and diesel.The technologies can be classified as bio-chemical (enzymatic or chemical hydrolysisand fermentation), thermochemical (gasifica-tion and catalytic conversion or carbohydratereforming), and hybrid (gasification and fer-mentation). Undoubtedly, great technicalprogress has been achieved in cellulosic tech-nologies during the past 15 years. Still, they allface technical challenges before becomingcost-competitive. Most likely there will be nosingle technology winner, but rather tech-nologies will be adapted to the particularcharacteristics of local feedstocks. Closer col-laboration within the Americas will allow thecountries of the Western Hemisphere tocapitalize on their collective technical expert-ise and biomass resources to produce signifi-cant amounts of ethanol further enhancingtheir energy security, economic growth andenvironmental record.

Manage Expectations ProperlyThe new federal renewable fuels stan-

dard calls for the United States to raise itsannual biofuel production from 6.5 billiongallons per year in 2007 to 36 billion gallonsper year by 2022. This is a tremendousundertaking in terms of investment required,construction activity and infrastructuredevelopment. Corn ethanol alone will not


suffice to reach that goal, since U.S. cornethanol production will max out at approxi-mately 15 billion gallons per year. Hence,there will be a significant gap between U.S.ethanol supply and demand, as shown inFigure 1. In this model the supply projectionsare based on a realistic capacity growth ofU.S. corn and cellulosic ethanol, whereasdemand is based on a combination of histor-ical trends in the number of total and flexiblefuel vehicles on the road, per capita milesdriven per year, and estimated E10 and E85market penetration rates.

The projected ethanol shortage will have

to be filled by ethanol derived from sourcesother than corn. Cellulosic ethanol is viewedas the only feasible domestic solution for theUnited States, but expectations of commer-cial cellulosic plants within the next two tothree years are not realistic. Resolution ofscale-up issues in newly built demonstrationplants will require several years, and lengthyconstruction (due to a shortage in stainlesssteel) will add more time.

If expectations for cellulosic ethanol arenot properly managed, the whole biofuelsindustry will suffer from a potentially fatalpublic and investor reaction. There have

already been “false starts” in the past. Thistime around, when policy, technology andinvestment have finally converged, we can notafford to miss the golden opportunity for along-term prospective.

Latin America Part of SolutionThe United States must look at its hemi-

spheric neighbors to make up the demand-supply gap. Sugarcane ethanol from Brazil,Colombia and Central America needs to bean integral part of the U.S. energy strategy,especially when an increase in cane ethanolcapacity in Latin America provides an expedi-ent, cost-effective and low-risk strategy. Thiscan be accomplished by adding (or expand-ing) ethanol production capability at existingsugar mills to enable them to produce adiverse portfolio of products: sugar, ethanol,renewable electricity and steam, animal feed(molasses) and fertilizers (vinasse).

Undoubtedly, the United States needsLatin America for energy security throughdiversification. Conversely, Latin Americaneeds the United States for capital and tech-nology infusion to build or expand their caneethanol (and, in the future, cellulosic ethanol)capabilities to satisfy their own energy needsand enter the U.S. market, the largest fuelmarket in the world (145 billion gallons peryear of gasoline).

This interdependence calls for closer

OUTLOOK

Ethanol Demand

Corn Ethanol Supply

Total Ethanol Supply

-

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

2006

2008

2010

2012

2014

2016

2018

2020

2022

2024

2026

2028

2030

Bill

ion

gallo

ns/y

r

SOURCE: GEORGE PHILIPPIDIS

Figure 1. Projected U.S. ethanol demand and supply 2007-2030


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collaboration within the Americas in the ener-gy sector and by extension in agriculture,project financing, trade, immigration andpoverty reduction.

Biofuels Challenges

in Latin AmericaWhile conditions are favorable for bio-

fuels production, Latin America faces a num-ber of challenges that make foreign investorshesitant. Those issues need to be addressedon a hemispheric basis under the joint leader-ship of the two biofuels giants, the UnitedStates and Brazil. The challenges includepolitical, economic, trade and social issues.Political instability and poor regulatory andlegal frameworks need to be addressed. LatinAmerican countries need to commit to pro-tecting foreign investment, intellectual prop-erty and the sanctity of contractual agree-ments.

For Latin America to realize its full bio-fuel production potential, significant invest-ment will be needed. Joint ventures betweenU.S. and Latin American investors, helpedwith debt financing from regional develop-ment banks, is the best means to fund localbiofuel projects.

Although one has to recognize the com-plexity of agricultural subsidies world-wide,there is no excuse for setting up barriers to theopen trade of biofuels. For biofuels to trulybecome world commodities and hence cost-

competitive, import quotas and tariffs need tobe eliminated.

Through economic growth and employ-ment opportunities the biofuels industry canbecome a means to alleviate rural poverty inLatin America and reduce migration to theUnited States. For local people to take advan-tage of employment opportunities, the publicand private sectors need to team up to pro-vide workforce training and developmentwith the active participation of local educa-tional institutions.

RecommendationsEthanol and other biofuels are a key part

of the solution to our country’s need forenergy diversification. The corn industry hasintroduced Americans to a new era of fuels,but we need additional abundant ethanolresources to break our addiction to oil.Domestic cellulosic biomass and biofuelsfrom Latin America are two key sustainableresources. The U.S. needs to pursue a four-prong biofuels strategy. First, the corn indus-try needs to improve the sustainability of itsethanol by eliminating fossil energy use andconcentrating on agronomic and processimprovements rather than conversion ofmore U.S. land to ethanol production.

Second, through public-private partner-ships the United States should treat the com-mercialization of cellulosic technologies as amatter of national security (a new Manhattan

project) and invest all the necessary resourcesto accelerate deployment.

Third, the United States should pursuecloser energy integration with Latin Americathough regulatory convergence and open bio-fuels trade, thus encouraging private invest-ment in sugarcane ethanol production to sup-plement domestic capacity. This is the fastestand lowest risk means to boost E85 availabil-ity within three to four years and displacegasoline use to an extent significant enough tocause oil demand and prices to drop.

Fourth, consumers should be educatedabout the benefits of biofuels and incen-tivized to switch to flexible-fuel vehicles, cre-ating proper market conditions for automo-tive manufacturers to switch their productionlines to such vehicles, which will dramaticallycut U.S. dependence on foreign oil.

On the road toward fuel diversificationthere is no silver bullet. It is not an issue ofcorn versus sugarcane, food crops versus cel-lulosic biomass or even ethanol versusbutanol. The sooner we realize that U.S. ener-gy security needs all of the above, the soonerour country will be able to develop and com-mit to a coherent long-term energy policy. EP

George Philippidis is associate director of

the Applied Research Center and co-direc-

tor of the Energy Business Forum at Florida

International University. Reach him at

[email protected] or (305)

606-9998.

OUTLOOK





any ethanol projects, companies, service providers andother stakeholders along the supply chain are driven byindividuals and small groups. A board of directors

commonly oversees operations. With today’s market environment,boards must remain proactive and committed to the industry.

The role of the board includes oversight, direction, implica-tion, anticipation, synthesis of information, probing and robustconversation, just to name a few. The end result from the actionsof this collective body is to ensure successful growth, viability andthe legacy of the organization.

When a chairperson walks into the boardroom and takes heror his seat at the head of the board table, the unique role of aleader among equals begins. First-rate chairmen/leaders stimulatean energy and atmosphere that invites the directors to step up andparticipate in robust discussions. With that come many challenges.

The first challenge of the chairman/leader is to stir a readi-ness for participation from all directors and trigger internalreminders of their role and responsibilities to the board andorganization. The way in which the chairperson creates the cli-mate of the boardroom can shape the effectiveness of the meet-ing. We have seen chairmen do this well and seen that effect mir-rored in the high quality of the discussions, decisions and ques-tions asked during the meeting. We have also seen a chairpersondo this poorly and it too receives the same poor reflection to thedetriment of not only the quality of the meeting output, but theun-energized effect that it can have on the organization. The

chairperson sets the tone for the “tone at the top”—a phrasecoined by the Institute of Internal Auditors.

Being chairman of the board of a growing and successfulorganization is more demanding today than it was 10 or 15 yearsago. Today’s boards have more diversity of people, viewpointsand experiences. Organizations today are challenged with morevariables, market and economic conditions that can changeovernight, compressing reaction time for both board and manage-ment. Most experts predict that the competitive environment willget even tougher in the future. Competing and succeeding in thisenvironment requires a board chairperson to accelerate his or herability to grasp complex issues quickly and completely andrequires him or her to obtain information from different sourcesto stay informed from different viewpoints. Many boards areworking in environments that include comprehensive environ-mental issues, audit and regulatory concerns, increased homelandsecurity issues, higher CEO turnover and multiple perspectivesthat range from local to global.

Balancing Priorities, RelationshipsAnother chairman challenge is the judicious balance between

full board discussion and committee work. Committees arecharged with the “leg work” of the board, but the chairman needsto check-in with the committee chair to make certain that fullboard issues are brought back to the board. A role of the boardchairperson is to help the board overcome reluctance to create

MANAGEMENT

M

Overcoming Challenges in the BoardroomBy Tracy Houston and Cindy Knutson


MANAGEMENT

committees and to define key issues ortopics that need a committee. For example,

a board may find itself needing to establisha committee to review the recommenda-

tions of manage-ment on new tech-nology issues orpurchases. The fullboard can be ac o m m i t t e e .However, thispractice can bogdown the board,take valuable timeand often does notdig into the issuesas thoroughly as asmall committeecan. It is vital to aboard’s effective-ness to ensure thatboard membersnot relinquish theireducation on compensation, audit, nomi-nating committee and finance because “itis the committee’s responsibility.” The fullboard can struggle with discussion andrecommendations brought to them fromthe committee if this knowledge and edu-cation is ignored. The board chair can be

Houston

Knutson

instrumental in ensuring that this does notoccur.

A third challenge facing any leaderand the boardroom is not an exception. Itis the relationships and interactions that

occur in the boardroom between boardmembers. While relationships can be likeweather, if it is persistent it engulfs us, andwe get used to them in such a way that wedon’t see how it is not impacting our

behavior in ways that impede or slowdown effectiveness. The longer a boardhas worked together, the more of a boardculture, atmosphere and generally acceptedways of operating is created. This can givethe illusion that everything is business asusual when in fact the boardroom is a con-stantly changing interplay of viewpoints,personalities, organizational issues, market-place changes, economic impacts andexperience, among others. Each boardmeeting brings its own dynamics that theboard chair needs to recognize, adapt toand adjust facilitation techniques to ensurean effective meeting. The more a boardchair is aware of his or her own personalleadership style and can adjust his or herresponse, the more opportunity exists forsuccessfully channeling the meetingdynamics.

Establishing protocols for resolvingconflict is important for the board and thechair to implement when difficult situa-tions arise. It is important for board chairsto frame difficult issues and topics in a waythat will allow other interpersonally talent-ed board members to step in and diffuseemotionally charged comments or lead thediscussion toward a neutral ground for amore objective view. Conflict can createopportunity for candid, open discussionthat elevates a board to a higher level ofdialogue. Astute board chairs can use theenergy of these situations to broaden

MANAGEMENT

Defining Difficult Dynamics for the Chairperson

Lobbing a bomb: When a large topic is introduced to the board without full discussion.

Bullying: Dominant board member who pushes point of view to the exclusion of others.

Overly quiet: Rarely speaks out or wants to speak to the chairperson in the hallway rather

than the board meeting.

Emotionally charged comments: These tend to generate reactions rather than thought-

ful objective responses.

Founding members: The board member has been a part of the organization and has

invested so much that it skews their judgment and thinking ability. They often come across

as entitled to having a greater say.

Starpower CEO: When the chairperson is more in sync and in step with the CEO than the

board so that the role of the chair and the role of the CEO is not clearly separated.

The board chair is a position of privilege. As a leader among equals the chair can influ-

ence the board to raise itself to a higher level of performance. The board chairperson rep-

resents the board in all of his or her interactions inside and outside of the boardroom. The

presence as board chair stands out as an exemplary representative of the excellence of the

board he or she serves. The following are examples of courageous conversations a chair-

person can hold:

• Giving the CEO feedback about his/her behavior

• Talking to a board member who behaves offensively or makes

derogatory comments

• Conducting an executive session

• Critiquing a board member’s lack of participation

• Following up on the status of senior management assignment from a

previous meeting.


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views, expose new ideas or identify newconcerns that need to be addressed beforeproceeding with a decision or a vote.

Switching Roles, Board Additions

A fourth challenge happens when achairman must move in and out of the roleof being a chairman and into the role ofdirector. Moving between the two rolesmust be carefully chosen and executed. Itis not often that a chairman can removethe leadership hat and ask the board’s per-mission to speak as a director withoutundue influence to the situation. At timesthis happens without intentional thought.A chairperson must be constantly aware ofhis or her role and influential position dur-ing vigorous discussion. The chair shouldencourage constructive contention whilealso participating in the debate.

If you are a board chairperson you

realize that any upstanding board willinclude evaluating the chairperson in itsboard evaluation or peer evaluationprocess. To reduce the anxiety that this canbring the board should consider the fol-lowing guidelines:

• Select a designated time and place tomeet

• Create the questions together toensure consistency and agreement

• Make time for dialogue and discus-sion with the chairperson to ensure fullunderstanding and input.

A final challenge is welcoming newmembers to the board. This can be one ofthe most enjoyable aspects of a chairper-son’s role while being one of the mostimportant duties. We have been in board-rooms where the chairperson did notintroduce new and old members to eachother and help them know somethingabout each other. At their best, the chair-

person should be active with the board toidentify orientation programs internal andexternal to the organization that can helpaccelerate a new board member’s knowl-edge and contribution. The chairpersoncan identify existing board members withdifferent skills, experience and knowledgethat can act as mentors for the new boardmember. The chairperson as leader canensure a smooth introduction and accept-ance of the new board member and shapepositive dynamics and board chemistry tocontinue even with a new personality com-ing into the boardroom. EP

Tracy E. Houston is a senior consultant in gov-

ernance with Summit Point Consulting.

Reach her at tracy.houston@summitpointcon-

sulting.com or (303) 721-3219. Cindy Knutson

is the vice president of organizational effective-

ness for Summit Point Consulting. Reach her

at [email protected]

or (303) 721-3277.

MANAGEMENT

At their best, the chairperson should be active with the board to identify orientation programs internal and external to the organization that can help accelerate a new board

members knowledge and contribution.





ueled by concerns about climatechange and U.S. dependence onforeign oil sources, ethanol pro-

duction is a fast-growing industry thatmay account for 15 percent of liquidtransportation fuels within 10 years.Poised to meet growing demand, thenumber of ethanol production compa-nies is expanding at a slowing but stillrapid pace.

While ethanol production providesan alternative fuel source that may helpprotect the health of the planet and theU.S. economy, some ethanol producersare in need of protection from risksinherent in the operation of an ethanolproduction business. Fuel productionplants are subject to losses that candamage operational infrastructure,shutting down production for longperiods of time.

Ethanol producers are also at riskdue to factors completely beyond theircontrol, such as market fluctuationsthat affect the price of raw materialsnecessary to produce ethanol, including

corn prices. The volatility in fuel pricescan also have a significant impact onethanol producers’ profitability. Fuelproduction costs depend on raw mate-rial expenses, but the market price forfinished fuel can also vary considerably.The bottom line: While the ethanolproduction business holds great prom-ise, individual ethanol producers face avariety of risks that can keep them upat night.

Managing Risks, Getting Sleep

So how do ethanol producers takeadvantage of the great opportunitiesthe industry offers and prudently man-age the very real risks unique to theindustry? How do they deal with thepossibility of significant business lossesthat can result in lengthy, expensivedowntime and the uncertainties causedby fluctuating material and fuel costs?The answer may be a well-designedproperty insurance policy.

However, it’s important to bear in

mind that not just any insurance policywill do. Because ethanol producers facerisks that areunique to theirindustry, theyshould not settlefor a cookie-cutterpolicy offered toevery type of busi-ness from appleorchards to zincmining operations.Ethanol producersneed a policy tailored to address theirparticular concerns. The following areitems relevant in evaluating policyofferings.

Ethanol producers seeking thepeace of mind that comes with ade-quate insurance coverage need to lookbeyond regular property insurance poli-cies. Property insurance coverage typi-cally includes business income provi-sions that provide some measure ofprotection against income loss.However, if the protection ends there,

RISK

F

Fuel for Thought:Protecting an EthanolProduction BusinessBy Scott Helmer

Helmer

RISK

it’s not enough for an ethanol produc-er.

That’s because to determine busi-ness income protection limits, insur-ers typically look at annual income.However, that can vary a great dealfor an ethanol producer. Producerswho purchase coverage after a year inwhich income was reduced due toprice fluctuations may pay less fortheir coverage. However, if they suf-fer a loss during a year in whichincome is high, they’ll find their cov-erage isn’t sufficient to cover theirlosses.

On the other hand, producersdon’t want to pay too much for cover-age they don’t need. That’s why it’sessential to obtain coverage from aninsurer with expertise in the industry:a risk management partner whounderstands the risks posed by marketfluctuations. An insurance brokerwho is also an industry expert canoffer coverage that is adequate tocover losses in a profitable year with-out forcing producers to buy morecoverage than they need.


The best approach is a policy thatallows producers to estimate their annu-al incomes and then obtain a refund foroverestimates. This type of tailoring is

possible with an insurance broker whounderstands the ethanol productionindustry.

RISK

Addressing Time, Money Factors

Another factor that makes averagebusiness protection policies inadequatefor ethanol producers is the limitationson time and money a typical policy car-ries. For example, most policies providecoverage for income loss only and limitit to 30 or 60 days.

Ethanol producers may need muchlonger to recover from a loss. They haveexpenses to meet such as payroll forhighly skilled workers and ongoingoperational expenses that are unique tothe industry.

A serious incident at an ethanolproduction facility can knock the busi-ness out of commission for months.Ideally, an ethanol producer’s insurancecoverage would provide benefits tocover not only the loss of income thatwould occur while the facility wasundergoing reconstruction but wouldalso cover payroll expenses so that theproducer could retain the skilled work-ers needed to get operations going againafter repairs are made.

Consider that after a loss and duringrepairs, a smaller ethanol concern maybe losing valuable tax credits the busi-ness had counted on as a result of pro-jected production volume. A typicalbusiness insurance policy wouldn’t fac-tor the loss of income from taxes whendetermining coverage. An industryexpert would discuss such a provisionwhile crafting coverage specifically foran ethanol producer.

Contractual Obligations, Utility Interruptions

Another factor that may impactethanol producers’ ability to recoverfrom a loss is their contractual obliga-tions. In the ethanol fuel productionindustry, it’s common for producers tosign contracts agreeing to produce a cer-tain amount of fuel for a third party.The contracts often carry stiff penaltiesfor failure to produce and deliver theagreed upon amount.

What happens to those contracts

An added concern for ethanol producers is coverage against utility interruptions. Seamless utility service is vital for ethanol production—more so than for many other types of business.


As with any potentially rewardingventure, the ethanol production busi-ness is also subject to a number ofrisks. Some of those risks, which areoften specific to the industry, can deraila successful enterprise, leaving itexposed to catastrophic losses thatmake recovery unlikely.

However, with the right risk man-agement partner, ethanol producers canprotect their valuable businesses fromlosses that a broker who is not anindustry expert might not anticipate.For ethanol producers, it pays to take a

look at the business coverage limitswith all the special factors affectingtheir industry in mind. Only by takinginto account their unique circumstancescan ethanol producers ensure they havethe protection they need to fuel theirbusiness for years to come despitewhatever challenges may rise. EP

Scott Helmer is president and CEO of Helmer

Risk Management. Reach him at scotth

@helmerrisk.com or (877) 435-6371 ext. 226.

RISK

when a plant is out of commission? Atypical insurance policy might cover theloss of income, but would it also coverthe funds lost due to a failure to deliveron a contract or pay an amount adequatefor the ethanol producer to outsourcethe work in order to meet the contractu-al obligation? With the right risk man-agement partnership, ethanol producerscan address these specific risks.

An added concern for ethanol pro-ducers is coverage against utility inter-ruptions. Seamless utility service is vitalfor ethanol production—more so thanfor many other types of business.However, many policies severely limitthe amount of coverage for lossesincurred due to utility interruptions.That might be OK for some types ofbusinesses, but it could have a profoundnegative effect on an ethanol productionplant. A broker who knows the industrywould recognize the risk and make sureadequate coverage is available.

Another factor that can be criticallyimportant in determining whether cov-erage is adequate is how the insurer val-ues stock. In the event of a loss, someinsurers determine the value of loststock based on how much it cost to pro-duce it. Others determine value strictlyby the market, which, as we’ve observed,is subject to significant price swings.

How ethanol producers’ policiesdefine stock value can make all the dif-ference between recovering actual lossesand being exposed to major unanticipat-ed expenses. Again, the insurance bro-ker’s industry expertise comes into playsince an experienced broker would helpa client understand this risk and addressit.

Recovering, Moving ForwardThe ethanol production business

offers a multitude of exciting possibili-ties for success, which is why it is grow-ing at such a rapid rate. It plays a keyrole in policies designed to address envi-ronmental and geopolitical concerns.The industry can also provide muchneeded jobs that employ highly skilledindividuals.





ecently, the EnergyIndependence and Security Actof 2007 has coupled increasing

fuel efficiency standards and renewablefuel use in America. Under this law,ethanol production from dry and wetmilling processes is projected to increase.As ethanol production increases, so willwaste emissions from fermentationprocesses. Merichem Gas TechnologyProduct’s trademarked LO-CAT technol-ogy is a viable alternative for removinghydrogen sulfide from digester gas pro-duced as part of wet milling processes.Use of LO-CAT treated digester gashelps maximize use of valuable naturalresources.

The majority of ethanol in theUnited States is produced during drygrind fermentation of total mash fromcrops such as corn, wheat, barley,milo/sorghum and potatoes. Distillersdried grain with solubles, a cellulosiccoproduct of the dry grind process, isvaluable as animal feed or fertilizer.

Wet milling is more elaborate than

dry grind because grain must be separat-ed into its components. After cornmilling, corn is heated in a water solutionto loosen germ and fiber. In subsequentsteps, germ is removed from the kernel,corn oil is extracted, germ meal is addedto hulls and fiber to make corn gluten

feed, and gluten is separated to createcorn gluten meal for use in animal food.Only the starch of the corn is fermentedto produce ethanol. The process also pro-duces wastewater that must be treatedbefore disposal.

Although more ethanol is produced

EMISSIONS

R

Treating Digester Off-Gasfrom Wet Mill EthanolProductionBy Kenneth D. Jones, Steve Black and Tony Barnette

0

200

400

600

800

1,000

1,200

1,400

Stan

dard

Cub

ic F

eet

$11.60 Natural Gas

$4.64 Natural Gas

$0 digester gas

$6.96 saved

Figure 1 . Potential energy savings per 1 MMBtu

SOURCE: MERICHEM GAS TECHNOLOGY PRODUCTS


EMISSIONS

by dry versus wet milling, increasingdemand for ethanol as a biofuel, hasprompted increased use of new wetmilling processes to maximize the yield ofethanol from many cellulosic materialssuch as corn stalks, grain straw, paperpulp, municipal wastes, switchgrass andother sources. New processes for fer-menting woody and herbaceous biomassare being developed to yield moreethanol. These processes are projected toyield more sulfurous wastewater andsludge.

Wastewater and sludge from the newwet milling processes can be treated inanaerobic digesters before disposal.During this digestion process, sour gascontaining hydrogen sulfide is produced.When the gas stream is treated by LO-CAT, hydrogen sulfide is removed, yield-ing gas that may be used as an alternativefuel source while meeting environmentalstandards. Treated digester gas can beused to lower ethanol plant energy costsby lowering natural gas usage.

Potential Energy SavingsNatural gas prices have almost dou-

bled since January 2000, reaching$11.06/MMBtu this January. At presstime the New York Mercantile Exchangenatural gas futures contract settlementprice was $11.60/MMBtu. Typicaldigester off-gas can yield as much as 600Btu/standard cubic foot (SCF) versusnatural gas at 1,000 Btu/SCF.

Ethanol production energy costscould be reduced by more than half ifenergy requirements are supplementedthrough use of LO-CAT cleaned digesteroff-gas (Figure 1). Every 1,000 SCF oftreated digester off-gas could yield 0.6MMBtu, equivalent to $6.96 in saved nat-ural gas cost. Actual energy savings mayvary based on the availability and compo-sition of treated digester gas.

Sour gas is routed to a LO-CATabsorber. The type of absorber used isdependent upon the product gas hydro-gen sulfide specification. The convention-al liquid full scheme is used when approx-imately 99.99 percent hydrogen sulfideremoval efficiency is required. In fact, aslow as 1 parts per million by volumehydrogen sulfide can be achieved in thetreated gas. The venturi-mobile bed


option is used when moderate hydrogensulfide removal efficiency is required andlow pressure feed gas, less than 15 poundsper square inch, is treated.

In the absorber, sour digester gas iscontacted with LO-CAT solution.Hydrogen sulfide is absorbed from thegas into the LO-CAT solution wherechelated iron catalyst promotes a reactionto convert hydrogen sulfide to elementalsulfur. Treated gas then exits the top ofthe absorber and sulfur rich LO-CATsolution flows to the oxidizer.

In the oxidizer, LO-CAT solution ismixed with air as elemental sulfur settlesto the bottom of the vessel. Oxygen inthe air oxidizes (regenerates) the chelatediron in the LO-CAT solution returning itto its active state. In its active state, ironand LO-CAT solution are recycled to theabsorber to remove more hydrogen sul-fide.

Elemental sulfur that settles to thebottom of the vessel forms a 15 weightpercent slurry which is removed using afilter. Sulfur is then washed and filtered

EMISSIONS

resulting in 60 percent to 65 percent sulfurcake. The balance of the cake is water andtrace amounts of LO-CAT solution. Washwater is recycled back to the oxidizer.

LO-CAT ChemistryThe LO-CAT process was developed

to provide an isothermal, low operatingcost method for carrying out the modifiedClaus reaction:

H2S + 1/2 O2 � H2O + S°The overall reaction is explained using

the following equations.• Absorption of hydrogen sulfide:

H2S (g) + H2O (l) 1 H2S (aq) + H2O (aq)(1)

• Ionization of hydrogen sulfide:H2S (aq) � H+ + HS- (2)

• Sulfide oxidation: HS- +2Fe+++

� S°(s) + 2Fe++ + H+ (3)• Absorption of oxygen: 1/2 O2

(g) + H2O (l) 1 1/2 O2 (aq) + H2O (aq)(4)

• Iron oxidation: 1/2 O2 (aq) +H2O + 2Fe++

�2 OH- + 2Fe+++ (5)Equations 1 and 2 represent the

absorption of hydrogen sulfide into theaqueous chelated iron solution and its sub-sequent ionization, while equation 3 repre-sents the oxidation of hydrogen sulfideions to elemental sulfur and the accompa-nying reduction of the ferric (active) ironto the ferrous (inactive) state. Equations 4and 5 represent the absorption of oxygenfrom ambient air into the aqueous solu-tion, followed by oxidation of the ferrousiron back to the ferric state. Equations 3and 5 are very rapid. Consequently, iron-based systems generally produce relativelysmall amounts of byproduct thiosulfateions. However, equations 1 and 4 are rela-tively slow and are the rate controllingsteps in all chelated iron processes.

It is interesting to note that the chelat-ing agents do not appear in the processchemistry, and in the overall chemical reac-tion the iron cancels out. So the obviousquestion is why is chelated iron required atall, if it doesn’t take part in the overallreaction? The iron serves two purposes in


Green Fuels, Green Future

Investing in Saskatchewan gives you ready access to more assets and raw product than any other province.

Our province offers a young and vibrant workforce, ready and willing to take on new challenges and build careers.

The Saskatchewan government offers attractive incentives such as the SaskBIO program, an 80 million dollar program for new and expanding biofuel facilities.

Saskatchewan is a leader in biofuels. In fact, we were the fi rst province in Canada to mandate a 7.5 per cent ethanol blend in gasoline.

To learn more about biofuels investment opportunities in Saskatchewan, please visit

www.ei.gov.sk.ca/SaskBIO

12

3

4

The Government of Saskatchewan has recently made changes to the SaskBIO program, making it easier to apply and qualify for funding.

These qualities benefit the agricultur-al industry locally and internationally.Specifically, fertilizing companies recog-nize the benefits of using LO-CAT sulfurto make sulfur-based fertilizer products.Currently LO-CAT sulfur is used for soilpH adjustments, plant nutrients andfoliage fungicides.

LO-CAT sulfur is nontoxic and hasbeen approved for use by the OrganicMaterials Review Institute. OMRI estab-lishes standards for crops to receive

organic designation. OMRI follows theguidelines required for compliant use ofsulfur under the USDA National OrganicProgram Rule 7 CFR Part 205. EP

Kenneth D. Jones, Steve Black and Tony

Barnette are with the Gas Technology Products

division of Merichem Chemicals & Refinery

Services LLC. All can be reached at (713) 428-

5000.

EMISSIONS

the process chemistry. First, it serves as anelectron donor and acceptor—in otherwords, a reagent. Second, it serves as a cat-alyst in accelerating the overall reaction.Because of this dual purpose, the iron isoften called a catalytic reagent. Althoughthere are many metals, which can performthese functions, iron was chosen for theLO-CAT process because it is inexpensiveand nontoxic.

The chelating agent(s) do not takepart in the process reactions. Their role issimply to hold the iron ions in solution.Neither ferrous nor ferric ions are solubleor stable in aqueous solutions. Iron willordinarily precipitate at low concentrationsas either ferric hydroxide or ferrous sul-fide. The chelating agents are organic com-pounds that wrap around the iron in aclaw-like fashion, preventing the iron ionsfrom forming precipitates. The LO-CATprocess uses a proprietary system ofchelating agents to hold the iron in solu-tion over a very wide pH range.

LO-CAT has developed into a versa-tile processing scheme for treating gasstreams containing moderate amounts ofhydrogen sulfide. Advantages of these sys-tems include the ability to treat both aero-bic and anaerobic gas streams, removalefficiencies in excess of 99.9 percent,essentially 100 percent turndown onhydrogen sulfide concentration and quan-tity, and the production of innocuousproducts and byproducts.

Sulfur ProductElemental sulfur produced by the

LO-CAT process has quite profound dif-ferences from sulfur produced from otherprocesses. LO-CAT sulfur has a particlesize ranging between 8 to 45 microns,which is much smaller than sulfur pro-duced by other processes. The sulfur isproduced in a cake form that is 60 percentto 65 percent sulfur, water and traceamounts of LO-CAT solution. These dis-tinct differences give LO-CAT sulfur soft-er particle texture, hydrophilic nature andwater miscibility, and faster soil absorptioncharacteristic and degradation.





hile market factors deter-mine the cost of raw materi-als and selling prices, pro-

cessing innovations can reduce the costof producing fuel ethanol. Aside fromhedging and smart marketing practices,producers have little control over thecosts of corn, distillers grains andethanol. However, producers do havecontrol over savings associated withreducing energy consumption. A largeportion of the energy consumption inethanol production comes from extract-ing water from the fermentation liquorproduct stream. Here is where advancedmembrane separation technology fordewatering a water-rich ethanol streamcan be used to produce energy savingsof as much as 50 percent compared tothe conventional distillation and molec-ular sieve dewatering solution.

Although molecular sieves com-bined with distillation have proveneffective to separate water and ethanol,their use can be energy intensive.Molecular sieve units produce a purge

stream which contains between 60 per-cent and 80 percent ethanol that is recir-culated and reboiled in the distillationcolumn.

Molecular sieve units are comprised

of a water adsorption cycle duringwhich an ethanol/water vapor mixturecirculates across the molecular sievebed. During this regeneration cycle,fresh ethanol is injected into the molec-

EFFICIENCY

W

Plant Expansion ThroughMembrane IntegrationBy Christian Roy

GreenField Ethanol's plant in Chatham, Ontario, is making use of membrane separation technology to

dewater ethanol.

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EFFICIENCY

ular sieve bed in a counter current flowwith respect to the water adsorptioncycle. The binary mixture is sent to therectifier for reprocessing. The molecularsieve accounts for approximately one-third of the rectifying column total load.Also, molecular sieves may adsorb fueloil over time.

Vaperma, a Canadian-based compa-

ny has developed a trademarked Siftekmembrane system, which has beendesigned to increase throughput capaci-ty and save energy. With the Vapermaprocess configuration, the molecularsieve unit liquid phase purge stream isvaporized and dehydrated in the two-stage Siftek membrane cartridge config-uration. The membrane dehydration

system consumes less energy than theconventional molecular sieve regenera-tion method, and it enables significantunloading of the distillation column.The system can increase plant’s overallfuel ethanol production by approximate-ly 20 percent to 30 percent.

The membrane dehydrates themolecular sieve purge stream at areduced cost. The water-rich stream canbe directed toward the front end of theplant or is eliminated through the beercolumn. The membrane retentate end-product is fuel ethanol at 99 percent orhigher. The skid-mounted Siftek systemcan be easily integrated to the facilityduring plant maintenance shutdown.

How the Technology WorksThrough the application of mem-

brane technology the ethanol producerto achieve increased throughput capaci-ties and reduced energy consumption.Siftek’s polymeric membrane technolo-gy combines solvent and high tempera-ture resistance with a strong proprietaryhollow fiber that can be used in a varietyof new industrial applications. Themembranes are vapor phase separationunits that allow the preferred perme-ation of water over other vapor compo-nents in a gas mixture. These mem-branes are made of a special blend of


polymers selected for their specific mor-phological and chemical properties. Thedriving force for the separation phe-nomena is the ratio of the water partialpressure on the lumen and shell sides ofthe membrane. The high permeability ofwater across the membrane is due to itsrelatively high combined adsorption anddiffusion rates.

The water/ethanol mixture isslightly pressurized into the bundle ofhollow fibers. Dehydration of thewater/ethanol vapor mixture occurs byselective permeation of water vaporacross the active thin layer of each poly-meric hollow fiber. Thousands of hol-low fibers form a membrane cartridgebundle which is housed inside a stainlesssteel vessel.

Cellulosic materials as feedstocksthat will not compete with food suppliesare considered to be the future of fuelethanol. Conversion of cellulosic bio-mass to ethanol is challenging because

EFFICIENCY

GreenField's Growth Continues

GreenField Ethanol, formerly Commercial Alcohols, is Canada’s

largest ethanol producer. The innovative company announced in March

that it and Enerkem, a Quebec-based leader in gasification and the syn-

thesis of biofuels from cellulose, a collaborative partnership to design,

build and operate commercial-scale cellulosic ethanol plants. Vincent

Chornet, president and chief executive officer of Enerkem, said at the time

that the companies had secured a Canadian location for their first 10

MMgy plant.

GreenField has operation plants in Tiverton and Chatham, Ontario

and Varennes Quebec. It also has a 200 MMly (52.8 MMgy) facility under

construction in Johnstown, Ontario, which will be Canada’s largest once

it comes on line. The company is also developing a 145 MMly (38.3

MMgy) plant in Hensall, Ontario.


the sugar concentration is far below thatof corn or sugarcane. Processing cellu-losic materials to ethanol also requiresthe removal of huge volumes of waterfrom the fermentation liquor. The mem-brane solution is an attractive option fordewatering cellulosic ethanol as it iseven more effective with an increase inthe amount of water present in the feed.

Successful Pilot TestingRecently, Vaperma and Greenfield

Ethanol Inc. of Toronto, Ontario, suc-cessfully reported the operation of aSiftek pilot plant over a period exceed-ing 4,000 hours. The test involved the“all-in-one step” reprocessing of a 60percent to 90 percent ethanol/waterblend into a 99 percent fuel-grade anhy-drous ethanol at Greenfield’s 25 MMly(6.6 MMgy) plant in Tiverton, Ontario.The first actual industrial field trialenabled the production of approximate-ly 200,000 liters (5,300 gallons) of fuel-

grade ethanol. As a result of that fieldtrial, energy savings of 40 percent ofactual energy consumption wereobtained. The savings represent 3 centsper liter (11.4 cents per gallon).

Commenting on the impact of thisnew membrane separation technology,Greenfield CEO Robert Gallant said“The unit in Tiverton used substantiallyless energy and therefore fewer green-house gases were created in the process,reducing the plant’s carbon dioxide foot-print.”

Still under field testing, the Siftekmembrane at Tiverton processes 1.5cubic meters per day of feed originatingfrom the beer column. That was enoughto encourage Vaperma and Greenfieldto move on to a large-scale test of a 7.5MMly (2 MMgy) membrane.

In mid-June at the InternationalFuel Ethanol Workshop and Expo,Vaperma announced that it had installedits Siftek field demonstration system at

GreenField’s plant in Chatham, Ontario.The unit is expected to reach full pro-duction capacity by the fall of 2008.“We are confident that the full-scale unitwill give conclusive results in reducingour energy costs and consumption com-pared with conventional technologies,”Gallant said.

The Chatham project is alsoequipped with auditable greenhouse gasprotocol and software for measuring theemission reduction benefits generatedwith the membrane system, thereby cre-ating tradable carbon credits.

At this point, Vaperma’s technologyhas been shown to be low in mainte-nance with membrane cartridge replace-ment predicted not to be needed onaverage until after three years of contin-uous operation. EP

Christian Roy is co-founder of Vaperma Inc.

and co-inventor of Siftek polymer membrane

technology. Reach him at (418) 839-6989.

EFFICIENCY





s national gasoline prices con-tinue to rise, the nationalmedia has focused its attention

on the hardships these historically highprices have foisted on the motoringpublic. However, the price increaseshave also had a profound impact on thepeople and companies that move theproduct from the refinery through themany twists and turns of the supplychain until it reaches the consumer’s gastank. Simply put, the current pricingtrend is transforming all areas of thepetroleum industry and petroleum job-bers, terminal operators and marketersare being forced to find ways to wringcosts out of their businesses.

On top of that, the task facingtoday’s jobbers, terminal operators andretailers is complicated by the fact thatthe motor fuel supply is becomingincreasingly complex with the additionof new fuels, reformulations of oldfuels and federal mandates governingthe use of alternative fuels. One alterna-

tive fuel that has received increased playsince the dawn of the new century isethanol, which has been backed by ahigh-profile, auto-industry-driven adver-tising campaign and support from legis-lators in Corn Belt states where mostethanol feedstocks are grown and har-vested.

In reality, ethanol has been a promi-nent part of the nation’s motor-fuel sup-ply chain since it began being used as a10 percent oxygenate and octane boost-er in unleaded gasoline nearly 30 yearsago. More recently, the big push forincreased ethanol use is in its 85 percentethanol/15 percent gasoline form,known as E85. While the E10 that’sbeen used in the country’s motor fuelpool for three decades does not requireany engine modifications, E85 can onlybe used in flexible-fuel vehicles thathave been specifically designed for thattask.

Looking beyond the consumerimpact, terminal operators face a variety

of questions that they need answers tobefore they can start moving ethanolthrough their plants. Because of itsunique properties, ethanol-blended fuelsgenerally cannot be shipped by a petro-leum product pipeline due to opera-tional issues, mainly ethanol’s affinity forwater, which is a byproduct found atsome level in all petroleum pipeline sys-tems. Thanks to that—and coupled withthe fact that the majority of ethanol-production facilities are located near thesources of their feedstocks in theMidwest—most ethanol (and other bio-fuels) are transported chiefly by truck,barge and rail, creating an increase interminal traffic and the need for moreefficient plant processes. For example,common E10 requires only one incom-ing truck loaded with ethanol for every10 outgoing trucks leaving the terminalwith E10. By contrast, E85 necessitates8.5 incoming loads of ethanol for every10 outgoing loads of finished motorfuel.

PUMPS

A

Pump TechnologiesProvide GreaterEfficienciesBy Tom Stone

PUMPS

Regardless of how the various feed-stocks and finished motor fuels enter andexit the terminal, there is no question that

processes must be found to streamlinethe loading and unloading process, effi-ciently strip lines and clear tanks and

transports of every possible drop ofvaluable product, eliminating waste byensuring more precise blending consis-tency in biofuels operations.

Sliding Vane TechnologyOffers Efficiencies

As petroleum terminal operatorsmodify and expand existing facilities orupgrade newly acquired terminals inorder to handle higher volumes and newalternative fuels, the search for greaterefficiency, lower maintenance costs, bet-ter line-clearing capabilities and moreaccurate blending processes is promptingmany companies to take a new look at along established and proven pumpingtechnology. The sliding vane pump’s con-cept has been around for more than acentury and provides the essential solu-tion for streamlining loading/unloadingoperations, optimizing line stripping andtransport tank clearing, and offers volu-metric consistency in blending applica-tions.

The concept of sliding vane pumpsis simple, as is the comparison to the

competing technologies of centrifugalpumps and internal gear pumps.Centrifugal pumps employ only oneforce—increased velocity—to moveproduct. Increased product movementthus becomes a function of increasedspeed. In turn, higher speeds requireengines with more horsepower andgreater power consumption. At the sametime, centrifugal force is an inefficientmover of any residual product remainingin the line.

Internal and external gear pumpsprovide a mechanical solution for movingproduct. Therefore, as soon as the pumpsare placed in service the gears begin towear and flow rates drop. Additionally,due to the wear, volumetric consistencymay be compromised in blending applica-tions.

Sliding vane pumps are designed withunique “self-adjusting” vanes that allowthem to maintain near-original volumetricperformance during the life of thepump—meaning these pumps are notsubject to the efficiency-robbing slip thatoccurs from wear in gear pumps. Thisfeature also ensures the kind of volumet-ric consistency required to meet biofuel-blending standards. Compared to a cen-trifugal pump, a sliding vane pumprequires 25 percent to 30 percent lesshorsepower to move the same volume ofproduct. These pumps have long beencommon in the transportation industryand are increasingly installed in new con-struction of biodiesel and ethanol pro-duction plants. As terminal operators refitand expand, sliding vane pumps areemerging as an effective and efficienttechnology for petroleum bulk plant andterminal operators.

Sliding vane pumps have a series ofvanes (normally made of a nonmetalliccomposite) that freely slide into or out ofslots in the pump rotor. When the pumpdriver turns the rotor, centrifugal force,push rods and/or pressurized fluid caus-es the vanes to move outward in theirslots and bear against the inner bore ofthe pump casing forming pumping cham-bers. As the rotor revolves, fluid flowsinto the area between the vanes (pumping

chambers) when they pass the suctionport. This fluid is transported around thepump casing until the discharge port isreached. At this point the fluid is pushedout into the discharge piping.

Each revolution of a sliding vanepump displaces a constant volume offluid. Variance in pressure has minimaleffect. Energy-wasting turbulence andslippage are minimized and high volumet-ric efficiency is maintained. Sliding vanepumps are also self-adjusting. As a result,the system eliminates fluid slip thatwastes energy in other types of pumps.Further, since the vanes constantly adjustto accommodate for wear, unlike gearpumps that are not self-adjusting, slidingvane pumps maintain near-original andconsistent volumetric performance overtime. Since each revolution of the pumppositively displaces a constant volume ofproduct, bulk-plant operators know—bymonitoring speed and flow rate—thatthey have delivered the exact amount offuel their customers have ordered. Slidingvane pumps also provide a tremendousamount of suction capability, which ben-efits terminal operators by stripping linesand leaving no heel in tankers.

Because of the design of the pump’srotor and independent sliding vanes, slid-ing vane pumps are easy to maintain atpeak performance levels and, if necessary,can be completely rebuilt with pipingattached. Worn vanes can be replaced, byremoving the outboard head assembly,sliding out the old vanes, inserting thenew ones and reinstalling the head. In amatter of minutes, the pump can be back

PUMPS

Motor speed vane pumps provide improved

efficiency and energy consumption to ethanol

producers and transporters.

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ADVANCING CLEAN ENERGY BEYOND THE BREAKTHROUGH.

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www.ssoe.comETHANOL PRODUCER MAGAZINE AUGUST 2008

in operation. Simple vanereplacement also requires nospecial tools.

For owners of petroleumterminals, the result is opti-mized operating efficiency,more consistent blending, lesspower consumption, repair,maintenance, and wasted orcontaminated product, morespeed and precision in loadingand unloading. With bulkplants already challenged byhigh oil prices and required towring more costs out of theiroperations—and facing theprospect of handling a morediverse mix of precisely speci-fied fuels—sliding vane tech-nology provides the best avail-able solution.

Although vane pumpsmay require a higher upfrontinvestment than other types ofpumps, they measurablyreduce a terminal's operatingand lifecycle costs to producea justifiable return on invest-ment. Yet the paradigm ofmaking upfront investments inreturn for long-term savingshas become the normthroughout much of theAmerican economy. The U.S.construction industry, forexample, has in recent yearsshifted increasingly to the con-cept of "green building" andaway from its traditional focuson initial capital costs. Thepetroleum industry, whichitself aspires to be "green,"can do no less.

ConclusionIn summary, rising oil

prices have increased the costfor petroleum wholesalers tofinance their inventories andaccounts receivable, creating aneed to squeeze ancillaryspending out of their opera-tions by boosting efficiency

and eliminating waste. At thesame time, the high fuel pricesare also leading to increasedmarket shares for biodieseland ethanol, requiring petrole-um-terminal operators to facea reality that indicates that U.S.production of ethanol andother biofuels will triplebetween now and 2013. Thiswill force many terminal oper-ators to either modify orexpand their storage facilitiesand traffic capacity, or get outof the game. Compliance withgovernment and industry stan-dards for fuel specificationswill only become stricter inthat time, increasing thedemand for precise blending atthe terminal.

With a need to boostoperating efficiencies and theprospect of upgrading orexpanding terminal facilities,growing numbers of bulkplant operators are investigat-ing sliding vane pump technol-ogy and discovering they canoptimize performance and getmeasurable returns on theirinvestments. A conceptproven over a 100-year period,sliding vane pumps consumeless power, require less mainte-nance, offer high suction thathelps clear lines, tanks andtransports, and deliver precisevolumetric consistency in bothloading/unloading and blend-ing applications. In short, slid-ing vane pumps provide aviable, efficient solution forthe challenges of operating apetroleum bulk plant in today'smarketplace. EP

Darren Wight is a freelance writer

based in Knoxville, Ill. For more

information on Blackmer sliding

vane pumps, visit www.

blackmer.com or contact Jim

Becker at [email protected]

or (616) 475-9390.

PUMPS





n May 22, 2008, Congress overrode PresidentGeorge W. Bush’s veto to enact the Food,Conservation and Energy Act of 2008, more com-

monly known as the farm bill. The bill recognizes the valuethat rural and agricultural land can play in the renewable ener-gy economy, both in terms of the renewable fuels that can begrown or harvested into energy and the use of key real estateavailable for the siting of renewable energy projects.Although many of the more lucrative tax provisions, grantsand other incentives were pared down prior to enactment, thefarm bill is an important first step in shining light on the valu-able role that agricultural and rural lands—and the raw mate-rials found on them—can play in the renewable energy indus-try.

In the past, the Energy Policy Act of 2005 and industryplayers created considerable public attention around corn-based ethanol and solar and wind power.Less attention was paid to various waste-to-energy technologies including landfillgas-to-energy, wood and crop waste bio-mass, anaerobic digestion of animal solidwaste, and gasification of municipal solidwaste. Certainly, there were incentivesavailable to some of these technologies,such as production tax credits and five-year depreciation for certain biomasstechnologies and other qualifying facili-ties, and the availability of tax-exempt bonds for certain land-fill gas and municipal solid waste projects. However, projectsin these and similar areas, while generally worthwhile andcommercial, were not given as much attention by the press,project developers and lenders. This lack of focus made thesetypes of projects more difficult to develop and finance eventhough in many cases they offered potentially much greaterreturns than wind or solar if the technical challenges could besuccessfully met. Without as many financial incentives, suchprojects had to work harder to get off the ground. The FarmBill, by directing certain incentives and public attention tofarm-based and other rural bioenergy projects, should helpbreathe new life into these types of projects.

POLICY

O

The Farm Bill: PlantingSeeds of RenewableEnergy By Matthew E. Ross

Ross

The farm bill, by directing certain incentives and public attention to farm-based and other rural bioenergy projects,should help breathe new life into these types of projects.

POLICY

Earlier versions of the farm billhad significantly more robust incentivesfor both farms and project developersto install renewable energy equipmenton rural and agricultural land. However,in the interest of building a strongmajority, many of those provisions werestripped out in conference before thebill was submitted to the president withthe promise that they would be re-addressed in other energy legislationthis year. However, what remains is notinsignificant. Congress has demonstrat-ed a real interest in harnessing both theraw material and real estate that agricul-tural and rural lands have to offer aswell as diversifying America’s energyportfolio.

Making Way for Innovation, Development

Some of the more interesting tech-nologies that are boosted by the FarmBill are the various waste-to-energy pos-sibilities that either extract methanefrom, or burn, various types of waste


POLICY

streams and use the resulting product toproduce either natural gas or electricity.For example, the USDA has estimatedthat there are 150 million animal units(cows, swine and poultry) that collective-ly produce more than 2 billion tons ofwaste per year in the United States. Ifjust 10 percent of this total waste streamwere able to be captured and convertedto energy via anaerobic digestion or gasi-fication, that would create either approx-imately 110 billion cubic feet of naturalgas per year or about 32,230 megawatthours of electricity per year. Further,there are countless millions of tons offood and other organic wastes that arecreated in farming operations nation-wide. Harvesting that waste, as well astapping the prolific cellulosic and otherwoody biomass located on rural andagricultural land, could be a vital sourceof energy.

Here is a closer look at some of theprovisions that bode well for biomassand other biofuels development:

BBiioorreeffiinneerriieess—The USDA provides1) grants of up to 30 percent of projectcosts to assist in the development andconstruction of demonstration-scalebiorefineries (facilities that convertrenewable biomass into biofuels or elec-tricity) to demonstrate the viability ofone or more processes for convertingrenewable biomass (including variousforms of plant material, waste materialand animal waste) into advanced biofuels

Additional provisions legislators may want to consider in the future would include increased renewable portfolio standards and

renewable fuels standards, a national mandatory carbon emissionstrading regime, and appropriations for more robust grants and

incentives for these technologies and projects.


a national mandatory carbon emissionstrading regime, and appropriations formore robust grants and incentives forthese technologies and projects.

Progress One Step at a TimeIn a world of $130 per barrel oil,

global warming, aging energy infrastruc-ture and transmission congestion, it is inAmerica’s interest to look for as manyother creative opportunities to producerenewable energy as possible. The farm

bill is a step in the right direction,although more robust incentives will benecessary for this industry sector toreap the seeds that were sown with thefarm bill. EP

Tom Stone is the director of marketing for

Grand Rapids, Mich.-based Blackmer. Reach

him at [email protected] or (616) 248-

9252.

POLICY

(fuels derived from cellulosic biomass,vegetative waste, animal waste and bio-gas), and 2) loan guarantees of up to 80percent of project costs (or 90 percentof a loan amount), up to a maximum of$250 million, to fund the development,construction and retrofitting of com-mercial-scale biorefineries. This provi-sion allows for companies to implementinnovative solutions to convert thingslike plant material, waste material, andanimal waste into advanced biofuels. Inaddition, the USDA will enter into con-tracts with producers of advanced biofu-els and will provide funding to help thedevelopment, construction and retro-fitting of commercial scale biorefineries.

RReeppoowweerriinngg—The farm bill encour-ages biorefineries already in operation asof the date of the enactment of theFarm Bill to install new systems or pro-duce new energy from renewable bio-mass by allocating $35 million in manda-tory funding for 2009 and $15 million indiscretionary funding for each of 2009-2012.

RRuurraall EEnneerrggyy ffoorr AAmmeerriiccaa—TheUSDA and U.S. DOE will create a pro-gram to promote energy efficiency andrenewable energy development by agri-cultural producers and small rural busi-nesses. In particular, the program willprovide grants for energy audits andrenewable energy development andother financial assistance for energy effi-ciency improvements and renewableenergy systems. Grants provided underthis section can cover 25 percent of theproject costs and, combined with loanguarantees, can be used for 75 percent ofthe total project costs. The farm bill setsaside mandatory funding of $55 millionin 2009, $60 million in 2010 and $70 mil-lion in each of 2011 and 2012, as well asdiscretionary funding of $25 million ineach of such years.

Additional provisions legislatorsmay want to consider in the future wouldinclude increased renewable portfoliostandards and renewable fuels standards,

EVENTS CALENDAR

21st Ethanol Conference & Trade Show

August 12-14, 2008Qwest Center

Omaha, Nebraska

This event, hosted by the American Coalition for

Ethanol, reviews the status of the ethanol industry

each year, while looking ahead to the future.

Agenda topics will include ethanol transportation,

blending, cellulosic ethanol, distillers grains,

midlevel ethanol blends and the renewable fuels

standard in the Energy Independence & Security

Act of 2007.

(816) 333-9400

www.ethanol.org

Biofuelsmarkets Americas September 9-10, 2008

Buenos Aires, Argentina

Officially supported by the Argentine Biofuels and

Hydrogen Association, last year’s inaugural event

focused on the biodiesel market. Due to popular

request, this year's event has been expanded to

include BioPower Americas, a concurrent event.

The joint general session will include discussion of

the “bio revolution,” the global industry, climate

change, energy supply and demand, finance and

investment, sustainability, and feedstocks. The sec-

ond day of the event will break the agenda into the

two groups: biofuels and biopower.

+44 207 801 6333

www.greenpowerconferences.com

European Forum for Industrial Biotechnology

September 15-17, 2008Hotel Bloom

Brussels, Belgium

This inaugural event aims to bring together a sen-

ior and international group of biotechnology pro-

ducers, chemicals and plastics suppliers, biomass

and biorefinery representatives, end users from a

wide variety of industries, and academia. Topics of

discussion will include biofuels, biorefineries,

biobased products, Europe’s knowledge-based

bioeconomy, Asia’s perspective, chemicals, financ-

ing and commercialization, among many others.

+44 (0) 1372 802101

www.efib2008.com

International Distillers GrainsConference & Trade Show

October 19-21, 2008Indianapolis Marriott Downtown

Indianapolis, Indiana

This event, organized by BBI International Inc.,

aims to educate and empower the end users of

distillers grains, and enhance customer outreach

activities worldwide. The agenda will include topics

such as distillers grains supply and demand;

exports, particularly in Asia; fractionation; and glob-

al feeding trends, especially in poultry, swine and

cattle.

(719) 539-0300


World Biofuels SymposiumOctober 19-21, 2008

Tsinghua University

Beijing, China

This fourth annual event, organized by BBI

International Inc., will explore the world energy

issues that China currently faces, specifically in

regard to biofuels. Topics of discussion will include

advances, opportunities and challenges in biofuels

technologies and production. An agenda will

become available as this event approaches.

(719) 539-0300

www.worldbiofuelssymposium.com

Biofuelsmarkets AfricaNovember 20-21, 2008

Cape Town, South Africa

The approval of the Biofuel Industrial Strategy for

South Africa in December 2007 provides fresh

impetus to the country’s biofuels market, along

with a foundation and road map to push the mar-

ket forward. The initial 2 percent biofuels penetra-

tion scenario (400 million liters per year) will create

25,000 jobs, according to the strategy. This third

annual event will bring together executives from

across the continent to discuss strategies that will

enhance development of a sustainable, regional

biofuels industry.

+44 207 801 6333



Biofuelsmarkets East AfricaSeptember 16-18, 2008

Kilimanjaro Hotel Kempinski

Dar Es Salaam, Tanzania

This inaugural event will particularly focus on

Tanzania, Uganda and Kenya. The case-study-led

agenda will include presentations and panels that

review the current status of the biofuels market in

this region, and address the expanding opportuni-

ties for the production of feedstocks and biofuels for

use in Africa and for export. Agenda topics include

financing; sustainability; feedstocks; biofuels pro-

duction; and blending, marketing, distribution and

transportation.

+44 207 801 6333


Texas Biofuels Conference & Expo

September 17-18, 2008Hilton Austin Airport

Austin, Texas

This third annual event will take an in-depth look at

the latest regulatory, agricultural and technical

developments impacting the renewable fuels indus-

try in Texas. Special attention will be given to the

Energy Independence & Security Act of 2007 and

the impact it will have on the future of renewable

fuels in Texas.

(512) 358-1000

www.biofuelevents.com

NextGeneration BiofuelmarketsOctober 6-7, 2008

Amsterdam, Netherlands

This fourth annual event will bring together key play-

ers pioneering the development of next-generation

biofuels to address the latest developments in creat-

ing the cost-competitive, industrial-scale production

of next-generation biofuels technologies. An agenda

will become available as this event approaches.

+44 207 801 6333


Canadian Renewable Fuels Summit

December 1-3, 2008Hilton Hotel Lac Leamy

Hull, Quebec

Themed “Growing Beyond Oil,” the Canadian

Renewable Fuels Association’s fifth annual event

will continue to discuss the progress, challenges

and opportunities facing the Canadian biofuels

market. It will focus on policy and marketing, and

will be attended by a number of industry represen-

tatives from all levels of the ethanol and biodiesel

industries.

(519) 576-4500

www.canadianrenewablefuelssummit.com

Waste to EnergyDecember 10-11, 2008

Bremen, Germany

This event will focus on waste as a resource, bio-

fuels, economical plant operation and the reduc-

tion of greenhouse gas emissions. It includes a

trade show, which will showcase state-of-the art

machinery, engineering and services for the gener-

ation of power, heat and mobility from waste mate-

rials and renewable resources. More than 160

exhibitors and 2,000 delegates from around the

world are expected to attend.

+49-421-3505-347

www.wte-expo.com

National Ethanol ConferenceFebruary 23-25, 2009

San Antonio Convention Center

San Antonio, Texas

This event will cover the industry’s impact on the

U.S. economy, the environment, food prices and

the international market. A record of nearly 2,500

people attended in 2008. An agenda will be avail-

able as the event approaches.

(202) 289-3835

www.ethanolrfa.org


August 2008 Ethanol Producer Magazine

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