January 2008 Ethanol Producer Magazine

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ETHANOL PRODUCER MAGAZINE JANUARY 2008 7

features

insideJANUARY 2008 . VOLUME 14 . ISSUE 1

106 OUTLOOK Up Size, Downsize or Right Size?

What is the most efficient plant size in light of tighter ethanol production

margins? Is it 100 MMgy or larger, 10 MMgy or smaller, or somewhere in

between? By Michael Shirek

116 CONSTRUCTION Building the Biofuels Industry

Fargo, N.D.-based Wanzek Construction Inc. has built a solid reputation in

the biofuels industry. The company expects it will continue to serve the

industry as it grows. By Craig A. Johnson

124 Q&A Connecting Capitol Hill to the Midwest

U.S. Sen. Byron Dorgan, D-N.D., conducted a Q&A with EPM, in which he

discusses his thoughts and plans regarding renewable fuels.

Questions By Jessica Sobolik

134 EQUIPMENT Bringing in the Biomass

Nebraska twins invented a harvester that collects corn and corncobs. Now,

Ty and Jay Stukenholtz are building a business around their invention by

promoting the machinery and harvesting services, and marketing the

harvested biomass. By Ron Kotrba

64 WATER QUALITY Putting Water to the Test

Finding a site with an ample supply of water is only half the battle for

ethanol plant developers, especially if the water quality is lacking.

Preliminary water testing is crucial when considering the capital costs

associated with water pretreatment. By Bryan Sims

72 ENVIRONMENT More Corn a Cause for Concern

Maintaining water quality in some major U.S. watersheds may require

farmers to implement tighter conservation practices as they plant more

corn to keep up with the growing demand.

By Susanne Retka Schill

80 WATER QUANTITY The Future of the Ogallala Aquifer

A study says that the amount of water needed to irrigate more corn acres

and fuel ethanol plants in the nation’s midsection could contribute to the

depletion of the Ogallala aquifer. Ethanol proponents, however, are quick

to point out that there are other crops and industries that use as much or

more water than ethanol. By Anduin Kirkbride McElroy

88 TECHNOLOGY Squeezing More Out of Corn

Purdue University researchers have developed a new ethanol production

process that combines the best traits of dry- and wet-milling and

yields more ethanol per bushel of corn. By Jerry W. Kram

98 INNOVATION European Technology Companies Unite

U.S. ethanol producers caught a glimpse of the latest in European

technology at a symposium in Chicago organized by Distil Alliance. The

event showcased technologies that reduce production costs, improve

efficiencies and increase coproduct revenue. By Jessica Ebert

Page 64 Page 116 Page 124

© N

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Transforming corn and other grains into biofuels is a major industry

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departments contributors142 MAINTENANCEThe Fundamentals of Track MaintenanceRailroad track is the primary means of transportation to get ethanol from the plant to market. Ethanol project own-ers can minimize costs and eliminate future problems by implementing a simple, proactive track maintenance plan.By Hal Harrison and Steve Kadrlik

148 RISKA New Era in Design/Build ContractsContracts are the foundation to building a successful ethanol plant. Project owner/operators need a heightenedsense of awareness in the changing world of design/build contracts.By Todd Taylor and Kermit Nash

152 RESEARCHBreaking Down WallsUSDAAgricultural Research Service scientists are using the dairy cattle digestive system as an example of how tobreak down biomass materials. Their research could lead to a breakthrough in cellulosic ethanol production.By Erin K. Peabody

on the webEthanolProducer.com reader’s poll results

�For the week of Nov. 12Will ethanol prices rebound in 2008?

Yes, high gasoline prices should help ethanol prices climb out of the cellar—42.9 percent

No, the price of ethanol is no longer tied to the

price of gasoline like it has been historically—17.8 percent

No, there's simply too much supply for the

current demand—28.6 percent

Not sure—10.7 percent

�For the week of Nov. 5Will Congress pass the extended renewable fuels standard by the end of 2007?

Yes—41.5 percent

No—49.2 percent

Not sure—9.3 percent

�Canadian Renewable Fuels Summit 2007Ethanol industry representatives met in Quebec City, Quebec, in early December for the fourth annual CanadianRenewable Fuels Summit. What’s the state of the ethanol industry in Canada?

insideJANUARY 2008 . VOLUME 14 . ISSUE 1

11 Advertiser Index

14 The Way I See ItBy Mike BryanGovernments of All Sizes Should Address Climate Issues

18 Business & People

22 Commodities

24 A View From the HillBy Bob DinneenEyes on the Road Ahead

28 Industry News & BIObytes

38 Plant Construction List

50 Our PlantBy Jerry W. KramHear That Train a Comin’

52 In the FieldBy Susanne Retka Schil lNew Uses for Tropical Maize

54 Up FrontBy Anduin Kirkbride McElroyProject Development

56 Flex FactorBy Ron KotrbaEPA Grants E85 Aftermarket Certification

58 BusinessBy Bryan SimsThird-Quarter Financial Results Show Promise

60 DriveBy Robert WhiteFighting the Absurd Accusations

62 Legal PerspectivesBy Krista McIntyreEnvironmental Law: Air Quality Compliance

158 Events Calendar

160 EPM Marketplace

166 E-TownBy Jessica EbertWater Way

Ethanol Producer Magazine: (USPS No. 023-974) January 2008,Vol. 14, Issue 1. Ethanol Producer Magazine is published month-ly. Principal Office: 308 Second Ave. N., Suite 304, Grand Forks,ND 58203. Periodicals Postage Paid at Grand Forks, NorthDakota and additional mailing offices. POSTMASTER: Sendaddress changes to Ethanol Producer Magazine/Subscriptions,308 Second Ave. N., Suite 304, Grand Forks, North Dakota58203.

BPA Worldwide Membership Applied for October 2006

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2008 International Fuel Ethanol

Workshop & Expo

Adams Building Contractors

Agra Industries Corp.

Agri-Energy Funding Solutions

Alfa Laval Inc.

American Railcar Industries Inc.

Anhydro Inc.

Aqua Power Inc.

Aquatech International Corp.

Barr-Rosin Inc.

BBI Project Development

BetaTec Hop Products Inc.

Biodiesel & Ethanol 101 DVDs

Biofuels Canada

Biomass Magazine

Biothane Corp.

Brown, Winick, Graves, Gross,

Baskerville & Schoenebaum PLC

Buckman Laboratories Inc.

Burns & McDonnell

Calbrandt

Cashco Inc.

CEM Corp.

Cereal Process Technologies

Christianson & Associates PLLP

C.J. Schneider Engineering

Clifton Gunderson LLP

CompuWeigh Corp.

Davenport Dryer LLC

dbc SMARTsoftware Inc.

Delta-T Corp.

Distillers Grains Quarterly

Emerson Power Transmission

Encore Business Solutions

Ethanol 2008

ethanol-jobs.com

EthanolProducer.com

Ethanol Promotion &

Information Council (EPIC)

Ethanex Energy

Ethanol Technology

Fagen Inc.

FBA Consulting

FCStone LLC

Fermentis

Flowserve Corp.

Fremont Industries Inc.

Gamajet Cleaning Systems Inc.

GATX Corp.

GE Fanuc

Genencor International Inc.

GS CleanTech Corp.

H-O-H Chemicals Inc.

Hydro-Klean Inc.

71

44

32

48

37

36

6

130

78

69

97 & 141

33

55

87 & 147

146

67

74

27

12

126

145

34

104

153

63

84

123

35

21

5

149

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95

101, 108 & 156

20

68

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49

3

76

92

105

75

86

93

151

85

132 & 136

16 & 17

43

91

Ad IndexICM Inc.

Indeck Power Equipment Co.

International Biomass '08

Conference & Trade Show

Interstates Companies

Intersystems

ITT Industries Goulds Pumps

Kaltron Absorbents

Kennedy & Coe LLC

Layne Christensen Co.

Liberty International Underwriters

Ludeca Inc.

Lurgi Inc.

Management Recruiters of Atlanta

Mapcon Technologies Inc.

McC Inc.

Midwest Ethanol Transport LLC

Nalco Co.

Nexen Marketing USA Inc.

Noble Americas Corp.

North American Bioproducts Corp.

Novozymes

OPW Fluid Transfer

Ortman Ethanol Water Resources

Paragon Trailer Sales

PhibroChem

Pioneer Hi-Bred International Inc.

Poet LLC

Praj Industries Ltd.

RailWorks Track Systems Inc.

Regional Economic &

Cooperative Development

Renewable Fuels Association

Robert-James Sales Inc.

Ronning Engineering

RSM McGladrey Inc.

SafeRack

Salco Products Inc.

Seneca Waste Solutions

Siemens Water Technologies Corp.

SimplexGrinnell

Smar International Co.

SPX Cooling Technologies Inc.

Strongform Nationwide Industrial Builders

Sulzer Chemtech USA Inc.

Swanson Flo-Systems

TDC Dryers

Trinity Rail

U.S. Water Services

Vaperma Inc.

Victory Energy

Vogelbusch USA Inc.

Volkmann Railroad Builders Inc.

Walling Water Management

Westfalia Separator

2

4

114

40

94

59

45

30

165

57

109

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46

150

111

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131

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167

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Correction from our October 2007 issue: On page 73 of the Corn feature, it was incorrectly stated thatFoss North America had signed an agreement with Monsantoto use the company’s calibrations in the Foss Infratec wholegrain analyzers. Monsanto has its own proprietary program, butits calibration can be used in the analyzers.

Correction from our December 2007 issue:On page 18 of the Business & People section, U.S. EnergyServices’ new office address was incorrect. The new address is605 North Highway 169, Plymouth, Minn.


EDITORIALKathy Bryan [email protected]

Tom Bryan Editorial [email protected]

Jessica Sobolik Managing [email protected]

Dave Nilles Contributions [email protected]

Rona Johnson Features [email protected]

Ron Kotrba Senior Staff [email protected]

Anduin Kirkbride McElroy Staff [email protected]

Jerry W. Kram Staff [email protected]

Susanne Retka Schill Staff [email protected]

Bryan Sims Staff [email protected]

Jessica Ebert Staff [email protected]

Michael Shirek Online [email protected]

Jan Tellmann Copy [email protected]

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

ARTJaci Satterlund Art [email protected]

Sam Melquist Graphic [email protected]

PUBLISHING & SALESMike Bryan Publisher & [email protected]

Joe 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]

Trista Lund Advertising [email protected]

Jessica Beaudry Subscriptions [email protected]

Tim Greer Circulation [email protected]

Erika Wishart Administrative [email protected]

Christie Anderson Administrative [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.

SUBSCRIPTIONSTo 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.

Subscriptions to Ethanol Producer Magazine are available to all ethanol producers and future ethanol producers worldwide, free of charge.

Regular subscriptions are available for just $24.95 per year within the United States,

$59.95 for Canada and Mexico, and $110 for any country outside North America.

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 © 2007 by BBI International

ETHANOL PRODUCER MAGAZINE JANUARY 200814

he recent report by the Intergovernmental Panel on Climate Change has solidifiedwhat many already knew: Climate change is real, we are a large part of the problem,and time for change is of the essence.

It seems as though this report, if nothing else, has refocused the world’s attention on theimportance of reducing greenhouse gas emissions. Now the question is not so much why thisis necessary, but by whom, when and how will it get done? If history is any indicator, govern-ments around the world will step in and begin developing plans of action that may be non-achievable, onerous or terribly inefficient. They will throw huge amounts of money at the prob-lem, make a few corporations fabulously wealthy and then claim success. That’s what govern-ments seem to do best. Sorry if I sound a bit cynical, but we have all seen this happen time andtime again.

In my opinion, this is a problem that can’t be solved by government alone. The old axiom, “Think globally and act local-ly,” has never been more relevant. The reduction of GHG emissions must be done on a local level. The federal governmentneeds to work with state and local governments to establish the goals and objectives, and then provide the funding to helpthem get the job done.

Communities around the world need to step up and address these issues on a local level. It isn’t just a good thing to do;it is their responsibility. They must not wait for the federal government to intercede and make this happen from the topdown. This initiative has to begin at the local level by identifying polluters, identifying ways to mitigate pollution and becom-ing more energy self-sufficient in the process. There is hardly a community or city anywhere in the world that doesn’t havethe option to develop greater energy sustainability through indigenous renewable resources and, in the process, help reduceGHG emissions.

The variety of opportunities is impressive: solar, wind, geothermal, municipal solid waste, biogas, ethanol, biodiesel andhome heating oil are only a few examples. Then, as cities begin the process of drilling even further, the opportunity for homeenergy savings, and reductions in industrial energy use and pollution can greatly reduce GHG levels, while creating impres-sive economic benefits. Multiply this effect from cities around the globe, and the cumulative environmental and economicimpact will be staggering.

Global warming is a problem created by wealth, and wealth needs to be instrumental in helping to solve the problem.Environmentalists and capitalists can no longer afford to be at odds. Rather, they need to join hands to utilize the vision ofthe environmental community and the wealth of capitalism to create a safer, cleaner world.

That’s the way I see it!

The Way I See It

Governments of All Sizes Should Address Climate Issues

Mike BryanPublisher & CEO

[email protected]

T

GS CleanTech’s patent pending Corn Oil Extraction Technology safelyrecovers up to 75% of the corn oil trapped within the DDG.In addition, removing oil from the DDG can also be expected toreduce drying costs, reduce emissions of greenhouse gasesand volatile organic compounds and to enhancethe marketability of your remaining DDG.

Take advantage of GS Clean Tech’s turn-key, toll processoil extraction and biodiesel production capabilities

Generate $6 million in additional income for a 50 milliongallon facility and over $10 million for a 100 million gallon

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Capitalize by purchasing our Corn Oil Extraction Systemwith Co-Located Biodiesel technology model to receive the

greatest return on investment while increasing yourrenewable fuel production

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Contact GS CleanTech for more information aboutthe future of Renewable Fuel production.

GS CleanTech Corporation12600 Deerfield Parkway, Suite 100 • Alpharetta, Georgia 30004phone: 678.566.3588 • email: [email protected]


BBI conference receives accolades

The InternationalFuel Ethanol Workshop &Expo has been namedamong Tradeshow Weekmagazine’s “Fastest 50Trade Shows.” The publi-cation evaluated winners

based on the percentage of growth in atten-dance from 2004 to 2006 and the total netsquare footage of growth during the same years.The FEW grew 72 percent in attendance andadded 16,300 net square feet to the trade showfloor during this time. “We owe some credit tothe explosive growth of the fuel ethanol indus-try,” said Steve Stucko, group director of BBIInternational’s Conferences & Events division.“However, this has also created an increase inthe number of competing events.Our team hasresponded by adding more innovative featuresto the FEW, while closely examining andresponding to the needs of the exhibitors andattendees.”

More than 5,300 people attended the 2007FEW, which included 716 exhibit spaces. The2008 event has room for 803 booths,more than550 of which have already been reserved. Topurchase booth space for the event, visit www.fuelethanolworkshop.com or contact ConnieProvick at (719) 207-7048 or [email protected]. EP

Delta-T joins ethanol projectDelta-T Corp. was recently awarded a

$37 million engineering, procurement andtechnology contract by Agra Industries Inc.,general contractor for Western IllinoisEthanol Plant LLC’s 55 MMgy project nearGriggsville, Ill. Delta-T will provide processengineering, equipment design and procure-ment, construction supervision, commis-sioning, and start-up services. Constructionis expected to take 18 months. According toWIEP, site preparation and dirt work areunderway. EP

Business

Business&PeopleEthanol Industry Briefs

BUSINESS&PEOPLE

Syntec acquires ethanol catalyst technology

Vancouver, British Columbia-based SyntecBiofuel Inc. has finalized a $3 million privateplacement offering with Wood EnergyResources LLC, in which Syntec acquired theintellectual property and ethanol catalyst tech-nology assets to convert biogas and syngas intoethanol, biobutanol, methanol and propanol.Syntec, a leader in ethanol catalyst conversiontechnologies, intends to commercialize itsprocesses in November, according to SyntecPresident Michael Jackson. The company hasdevoted its research and development efforts tocatalysts since 2001, and has further refined effi-ciencies in-house. Syntec’s research efforts havebeen funded through private equity, as well asCanadian government agencies, the NationalResearch Council of Canada and NaturalResources Canada. 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

GS CleanTech finds corn oil provider

Ethanol production technology innovatorGS CleanTech Corp. recently announced that itwould extract about 10 MMgy of corn oil fromthe distillers grains produced at NortheastBiofuels, a 114 MMgy ethanol plant in Volney,N.Y., which is slated to start up before the newyear. “This is a very strategic project for us, andwe are thrilled to bring our technology to whatis on target to be the first major biorefinery inthe northeastern U.S.,” said David Winsness,GS CleanTech president and CEO. EP

GS CleanTech’s corn oil extraction system

PH

OTO

: GS

CLE

AN

TE

CH

CO

RP.

Rockwell Automation to acquire Pavilion

Milwaukee, Wis.-based Rockwell Auto-mation Inc., a global provider of automation,control and information systems for manufac-turing, announced it will acquire Austin, Texas-based Pavilion Technologies Inc., a processcontrol technology provider. Pavilion’s softwareproducts will be integrated into Rockwell’sFactoryTalk Services Platform, an integratedproduction and performance suite, and itsLogix Control Platform. “This acquisition con-tinues our investment in the process automa-tion business and expands our capabilities toserve this major global market more complete-ly,” said Steven Eisenbrown, Rockwell seniorvice president. EP


BUSINESS&PEOPLE

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Business People

U.S. Water tackles Galva water treatment

Cambridge, Minn.-based U.S. WaterServices signed an agreement in October toprovide water treatment for Big RiverResources Galva LLC, a 100 MMgy ethanolplant that started construction in mid-November in Galva, Ill. According to U.S.Water, the Galva facility will be the first toincorporate U.S. Water’s patented high-effi-ciency reverse osmosis process with its evap-oration and crystallization process. Big RiverResources selected the zero-liquid-dischargesystem because of the high mineral contentin the local well water and the long distanceto a river for discharge. The four-stage watertreatment process includes softening; carbondioxide reduction; the HERO process,which will recover 95 percent to 97 percentof the water; and the final evaporation anddistillation process to reduce final wastestreams to a landfill solid. EP

Chemineer launches line of agitators

Chemineer Inc., a developer and manufac-turer of mixing technology and equipment forfluid agitation applications, recently launched anew line of agitators designed to service a widerange of industries, including ethanol andbiodiesel. The new agitators, models 20 HT andGT, are available in right-angle and parallel-shaft configurations. The equipment features ahigh-efficiency gearbox, a variety of sealoptions and reversible rotation. The agitatorsare designed to meet many standards andrequirements, such as those set by theOccupational Safety and Health Admin-istration. EP

Mascoma acquires cellulosic ethanol technology

Mascoma Corp. announced inNovember the acquisition of CelsysBioFuels Inc., an Indianapolis-basedcompany formed in 2006 to commercial-ize cellulosic ethanol production technol-ogy. Terms of the transaction weren’tdisclosed at press time. The technology,developed in the Laboratory ofRenewable Resources Engineering atPurdue University, is based on propri-etary pretreatment processes for multiplebiomass feedstocks, including corn fiberand distillers grains. Michael Ladisch, aninternationally known leader in renew-able fuels and cellulosic biofuels, devel-oped the technology. He will take a two-year leave of absence from Purdue tojoin Mascoma as the company’s chieftechnology officer. EP

Sluneckaleaves EPIC

Tom Slunecka hasjoined Rapid City, S.D.-based KL ProcessDesign Group as vicepresident of businessdevelopment to help

develop the company’s cellulosic ethanolbusiness. KL Process is developing a 1.5MMgy wood-waste-to-ethanol plant inUpton, Wyo. Slunecka moved to KLProcess after three years as executivedirector for the Ethanol Promotion andInformation Council, which he helpedfound. At EPIC, Director of OperationsRobert White has been named interimdirector, while the search for Slunecka’sreplacement is underway. EPIC recentlyadded James Jirak as director of industryrelations, as well. EP

Neogen launches aflatoxin test for corn

Neogen Corp. recently developed a testmethod to determine the general level ofpossible aflatoxin contamination in corn. Thetrademarked Reveal for Aflatoxin SQ is for-matted similar to a home pregnancy test. Atest strip is immersed in a sample that hasbeen extracted from the process. After fiveminutes, the test, which uses the company’strademarked Reveal AccuScan III System,can return results in the ranges of less than 10parts per billion, 10 to 20 ppb, or greater than20 ppb. Neogen develops, manufactures andmarkets products dedicated to food and ani-mal safety. The food safety division is basedin Lansing, Mich. EP

MGPI CEO to retire

Ladd Seabergannounced he willstep down as chiefexecutive officer ofMGP Ingredients Inc.on June 30. He will

remain chairman of the board of direc-tors after that date. He will be succeededby Tim Newkirk, the company’s currentpresident and chief operating officer.Seaberg became chairman of MGPI’sboard in October. He has served as CEOsince 1988. EP

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COMMODITIES REPORT

Nov. 19—Natural gas storage inventories are at historic highs (9percent higher than average and 3 percent higher than 2006) and thewinter weather forecast calls for warmer-than-normal temperaturesacross the United States. Given these two factors, one would expectnatural gas prices to be relatively low. That is not the case. At presstime, natural gas prices were 4 percent higher than 2006. In addition,natural gas prices have increased 50 percent over the past twomonths from less than $5.50/MMBtu to more than $8/MMBtu.This doesn’t make sense when the natural gas prices are viewed inisolation from the larger carbon complex (oil). However, when nat-ural gas prices are viewed relative to oil prices a different pictureemerges.

Natural gas supply and markets are generally separate and dis-tinct from oil supply and markets. However, there is a tendency for

natural gas prices to be influenced by oil price changes. For example,when oil prices are high, natural gas prices tend to be relatively high.When oil prices are low, natural gas prices tend to be low. Over thelast four years, per barrel oil prices have been on average a multipleof eight times the per MMBtu natural gas price. If current naturalgas prices reflected that historic price relationship, prices would beclose to $12/MMBtu instead of slightly more than $8/MMBtu.

The chart shows the ratio of oil prices to natural gas prices overthe last four years. As mentioned above, the average ratio is eightover that time period, with a tremendous amount of variabilityaround the average. The chart’s trendline shows that the ratiobetween oil and natural gas prices appears to be increasing over time.Adjusting for the upward trendline and given the current oil price,natural gas prices “should” be $9/MMBtu, or 12 percent higher thancurrent prices. Whether viewed based on a historic average pricerelationship or an adjusted price relationship, natural gas prices arerelatively low compared to oil prices.

The conclusion: natural gas prices appear to be too high givencurrent natural gas fundamentals. However, when compared to oilprices, natural gas prices appear to be a bargain. EP

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

Are natural gas prices too high or too low?

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

Acreage battle looms in ‘08

Corn Report By Jason Sagebiel, FCStone

Nov. 16—The corn market continues to be supported and pressuredby outside markets such as energies, the dollar and metals. In Novemberthe USDA reduced the national yield figure from 154.7 to 153 bushels peracre. This decreased corn production from the previous estimate of13.318 billion to 13.168 billion bushels, compared to 10.535 billion bushelsone year ago. The demand side of the equation was reduced by only 50million bushels, stimulated by a reduction in feed and residual. The com-bination of the supply and demand picture equated to a carry-out of 1.897billion bushels, down 100 million bushels from the previous estimate.Looking at the macro world supply and demand, corn ending stocks stillrest at 110.39 million metric tons versus 104.98 million metric tons oneyear ago.

The question remains as to what the speculator will do with the longcorn position. At press time, the answer will most likely have a much bet-ter direction. However, what bears upon the marketplace during the NewYear is the battle of acres between corn and soybeans. Remember theprice hikes came in late February one year ago when March corn futureswere trading in the upper $4.30s. These price levels may leave themselvesvulnerable to be tested again, arising from any concern of more-than-

expected corn acreage loss. Overall, the market seems content in a tradingrange but long liquidation could very well come at the end of the year.Keep a watchful eye on the outside markets as well to offer any non-fun-damental direction. EP


COMMODITIES REPORT

DDGS Report By Sean Broderick, CHS Inc.

Ethanol Report By Spencer Kelly, OPIS

Nov. 17—Ethanol markets firmedthrough most of November. However,prices appeared to stall heading into theThanksgiving holiday amid forward priceindications that lagged and returned somebackwardation to physical markets.

Stronger near-term markets andrenewed backwardation turned up in theMidwest, where Chicago spot ethanol fornext-day delivery topped $1.96 per gallonand week-out deals reached $1.92 per gallon.Ethanol spot prices gained some 12 centssince the start of November and some 37cents or more since September.

Similar gains were also repeated inother markets, where spot deals topped $2per gallon for New York Harbor andHouston ethanol barges.

Sources reported prompt and near-prompt tightness, or at least an unwillingnessfrom suppliers to part with pre-Thanksgiving volume. However, in the latterhalf of November, any-month materialbegan to trade at a larger discount to the

prompts with December discussions start-ing to trade off. Chicago any-Decemberethanol traded at $1.85 per gallon and ran atan 11-cent discount against prompt trading.

Rack ethanol Midwest top-off volumealso gained substantially for the month, butpostings showed signs of cooling in lateNovember. On average, Iowa racks at$1.915 per gallon were up more than 10.5cents since October, but down about one-half a cent from its mid-month peak.

The key for ethanol demand remainedhigh-flying gasoline outrunning ethanol.Chicago spot unleaded ran about 52 centsmore than prompt ethanol by lateNovember. With the federal blending credit,that made ethanol about $1.03 per galloncheaper than unleaded gasoline. Weekly U.S.DOE data continued to show record levelsof discretionary blending, running almost60 percent over the same time last year. EP

For more information, contact OPIS FuelEthanol Report at (888) 301-2645, ext. 2478.

Tight prompt market emerges

Source: OPIS

Source: U.S. Energy Services Inc.

*Central Valley Source: CHS Inc.

Nov. 21—As December began, itappeared as though the name of the gamewas exports. With the weakness in the U.S.dollar, DDGS business to the export mar-ket, particularly Canada, is better than ever.The Gulf market and Mexico have alsobeen consuming in ever-increasingamounts as demand for proteins increases.With no impending break evident inChicago Board of Trade and world prices,this trend looks to continue at least for thewinter months.

Domestically, buyers have so far beenin denial, buying month to month and pay-ing higher prices in every transaction. Thistype of activity tends to “self fulfill” itself,as buyers have a lead time of up to 10 daysdue to logistics. Whatever cars at the plantthat do end up “on track” are generally spo-

ken for before they have any chance todepress prices. With soy, canola and cotton-seed meal prices rallying, DDGS is a goodprotein buy in the ration.

Going forward, the impendingdemand is not yet keeping up with project-ed supplies. Although there is a lot moretonnage coming on the market in the firstand second quarters and deferred quotesare reflecting this, buyers still have a largeportion of their ration to purchase.Whether the timing of the supply anddemand meet each other is going to deter-mine prices for the spring and the summer.However, with nearly every project in thelast six to eight months getting delayed, itlooks as though the buyers that are waitingfor “all this DDGS” to come onto the mar-ket are going to have to blink first. EP

Source: FCStone

Export market demand continues to rise

REGION

West Coast

Midwest

East Coast

SPOT

260.241

246.893

241.929

RACK

255.829

251.352

244.166

RETAIL

319.21

302.392

298.772

August 2007

July 2007

August 2006

434,000*

421,000

329,000

REGION

West Coast

Midwest

East Coast

SPOT

191.036

186.089

191.964

BULK TRUCK (rack)

185.75

178.5

- - - -

SPLASH/TOP OFF (rack)

195.838

192.079

193.04

DATE

Nov. 16, 2007

Oct. 16, 2007

Nov. 16, 2006

CLOSE

3.79 1/2

3.60 1/2

3.51 1/2

LOW

3.77 1/2

3.54 3/4

3.50

HIGH

3.81 1/2

3.61 3/4

3.65

LOCATION

Minnesota

California*

Chicago, Ill.

Buffalo, N.Y.

Central Florida

NOV. 2007

130

185

137

150

170

OCT. 2007

120

170

132

144

155

NOV. 2006

95

140

100

114

126

Source: OPIS

NYMEX

N. Ventura

Calif. Border

NOV. 16, 2007

8.05

6.57

6.58

OCT. 26, 2007

7.22

6.57

6.58

NOV. 16, 2006

7.75

7.45

6.75

Regional Ethanol Prices (Monthly averages in cents per gallon)

Regional Gasoline Prices (Monthly averages in cents per gallon)

DDGS Prices ($/ton)

Corn Futures Prices (December 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

OCT. 25, 20073.66

3.54

3.32

3.71

3.33

4.21

NOV. 30, 20063.73

3.72

3.60

3.88

3.82

4.45

NOV. 16, 20073.69

3.71

3.47

3.80

3.45

4.30


January columns frequently take stock of the year that was, focusing on the events and achievements that defined

that previous 12 months. The U.S. ethanol industry can certainly be proud of everything it accomplished in 2007.

For instance, the renewable fuels standard was fully implemented without incident and our industry surpassed the

7 billion-gallon capacity threshold, expanded the use and production of ethanol to states not familiar with our fuel, and

saw ground broken on the first of many cellulosic ethanol plants. (I hope we are also celebrating an expanded RFS, but

negotiations are still ongoing as of this writing.)

While 2007 proved to be a fruitful year, we also experienced firsthand what happens to industries that succeed faster

and more robustly than its competitors would like. Chock full of misinformation, media report after media report blasted

our industry for perceived shortcomings. Indeed, it felt like our industry was playing much more defense than offense.

To continue to achieve the kind of success our industry desires, we must keep our eyes focused on the road ahead

and cannot concern ourselves too much with what happened in our rearview mirror. After all, 2008 will require our com-

plete attention.

The continued development of new markets for ethanol blending will be a top concern for the Renewable Fuels

Association and the industry. Great progress has been made in states like Tennessee, Georgia and Florida. Together

with the expected expansion of ethanol blending in California, the demand for our product will no doubt continue to grow.

Rapid advancements in technology will unlock never-before dreamt horizons for the U.S. ethanol industry. Improved

efficiencies at existing grain-based ethanol plants will further reduce water use, create new sources of fuel for the biore-

fineries themselves and increase ethanol yields from every bushel of grain.

Moreover, the investment by our industry, together with the federal government, will tremendous progress in the

commercialization of cellulosic ethanol technology. 2008 will build upon the groundbreaking achievements we witnessed

in 2007 by companies like Range Fuels, Abengoa Bioenergy and Poet. Indeed, there is tremendous opportunity for inno-

vation in both traditional and next-generation ethanol production.

As domestic opportunities abound, a growing world ethanol industry will require increased attention. As more coun-

tries around the world seek to develop domestic ethanol, our industry and those of Canada, Brazil and Europe are in a

leading position to foster growth and ensure a robust global ethanol industry. Likewise, we will also have to be mindful

to ensure that efforts to develop a global trade in ethanol do not infringe or restrain the continued development of exist-

ing ethanol industries.

Last, but certainly not least, our industry has an opportunity to start telling its story. We have been under attack by

those threatened by ethanol’s growing role in energy and agriculture. This was to be expected. As we have grown, we

have attracted a list of antagonists that represent some of the nation’s least-liked industries. This attention should not be

viewed through the lens of a victim, but rather as an opportunity for the U.S. ethanol industry to finally come together and

speak with one voice about the economic, environmental and energy security necessity of a robust, domestic renewable

fuels industry. Without question, that will be a focus in 2008.

I eagerly look forward to the opportunities that lie ahead and hope to see you on the road with us.

Bob DinneenPresident and CEO

Renewable Fuels Association

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BIObytesEthanol News Briefs

Ethanol leaders request Farm Credit expansionIowa’s renewable fuels industry leadersrecently wrote letters to several U.S. sena-tors, calling for them to support anamendment added to the Farm Bill bySen. Saxby Chambliss, R-Ga., that wouldexpand Farm Credit Services' lendingauthority to renewable fuels facilities.Currently, Farm Credit can only lend to astart-up ethanol or biodiesel plant if thefacility is 50 percent farmer-owned. Theletter pointed out that this may have beenreasonable in the early days of the renew-able fuels industry, but now bigger, moreexpensive plants are being built, “makingit impossible to achieve 50 percent farmerownership.”

Rex Stores takes stake in ethanolAppliances and electronics retailer RexStores recently invested $50.8 million inOne Earth Energy’s 100 MMgy ethanolplant being developed in Gibson City, Ill.The investment gives Rex 74 percentequity in the project. First National Bankof Omaha’s Renewable Fuels Groupclosed $110 million of senior secureddebt for the project in October. FagenInc. is providing complete design, engi-neering and construction services, usingICM Inc. process technology.Construction is expected to be completeby the spring of 2009. In July, Rex added$10 million to its existing investment inBig River Resources LLC, which recentlyfinished a 40 MMgy expansion in WestBurlington, Iowa.

Countryside drops ethanol plansCountryside Renewable Energy Inc.abandoned its plan to consolidate up to10 farmer-owned ethanol plants and hasceased operations. Countryside hadsigned nonbinding letters of intent toacquire an interest in several ethanolplants, including Dakota Ethanol LLC inWentworth, S.D. It planned to operate theplants through the same management and

�continued on page 30

While the southeastern United States hasseen limited E10 and E85 blending, widespreadadoption of the ethanol blends is being consideredin several states through rule changes that wouldloosen the standards slightly.

�Florida: The state Department ofAgriculture held a public workshop in lateOctober to gather suggestions from the industryon rule adjustments. The department proposed toadopt a one-pound-per-square-inch increase to thevapor pressure standard year-round, according toMatt Curran, chief of petroleum inspections forthe consumer services division. The department iscurrently reviewing other suggestions made byindustry representatives at the meetings to loosenthe midpoint distillation (T50) requirement andvapor-to-liquid ratio standard. With the publiccomment period closed, the new rules were in thereview stage before submittal to the FloridaSecretary of State for an additional 21-day publiccomment period.

�South Carolina: Proposed changes fol-lowing National Institute of Standards andTechnology Handbook 130 recommendationshave been filed, according to Carol Fulmer, direc-tor of the state’s consumer services division with-in the state Department of Agriculture. Once thelegislative session begins in January, the legislaturehas 120 days to consider the proposal. If no actionis taken, it becomes effective. “The current regula-tions do not really address the [ethanol] issue,”Fulmer said. “All they say is that the fuel has tomeet current ASTM standards.”

Fulmer said while the state currently has E10and E85 blends available, the changes shouldencourage more blending. “There is some concernabout distillation and vapor pressure, and if youblend with any gasoline, it might fail those specs.The major oil companies have some concernunless there is some allowance for that.”

�North Carolina: “There’s a misconcep-tion that we haven’t allowed ethanol blending inthis state,” said Steve Benjamin, standards divisiondirector at the state Department of Agriculture.“It’s been legal for over 15 years.” He said BP,Marathon and other local distributors have beencontacting officials in several southeastern statesabout adding E10 blends. “They see [ethanol

blends] coming and want to be prepared,” he said.He said he’s somewhat puzzled by the questionsbeing posed about specifications or the requestsfor ethanol blending approval since a set of speci-fications has been in place since he started at thedepartment 15 years ago.

North Carolina has its own specifications anddoesn’t follow the NIST 130 handbook, Benjaminexplained. The division has a draft proposal beingreviewed now that would loosen the current regu-lations. He explained the current T50 distillationspecs are set at 158 degrees Fahrenheit, and theproposal seeks to drop that to 148 degrees andpossibly waive the vapor lock requirement. He saidhe expects to present the draft proposal to the stategas and oil board meeting in February or March,after which it goes to the state assembly for finalapproval.

�Georgia: The state Department ofAgriculture held two town hall meetings in lateNovember to gauge public and petroleum indus-try support for changes to the state’s ethanolblending requirements. The department’s fuel andmeasures division recommended the T50 bedropped to 150 degrees Fahrenheit, the V/L bedropped 10 to 12 degrees, and a waiver of the one-pound psi pressure requirement. After the townmeetings, the commissioner of agriculture willdecide whether to implement the proposed emer-gency regulations, possibly in the first quarter of2008, according to David Au, state oil chemist.

—Susanne Retka Schill

INDUSTRYNEWS

Southeast tweaks specs to boost E10 use



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INDUSTRYNEWS

Company considers regional ethanol pipeline

Tulsa, Okla.-based Seminole EnergyServices is gauging the interest ofNebraska ethanol producers in a $150million pipeline covering 175 miles incentral Nebraska with a new terminalpegged somewhere within a 25-milestretch between Hastings and GrandIsland. The facility would have the capac-ity to store 27 million gallons (nearly650,000 barrels) of ethanol at one time,and if enough ethanol producers sign on,the terminal could aggregate nearly 2 bil-lion gallons per year near the intersectionof two major rail lines. The proposedfacility will also contain a unit-train load-ing facility.

Seminole Energy’s business develop-ment representative Kirk McClymonttold EPM his company is already buildinga natural gas pipeline through centralNebraska, predominantly to serveethanol producers that consider local nat-ural gas supplies to be limited and there-fore more costly. The company hopes toincrease natural gas supplies to those pro-ducers and help to lower energy costs.Now, Seminole Energy is gauging interestin an ethanol pipeline to increase productoutput while lowering transportationcosts. “We’re already securing right ofways and environmental easements,”McClymont said. “It’s been my con-tention that we need a pipeline to moveethanol around the state. We’re trying tosee if it will be economically feasible tobring the product to a central area thatwill have access to Union Pacific andBurlington Northern Santa Fe [rail-roads].”

McClymont said it's ideal to build anatural gas pipeline while planning anethanol pipeline. “It’s an opportune timeto explore,” McClymont said. “It will takeseven to 10 months to build the natural

gas pipeline, which would be ample timeto gauge interest in the project.” Frommid-November to mid-December,Seminole Energy will be talking withplants “in the fairway,” or close to thenatural gas line under construction, hav-ing them sign confidentiality agreementsand filling out questionnaires about theircurrent rail situation. “If producerschoose to fill out the questionnaire, we’llassess the interest,” McClymont said. “Ifthere are only two or three, then it prob-ably won’t work.” If closer to eight or 10plants show interest, then the company'sengineering staff would assess the feasi-bility of the project, which would take anadditional 30 days. It would take another60 days to complete a precedent agree-ment and a detailed plan to get thepipeline and terminal built. “We need acommitment from the plants,”McClymont stressed.

He couldn’t say how much producerswould have to pay per gallon for access tothe pipeline at press time, but he said hewould be able to estimate costs in mid-January. He added there are still unan-swered technical questions to beaddressed, such as corrosiveness.

Ethanol plants choosing to invest inthe pipeline/terminal project would havethe option to sell their products to theend-user directly from the plant or fromthe terminal. McClymont said the bigpipeline runners—the Kinder Morgansand Magellans of the world—aren’t inter-ested in pipelining ethanol, in partbecause of the lack of large volumes at acommon point. If the proposed terminalhas 650,000 barrels of on-site storage andnearly 2 billion gallons of ethanol comingthrough it every year, the major oilpipeline operators may think differentlyabout ethanol.

—Ron Kotrba


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�continued from page 28



marketers, allowing those plants to bettercompete with larger players in the ethanolindustry. However, declining margins inthe ethanol industry made the venture lessattractive to investors. The last of the let-ters of intent expired Oct. 1, andCountryside ceased operations at the endof that month.

North Dakota college to add biofuels programRepresentatives from the North DakotaState College of Science in Wahpeton,N.D., met with ethanol producers to gath-er input on its new biofuels technologyprogram, which will enroll its first class inthe fall of 2008. The two-year associatedegree will include a core curriculum inbasic sciences, plus specialized courses oninstrumentation, process control, qualitycontrol and microbiology, according toHarvey Link, NDSCS vice president forinstitutional advancement. The course alsoincludes an internship. The biofuels train-ing program is one of several new coursesthat involve emerging technologies such asnanoscience, micro science and biotech-nology.

INDUSTRYNEWS

Commercial-scale cellulosic ethanol plant breaks ground

Broomfield, Colo.-based Range Fuels estab-lished itself as a pioneer in cellulosic ethanol pro-duction when the company broke ground on thenation’s first commercial-scale cellulosic ethanolfacility in Treutlen County near Soperton, Ga., inearly November.

Approximately 700 people attended thegroundbreaking at the site of the future cellulosicfacility. The event featured federal, state, city andcounty dignitaries, including U.S. Secretary ofEnergy Samuel Bodman, Georgia Gov. SonnyPerdue, state Sen. Jack Hill, former state Sen.Hugh Gillis and Range Fuels CEO MitchMandich. “There was just a tremendous spiritthere,” Mandich said. “When you get state andfederal support at those levels, in addition to localrepresentation, it was a very meaningful event.”

The new plant will use wood and woodresidue from Georgia’s pine forests and mills as itsfeedstock. Once fully operational, the facility willhave a maximum capacity of 100 MMgy. As partof its $76 million Technology InvestmentAgreement with the U.S. DOE, Range Fuels willreceive $50 million for the construction of thefirst 20 MMgy. The remainder of the grant willgo toward construction of the next phase of theproject. Construction of the first phase is expect-ed to be complete by late 2008, according toMandich.

The Soperton facility has been permitted as

a minor source of emissions. Its proximity toboth wood supplies and ethanol markets willminimize energy expended in supplying the facil-ity with feedstock and providing ethanol to con-sumer markets, further demonstrating the low-impact, environmentally friendly nature of RangeFuels’ technology. “The state of Georgia has pro-vided us with an excellent opportunity to locateour first plant using its abundant, renewable for-est resources as feedstock,” Mandich said. “Ourtechnology transforms the wood and wood wastefrom Georgia’s millions of acres of woodlandsinto ethanol, a key source of transportation fuel.”

—Bryan Sims

Left to right: U.S. Energy Secretary Bodman, VinodKhosla of Khosla Ventures, Mandich and Gov.Perdue.

PH

OTO

: RA

NG

E F

UE

LS

INDUSTRYNEWS

FCStone launches carbon entityIn addition to helping its customers

and client base mitigate environmentalrisk, FCStone Carbon LLC, a whollyowned subsidiary of the risk managementcompany FCStone Group Inc., aims tocreate, represent and market technologiesthat improve efficiencies in the renewableenergy sector.

“Ethanol and biodiesel producers areshowing a tremendous amount of interestin making sure they get ahead of the curveand manage their total environmentalrisk,” explained Mike Knobbe, presidentof FCStone Carbon. “They’re showing alot of interest as margins compress in thatindustry. They want to become the mostefficient player on the block and be low-cost.”

To that end, the company has beenworking to develop a portfolio of servicesand technologies that can help ethanolproducers better understand their energyfootprint, carbon emissions profile, andthe tools available to mitigate costs andenvironmental risks, according to MikeKinley, vice president of technology forFCStone Carbon. “We’re going to themnot with just a carbon marketing platform,

but with a suite of technologies and serv-ices that will help them find a pathway tobeing a low-cost producer and a low emit-ter,” he said. “We’re the only company thatwe’re aware of that’s linking both tech-nologies to reduce costs and risk to thecreation of greenhouse gas emission cred-its or environmental emissions credits.”

On the technology side, the companyrecently announced a partnership withengineering company Harris Mechanical;AE&E Von Roll, an equipment provider;and Alliant Energy, a Midwest powerprovider, to develop, scale up and market afluidized bed reactor technology for therenewable fuels industry. “They have with-out a doubt the best design, and we’vepartnered with them to market that tech-nology,” Kinley explained. The reactor canbe used by an ethanol plant to incinerate

its low-cost, low-value coproducts like thesyrup left over from the thin stillagestream. The process steam that is createdcan be used to replace natural gas. “Thetechnology has been used in other indus-tries and has been extremely beneficial,”Kinley said. In addition, the reactor thatFCStone Carbon will market has beenscaled up and run pretty much nonstop atCorn Plus LLLP in Winnebago, Minn., hesaid.

Cost-reducing and energy-savingtechnology isn’t the sole focus of the com-pany. As ethanol producers and others inthe renewable fuels industry work toreduce their carbon footprints, FCStoneCarbon will usher those companies intothe carbon market and help them to tradetheir emissions. “I think that in the currentenvironment and as we go forward,ethanol plants have to identify ways tobecome more competitive,” Kinley said.“We see this technology and greenhousegas platform as another area of opportu-nity to reduce risk and reduce cost, and it’sdefinitely the right time to bring this to thetable.”

—Jessica Ebert




Gate Biofuels plans biofuels terminal in FloridaGate Biofuels LLC, a subsidiary of GatePetroleum Co., is in the early stages ofdeveloping a 55 million-gallon biofuelsterminal in Jacksonville, Fla. The $90 mil-lion facility will be capable of receiving,blending and shipping ethanol andbiodiesel via truck, barge or rail. It willalso provide fuel storage for GateBiofuels and third parties. Once the ter-minal is operational, Gate Petroleum willoffer E10 at all of its retail gasoline loca-tions in Jacksonville and the surroundingareas.

UN head calls for balancedapproach to biofuelsConflicting reports and statements by var-ious United Nations officials regardingbiofuels and their impact on food andworld hunger led Secretary-General BanKi-Moon to issue a statement about thematter in November. Ki-Moon was inBrazil on an official trip focused on cli-mate change. “Clearly, biofuels have greatpotential for good and perhaps also for

INDUSTRYNEWS

Novozymes eyes Midwest expansion

Novozymes is screening sites in theMidwestern United States for a potential newenzyme production plant. However, the com-pany has no active plans to build a plant, saidThomas Nagy, Novozymes executive vicepresident for stakeholder relations. “We havenot made a decision to expand,” he said. “Weare trying to get ahead of the curve, so whenwe see it is needed, then we will be throughsome of the initial steps.”

With the rapidly expanding ethanol mar-ket and the impending growth in productionof cellulosic ethanol, the company wants tobe prepared for the future. “We expect ourgrowth to be in the area of 20 [percent] to 25percent for the next couple of years and thenprobably slowing down a little bit,” Nagy said.“Then we expect the enzymes for the bio-mass to be ready to be utilized by that time.”

One reason the company is taking thesesteps is to prepare for the uncertain pace atwhich cellulosic ethanol technology willdevelop. “We still believe that we and ourpartners in the industry have some research todo,” Nagy said. “We also know that, all of asudden, things may go faster than anticipated,so that is why we are preparing this initialphase.”

Nagy said the company is looking at sitesin the Midwest because it believes that areawill continue to be the heart of the ethanolindustry. “Looking at the U.S., biofuels busi-nesses are almost exclusively based on corn,”he said. “We also believe that in the U.S., cornstover will be the cellulosic material that willbe commercialized first. That means it will bein the Corn Belt, where most of our cus-tomers will most likely be located. We want tobe close to our customers to make the mostefficient supply chain with them.”

The company is currently in talks withstate and local officials in Iowa, Nebraska,South Dakota, Minnesota and Illinois to dis-cuss suitable sites. “We have a team surveyingthese different states right now,” Nagy said.“We are zooming in on various sites to get anidea for what would be a good location in casewe need one."

—Jerry W. Kram


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INDUSTRYNEWS

NCERC hosts Operators’ SchoolEthanol Technology held The

Operators’ School on Nov. 13-15 at theNational Corn-to-Ethanol Research Centerin Edwardsville, Ill. Aimed at operatorsworking in ethanol production facilities, thecourse featured lectures and demonstrationsof production and management techniquesdesigned to yield the most efficient processpossible.

According to Ethanol TechnologyGlobal Sales Manager Chris Richards,approximately 50 people attended, and allbut four were from operating or soon-to-be-operating fuel ethanol plants. Richards saidthe turnout was strong, and the program waseffective. “We put together two-and-a-halfdays of training, where the first two dayswere based on the process itself, right fromgrain intake and milling all the way throughthe dryhouse and dehydration,” he said. “Ineach of the talks there, we attempted to takeit down to an operator’s level, where wecould look at how operating teams affectprofitability in each area and how they couldimprove efficiencies.”

Presenters at The Operators’ Schoolincluded 2007 International Fuel EthanolWorkshop High Octane Award winner Dave

Kelsall, Mike Ingledew of the EthanolTechnology Institute, members of theEthanol Technology team, members of theNCERC team and McCord Pankonen ofDocumentation Specialists InternationalInc., a training product and consulting serv-ice provider. “Overall it went extremelywell,” Richards said. “We had a fairly detailedreview sheet … ranging from individual pre-senters to the plant visits that we had. Oneach day, we actually had either an hour or anhour-and-a-half visit to the plant, where wecould actually see [it] running and working,and review the areas we just discussed.”

Ethanol Technology designed the pro-gram for instruction at the operator’s level,and the knowledge acquired at TheOperators’ School can be used to increaseplant efficiency and hold up sagging marginscaused by low ethanol prices and high cornprices. “The theme that went all the way

through the course was ways that plants canmake their operational side more profitableand more effective,” Richards said. “When itcomes down to it, an operating team can’treally affect the incoming or outgoing pricesof products, but they can affect how [theplant uses] them.”

Richards called The Operators’ Schoola big success and said Ethanol Technology isalready preparing for the event in 2008.“We’re very close,” he said, when asked ifany decisions had been made. Though noth-ing has been confirmed, Richards said theNCERC is again being considered. Whenthe date is announced, registration informa-tion will be available at EthanolTechnology’s Web site at www.ethanoltech.com.

—Michael Shirek



harm,” he said. “It is up to national gov-ernments to responsibly balance the socialcosts and benefits.” He said research intorenewable technologies should continue.At the same time, issues of food securitythrough pricing and other sustainabilitymatters should be looked at.

Alltech moves forward with ethanol plant projectAlltech received approval from theKentucky Economic DevelopmentFinance Authority for financial incentivesthat will go toward building a $40 millionethanol plant in Springfield, Ky. The $8million incentive is based on a sales taxrefund for building and equipment costs, astate income tax wage reduction for newemployees and a credit against stateincome taxes. The company has alsoapplied to the U.S. DOE for grant assis-tance and expects to get approval inFebruary. The biorefinery will use up to 30percent cellulosic feedstocks such asswitchgrass, corn cobs and corn stover. Itwill also use the fiber left over from thecorn-to-ethanol process to make addition-al products. EP

INDUSTRYNEWS

CMEC, SunOpta to build cellulosic ethanol plant

In November, SunOpta BioProcess Inc., asubsidiary of SunOpta Inc., signed a letter of intentwith Central Minnesota Ethanol Co-op in LittleFalls, Minn., to complete feasibility and engineeringstudies that may lead to the two companies jointlybuilding, owning and operating a 10 MMgy cellu-losic ethanol plant. The facility would be adjacent toCMEC’s existing corn-to-ethanol plant and woulduse local wood chips as a feedstock, provided finalengineering and definitive agreements are complet-ed.

The critical pretreatment process step will uti-lize SunOpta BioProcess’ patented auto hydrolysisprocess, which uses steam explosion technology topretreat and partially hydrolyze lignocellulosic mate-rials. In this process, no external chemical catalyst isrequired, and the water contained in the feedstockis efficiently used, eliminating the need for largeexternal water sources. This technology is currentlybeing used in a number of demonstration-scale cel-lulosic ethanol plants around the world, accordingto SunOpta.

The proposed facility would initially produce10 MMgy of cellulosic ethanol with modular scale-up plans to expand to more than 50 MMgy. Thewood waste feedstock supply would also be used inCMEC’s biomass gasifier, which started operatingin the fall of 2006, to provide power to both plants.

“We anticipate powerful synergies with

CMEC’s management and operations expertise,excellent existing infrastructure and strong commu-nity relationships,” said Murray Burke, president ofSunOpta BioProcess. “We expect the planned cel-lulosic ethanol facility to be one of the first of itskind in the world, bringing the commercial produc-tion of cellulosic ethanol to reality. This venture isconsistent with [SunOpta’s] long-term strategy ofleveraging our proprietary technology in the own-ership and operation of leading-edge cellulosicethanol operations.”

On Oct. 28, a minor fire and explosionoccurred in a wood chip storage silo for the bio-mass boiler at CMEC’s corn-based plant. Therewere no injuries, and no damage was sustained inthe rest of the facility. The cause wasn’t immediate-ly determined. After a brief shutdown, it was online one day later.

—Jessica Sobolik

CMEC's current corn-based ethanol plantwith biomass boiler may have a cellulosicethanol neighbor.

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INDUSTRYNEWS

RIN webinar reveals need for compliance The beginning of 2008 marks four months

into the implementation of renewable identifica-tion numbers. During this time, ethanol produc-ers and other effected parties continued to adjustto the new system and comply with reportingrequirements.

Quarterly reports are due two months fol-lowing the end of the quarter. The first report-ing requirement was the third-quarter 2007report, which was due Nov. 30. The year-endcompliance report is due Feb. 28.

To help obligated parties prepare for thelooming deadlines, the RINSTAR RenewableFuel Registry held a RIN Boot Camp on Oct.30. According to Clean Fuels ClearinghousePresident Clayton McMartin, 234 people repre-senting more than 100 companies attended thewebinar. About one-third of the attendees wereproducers or importers. The webinar, anInternet-based conference, consisted of an hourof prepared material, and an hour of questionsand answers from U.S. EPA representatives. Theonline tool was designed to help attendeesunderstand the basics of compliance and reportpreparation.

McMartin said it was apparent fromattendee questions that compliance with therenewable fuels standard, from which the RINs

were implemented, isn’t up to par. “The industryis in denial,” he said. “I think people are just nowrealizing this is for real.” Poll data taken duringthe event indicated that 59 percent of therespondents hadn’t started on the third-quarterreport, while just 5 percent had completed andsubmitted the report to the EPA.

Another poll showed that 61 percent ofrespondents received RINs at least one day afterthe product transfer document. “One of themost revealing things from the webinar is thatRINs are not accompanying renewable fuel asrequired by the regulations,” McMartin said.“The fuel shows up, and the RINs show up later.RINs are to be transferred the same day theproduct is transferred. I see companies that aretwo months behind on their transfers.”

Another webinar will likely take place inJanuary and cover year-end reporting, McMartinsaid. With the right system, he said reporting canbe simple. “We built our system on a solid foun-dation of a database,” he said. “We account forevery transaction, which allows us to put every-

thing back together. We keep the data organizedso that reports can be generated the day after thequarter ends.”

Customers of the RINSTAR registry havefound this to be true. “For less than $200 andjust a few minutes of my time, we had our third-quarter reports into the EPA,” said Mike Swan,operations manager at Holland Terminal Inc. “Isent these reports through [EPA’s Central DataExchange] system, which is a minor accomplish-ment on its own.”

McMartin said the registry continues togrow each week. “We are handling as many as800 transactions a day now—up from around250 in September,” he said. “Our transactionrate is on a pace of 10,000 transactions permonth.” The transactions are among more than30 member companies, which McMartin saidaccounts for more than 1 billion gallons ofrenewable fuel transfers annually. “That showsyou how much [fuel] trading happens before itgets to the end-user,” he said.

RINSTAR was developed by Clean FuelsClearinghouse. It is a Web-based renewable fuelsvalidation and credit management system, opento all stakeholders in the renewable fuels arena.

—Anduin Kirkbride McElroy

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fleet management.

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INDUSTRYEXPANSION COMPLETEPLANT EXPANSIONPROJECT COMPLETENEW PROJECT

Ethanol Plant Construction

n the December issue of EPM, we noted that several plants were

finishing construction and starting production, but fewer plants were

starting construction. For example, from September to press time in

November, 10 plants had completed construction. During this same

time, only two plants began construction. This time frame is a

microcosm of the ethanol industry’s construction slowdown. 2008 is likely to

begin with the continuing decline in construction capacity until something

changes.

A project can take several years to get from concept to production.

Sometimes the equity drive ends up taking the longest. Unfortunately, when

equity drives slow significantly, so does everything else. “Once ethanol’s

price went down [during the summer of 2007], it became much harder to

close equity drives,” said Art Wiselogel, a manager in BBI International’s

Project Development division. Wall Street investors lowered the amount of

money they were willing to loan to projects, decreasing the bank’s risk and,

in turn, making it harder for a project to raise more money in an unfavorable

season. “The only plants you’re going to see get started [at the beginning

of] the fourth quarter are those that are self-financed,” Wiselogel said.

This may explain the lack of plants that began construction between

September and November, but it doesn’t discourage all project developers.

In Casselton, N.D., Tharaldson Ethanol LLC is building a 100 MMgy facili-

ty. The project began construction in May, and despite the severe weather

that threatens the region every winter, crews will be on the ground until the

job is complete. “Everyone’s got their eyes on us,” said one engineer at the

site. This isn’t a self-promoting statement. Rather, with so much at stake,

getting the job done at close to 100 percent efficiency has become a neces-

sity.

Competition is increasing with each passing month. Wiselogel said he

expects ethanol capacity coming on line in the third and fourth quarters of

2007, and possibly into the first quarter of 2008, to exceed 1 billion gallons

before there is a slowdown in completed projects. According to Wiselogel,

14 billion gallons of corn-based ethanol capacity may be all the U.S. mar-

ket can bear. “This will probably continue until the financial environment dic-

tates otherwise,” he said.

In keeping with this trend, no new plants were added to the list this

month. However, three plants completed construction. Advanced

BioEnergy LLC in Fairmont, Neb., began production Oct. 25 and is current-

ly running at full capacity. Renew Energy LLC in Jefferson, Wis., started pro-

duction in November. Likewise, Western New York Energy LLC in Shelby,

N.Y., began production just before Thanksgiving. In addition, two facilities

completed expansion projects. Big River Resources LLC in West

Burlington, Iowa, and Husker Ag LLC in Plainview, Neb., completed 40

MMgy expansion projects in November.

—Craig A. Johnson

Slow but Steady

I

Tharaldson Ethanol LLC


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:

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Construction Represents 4.79 Billion Gallons Annually

Biofuel Energy Corp.

Location Fairmont, Minnesota Ethanol marketer Cargill Inc.

General contractor The Industrial Co. Distillers grains marketer Cargill Inc.

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

Capacity 110 MMgy Broke ground September 2006

Feedstock corn Target start-up date first quarter 2008

Synopsis of progress

Finishing touches remain, including piping and electrical work, and work on the materials handling area.

Location West Burlington, Iowa

Design/builder Fagen Inc.

Process technology ICM Inc.

Capacity from 52 MMgy to 92 MMgy

Feedstock corn

Ethanol marketer Provista

Distillers grains marketer UBE Ingredients

Carbon dioxide marketer N/A

Start date December 2006

Completion date November 2007

Expansion Complete Big River Resources LLC


The plant completed construction and aimed to ramp up to 100 percent capacity by mid-December.

Congratulations Big River Resources LLC!

Aberdeen Energy LLC

Location Mina, South Dakota Ethanol marketer undeclared

Design/builder Fagen Inc. Distillers grains marketer undeclared

Process technology ICM Inc. Carbon dioxide marketer N/A

Capacity 100 MMgy Broke ground November 2006

Feedstock corn Target start-up date early 2008


N/A

Altra Indiana LLC

Location Cloverdale, Indiana Ethanol marketer undeclared

General contractor F.A. Wilhelm Construction Distillers grains marketer undeclared

Process technology Vogelbusch Carbon dioxide marketer undeclared

Capacity 88 MMgy Broke ground October 2006

Feedstock corn Target start-up date April 2008


N/A

The Andersons Marathon Ethanol LLC

Location Greenville, Ohio Ethanol marketer The Andersons Inc.

Design/builder ICM Inc. Distillers grains marketer The Andersons Inc.

Process technology ICM Inc. Carbon dioxide marketer undeclared




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

Arkalon Energy LLC

Location Liberal, Kansas Ethanol marketer Murex

Design/builder ICM Inc. Distillers grains marketer Conestoga Energy Partners


Capacity 110 MMgy Broke ground August 2006

Feedstock corn/milo Target start-up date December 2007


Roadwork and construction of the rail spur continue at the site.

Absolute Energy LLC

Location St. Ansgar, Iowa Ethanol marketer RPMG

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


Capacity 100 MMgy Broke ground July 2006

Feedstock corn Target start-up date February 2008


One-third of all roadwork is complete, and most construction is focused on the energy center and processing

building. The facility is receiving corn.

Advanced BioEnergy LLC

Location Fairmont, Nebraska Ethanol marketer RPMG



Capacity 100 MMgy Broke ground December 2005

Feedstock corn Start-up date October 2007


The plant began production Oct. 25 and is running at full capacity. Congratulations Advanced BioEnergy LLC!

Project Complete


Absolute Energy LLC

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Electrical Construction • Electrical Engineering • Automation • Instrumentation

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Bridgeport Ethanol LLC

Location Bridgeport, Nebraska Ethanol marketer undeclared

Design/builder ICM Inc. Distillers grains marketer undeclared



Feedstock corn Target start-up date October 2008


N/A

Calgren Renewable Fuels LLC

Location Pixley, California Ethanol marketer Calgren Renewable Fuels

General contractor Lurgi Distillers grains marketer J.D. Heiskell & Co.

Process technology Lurgi Carbon dioxide marketer N/A

Capacity 52 MMgy Broke ground March 2007

Feedstock corn Target start-up date February 2008


Work continues on the cooling tower. The pipe rack between the distillation, dehydration and evaporation area

and process area is erected, and pipe is being installed. Forms are stripped from the foundations for the two

liquefaction tanks.

Cardinal Ethanol LLC

Location Union City, Indiana Ethanol marketer Murex



Capacity 100 MMgy Broke ground February 2007

Feedstock corn Target start-up date summer 2008


Rail spur construction continues. Water pipes are being set for the fire system. Construction of the county

road and nearby highway continues. Work on the energy center has also begun.

Cardinal Ethanol LLC

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Biofuel Energy Corp.

Location Wood River, Nebraska Ethanol marketer Cargill Inc.

General contractor The Industrial Co. Distillers grains marketer Cargill Inc.


Capacity 110 MMgy Broke ground May 2006



Construction continues on the materials handling area. Piping and electrical work is underway.

Cascade Grain Products

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Cilion Ethanol LLC

Location Keyes, California Ethanol marketer undeclared

General contractor Harris Construction Distillers grains marketer undeclared

Process technology Praj Industries Carbon dioxide marketer N/A


Feedstock corn Target start-up date second quarter 2008


Overall construction is more than 50 percent complete.

Central Illinois Energy Co-op

Location Canton, Illinois Ethanol marketer Cargill Inc.

General contractor Lurgi Distillers grains marketer Cargill Inc.

Process technology Lurgi Carbon dioxide marketer N/A


Feedstock corn Target start-up date December 2007


N/A

Coshocton Ethanol LLC

Location Coshocton, Ohio Ethanol marketer undeclared

General contractor The Industrial Co. Distillers grains marketer undeclared

Process technology Delta-T Corp. Carbon dioxide marketer undeclared




N/A

Center Ethanol Co. LLC

Location Sauget, Illinois Ethanol marketer Center Oil Co.

General contractor T.E. Ibberson/McCarthy Industrial Distillers grains marketer undeclared



Feedstock corn Target start-up date January 2008


N/A

Cascade Grain Products LLC

Location Clatskanie, Oregon Ethanol marketer Eco-Energy

General contractor JH Kelly Ethanol Distillers grains marketer Land O’Lakes


Capacity 108 MMgy Broke ground June 2006

Feedstock corn Target start-up date March 2008


Work on the fermentors is complete, and construction of steel tanks continues. Steel is also going up for the

process center. The distillation, dehydration and evaporation area is being enclosed.

Castle Rock Renewable Fuels LLC

Location Necedah, Wisconsin Ethanol marketer Murex






Overall construction is more than 95 percent complete. Some work in the tank farm remains.

Castle Rock Renewable Fuels LLC

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Heartland Grain Fuels LP

Location Aberdeen, South Dakota Ethanol marketer Aventine Renewable Energy

Design/builder ICM Inc. Distillers grains marketer Dakotaland Feeds


Capacity from 8 MMgy to 48 MMgy Start date September 2006

Feedstock corn Target completion date first quarter 2008


All concrete work is complete. The energy center and electrical work are 75 percent complete. Construction

of all mechanical components is 80 percent complete. Hydro-testing of storage tanks has begun.

Plant Expansion

GreenField Ethanol

Location Johnstown, Ontario Ethanol marketer Commercial Alcohols

General contractor SNC Lavalin Distillers grains marketer Commercial Alcohols


Capacity 200 MMly (53 MMgy) Broke ground October 2006

Feedstock corn Target start-up date fourth quarter 2008


Hydro-testing of beer well is complete. Field-erected potable water tanks are complete, and mechanical

installation in the process area and energy center is ongoing.

Greater Ohio Ethanol LLC

Location Lima, Ohio Ethanol marketer undeclared

General contractor Alberici Constructors Inc. Distillers grains marketer undeclared

Process technology Benchmark Products Inc. Carbon dioxide marketer N/A




N/A

Location Watertown, South Dakota

Design/builder ICM Inc.

Process technology ICM Inc.

Capacity from 50 MMgy to 100 MMgy

Feedstock corn

Ethanol marketer Aventine Renewable Energy

Distillers grains marketer Glacial Lakes Energy

Carbon dioxide marketer N/A

Start date December 2006

Target completion date late 2007

Plant Expansion Glacial Lakes Energy LLC


N/A

Didion Ethanol LLC

Location Courtland, Wisconsin Ethanol marketer undeclared

General contractor Agra Industries Distillers grains marketer undeclared





N/A

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


Fermentation tanks and evaporators are being erected. Concrete work is complete in the process area and

continues in the energy center. Construction in the grain receiving area is progressing, and site preparation

is beginning for the grain elevators. Most major equipment is on-site. The distillers grains building and bridge

over the railroad loop are complete. The tank farm is about 80 percent complete.

First United Ethanol LLC

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Husker Ag LLC

Location Plainview, Nebraska Ethanol marketer Eco-Energy

Design/builder ICM Inc. Distillers grains marketer Husker Ag LLC


Capacity from 27 MMgy to 67 MMgy Start date September 2006

Feedstock corn Completion date November 2007


Construction is complete, and the plant started its boiler Nov. 15. Congratulations Husker Ag LLC!

Expansion Complete

Indiana Bio-Energy LLC

Location Bluffton, Indiana Ethanol marketer Aventine Renewable Energy




Feedstock corn Target start-up date June 2008


N/A

Kansas Ethanol LLC

Location Lyons, Kansas Ethanol marketer Poet Ethanol Products




Feedstock corn/milo Target start-up date March 2008


N/A

Levelland/Hockley County Ethanol LLC

Location Levelland, Texas Ethanol marketer Lansing Trade Group

Design/builder ICM Inc. Distillers grains marketer Lansing Trade Group

Process technology ICM Inc. Carbon dioxide marketer Chaparral Energy Inc.


Feedstock corn/milo Target start-up date February 2008


N/A

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

Husker Ag LLC

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Marquis Energy LLC

Location Hennepin, Illinois Ethanol marketer undeclared






Electrical and piping work is ongoing. The rail spur is approximately 50 percent complete.


Nesika Energy LLC

Location Scandia, Kansas Ethanol marketer Poet Ethanol Products

General contractor Free Country Design & Construction Distillers grains marketer Nesika Energy LLC



Feedstock corn Target start-up date November 2007


Overall construction is more than 95 percent complete. The wet feed system that will deliver hot, wet feed to

cows at a nearby farm is operational.

Otter Tail Ag Enterprises LLC

Location Fergus Falls, Minnesota Ethanol marketer RPMG

General contractor Harris Mechanical Distillers grains marketer CHS Inc.


Capacity 57.5 MMgy Broke ground October 2006



High winds in mid-November damaged a 1 million-gallon on-site storage tank. No injuries were reported, and

the damage won’t alter the plant’s target start-up date.

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 Carbon dioxide marketer undeclared




N/A

Northeast Biofuels LLC

Location Volney, New York Ethanol marketer Noble Americas Corp.

General contractor Lurgi Distillers grains marketer Perdue Farms

Process technology Lurgi Carbon dioxide marketer BOC Gases




N/A

Nexsun Ethanol LLC

Location Ulysses, Kansas Ethanol marketer undeclared




Feedstock corn/milo Target start-up date 2008


Dirt work continues, despite unfavorable weather conditions.

Pacific Ethanol Magic Valley LLC

Location Burley, Idaho Ethanol marketer Kinergy Marketing

General contractor Parsons RCI Inc. Distillers grains marketer Pacific Ag Products LLC





The process building is being enclosed. Construction continues in various areas of the site.

NEDAK Ethanol LLC

Location Atkinson, Nebraska Ethanol marketer Eco-Energy

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





The fire tank foundation is poured, and electrical and piping work continues.

Marysville Ethanol LLC

Location Marysville, Michigan Ethanol marketer undeclared




Feedstock corn Target start-up date early 2008


N/A


Pacific Ethanol Stockton LLC

Location Stockton, California Ethanol marketer Kinergy Marketing

General contractor Parsons RCI Inc. Distillers grains marketer Pacific Ag Products LLC


Capacity 50 MMgy Broke ground April 2007

Feedstock corn Target start-up date third quarter 2008


At least seven storage bins have lids. Steel erection continues on additional bins.

Panda Hereford Ethanol LP

Location Hereford, Texas Ethanol marketer Aventine Renewable Energy

General contractor Lurgi Distillers grains marketer Panda Ethanol

Process technology Lurgi Carbon dioxide marketer undeclared




N/A

Platinum Ethanol LLC

Location Arthur, Iowa Ethanol marketer Provista

Design/builder Fagen Inc. Distillers grains marketer UBE Ingredients



Feedstock corn Target start-up date August 2008


N/A

Patriot Renewable Fuels LLC

Location Annawan, Illinois Ethanol marketer Murex




Feedstock corn Target start-up date spring 2008


Construction of the fermentation tanks and the eight-mile rail loop is nearly complete.

Poet Biorefining-Alexandria

Location Alexandria, Indiana 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





Otter Tail Ag Enterprises LLC

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Poet Biorefining-Chancellor

Location Chancellor, South Dakota Ethanol marketer Poet Ethanol Products



Capacity from 50 MMgy to 100 MMgy Start date October 2006

Feedstock corn Target completion date second quarter 2008



Plant Expansion

Renova Energy of Idaho LLC

Location Heyburn, Idaho Ethanol marketer Renova Energy

General contractor Dilling Corp. Distillers grains marketer Renova Energy

Process technology Katzen International Carbon dioxide marketer Renova Energy




Overall construction is more than 50 percent complete.

Renew Energy LLC

Location Jefferson, Wisconsin Ethanol marketer Renew Energy

General contractor CR Meyer Distillers grains marketer Renew Energy



Feedstock corn Start-up date November 2007


Construction is complete. Congratulations Renew Energy LLC!

Project Complete

Poet Biorefining-Marion

Location Marion, Ohio Ethanol marketer Poet Ethanol Products







Poet Biorefining-North Manchester

Location North Manchester, Indiana Ethanol marketer Poet Ethanol Products



Capacity 65 MMgy Broke ground third quarter 2007




Poet Biorefining-Leipsic

Location Leipsic, Ohio Ethanol marketer Poet Ethanol Products







Siouxland Energy & Livestock Co-op

Location Sioux Center, Iowa Ethanol marketer C&N Ethanol Marketing

Design/builder ICM Inc. Distillers grains marketer Farmers Co-op Society


Capacity from 25 MMgy to 55 MMgy Start date October 2006

Feedstock corn Target completion date December 2007


N/A

Plant Expansion

Southwest Iowa Renewable Energy LLC

Location Council Bluffs, Iowa Ethanol marketer Lansing Ethanol Group

Design/builder ICM Inc. Distillers grains marketer Bunge



Feedstock corn Target start-up date August 2008


Installation of the loading system and cooling tower depot is underway. Additional structural steel work was

set to begin around Thanksgiving.

Poet Biorefining-Fostoria

Location Fostoria, Ohio Ethanol marketer Poet Ethanol Products








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Standard Ethanol Cambridge LLC

Location Cambridge, Nebraska Ethanol marketer Noble Americas Corp.

General contractor The Industrial Co. Distillers grains marketer The Scoular Co.


Capacity 44 MMgy Broke ground April 2006



N/A


Superior Ethanol LLC

Location Superior, Iowa Ethanol marketer RPMG

General contractor Agra Industries Distillers grains marketer undeclared





N/A

Terra Grain Fuels Inc.

Location Belle Plaine, Saskatchewan Ethanol marketer undeclared

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


Capacity 150 MMly (40 MMgy) Broke ground September 2006

Feedstock wheat Target start-up date December 2007


N/A

U.S. Bio Janesville

Location Janesville, Minnesota Ethanol marketer Provista




Feedstock corn Target start-up date third quarter 2008


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

time.

U.S. Bio Dyersville

Location Dyersville, Iowa Ethanol marketer Provista







time.

U.S. Bio Hankinson

Location Hankinson, North Dakota Ethanol marketer Provista







time.

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




With more than 140 workers on-site, construction is underway on the tanks, distillers grains area and the

process center. Crews are on pace to meet the target start-up date as they take advantage of an unusually

warm autumn in North Dakota.

U.S. Bio Marion

Location Marion, South Dakota Ethanol marketer Archer Daniels Midland

Design/builder Fagen Inc. Distillers grains marketer Archer Daniels Midland






time.

THE FUNDING EXPERIENCE AND CONNECTIONS TO GETYOUR PROJECT OFF THEGROUND.

8090 South 84th Street, LaVista, NE 68128 | T: [402] 895-5067 | F: [402] 891-5702

www.agri-energyfs.com | [email protected]

Agri-Energy Funding Solutions works with lenders and private investors nationally and internationally to secure financing for new or expanding biodiesel, ethanol and biomass plants.

Agri-Energy Funding Solutions provides:• Construction/permanent financing

• Mezzanine & equity funding

• Working capital line of credit

• USDA financing


VeraSun Bloomingburg LLC

Location Bloomingburg, Ohio Ethanol marketer Cargill Inc.

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





According to the company Web site, construction continues on schedule. No further information was available

at press time.

VeraSun Hartley LLC

Location Hartley, Iowa Ethanol marketer VeraSun Energy

Design/builder Fagen Inc. Distillers grains marketer VeraSun Energy





According to the company Web site, construction continues on schedule. No further information was avail-

able at press time.

VeraSun Welcome LLC

Location Welcome, Minnesota Ethanol marketer VeraSun Energy

Design/builder Fagen Inc. Distillers grains marketer VeraSun Energy





According to the company Web site, construction continues on schedule. No further information was avail-

able at press time.

Verenium Biofuels Louisiana

Location Jennings, Louisiana Ethanol marketer undeclared

General contractor Cajun Constructors Inc. Distillers grains marketer N/A

Process technology Verenium Biofuels Carbon dioxide marketer N/A

Capacity 1.4 MMgy Broke ground February 2007

Feedstock sugarcane bagasse/energy cane Target start-up date first quarter 2008


Overall construction remained at 50 percent complete in mid-November.

Western New York Energy LLC

Location Shelby, New York Ethanol marketer Eco-Energy


Process technology ICM Inc. Carbon dioxide marketer EPCO Carbon Dioxide Products


Feedstock corn Start-up date November 2007


Construction at the site is complete. Hydro-testing is underway, and the boiler was fired just before

Thanksgiving. Congratulations Western New York Energy LLC!

Project Complete

White Energy Hereford LLC

Location Hereford, Texas Ethanol marketer Murex

Design/builder Fagen Inc. Distillers grains marketer Quality Distillers Grain



Feedstock corn/milo Target start-up date fourth quarter 2007


N/A

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 first quarter 2008


N/A

The plant is still under construc-

tion, but the train whistle and bell are

sounding at Patriot Renewable Fuels

LLC in Annawan, Ill. The company pur-

chased a 1966 Electro Motive Division

General Electric switch engine from the

Iowa Interstate Railroad.

The old engine will receive a new

paint job in the company’s colors of red,

white and blue on a silver background.

Gene Griffith, CEO and chairman of

Patriot Renewable Fuels, said the design

was inspired by the safety vehicles of the

ethanol-powered IndyCar Series. “We

thought that was a very attractive paint

scheme, so we thought we would try to

do something similar,” the chief executive

officer says.

The company is building a 45,000-

foot rail yard, which will be the largest pri-

vate rail yard on the Iowa Interstate

Railroad, a short line that runs from

Omaha, Neb., to Chicago. The yard will

have the capacity to hold 500 cars of

ethanol, distillers grains and corn at one

time. “We will be able to assemble unit

trains and store all the cars that will be

required to service the plant,” Griffith

says. “We will have the ability to receive

corn by rail, as well.”

The recently overhauled switch

engine is being used to help build the rail

yard. Its 645-cubic-inch cylinders deliver

1,400 horsepower, which allow it to move

25 cars of ballast rock at a time. More

than 200 railcars of ballast rock will be

needed from a quarry in Milan, Ill., to

complete the rail yard. Colo Railroad

Builders is building the rail yard, laying an

average of more than 800 feet of rail per

day. Griffith says the track’s innovative

design makes the installation clean and

efficient. “Colo is an experienced railroad

contractor, and it is doing a good job for

us,” he says. “Our siding will be 9,500

feet, and it is constructed of ribbon rail on

steel ties. Ribbon rail was brought in

1,400-foot lengths on 25 or 30 special

cars designed to haul that kind of rail.

The steel ties have some advantages in

that the durability, we think, will be almost

Hear That Train a Comin’

PATRIOT RENEWABLE FUELS LLC

LOCATION Annawan, Illinois

DESIGN/BUILDER Fagen Inc.

PROCESS TECHNOLOGY ICM Inc.

CAPACITY 110 MMgy

FEEDSTOCK corn

ETHANOL MARKETER Murex

DISTILLERS GRAINS MARKETER CHS Inc.

CARBON DIOXIDE MARKETER N/A

BROKE GROUND February 2007

START-UP DATE summer 2008

:OU

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:OU

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indefinite. Instead of spikes, the rails are

attached with clips that inserted and fas-

tened permanently. We should have a rail

yard here that will need very little mainte-

nance for a very long time.”

After the engine finishes its work on

the rail yard, it will be off to Kansas City,

Mo., for more upgrades and its new paint

job. One of the upgrades will be a remote

control system that will allow an operator

on the ground to control all functions of the

engine from a belt pack, including the throt-

tle, brakes, whistle and bell.

Patriot Renewable Fuels was formed

after a Henry County economic develop-

ment committee explored the possibility of

locating an ethanol plant in the rural coun-

ty about 30 miles from the Quad Cities

(Davenport and Bettendorf in Iowa, and

Moline/East Moline and Rock Island in

Illinois). “The village of Annawan has been

very proactive in developing jobs and

industry in this area,” Griffith says. “There

were two of us that took that on and decid-

ed to make it a reality in January 2005. We

started our fundraising in January 2006

and broke ground in late 2007.” Most of the

money was raised within 100 miles of

Annawan.

The company’s name was derived in

part from Henry County, which was named

for Patrick Henry, who said, “Give me liber-

ty or give me death.” Griffith reasons, “The

name was suggested and sounded good.

It coincides with the idea that we are trying

to reduce our dependence on foreign oil.

It’s a national priority to develop renewable

fuels, and the name just seemed appropri-

ate.”

The plant will be one of the largest

dry-grind ethanol plants in Illinois. “This will

be a major employer in Henry County,”

Griffith adds. “We won’t be the largest

employer in the area, but we will have a

major impact by bringing in 50 new jobs. It

is the largest single project that has been

started in Henry County.”

The plant will also be distinctive for its

access to transportation. Besides its rail

links through the Iowa Interstate Railroad,

which connects to most major rail lines in

the United States and Canada, the plant is

adjacent to Interstate 80, a major east-

west artery across the country. The plant is

also close to two major highways going

north and south. It is only 30 miles from ter-

minals on the Mississippi and Illinois rivers,

allowing the plant to utilize barges for

transportation.

—Jerry W. Kram


PHOTOS: PATRIOT RENEWABLE FUELS LLC

:INT

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FIE

LD

Remember seeing the sil-

houette of two faces looking at each

other and trying to refocus your eyes to

see the lamp in the middle? That’s what

happened to Fred Below when he start-

ed working with tropical maize. As a

crop physiologist, he has known for

years that corn stores sugar in its stalks.

“First it’s in the leaves, then it’s in the

stalks, then it’s in the grain where the

sugar is converted to starch,” he says.

The University of Illinois at Urbana-

Champaign researcher was looking at

tropical maize plants one day with his

graduate students when the obfuscated

became obvious.

“It’s a new use for a phenomenon

that has been known for a long time,” he

explains. Corn, or maize, that has

adapted to the photosynthesis periods

of tropical regions grows normally there,

but when it’s transplanted and growing

during longer summer days in Illinois, it

behaves differently. In the longer photo-

synthesis period, the tropical maize

delays its flowering cycle and grows

taller. Instead of sending its energy into

tasseling and cob formation, it stores

sugar in the stalk. In other words, it

behaves exactly like its sister grassy

crops—sugarcane and sweet sorghum.

“We’ve grown some of the materi-

al, measured some of its biological

potential and squeezed some juice for

fermentation studies,” Below says. The

stalks yielded about 25 percent simple

sugars—mostly sucrose, fructose and

glucose. The initial data from fermenta-

tion studies indicates that yeast makes

good quantities of butanol and ethanol,

and there doesn’t appear to be any nat-

ural inhibitors, he says.

Midwestern-grown tropical maize

easily grows 14 to 15 feet tall, he says,

compared with the 7.5-foot typical

hybrid corn varieties. Below’s prelimi-

nary data indicates that biomass yields

will total approximately eight tons per

acre. Good biomass yields should be

achievable with one-fourth the fertilizer

required in conventional corn crops, he

says. The heavy nitrogen applications

used in corn production are primarily uti-

lized by the corn plants to maximize the

yield of grain.

“The nice thing is that it can be

planted and managed the exact same

way as corn,” he says. “The farmer can

use existing equipment, and we think

he’ll be able to use silage cutters for har-

vest.”

More work needs to be done,

Below says. As a plant scientist, he will

continue to learn how to maximize the

plant’s potential. Others working in

process engineering will need to exam-

ine how it will fit into the ethanol indus-

try. He expects that the simple sugars

will be extracted first for fermentation

into ethanol in one process, with the

remaining pulp, or bagasse, burned for

energy or run through a cellulosic

ethanol process.

At this point, Below has just

enough seed to use for his research in

Illinois. However, he is trying to make

arrangements to increase seed quanti-

ties so that others can plant test plots for

research and demonstration. Plus, the

original research project using tropical

maize will continue. Very little nitrogen is

used in the production of corn in the

tropics, Below explains, which should

result in varieties that are quite efficient

in using available nitrogen. Midwestern

corn varieties, on the other hand, have

been developed in recent years for high

responses to added nitrogen. His work

with tropical maize began in the search

for genes to improve the efficiency of

nitrogen utilization in Midwestern corn. It

appears that effort will be successful, as

well.

—Susanne Retka Schill

New Uses for Tropical Maize


PHOTO: CENTER FOR ADVANCED BIOENERGY RESEARCH, UIUC

University of Illinois doctoral student MikeVincent, left, holds a stalk of regular hybridcorn and compares it to a stalk of tropicalmaize held by Below.


:UP

FR

ON

T

Rick Serie has spent his career

in management and project development,

first in the amusement industry and later in

the ethanol industry. In 1988, Serie saved

an amusement park from demolition by

successfully renovating the park. In 1995,

he was project coordinator for Agri-Energy

LLC in Luverne, Minn. Today, he draws on

these experiences while managing Poet

Biorefining-Chancellor. The 50 MMgy

plant is in the middle of an expansion to

100 MMgy. A solid waste fuel boiler is also

being installed to generate enough steam

from the burning of wood biomass to pro-

duce more than half of the expanded

plant’s power needs.

Q: How was Chancellor chosen tohave a solid waste fuel boiler? A: We’re in close proximity to a wood sup-

plier, which was one of the key elements in

deciding to go forward. It takes a tremen-

dous amount of wood—150 to 350 tons of

wood per day. This is a testing ground for

Poet. If it works well and the logistics work

out, I’m sure Poet will consider putting

them in other plants.

Q: How did your experience in theamusement industry prepare youfor what you’re doing now?A: Organizing a project and actually run-

ning the park itself can be good insight into

running a business, operating profitably

and working with a board of directors. It’s

also good for establishing budgets, financ-

ing and everything that a general manag-

er does.

Q: How does the job of generalmanager differ between theindustries?A: We had a couple hundred seasonal

employees at the park. Because of the

limited full-time staff, I also did the market-

ing and sales.

Q: Describe the management phi-losophy at Poet.A: Poet grew because we know the busi-

ness well. We do a great job for all of our

shareholders and employees. Everyone is

equal. The work culture is teamwork, com-

munications and a positive attitude, which

relates to leaving your ego at the door. In

our system, it doesn’t matter where the

good idea comes from. You don’t have to

be the general manager to have a good

idea implemented. The best idea wins out.

It’s a much easier way to manage

because you have everyone involved and

you’re getting everyone’s feedback on the

decision process. You’re doing what’s best

for all—shareholders, management,

employees. It’s a proven fact that those

closest to the problem know the solution,

but they have to have trust to bring those

solutions forward.

Q: Did you have a mentor in theindustry?A: Jeff Broin. We worked very closely put-

ting the original plant together in Luverne

and became business associates. He had

this vision, and a lot of times he talked

about his vision, and how good ethanol

was for America and for farmers.

Q: What’s the greatest lessonyou’ve learned in your career? A: Nothing is given. You have to work

hard. The harder you work, the luckier you

get. I’ve always lived by that.

—Anduin Kirkbride McElroy

Project Development

Name

Rick Serie

Title General Manager

PlantPoet Biorefining-Chancellor

HometownLuverne, Minn.

Career Chronology

Poet Biorefinery-Chancellor, General Manager 2000 – Present

Boyle Development, Vice President of Operations1995 – 2000

Arnolds Park Amusement Park, General Manager1988 – 1995

Serie Fun Shows, Owner1970 – 1988

PHOTO: POET LLC



55

55

:FLE

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CT

OR

T he U.S. EPA recently

granted a specified certificate of

conformity for an aftermarket E85

kit installed in certain 4.6-liter Ford

Motor Co. fleet vehicles. Flex Fuel

U.S., developer of the Flex-Box

Smart Kit, gained its first of what

CEO Mitch Sremac says will be 12

certificates of conformity for 12

engine series in the next six

months. “Our first was the 2006

Lincoln Town Car Livery, Mercury

Grand Marquis and Ford Crown

Victoria series,” the chief executive

officer says. “Our second will be for

the 5.7-liter Dodge Chargers and

Dodge 300, and then Ford

Mustang.”

The certification is good for up

to 225 vehicles. “We didn’t want to

buy certification of 5,000 if we only

sold a few hundred,” Sremac tells

EPM. Additional fees are due to the

EPA if more than 225 total vehicles

get the E85 retrofit. “This is an

expensive endeavor,” he says.

Each model costs $30,000 to certi-

fy, including fees paid to the EPA

and engine tests done at an

agency-approved test lab. Flex

Fuel U.S. says it has one of the pre-

mier labs in the country—Roush

Industries—collecting emissions,

performance and fuel economy

data on its kits, which are then pre-

sented to the EPA. Sremac says his

competitors have found it difficult to

gain a certificate of conformity

because of the breadth of vehicle

variety that their systems cover, as

well as the upper hand he says his

Flex-Box Smart Kit has over the

competition in terms of design. The

Flex-Box Smart Kit doesn’t mess

with original engine manufacturer

fuel trim language inside the engine

control module. Instead, an extra

injector is installed just behind the

throttle plate on the manifold.

Rather than a sensor relaying to

the ECM which air-to-fuel ratio to

deliver, the factory system performs

undisturbed while the supplemental

ECM gains its queues for extra fuel

volume from sensors detecting

emissions or alcohol concentration,

engine speed and load. “It gives

just enough extra fuel so the facto-

ry ECM does not go out of calibra-

tion and read [a malfunction indica-

tor light],” he says. “Everyone else

just uses the factory ECM and

adjusts timing by 30 percent.”

There is a provisional patent on the

kit, he adds.

Sremac says the marketing of

his kits was geared toward fleets

because that’s where they would

be most readily accepted. “They

are the ones who can reap the ben-

efits of the certification through

alternative vehicle tax credits and

other incentives,” he says. So far,

the response from fleet managers

has been very good, and Flex Fuel

U.S. has a pilot program underway

in a major Midwestern city. “If it

goes well, they’ve agreed to con-

vert all 2,500 of its police vehicles,”

he says.

Fuel economy loss averages

between 2 percent and 5 percent,

Sremac says. “With the Crown

Vics, it’s 4 percent,” he says. “Is

there a reduction? Absolutely, but

we’re not seeing the 20 percent to

25 percent reductions people talk

about.”

Installation can be done

at any of the 1,100 AAMCO

Transmissions centers nationwide,

or by fleet mechanics who have

taken a one-day installation training

seminar at Flex Fuel U.S.’s training

facility. “The reason we chose

AAMCO is it is ubiquitous, and it

has high-caliber technicians,”

Sremac says.

—Ron Kotrba

EPA Grants E85 Aftermarket Certification


PHOTO: FLEX FUEL U.S.

Flex-Box Smart Kit for 2006 Lincoln Town Cars

All products written by member companies of Liberty Mutual Group. © 2007 Liberty Mutual Group.

Of all the reasons Liberty International Underwriters has become a leading specialty lines insurer, what truly sets us apart is our instinct to do the right thing. We meet your needs quickly, consistently, and responsibly. Together, we can provide the best products for your clients. We don’t just value our relationship with you. We work at it.

For specific information about the types of risk we write, visit libertyiu.com/renewableenergy. Liberty Mutual is rated A by A.M. Best.

E X C E S S C A S U A L T Y & U M B R E L L A • E & O • D & O • P R I M A R Y C A S U A L T Y • F I D E L I T Y • E N V I R O N M E N T A L • C O N S T R U C T I O N • M A R I N E • E N E R G Y

Yes, there’s a renewable energy insurer that’s as responsible as you are.

He’s no stranger to risk. Or his customers.

– Anthony Carroll, Chief Underwriting OfficerLIU Global Energy, Marine and Construction

:BU

SIN

ES

S

Several ethanol producers

saw positive gains during their fis-

cal year third quarter, despite com-

pressed operational profits that are

expected to linger into 2008.

Producers that experienced finan-

cial success credited improved

diversification of upward sales rev-

enue streams, and increased merg-

er and acquisition activity. Those

that reported declines were impact-

ed by difficult market conditions

such as lower-than-average

ethanol prices, a lack of discre-

tionary blending by refiners and

independent distributors (which is

now on the rise), and the absence

of an expanded nationwide renew-

able fuels standard (RFS) to offset

the supply imbalance.

�End-to-end energy provider,

marketer and producer Aventine

Renewable Energy Holdings Inc.

reported a net income of $3 million,

down more than 43 percent from

the same period last year. Total

cash flow from its operations for the

quarter totaled $8.8 million.

Revenue decreased 8.7 percent,

compared with 2007 second-quar-

ter results.

�The Andersons Inc. estab-

lished new earnings records, as the

Maumee, Ohio-based producer

reported a net income of $10.6 mil-

lion with revenues totaling $554

million. During the first nine months

of 2007, the company earned a net

income of $45.3 million on rev-

enues of $1.6 billion.

�Net earnings for ag giant

Archer Daniels Midland Co.

increased to $441 million, a $38

million gain from the $403 million it

posted over the same period in

2006. ADM’s corn processing divi-

sion, which houses ethanol sales,

decreased $36 million to $253 mil-

lion, due to lower ethanol sales

prices, volumes and higher net

corn costs.

�Pacific Ethanol Inc. swung

into a third-quarter loss as the

California-based producer posted a

$4.8 million net loss versus a profit

of $3.8 million during the same

period last year, despite a record

level of sales and ethanol volumes.

The company sold more product

(50 million gallons, compared with

22.7 million gallons one year ago)

but made less profit due to low

ethanol prices, as revenue nearly

doubled to $118.1 million (a 93 per-

cent increase) from $61.1 million

during the same time last year.

�U.S. BioEnergy Corp. saw

its net income rise 34 percent to

$11.1 million compared with $8.3

million during the previous quarter.

The Minnesota-based ethanol pro-

ducer posted its revenue at $150

million, slightly lower than the $154

million it reported in its previous

quarter.

�VeraSun Energy Corp., one

of the nation’s largest ethanol pro-

ducers, reported strong earnings

primarily due to an increased rev-

enue stream. The Brookings, S.D.-

based company reported revenues

of $221.9 million, a 49 percent

increase compared with the same

quarter last year. Although it posted

a net income of $7.8 million, com-

pared with $32 million the same

time a year ago, VeraSun’s net

ethanol sales increased $58 million

to $188.5 million as a result of a 72

percent increase in ethanol volume

sold (95.1 million gallons).

—By Bryan Sims

Third-Quarter Financial Results Show Promise


Goulds Pumps

the global leader ina growing industry.Goulds Pumps has the largest selection—and installed base—of ethanoland corn processing pumps in the world. And our 3196 is the most popularprocess pump across all industries. Combined with advanced technology likeour PumpSmart® controls and ProSmart® monitoring for improved performance,and a local sales and service network that’s second to none, you get more thanreliability. You get peace of mind.

Call 1-800-734-PUMP for our new ethanol brochure or visitgouldspumps.com for the name of your local representative.


“Food Riots in Mexico,

“Crimes Against Humanity,” “Biofuel

Bust,” “Dead Zone in the Gulf of

Mexico.” The ethanol industry has

heard it all over the last six months. It

appears some in the media have treat-

ed us like a piñata, swinging wildly

while blindfolded. It has bordered on

the absurd. In some corporate circles

ethanol has become as convenient an

excuse as “the dog ate my homework”

is in grade school.

Please, enough is

enough.

As many of

you are well aware,

the industry has

formed a coalition

to fight back

against these

accusations, which

stem from what we

believe is a well-

orchestrated, well-

funded campaign by ethanol’s detrac-

tors. While our critics may have deep

pockets, our industry is united and the

facts are on our side. The headlines

may cause many of us angst, but

there is positive news: consumers

appear to be tuning out the anti-

ethanol drumbeat. The latest Ethanol

Promotion and Information Council

consumer research found that nearly

one-third of respondents indicated that

their attitude toward ethanol has

become more favorable over the last

six months. Sixty-two percent reported

their opinions stayed the same.

In baseball vernacular, our oppo-

nents have swung for the fences and

grounded out to shortstop.

Let’s take a look at the facts. Our

research found that an overwhelming

majority of consumers still believe the

United States is too dependent on for-

eign sources of oil. When the price of

oil reaches record levels, how can any

critic argue against alternative ener-

gy? The International

Energy Agency reports that

as the world seeks to boost

energy supplies over the

next two decades, an

increasing percentage of its

supplies of oil and gas will

come from a dwindling num-

ber of countries, largely cen-

tered around the Persian

Gulf. This will leave industri-

alized countries even more

dependent on this volatile

region.

So-called experts have pointed

the finger at the ethanol industry for

rising food prices. However, with rising

heating oil prices, these detractors

appear to have gone underground.

Where is the outrage when residents

on fixed incomes in the Northeast face

tough “food-versus-fuel” choices this

winter?

The economic impact is across

the board. According to the Air

Transport Association, every $1

increase in the per-barrel price of oil

adds $470 million per year in jet fuel

costs to the U.S. airline industry.

It's ludicrous that some will print

accusations that the price of gummy

bears in Germany will rise due to

ethanol production, while consumers

realign their family budgets to deal with

rising energy costs. A Consumer

Federation of America report found

that over the last five years household

energy expenditures have nearly dou-

bled and are now more than 23 per-

cent more than spending on food.

Our survey found that 79 percent

of respondents agreed that the gov-

ernment should require cleaner and

more efficient sources of energy.

That’s positive news for E85 and bad

news for our detractors. "America's

Flex-Fuel" is on the move. In

November the first E85 pump in metro

Atlanta began operating at the Texaco

Food Mart in Smyrna, Ga. This is a

significant step in EPIC’s effort to

increase the availability of ethanol

blends throughout the United States.

This is not to say we can rest

easy. We will continue to set the

record straight. As comedian George

Carlin once said, “Just cause you got

the monkey off your back doesn't

mean the circus has left town.” EPIC

takes great pride in our industry, and

we will continue to press forward with

spreading the news about the positive

benefits of ethanol.

Robert White is the director of opera-

tions of the Ethanol Promotion and

Information Council. Reach him at

[email protected] or (402) 932-

0567.

Fighting the Absurd AccusationsBy Robert White

:DR

IVE

White

High performance starts in the fieldHigh performance starts in the field

Pioneer is a vital link between growers and the ethanol industry. Planted on more acres than any other brand, Pioneer® brand corn hybrids help ensureethanol plants a more consistent supply of high quality grain. Pioneer brand High Total Fermentable (HTF) ethanol hybrids are attracting more growers,which will put more corn with higher levels of ethanol yield in fields near ethanol plants. And with up to a 7 percent variation in ethanol yield among different hybrids, HTF hybrids can produce higher returns for ethanol plants.

Many ethanol hybrids contain the Herculex® insect protection trait, reducing insect damage to grain and the presence of molds and mycotoxins. This helpsensure a stronger market for distillers grain.

Pioneer is dedicated to leading the industry with products, agronomic support and … TECHNOLOGY THAT FUELS.™Herculex® insect protection technology by Dow AgroSciences and Pioneer Hi-Bred. ®Herculex and the HX logo are registered trademarks of Dow AgroSciences LLC.

See product label for provisions of this mark. MARKET CHOICES is a certification mark used under license from ASTA.

® YieldGard is a registered trademark under license from Monsanto Company.

To protect the usefulness and availability of these technologies for the future, growers must implement an Insect Resistance Management(IRM) program as specified in product use guides for the following traits available in Pioneer corn hybrids: Herculex® I, Herculex RW,Herculex XTRA and YieldGard® Corn Borer.

For detailed IRM requirements for hybrids with in-plant insect resistance, refer to the appropriate product use guide, available from yourPioneer sales professional or on the web at: www.pioneer.com/IRM.

www.pioneer.com/ethanol®, SM, TM Trademarks and service marks of Pioneer Hi-Bred.All purchases are subject to the terms of labeling and purchase documents. © 2007 PHII INDSL007082P238AVAR1

The DuPont Oval Logo and The miracles of science™ are trademarks of E.I. du Pont de Nemours and Company.

^

^


:LE

GA

LP

ER

SP

EC

TIV

ES

thanol plant owners and

operators are subject to

environmental laws,

including complex air

quality regulations that

govern the quantity and quality of air

emissions generated at the plant. Air

quality regulations are adopted by

state and federal environmental pro-

tection agencies. Failure to comply

can result in significant monetary

penalties. In 2002 the U.S. EPA

implemented an enforcement initia-

tive against ethanol producers in

Minnesota. Settlements with produc-

ers got the attention of the industry

and state agencies. Since then, per-

mit agencies have

imposed tighter limita-

tions and sought more

robust compliance

demonstrations in per-

mits. This article sum-

marizes the air quality

regulations that apply

to ethanol plants.

In the midst of

project development

activities for a new

plant, owners and

operators must initiate

the regulatory process to obtain a

pre-construction air quality permit. An

owner or operator is required to

obtain the permit prior to commence-

ment of construction or initiation of

on-site activities of a permanent

nature. Depending on the level of

proposed air emissions from the

plant, the permitting process can take

four to 18 months. Although many

permit agencies have experience

with ethanol plants, every permit is

different and negotiable. While permit

agencies strive to balance environ-

mental protection with operating flex-

ibility, permits require monitoring,

record-keeping and reporting that

can overburden plant staff. The pri-

mary objective for the owner or oper-

ator in this process is to obtain a valid

permit reflecting the proposed opera-

tion of the plant and allowing suffi-

cient operational flexibility.

The owner or operator will be

subject to air emissions requirements

based on the proposed operating

specifications. Any material changes

from the design presented in the

application could trigger additional

review. The owner or operator will

also be required to obtain an operat-

ing permit. In some

instances the pre-

construction permit

transforms into the

operating authoriza-

tion after certification

of compliance. In

other instances, a

second permit appli-

cation and review is

required. In both

cases, the operating

permit will reflect the

terms and conditions

of the original pre-construction per-

mit. In both cases, the terms and con-

ditions are enforceable. Operating

permits typically have a finite term

and the owner or operator will be

required to apply for renewal in a

timely manner. Additional permit

review may be triggered by subse-

quent physical or method of opera-

tion changes.

The terms and conditions

included in permits derive from air

quality rules that 1) protect public

health by ensuring that the amount of

pollution allowed from any single

source does not adversely impact

ambient air quality to which the gen-

eral public is exposed, or 2) reflect

technology standards adopted for

categories of operating equipment, or

3) regulate the emissions of haz-

ardous air pollutants determined by

EPA to present significant risk to the

environment and public health. Other

rules control esthetic impacts, such

as dust or odor generation.

To demonstrate compliance,

owners and operators are typically

required to conduct emissions test-

ing, monitor production or emissions

rates, maintain records and submit

reports to the permitting agency.

Owners and operators are required

to certify compliance and disclose

noncompliance. State and federal

agencies have authority to inspect

the plant and require the permit hold-

er to comply, install additional pollu-

tion controls and assess penalties for

noncompliance. Repeat violations

increase the severity of the regulato-

ry response.

The obligation to obtain an air

quality permit is only the first of many

responsibilities for environment com-

pliance at ethanol plants. Early

investments made by owners and

operators in negotiating the permit,

understanding its contents and imple-

menting systems to ensure compli-

ance will pay off. Owners and opera-

tors that develop a clear understand-

ing of the regulations, establish a

constructive relationship with regula-

tors and train employees on environ-

mental compliance will be the wiser

for the effort.

Krista McIntyre is a principal at StoelRives LLP. Reach her at [email protected] or (208) 387-4239.

Environmental Law: Air Quality ComplianceBy Krista McIntyre

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.

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WATER QUALITY

TESTWater quality is equally as important as water quantity in choosing a site foran ethanol plant. EPM talks to water management and project developmentconsultants about the importance of water testing.

By Bryan Sims

PUTTING WATER TO THE

PHOTO: U.S. WATER SERVICES


WATER QUALITY

WATER QUALITY

ater quality plays a vital role during the opera-tion of ethanol plants and should be a consid-eration during the feasibility and developmentphases of an ethanol project. “When you look

at water quality, it influences how much capital equipment isrequired up front to pretreat that water,” says U.S. Water ServicesMarketing Manager Mike Mowbray. “Capital costs ultimatelydetermine the quality and quantity of water for an ethanolplant.” Plymouth, Minn.-based U.S. Water Services has beeninvolved in more than 40 ethanol plant designs, start-ups andconsulting services. Once a producer decides how much he canspend on water equipment, industry experts recommend identi-fying eight key areas to consider before choosing a plant site: aviable water source; design requirements; environmentalimpacts; options for equipment and treatment in the form ofrequired capital and expense outlays; proper control mecha-nisms to maintain water quality and water system designs;resources to monitor treatment equipment in real time to mini-mize asset degradation; effluent discharge regulations imposedby a particular state; and preliminary water quality samples takenat anticipated operational levels.

To avoid any potential pitfalls during the project develop-ment process, consulting firms such as the Natural ResourcesGroup offer preliminary analysis services such as its “Fatal Flaw

Analysis.” The purpose of an FFA is to provide ethanol plantdevelopers with an outline of possible site issues that could limitconstruction on a particular property or cause significant timedelays, says Angela Ronayne, project manager of Minneapolis-based NRG’s renewable fuels group. Employing a project devel-opment advisor such as NRG can prove beneficial in the longrun for both the developer and the contractors to avoid any legalconsequences that may have been overlooked. “[An FFA] is not

W

Mowbray adds coagulants in a gang stir to precipitate unwanted river watersolids.

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WATER QUALITY

a substitute for the permitting stage,” Ronayne emphasizes. “It’ssimply a consulting parameter to follow during the feasibilitystage of an ethanol project.”

To understand how important water quality managementissues are for any ethanol plant in today’s expanding industry,project developers must be engaged with the micro-intricacies ofwater activity inside and outside of a given a facility.

Water SourcingFor a typical corn-based ethanol plant, the selection of an

appropriate water source and the conducting of preliminarywater quality tests is a critical portion of the project develop-ment process. Groundwater or well water is a popular choicebecause it’s more readily available and generally higher in qualitythan surface water from a river or a local municipality.Depending on the scope of the project and how much a pro-ducer wants to spend, each water source has its advantages,according to Kent Herbst, a certified water technologist andethanol team leader for U.S. Water Services. Another option toconsider is the use of “grey water” from a wastewater treatmentplant. Water companies say that grey water has been used as asupplement to a main water source, but they caution that it’sexpensive to pretreat. “Well water is probably easier to treat just

because it’s typically more consistent than surface water,” Herbstsays. “It’s easier to design an ethanol plant based on well waterfor that sake. Although, there is some pretty bad well water outthere that we encourage people to shy away from.”

Although groundwater is more consistent than surfacewater, it can vary drastically among different aquifers within thesame geographic location. Additionally,the composition of groundwater canchange over time as aquifers becomestressed because of continuous use suchas in the case of the Ogallala Aquifer—thenation’s most abundant groundwatersource that stretches from South Dakotato Texas. The pumping rate can also affectwater quality. “If you pull out 100 gallonsper minute versus 1,000 gpm, you canhave different water quality,” Herbst says.

As more projects come on line in the Midwest, quality watermay become scarce prompting project developers to look else-where for plant sites. Locations such as southwest Minnesota,southeast South Dakota, eastern Iowa and Colorado tend to“have some bad, deep aquifers,” Herbst says. The East and WestCoast areas have better groundwater quality, he adds.

Herbst

WATER QUALITY

TestingOnce a water source is identi-

fied, water management companiesstrongly recommend collecting watersamples at anticipated operationallevels. This is imperative when gaug-ing how the water quality couldimpact utility systems and processes.“We always try to encourage peopleto do well testing early in the processand sample a couple of differentwells because different areas on theaquifer, and different aquifers withinthe same region may have vastly dif-ferent water,” Mowbray says. “As aresult you may save yourself moneyand headaches by relocating yourplant.”

Water sampling conducted dur-ing the feasibility stage of an ethanolproject determine what type offront-end water pretreatment meth-ods should be utilized. Ultimately, it’sup to the ethanol company and theengineer, procurement and construc-tion contractor and the technologyfirm to come up with solutions towater quality challenges. Carefullytesting and monitoring constituentor mineral levels (hardness) relativeto the incoming water rate can pre-vent asset degradation. “What’sequally important is making sure thatthe technology providers in conjunc-tion with the EPC firm don’t experi-ence slow downs due to unforeseenwater problems,” says Tony Stanich,industry development manager forNalco Co.’s grain/ethanol industrysector. The Illinois-based companyprovides integrated water treatmentand process improvement servicesand has more than $40 million inglobal sales in the grain and biofuelsprocessing industries. Nalco, and itsjoint venture partner Siemens WaterTechnologies, manage more than$200 million in assets as part of itsTreated Water Outsourcing business.“We try to work closely with the

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WATER QUALITY

EPC, technology provider, and owner inthe selection of water treatment equip-ment, chemical, and control technologyto minimize related operational and cap-ital costs specific to the plant site,”Stanich says.

Pretreatment MethodsLooking through a typical “cookie-

cutter” lens, pretreatment modelsemployed by corn-based ethanol plantsinclude reverse osmosis and some typeof polishing softeners for the steamboilers to decrease sulfate and minerallevels that contribute to unwanted hard-ness levels. “Over the past 12 months,we’ve seen the need for more complexwater treatment systems,” Stanich says.“In the past most sites only required asimple reverse osmosis system followedby water softener systems.”

Iron, manganese and silica are a fewof the key elements in water that wouldlimit water treatment measures. “Youcan handle high hardness relatively easilywith lime softening for its precipitationprocess,” Herbst adds. “Once you startgetting into sodium, chloride and sulfate,those three are some bad actors that areextremely tough to precipitate out of thewater, so you end up just moving itaround and you concentrate it andthere’s no way to physically remove itfrom the water before it gets dis-charged.”

Conducting appropriate water pre-treatment methods tailored to the specif-ic needs of a particular plant’s utility andprocess demands should be of para-mount interest as well. Requirements forthe two can vary between technologyproviders. For example, some ethanolfacilities need varying amounts of waterfor utility systems, such as for heatexchangers or heat recovery stream gen-erators as both require high-quality waterand high maintenance to mitigate miner-al scales or deposits. Incoming waterquality also impacts cooling tower oper-ations, which requires the largest amountof water. Correct observation of the“cycles of concentration” is importantwhen monitoring water activity in thisprocess. “The higher the cycles you runthe less water and chemicals you use soit’s a balance of maximizing the cyclesrelative to what capital costs you have todo for pretreatment,” Herbst says.

Water OutputBalancing environmental sustain-

ability while maximizing production andminimizing investment can be a difficultfeat for any ethanol producer. Waterquality effluent is probably one of themost variable process constraints associ-ated with water management in anethanol operation because each site isdifferent. Understanding the dischargeparameters imposed by each particular

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depends on what location and stateyou’re in. I would expect that waterquality is going to be more heavily scru-tinized as projects move forward in thecoming years.”

Most process technology firmssuch as ICM provide zero liquid dis-charge equipment, which doesn’timpact effluent water discharge.However, much of the concern lies inthe effluent that comes from the cool-ing towers. Because it’s the central pieceof equipment that requires the mostand highest quality water, it remains theexclusive contributor to dischargeissues. The cooling tower is usually thepoint where water is reused or recycled,depending on the flexibility of the dis-charge permit. “States have becomemore protective of their water qualityin recent years so they’re not going tolet you dump your effluent into areceiving stream without permission,”Ronayne says. “If the facility choosesto discharge to a receiving stream thewater balance is typically designedaround the source water and the dis-charge limit.”

Whether an ethanol plant sourcesits water from a well, river or localmunicipality, ethanol developers mustbe mindful of the increasingly stringentdischarge regulations and limitationsset forth. “Producers don’t want tospend any more money than they haveto,” Stanich says. “But, they still want tofollow environmentally sustainablepractices. Balancing the two is wherewe can help.” EP

Bryan Sims is an Ethanol ProducerMagazine staff writer. Reach him [email protected] or (701) 746-8385.

state dictates front-end pretreatmentand/or process technology designs. “If wehave a state that chooses to be restrictivethen we have limits that are set in terms ofhow efficiently we can operate,” says ChrisSleigher a water specialist with ICM Inc.,which is involved with nearly 100 ethanolprojects around the country. “Water quali-ty is definitely becoming a much morestringent issue today,” Ronayne says. “Ofcourse, certain areas [of the country] aremore stringent than others. It really

WATER QUALITY

Nalco’s customer analytical examines ethanol make-up for water quality.

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www.fuelethanolworkshop.com

June 16-19, 2008

Gaylord Opryland Resort & Convention CenterNashville, Tennessee, USA

BBI International’s

Minnesota

Wisc

Iowa

Missouri

Arkansas

Louisia

M

Nebraska

South Dakota

North DakotaMontana

Wyoming

ColoradoKansas

Oklahoma

Texas

New Mexico

ENVIRONMENT


consin

IllinoisOhio

Indiana West Virginia

Pennsylvania

New York

s

ana

Mississippi

Alabama

Tennessee

Kentucky

North Carolina

Virginia

Concerna cause for

More CornMaryland

DelawareNew Jersey

ENVIRONMENT

The increase in U. S. corn acres planted in response to grow-ing demand from the fuel, feed, food and export markets hasraised concerns about water quality in watersheds and couldlead to more stringent conservation practices.

By Susanne Retka Schill


ENVIRONMENT

he prospect of vastly expanded corn acres has setoff alarms in two of the nation’s watershedswhere water quality is heavily impacted by agricul-ture: Mississippi River and Chesapeake Bay.

Simply put, more corn means more fertilizer, and in manyplaces tillage practices that could cause soil erosion. Threereports issued in 2007 expressly examined the effects on waterresources and reviewed the best management practices andpolicy choices needed to deal with increased corn acres. Onewas prepared by the Environmental Working Group, whoraised concerns about the prospect of more corn acres and theneed to tighten conservation compliance.

Water quality issues that stem from agricultural practicesfocus on three areas: nitrogen, sediment and phosphorus.Phosphorus is a nutrient that attaches to soil, says GylesRandall, a soil scientist at the University of Minnesota’sSouthern Research and Outreach Center in Waseca, Minn. “Ifyou can keep water on the land and the soil on the land, youcan keep phosphorus on the land.” On hilly land and in fieldsnear streams, tillage practices can make a big difference in pre-venting soil and nutrient losses, he says. When hay land andmeadows, where there is no runoff or sediment loss, are con-verted into cropland, it’s likely that more phosphorus will enterthe nation’s waterways.

Nitrogen behaves differently in that it leaches into the soilrather than being carried into streams by runoff and erosion,Randall says. “The more corn we grow, the more nitrogen inthe system,” he says. “Corn and soybean [fields] are both fair-ly leaky.” By leaky, Randall means that excess nitrogen is ableto leach into the ground through drainage tiles in farm fieldsand flow into streams. According to a report by theChesapeake Bay Commission, “Biofuels and the Bay—Gettingit Right to Benefit Farms, Forests and the Bay,” 150 pounds ofnitrogen per acre is typically applied to corn in the region. “Inaddition, corn is a relatively inefficient user of these nutrients,consuming only 50 [percent] to 60 percent of the fertilizerapplied,” the report says. “Barring conservation managementpractices, an estimated 20 to 40 pounds of nitrogen per cornacre is released into the groundwater and streams leading tothe bay.” The report calls for a full suite of conservation prac-tices to reduce that nitrogen loss. It also says, however, that thepotential threat could produce a positive outcome. “The influxof corn, and the threat it brings for significant increases innutrient loadings to the bay, may improve technical assistanceand ramp up implementation of best management practiceson farms that, until now, had little financial incentive or abilityto do so.”

Chesapeake Bay was the nation’s first watershed to tackle

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ENVIRONMENT

pollution problems starting with the creation of a tri-state gov-ernmental commission in 1983. The mid-1980s marked thebeginning of conservation compliance measures and incen-tives to reduce erosion on highly erodible soils. A report by theNational Research Council titled “Water Implications ofBiofuels Production in the United States,” covers a range ofissues surrounding water quantity, biorefinery water use andwater quality. The report credits the conservation compliance

measures of the 1980s for reducing soil erosion levels anddecreasing nutrient losses. The report raises the concern thatmore corn for biofuels will reverse that trend.

With nutrients from the entire U.S. Corn Belt running intothe Mississippi River watershed, more corn acres means morenitrogen draining into the Gulf of Mexico, the report states.Researchers have concluded that excess nitrogen in the riversystem is the major cause of the oxygen starved “dead zone”in the gulf, where many forms of marine life cannot survive.“This year (2007), we have near-record gulf hypoxia at 20,000square kilometers (7,700 square miles),” says Jerald Schnoor,professor of environmental engineering at the University ofIowa. “We have a national goal to reduce this hypoxia to 5,000square kilometers (1,900 square miles). We’re going in thewrong direction.”

Schnoor chaired the committee of scientists who wrotethe National Research Council’s report. Aside from describingwater quality issues surrounding biofuels, the report reviewspractices and technologies that can significantly reduce theimpact of increased corn acres. Conservation tillage practiceshave had a positive effect on erosion. The USDA’s NationalResources Inventory shows a 40 percent reduction in annualcropland erosion from 1982 to 2003. However, the shift toconservation tillage may have reached a plateau, Schnoor says.

High nutrient runoff creates algae blooms like this one in a pond in CalvertCounty, Md. The photo was taken in the fall of 1993.

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ENVIRONMENT

“We need new incentives, new encour-agement to take us further,” he adds.One suggestion offered in the NationalResearch Council report is to makeethanol subsidies variable, and in timesof high profitability to divert the fundsto cellulosic ethanol research and farm-ers who improve their practices.

The EWG goes a step further in itsrecommendations. EWG spokespersonMichelle Perez was the lead author ofthe report “Trouble Downstream:Upgrading Conservation Compliance.”She says while her group works toimprove funding for the USDA’s volun-tary conservation programs, the reportrecommends expanding conservationrequirements. “In exchange for taxpay-er support, we make the case that farm-ers should provide a minimum level ofenvironmental performance,” she says.Current laws require those farminghighly erodible land to implement con-servation measures to qualify for sever-al farm programs. EWG is proposingthat the eligibility requirements includequalifying for crop insurance. They alsorecommend that the minimum stan-dards be expanded from soil conserva-tion measures to include requirementsfor nutrient management plans and theplanting of grassy buffer zones alongsurface waters that trap sediments andnutrient runoff.

In its fact sheet, “The UnintendedEnvironmental Impacts of the CurrentRenewable Fuel Standard,” the EWGsummarizes the concerns environmen-

talists have with increased corn produc-tion for biofuels. The group lists fivemajor unintended environmentalimpacts: loss and degradation forwildlife habitat, an increase in aquiferdepletion, herbicide and insecticide pol-lution, nutrient pollution and soil ero-sion. “The majority of corn is notgrown under conservation practices,”Perez says. “Many farmers still conven-tionally plow every year. The estimateof how much soil erosion occurs witheach gallon of ethanol produced is amajor number.” EWG calculates that24 pounds of soil is lost per gallon ofethanol produced. (In its calculations,EWG uses the latest USDA NationalResources Inventory figure for averagecropland erosion of 4.9 tons per acrefor 2003, plus the 2006 national averagecorn yield of 149 bushels per acre andethanol production of 2.7 gallons perbushel of corn.) Coupled with nutrientlosses amounting to an average of 25pounds of nitrogen per acre of corn,she says farmers are not optimizingnutrient management practices. “Ournational policy is not sending the rightsignals to farmers. There is no regulato-ry policy, and the voluntary cost incen-tives we have are under funded anddon’t send as strong a signal as theycould.” EWG reports that 75 percent offarmer requests to participate in volun-tary programs go unfunded. “I don’tthink anyone’s against corn farmers orethanol producers in general,” Perezsays. “Because of these environmental

This series of satellite photos, taken in 1973, 1989 and 2003, show three decades of change in the birdsfoot delta of the Mississippi River. The river collects soil eroded from the central half of the UnitedStates. Upon reaching the Gulf of Mexico in Louisiana, the river’s velocity abruptly slows and mud andsand are deposited in an alluvial fan pattern.

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� Continued on page 78


ENVIRONMENT

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Potential Ecological Impact

In 1999, a study indicated that the pollen from Bt corn was athreat to monarch butterflies that fed on milkweeds near cornfields.The experiment couldn’t be duplicated outside of the laboratory andsubsequent studies proved that genetically modified corn posed norisk to the butterflies. The jury is still out, however, on whether genet-ically modified corn impacts aquatic ecosystems.

Scientists have genetically engineered cornvarieties to express the Bt toxin found in the natural-ly occurring microorganism Bacillus thuringiensis.These varieties are widely used by farmers to con-trol crop losses caused by rootworm and corn borer.Before licensing Bt corn, the U.S. EPA conducted tri-als to test its impact on water biota, but it used acrustacean commonly used in toxicity texts and did-n’t consider insects more closely related to the peststargeted by Bt corn.

A study by Todd Royer, an environmental sci-ence professor at Indiana University in Bloomington, and several col-leagues, postulated that Bt corn may affect the aquatic food chain incorn country waterways. The species of interest is the caddisfly, anaquatic insect that’s related to the pests targeted by the toxin in Btcorn. Caddisflies are a food source for higher organisms, like fishand amphibians. The study, “Toxins in Transgenetic Crop ByproductsMay Affect Headwater Stream Ecosystems,” was funded by theNational Science Foundation and involved Royer, Emma Rosi-Marshall of Loyola University Chicago, Jennifer Tank of Indiana’sUniversity of Notre Dame near South Bend and Matt Whiles ofSouthern Illinois University in Carbondale.

The researchers have verified parts of their theory, Royer says.They found the Bt toxin in the decaying corn detritus in streams.They also found corn pollen in the guts of caddisflies, which estab-lishes that they feed on corn detritus. In the laboratory, researchersfound consumption of Bt corn increased mortality and reducedgrowth in the soft-sided caddisfly larvae. “We’ve documented theaffect of Bt in the laboratory, but to this point we’ve not seen an effectin the stream,” Royer says. The next step is to design a project thatanswers the question: Does it matter out in the real stream? “Myimpression is that the environmental impact at this point is prettysmall,” Royer says. “The kinds of streams we’re examining are inwatersheds with very intensive agriculture.” He says it will be difficultto design a study in streams that have other problems includingwater quality issues, habitat degradation and sedimentation, all ofwhich impact the health of the stream’s biological community. Royersuggests there could be greater problems if corn acres move intonew areas where streams aren’t already impacted by farming. “Everynew technology comes with some benefits and some risks,” he says.“I think probably the risks associated with widespread planting of Btcorn were not fully assessed.”

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ingly more expensive.”There are some positive environ-

mental outcomes on the horizon.High energy costs could prompt farm-ers to till less and manage fertilizerapplications to optimal levels.Precision farming is considered to bea promising technology to help opti-mize fertilizer use. New foliar nitrogenapplicators are equipped with sensorsto identify nitrogen-deficient plantsand can apply variable rates of nitro-gen where needed. While the use ofyield monitors in combines has caughton, Randall says the move towardfarmers using the equipment to man-age variable fertilizer rates on the landis slow to catch on. “Quite often thepayback isn’t there,” he says. “Theenvironment isn’t included in thatequation for success, if it doesn’t payout in higher yields.” Sharpley, who isan expert on phosphorus issues,agrees, “If your livelihood dependedupon it, you’d want to be sure to applyenough fertilizer to get good yields.”

Times change, however, andfarmers may need to heighten theirenvironmental awareness. “Farmersare doing a pretty good job given theinformation and programs that areavailable to them,” Sharpley says.“When things change, like we’ve beenseeing with oil prices and the drive forbiofuels, we see changes.” That maymean reacting to the potential forincreased amounts of nutrients leach-ing and flowing into the nation’swaterways as grain productionbecomes more concentrated. “Weneed to be aware of the consequencesand not go headlong into this andafterwards say we have got a prob-lem,” he says. EP

Susanne Retka Schill is an EthanolProducer Magazine staff writer. Reachher at [email protected] or(701) 746-8385.

concerns, we want ethanol done right.We don’t want to trade our energy policyand global warming potential gains forlocal and regional losses in water quality,air quality and wildlife.”

Soil scientists are sympathetic to thefarmers’ position as well. “Sometimesfarmers are stuck in the middle,” saysAndrew Sharpley, a soil scientist whoworked in the Chesapeake Bay watersheduntil moving to the University of

Arkansas in Fayetteville. “As we’ve seenin the past, forces outside the farm drivewhat farmers do on the farm. The waterquality impacts tend to be indirect andafter the fact.” Sharpley compares agri-culture’s attempts to improve its environ-mental impact on water to the experienceof municipal water treatment facilities.“Cleaning up the first 30 [percent] or 40percent is relatively easy,” he says. “Toclean up the water further gets increas-

ENVIRONMENT

� Continued from page 76

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WATER QUANTITY


WATER QUANTITY

The Future The Ogallala aquifer irrigates some of the mostimportant cropland for food and fuel. For years,it’s been steadily depleting leaving some to won-der about the sustainability of tapping into it forincreased corn irrigation and ethanol production.

By Anduin Kirkbride McElroy


of theOgallala Aquifer


WATER QUANTITY

summer’s flight from Chicagoto Denver can give one a newperspective on water use.Before the plane climbs above

the clouds, one can see vast stretches ofprairie land, cut into rectangles of dark greencrops. From the sky, the crops seem to goon and on, delineated only by roads, treesand winding rivers. According to theNational Corn Growers Association, morethan 85 percent of all corn produced in theUnited States is nonirrigated, and much of itis raised on this fertile land that’s been underagricultural production since white men set-tled the region in the 1800s.

As the flight continues over Illinois,Iowa, Nebraska and eastern Colorado, onemight notice that the farmscape begins tochange. Circles, one-half mile in diameter,start to be dispersed amongst the rectangles.Further on, the land looks like a pale greenand yellow checkerboard with dark greencheckers placed atop of the squares. As theplane descends over eastern Colorado, theprevailing color of the land is brownish yel-low, a striking contrast to the circles full ofdark green crops.

The land west of the Missouri River isfertile, but crops must be coaxed out of theground with irrigation. The dark green cir-cles are a result of center-pivot irrigation,which enables the arid prairie states to be asfruitful as the Midwestern states. Colorado,for example, with its mountains and highprairies, is the 13th largest corn-producingstate in the United States, according to DaveKramer, general manager of SterlingEthanol LLC and Yuma Ethanol LLC innortheastern Colorado. What’s more, YumaCounty is one of the top three largest corn-producing counties in the country, produc-ing 42 million bushels per year.

Irrigation has also enabled Nebraska tobe an integral part of the Corn Belt. About60 percent of corn acres in the state are irri-gated, according to the Nebraska CornBoard. The state’s corn supply and ambi-tious development recently bumped itsranking to the second largest ethanol-pro-ducing state, after Iowa. Nebraska has more

than 1,565,000 gallons of annual capacitybuilt or under construction.

Water Source Yes, the land is fertile, thanks to a gen-

erous supply of groundwater. The HighPlains aquifer, also known as the Ogallalaaquifer, lies under portions of eight states:South Dakota, Nebraska, Wyoming,Colorado, Kansas, Oklahoma, New Mexicoand Texas. It is one of the largest aquifers inthe world, spanning about 175,000 squaremiles. According to the U.S. GeologicalSurvey, approximately 27 percent of the irri-gated land in the United States is in thisregion, and about 30 percent of the ground-water used for irrigation in the United Statesis pumped from the Ogallala aquifer. In2000, irrigation withdrawals were 17 billiongallons per day and 1.9 million people weresupplied by groundwater from the Ogallalaaquifer with total public supply withdrawalsof 315 million gallons per day, according tothe USGS. The aquifer is not only large, butit’s also accessible. “It’s relatively shallow, thequality is relatively good, so it’s very userfriendly,” says David Hume, a hydrogeolo-gist and senior associate at Leggette,Brashears & Graham Inc.

The aquifer was formed over millionsof years, but has since been cut off from itsoriginal natural sources and is being deplet-ed faster than it can be recharged. The watertable in the Ogallala Formation is separatedfrom overlying land-use practices by asmuch as 400 feet of unsaturated sediments,and recharge has been estimated to take atleast 50 years. Over extraction has led to sub-stantial declines in the water table in manyplaces, complete exhaustion of extractablegroundwater in others, and debate and legis-lation about the aquifer’s future, according toa report by Environmental Defense, a non-profit environmental advocacy group for-merly known as the Environmental DefenseFund. The report, “Potential Impact ofBiofuels Expansion on Natural Resources; acase study of the Ogallala aquifer region,”was released in September. Large portionsof the aquifer show declines in the water

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WATER QUANTITY

table of more than 100 feet. Some reportshave found that the water level is droppingby 3 to 5 feet a year in some areas.Estimates for its lifespan range from 60 to250 years, depending on the area.

In the arid Plains, states have devel-oped complicated legal arrangements forissuing water rights and developing waterdiversions. Water is appropriated by thegovernment and the rights to it are tradedand sold to the highest bidder. Lately,expanding cities have bought water rightsfrom irrigation districts—essentially put-ting irrigated agriculture out of business.“Some areas in the Ogallala aquifer region,particularly in parts of Colorado andNebraska, have existing groundwater pro-tections that will reduce opportunities toconvert new land to irrigated production,”the Environmental Defense report states.“Strengthening and expanding any existinglocal and regional groundwater conserva-tion efforts may be one of the most effec-tive ways to minimize groundwater deple-tion and the destruction of significantremaining blocks of wildlife habitat.”

Indeed, water rights are a significantissue in Colorado, as current producerFront Range Energy LLC found out whendeveloping its plant in Windsor. Accordingto BBI International Project DevelopmentVice President Mark Yancey, who did proj-ect development for the plant, the compa-ny spent about $1 million just for the rightto use the water; sourcing the water was aseparate endeavor.

Years of drought have made aquiferresources even more important in thePlains states. Now that ethanol has movedinto all corners of the aquifer people arestarting to express concern over the indus-try’s impact. Ethanol brings an increaseddemand for corn, which must be irrigated,and production of the fuel also requiressignificant amounts of water.

Like many industrial processes, wateris vital to ethanol production. The majori-ty is used in the cooling process; theamount used can be influenced by thequality of the water, Yancey says. The pro-duction process uses between 3 to 5 gal-

lons of water for every gallon of ethanolproduced. In the past few years, the lack ofwater has stopped the development ofsome plants. Proposed plants from Floridato northern Minnesota to California havefaced opposition from those concernedabout the facilities’ water use. “Regulatoryagencies and the public are more aware ofthe volume of water required,” Humesays. “Opposition at public meetings hascertainly increased in the past few yearscompared with when the industry firsttook off—you might have a few residentswho would be concerned about theimpact a plant could have on their watersupply. In general, the industry hasbecome more aware of possible oppos-tion and the importance of water for plantoperations.” Some of the awareness likelycomes from media coverage of recentreports about ethanol’s water require-ments.

A report issued in October by theNational Research Council titled “Waterimplications of biofuels production in theUnited States” analyzed the potentialimpacts on water quality and supply fromincreased use of corn for ethanol produc-tion. The NRC formed a committee tolook at how shifts in the nation’s agricul-ture to include more energy crops, andpotentially more crops overall, could affectwater management and long-term sustain-ability of biofuels production. It foundthat an increase in ethanol productionfrom corn could significantly impact waterquality and availability unless new practicesare employed.

The report acknowledged that thewater consumed in the ethanol productionprocess is similar to most other industries,but could still substantially affect localwater supplies. It estimated that a 100MMgy plant would consume as muchwater as a town of 5,000 people, using thenational average water use per person perday of 180 gallons. “Biorefineries them-selves generate local, but often intense,water supply challenges, while irrigatedagriculture can generate regional-scaleproblems,” the report says. “If, however,

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WATER QUANTITY

the agriculture is rain-fed, water for the biorefinery may be theprimary source of groundwater or surface water extraction inthe area. Compared to the water incorporated in the feedstock,water use for the biorefineries is quite small.” The report con-cluded that producing 1 gallon of ethanol from irrigated cornrequires 780 gallons of water, using statistics from 2003 when2,100 gallons of irrigation water was used to produce a bushelof corn, which yielded 2.7 gallons of ethanol. This numberdoesn’t include the water required to make the ethanol, and isactually about 200 times greater than the 4:1 water to ethanolratio. Yancey confirms these findings. “The water used to pro-duce ethanol at a 100 MMgy plant is equal to one centerpivot—1,000 gallons per minute,” he says.

Growing biofuels crops in areas with limited water sup-plies is a major concern, the report says. According to the NRC,“the committee found that agricultural shifts to growing cornand expanding biofuels crops into regions with little agriculture,especially dry areas, could change current irrigation practicesand greatly increase pressure on water resources in many partsof the United States.” Biofuels crop irrigation could competewith, or even be constrained by, regional water demands fordrinking, industry and other uses. “In the next five to 10 years,increased agricultural production for biofuels will probably notalter the national-aggregate view of water use,” the reportreads. “However, there are likely to be significant regional andlocal impacts where water resources are already stressed.”

The Ogallala aquifer is certainly stressed. “This aquifer iscurrently being pumped at a rate of more than 1.5 billion gal-lons per day for agriculture, municipalities, industry and privatecitizens,” the report reads. “Thus, 15 million gallons per day forbioethanol would represent only 1 percent of total withdrawls.But it is an incremental withdrawal from an already unsustain-able resource. Current water withdrawals are much greater thanthe aquifer’s recharge rate (about 0.02 to 0.05 foot per year insouth-central Nebraska …), resulting in up to a 190-footdecline in the water table over the past 50 years. It is equivalentto ‘mining’ the water resource, and the loss of the resource isessentially irreversible.”

The Environmental Defense study looked at the Ogallalaaquifer as a “microcosm of the environmental concerns thatmay accompany rapid and unplanned expansion of biofuelsproduction.” According to the report, the aquifer supports themajority of irrigated agriculture in the southern Great Plains.“However, in recent decades it has experienced substantialwater table declines in areas where rates of groundwater pump-ing have far exceeded rates of replacement,” the report says.

The report found that the water demands for individualplants from ethanol processing and feedstock production aren’texceptionally higher than other industrial or agricultural users.However, the construction of new plants in areas where wateris already scarce can impact the level of the aquifer. “Waterdemands from new ethanol plants in areas of Ogallala aquifer


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depletion may reach 2.6 billion gallons peryear for corn-to-fuel processing alone, andbetween 59 [billion] and 120 billion gallonsper year for increased water demand ifthere are local increases in irrigated cornproduction,” according to the study.Interestingly, the region is experiencingethanol production growth in areas wherewater resources are most stressed. Thereport points to southwest Kansas and theTexas panhandle, where several plants areproposed or under construction, as areaswith the highest depletion, defined as with-in 50 miles of aquifer zones where watertables have dropped by more than 10 feetbetween 1980 and 1996.

Other Water UsersThe Environmental Defense report

didn’t go over very well with the NebraskaCorn Board. “It made for sensationalheadlines and is just the latest in a series ofattacks on corn and ethanol producers inregard to water,” said Jon Holzfaster, afarmer and chairman of the board.“Those who want to blame the expansionof ethanol for increased water usage areignoring the fact that corn is going to beproduced in Nebraska, whether or notthere is an ethanol industry. And that thosesame acres will likely be irrigated whetherthey are growing corn, soybeans or anyother crop.” Holzfaster compared thewater used to raise corn to that used towater homeowner’s lawns and golf cours-es. “It is estimated that it may take around1,750 gallons of water to produce a bushelof corn,” he said. “That sounds like a lot,but did you know it takes 684,000 gallonsof water per acre per year to irrigate a golfcourse? And that, on average, a homeown-er uses 21,600 gallons to water his or herlawn each year?” The NCGA has alsofound it useful to put the numbers in per-spective. Based on USGS statistics,NCGA Chief Executive Officer RickTolman points out that it takes 1,851 gal-lons of water to refine a barrel of crude oiland 1,500 gallons to produce a barrel (42gallons) of beer.

Regardless of these justifications,Environmental Defense advocates for

policy changes that would encourage sustain-able ethanol development. “Current biofuelspolicy makes few distinctions between differ-ent biofuels production pathways,” the groupsays. “But plant location, production tech-niques and choice of feedstocks stronglyinfluence the environmental footprint ofethanol production.” Ideal policy changes,which would by nature need to be local andregional, would guide ethanol productiontoward more sustainable locations by makinglocal approval of ethanol plant siting contin-

gent on analyzing the impacts on waterresources in areas of existing water scarcity.“Local agencies should be careful to considerindirect effects of ethanol in driving new irri-gated cropland acres as well as calculations ofwater use directly for ethanol plant opera-tion,” Environmental Defense says. EP

Anduin Kirkbride McElroy is an EthanolProducer Magazine staff writer. Reach herat [email protected] or (701) 746-8385.

WATER QUANTITY

TECHNOLOGY


PHOTO: PURDUE NEWS SERVICE PHOTO/DAVE UMBERGER

Li Fu Chen, a professor in food sciences, demonstrates the machine he helpedinvent that is used to produce ethanol as well as many edible products.

TECHNOLOGY

SQUEEZING MOREOUT OF CORN

Millers have been converting corn into valuable productsfor centuries, so when a new process comes aroundclaiming to do it faster, cheaper and cleaner while yieldingmore ethanol and creating more valuable coproducts, itdemands attention. Reed-Three Rivers Bio-Grain Inc. isimplementing a process they say will do all that.

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TECHNOLOGY

thanol isn’t made from corn. It’s made from starch.While a good-sized chunk of a corn kernel is made upof starch, there’s a lot of other stuff in there as well.Stuff that can be even more valuable than the ethanol

made from the starch. In a conventional dry-mill ethanol plant all ofthe potentially valuable fiber, oil and proteins in corn get tossed intothe fermentation tank with the starch. It comes out of the process asdistillers grains. Fiber and oil can be extracted from the distillersgrains, but almost all of it is used for animal feed. Wet mills separatethe fractions of the kernel so a pure starch stream can be used forfood or as a feedstock for ethanol production. The coproducts areseparated in the process and can be marketed as well. But wet millsare expensive to build and operate and require chemicals such as sul-fur dioxide which are regulated as pollutants.

Purdue University researcher Li Fu Chen and his graduate stu-dent Qin Xu have developed a process which, if successfully imple-mented on a commercial scale, would combine the advantages ofboth milling systems. It has the potential to lower the cost of fraction-ation without the use of harsh chemicals and produce slightly moreethanol per bushel of corn. The Purdue Research Foundationlicensed the patent for what has become the Chen-Xu process to BioProcessing Technology Inc., which has in turn reached an agreementwith Reed-Three Rivers Bio-Grain Inc. of San Jose, Ill., to implementthe system in the latter’s proposed ethanol plants. Reed-Three Rivers

Bio-Grain is proposing to build nine 240 MMgy ethanol plants inIllinois, Indiana, Kentucky and Arizona. Construction on the plantswill begin in early 2008, says Dale Elder, vice president and chieffinancial officer of Reed-Three Rivers Bio-Grain.

The Big SqueezeThe Chen-Xu process differs from wet milling in the number of

steps it requires to fractionate the corn kernel. According to Chen,wet milling can take up to 13 steps to remove valuable products fromthe corn, starting with a two-day soak in a dilute sulfur dioxide solu-tion to soften the kernels and release nutrients. The Chen-Xu process,on the other hand, takes just two to five steps, depending on whichcomponents of the grain are extracted, and requires no preprocess-ing. “The process I developed doesn’t require soaking,” Chen says.“In wet milling, to remove the oil they separate the germ first. WhatI did was remove the oil, [the protein] zein, gluten and fiber to obtainsome syrup. Then this syrup can go to fermentation. Compared withwet milling we get the same kinds of products and byproducts.Because we don’t go through the soaking, these products can be foodor pharmaceutical grade.”

According to the patent for the process, corn is fed into a high-shear processor with water or steam. If the starch is to be used forethanol production or corn syrup, thermostable amylase enzymes canbe added during this step to start breaking down the starch into sim-

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TECHNOLOGY

ple sugar. The heat and pressure inside the high-shear processor par-tially gelatinizes the starch, making it more soluble in water and pro-moting liquefaction. The oil and protein in the corn combine in theprocessing, which also improves the action of enzymes on the starch.

The result is extruded as a paste, which is combined with an

alcohol to extract corn oil and zein. After extraction, water is addedto the remainder to dissolve the starch and sugars. Insoluble branfiber and protein (gluten) are filtered out of the solution. The purifiedstarch stream can then be used for ethanol production or other prod-ucts.

Chen has been working on the system for decades, having beengranted the first patent related to the system in 1989. While the Chen-Xu process differs from existing milling methods, it’s just a new wayto use existing technology, he says. “If you look at the procedure, it isdifferent,” he adds. “But technology wise there is nothing new in theworld. You just put different technology together, that’s it.”

Implementing Chen-XuInventions and processes developed at Purdue University are

commercialized through the Purdue Research Foundation. Thefoundation licensed the Chen-Xu process to Bio ProcessingTechnology, which is headed by Purdue emeritus professor John Tse.“This company was formed to bring the Chen-Xu process to com-mercial production,” he says. “It takes a lot of effort and we have nowgotten to that point.”

Tse is excited by the potential for the new process to increaseethanol production while reducing pollution. “This is a new processthat has no problems in the manufacturing process like the tradition-al dry-grind and wet-milling methods,” he says. “With this method,

A simplified flow chart of the Chen-Xu process shows the high-value productsthat can be extracted from corn while isolating starch for ethanol production.

High ShearProcessor

Extractor

ExtractedResidue

Sugar Syrup

Fermentation

Distillation

Filtration Separator

EvaporatorCorn Oil

Zein

Fiber

CO2

Fuel Ethanol

Gluten Meal

Chen-Xu Process


TECHNOLOGY

we don’t produce distillers grains. Theproblem with manufacturing distillersgrains is that it comes after the fermenta-tion process and distillation and is notenvironmentally friendly. A Minnesotaplant was fined in 2002 for violations ofthe Clean Air Act. They were forced toinstall control devices. We don’t have thisproblem because we don’t manufacturedistillers grains.” The emissions from theplant will be much lower than traditionalplants, Elder says. “We don’t have lowerpollution problems, we essentially haveno pollution problems,” he says. “Wedon’t even need thermal oxidizers.”

Water consumption will also belower than traditional plants because thecorn doesn’t need to be soaked in waterto dissolve the starch. “We will probablyuse a third less water than a traditionalethanol plant,” Elder says. “For onething, we will recycle everything. We don’thave any wastewater that will run outsideof the plant.”

The coproducts of the Chen-Xuprocess are corn oil, gluten, fiber andzein. “Our coproducts are extractedbefore fermentation,” Tse says. “All theseare food- and pharmaceutical-grade.They are not like distillers grains, which isjust animal feed for cows. Therefore ourcoproducts will bring in much more insales than distillers grains. It will make thesales of our coproducts that much high-er than a dry-grind ethanol plant can getfrom distillers grain.”

The process extracts starch com-pletely from the corn kernel whichmeans more ethanol can be made from abushel of corn. In dry-grind plants, asmall amount of starch remains uncon-verted in the distillers grains. Accordingto Chen, plants should be able to make2.85 gallons of ethanol from a bushel ofcorn, which is slightly higher than the cur-rent industry average. Elder thinks pro-duction could even exceed 3 gallons perbushel. Another advantage of theprocess is the projected lower cost of thesystem, which Tse estimates is 40 percent

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TECHNOLOGY

less than a dry-grind ethanol plant.Operating costs should be lower as well, Tse says, because

of the inherent efficiency of the process. Because the starch isalready partially hydrolyzed before it enters the fermentationtank, the throughput time of the process is much quicker.“From the time we feed the corn in, to the time the ethanolcomes out, the total is less than 24 hours,” he says. “It’s a moreefficient way of manufacturing ethanol so the processing costis cheaper than the traditional dry-grind method.”

Building BigBio Processing Technology signed a sublicense agree-

ment with Reed-Three Rivers Bio-Grain in September 2007 touse the Chen-Xu technology in its ethanol plants. The agree-ment is unusual in that Reed-Three Rivers Bio-Grain is takingthe process from the bench scale to full production withouttesting it first in a pilot or engineering-scale demonstrationplant. “We are skipping the pilot plant that many people thinkwe would need,” Tse says. “We have experts working on this.We will be able to get a turnkey construction contract from oneof the largest chemical and pharmaceutical contractors in theworld. So there’s a guarantee for the output.” Elder says theydon’t need to build a pilot plant because they know whatthey’re doing and they have confidence in the technology. “Wewouldn’t be messing with this if we weren’t absolutely certainof the technology,” he adds.

The company turned to builders from the pharmaceuti-cal industry because Elder thought they were more suited todesign these plants than the major design/build companies inthe ethanol business. “We’ve got to be very careful with thepeople we bring in to do the building on this,” says Elder, whodeclined to name the company. “They understand what has togo in to maintain the quality in these things.” Most of the infor-mation about how the company plans to implement theprocess is proprietary, Elder says. “This is a brand new technol-ogy,” he says. “We’re taking it from test tubes and beakersthrough to commercialization.” Reed-Three Rivers Bio-Grainplans to break ground on the new plant shortly after NewYears in Danville, Havana or Greenville, Ill. The company isalso looking at sites in Henry, Ill., Paducah, Ky., Gila Bend,Ariz., and three sites in Indiana for future plant development.

‘It is a much more elegant method andis certainly the cleanest process I’veever seen. I think a lot of people aregoing to look at it and be amazed athow well it works, how efficient it worksand how profitable it is.’


double crop their land in a year.”Because these facilities will be work-

ing with high-quality products they willneed to employ about 205 people, whichis more than a typical ethanol plant.“These products are all food- or phar-maceutical-grade materials,” Elder says.“There are no automatic functions here.In most dry-mill plants, the only byprod-uct is [distillers grains] and you can han-dle that about any way you want. Butwith pharmaceutical-grade materials, ithas to be handled carefully and moni-tored all the time.”

Building a new technology fromscratch has its challenges. “Finding andredesigning equipment to meet ourneeds has been a challenge,” Elder says.“But fortunately we have run into manymanufacturers who are willing to workwith us on this and do what’s necessaryto get their equipment to do what weneed it to do. Another challenge is to getanyone to take you seriously with thenumber of plants that get announcedand don’t get built. But we are up to thechallenge and our plants are going to getbuilt. Our funding is all in place.”

Elder says his group was planningto build a traditional dry-grind ethanolplant about 18 months ago before learn-ing about the Chen-Xu process. Hebelieves the process will permanentlychange the ethanol industry. “This is aparadigm shift in the way ethanol is pro-duced,” he says. “It’s a far better processthan anyone has seen before. I think itwill make ethanol a far more viable prod-uct in the U.S. and the world market. It isa much more elegant method and is cer-tainly the cleanest process I’ve ever seen.I think a lot of people are going to lookat it and be amazed at how well it works,how efficient it works and how prof-itable it is.” EP

Jerry W. Kram is an Ethanol ProducerMagazine staff writer. Reach him [email protected] or (701) 746-8385.

The nine proposed plants will each have acapacity of 240 MMgy, more than double thecapacity of a typical large-scale ethanol plant.“It’s an economy of scale matter,” Elder says.“With the Chen-Xu method and the byprod-ucts that are put out besides ethanol, it becameobvious that the economy of scale workedbetter at the 240-million-gallon range than anyother. In fact, some of these plants mayexpand beyond that.”

The plants will also use drier technology

owned by the Reed Klondike Group so theycan take in corn harvested at 38 percent mois-ture. Elder says corn harvested at that mois-ture level contains more starch. “Therefore wewill be able to get more ethanol productionout of a bushel of corn than other plants sim-ply because we get more starch up front,” hesays. “It’s going to be nice for farmers. We’regoing take the corn after about 90 days, and Ithink south of the St. Louis area there aregoing to be many farmers who will be able to

TECHNOLOGY

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INNOVATION


BioGasol’s pilot plantPHOTO: BIOGASOL

INNOVATION

European Technology Companies

Unite


Eight European firms have joinedforces to market their technological

wares to ethanol producers worldwide.Representatives of four Denmark-based

companies held a symposium in Chicago toexplain how their cutting-edge technologies reduce

ethanol production costs, improve efficiencies andincrease coproduct revenue.

By Jessica Ebert

INNOVATION

riginally established to serve the breweryindustry, Distil Alliance, a coalition ofequipment suppliers and technology inno-vators, is making itself known to the

ethanol industry. “The Distil Alliance is a mix of variouscompanies that offer groundbreaking core processes andwell-proven, reliable technologies,” explains NielsAmmundsen, chairman of DA and a mechanical engineerfor Union Engineering, a Danish carbon dioxide technolo-gy developer. On a recent trip to the United States, DA metindividually with leading companies in the ethanol industryincluding Poet LLC and Fagen Inc., and sponsored a one-day symposium in Chicago. The latter brought these leadingEuropean equipment suppliers together with other ethanolproducers in an intimate networking setting. The seminarconsisted of introductory presentations about DA and itsmembers followed by workshop discussions where theattendees could meet one-on-one with company representa-tives. EPM was able to participate in these discussions andreports on the innovative technologies offered by DA.

Intriguing InnovationBioGasol, an engineering and technology company, has

developed cellulose-to-ethanol technology that overcomes

the major barriers of this process and has many ethanolproducers talking. The company was established in January2006 as a spin-off of a research and development effort atthe Technical University of Denmark. Since 1994, thiswork, led by Birgitte Ahring now chief executive officer of

O


BioGasol’s pilot plant

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INNOVATION

BioGasol, was aimed at devel-oping a process for the copro-duction of ethanol biogas (i.e.methane), hydrogen andlignin as a solid fuel. Theprocess utilizes proprietaryequipment and patentedprocesses and a unique, heat-loving or thermophilic bac-terium isolated 15 years agofrom a thermal spring inIceland. In 2005, a grant fromthe Danish Energy Department made it possible to create apilot-scale facility for testing the new technology, which thecompany has done since 2006. Now, BioGasol has plans tobuild a demonstration plant on an island called Bornholmnear the Swedish coastline.

BioGasol’s cellulosic ethanol technology stands outfrom other processes in three major ways. First, pretreat-ment of the biomass, which can range from wheat straw tocorn stover to bagasse and woody materials, involves amethod called wet explosion. “We essentially pressure boilthe biomass,” explains Rune Skovgaard-Petersen, engineer-ing manager for BioGasol. A little bit of oxygen and pres-

sure released at high temperatures breaks apart the lignincage that locks away the sugars needed for fermentation.“It’s a brute-force method for destroying the biomass struc-ture and separating the cellulose and hemicellulose from thelignin,” Skovgaard-Petersen explains. This process differsfrom the acid-wash that is typically used for pretreatment.

The pretreated biomass is pumped into a reactor forthe combined hydrolysis and fermentation of the material.BioGasol uses enzymes from Novozymes for the hydrolysisof the cellulose and hemicellulose into glucose (C6 sugar)and xylose (C5 sugar). The former is simultaneously fer-mented to ethanol by an industrial yeast, while the latter is

‘Coproducts improve margins and can become a large part of

profits. We’ve discovered that biofuel waste streams may contain

more value on the protein side than the main manufactured

product. Our technology adds value to new coproducts.’


INNOVATION

funneled to a second reactor. Thelignin that remains is separated andsold as a solid fuel pellet.

A second reactor is raising theeyebrows of those ethanol producerslooking to the future and to the real-ity of second-generation plants. Inthis fluid bed reactor, oxygen is elim-inated, the temperature is cranked upto 70 degrees Celsius (158Fahrenheit) and a novel bacteriumconverts the xylose to ethanol andhydrogen. “The C5 fermentation unitis getting a lot of attention,”Skovgaard-Petersen says. “This is thestep that positions BioGasol in therace.”

Finally, any remaining organicmaterial is shuttled to a second anaer-obic digester and converted intomethane. “We call the whole processthe carbon slaughterhouse,”Skovgaard-Petersen says. “It’sbecome part of our philosophy; getas much energy out of the biomass aspossible.” In addition, the processwater is treated with the company’spatented desalination technology andreused. According to Skovgaard-Petersen, only 0.3 gallons of newwater is added to produce one gallonof ethanol.

In March 2007, BioGasol wasnamed one of the top-most innova-tive private companies in Europe, theMiddle East, and Africa by RedHerring, a European media company.This past fall, the company signed ajoint-development agreement withthe food manufacturer Tate & LylePLC. The two companies will inte-grate BioGasol’s technology intoTate & Lyle’s corn processing facili-ties for the conversion of corn fiber-to-ethanol.

In the meantime, the company ismoving forward with its plans for ademonstration plant on the island of

Bornholm. Construction of the 2.6MMgy facility is expected to beginsoon with startup planned for 2009.

Cunning ColumnsIn a similar attempt to squeeze as

much value from coproducts as pos-sible, the technology companyUpfront Chromatography hasdesigned a process for extractinghigh-value protein from raw materi-als for the production of food addi-tives and ingredients for human con-sumption and healthcare.“Coproducts improve margins andcan become a large part of profits,”says Morten Olander, a biotechnolo-gy engineer with Upfront. “We’vediscovered that biofuel waste streamsmay contain more value on the pro-tein side than the main manufacturedproduct. Our technology adds valueto new coproducts.”

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INNOVATION

The process is a separationtrademarked solution calledRhobust. It takes place in stainlesssteel cylinders called columns thatare filled with tiny beads that looklike grains of sand. Raw material ispumped through the column andproteins bind to the beads, whichare then separated and washed.The proteins are finally eluted orremoved from the beads and usedin downstream processes thatresult in ingredients for the pro-duction of salad dressings, icecream, powdered soup and skincare products.

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er and developer, is already a famil-iar name in many ethanol plants.The name is synonymous withhigh-efficiency pumps and accord-ing to Henrik Skov Laursen, aregional segment manager for thecompany, “the more efficient thepumps are the more efficient theoverall process is.” AlthoughGrundfos pumps are typically usedto move water and ethanol arounda plant, in 2008, the company willbe bringing a solids-handling pumpto the U.S. market. “We’ve alwaysbeen on the water side but nowwe’re growing the business and[research and development] on theprocess side,” Laursen says. In fact,all the pumps at BioGasol’sdemonstration plant will be of theGrundfos variety. In addition, thecompany has introduced a newmetering pump, which they show-cased at last year’s InternationalFuel Ethanol Workshop and TradeShow. This pump can be used forenzyme dosing and is an area thatGrundfos is focusing on.

Finally, Union Engineering, acompany with more than 70 yearsexperience in the design and con-struction of carbon dioxide recov-ery plants, is gearing up to servicenew ethanol plants, especially thosebeing built on the coasts. Forinstance, the company built thecarbon dioxide recovery facility atthe Northeast Biofuels plant inNew York. Coastal plants like thisone are relatively close to the majorconsumers of carbon dioxide,including the food and beverageindustries and companies that pro-duce dry ice, therefore transporta-tion costs are lower. EP

Jessica Ebert is an Ethanol ProducerMagazine staff writer. Reach her [email protected] or (701) 746-8385.

dairy cooperative in Australia for theprocessing of cheese whey and the sep-aration of proteins for food and health-care.

Now the company is in talks withcorn processors and ethanol producersto explore the possibility of breakinginto these industries. One person whoattended the symposium, a science andtechnical manager for a West Coastethanol producer said her company was

keen to explore this chromatographysolution. “Margins are very tight at themoment so we’re looking for somethingthat will get straight to the bottom line,”she said.

Old FavoritesThe two remaining members of

DA who made the trip across the pondare veterans of the ethanol industry.Grundfos, a leading pump manufactur-

INNOVATION

OUTLOOK


PHOTO: NESIKA ENERGY LLC

Nesika Energy LLC in Scandia, Kan., is the first 10 MMgy ethanol plant designedby ICM Inc. The plant is set to come on line in January 2008.

OUTLOOK

The fuel ethanol industry’s building frenzy has settled and the slowingpace of growth should give industry leaders a chance to decide whereto go in 2008. Will companies continue to construct 100 MMgy plantsin the heart of the Corn Belt or will smaller facilities make a comeback?

By Michael Shirek



OUTLOOK

n April 2003, EPM published a feature article titled“Advent of the Giant Dry Mills” and posed thequestion: Are 100 MMgy ethanol plants becomingthe industry’s new standard? Fifty-six months later,

the answer isn’t a resounding yes, but rather a brisk nod.While the giant dry mill isn’t the only game in town, it’s thebiggest game in town. As the ethanol boom of 2006 expend-ed its energy in 2007, the question is no longer whether thehigh-capacity plant is the industry standard, but rather whatwill replace the behemoth as the plant du jour?

Since the ink dried on “Advent of the Giant Dry Mills,”the number of dry-mill ethanol plants with 100 MMgy ormore of capacity has risen from three to 12 with two moreplants sporting capacities of more than 90 MMgy and 27more 100 MMgy-plus plants in various stages of construc-tion. But with low ethanol prices and high corn pricessqueezing the bottom line and taking away investor interestin the industry, the giant ethanol biorefinery may be on itsway out, for now. In October, VeraSun Energy Corp. sus-pended construction of its 110 MMgy plant at Reynolds,Ind., citing market conditions. Although VeraSun says it willpick up where construction left off when market conditionsimprove, the suspension proved that one of the top threeethanol producers in the United States wasn’t willing to defy

market conditions when it had the option to hold back.If market conditions have stalled the advent of the giant

I

VeraSun Charles City in Charles City, Iowa, is one of the dozen 100 MMgy-plusdry mill ethanol plants in the United States. Although more than 20 100 MMgyplants are now under construction, the window for these large plants may beclosing.

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OUTLOOK

dry mills, what’s in store for theindustry as it builds out to itsfull capacity?

Finding the Next Big Thing

“With logistics and thecompetitive nature of theseethanol plants, corn-basedplants will probably stay in the40 [million] to 50 millon gallonrange,” says Jeff Kistner, BBIInternational vice president ofproject finance. “The [100 MMgy] plants are there, but Idon’t see the economic benefits in them right now. We mightin the future, but probably not too many more will be builtthat way, I don’t think. Right now in a lot of geographic loca-tions, these 40 million and 50 million gallon plants are thebest returning per gallon.” The 40 MMgy to 50 MMgy plantdoes have inherent advantages over those twice its size incertain market conditions, Kistner says. Right now, the mid-size plants are doing better on the margin because they’renot exhausting their local corn supplies and having to bringthe expensive commodity to the plant site from a distance.

And the mid-size plants could also be the next industry stan-dard because they have a built-in flexibility that the 100MMgy plants don’t: they can be expanded if conditions war-rant. “You can double, you can expand and you can improveby doing minor things for just a few million dollars com-pared with building a 100 million gallon plant and trying toraise $120 million in equity. You only have to raise $40 mil-lion to $50 million on the smaller plants.” Once a plant isbuilt up in capacity, the only way to reduce it is to run belownameplate and produce fuel ethanol at less than peak effi-ciency.


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OUTLOOK

Though the mid-size plant could experience a revival,there is another denizen within the U.S. fuel ethanol industrythat seems to have all but vanished. The small ethanolplant—those with nameplate capacities between 5 MMgy and25 MMgy—could have new life when the industry’s growthreturns from the stratospheric heights of 2006 and 2007.According to EPM’s ethanol plant construction list, there areonly two such plants under construction in the United States:Renova Energy of Idaho LLC (20 MMgy) in Heyburn, Idaho,and Nesika Energy (10 MMgy) in Scandia, Kan.

Andy Hill is plant manager at Nesika Energy, which is setto begin production in January 2008. He says his plant cancompete with the industry titans because the modest price ofethanol doesn’t affect the revenue produced by the entirety ofits final product. Nesika Energy was built next to a feedlotspecifically to take advantage of two markets: ethanol anddistillers grains. “[Nesika Energy’s] main goal was the wet

feed, being in the proximity ofa feed yard,” Hill says. Theplants relatively diminutivesize isn’t a concern for thecompany’s profit marginbecause the operation isdesigned to capitalize on itsparticular situation. “You canalways expand,” Hill says, “butas far as being the right fit forthe feed yard, this came out tobe a very good player in thegame.”

Nesika Energy gains its market advantage by processingcorn that would be used as feed and selling off two value-added products. Selling the wet distillers grains to the adja-cent feedlot also saves the company the energy costs associ-ated with drying the distillers grains. The move away fromrelying on fuel ethanol as the primary source of revenuecould become a bigger factor in the industry if smallerplants can find innovative ways to prop up their bottom lineswith diversified product lines tailored to their particular geo-graphic region.

Thinking Outside the RailsAnother feature unique to Nesika Energy when

grouped with its larger contemporaries is the absence of unittrains for ethanol transportation. With a nameplate capacityof just 10 MMgy, Nesika Energy can effectively get its prod-

‘We have to be able to differentiate ourselves going

forward. Just building an ethanol plant in South

Dakota, Minnesota, Iowa, Nebraska, just won’t cut it

anymore. You have to be different to attract some

attention if you’re going into an overbuilt area.’


OUTLOOK

uct to market using trucks. The mode of transporting thefuel ethanol isn’t exactly innovative, but the logic behind it is.Nesika Energy is the first 10 MMgy plant designed by ICMInc., a process technology giant. “I think you’re going to seethat in strategic locations, where [the plant is] tied to a feed-lot,” Kistner says. “ICM is working on a smaller plant to rollout on the international level, and it works perfectly for what[Nesika Energy] is looking for.”

“It’s more of a design for the export markets because ofthe footprint that it leaves,” Hill says. “It can be serviced bytrucks [instead of] trains. If you get into Africa or Europe,they don’t have the infrastructure there for unit trains but theydo have the capacity for trucking.” It isn’t clear yet whetherICM’s smaller process design will find a home in the U.S. mar-

ket, but Hill says it’s a way for groupswithout cavernous pockets to get intothe industry. “I think the smaller onesmight be the way to go due to theirsmall footprint and the [lack of] unittrains,” he says. “You don’t have to havethat many people to operate it [and]everything is very scaled down.”

Kistner says that smaller plantscould find their place in communitieslooking to promote sustainability bykeeping energy resources and dollars

within their borders, but in the commercial game they mightnot fare as well. The smaller plants will earn their place at thetable when cellulosic ethanol finds its legs commercially, hesays. When it comes to corn ethanol, the ideal plant size will

be determined solely by the market unless the governmentsteps in to steer the industry. “We have to be able to differ-entiate ourselves going forward,” Kistner says. “Just buildingan ethanol plant in South Dakota, Minnesota, Iowa,Nebraska, won’t cut it anymore. You have to be different toattract some attention if you’re going into an overbuilt area.”What could happen, Kistner says, is that small- to mid-sizedethanol plants could be collocated with other ventures suchas feedlots with anaerobic digestion in a closed system or

Kistner

Lifeline Foods LLC, a 40 MMgy plant in St. Joseph, Mo.

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LLC


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1

2

3

4

through other innovative projects.Whichever direction the indus-

try takes in 2008 and beyond, it’sclear that the 100 MMgy plantprobably won’t be the unanimouschoice for the industry standard.And the heart of the Corn Belt willlikely see its growth begin to waneif the corn market gets even tighter.Kistner says an industry slowdown,however, won’t be fatal because therecent growth was quite steep. “Ithink [the industry] is going to beback to normal growth,” he says.“What I mean by normal [is that]we’re going to consistently have our13 to 15 plants under construction.It’s not going to be 50 or 60 plantsunder construction like we’ve seenin the past 18 months. The capital’snot there and a lot of the goodlocations are already built out. Nowwe’re forcing projects in less ideallocations where you’re going tohave to build infrastructure for rail,natural gas and water, and that’s justadding costs to these projects.”

As Nesika Energy comes online in January, the smallest cornethanol plant under constructionjoins its bigger brothers in the com-petitive market. Whether the smallplant can gain a solid foothold inthe U.S. market remains to be seen,but if the era of the giant dry millis a possibility, a scaled-down ver-sion of the dry mill could take itsplace as the next big thing. EP

Michael Shirek is the EthanolProducer Magazine online editor.Reach him at [email protected] or (701) 746-8385.

OUTLOOK

‘I think [the industry] is going to be back to normal

growth. What I mean by normal [is that] we’re going

to consistently have our 13 to 15 plants under

construction. It’s not going to be 50 or 60 plants

under construction like we’ve seen in the past 18

months.’

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CONSTRUCTION


CONSTRUCTION

BUILDING BIOFUELS

Wanzek Construction Inc. started in 1971 as a small firm headquartered in Leo and Janet Wanzek’s home in Fargo, N.D.Today, the company has more than a thousand projects underits belt, employs 800 people and owns a fleet of 30 cranes.

Article and Photographs By Craig A. Johnson


THE

INDUSTRY

CONSTRUCTION

n a brisk North Dakota morning in earlyNovember, the crew at the TharaldsonEthanol LLC construction site started the dayplanning for one of the more risky operations:

lifting and setting two 14,000-pound hammermills. Planningfor the move took more than an hour as each team learnedits part in the process. The 70,000-pound crane gently liftedthe first hammermill and placed it on the slab without inci-dent, exactly what every contractor wants. In this case, thegeneral contractor is Fargo-based Wanzek Construction Inc.

Jim Heyer, vice president of engineering and construc-tion for Tharaldson Ethanol, says Wanzek Construction wasthe first contractor the company considered when theybegan to seek a general contractor to build a 110 MMgyplant near Casselton, N.D. “Wanzek is a professional compa-ny dedicated to safety. That’s what we wanted,” Heyer saysreferring to Wanzek’s decision to keep a team member on-site at all times, which shows the company’s desire to createa safe and dynamic environment. Among general contrac-tors, Wanzek has a sterling reputation not only because itemploys a professional staff, but also because of its commit-ment to safety and precision on the job site. Getting the jobdone doesn’t mean getting the job done fast if someonemight be injured. This is part of what Jason Kaufman, direc-

tor of project development for Wanzek Construction, refersto as Wanzek’s “safety culture.” There is value in having anexperienced staff, Kaufman says. “We put the time into peo-ple,” he says. “We’ve put a lot of effort into creating a cor-

O

A Wanzek Construction crane prepares to lift one of two 14,000-pound hammermills.

CONSTRUCTION

porate culture that takes care of those people.”Wanzek was also careful to create a service that other

construction companies could utilize. “They’ve always beenforward thinking,” says Kevin Bucholz vice president of

Moore Engineering Inc. in West Fargo, N.D., which has part-nered with Wanzek to build dams, sewer and water, andheavy earthwork projects. “In this region you have a lot ofsmaller general contractors … [Wanzek’s crane service] is a

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Crews work with precision to ensure a smooth transition of the hammermill fromtruck to pad.


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CONSTRUCTION

specialized service, but it was their vision to find marketswhere they could utilize their capabilities,” Bucholz says.

In 1971, Leo Wanzek and his wife, Janet, foundedWanzek Construction and based the company out of theirFargo home. Their first contract came from the U.S. ArmyCorps of Engineers, who hired them to complete a visitor’scenter on Lake Ashtabula, near Valley City, N.D. Since then,Wanzek has established a reputation as a family-owned com-pany that provides world-class services to the biofuels andwind energy industries, and the heavy/civil construction sec-tor. Early projects the company undertook were civil engi-neering jobs involving mainly road work, excavations andbridges. Thirty years later, with more than a thousand proj-ects behind them, Wanzek has developed into one of theleading providers of construction support in the industrywith more than 800 employees and a fleet of 30 cranes. Thecompany has been involved with 15 biofuels projects,including nine Poet LLC plants, three VeraSun Energy Corp.plants and Archer Daniels Midland Co.’s Marshall, Minn.,facility.

Wanzek’s diversity in the heavy-industrial markets allowsit to meet a client’s expectations and field a team to get thejob done. One of the company’s strengths is its large cranecapacity. Even if Wanzek doesn’t win a contract, oftentimes

the company is called in as a subcontractor because of itscrane fleet.

Wanzek’s involvement with the ethanol industry datesback to some early projects and its business relationships

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continue to the present. Ethanol and biodiesel have been animportant aspect of those business relationships, as well asWanzek’s ability to meet the needs of its clients. “As ourcompany has grown over the years, our core competencies inheavy industrial work have expanded,” says Jon Wanzek, LeoWanzek’s son and president of Wanzek Construction.

The Ethanol IndustryIn the past year, the ethanol industry has experienced a

slowdown in construction, brought on by the high cost offeedstocks and building materials, according to Kaufman.Despite the slower pace, he’s confident about the company’sfuture in the biofuels industry. “There’s no question there’sbeen a slowdown, but we’re optimistic that in six to 12months, you’ll see a turnaround,” he says.

According to Art Wiselogel, a project development man-ager for BBI International, ethanol plant construction startscoming out of 2006 were benefited by low-cost corn andgood returns for ethanol. In 2007, the landscape changed.Following demand, the price of corn went up. Constructionmaterials, which were already high, went higher. Then theprice of ethanol dropped, leaving construction starts in a pre-carious position. “Last spring (2007) is when we started see-ing the closing of equity drives,” Wiselogel says.

Kaufman thinks that improving the ethanol distributionsystem is the most important step toward continued indus-try growth. He and many others believe the low ethanolprices are not the result of an ethanol glut, but rather a


Working in a constant 30 mile per hour wind, a worker sets rebar for the concrete that will be poured later.

CONSTRUCTION

dearth of handling facilities. As production increased, theinfrastructure necessary to assist the ethanol industry didn’tkeep up. “A lot of folks could see this coming; the market was

obviously overheated,” he says.Wiselogel echoes his sentiment, point-ing to the current infrastructure. “Theinfrastructure for getting ethanol intothe gasoline market needs to beupgraded and improved … specifically,refineries and ethanol storage in theserefineries needs to be increased. Thoseare the primary limiting factors.”Wiselogel predicts there to be a two-year lag for the entire storage and infra-structure complex to come on line.

Thinning margins and more competition for fewer con-tracts in the ethanol industry may signal belt-tightening forsome contractors, who are also dealing with high fuel, equip-ment and labor costs. Addressing the rise in the cost of labor,Kaufman points to the role of experience as a determiner offuture success. “Finding qualified personnel is the mostimportant step. [Wanzek] has to get the right equipment into

the right hands at the right time.”Despite the increased competition for construction proj-

ects, Jon Wanzek sees a future in the ethanol industry and aplace for Wanzek Construction in it. “We’re optimistic thatthere will opportunities for smart, strategic growth,” he says.“There’s going to be a continued demand for ethanol andbiodiesel.” We’ll continue to manage our growth in a changingindustry.” EP

Craig A Johnson is the Ethanol Producer Magazine plant list &construction editor. Reach him at [email protected] or(701) 746-8385.

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U.S. Sen. Byron Dorgan, D-N.D. visits Red Trail Energy LLC in Richardton, N.D.PHOTOS: OFFICE OF SEN. BYRON DORGAN

Q&A


ConnectingCapitol Hill to

the MidwestU.S. Sen. Byron Dorgan, D-N.D., is part of a growing group in Congress that is interested

in and excited about the potential benefits of renewable fuels in the United States. Here,he shares some of his ideas and plans with EPM.

By Jessica Sobolik


Q&A

:Renewable fuels, including ethanol andbiodiesel, have become popular in Congressin the past couple years. Can you explainwhy support for the industry is buildingsteam on the Hill?

A: Renewable fuels hold tremendous potential to reduceAmerica’s dangerous dependence on imported oil, growlocal economies, reduce harmful greenhouse gas emissionsand provide new markets for farmers. These are win-win-win solutions.

I coauthored the original renewable fuels standard thatwas included in the Energy Policy Act of 2005. It called forthe production of 7.5 billion gallons of renewable fuel annu-ally by 2012. We are now on pace to exceed that goal as soonas next year. I have also introduced legislation to expand therenewable fuels standard to 36 billlion gallons by 2022.

It is important to continue to find ways to reduce theimported oil we use in our daily lives. In America, we use 25percent of the world’s oil. We import more than 60 percentof that oil—much of it from hostile parts of the world.Many in Congress feel that America will remain vulnerable ifwe continue to depend on Saudi Arabia, Nigeria, Iran,Venezuela and others to feed our energy appetite. Renewablefuels are an important way to help satisfy our energydemand.

Q: What challenges do you think the industry will face inthe future?A: The largest challenge facing renewable fuels in the imme-

diate future is ensuring that we have theproper infrastructure.

For example, we have more than16,000 flexible-fuel vehicles on the roadin North Dakota but only 23 E85pumps. We have been successful in ourefforts to boost production of renew-able fuels, but at the same time, we needto make sure drivers have access tovehicles that can burn greater blends ofethanol and have access to E85 and blender pumps.

We are producing more renewable fuels, but we need tofind ways to market and deliver renewable fuels to the con-sumer. I introduced bipartisan legislation earlier this yearwtih Sen. Richard Lugar, R-Ind., called the Renewable FuelsStrategy Act. It requires automakers to manufacture moreflexible-fuel vehicles and creates greater incentives andrequirements for service stations to install renewable fuelspumps.

Q: Earlier this year, you introduced the Security and FuelEfficiency (SAFE) Energy Act of 2007 (S.875). What isthe purpose of this bill? A: The SAFE Energy Act is a comprehensive approach toreducing America’s dependence on foreign oil. I recognizethere is no “silver bullet” to solving our energy crisis. Wecan’t dig and drill our way out of our current energy crisis—that’s a strategy I call “yesterday forever.” Conservationalone is not the only answer, either. The SAFE Act is a bal-

QDorgan

Q&A

anced energy policy that reduces the amount of oil we use inour economy.

The SAFE Act includes four parts: 1) gradual increasesin vehicle efficiency standards, 2) expansion of the produc-tion and use of renewable fuels, 3) access to oil and gasreserves in the eastern Gulf of Mexico, and 4) enhancementof international diplomatic alliances for energy security. Iworked with the Energy Security Leadership Council, agroup of senior business executives and retired militarycommanders, to develop this balanced energy strategy. It willhelp to ensure that the generations that follow aren’t left vul-nerable by a reliance on foreign oil.

Q: The Senate recently passed the Clean Energy Act. Howdid that come about? Any debates or concerns?A: The Senate passed the Clean Energy Act in June to addressrising energy prices and our growing addiction to imported oil.This bill represents the work of four Senate committees. Eachpassed strong bipartisan bills that were packaged into the CleanEnergy Act.

The Clean Energy Act includes many provisions that werecontroversial but long overdue, including increases in vehicleefficiency standards that haven’t changed in more than 20 years.I was pleased that three of the four key pieces of my SAFEEnergy Act were included in the bill that passed the Senate,including increases in vehicle efficiency standards, expandedproduction of renewable fuels and enhanced energy diplomacy.The House passed its own Energy Bill in August. Now theSenate and House are working to reconcile the two bills inorder to send one final bill to the president for his signature.

Q: As one of the original authors of the Energy Policy Actof 2005, would you say it has worked as intended thusfar? Do you feel there is room to expand that legislation?A: The Energy Policy Act of 2005 was a boost to therenewable fuels industry, and the Clean Energy Act expandson that. The renewable fuels standard I mentioned earlier

Dorgan speaks to reporters before a summit he organized in Fargo, N.D., to discuss what must be done to fix renewable fuel distribution bottlenecks andother hurdles that limit the use of renewables.

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will be expanded nearly sevenfold to36 billion gallons by 2022 and callsfor greater production of advancedbiofuels from biomass and otherfeedstocks. Where we have room togrow is in providing more robust,long-term incentives for renewables.The Senate Finance Committeedeveloped a package of tax incentivesthat extends for two years (throughDec. 31, 2012) an important tax cred-it that encourages production ofrenewable fuels. It also creates a newproduction tax credit that will hlepencourage investment in cellulosicethanol. Unfortunately, even theseshort-term extensions didn’t receiveenough votes to pass as a part of theClean Energy Act. However, theEnergy Bill passed by the House ofRepresentatives includes tax incen-tives and we hope to include renew-able fuels incentives in the final billthat’s sent to the president.

Q: You have an energy plan forNorth Dakota. Do you think this issomething that other states could

implement as well, tailored to theirown resources?A: I believe a coherent energy plan isimportant for any state to have, andthat’s why my goal has been to createan Energy Corridor in North Dakota.The state has a vast and diverse port-folio of energy resources, and thedevelopment of those resources willhelp our state’s economy and ournation by leading us toward energyindependence.

North Dakota is the Saudi Arabiaof wind. We have tremendous coaland oil reserves. We produce corn,sugar beets, biomass and other feed-stocks that can be converted intoethanol. No state has greater potentialthan North Dakota to provide signif-icant amounts of energy to meet ourcountry’s growing demand.

Q: Often the oil and renewablefuels industries are pitted againsteach other. Do you feel the twocould work together to benefiteveryone?A: We will always use our fossil fuels.

Dorgan fills his van with E85 at a Cenex station’s newly opened E85 gas pump in Bismarck, N.D.

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That is a fact. The question is how weuse them. We also need to worktogether to develop our renewablefuels industry. Yes, we need to digsome. Yes, we need to drill. Fossilfuels will always be a part of our ener-gy portfolio. We also need to under-stand that renewable energy is nolonger some sort of sideshow.Renewable energy is a significant partof our energy portfolio, and mustwork in concert with fossil fuels in away that benefits our energy supply,helps reduce our dependence on for-eign oil and addresses climate change.

More oil companies are blendingrenewable fuels like ethanol orbiodiesel into their fuel mix. Newresearch is showing that alternative

renewable fuels feedstocks such asalgae could create even greater collab-oration between fossil and renew-ables. As more energy companieslook for ways to capture carbon diox-ide for beneficial use, they could the-oretically inject that carbon dioxide inalgae pond farms that could be har-vested as a feedstock for renewablefuel. Finding new and innovative waysto meet energy demand was one ofthe themes of the Great PlainsEnergy Expo that I co-hosted in lateOctober in Bismarck, N.D. I organ-ized this event with Bismarck StateCollege and Kadrmas, Lee & Jacksonto bring all the major players togeth-er—both from the fossil fuels andrenewable industries—to discuss our

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This country has rich biomass resources likewood chips, crop residues and waste, switch-grass, and many others that can be utilizedwithout significantly impacting traditionalfarmland.

Dorgan speaks at Archer Daniels Midland Co.’s ribbon-cutting ceremony held for the company’sbiodiesel plant in Velva, N.D.

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energy future and how to harness itto benefit our state and our nation.Our country’s demand for energy isgrowing very rapidly, and I believethere is enough room for bothindustries to succeed.

Q: What other renewable fuels doyou see becoming major energyplayers in the future?A: Fuel that comes from biomassor cellulose holds tremendouspotential for this country. Therenewable fuels standard included inthe Senate version of the CleanEnergy Act contained a provisionthat mandates the production anduse of 21 billion gallons of non-starch, or biomass-derived fuel,between 2015 and 2022. This coun-try has rich biomass resources likewood chips, crop residues andwaste, switchgrass, and many othersthat can be utilized without signifi-cantly impacting traditional farm-land.

Ultimately, we must continue todevelop all forms of renewableenergy. I have funded a project inNorth Dakota that uses wind powerto separate hydrogen from waterthrough electrolysis. Vehicles thatrun on hydrogen, for example, gettwice the power and efficiency tothe wheel, and emit water vapor outthe tailpipe.

These renewable fuels provideincome for our farmers. They helpprotect the environment and reducethe need to import oil from nationsthat want to harm us. It is criticalthat we develop our renewable fuels,and I’m going to keep working tomake sure we do so. EP

Jessica Sobolik is the EthanolProducer Magazine managing editor.Reach her at [email protected] (701) 373-0636.


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PHOTO: CERES AGRICULTURE CONSULTANTS

EQUIPMENT

Nebraska twins invent the Residue Recovery System, a custom-made biomass collection system for combines that harvests andstores whole corncobs separately from the grain in a single passthrough the field.

By Ron Kotrba


BRINGING IN THE

BIOMASS


EQUIPMENT

y and Jay Stukenholtz areinventors. They’re also iden-tical-twin brothers. The dif-ferences in appearance

between the two may be hard to see, butonce they speak it’s easier to distinguishone from the other. Ty is soft-spokenand responds quickly while Jay speaks ina deeper tone, his responses taking a lit-tle longer as if he’s battling the profundi-ty of his own thoughts. Raised on theirfamily’s 350-acre farm outside ofNebraska City, Neb.—land they stillwork today—the 34-year-olds eachearned an agricultural engineering degreefrom the University of Nebraska. Ty andJay graduated in 1997. With their educa-tional training and farming experience,the Stukenholtz brothers know all aboutharvesting corn. Now they know evenmore about corncob harvesting. Soonafter graduating from the university, thetwins’ inventiveness materialized. Theiringenuity eventually turned into a ratherlucrative custom-harvest business, rakingin corn and whole corncobs in the sametime it would take others to harvest justthe grain. Their invention is a custom-built add-on that can be used with virtu-ally any combine on the market. Its pur-pose is to effectively separate the corn-cobs from the stalks and leaves duringthe harvest, keeping the cobs separate inthe combine’s onboard storage. It’s calledthe Residue Recovery System, a patentedand trademarked ensemble of equip-ment they originally built to collect andsell corncobs to a furfural plant outsideof Omaha, Neb. Furfural is a liquid alde-hyde made from corncobs and similaragriculture residues, and is used as anindustrial solvent.

Ty relates the progression of eventsthat took place after he and his brothergraduated from college. “The first twoyears we were back from college our dadharvested on the family farm,” he says.“Then it got rented out, so we didn’thave anyplace to harvest.” It wasn’tgoing to be easy for them to refine their

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New directions in ethanol production are cropping up. T


EQUIPMENT

design with no land to work. That prompt-ed the two to search for custom-harvestacres so they could keep their projectgoing. Finding that special farmer willingto allow experimental equipment runs ontheir land was challenging. “We were fortu-nate enough to find one with a couplethousand acres of corn that we could runover,” Ty says. “It helped get the bugs outof our design.” The Stukenholtz brothersharvested corn within two miles of thecob processing plant in Omaha using theircob collection system. “We ended up get-ting between $40 and $50 an acre just forthe cobs, so compare that to a $20 or $25-an-acre custom rate and it’s pretty lucra-tive,” he says.

With the family farmland rented toanother farmer, the brothers custom har-vested from 1999 to 2004. Using their sin-gle-pass harvesting invention, theStukenholtz brothers were able to under-cut other custom harvest bids by amassingthe dense cobs and selling them to buyerssuch as the furfural plant or ruminant feedmarkets. The farmers weren’t going tomiss the cobs; they just wanted the grain.According to the Stukenholtz brothers,cobs are the least valuable component inthe corn-crop residue. The farmers thatthey are working with plant corn-on-corn,meaning crops are not rotated seasonally.Cob piles at the edge of the fields aren’talways completely cleaned up by harvest’send, and when the next year’s corn cropstarts coming in, farmers have difficultiesin areas where cobs were left over winter.“It ties up the nitrogen,” Jay says. “Asmuch as the cost of the fertilizer is, espe-cially if it keeps going up, and if it takesextra fertilizer to break down the lignin inthe corncob to make it into a usable nutri-ent, that offsets the value in a corn-on-corn rotation,” he says. “The cobs are outthere every year—it might be beneficial toremove them.”

The InventionAnother farmer, who was working

with the Omaha furfural plant, designed a

wagon to be pulled behind a combine thatcleaned the corncobs out of the stover.“They had a hard time making it work,” Tysays. “Eventually they got some of thebugs out, but from our experience, pullinga wagon in our part of the country—any-where really—there just had to be a betterway.” There was one year when all thebrothers did was separate cobs via pull-behind wagons, but that didn’t match theefficiency of typical corn-harvesting com-bines. “That’s when we undertook ourproject,” Ty says. “The intent was to builda machine that could run in the hills ofsoutheast Nebraska.”

Because rotary combines make up avast majority of combines marketed in theUnited States today, most of theStukenholtz’s biomass collection systemshave been tailored for rotary combines.The Residue Recovery System consists ofwhat’s trademarked the CleanBoot and theTopTank. “The CleanBoot typically con-tains a sieve and two blowers,” Ty says.One fan is used for cleaning the lighter,fluffier leaves and stalks from the densercobs; the other blower is used to transportmaterial to the TopTank. “The blower fanis downstream from a Venturi,” he says. AVenturi effect, named for Italian physicistGiovanni Battista Venturi, is created whenairflow passes through a constricted areaand pressure on the inlet side is increasedwhile pressure on the downwind side ofthe Venturi decreases, creating a vacuum-like environment. “It’s unlike anything elseI’ve ever seen,” Ty continues. “It can take atremendous amount of material and blowit into the tank, and it doesn’t take a lot ofpower. It’s taken quite a few years to get itironed out to where we are now.”

Just as their voices are unique, so arethe roles each twin plays in the ongoingdevelopment of the Residue RecoverySystem. For example, Jay handles theblowers and CleanBoot on the back-endof the combine, while Ty focuses on theTopTank and grain extension on top ofthe harvester. The TopTank holds 3,000pounds of cobs, so it’s sized at about 80

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percent of a combine’s onboard grain storage tank. Thus, harvesterswith a 300-bushel grain tank would be outfitted with a 300-cubic-feetcob tank, which only takes about half-a-minute to unload once it’sfull. Patent-pending Autofold technology also allows the operator tocollapse the storage bin from inside the cab. With all of the work theStukenholtz brothers have done with corncob harvesting, Ty stilladmits, “Cobs are not an exact science.”

After 10 years of refining and tweaking their invention and sup-plying a dozen or more custom-engineered collection systems to a

smattering of farmers and agribusinesses in the Midwest, theStukenholtz brothers and their new business partner Beth Pihlbladprepare to take this implement to the next level. Pihlblad was intro-duced to the Stukenholtz’s through a cousin who had been workingwith them early in the development of their invention.

Pihlblad herself was immersed in renewables, working with arecycling company that was using woody biomass to cofire with coal.“I became more curious about their invention, so I contacted themlast fall and that’s when they told me their story,” she says. “I wasintroducing them to the larger potential of what they created.”Pihlblad says the Stukenholtzes knew of the emerging biomass uti-lization industries such as biomass-to-power, cellulosic ethanol andthe “green” chemistry movement, but didn’t realize how big aneffort was being amassed in that direction.

Shortly after Jan. 1, Ty, Jay and Pihlblad formed a company,Ceres Agriculture Consultants, to promote their machinery and har-vesting services, and to build relationships in the industry. The broth-ers started another company in 2001, Cobco Manufacturing Inc.,which they formed to help market prototypes of their equipment,harvested cobs and other forms of biomass to end users. “We’vesupplied two coal plants with cobs—one was at the University ofMissouri in Columbia—and we’ve worked with a public utility com-pany supplying them with cobs,” Ty says. Now, Ceres AgricultureConsultants will take a lead role in promoting renewable energy proj-

Jay, left, and Ty Stukenholtz invented the Residue Recovery system to harvestcorn and corncobs.

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ects development for its business partners. Cobco will likely be trans-formed into what Pihlblad calls a “fuel processing and trucking/dis-tribution company.” Ty explains the rationale behind this move. “Alot of the markets we have for cobs, which have sustained our proj-ect, are 250 miles away,” he says. “We already have the trucks we needto get started … We would have to expand a lot, but we have a startanyway.”

Amidst all of these activities—developing renewable energyprojects, agricultural consulting, custom-harvesting, and fuel pro-cessing and distribution—one wonders what will become of theStukenholtz’s cob collection system? “We still need to refine the engi-neering and partner with a manufacturer,” Pihlblad says. An after-market equipment maker will likely be the first partner in the manu-facturing of this machinery, Jay says. “Once it appears the market isbig enough, the [original equipment manufacturers] will be morelikely to pick it up.”

Deciding exactly how large the market is for their inventionremains a challenge. “We’re having a hard time trying to figure itout,” Ty says. “We are going to need somewhere between a coupleof these and 500. That’s the biggest challenge here—moving fromthe prototype stage with custom-built machines for specific applica-tions to a product that has manufacturability.” Until a manufactur-ing agreement is set, the brothers will continue to test and refine theircreation for different applications. This fall they will harvest 60 acres

of soybeans and test their invention collecting the soybean pods.The residue sizes make the biggest difference when configuring eachcustom-built apparatus. “Change the air, change the sieve size, and ifyou have to, change the whole sieve,” Jay says. “That’s what we haveto do for different residues.” The twins are especially interested intrying their device on wheat straw, Ty says. “There’s a large push—especially in the cellulosic ethanol industry—to use wheat straw,largely because wheat is grown in drier climates,” he says. “But withwheat straw there are density issues that will require a larger TopTankon the combine.” Pihlblad says she will concentrate on buildingmomentum in the emerging biomass industries for the cob collec-tion system they’ve developed. “We’ll be focusing on education with-in the industry,” she says. “Farmers are going to have to see thevalue—the intrinsic value imbedded, and how much money they canmake on this. Our focus until next spring will be education andawareness, and generating momentum—we need momentum. Weneed farmers to be asking, ‘Where can I use this? Where can I buyit? What are its applications?’” Moreover, Pihlblad says what’s reallyneeded are outlets for all of the available biomass materials. EP

Ron Kotrba is an Ethanol Producer Magazine senior staff writer.

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

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

The Fundamentals of Track MaintenanceBy Hal Harrison and Steve Kadrlik

ore than 100 new ethanol and biodiesel facilities areexpected to start production in the United Statesthis decade. As the competitiveness within each

industry grows, project owners spend considerable time andexpense selecting the right property, preparing the site andconstructing the facility. Yet, once the facility is in production,many owners will overlook protecting their multi-million dol-lar investment in railroad track infrastructure.

If properly maintained, railroad track will endure into thenext century and generate a handsome return on investment.

If neglected, the track will deteriorate,exposing owners to thousands of dol-lars in lost productivity and revenues,safety incidents and excessive trackrehabilitation costs.

Even for facilities less than twoyears old, it’s not too early to initiate atrack maintenance program to safe-guard the investment and ensure plantoperations are not interrupted due totrack failure.

Track maintenance doesn’trequire a significant time or financialinvestment. Much like there’s no need

to call in a professional to fuel and wash your car, or put air inthe tires, the same applies for an ethanol facility’s railroadtrack. Basic track housekeeping can be performed by a facilitymanagement team as part of a routine maintenance regimen.

Initial track maintenance is simple, but occasionally over-looked. The main objective is to keep the track free from anytype of obstruction. Clean up corn, distillers grains and other

M

*Programs vary based on the track design, train tonnage and train volume.Consult a qualified track contractor for a recommended program for your track.

Average recommendedtrack maintenance program*

Track age ProgramUp to five years • Semi-annual inspections and minor maintenance • Adjust switches and tighten bolts • Resurface approaches if necessarySix to 10 years • Semi-annual inspections and maintenance • Adjust switches and tighten bolts • Resurface track11 to 15 years • Semi-annual inspections and maintenance • Adjust switches and tighten bolts • Resurface track • Repair/replace track components (switches, frogs, turnouts, etc.)15 years or more • Semi-annual inspections and maintenance • Adjust switches and tighten bolts • Repair/replace track components (switches, frogs, turnouts, etc.). Bi-annual inspections and maintenance • Replace ties • Replace rail/resurface track (varies based on track design, and train tonnage and volume)

SOURCE: RAILWORKS TRACK SYSTEMS

Harrison, left, and Kadrlik


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materials that may have spilled from a railcar. Apply a herbi-cide or cut down vegetation that may have begun growingwithin and around the track. During the winter months,remove snow and ice from the track and switch points. Aproactive and ongoing housekeeping program that paysattention to these areas will extend rail life and help maketrain movement more fluid throughout the facility.

Plant managers who wait to take action until othersreport track problems are taking a costly risk. Plant person-nel can’t count on railroads to alert them to track defects.The practice of railroads conducting routine industrial trackinspections is a thing of the past. Railroad inspectors gener-ally examine track only when they suspect a defect or safety

concern. If inspectors find a serious defect, the railroad willnot hesitate to “red flag” or discontinue service until repairsare completed.

Industry train crews are credited with reporting manytrack failures. However, a plant manager is already behindwhen a train crew member reports a “dip or kink, or the

Routine track housekeeping

Clean up any rail car spillage (corn, distillers grains or other materials) that falls into the track

Control vegetation on and around the track

Remove snow and ice from the track and switch points

Start a semi-annual track maintenance program with a qualified track contractor

RailWorks Area Manager Randy Ruppert inspects track at a Nebraska ethanolfacility.

SOURCE: RAILWORKS TRACK SYSTEMS

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track is way out of cross level.”Taking a preventive approach

will be less costly in the long run,eliminate safety risks and avoid atrack outage. That begins by relyingon a qualified track contractor toconduct semi-annual inspections,generally in the fall and spring, orbefore and after winter takes its tollon the track.

A thorough inspection involveswalking the entire track, evaluatingthe subgrade, rail, ties, ballast,switches and turnouts. The inspec-tion team will also often performroutine maintenance, such as adjust-ing switches and tightening bolts. Ifa pressing deficiency is identified,the contractor will notify the facilitymanager so immediate action can betaken. A few days after the inspec-tion, the contractor will present adetailed report featuring an overalltrack evaluation and an assessment

of each turnout in the facility.Even though the track design

and scope vary from facility to facil-ity, new ethanol startups will be con-fronted with similar track infrastruc-ture concerns a few years into pro-duction. One of the most commonproblem areas is ballasted “approachtrack” set on the subgrade. Thistrack adjoins direct fixation track instructures, which is set on concreteand generally located near the trackscale. Track is only as good as thesurface it is built upon. If the sub-grade is inadequate, the approachtrack may show signs of settling asearly as one year into use. A qualifiedtrack contractor can repair this prob-lem by using a tamper to raise theelevation of the track, and tampingand re-ballasting the subgrade.

Another common problem areais water drainage, particularly atfacilities that have expanded produc-

A common problem area occurs where the ballasted track adjoins direct fixation track in structuressuch as weigh scales.

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tion capacity since opening. Theaddition of a new road or structureon the property can impact howwater collects and drains. Whenwater doesn’t drain properly, it canerode the track subgrade, creatingdips or uneven elevation. Again, theremedy calls for correcting thedrainage problem and resurfac-ing—or tamping—the track toachieve the proper elevation.

Resurfacing costs vary basedon the track profile, length and ifany additional ballast is needed.Spot surfacing to correct low spotsin approach tracks, isolated dips onthe track and minor cross-level cor-rections may cost as much as$4,000 to $5,000. Resurfacing theentire track structure is more costly,with an average cost of $2 per footand $1,200 per turnout.

The popular expression “Payme now or pay me later” rings truewhen it comes to longer-term trackmaintenance. Spreading out a trackmaintenance investment over 15years will put one ahead comparedto putting off the expense until asevere problem arises. Well-main-tained track will extend the life ofthe track and track components andsave maintenance dollars in thelong run.

Neglected track requires emer-gency repairs and more extensiverehabilitation. Without mainte-nance, track components such asties, rail, ballast and switches willfail prematurely and requirereplacement years sooner than nec-essary. Wood ties with a life of 25to 30 years will deteriorate yearsearlier. The same goes for rail,which if neglected will break downrather than last indefinitely.

Private industry can take a lessonfrom well-traveled railroads. Invest inproperly maintaining a track networkand it will keep a business free fromsafety incidents and profitable for gener-ations to come. EP

Project Manager/Estimator Hal Harrisonand Area Manager Steve Kadrlik work in theLakeville, Minn., office of RailWorks TrackSystems, a leading North American track

contractor. Reach Harrison at [email protected]. Reach Kadrlik at [email protected]. Both can be reached at(952) 469-4907.

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

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RISK


A New Era in Design/Build Contractsby Todd Taylor and Kermit Nash

s the ethanol industry adjusts to increased competi-tion, a tighter credit market and escalating inputcosts, the fine details of the design/build contract

are becoming more important than ever. Arguably, the mostcritical part of an ethanol construction project is thedesign/build contract. Owners must be aware that even theseemingly insignificant terms of the contract can have signif-icant practical, financial and legal consequences. As the Greekphilosopher Plato once said, “The beginning is the mostimportant part of the work.”

Carefully negotiating the terms, including what may beconsidered purely business or technical terms (the “boiler-plate”), is an investment that may save an owner significanttime and resources during and after construction.

The ethanol industry has transitioned from a once cau-tious use of design/build contracts to a saturation of contract

forms from the American Institute ofArchitects, the Design/Build Instituteof America, Associated GeneralContractors of America and other rep-utable sources. Each organization hasforms that are excellent starting points,but according to their own sources, theyshould be used as guides and not blind-ly accepted. Also, the increasing numberof developers in the biofuels construc-tion industry has produced a new gener-

ation of “hybrid” construction documents which take ele-ments from different design/build contracts. The forms areessentially a “cafeteria-style” approach to contract formationas they deviate, sometimes substantially, from standard indus-try documents. While this deviation is not an unpardonable

sin, making certain that all the parties are in agreement with allof the terms of the design/build contract can be like learningto ride a bike—without the training wheels—for the first time.

Each ethanol project has unique requirements whichmust be considered at the design/buildcontract negotiation stage in order toaddress the owner’s goals. The industryis accustomed to a “design/build bidcontract” or “design/build lump sumcontract” with fairly standard terms.Yet, one can skim no further than thedefinitions section of hybrid contractsand discover awkward shifts of dutiesand responsibilities from the contractorto the owner. While this departs frommost independent owner’s expectations, many owners areshocked to discover that their executed design/build contractreflects this “agreement.”

The most common, yet avoidable, areas of disputeinvolve poorly defined, inconsistent or insufficiently definedterms in the contract. If the parties aren’t careful, terms of adesign/build contract can be ambiguous, used incorrectly orassume that each party understands a definition. For example,if you ask 10 people to define “best efforts,” which is a com-mon contract term, you will likely get 10 different answers—even from lawyers. Take into consideration instances when theterms are as technical as a performance guarantee where opin-ions vary between experts.

In addition to a reputable legal counsel negotiating thesepoints, an experienced owner’s representative can also spotissues for the owner. The owner’s representative can also pro-vide accountability to ensure that the negotiated criteria and

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other technical aspects are drafted andexecuted properly.

Other factors of considerationare a matter of common sense.Contracts should avoid dense industryjargon. Implement the “bus stop”approach to contract drafting. If theaverage person at the bus stop can’tmake sense of your agreement, thenthey won’t be able to understand itwhen they’re sitting in the jury box and in charge of resolv-ing your contract dispute.

For specific industry terms relating to design criteria,change orders, payments, timing, “substantial completion,”retainage, warranties and dispute avoidance, solid advicefrom a party who understands how these matters will beresolved if there is a dispute will help build a better contract.For example, change orders often cause difficulties if theyaren’t detailed and don’t discuss timing, cost increases andresponsibilities. Since change orders are often an exceptionto the lump-sum requirement of a design/build contract,owners must overlook the potential for additional costs, timeand completion obligations in the balance of the contract.Court decisions throughout the United States demonstratethat changes not contemplated at the time of contract, evenif not properly documented, can be properly awardedagainst an owner. Just think what would happen when “sub-stantial completion” is not understood among parties, sinceit does not always mean the ability to produce fuel.

Handling Disputes Even with the most careful planning and drafting, prob-

lems will occur once construction has commenced. Anowner representing shareholders, investors and lenders, hasa tendency to react quickly to keep a project on task.However, reacting too quickly can create ancillary problemsthat hinder resolving a business issue. The following offers acouple of practical considerations in light of a design/buildcontract.

First, carefully review the facts with the relevant con-tract provisions and construction binder to confirm the factsand factors of the situation. Second, confirm who bearsresponsibility for the problem pursuant to the contract.Third, convene with the owner’s representative and an attor-ney to review the situation in detail, identifying all of theissues and potential outcomes in order to prepare aresponse. Be careful to consider all facts and possibilities,including potentially harmful information, since it is easierto deal with negative facts early in the process. Fourth, con-sider the costs of the alternatives, including the time and


Court decisions throughout the UnitedStates demonstrate that changes notcontemplated at the time of contract,even if not documented properly, can beproperly awarded against an owner.


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frustration that are a part of disputes and, for larger issues,litigation.

If a problem or dispute arises during the constructionprocess, most modern design/build contracts follow adefined process that may include alternative dispute resolu-tion, mediation and arbitration. Careful consideration of thecontract requirements may prevent a problem from growingto an act of default that gives further remedy to either party.By following the proper notice provisions, including the tim-ing requirements, you are adhering to the requirements ofthe design/build contract and creating a paper record ofevents required by insurance or used if litigation occurs. Aproblem doesn’t have to stop the construction process.However, any indication that the problem is not going to beresolved in a reasonable manner may have broader implica-tions for the project.

Failed negotiations usually lead to a form of alternativedispute resolution. Most modern design/build contractscontemplate non-binding mediation, followed by eitherbinding arbitration or litigation. Mediation is non-binding

and less formal than either arbitrationor litigation. A well-drafteddesign/build contract will state thatthe goal of mediation is to get the par-ties to reach a mutually acceptableagreement to resolve a dispute. Themediator is usually an impartial indus-try expert, attorney or retired judgewho has no formal power to force asettlement, but instead may help each

party identify strengths and weaknesses with their case andoffer creative methods to reach an agreement.

Arbitration is typically binding and the award can’t beappealed in the courts. The arbitration process is less formalthan litigation, but implements the use of many of the sameevidentiary concepts and procedures. An advantage is thatthere is no jury and formal procedural calendar, which expe-dites the resolution process. In the event the design/buildcontract does not contain an arbitration clause, or the partiescannot resolve their issues amicably, litigation is a likely nextstep. The scope of this article neither allows the space or theneed to articulate the costs of litigation nor the impact on aconstruction project. However, a well-negotiated contract,good legal counsel and proper documentation will be keyfactors in litigation preparation.

When problems and disputes arise during the construc-tion process, the parties may carve out issues that are notmaterial to the completion of the project, allowing the con-struction process to continue. It is possible for parties toresolve matters pertaining to costs and expenses relative to

The arbitration process is less formalthan litigation, but implements the useof many of the same evidentiary conceptsand procedures.


RISK

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the design/build contract withoutimpacting other aspects of theproject. However, if the issue ismaterial to the design, construc-tion, operation or safety of a proj-ect, there will likely be no carve-outavailable. Since problems alwaysarise, the contractor should havecontemplated some degree ofpotential problems into their esti-mate of construction completionand cost.

For post-completion projectissues, the design/build contract isstill the source for resolving anyissue. Once final completion isreached pursuant to the contract,post-completion issues shift fromconstruction performance to war-ranties. The warranty provision iscritical to resolving problems as thefinal payment subject to final com-pletion has been met, bills havebeen paid and the contractor andsubcontractors are working on theirnext project. Moreover, if the issuearises after the release of anyretainage on the project, any com-mitment to address an issue willlikely be an out-of-pocket cost forthe party who has to make a correc-tion. Warranty issues may be sub-ject to alternative dispute resolu-tion. Also, the critical element willbe giving proper notice to the con-tractor upon discovery of the issue.

Do not rule out the impor-tance of the bond and insurancepolicy for the project. Each policycontains language, often unread,that requires notice to be deliveredto the carrier of any claim, defect,damage or otherwise. Failure totender a claim in a timely mannermay violate the terms of the policyor negate any proper claim made bythe contractor or the owner.

Words fail to describe a project thathas crumbled due to poor contractnegotiation. The old adage that anounce of prevention is worth a poundof cure is never more real than whenconsidering how critical thedesign/build contract negotiationprocess can be. Since the goal of everyproject is to pump fuel, do not overlookthe essential steps of properly preparing

the contract, or if its already in place,getting the counsel you need in theevent a problem arises. EP

Todd Taylor and Kermit Nash are officerswith Fredrikson & Byron P.A. Reach Taylorat [email protected] or (612) 492-7355.Reach Nash at [email protected] or(612) 492-7356.


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Breaking Down WallsBy Erin K. Peabody

here may soon be another reason to support the local dairyfarmer.

In Wisconsin, where a similar message is proudlyplastered on everything from bumper stickers to T-shirts to coffee-shop windows, researchers at the USDA Agricultural ResearchService’s U.S. Dairy Forage Research Center are proving that the nationhas an unlikely ally in its quest for energy independence: dairy cows.

Featuring one of the most sophisticated digestive systems innature, cows and other ruminants can convert rough, fibrous plantmaterial into critical, life-sustaining energy and milk.

Yet, while herds of these natural plant processors are scatteredacross the country’s vast bucolic landscape, there’s not a single commer-cial facility in the United States capable of a similar feat: converting theEarth’s most abundant renewable resource—plant cellulose—into fuel.

Lignin Locks up Energy Even though dairy cows are impressive plant-to-energy convert-

ers, they can’t digest especially fibrous feed portions toughened up bylignin, the cementing agent that holds plant cell walls together.

For bioenergy researchers, lignin and other cell wall componentsare significant stumbling blocks to unlocking the enormous energythat’s tied up in plants. “It’s all about the sugars,” says Michael Casler, ageneticist based at DFRC. “To draw energy from a crop, you’ve got toget to the sugars so that they can be fermented into fuel.”

However, in cows and biofuels research, lignin almost always getsin the way. Plants use three main materials to build their cell walls: thepolysaccharides cellulose, hemicellulose and the phenolic polymerlignin. Cellulose is a chain of glucose (sugar) molecules strung togeth-er. As these molecules multiply, they organize themselves in linear bun-dles that crisscross through the cell wall, giving the plant strength andstructure.

The cellulose bundles are weakly bound to an encircling matrix of

hemicellulose, which is strongly linked to lignin. The gluey lignin poly-mer further strengthens plants and gives them flexibility. Lignin is thereason plants can pop back up after heavy rains and winds, and it’s howthey made the leap from a life in the ocean to one on land eons ago.

Plants have invested great energy in crafting exquisite cell wallstructures that resist degradation and loss of their precious sugars. Overthe course of millions of years, they’ve had to fend off an insatiablecrowd of energy-hungry fungi, bacteria, herbivores—and now, people.

A Sticky Plasticity John Ralph, a DFRC chemist, is one of a handful of scientists in

the world who is probing lignin’s structural details. With the help ofnuclear magnetic resonance, a technology that takes advantage of themagnetic fields surrounding atoms, Ralph and colleagues have beenable to chip away at lignin’s mysteries, including how plants make itthrough a process known as “lignification.”

Many of Ralph’s insights have come from years of scrutinizingthe lignin structures in transgenic plants. He says there’s much to belearned about a gene by watching what happens when it’s altered.

For example, almost 10 years ago, Ralph and colleagues publisheda paper describing what happens to loblolly pine trees when they’redeprived of the gene that codes for cinnamyl alcohol dehydrogenase—an enzyme that helps make vital lignin building blocks. Ralph says thateven with extremely low levels of the important lignin-buildingenzyme, the trees compensated by incorporating novel monomers—small molecules that can bind with others to form polymers—toensure that they had the necessary lignin-like glue to perform basicfunctions.

After using nuclear magnetic resonance and other methods toanalyze many other genetically transformed plants—including tobacco,aspen, alfalfa, corn and the model plant Arabidopsis—Ralph and his col-leagues and collaborators have laid a foundation of basic knowledge

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about how lignin production is orchestrated in plants.Ralph belongs to a major camp of scientists who maintain that

the formation of the lignin polymer is pretty much a random affairand isn’t strictly controlled by proteins and enzymes like many otherplant polymers. Another group argues that lignification is just like pro-

tein building, a process that’s predictable and leaves few surprises.Ralph contends that the plant has a wider number of building

blocks for assembling lignified cell walls at its disposal. He says theplant can put these components together in a virtually infinite num-ber of ways, as did the pine trees and many other transgenic plants.

Plant molecular geneticists Jane Marita, left, and Mike Sullivan study genetically modified alfalfa to see what factors influence the plants' architecture.

Weimer, center, discusses tests of a new biobased glue with chemist ChuckFrihart, left, and technician Brice Dally of the USDA Forest Service's ForestProducts Laboratory.


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Ralph calls it “metabolic plasticity.” Lignification is “a remarkablyevolved solution that allows plants considerable flexibility in dealingwith various environmental stresses,” he says.

Even if some don’t appreciate lignin’s evolutionary role in help-ing plants adapt, that’s OK, Ralph says. “A greater awareness of theseplant processes will increase our opportunities to modify lignin com-position and content,” he says.

Zooming in on Lignin Another of DFRC’s many lignin-related discoveries has been

especially well received in scientific circles. Fachuang Lu, a researchassociate in Ralph’s group, was the first to find a way to study thehighly detailed chemical structure of the entire plant cell wall.

In the past, the job of extracting the various polymers from cellwalls for detailed analysis required the deftness of a brain surgeon.There was always a tradeoff between the integrity of the materialextracted and the speed with which it could be done.

Now, entire cell walls can be dissolved in a special solution inwhich all their contents—cellulose, hemicellulose and lignin—aredissolved in a matter of hours instead of weeks, as with traditionalmethods. Once all the polymers are in the solution, nuclear magnet-ic resonance can provide a structural picture of them. “Traditionally,we could only get a portion of the cell wall into solution,” Ralph says.“By using this new solution and nuclear magnetic resonancemethod, we can get a chemical fingerprint of the major and minor

structures of the entire cell wall. The amount of detail is striking.”Researchers interested in running cell wall samples from either

conventionally bred or genetically modified energy crops can use thetool to get a zoomed-in view of what their plants’ modified cell wallslook like. With such powerful capabilities, the method can serve asan important gauge of progress.

Low-Input Plants for Energy In addition to probing minute cell-wall structures, DFRC scien-

tists are also breeding plants that possess energy-friendly qualities.Casler is hanging his hopes on grasses—the perennials that cover anestimated one-third of the nation’s acreage.

Aside from switchgrass, on which he’s built an entire breedingprogram, Casler is also eyeing the promise of other low-input grass-es, such as smooth bromegrass, orchardgrass and reed canarygrass.He thinks they have the potential to feed both cows and the coun-try’s enormous energy appetite.

Casler and colleague Hans Jung, a DFRC dairy scientist basedin St. Paul, Minn., have been selecting grasses that possess either lesslignin or fewer ferulates, which are chemicals that help bind lignin tohemicellulose in the cell wall, impeding access to the sugars. “Whenwe started these studies, we wondered ‘Is it lignin that’s most respon-sible for binding up the carbohydrates, or is it the way ferulates linkthe lignin to hemicellulose?’” Casler says.

After running studies in several grass species, Casler, Jung and


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collaborators have proved that either approach works when it comesto breaking down tough cell walls. Hoping to breed plants whose cellwalls are more easily degraded, Casler and Jung will soon begincrossing promising grass lines.

Focusing on Alfalfa Other DFRC researchers are focused on alfalfa—a crop that,

unlike corn and other grasses, fixes its own nitrogen and thereforerequires less fertilizer. Plant physiologist Ronald Hatfield and molec-ular geneticist Michael Sullivan are working to boost alfalfa’s biomassby altering genes that affect its development. “We’re looking at alfal-fa’s developmental structure, how it branches,” Hatfield says. “We’realso trying to reduce leaf abscission, or leaf drop.”

Because alfalfa plants are grown close together, many of theirunderstory leaves fall off from lack of sunlight. Hatfield and Sullivanwould like to minimize loss of this valuable plant material.

Hatfield, Sullivan and Ralph are collaborating with the NobleFoundation in Ardmore, Okla., to build the ideal alfalfa plant. “TheNoble Foundation usually engineers the plants with reduced lignin,”Hatfield says. “Then we use nuclear magnetic resonance and otheranalytical techniques to see what the modified cell walls look like andhow easily they can be processed either by the cow or for biomassconversion to energy.”

The alfalfa research team has already discovered that when theytransform plants by down-regulating enzymes called “methyl trans-

ferases,” they can reduce lignin content, boost cellulose content andenhance cell wall digestibility.

Part of the Big PictureIn the end, DFRC researchers believe that agriculture’s role in

supplying renewable energy to the country is crucial. However,Hatfield cautions that the bioenergy movement mustn’t miss the for-est for the trees. “We need to consider the whole agricultural pic-ture,” he says. “You can’t convert everything into bioenergy.”

There are other biobased products and niche industries to con-sider. Take alfalfa, for instance. DFRC researchers have found that,in addition to providing great grist for the ethanol mill, alfalfa is asource of quality protein and health-promoting nutraceuticals. Plus,its fiber fractions have value as a water-filtering agent, and it’s an idealsubstrate for making an all-natural glue.

“We also have to think in terms of sustainability for the sake oflocal agricultural economies and our natural resources,” Hatfieldsays. EP

Erin K. Peabody is a member of the USDA-ARS’ information

staff. Reach her at [email protected] or (301) 504-

1624. This article was published in the April 2007 issue of

Agricultural Research.

Changing the ClimateFebruary 25–27, 2008

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EVENTS CALENDAR

6th European Motor Biofuels ForumJanuary 9-10, 2008

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This forum will attract a wide range of participants

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Ethanol Short CourseFebruary 11-15, 2008

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World Biofuels Markets Congress

March 12-14, 2008Brussels Expo

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Canadian Renewable Energy Workshop

March 16-18, 2008IPSCO Place

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This inaugural event will facilitate the continued

development of Canada’s ethanol and biodiesel

industry. Decision-makers and key stakeholders

will network and discuss emerging technologies

and operating practices. More information will be

available as the event approaches.

(519) 576-4500

www.crew2008.com

Ethanol 2008 AustraliaApr i l 8-11, 2008

Sydney Convention & Exhibition Center

Sydney, Australia

This third annual event will continue to build

Australia’s ethanol industry by bringing together

industry leaders, ag business firms, investors,

technology providers, vendors, governments,

trade associations and other stakeholders to dis-

cuss development opportunities. More information

will be available as the event approaches.

Australia: +61 7 3360 7000

U.S.: (719) 539-0300


Agricultural Outlook ForumFebruary 21-22, 2008

Crystal Gateway Marriott Hotel

Arlington, Virginia

This 84th annual event, themed “Energizing Rural

America in the Global Marketplace,” will address

several issues facing today’s agriculture sector.

Besides general ag and foreign trade outlooks, the

agenda is broken down into five concurrent session

tracks: Rural America, Energy & Technology, Policy

& Trade, Food Risk & Security, and Conservation.

The Energy & Technology track will discuss biofuels

(specifically ethanol) and biomass for energy.

(202) 720-5447

www.usda.gov/oce/forum

13th Annual National Ethanol Conference

February 25-27, 2008JW Marriott Orlando, Grande Lakes

Orlando, Florida

This Renewable Fuels Association (RFA) event,

themed “Changing the Climate,” will include RFA

President Bob Dinneen’s annual State of the

Industry Address, along with various panel discus-

sions and concurrent breakout sessions. Breakout

sessions topics include technology, E85, future

feedstocks, distillers grains, financing, cellulose and

safety. Panel discussions will include economic

impacts, international markets, infrastructure

demands, cellulosic ethanol technology and the

annual Washington Insiders’ Roundtable.

(719) 539-0300

www.nationalethanolconference.com

Washington InternationalRenewable Energy Conference

March 4-6, 2008Washington Convention Center

Washington, D.C.

This event will present the latest developments in

renewable energy. Speakers will discuss the status

of key renewable energy technologies, plus sys-

tems costs, economics, markets, manufacturing and

financing. Biofuels and biomass technologies will

also be discussed. A trade show will be collocated

with the conference.

(202) 393-0001

www.wirec2008.org

International BiomassConference & Trade Show

Apr i l 15-17, 2008Minneapolis, Minnesota

This event, which stemmed from the Energy and

Environmental Research Center’s biomass confer-

ence last year in Grand Forks, N.D., aims to facili-

tate the advancement of near-term and commer-

cial-scale manufacturing of biomass-based power,

fuels and chemicals. Topics include biorefining

technologies for the production and advancement

of biopower, bioproducts, biochemicals, biofuels,

intermediate products and coproducts, which will

be presented through general sessions, technical

workshops and an industry trade show.

(719) 539-0300

www.biomassconference.com

Alternative Fuels & VehiclesNational Conference + Expo

May 11-14, 2008Las Vegas Rio All-Suite Hotel

Las Vegas, Nevada

This 14th annual event focuses on alternative

fuels, alternative fuel vehicles, advanced trans-

portation technologies, vehicle emissions and poli-

cy. The preliminary agenda includes discussions

that will educate vehicle fleet operators and end-

users on the options available in alternative fuels.

The expo features auto manufacturers, technology

developers, fuel suppliers and many others. There

will also be a ride-and-drive event.

(702) 254-4180

www.afvi.org/NationalConference2008

24th Annual International Fuel Ethanol Workshop & Expo

June 16-19, 2008Opryland Hotel & Convention Center

Nashville, Tennessee

This conference will follow the record-breaking

2007 event, in which more than 500 exhibitors par-

ticipated and more than 5,300 people attended.

More information will be available as this event

approaches.

(719) 539-0300

www.fuelethanolworkshop.com



EPM MARKETPLACE

Associations/OrganizationsTrade

Ethanol Promotion & Information Council (EPIC)

402-932-0567 www.drivingethanol.org

Chemicals

PhibroChem Ltd.

800-223-0434 www.lactrol.com

Anti-Microbial

PhibroChem Ltd.

800-223-0434 www.lactrol.com

CIP

Univar USA Inc.

402-733-3266 www.univarusa.com

Water Treatment

Fremont Industries Inc.

952-445-4121 www.fremontind.com

Cleaning

Dryer Systems

Hydro-Klean, Inc.

515-283-0500 www.hydro-klean.com


800-369-5500 www.senecacompanies.com

Ductwork

Hydro-Klean, Inc.




Emergency Spill Response

Hydro-Klean, Inc.




Fans

Hydro-Klean, Inc.




Filter Media



Heat Exchanger

Hydro-Klean, Inc.




Hydro-Blasting

Hydro-Klean, Inc.


Plate-Frame

Hydro-Klean, Inc.




Railcars

Drumm Inc.

513-641-4141 www.tankcarcleaning.com



Smoke Stack

Hydro-Klean, Inc.




Tank Cleaning Services

Hydro-Klean, Inc.




Construction

Fabrication

Mid-South Maintenance, Inc.

901-527-1570 www.mid-southmaintenance.com

VAL-FAB Inc.

877-482-5322 www.valfab.com

Insulation

Mavo Systems

763-788-7713 www.mavo.com

Management

Cain and Associates Engineers & Constructors, Inc.

251-661-2605 www.hkcain.net

Plant Construction

Agra Industries, Inc.

715-536-9584 www.agraind.com

Agri-Systems

406-245-6231 www.agrisystems.net

Reimer Welding Inc.

218-773-0886 www.reimerwelding.com

Railroad Tracks

Volkmann Railroad Builders, Inc.

262-252-3377 www.volkmannrr.com

Tanks

Caldwell Tanks

502-964-3361 www.caldwelltanks.com

Eagle Tanks, Inc.

888-678-0698 www.eagletanks.com

WINBCO Tank Company

641-683-1855 www.winbco.com

Consulting

Advertising

Holly AR Jaffe

203-221-4994 [email protected]


EPM MARKETPLACE

Business Plans

Equity Financial Resources

877-455-1945 www.equityfinancialres.com

ICM, Inc.

716-796-0900 www.icminc.com

Environmental

ICM, Inc.


Seneca Companies


Feasibility Studies

Harris Group Inc.

206-494-9422 www.harrisgroup.com

Groundwater Services

Leggette, Brashears & Graham, Inc.

651-490-1405 www.lbgweb.com

Management Services

FeedConcepts

360-813-4212 www.feedconcepts.com

Personnel Recruiting

SearchPath of Chicago

815-261-4403 www.searchpath.com/chicago

Plant Optimization

Harris Group Inc.


Terratec Biofuels of Solutia

800-742-1476 www.TerratecBiofuels.com

Project Development

Ethanol Productions


Harris Group Inc.


Public Relations

Lanser Public Affairs, LLC

262-797-7876 www.lanserpublicaffairs.com

Quality Assurance

Carolina Management System Services


Risk Management

Harris Group Inc.


Education

Minnesota West Community & Tech College

320-564-4511 www.mnwest.edu

Employment

Recruiting

Hobbs & Towne

610-783-4600x108 www.hobbstowne.com

SearchPath of Chicago

815-261-4403 www.searchpath.com/chicago

Engineering

Civil

Antioch International, Inc.

402-289-2217 www.antioch-intl.com

Control Systems

Bachelor Controls

785-284-3482 www.bachelorcontrols.com

Design/Build



Agri-Systems


Delta-T Corporation

757-220-2955 www.deltatcorp.com

Ethanol Productions


GS CleanTech Corp.

678-566-3588 www.gs-cleantech.com

ICM, Inc.


General

Process Design

Agri-Systems


Process Engineering Associates, LLC

865-220-8722 www.processengr.com

Vogelbusch USA, Inc.

713-461-7374 www.vogelbusch.com

Equipment & Services

Air Pollution/Odor Control

Anguil Environmental Systems, Inc.

414-365-6400 www.anguil.com

Ceco Abatement Systems, Inc.

630-493-0624 www.cecoenviro.com/Abatement

ICM, Inc.


Blowers & Fans

New York Blower Company

800-208-7918 www.nyb.com

Robinson Industries, Inc.

724-452-7017 www.robinsonfans.com

Centrifuge Repair

Nosnhoj Services Inc.

317-887-6436 www.nosnhojinc.com

Centrifuges

Westfalia Separator, Inc.

201-784-4322 www.wsus.com

Your Solution. Advertise Today.

EPM MARKETPLACE

Reach your customers

[email protected] 916-705-5510

PlantEquipment

Failure AnalysisWear

Mechanical

Weld

ing

Corrosion

MTA, Inc.


EPM MARKETPLACE

Compressed Air Systems

Sullair Corporation

800-785-5247, x3036 www.sullair.com

Computer Software

Integrated Business Solutions

888-697-3060 www.ibsolutions-llc.com

dbc SMARTsoftware, Inc.

770-427-7633 www.dbcsmartsoftware.com

Control Systems

FeedForward, Inc.

770-426-4422 www.feedforward.com

Revere Control Systems

800-536-2525 www.reverecontrol.com

Control Systems-Distributed

Conveyors–Enclosed

Hudco Industrial Products, Inc.

800-247-9908 www.hudcoinc.com

Conveyors–Pneumatic

Blower Engineering

800-388-1339 www.blowerengineering.com

Gusmer Enterprises, Inc.

847-277-9785 www.gusmerenterprises.com

Dryers-Fluid Bed

Aeroglide Corporation

919-851-2000 www.aeroglide.com

Dryers-Other

Davenport Dryer, LLC

309-786-1500 www.davenportdryer.com

Dryers-Rotary Drum

Aeroglide Corporation

919-851-2000 www.aeroglide.com

ICM, Inc.


Phillips Kiln Services Ltd.

800-831-0876 www.kiln.com

Emission Monitoring Systems

MonitorTech Corp.

866-682-6771 www.monitortechgrp.com

Fermentors

WINBCO Tank Company


Filtration Equipment

Fluid Engineering

814-453-5014 www.fluideng.com

Grain Handling & Storage

McC, Inc.

763-477-4774 www.mccormickconstruction.com

Sukup Manufacturing Co.

641-892-4222 www.sukup.com

Heat Exchangers

Des Champs Technologies

540-291-1111 www.deschamps.com

Dracool-USA

937-743-5899 www.dracooloflykens.com

Instrumentation

Instrument Associates

708-597-9880 www.instrumentassociates.com

Shimadzu Scientific Instruments

800-477-1227 www.ssi.shimadzu.com

Laboratory-Testing Services

Eurofins GeneScan, Inc.

504-297-4330 www.gmotesting.com

Midwest Laboratories

402-334-7770 www.midwestlabs.com

Trilogy Analytical Laboratory

636-239-1521 www.trilogylab.com

Loading Equipment

SafeRack

866-761-7225 www.saferack.com

SafeRack

866-761-7225 www.saferack.com

Maintenance Services

Mid-South Maintenance, Inc.

901-527-1570 www.mid-southmaintenance.com

Maintenance Software

Mapcon Technologies, Inc.

800-922-4336 www.mapcon.com

Mills-Hammer

CBT Wear Parts, Inc.

888-228-3625 www.cbtwearparts.com

CPM/Roskamp Champion

800-366-2563 www.cpmroskamp.com

Continuous Emissions Monitoring SystemsEasiest installation, operation and maintenance

Meet or exceeds EPA requirementsNOx, O2, CO, SO2 and others

Turnkey systems for under $100,000.00P.O. Box 9271, Columbus, Oh 43209



EPM MARKETPLACE

Millwright

Agri-Systems


Molecular Sieves

Vaperma, Inc.

418-839-6989 www.vaperma.com

Pipe

Robert-James Sales, Inc.

800-666-0088 www.rjsales.com

Pipe-Fittings



St. Louis Pipe & Supply

800-737-7473 www.stlpipesupply.com

Pipe-Flanges



Pressure Vessels

WINBCO Tank Company


Pumps

Valley Equipment Co. Inc.

423-753-3541 www.valleyequipment.com

Yamada America, Inc.

800-990-7867 www.yamadapump.com

Security Services

Illinois Security Services Inc.

773-881-0044 www.Illinoissecurity.com

Sensors

Electro Sensors

800-328-6170 www.electro-sensors.com

Separation Equipment

Fluid Engineering


Puritan Magnetics, Inc.

248-628-3808 www.puritanmagnetics.com

Steel Suppliers

Chapel Steel


Storage-DDGS

Laidig Systems, Inc.

574-256-0204 www.laidig.com

Tanks



Paragon Trailer Sales

800-471-8769 www.paragontrailer.com

Ultraflote Corporation

713-461-2100 www.ultraflote.com

WINBCO Tank Company


Thermal Oxidizers

ICM, Inc.


Pro-Environmental, Inc.

909-989-3010 www.pro-env.com

Used Equipment

Valves

Central States Group

800-318-2747 www.centralstatesgroup.com


EPM MARKETPLACE

Your Ad HERE


EPM MARKETPLACE

Check-All Valve Mfg. Co.

515-224-2301 www.checkall.com

Metso Automation

508-852-0215 www.metsoethanol.com

Wastewater Treatment Services

Biothane Corporation

856-541-3500x501 www.biothane.com

Water Treatment

Fluid Engineering


Layne Christensen Company

262-246-4646 www.laynechristensen.com

Siemens Water Technologies

800-525-0658 www.siemens.com/water

Finance

Accounting

Kennedy and Coe, LLC

800-303-3241 www.kcoe.com

Appraisals

Federal Appraisal & Consulting, LLC.

908-823-0607 www.federalappraisal.com

Natwick Associates Appraisal Services

800-279-4757 www.natwick.com

Due Diligence

Harris Group Inc.


Equity Procurement

Greenman Funding


Insurance

Chubb Insurance

312-454-4250 chubb.com

Lender Representatives

Agri-Energy Funding Solutions

402-895-5067 www.agri-energyfs.com

Greenman Funding


Risk Management

First Capitol Risk Management

800-884-8290 www.firstcapitolrm.com

R.J. O’Brien

800-621-0757 www.rjobrien.com

R.J. O’Brien

800-621-0757 www.rjobrien.com

Marketing

Fuel Ethanol

Atlas Renewable Energy, LLC

800-884-8290 www.atlasenergyllc.com

Noble Americas Corporation

626-585-1705 www.thisisnoble.com

Provista Renewable Fuels Marketing

651-355-8519 www.provistafuels.com

Transportation

Air Charter Service

Crossroads Aviation

800-720-1866 www.crossroadsaviation.com

Heavy Highway Transport

Landstar Carrier Group

920-487-3877 www.landstar.com

Rail

Blacklands Railroad

903-439-0738 www.blacklandsrailroad.com

Rail Consulting

Antioch International, Inc.

402-289-2217 www.antioch-intl.com

Railcar Leasing

GATX Rail

312-621-8008

Railcar Moving

Heyl & Patterson Inc.

412-788-9810 www.heylpatterson.com

MH Equipment Company

317-240-6300 www.mhequipment.com

Railcar Parts

Salco Products, Inc.

630-783-2570 www.salcoproducts.com

Utilities

Natural Gas

Utility

Integrys Energy Services

608-235-2547 www.integrysenergy.com

Water

Layne Christensen Company

262-246-4646 www.laynechristensen.com

RAILCAR MOVING

P 412-788-9810 F 412-788-9822 E [email protected]

The CUB™ is an electromechanicalmachine designed to move single

railcars or groups of cars. Some advantages of the CUB™ are:

•Safety of Personnel•One Person Operation•Little Maintenance Requirements•Low Investment/Operating Costs

Ask about our complete line of Railcar Moving Devices

www.heylpatterson.com

124 W. Broadway, Suite 300Madison, Wisconsin 53716www.integrysenergy.com

Contact Mark Rundle [email protected]

or (608) 222-5170.


EPM MARKETPLACE

Reach your customers

:ET

OW

N

Nestled along a bend in the

Columbia River and flanked by U.S.

Interstate 84, the riparian community of

Boardman, Ore., made news recently

when the first ethanol plant in the

Northwest came on line. Owned and

operated by West Coast ethanol pro-

ducer Pacific Ethanol Inc., the 40

MMgy plant in Boardman officially

opened in early October. “We’ve had a

very successful start-up, and now are

running at levels above design capaci-

ty,” says Neil Koehler, chief executive

officer and president of Pacific Ethanol.

The Boardman plant lies within

the East Beach Industrial Park, one of

three such parks established by the

Port of Morrow, a government agency

with a mission to improve livability in

Morrow County through the creation of

new and higher-paying jobs. The area

has become a hub for food, fiber and

seed, and lumber processing indus-

tries. The riverside is marked by such

names as Lamb Weston, the French

fry maker; Oregon Potato; and

Boardman Foods Inc., the fresh onion

packer and processor. “We’re at a

great transportation corridor,” explains

Lisa Mittelsdorf, director of economic

development for the port. “Easy

access to transportation [whether

truck, barge or rail] is the key reason

why they locate here.” In addition, the

county lies in agriculture country, and

the port is adorned with manufacturing

facilities that mainly produce value-

added agricultural products. “We deal

with potatoes and onions, so having a

plant that did a process with corn was-

n’t a stretch for us,” she says.

The new plant will supply fuel to

meet Portland’s E10 mandate that

took effect in July, as well as the entire

state’s E10 mandate, which will take

effect Jan. 1. For the town of

Boardman, the new facility means

more high-paying jobs, a source of

feed for the area’s cattle and dairy

farmers, and a buyer for locally grown

corn, although most of the plant’s feed-

stock will be railed in from the Midwest.

“Being right on the river, having rail

access and also having the ability to

distribute the coproducts locally … all

the pieces came together perfectly for

this project,” Mittelsdorf says.

For this rural agricultural commu-

nity, the real benefit lies in the jobs that

the new plant provides. “Right now

there are 35 to 40 new jobs,”

Mittelsdorf says. “Since the plant is

located in an enterprise zone, which

means it gets some property tax relief,

it has to commit to paying 150 percent

of the county wage. Adding another 35

to 40 jobs that are paying better than

the ones you have is always a good

thing.”

—Jessica Ebert

Water WayBoardman , O regon — Popu la t i on : 3 , 400


PHOTO: LISA MITTELSDORF, PORT OF MORROW

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January 2008 Ethanol Producer Magazine

Documents

Transcript of January 2008 Ethanol Producer Magazine