Ethanol April 2014

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www.EthanolProducer.co

APRIL 2014

INSIDE: MEETING THE DEMAND FOR HIGH-PURITY LIGNIN

Looking

UpAmericas First BigCellulosic Ethanol PlantsRise to CompletionPage 28

PlusKiORs Teachabl

Startup ExperiencePage 3

AndNew and Nove

Sugars ArrivePage 3


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We know were in a battle, but were ready for the figh

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4| Ethanol Producer Magazine| APRIL 2014

APRIL 2014 VOLUME20 ISSUE4CONTENTS

DEPARTMENTS

6 EDITOR'S NOTE Here We GoBy Tom Bryan

7 AD INDEX

10 THE WAY I SEE ITIt's Time to Focus on theElephant in the Corner

By Mike Bryan

11 EVENTS CALENDAR

12 VIEW FROM THE HILLMoving Toward a Cleanand Renewable Future

By Bob Dinneen

14 DRIVEThe Real Cost of Food

By Tom Buis

16 GRASSROOTS VOICE How RINs Really Work, and

Why Big Oil Hates Them

By Ron Lamberty

18 EUROPE CALLING EUs Struggle for E10

By Robert Vierhout

20 BUSINESS BRIEFS22 COMMODITIES

24 DISTILLED

44 BUSINESS MATTERS Legal Argument Challenges

EPA Authority to Change RFS By Alexander F. Logemann

46 MARKETPLACE

Ethanol Producer Magazine: (USPS No. 023-974) April 2014, Vol. 20, Issue 4. Ethanol Producer Magazineis published monthly by BBI International. Principal Ofce: 308 Second Ave. N., Suite 304, Grand

Forks, ND 58203. Periodicals Postage Paid at Grand Forks, North Dakota and additional mailing ofces. POSTMASTER: Send address changes to Ethanol Producer Magazine/Subscriptions, 308 Second Ave.

N., Suite 304, Grand Forks, North Dakota 58203.

CONSTRUCTIONEarly Risers

Americas rst big cellulosic ethanol plants

will start up in succession this year.

By Chris Hanson

PROCESSOptimization OutlaysKiOR isnt an ethanol producer, but its

successes and setbacks are informing.

By Ron Kotrba

INNOVATIONThe Sugar ProducersExisting ethanol producers are sizing up

some sweet next-generation feedstocks.

By Susanne Retka Schill

BIOREFININGLignins Big LeapThe market wants high-purity lignin.

Canadas Lignol still aims to make it.

By Tom Bryan

28 34

38 42

FEATURES

ON THE COVER

Welders work on

a distillers grainssilo at Poet-DSMsEmmetsburg, Iowa,cellulosic plant.

PHOTO: POET-DSM


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

Finally, its about to happen. Two of Americas rst b

cellulosic ethanol plantsthe kind weve all been waiting years tseeare now substantially nished and in startup. I dont want to jintheir commissioning by overstating their completion, but Abengoa Bioenergy and Poe

DSM Advanced Biofuelsand later, DuPontwill be producing big volumes of ethan

from corn residue this year.

Taking nothing away from the accomplishments of other cellulosic ethanol plan

now operating or being commissioned, the sheer size of these high-prole facilities

Iowa and Kansas simply merits excitement. As we report in Early Risers, on page 2

by the end of the second quarter, both Abengoa and Poet-DSM will have their plan

onlineproducing 25 million gallons apieceand America will be on its way to producin

50 million to 60 million gallons of cellulosic ethanol annually. DuPont is expected

follow, adding another 30 million gallons of capacity by years end.

History tells us it wont be simple. To date, there have only been a few large-sca

cellulosic biofuel plants commissioned worldwide, and each has faced steep operation

hurdles. The Beta Renewables cellulosic ethanol plant in Crescentino, Italy, and Ine

Bios Indian River BioEnergy Center, for example, continue to wade through optimizatio

challenges.

For context, our page-34 story, Optimization Outlays, examines the scale-u

learning curve thats being experienced by KiOR in Columbus, Miss. Its not ethanol th

KiOR makes, but rather cellulosic gasoline and diesel fuel from Southern Yellow Pine. W

report that the company is working to increase the operational output of its plant, anfrom the look of its fourth-quarter production numbers, making progress.

Examining other advanced biofuel aspirations, we prole two companies employin

widely different approaches to produce sugars for next-generation ethanol. The Sug

Producers, on page 38, explains that Sweetwater Energy and Proterro are pursuin

unrelated platforms that strive for similar ends: supplementing ethanol plant fermentatio

broths with sugar water. Sweetwater has offtake agreements in place with ethanol plan

and is much further along than Proterra, but both platforms are promising.

Finally, this month, we revisit the company that essentially introduced the U.

biofuels industry to the latent value of high-purity lignin. In Lignins Big Leap, on pa

42, we report that Canada-based Lignol Innovations Ltd. is still intent on scaling up ibiorening process and creating a market for its super-clean lignin. But like so many oth

biobased products, the real challenge is not selling the stuff, but making it.

.

EDITOR'S NOTE

Here We Go

Tom BryanPresident & Editor in [email protected]


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APRIL 2014| Ethanol Producer Magazine

TM

EDITORIALPresident & Editor in ChiefTom Bryan [email protected]

Vice President of Content & Executive EditorTim Portz [email protected]

Managing EditorHolly Jessen [email protected]

Senior EditiorSusanne Retka Schill [email protected]

News EditorErin Voegele [email protected]

Staff WriterChris Hanson [email protected]

Copy EditorJan Tellmann [email protected]

ARTArt Director

Jaci Satterlund [email protected]

Graphic DesignerRaquel Boushee [email protected]

PUBLISHINGChairman

Mike Bryan [email protected]

CEOJoe Bryan [email protected]

SALES

Vice President of OperationsMatthew Spoor [email protected]

Business Development DirectorHoward Brockhouse [email protected]

Senior Account ManagerChip Shereck [email protected]

Marketing Director

John Nelson [email protected]

Circulation Manager

Jessica Beaudry [email protected]

Trafc & Marketing CoordinatorMarla DeFoe [email protected]

Customer ServicePlease call 1-866-746-8385 or email us at [email protected]. Subscriptions to Ethanol Producer Magazineare free of charge to everyone with the exception of a shipping andhandling 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 madeout to BBI International) to: Ethanol Producer MagazineSubscriptions, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. You can also fax a subscription form to 701-746-5367. Back Issues, Reprintsand PermissionsSelect back issues are available for $3.95 each, plus shipping. Article reprints are also available for a fee. For more information, contact us at 866-746-8385 or [email protected] Producer Magazineprovides a specic topic delivered to a highly targeted audience. We are committed to editorial excellence and high-quality print production. To nd out more aboutEthanol Producer Magazineadvertising opportunities, please contact us at 866-746-8385 or [email protected]. Letters to the Editor We welcome letters to the editor. Send toEthanol ProducerMagazineLetters to the Editor, 308 2nd Ave. N., Suite 304, Grand Forks, ND 58203 or email to [email protected]. Please include your name, address and phone number. Letters may be edited forclarity and/or space.

COPYRIGHT 2014 by BBI InternationalPlease recycle this magazine and remove

inserts or samples before recycling

VOLUME20 ISSUE4

ADVERTISER INDEX

2014 International Fuel Ethanol Workshop & Expo 8-9

2014 National Advanced Biofuels Conference & Expo 45

2014 National Ethanol Conference 15

BetaTec Hop Products 19

Bilnger Water Technologies 21

Buckman 30

Cashco, Inc. 24

DuPont Industrial Biosciences 48

Enerkem 37

Fagen, Inc. 5

Fluid Quip Process Technologies, LLC 41

Greenbelt Resources Corporation 36

Growth Energy 2

ICM, Inc. 11

Iowa Economic Development Authority 47

Lallemand Biofuels & Distilled Spirits 3

Nalco, an Ecolab Company 33

Novozymes 17

POET-DSM Advanced Biofuels 13

Sulzer Pumps Solutions, Inc. 25

Tower Performance, Inc. 43

Vecoplan LLC 26

Vogelbusch USA, Inc. 31

Wabash Power Equipment Co. 32

West Salem Machinery Co. 20

WINBCO 27


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ANNIVERSAR

Y


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Debate rages over the renewable fuelstandard (RFS) that mandates the use ofbiofuels such as ethanol and biodiesel. At the

same time, we have had a market mandate for fossil fuels, inparticular gasoline, for more than 100 years because there was

no competition.

We have gone from sending ships out from Nantucket,

Mass., to kill whales for their oil to burning million-year-old

dead vegetation buried deep in the earth in the form of oil

and coal.

It doesnt seem like much progress has been made in terms

of energy, but in reality, its the natural progression of things.

The sun can generate more power than we could ever use and

creates the wind that can generate enormous energy when

harnessed. There are billions of tons of biomass energy that

go largely untapped and powerful oceans that create enoughenergy to stagger the imagination. Yet, we plod along, debating

whether we should mandate the use of renewable fuels like

ethanol and biodiesel as if that were really important in the

scheme of things.

The world is heating up, and anyone who thinks that

human activity is not at the root of that trend is simply ignoring

science. Its time to think big, to think on a global scale, to stop

focusing on the gnat on the table when there is an elephant

standing in the corner.

Ethanol is a transitional fuel, just like fossil fuels have

provided a transition from whale oil and wood. But rst, we

have to let go of the past and accept the transition to a new

era of renewable, cleaner energy. At some point in the future,

the ethanol industry may even have to accept the eventual

transition from corn-based ethanol to cellulosic ethanol and,

eventually, to an entirely new type of fuel altogether.Its natural to cling to the past, but its time to let go, open

our arms to the future and embrace the wonderful energy gifts

that nature has laid at our feetthe sun, the wind, the oceans,

biomass and geothermal energy. I imagine our great-great-

grandchildren will wonder why we continued to pollute their

earth with fossil fuels when there was so much clean energy

at our disposal. They will be amazed at our lack of energy

ingenuity, just as we are stunned that we actually killed whales

by the thousands for their oil.

In time, automobiles can and will be powered with

electricity generated by natures clean resources. Its time to get

past the debate about the RFS and accept the fact that ethanol

and biodiesel are just logical steps in the energy transition from

where we are today, to where we need to be tomorrow.

Thats the way I see it!

Its Time to Focus on the

Elephant in the CornerBy Mike Bryan

Author:Mike BryanChairman, BBI International

[email protected]

THE WAY I SEE IT


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International Fuel EthanolWorkshop & ExpoJune 9-12, 2014Indiana Convention CenterIndianapolis, IndianaNow in its 30th year, the FEW provides the globalethanol industry with cutting-edge content and

unparalleled networking opportunities in a dynamicbusiness-to-business environment. The FEW is thelargest, longest running ethanol conference in theworldand the only event powered by Ethanol ProducerMagazine.

866-746-8385 | www.fuelethanolworkshop.com

National Advanced BiofuelsConference & ExpoOctober 13-15, 2014Hyatt MinneapolisMinneapolis, MinnesotaProduced by BBI International, this event will feature theworld of advanced biofuels and biobased chemicals

technology scale-up, project nance, policy, nationalmarkets and morewith a core focus on the industrial,petroleum and agribusiness alliances dening thenational advanced biofuels industry. With a verticallyintegrated program and audience, this event is tailoredfor industry professionals engaged in producing,developing and deploying advanced biofuels, biobasedplatform chemicals, polymers and other renewablemolecules that have the potential to meet or exceed theperformance of petroleum-derived products.866-746-8385 | www.advancedbiofuelsconference.com

National Ethanol ConferenceFebruary 18-20, 2015Gaylord Texan Resort &Convention Center

Grapevine, TexasThe NEC provides attendees with timely information oncritical regulatory, marketing and policy issues facingthe ethanol industry. Experts will speak to the currentmarket situation, and address how we as an industry cancontinue to grow through innovation, new technologiesand feedstocks, and by developing more diverse andglobal markets.

International BiomassConference & ExpoApril 20-22, 2015Minneapolis Convention Center,Minneapolis, MinnesotaOrganized by BBI International and produced by

Biomass Magazine, this event brings current and futureproducers of bioenergy and biobased products togetherwith waste generators, energy crop growers, municipalleaders, utility executives, technology providers,equipment manufacturers, project developers, investorsand policy makers. Its a true one-stop shop the worldspremier educational and networking junction for allbiomass industries.866-746-8385 | www.biomassconference.com

EVENTS CALENDAR


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The year 1970 marked a distinct turning pointin the way Americans view the environment.

Wisconsin Sen. Gaylord Nelson, along with concerned

citizens across the country, began the Earth Day movementthat changed Americas priorities for the next 44 years. The

creation of Earth Day on April 22, 1970, began to shift the way

we think about environmental policies, forcing us to consider

the ecological consequences of fossil fuel production and the

clean energy potential of renewable fuels.

Flash forward to today. Its now 2014 and the push for

clean renewable fuels is in full swing. Ethanol has taken off

and is now blended into 97 percent of U.S. gasoline, effectively

replacing 476 million barrels of imported oil. A new study

conducted by Life Cycle Associates, and commissioned by

the Renewable Fuels Association, recently found that, As the

average carbon intensity of petroleum is gradually increasing,the carbon intensity of corn ethanol is declining.

The study delves deeper into the numbers, nding that

corn ethanol reduces greenhouse gas (GHG) emissions by

32 percent compared to gasoline, including indirect land use

change. Additionally, corn ethanol reduces GHG emissions

by 37 percent compared to tight oil from fracking and 40

percent compared to tar sands. Sen. Nelson would have been

proud of these environmental enhancing accomplishments.

But we wont stop there. Out of the different feedstocks that

produce ethanol, cellulosic is the least carbon intensive of all.

Therefore, as we expand and move toward a cleaner, greener

future, the commercial success of cellulosic ethanol is criticalto both political and market success for all renewables.

As we speak, Ineos Bio is producing ethanol out

of vegetative, yard and municipal solid waste. Abengoa

BioEnergy and Poet-DSM are expected to start cellulosic

ethanol production early this year. Additional facilities are

under construction including DuPont Cellulosic Ethanol andQuad County Corn Processors bolt-on facility.

While we see success both in reducing greenhouse gas

emissions and advancement into next generation biofuels, the

ethanol industry is under attack today. The U.S. EPA is pushing

to reduce the levels of ethanol blended into gasoline. The 2007

passage of the Energy Independence and Security Act led to

dramatic expansion of corn-based ethanol. That success laid

the foundation for the advancements in cellulosic and advanced

ethanol. We will continue ghting to keep the renewable fuel

standard at the levels Congress intended so there is stability

and growth in the ethanol market and increased investment in

next-generation biofuels.Sen. Nelson stated on the 25th anniversary of Earth Day,

"The opportunity for a gradual but complete break with our

destructive environmental history and a new beginning is at

hand. We can measure up to the challenge if we have the will

to do sothat is the only question. I am optimistic that this

generation will have the foresight and the will to begin the task

of forging a sustainable society."

Yes, Sen. Nelson, we are up to the challenge. Is the EPA?

Moving Toward a Clean

and Renewable FutureBy Bob Dinneen

Author: Bob DinneenPresident and CEO,

Renewable Fuels Association

202-289-3835

VIEW FROM THE HILL


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THANK YOU TO OUR SPONSORS!

FEBRUARY 17-19, 2014 JW MARRIOTT ORLANDO

ORLANDO, FLORIDA


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The Real Cost of FoodBy Tom Buis

Time and again, we have heard the claimsabout how ethanol is the cause of rising foodprices. The ethanol industry has been accused of driving upcosts for everything from chicken wings to tortillas. Some of thesetall tales have even gained traction in the press. Big Oil and some

food special interest groups continue to use misinformation to tryto convince consumers that they are paying higher prices for foodbecause of the renewable fuel standard (RFS) despite the facts.

Corn, the major feedstock for U.S. ethanol production, is onlya fraction of overall food and grain costs. For every $1 spent atthe grocery store, more than 85.5 cents goes to pay for secondaryoperations such as processing, packaging and marketing. The lessthan 15.5 cents remaining goes to farmers and, of that, about 3pennies to corn producers.

Digging deeper, it is obvious the falsehoods about the priceof food are even more off base. No. 2 yellow corn used in theethanol process is primarily used for livestock and poultry feed.

Ethanol production uses only the starch from the corn kernel and

for every bushel of corn used to produce ethanol, 33 percent goesback into the livestock feed chain in the form of a high-protein,competitively priced animal feed product. This coproduct replaces

corn and soybean acreage that would otherwise be devoted toanimal feed production. According to analysis by Air ImprovementResource Inc., only 17.5 percent of net corn acres are used toproduce ethanol, not the 40 percent claimed by the antiethanolcrowd.

So, if corn isnt driving the cost of food, as special interestgroups would like you to believe, what is? Well, the answer isquite simpleenergy costs. According to the World Bank,United Nations, USDA and countless other objective economic

studies, energy costs are the leading contributor to rising foodprices. Ethanol is actually reducing fuel costs for consumers andrenewable fuels can help constrain the energy costs associated withfood production, processing and merchandizing, while reducingour addiction to foreign oil.

The consumer price index for food since the RFS was

implemented in 2008 has very closely tracked the increases in theoverall index, growing at about 3 percent per year. In 2014, theindices are expected to continue to grow at similar rates. Consumergasoline prices, however, have increased by more than 25 percenton average per year over the same period. In effect, consumers aregetting hit twice by high fuel prices. First, they pay for the gasolinethey need for family transportation. Then, they pay higher pricesfor the food they purchase because of energy costs.

Food costs will only drop if Big Food is willing to passa portion of its high prots on to the consumers. Despite theiraccusations of unbearable food costs resulting from our renewableenergy policy, the National Restaurant Association acknowledgedits members have a long record of growth, and expect to reach$683.4 billion in sales in 2014 alone, nearly double their sales in2000.

The most damaging fact to Big Oils and Big Foods falseclaims is the price of corn itself. Though outside factors, such as

adverse weather, can cause price spikes from time to time, farmprices for corn have historically been near the cost of production

and the current year is no exception to this trend. Dont be fooled,

the oil and food industries that seek to limit consumer options at

the pump and abolish the renewable fuel standard are doing so toprotect their control over our food and energy markets, plain andsimple. When you peel back all the rhetoric and hype, this is simplya battle about market shareno more, no less, and Big Oil and BigFood will say and do anything to maintain their record prots andnear monopolistic control.

When the truth is laid out in an open and honest fashion,consumers should realize they dont have to choose between highquality, affordable food and renewable energy that is reducing their

gas bills.First-generation ethanol reduces our dependence on foreign

oil, revitalizes our rural communities, improves our environmentand employs nearly 400,000 workers while driving down fuel costsfor consumers. The next generation will make an even greaterimpact. Americas farm families will continue to feed us while

American workers in the U.S. ethanol industry produce the fuel to

power our cars.

Author:Tom BuisCEO, Growth Energy

[email protected]

DRIVE


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How RINs Really Work, and

Why Big Oil Hates ThemBy Ron Lamberty

One of the central characters in Big Oilsmisinformation campaign on the renewable fuelstandard (RFS) continues to be the RINshortfor renewable identication number. As most of youreading this know, a RIN is a 38-digit number that serves as a proofof purchase seal for oil companies to submit to the U.S. EPA asproof theyve complied with terms of the RFS. Unfortunately,

the Big Oil PR machine has so thoroughly demonized andmischaracterized RINs that even really smart people who shouldunderstand basic principles of economics have completely boughtin to the myth that increased RIN prices equal increased prices atthe pump. The truth is, RINs can only increase the price of fuel thatdoes not contain ethanol, because ethanol blends come complete

with their own RIN attachedno extra charge.In the real world, over the past 15 months, higher RIN prices

helped independent gas station and convenience store owners sellmore renewable fuel than theyve ever sold, well above Big Oilsimaginary 10 percent blend wallat pump prices well belowlower-octane nonblended fuels. Marketers who have sold E85 foryears priced more aggressively, knowing that the RINs they wouldreceive would more than make up for lower pump prices. More

new E85 fueling locations were added last year than in any of thepast ve years. Increased RIN prices helped expand the availabilityof renewable fuels as station owners did the math and realized thatan investment in equipment to sell more renewable fuels would

have a quick payback. The number of retailers offering E15 andhigher ethanol blends continues to expand this year, despite Big Oilcontract restrictions and fear of the mythical liability bogeyman,because independent station owners recognize the opportunities

offered by RINs and greater renewable fuel sales.The ability for independent fuel marketers to sell renewable

fuels at lower prices while improving prot margins by sellingRINs, has given independent fuel marketers something they havenever had before: an advantage over Big Oil.

If Joes Corner Convenience Store and Exxon/Mobil each get

8,000 gallons of E10, they each get 800 RINs. Exxon/Mobil hasto turn theirs in to EPA. Joe doesnt rene products that harm theenvironment, so he can sell his RINs. So far this year, Joes RINs

would be worth about 400 bucks. That means he could sell hisE10 for 5 cents less than the oil company or pass 3 cents along

to customers and make 2 cents more prot. Or he could put $400toward a pump upgrade to sell E15 or E85 or any other blend toget him more RINs. Either way, until Exxon/Mobil sells morerenewables than the RFS requires, it cant compete with Joe.

And thats why Big Oil hates RINs. This is not a positionfamiliar to them, and not one I imagine they see themselves inmuch longer.

A couple of years ago, West Virginia Sen. Jay Rockefellerbecame exasperated at the CEOs of the Big Five oil companiesin a Senate hearing, and told them they were Deeply, profoundlyout of touch, and deeply and profoundly committed to sharingnothing." Rockefeller said the Big Oil execs got that way becauseYou never lose. You've never lost. You always prevail. You alwaysprevail in the halls of Congress, and you do that for a whole varietyof reasons, because of your lobbyists, because of your friends,

because of all the places where you do business. And I don't reallyknow any other business that never loses," he said.

Big Oil knows they dont have to lose on RINs, either. Witha minimal commitment to E15 and/or E85, oil companies wouldhave all the RINs they need and extras for future years. RIN prices

would retreat to the levels of two years agothe last time BigOil bought more renewables than the RFS required. But Big Oil

wont do that, because even minimal E15 exposes 5 percent of amarket that Big Oil currently does not have to worry about winningor losing. It may be hubris to amend John D. Standard Oil

Rockefellers great-grandsons analysis of oil company behavior,but I would suggest that the main reason Big Oil doesnt lose is thatthey very rarely have to play the game.

Author:Ron Lamberty

Senior Vice President,American Coalition for Ethanol

[email protected]

GRASSROOTS VOICE


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EUs Struggle for E10By Robert Vierhout

We all know how much the American industryis struggling to get E15 onto the market. Thepowerful opposition of fossil fuel, automobile and food industriesis effectively blocking the rollout, scaremongering car owners that

E15 is bad for their engines. Even though E15 is probably the mosttested fuel in the U.S., this idea that E15 could harm has an effect.Only a shred of doubt seems to be enough to make consumersconcerned and sceptical.

For European ethanol producers, E15 is still a distant dream.For us, the struggle is to get from E5 to E10. The legislation to offerE10 has been in place since 2009 but its use, even ve years after thelegislation came into force, is still very disappointing.

There are only three countries in Europe where one can buyE10: France, Germany and Finland. Sweden, the Netherlands,Belgium, Lithuania, Bulgaria and the U.K. are considering E10in the future, but the accidents that occurred when E10 wasintroduced in Germany are not yet forgotten and explain the slow

pace of implementation elsewhere.The argument revolving around potential engine damage from

E10 was used by the German car and oil industries. It resonateswith the average motorist who gets scared that one day his car willstop if he lls up with E10. Not surprisingly, E10 sales had a poorstart in Germany when the fuel was introduced in early 2011. Butremarkably, its share is continuously increasing and now stands ataround 17 percent of gasoline salesnot entirely bad for a fuelthat was held with such suspicion. E10 is not only cheaper, but itperforms well too. Since its introduction, not a single car failure hasbeen reported. So much for the scaremongering.

In France, the E10 share is now close to 30 percent of gasolinesales. And, as in Germany, the growth is on the back of shrinking

gasoline consumption. France is topping Germany because the E10introduction was handled better by the government and car/fuelstakeholders.

In the U.K., the government postponed the introduction ofE10, referring to the problems in Germany (what problems?) andsaying indirect land use change policy should be resolved rst at theEU level.

Now a new witch hunt has started. A U.K. car magazinemeasured fuel consumption and emissions from cars running onE10. Tests on four cars found that compared to 100 percent fossilgasoline, the average fuel consumption was 7.7 percent higher

higher with E10, and as a consequence, increased tailpipe emissions.This contrasts markedly with Finnish research from 2011 thatfound little difference between E5 and E10 consumption. Somebasic errors must have been committed during the U.K. tests; fuelconsumption cannot rise that much when using E10 as suggestedby this research. The higher tailpipe emissions are understandable,but do not reect the true lifecycle emissions of the two fuels. Onlyif the emissions of biofuels are measured on a well-to-wheel basiscan we have accurate data on the greenhouse gas emissions ofbiofuels compared to fossil fuels.

The writers of the U.K. magazine article gave the nal blowto E10 by using the old argument: "The new E10 fuel will costU.K. motorists more." But the article didn't indicate in any wayhow much that additional cost would be. The messages they gave

were clear: More fuel consumption, more emissions and moreexpensive. Let's forget about E10.

Why did the writers not bother looking at other EU countriesthat have introduced E10? If they had done so, they would see thatE10 is cheaper, there are no car damages reported and a Finnishstudy concluded E10 fuel consumption is just 1.5 percent highercompared to E5. Also, several very technical studies demonstrateethanols higher octane delivers benets to engine performance,improves the combustion process and increases fuel efciency.

The negative E10 story, however, ts well with the many othersupposed negative impacts of biofuels that appear in the media,of which most, if not all, have been proven to be false. Just likethe myths that biofuels cause food price ination, massive land use

effects and land grabbingthe U.K. E10-study is bogus, too.

Author:Robert VierhoutSecretary-general, ePURE

[email protected]

EUROPE CALLING


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Put BetaTecnatural hop extracts to work in your fermentation

process to replace antibiotics and enhance yeast propagation.

IsoStabis the natural way to effectively control gram-positive

bacteria while eliminating antibiotics and harsh chemicals. Plus,

antibiotic-free DDGS adds value to your co-products. VitaHop

Silver yeast nutrient enhances yeast performance and vitality,

inducing faster fermentations and larger yields. Combined with

BetaTecfermentation expertise and training, these technologies

will significantly increase your plants efficiency.

BetaTecthe natural hop to higher profits. For more information

specific to fuel ethanol producers, visit www.bthp.info.

www.betatechopproducts.com


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The board of directors of the Neb-raska Corn Board has selected KellyBrunkhorst to serve as the organiza-tions new executive director, effective July

30. He will replace Don Hutchens, whowill retire after holding the position for

27 years. Brunkhorst currently serves as

the director of research for the Nebraska

Corn Board. He began working for the or-

ganization in 2004 after serving as the vice

president of operations and education for

the Nebraska Grain & Feed Association.

During his employment with the Nebraska

Corn Board, Brunkhorst's work included

research, grant writing, seed industry and

rst purchaser relations, and leadership

on issues related to transportation, indus-

trial uses for corn, domestic and interna-

tional markets. He has also represented

the board on national research, production

and stewardship committees, in addition tobeing chosen to participate in two national

strategic planning initiatives.

VecoplanI n t e g r a t e dControls hasadded HenryGilliland to itselectrical engi-

neering team.Gilliland gradu-

ated from North

Carolina State

University in

2012 and brings three years of practical

experience to his new position. He worked

on a co-op basis at Highland Industries

while earning his degree and later worked

as a full-time engineer with the company.

His responsibilities include working with

senior engineers to coordinate the design

and development of individual machine

control panels and turnkey integrated co

trol systems for industrial processing lin

and manufacturing plants.

A v e n t i nRenewable Enegy Inc. has namPam Cookseypurchasing manag

of its 165 MM

wet mill and d

mill ethanol plan

in Pekin, Ill. Pri

to joining AventinCooksey spent 2

years with Tate & Lyle in Lafayette, In

Her responsibilities included purchasin

capital expenditures equipment and neg

tiating contracts and contractor labor rat

on a national and global level. She al

spent 13 years at Archer Daniels Midlan

Co., where she worked in purchasing f

the corn sweetener division.

BUSINESS BRIEFS People, Partnerships & Deals

Cooksey

Gilliland

Brunkhorst Hutchens


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APRIL 2014| Ethanol Producer Magazine|

L a l l e m a n dBiofuels & Dis-tilled Spirits, a

global provider offermentation ingre-

dients to the fuel

and beverage alco-

hol industries, has

appointed AngusBallard as its newgeneral manager.

Ballard joined Lallemand in 2002 as direc-

tor of operations for the North America

Bakers Yeast division and then transi-

tioned into the role of corporate director

of procurement and supply chain for Lal-lemand Inc. in 2007. He has 18 years of

experience in the yeast industry and has

most recently been responsible for Lalle-

mands Global Dry Yeast export business.

DuPont has joined the AdvancedEthanol Council. The companys com-mercial-scale cellulosic ethanol facility is

currently under construction in Nevada,

Iowa. Once complete, the 33 MMgy facil-

ity will utilize a fully integrated end-to-end

production system that will be available

to license globally. DuPont also operates

a demonstration facility in Vonore, Tenn.,that has conrmed the economics of its

biomass procurement strategy and demon-

strated the value proposition of its tech-

nology.

Garner Industries, manufacturer ofBinMaster inventory management systems

and bin level indicators, has promoted

Jenny Christensen to vice president of

marketing for both the Garner and Bin-Master divisions. She is responsible for

driving the companys brand strategy and

revenue growth through new products and

the use of innovative marketing platforms

to expand the companys diverse customer

base. Christensen joined Garner in 2008 as

director of marketing.

Rail Safe Training Inc. has hired

John Licht has market director. The

organization provides training for a varie

of professions, including those involved

transload operations, unit train operation

and agricultural rail terminals. Lichts exprience includes transload terminal site d

velopment, industrial and military railw

training and safety programs.

The NCERat Southern Ilinois UniversiEdwardsville hexpanded its r

search team with thaddition of AruAthmanathan , postdoctoral fello

specializing in cell

losic and advanc

biofuels research. He has experience

the characterization and fermentation

many cellulosic and advanced feedstock

including corn stover and sweet sorghu

bagasse.

Ballard

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22/48


Feb. 10End users of natural gas enjoy a range of pricing op-tions: buy gas in the spot index, on a monthly index or at a xedprice for a variety of terms ranging from a single day to multipleyears. Budget-oriented consumers tend to favor longer-term xedprice purchases to avoid volatility in pricing and more easily forecastcosts. The ethanol industry leans toward shorter-term monthly indexor spot priced purchases, owing to the margin-driven nature of thebusiness and the uncertainty of future markets.

An examination of historical pricing shows a slight pricing ad-vantage for spot transactions. Looking at the Ventura Hub in Iowafrom January 2008 through November 2013, spot prices were dis-counted an average of 5 cents to the corresponding monthly index.Although spot prices were as high as 89 cents over, they also aver-aged as much as $1.67 below. This is a function of a number ofdrivers, including a declining price trend, an upward-sloping forwardcurve and a stronger relationship to the futures market for monthlyindexes than the spot. Thus, purchase portfolios have been heavily

weighted toward the spot market.The past three months ipped the historical script. December

2013 spot pricing at Ventura averaged 87 cents above the monthly

index, and when the dust settled after January, the spot averaged$3.07 premium to the monthly. Including the newest data in the agregate calculation erased any meaningful pricing advantage for thspot market. Consumers focused on short-term pricing instrumenmight want to revisit their thinking on spot versus monthly indepricing, potentially splitting purchases between the two.

Natural Gas Report

Corn Report

Feb. 10The corn market has been aggressive toward the up-side, giving corn producers higher prices in February. Through thefall, managed money pushed values lower, but a lower-than-antici-pated carryout report in January allowed the market to nd a bot-tom. Managed money pushed values higher on short liquidation, andthe bounce was met with producer selling. Old crop values reachedthe upper $4.40s as producers pondered new crop sales. The rstglimpse of planting intentions comes March 31. Until then, the mar-

ket assumes demand is increasing on corn exports. The upside maybe limited due to GMO issues in China. Currently, the USDA proj-ects 1.6 billion bushels of corn to be exported, up from 869 milliona year ago. Feed demand is projected at 5.3 billion bushels, up 965million. This gure could be adjusted in the coming months as grainanimal consuming units have declined in recent years, if the USDAcan conrm this with the March stocks report. Subtle declines in feeddemand could very well be offset by increases in exports.

Globally, many analysts lowered Southern Hemisphere corn pro-jections on less-than-optimal growing conditions, especially later inthe production cycle. World ending stocks declined in February due

to lower carryout in the U.S. and a reduction of Argentina corn prduction. The market that no one pays close attention to is FSU-1(Ukraine), where production and exports increased. Despite buyinin demand at lower values, corns upside is limited due to a near 1billion bushel carryout.

Advantage to spot pricing natural gas disappears by Ben Straus

Lower corn values stimulate feed, export demand by Jason Sagebiel

COMMODITIES Prices & Market Analyses


23/48


DDGS Report

Ethanol Report

Feb. 10Continued reductions in

gasoline supplies through early 2014 have

created increased buyer interest in both the

RBOB gasoline and ethanol markets. Total

gasoline stocks fell steadily for each of the

rst ve weeks of the year, according to

Energy Information Administration data.

With gasoline stocks well below the level a

year ago and the ve-year average, traders

are expecting additional price strength to

develop ahead of the traditional spring and

summer driving seasons. Gasoline prices

have continued to show strength in not

only futures markets, but also in the spot

and rack markets, as buyers try to gain ac-

cess to additional product, while focusing

on growing demand.

Ethanol futures have beneted from

the tightness of gasoline supplies, but ris-

ing corn prices have weighed on produc-

tion levels through early February. This is

creating some additional price support in

ethanol futures. Front-month markets rose

15 cents per gallon above the previous

months levels as traders tried to keep up

with expected demand growth as well as

increased production costs due to higher

corn prices.

Supplies of both gasoline and etha-

nol are expected to tighten even further

through the upcoming months as demand

increases. This is likely to cause even fur-

ther support in nearby energy prices.

Feb. 10By mid-February, the mar-

ket had rebounded even higher from the

early January lows. The talk of Chinese

rejections has abated, and business is close

to being back to normal, albeit with an un-

derlying fear of when, or if, the other shoe

will drop in China. The hope is that ap-

proval is imminent for the MIR 162 corn

trait that caused the rejection issue.

Domestic buyers took advantage ofJanuary price drop, particularly in the West

Coast markets. With positive cash ows

for the rst half of 2014, dairies there

were locking in feed costs. Nearer to the

plants, buyers are still operating hand to

mouth. With railcars for DDGS moving

very slowly, local truckloads have been

trading at a steep discountup to $35 per

ton below what a loaded railcar garners.

Also, we have been hearing about plants

slowing or shutting down due to ethanol

cars not returning and tightness in natural

gas supplies. Over all, the winter weather is

not helping at all.

DDGS pricing will continue to be

inuenced by what China does, or does

not do, with its import pace and regula-

tory actions. South American crop condi-tions and early season planting prospects

in the U.S. will also have an impact, mak-

ing DDGS prices tough to predict. It does

look as though plants will have opportuni-

ties to lock in most of their year at more

than 120 percent of the value of local

corn prices.

Regional Ethanol Prices ($/gallon)Front Month Futures (AC) $1.957

Region Spot Rack

West Coast 2.250 2.850

Midwest 1.930 2.300

East Coast 2.330 2.574

SOURCE: DT

Regional Gasoline Prices ($/gallon)Front Month Futures Price (RBOB) $2.748

Region Spot Rack

West Coast 2.901 2.833

Midwest 2.689 2.626

East Coast 2.737 2.837

SOURCE: DT

DDGS Prices ($/ton)

Location Apr 2014 Mar 2014 Apr 2013

Minnesota 180 185 260

Chicago 225 214 285

Buffalo, N.Y. 215 220 267

Central Calif. 280 260 315

Central Fla. 262 252 309

SOURCE: CHS In

Corn Futures Prices(May Futures, $/bushel)

Date High Low Close

Feb 7, 2014 4.50 1/2 4.45 3/4 4.50

Jan 7, 2014 4.38 1/4 4.33 4.33 3/4

Feb 7, 2013 7.23 1/2 7.11 1/4 7.12

SOURCE: FCSton

Cash Sorghum ($/bushel)

Location Feb 7,

2014

Jan 16,

2014

Feb 22,

2013

Superior, Neb. 4.46 4.20 6.68

Beatrice, Neb. 4.14 3.98 6.58

Sublette, Kan. 4.30 4.14 6.72

Salina, Kan. 4.44 4.37 6.65

Triangle, Texas 4.37 4.20 6.63

Gulf, Texas 5.57 5.33 7.13

SOURCE: Sorghum Synergie

Natural Gas Prices ($/MMBtu)

Location Dec 31,

2013

Feb 12,

2014

Feb 13,

2013

NYMEX 4.23 4.82 3.23

NNG Ventura 4.86 8.20 3.29

CA Citygate 4.65 6.42 3.59

SOURCE: U.S. Energy Services In

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

Per Day Month End Stocks

Nov 2013 931 27,915 15,572

Oct 2013 903 27,995 15,771

Nov 2012 825 24,744 19,992

SOURCE: U.S. Energy Information Administratio

Logistics, hard winter conditions slow DDGSmovement, markets remain strong by Sean Broderick

Tighter gasoline supplies liftethanol futures by Rick Kment


24/48


DISTILLED Ethanol News & Trends

The U.S. EPA has announced it will re-consider the cellulosic volume requirements ofthe 2013 renewable fuel standard (RFS). Last

August, the agency nalized the 2013 RFS rule-making, setting the cellulosic standard at 6 mil-lion gallons. The industry generated less than 1million cellulosic renewable identication num-bers (RINs) last year, however.

The American Petroleum Institute andAmerican Fuel & Petrochemical Manufacturersled respective petitions with the EPA in Octo-ber, asking that the 2013 cellulosic standard berevised.

In response to the petitions, EPA Admiistrator Gina McCarthy issued letters to the Aand AFPM in January conrming that the ptitions demonstrate that the statutory critefor reconsideration are satised. Specicalthe petitions included information on reduc2013 production estimates made by a celluloproducer.

McCarthy also indicated that the EPA winitiate a notice and comment rulemaking to rconsider the cellulosic portion of the nal 20RFS rule.

EPA to reconsider 2013 RFS cellulosic volumes

Cellulosic ethanol is undergoing eettesting in Germany. Clariant, Haltermann

and Mercedes-Benz recently announced a12-month project to test an E20 fuel madewith cellulosic ethanol produced using Clari-ants sunliquid process at the companys1,000-ton-per-year demonstration plant inStraubing, Germany.

Haltermann, a German-based oil rener,will blend the resulting ethanol with selectcomponents at its plant in Hamburg. Accord-ing to Clariant, the specications of the result-ing fuel reect potential European E20 fuelquality. A gas station on the Mercedes-Benzsites in Stuttgart-Untertrkheim will dispensethe E20 blend to test eet vehicles.

The eet test will demonstrate that thefuel is ready for market and technically com-patible within series vehicles at a blending rateof 20 percent with super gasoline. This showsthat second-generation biofuels based on agri-cultural residues are now technologically readyand available, not only in production but inapplication as well, said Andre Koltermann,head of group biotechnology at Clariant.

Cellulosic E20 eet testedat demo plant in Germany

Statutory 2013

RFS CellulosicRequirement

1 billion

Final 2013RFS CellulosicRequirement

6 million

Cellulosic RINs Generatedin 2013

D3cellulosic biofuel

D7cellulosic diesel

422,740 395,777

Cellulosic Volumes 2013 Cellulosic Fuel Production(in gallons)

D3cellulosic biofuel

D7cellulosic diesel

281,819 232,808

SOURCE: U.S. EPA

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Iowa RFA: Ethanol benefts states economy

The Iowa Renewable Fuels Asso-ciation has released the results of an eco-nomic impact study conducted by JohnUrbanchuk of AVF Economics. The re-port highlights the impact of the renew-able fuels industry on Iowas economy.

The analysis shows that the overallrenewable fuels industry, including etha-nol and biodiesel producers, generatednearly $5.6 billion in economic activityin Iowa last year, which equates to ap-proximately 4 percent of the states gross

domestic product (GDP). The renewabfuels industry also generated about $4billion in household income and suported more than 62,000 jobs in Iowa volume equivalent to approximatelypercent of total state employment.

The states ethanol industry alogenerated $10.62 billion in purchase$5.04 billion in GDP, and $3.74 billioin household earnings. It also support55,161 jobs.

DISTILLE

The Economic Engine of Ethanol in Iowa

Direct

Indirect

Induced

Total

GDP (in millions)

$221.80

$665.00

$257.70

$1,144.50

Jobs

2,253

6,885

4,022

13,161

Income (in millions)

$204.50

$333.20

$143.20

$680.80

SOURCE: ABF ECONOMICS

Mapco Express Inc., a convenience store

operator based in Tennessee, has announced

it will begin offering E15 to customers at new

build and select megastore locations beginning

this year.

Based on the performance of this prod-

uct, our goal will be to add the E15 fuel option

to our megastores as we continue to increase

the number of these locations in the future.

Assuming a successful program, our goal is to

have 100 stores offering E15, said Dan Gor-

don, vice president of business development at

Mapco.

Mapco operates 362 convenience stores

under a variety of brand names. The companyis one of the largest company-operated conve-

nience store chains in the U.S. and a leading C-

store operator in the Southeast. More than half

of its locations are in Tennessee, the remain-

ing are located in Alabama, Georgia, Arkansas,

Mississippi, Kentucky and Virginia.

Southeastern fuel retailerto offer E15 at C-stores


26/48


DISTILLED

President Obama signed the 2014 FarmBill into law during a Feb. 7 ceremony at

Michigan State University. During his speech,Obama also announced the launch of a newMade in Rural America export and investment

initiative.

Despite its name, the Farm Bill is not justabout helping farmers, Obama said during hisspeech at MSU. Secretary Vilsack calls it ajobs bill; an innovation bill; an infrastructurebill; a research bill; a conservation billits likea Swiss army knife, he continued, noting thelegislation helps create jobs and provides aneconomic lift for rural communities.

The new Made in Rural America initiative

is expected to further benet the U.S. agricul-ture community and related businesses. The

program is charged with bringing togetherfederal resources to help rural businesses and

leaders take advantage of new investmentopportunities and access new customers and

markets abroad.

Obama signs farm bill,launches new initiative

SOURCE: U.S. GRAINS COUNCIL

Experts discuss DDGS export marketopportunities, challenges

Experts in the distillers grains industrydiscussed current market opportunities andchallenges during a recent webinar hostedbyEthanol Producer Magazine.

Distillers grains exports approached anew record as 2013 came to a close, and the

big story was China, which now tops the listof importers. While distillers grains exportmarkets are strong, buyers in many of thesemarkets are imposing new requirementson U.S. distillers dried grains with solubles(DDGS). In addition, the continued diversi-cation of coproduct streams at U.S. etha-

nol plants presents new challenges with rgard to changing DDGS compositions.

Gerald Shurson, a professor in tUniversity of Minnesotas Department o

Animal Sciences, opened the event with

discussion of feeding trials, consumer nee

and changing DDGS oil content. SeBroderick, DDGS marketing manager CHS Inc., spoke about supply and demanwhile Randy Ives, director of ethanol sevices at Gavilon, closed the webinar wia discussion of the Chinese export markand upcoming regulatory changes.

Top DDGS Destinations

Jan.-Nov. 2012

Jan.-Nov. 2013

China Mexico Canada Japan Vietnam

1,967,445 1,387,950 542,071 354,249 362,033

3,936,826 1,197,704 449,470 342,618 334,414

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27/48


EPA reveals 2013 RIN dataU.S EPA data indicates nearly 16.62 bil-

lion renewable identication numbers (RINs)were generated last year, including more than13.31 billion D6 renewable fuels RINs. Most

D6 RINs were generated for ethanol, with aminority generated for biodiesel, nonester re-newable diesel and butanol.

Approximately 442,740 D3 cellulosicbiofuel and 387,445 D7 cellulosic diesel RINs

were generated in 2013, bringing the total forcellulosic RINs to about 830,185 RINs.

More than 550.98 million D5 advancbiofuel RINs were generated last year, incluing 457.2 million for ethanol. About 2.72 blion D4 biomass-based diesel RINs were al

generated last year.EPA data shows that nearly 15.39 billio

RINs were generated by domestic producewith 745.24 million generated by importeand 483.24 million generated by foreign enties.

Iogen Corp. has developed and patenteda new method to make drop-in cellulosic bio-fuels from biogas using existing renery assetsand production operations. The company es-timates enough rening capacity is already inplace to produce 5 to 6 billion gallons of thefuel.

The technology involves processing bio-gas to make renewable hydrogen, which is thenincorporated into nished transportation fuelsin selected renery hydrogenating units.

The company developed the biogas-to-

cellulosic fuels approach as it examined send-ing the tail end of fermentations to an anaero-bic digester as a way to increase the efciencyof its cellulosic ethanol process.

Iogen plans to implement the process atlarge-scale cellulosic ethanol plants it plans todevelop in Kansas and North Dakota.

Iogen announcesbiogas-to-renewablehydrogen process

DISTILLE

SOURCE: EPA

2013 RIN Roundup

D3 cellulosic biofuel

D4 biomass-based diesel

D5 advanced biofuel

D6 renewable fuel

D7 cellulosic diesel

422,740

2,724,275,779

556,267,369

13,335,259,120

395,777


28/48


CONSTRUCTION

LAST LIFTS:Abengoa's cellulosic ethanol plant in Hugoton, Kan., began commissioning in February. Getting the job done,more than 1,000 construction workers were on site over the last six months of 2013.PHOTO: ABENGOA BIOENERGY CORP.


29/48


30/48

CONSTRUCTION

Beginning last summer, Abengoa

drove especially hard to complete the build.

Starting in about July, we had the big -

nal push to get construction completed,

Standlee said, adding that more than 1,000

construction workers were on site from July

through December. He said it was awe-in-spiring to attend morning safety meetings

and see the entire workforce assembled,

donned in hardhats and reective vests.

Thats a pretty massive undertaking.

With primary construction complete,

contractors were busy setting minor com-

ponents, nishing up the electrical systems

andin the feedstock pretreatment and

yeast propagation areascompleting panel

instrumentation and controls, Standlee said.

The plant began moving through its

second phase, initiating the whole startup

scenario, at the end of January. While going

through its "ramp-up and debugging" pe-

riod at press time, Abengoa was preparing

to begin initial production runs, according

to Standlee.

For the most part, all major construc-

tion is complete, Standlee said. The next

step for the facility is the commissioning

process, which is expected to take some

time. I dont think were going to nish our

commissioning for a while, he added. It

could very well take a period of months.

He expected the process would start in the

rst quarter of the year, probably in Febru-ary.

Another Q2 StartMore than 500 miles northeast of the

Abengoa facility, Poet-DSMs Project Lib-

erty plant is standing tall amongst the prai-

rie and farmland in Emmetsburg, Iowa.

The 25 MMgy plant broke ground in early

2012 and is expected to be the second com-

mercial-scale cellulosic plant to complete its

construction and commissioning this year.

Sitting adjacent to Poets corn ethanol plant,

the facility has taken shape over the past

two years and is now beginning to tower

over the Emmetsburg skyline.

Since last year, the site has gone from

having a few tanks and construction activi-

ties to resembling of a cellulosic plant, ex-

plained Steve Hartig, general manager of

licensing at Poet-DSM. When youre

Emmetsburg, it kind of looms in the sk

line, he said. Photographs of the site co

rmed recent progress. Fermentation an

enzymatic hydrolysis tanks were in plac

and construction was being completed o

the biomass receiving area where feedstopretreatment occurs. Other componen

unique to the biorenery were also in pla

in late January, including an anaerobic d

gester that handles the liquid waste strea

from the ethanol process.

As each project is nished, personn

begin the commissioning process on th

unit, Hartig told EPM. The pretreatme

machinery was being completed and unde

going some commissioning, such as powe

ing up and functionality testing. The ma

hydrolysis and fermentation tanks were, f

the most part, mechanically complete an

had been lled with water to test the pum

and scan for leaks.

As February approached, crews we

focusing on the substantial completion

the plants front-end pretreatment equi

ment, along with its solid fuel boiler an

Commitment makes the best chem

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31/48

STANDING TALL: The multistory steel framework of the Poet-DSM cellulosic ethanol plant rises high above thskyline of Emmetsburg, Iowa.

CONSTRUCTIO

the anaerobic digester. The boiler and di-

gester will utilize the liquid and solid waste

streams to generate steam for both the cel-

lulosic ethanol plant and the neighboring

corn ethanol plant.

Basically, the plant will be mechani-

cally complete at about the end of [the rst

quarter of 2014], and well be starting up in

Q2, Hartig said. As we nish a piece of

the plant, we start doing the testing and the

work on that piece. So its kind of a rolling

process.

Nose to GrindstoneMore than a two-hour drive southeast

from Emmetsburg, the DuPont cellulosic

ethanol plant lays claim to the frosty, win-

ter soil near Nevada, Iowa. The DuPont

facility broke ground on a chilly November

morning in 2012, and has moved throughvarious construction stages since then. The

plant, which is expected to be completed by

midyear, will utilize 590,000 bales of corn

stover each year to produce 30 MMgy of

cellulosic ethanol.

Rather than sharing frequent updates

on its construction progress, DuPont has

played its cards relatively close to the vest,

concentrating more on internal benchmarks

than external communications. I think the

team is almost singly focused on getting this

plant up and running in 2014 and meetingthat milestone, said Wendy Rose, global

public affairs leader at DuPont. The com-

pany is working with its teamsFagen and

KBRto start producing cellulosic ethanol

once the last pieces of the project are n-

ished, she added. Were pretty happy that

construction is continuing on track, and

were going to deliver this in 2014.

As construction progresses, it cer-

tainly catches the attention of those pass-

ing though. Folks that are in the area, theydrive by and say, Wow! This is incredible,

because it is an enormous undertaking, and

we have state-of-the-art technology goin

into this plant, said Rosen.

The plant is still expected to nish co

struction in the fourth quarter of this ye

Rosen told EPM. This team is incredib

focused on hitting these marks because

of that plays right into our capital expe

ditures here, she said. We did a groun

breaking when we said we were going to d

it, and well see an opening when we said wwould do it in 2014.


32/48


CONSTRUCTION

Farmer FollowingsOne of the most daunting tasks in

creating a cellulosic facility might not be

so much the technology and equipment

challenges, but the procurement of feed-

stock. Weve built numerous ethanol

plants of our own and we know what the

construction process is like, Standlee said.

We know our technology works, were

comfortable with our ability to handle the

product once its there, but one of the big-

gest challenges is the massive amounts of

feedstocks that you have to deal with.

For the past four years, Abengoa h

experts in Hugoton, negotiating and vis

ing with growers to develop a mutual u

derstanding about how to be good stew

ards of the land and avoid overharvesticorn stover. We certainly dont want

spend hundreds of millions of dolla

building a facility and shoot ourselves

the foot by having a farmer nd out he

taking too much stover off his land an

didnt leave enough to stop erosion an

(needed to) leave some of the nitrog

and nutrients back in the soil, Standl

said.

PHOTO: POET-DSM ADVANCED BIOFUELS

PHOTO: ABENGOA BIOENERGY CORP.

SHAPING UP: (top photo) Poet-DSM has secured corn residue from 200 farmers near Emmetsburg, Iow(lower photo) Abengoa needs less than 15 percent of the corn residue available within about 50 milesHugoton, Kan. Both companies secured about 100,000 tons of biomass in the 2013-14 harvest.

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CONSTRUCTIO

In addition to the summer construc-

tion push, Abengoas other milestone was

being able to harvest more than 100,000

tons of stover by the end of November.As you imagine, that is a massive amount

of feedstock that required a lot of coordi-

nation to get it off the land and into some

sort of storage. Were very proud of that

milestone, Standlee said. Abengoas plant

is able to operate on less than 15 percent

of the available corn stover within a 50-mile

radius, which allows the facility to exist in a

noncaptive market situation, he added.

For Poet-DSM and DuPont, feedstock

procurement has also been a massive, mul-

tiyear undertaking. A group called Poet Bio-

mass has worked for Poet-DSMs outreach

the past seven years to develop the stover

collection procedures and has been step-

ping up its efforts each year to collect ad-

ditional biomass, Hartig said. This year, we

have about 200 farmers under contract to

supply biomass and weve harvested about

100,000 tons of biomass, he explainied.

Thats enough to get us really up and run-

ning through the next harvest. Its going

well, but its taken a lot of time because its

a new crop.

Poet-DSM has established multiplelanes of outreach to local farmers in or-

der to secure its corn stover. In addition

to brochures and informational videos for

farmers dropping off corn at the neighbor-

ing ethanol plant, the company has worked

with university researchers to study corn

stover harvesting and manages booths at

local county fairs to meet growers and local

residents. Its a lot of different outreach,

teaching and talking, Hartig said.

Leveraging its existing grower relation-

ships through Pioneer, DuPont also had asuccessful year securing corn stover for its

cellulosic ethanol plant, with more than

200 farmers participating in its procure-

ment process. This is our fourth harvest

and we have had incredible responses year

over year, Rosen said. The best thing I

can say about it is that we practically have

a 100 percent return rate on folks that have

participated the year before.

DuPont is on track to have enough

feedstock supply once the plant opens.When we license this technology, a lot

of potential licensees and customers will

feel really solid about our expertise in the

supply chain piece, Rosen said. That is a

very complicated piece in this whole puzzle,

which is guring how to build a sustainable

supply chain to fuel a plant that is going

be producing 30 million gallons of fuel p

year. Its a big deal.

Author:Chris HansStaff Writer, Ethanol Producer Magaz

[email protected]

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In a world where Big Oil thinks of cellulosicbiofuel as imaginary pixie dust, KiOR Inc.is among the few companies proving early,and convincingly, that the fuel can be made atcommercial scale.

The Pasadena, Texas-based company produces commercial

volumes of not ethanol but cellulosic gasoline and diesel fuel from

Southern Yellow Pine at its 15 MMgy renery in Columbus, Miss.

Its the rst of several plants the company hopes to replicate withits copy exact strategy.

Before construction was complete on the Columbus facility

in 2012, KiOR signed offtake agreements with Hunt Rening,

Catchlight Energya joint venture between Chevron Corp. and

Weyerhaeuser Co.and FedEx Corporate Services. KiOR and

Catchlight Energy also have a feedstock supply agreement for the

facility. The engineering, procurement and construction rm in

Columbus was KBR.

While KiORs drop-in fuels are not directly subject to the

highly contentious ethanol blend-wall debate, the company does

nd kinship with corn ethanol producers and cellulosic project

developers in its stance against the U.S. EPAs 2014 renewablevolume obligation (RVO) proposal under the federal renewable

fuel standard (RFS). The EPAs 2014 RVO proposal is one of

the biggest obstacles our industry currently faces when it comes

to expansion and development, says Fred Cannon, KiORs

president and CEO. The EPAs current proposal has the potential

to signicantly hamper the industrys ability to obtain affordable

capital to grow and compete with conventional fuels. A stable

regulatory policy is of vital importance for the continued growth

and advancement of the renewable fuels industry.

Its not just the investment-blocking regulatory uncertain

that impedes the progress of KiOR, not to mention every oth

advanced biofuel project under development. Technical obstacl

encountered on the commercial scale-up learning curve abound well. This story is all too familiar to cellulosic ethanol producer

whose commercial realization perpetually seems just a few yea

away. But these kinds of hindrances can be expected when worki

to revolutionize the worlds energy production paradigm.

On a recent operational update conference call, Canno

spoke about his companys plan to increase the performance anoperational output of the Columbus facility. He opened the c

with an overview of KiORs 2013 biofuel production. During th

fourth quarter of 2013, Cannon said KiOR produced 385,0

gallons of fuel, 41 percent of which was cellulosic gasolin

37 percent cellulosic diesel, and 22 percent fuel oil. Total fu

production for 2013 was 597,000 gallonsfar less than the plan

15 MMgy nameplate capacity. To boost performance, the compan

plans to complete a series of optimization projects and upgrade

KiOR will also continue its research and development effor

aimed at increasing yields while improving operational efcien

and operational economics.

KiORs technology works similarly to an oil renery, whi

involves catalytic cracking and hydrotreating, but instead of usin

petroleum crude as feedstock, it uses woody biomass. KiOR

biomass uid catalytic cracking unit (BFCC) is similar in conce

to the uid catalytic cracking (FCC) unit in a renery, but has be

modied to accommodate a solid feed rather than a liquid feed

Cannon tells EPM. KiOR has a proprietary catalyst with physic

properties similar to a typical FCC catalyst to promote the desire

reactions needed to convert the solid biomass into a liquid fuel

According to Cannon, the biomass contacts a hot catalyst, vaporiz

and forms coke and both noncondensable and condensable gase

PROCES

MOVING PRODUCT: In the fourth quarter of last year, KiOR moved 385,000 gallons of product, including cellulosic gasoline, diesel and fuel oil. This was more than half production for all of 2013.

PHOTO: KIOR INC.


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BIOMASS TRANSFER: When operating at nameplate capacity, the Columbus facility should be able to proce

500 bone-dry tons a day of Southern Yellow Pine.

The coke stays on the catalyst and is

burned off in the regenerator to provideheat for the process, he explains. The

noncondensable gases are burned in a

waste heat boiler and turn a steam turbine

generator to provide electricity for the

process. The condensable gases are

separated and result in renewable crude,

which we upgrade into our cellulosicfuels.

The optimization projects to be madethis year include making changes to the

BFCC unit, hydrotreater and wood yard

to eliminate bottlenecks. The Columbus

facility can currently process between 250

and 300 tons of biomass daily, yielding

around 30 gallons per ton. When operatingat nameplate capacity, the facility should

be able to process 500 bone-dry tons daily

with signicantly higher yields.

Optimization to the BFCC unit will

include integration of next-generation

catalysts. We have relationships with

multiple catalyst suppliers and workclosely with them to manufacture our

catalyst while guarding our intellectual

property, Cannon says. Our world-class

team of scientists works around the clock

on different types of catalysts along with

tweaks on existing platforms.

At KiORs research and development

facilities in Pasadena, the company hasmultiple hydrotreaters that it uses to

conduct research. More specical

Cannon says, KiOR is buildin

optimization know-how that yiel

minimum volumes of fuel oil and of

spec product.

Furthermore, the company inten

to reduce its natural gas consumption

the Columbus facility through more he

integration throughout the plant and,

the case of natural gas used for hydroge

generation, reduced consumption hydrogen at the hydrotreater itself. Mo

broadly, wherever natural gas is sole

used for heat duty, it can be replace

with biomass, like in the case of biomas

powered dryers and other sorts

technology present in the forest produc

industry today, Cannon says.

He continues, We expect the vario

projectswhich we have determin

are necessary to optimize the facili

based on our operating experience an

learnings over the last yearwill requi

approximately $10 million of capiinvestment over the course of 2014. W

are actively pursuing a number of ways

nance this project.

The successful execution of KiOR

optimization efforts in Columbus

critical to getting future plants nance

including the Columbus II project, whic

seeks to replicate the optimized Columb

facility at the same location. Bigger y

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KiOR is looking at developing its agship

facility, scaled at three times the size of its

Columbus plant, in Natchez, Miss.

KiORs process works, and it works

well, based on thousands of hours of

research and development at our lab,

pilot- and demonstration-scale facilitiesin Pasadena, Cannon says. Since its

inception, KiORs pilot facility has accrued

more than 10,000 hours of operation and

evaluated more than 250 catalyst systems.

Its demonstration plant has 400 times the

processing capacity of its pilot plant and

produces 15 barrels of renewable crude aday.

The companys copy exact strategy

is not quite what it seems, though. Rather

than duplicating the Columbus facility,

which contains the BFCC technology to

convert woody biomass to renewable crudeand hydrotreating to upgrade the crude oil

to diesel and gasoline, the copy exact

strategy intends to develop multiple BFCC

facilities that deliver renewable crude oil to

a centralized upgrading processing plant.

Developing a new technology is

always a challenge, and we are learning

more about our technology every day,

Cannon says. Our commitment toinnovation and research and developments

has been, and will continue to be, what

drives our progress and success.When asked what advice he could

share with other cellulosic biofuel project

developers from experiences gained in

commercial scale up, Cannon says he has

nothing to add. Let them learn the hard

way like we have, he says. As for what the

company has learned in its commercial

experiences to optimize its own production,

Cannon says, Weve learned that creating

a strong foundation is the best way to

generate sustainable, long-term success.

Weve learned that continued research and

development efforts are a great way toimprove yields, operational efciency and

the economics for our existing and future

commercial facilities.

Author: Ron KotrbaEditor, Biodiesel Magazine

[email protected]

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while addressing the growing demand for

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PROCESS


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The Sugar ProducersSweetwater Energy and Proterro aim for low-cost sugar that may give todays corn ethanol plants glide path into advanced ethanol production.

By Susanne Retka Schill

INNOVATION

NEW PATHS:Sweetwater Energy hosted tours of its demonstration facility, incorporating a Wizard of Oztheme to lead guests along a yellow brick road with color-codetanks. It helps people remember, says CEO Arunas Chesonis.

PHOTO: SWEETWATER ENERGY


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demonstration scaleNaturally Scientics

demo plant in Nottingham, U.K., has been

operational for two years, and Sweetwater

completed its demo in Rochester, N.Y.,

about a year ago. They also plan to build

a commercial facility in Rochester, whichNaturally Scientic will use to scale up its

other new technology that converts carbon

dioxide into C3 sugars.

As the nal details for both the

Wisconsin and New York projects are

nalized, Chesonis says his team is

making the nal push on raising money.

The company also expects to receive a

loan guarantee through the export bankof Denmark, due to the use of Danish

technology.

Raising capital and launching startupsis not new to Chesonis. My [chief

nancial ofcer] and I raised $4 billion

in our last company, he says, but then

adds, Any time its a new technology thathasnt been proven at scale yet, its always

a challenge. Chesonis comes from the

telecommunications sector, where he

led and sold two successful companies.

He brought key executive ofcers with

him when he took on the leadership at

Sweetwater as they decided to shift focus

to cleantech. One reason, he explains, was

to avoid the sort of market dynamics thatdrove the telecomm prices down 75 percent

over a decade, although commodity markets

have their own headaches, he admits.

The companys goal is to be able to

produce its sugars for 10 to 12 cents per

pound and, including the return to investors,

sell them for 17 to 18 cents per pound,

Chesonis says. That will be competitive

with the price of dextrose, which is in the

low 20-cent range, although he adds his

company is currently paying 25 to 30 cents

per pound for dextrose to supplement itscellulosic sugars for Naturally Scientics

development work.

Mimicking NatureProterros ambition is to provide an

even lower-cost sugar. Its unique sugar

platform harnesses the power of the sun in

a photobioreactor where microbes convert

carbon dioxide and nutrients into easily

fermentable sucrose. CEO Kef Kasdinsays the companys economic projections

indicate a production cost around 5 cents

per pound. A pilot facility with four full-

size reactors has been in operation since

September in Orlando, Fla., collecting data

to conrm those projections.

The Proterro bioreactor mimics a leaf

by growing cyanobacteria microorganisms

on a fabric surface, providing maximum

exposure to sunlight while a thin layer of

water and nutrients ows across the surface.The fabric is enclosed in a polyethylene

balloon lled with air and carbon dioxide.

At ambient temperatures, the cyanobacteriasecrete sugars which are carried away in the

owing water. That sugar water could go

directly into ethanol production or we may

need to further concentrate it, Kasdin

explains.

Using off-the-shelf components

plastic, the special fabric and plumbing

the capital cost for the photobioreacto

is very different from the typic

biorenery system. The entire resear

and development program has cost

million to date, according to Kasdin.

looks more like agriculture and not at

like a chemical plant, she adds. While th

modular system is relatively simple, wh

will contribute to the cost is the numb

of photobioreactors needed and the lan

area to support them. Current estimatare that a system of photobioreacto

would produce the same amount of sug

as sugarcane on one-thirtieth of the land

With a minimum temperature of

degrees Fahrenheit needed for the microb

to be productive, the outdoor systems anot meant for winter climates, althoug

power or chemical plants would be able

utilize waste heat and CO2in the system

potentially extending their reach from th

far south. Kasdin says the sugar watproduced in the South can be concentrat

for shipment to northern ethanol plan

INNOVATION

SIMPLIFYING THE PROCESS: Chief technology ofcer John Aikens, co-inventor of Proterro technology and a cfounder of the company, shows the bioreactor in collapsed form.

PHOTO: PROTERRO


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INNOVATIO

plus the company is looking at the Brazilian

industry for potential customers. The

advantages to the Proterro system will be

its low cost and the modular approach

that will allow incremental expansion, plus

the ability to use waste carbon dioxide toproduce a clean sucrose that contains no

inhibitors.

As the pilot work continues, Proterro

is now raising capital to nance a

demonstration-scale project and lookingfor potential partners with waste carbon

dioxide to host it. Proterros R&D efforts

to date have been backed by Battelle

Ventures, Braemar Energy Ventures,

Cultivian Ventures and Middleland Capital.

With patents in place on the latest

designs and the demonstration phaseapproaching, the company is laying the

groundwork to clear the regulatory hurdles.

The use of a genetically modied organism

requires preparing a Microbial Commercial

Activity Notice for review by the EPA.The company will

Ethanol April 2014

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