October 2008 Ethanol Producer Magazine

INSIDE: RAILROADS, ETHANOL PRODUCERS FOCUS ON SAFETY

WWW.ETHANOLPRODUCER.COM

OCTOBER 2008

Beefing Up Barley

Research Results Have Prompted EthanolProducers to Take Another Look at This Crop

EP

MO

tb

2008

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ETHANOL PRODUCER MAGAZINE OCTOBER 2008 7

features

insideOCTOBER 2008 . VOLUME 14 . ISSUE 10

102 TRANSPORTATION Rail-to-Truck Ethanol Terminals

Shipping vast amounts of ethanol from the Midwest, where much of it is

produced, to the East and West coasts, where it’s consumed, requires more

than just adding railcars and tracks. Terminals for transloading are also

needed to keep shipping costs down. By Erin Voegele

110 SAFETY Staying on Track

More ethanol shipments over the nation’s rail system have led to an increase

in the number of nonaccidental releases of ethanol. EPM looks at what rail

companies and ethanol producers are doing to bring those numbers down.

By Ryan C. Christiansen

118 PROFILE A Taste of Victory

Victory Energy Operations LLC's rapid growth rate hasn’t gone unnoticed. The

boiler supply company ranked No. 15 in Entrepreneur Magazine’s 2008 Hot

100, a list of the fastest growing companies in the United States. By Anna

Austin

126 INDUSTRY Making the Most of Every Dollar

Corn prices remain high but not as high as they were earlier in the year. That

should give producers a bit of wiggle room when it comes to profit margins.

By Bryan Sims

62 EQUIPMENT In Dynamic Pursuit of Efficiency

A U.K.-based company is in the midst of testing the commercial power of its

PDX Ethanol Reactor Tower, which is designed to boost ethanol production

efficiency. By Ron Kotrba

70 TECHNOLOGY In the Lab

PhibroChem recently opened a new laboratory in St. Paul, Minn., to expand its

diagnostic, research and product development work. The lab also plans to

explore and anticipate the organisms most likely to contaminate cellulosic

ethanol plants. By Jessica Ebert

78 FEEDSTOCK Beefing Up Barley

Barley’s potential as an ethanol feedstock has taken on new life as

researchers develop and test new hulled and hulless varieties.

By Susanne Retka Schill

86 CELLULOSE Building Better Energy Crops

Ceres Inc. is preparing for the advent of the commercial production of

cellulosic ethanol by developing high-yielding energy crop seeds. The

company is concentrating its efforts on switchgrass, miscanthus and sorghum.

By Kris Bevill

94 ENZYMES If You Build it …

Novozymes and Genencor will soon have a presence in the Corn Belt near

their customer bases. Novozymes is building an enzyme production facility,

while Genencor’s project involves a training center. By Suzanne H. Schmidt

Page 78 Page 94 Page 126

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2Novozymes North America, Inc.77 Perry Chapel Church Road · Franklinton, NC 27525 Tel. +1 919-494-3000 · Fax +1 [email protected] · www.novozymes.com

If squeezing the last bit of ethanol from your corn is important to

you, your options have now improved. Spirizyme Ultra is a new,

premium glucoamylase designed to deliver consistently higher

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departments contributors132 OPTIMIZATION

Emerging Process Optimization Opportunities for Ethanol FacilitiesTechnologies and process options abound for ethanol producers looking to enhance productivity.An in-depth review of what’s available provides some optimization goals that can improve yield.By Philip A. Marrone, Kenneth R. Liberty and David J. Turton

136 POLICY

Punitive Measures Ineffective in the Energy SectorIn the 1970s, the U.S. government unsuccessfully implemented price controls intended to aid energy consumers. The failure of such measures provides a learning experience and solidifiesrenewable fuels’ role in the marketplace. By Tim Sklar

140 BYPRODUCT

Carbon Footprint, Trade Evolving with IndustryReduced carbon emissions are becoming a pivotal selling point for growing “green” industries. Newgreenhouse gas emissions protocols may provide more good news for the ethanol industry.By Sam Rushing

144 FERMENTATION

Yield Remains Key to Determining ProfitabilityWhen it comes to enhancing the bottom line, throughput isn’t the name of the game. A small percent increase in ethanol yield provides the greatest increase in profits. By Dave Kelsall

148 CORN

Analyzing the Complex 2008 Corn Crop2008 provided a rollercoaster ride for corn producers and those depending on the crop. How willthis year's near-record corn crop impact 2009 plantings and the ethanol industry? By Elaine Kub

insideOCTOBER 2008 . VOLUME 14 . ISSUE 10

11 Advertiser Index

14 The Way I See ItBy Mike Bryan

Hurricane Season

Should Spur Ethanol Support

20 Business & People

24 Commodities

26 A View from the HillBy Bob Dinneen

Thinking Nationally, Acting Locally

27 RFA Update

30 Industry News & BIObytes

40 Plant Construction List

48 Our PlantBy Kris Bevil l

Big Things Happening in the Bayou

50 In the FieldBy Susanne Retka Schil l

GreenSeeker Matches Nitrogen to Crop Needs

52 Up FrontBy Kris Bevil l

A Kiwi in Corn Country

54 BusinessBy Bryan Sims

Ethanol Sales Improve Quarterly Earnings

56 FinanceBy Jesse McCurry

Overtaxed and Under-Reviewed:

A Simple Way to Save Money

58 Legal PerspectivesBy John Eustermann and Randy Shefman

The Implications of Plant Optimization Activities

152 Events Calendar

154 EPM Marketplace

Ethanol Producer Magazine: (USPS No. 023-974) October 2008,Vol. 14, Issue 10. Ethanol Producer Magazine is published monthly.Principal Office: 308 Second Ave. N., Suite 304, Grand Forks, ND58203. Periodicals Postage Paid at Grand Forks, North Dakota andadditional mailing offices. POSTMASTER: Send address changes toEthanol Producer Magazine/Subscriptions, 308 Second Ave. N.,Suite 304, Grand Forks, North Dakota 58203.

BPA Worldwide Membership Applied for October 2006

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

1. EPA denies RFS waiver request

2. Pacific Ethanol closes credit facility

3. ADM reports fourth-quarter losses

4. Global Renewable Energy tests sweet sorghum in Florida

5. SunEthanol receives fourth U.S. DOE grant

6. Experts discuss biomass-based ethanol future

7. Arisdyne Systems to optimize biodiesel, ethanol technology

8. The Andersons posts record second-quarter earnings

9. California plant chooses Fagen as lead contractor

10. Poet to build pilot-scale cellulosic ethanol facility

Corrections from our August 2008 issue:The author information at the end of the Pumps contribution, titled “Pump Technologies Provide

Greater Efficiencies,” on page 255 should have read: Tom Stone is the director of marketing for

Grand Rapids, Mich.-based Blackmer. Reach him at [email protected] or (616) 248-9252.

The author information at the end of the Policy contribution, titled “The Farm Bill: Planting Seeds

of Renewable Energy,” on page 259 should have read: Matthew E. Ross is in the Energy and

Project Finance Group at the law firm Ballard Spahr Andrews & Ingersoll LLP. Reach him at

[email protected] or (202) 661-2279.

Corrections from our September 2008 issue:The Industry News story on page 33, titled “Canadian RFS opens doors for new markets,”

incorrectly stated that there are only two provinces in Canada with ethanol mandates. Manitoba

joined Ontario and Saskatchewan when its ethanol mandate was enacted Jan. 1, 2008.

On page 102 of the Fractionation feature, titled “Food and Fuel Technology Bundle,” it incorrect-

ly stated that ICM Inc. laid off 750 employees. The company laid off 105 employees. On the

same page, ICM’s food and fuel technology package was incorrectly identified as PKO. It is

called TKO.

On page 109 of the Use feature, titled “Rocky Mountain E85,” it incorrectly stated that Colorado

Gov. Bill Ritter Jr. established the Governor’s E85 Coalition in 2006. Gov. Bill Owens, who Ritter

replaced in 2007, established the coalition.

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2009 Canadian Renwable Energy Workshop

2009 InternationalFuel Ethanol Workshop & Expo

ABENCS

Agra Industries Corp.

American Railcar Industries Inc.

Anhydro Inc.

Aqua Power Inc.

Aquatech International

Barr-Rosin Inc.

BBI International CommunityInitiative to Improve EnergySustainability (CITIES)

BBI Project Development

Best Energies Inc.

BetaTec Hop Products Inc.

Biodiesel & Ethanol 101 DVDs

Biofuels CanadaBiofuels Recruiting

Biomass MagazineBuckman Laboratories Inc.

Burns & McDonnell

Calbrandt

Centrisys Corp.

Cereal Process Technologies LLC

Check-All Valve Mfg. Co.

Chemineer Inc.

Christianson & Associates PLLP

Clifton Gunderson LLP

Coverall Building Systems

Crown Iron Works Co.

dbc SMARTsoftware Inc.

Delta-T Corp.

Distillers Grains QuarterlyDuPont Chemical Solution Enterprise

Eco-Tec Inc.

Eisenmann Corp.

Energy from Biomass to Waste Expo& Conference

Engineered Storage Products Co.

ethanol-jobs.com

ETS Laboratories

Faegre & Benson LLP

Fagen Inc.

FCStone LLC

Fermentis

Gamajet Cleaning Systems Inc.

Genencor International Inc.

GreenShift Corp.

Gusmer Enterprises Inc.

ICM Inc.

Indeck Power Equipment Co.

93

92

34

32

4

6

88

77

29

117

76, 84 & 124

98

31

46

68 & 137

100 & 147

108 & 129

53

5

35

120

83

65

106

42

66

55

107

125

60 & 61

51 & 80

23

114

67

37

47

59 & 128

134

85

3

145

57

121

28

16 & 17

112

2

10

Ad Index

International Distillers Grains Conference and Trade Show 2008

Interstates Cos.

Intersystems

Kennedy & Coe LLC

Lallemand Ethanol Technology

Larox Corp.

Mapcon Technologies Inc.

Martrex Inc.

McC Inc.

Nalco Co.

Natural Resource Group Inc.

National Ethanol Conference

Natwick Associates Appraisal Services

Nestec Inc.

New York Blower Co.

Nexen Marketing USA Inc.

North American Safety Valve

Novozymes

Paul Mueller Co.

Peters Machine

PhibroChem

Pioneer Hi-Bred International Inc.

Poet LLC

Primafuel Inc.

Pro-Enviornmental Inc.

R&R Contracting Inc.

RailWorks Track Systems Inc.

Renewable Fuels Association

Resonant BioSciences LLC

Robert-James Sales Inc.

Roskamp Champion/CPM

SafeRack LLC

Salco Products Inc.

Seneca Waste Solutions

Smar International Corp.

Spraying Systems Co.

Strongform Nationwide Industrial Builders

Sulzer Chemtech USA Inc.

Syngenta

TDC Dryers

Trico TCWind Inc.

Tri-Mer Corp.

U.S. Water Services

Vaperma Inc.

Victory Energy Operations LLC

Vogelbusch USA Inc.

Volkmann Railroad Builders Inc.

Watson-Marlow Bredel Pumps

WIKA Instrument Corp.


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44

82

33

18

149

36

138

43

116

113

109

73

75

15

123

141

8

150

139

39

19

164

64

45

99

81

38

122

163

97

96

143

74

135

90

89

104 & 105

12

130

142

131

72

101

133

146

115

91

151

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

Step ahead with us. We’re hiring. As a world leader in agriculture and plant science,

Syngenta is uniquely positioned to help the renewable-

fuels industry reach its full potential. If you’re interested

in joining a team dedicated to shaping the future of

our industry, we want to hear from you. Syngenta is

now hiring to fi ll numerous positions in its expanding

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We’re on the right path.

BI008_Ethanol_Producer_vend.indd 1 8/13/08 2:05:45 PM


EDITORIAL

Jessica Sobolik Managing [email protected]

Dave Nilles Contributions [email protected]

Rona Johnson Features [email protected]

Ron Kotrba Senior Staff [email protected]

Jerry W. Kram Staff [email protected]

Susanne Retka Schill Staff [email protected]

Kris Bevill Staff [email protected]

Erin Voegele Staff [email protected]

Anna Austin Staff [email protected]

Suzanne H. Schmidt Staff [email protected]

Ryan C. Christiansen Staff [email protected]

Bryan Sims Staff Writer & Plant List [email protected]

Hope Deutscher Online [email protected]

Jan Tellmann Copy [email protected]

Amber Armstrong E-Media [email protected]

ART

Jaci Satterlund Art [email protected]

Sam Melquist Graphic [email protected]

Elizabeth Slavens Graphic [email protected]

Jack Sitter Graphic [email protected]

PUBLISHING & SALES

Mike Bryan Publisher & [email protected]

Kathy Bryan Publisher & [email protected]

Joe Bryan Vice President of Media & [email protected]

Tom Bryan Vice President of Communications & [email protected]

Matthew Spoor National Sales [email protected]

Howard Brockhouse Senior Account [email protected]

Clay Moore Account [email protected]

Jeremy Hanson Account [email protected]

Chip Shereck Account [email protected]

Tim Charles Account [email protected]

Chad Ekanger Account [email protected]

Marty Steen Account [email protected]

Marla DeFoe Advertising [email protected]

Jessica Beaudry Subscriptions [email protected]

Jason Smith Subscriber Aquisition [email protected]

Erika Wishart Administrative [email protected]

Christie Anderson Administrative [email protected]

Nicole Zambo [email protected]

HOW TO REACH US

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

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

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

Letters should include the writer’s full name, address

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

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

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

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

(checks made out to BBI International) to:

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

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

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

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

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

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

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

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

COPYRIGHT © 2008 by BBI International


ETHANOL PRODUCER MAGAZINE OCTOBER 200814

t was interesting to watch the events that occurred before and after the U.S. landfall ofHurricane Gustav and the implications it was feared to have on the supply of oil fromthe Gulf of Mexico. At the same time, we still see signs at a number of gas stations in

Colorado that say “Ethanol-Free Gasoline.”This and other attacks on the ethanol industry seem totally at odds with the stark reality of

our energy vulnerability. The fact that a hurricane could disrupt 25 percent of the energy sup-ply of an entire nation is troubling, but the attacks being launched against domestically producedethanol at the same time are even more troubling.

It’s time for Americans to realize that our energy vulnerability reaches far beyond ourdependence on foreign oil. Our vulnerability is right here at home in the Gulf of Mexico. With Hurricane Gustav, we mayhave dodged an energy crisis bullet, but even as a result of a moderate storm, it affected the oil supply from the Gulf fordays.

If we subscribe to the idea of global warming, then we also have to accept the fact that such storms will be more fre-quent and possibly more violent. America has a concentrated energy base in the Gulf of Mexico that can be substantiallydisrupted or even totally shut down in the blink of an eye. Conversely, ethanol is akin to distributed generation in the elec-trical industry. Everyone endorses the concept of distributed electrical generation as an excellent strategy to ward off poten-tial power disruptions. Isn’t the fact that ethanol production is distributed over the entire Midwest and growing in other partsof the country a similarly sound concept?

Distributed power generation from small independent power producers is not the total answer to securing our electri-cal energy future, nor is distributed fuel production in the form of ethanol. However, it is an important step in the directionof energy security, helping to maintain our crucial energy supply as we encounter an increasing number of weather-relateddisruptions.

Perhaps as a result of global warming, we have entered a new era of potential energy disruptions. Whatever the cause,it makes an even stronger case for distributing our renewable energy supply from coast to coast.

That’s the way I see it!

The Way I See It

Hurricane Season Should Spur Ethanol Support

Mike BryanPublisher & CEO

[email protected]

I

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

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

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

facility or extracting oil and producing biodiesel onsite at your facility.

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

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

Removing oil from your DDG can also be expected to enhance dryer operationwhile reducing drying costs, reduce emissions of greenhouse gases and to

enhance the marketability of your remaining DDG.

www.greenshift.com

Contact GreenShift for more information aboutthe future of Renewable Fuel production.

GreenShift Corporation1 Penn Plaza, Suite 1612 • New York, NY 10119phone: 1 888 ETHANOIL • email: [email protected]

Established Technology Leadership.Proven High Yields. Consistent Production. Fully Automated.

School sponsored by Lallemand Ethanol Technology and held in at the National Corn-to-Ethanol Research Center (NCERC). The three-day program is designed as The Practical Workshop for ethanol plant operators.

Lectures will cover complete processing areas consisting of raw materials through distillation and co-products. These theories will be applied through

laboratory and functional demonstrations at NCERC.

practical experience and find ways that plants can make their operations more effective and profitable.

For more information or to enroll, visit www.ethanoltech.com or call Liz at 414-393-0410.

©2008 Ethanol Technology Institute, a business unit of Lallemand, Inc.For additional information go to www.ethanoltech.com

®, TM, SM Trademarks and service marks of Pioneer Hi-Bred.All purchases are subject to the terms of labeling and purchase documents.© 2008 PHI INDSL010514P238AVC

Today Pioneer is driving new opportunities to help industry become

more profi table by delivering high-quality grain, proven expertise

and innovative services to meet growing demands from the biofuels,

livestock and food production industries.

Several key Pioneer® brand hybrids have been developed for

end-use markets: High Total Fermentable (HTF) hybrids provide more

ethanol per bushel. High Available Energy (HAE) hybrids contain

more digestible energy for pork and poultry producers. Food-grade

corn hybrids offer food processors higher milling quality corn.

Delivering high-output products is only one piece of the

equation. Pioneer also is developing new ways to profit from

our products by using innovative tools. Pioneer MarketPoint®

resource will help buyers identify and buy the grain best

suited for their business, and Pioneer QualiTrakSM system

assists processors and growers in evaluating and understanding

quality variations of incoming grain.

To learn more about these products and services and our

commitment to American agriculture, visit www.pioneer.com/enduse


Business

Business&PeopleEthanol Industry Briefs

BUSINESS&PEOPLE

Pacific Ethanol secures $40 million funding

Through its marketing subsidiaryKinergy Marketing LLC, Pacific EthanolInc. closed on a $40 million revolvingcredit facility with Wachovia CapitalFinance Corp. The credit facility, whichmatures in three years, replaces a $25 mil-lion credit facility between Kinergy andComerica Inc. that started August 2007.According to Pacific Ethanol Presidentand Chief Executive Officer Neil Koehler,the company sought this most recentfunding to enhance liquidity and keep pacewith its rapid growth, which will provideworking capital that was subject to limita-tions based on qualifying collateral when itwas finalized in August 2008. 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

Iowa producer to install corn oil extraction unit

Amaizing Energy LLC has agreed toinstall a corn-oil extraction unit at its 55MMgy dry-grind, corn-based ethanol plantin Denison, Iowa. The unit will be engi-neered and constructed by Basehor, Kan.-based Primafuel Solutions. AmaizingEnergy chose Primafuel’s trademarkedSMAART Oil solution because theethanol plant felt it was the best technolo-gy, according to company President andGeneral Manager Alan Jentz. The extrac-tion unit is slated to be operational thiswinter, at which time Amaizing Energyhopes to begin selling the corn oil tobiodiesel producers. EP

Brazilian ethanol projects receive funding

Two companies announced they hadsecured funding to move forward withBrazilian ethanol projects in July. Dallas-based Southridge Enterprises Inc. formeda partnership with Durmundo Carasca SAto construct and operate an ethanol facilityin Brazil. Durmundo Carasca will con-tribute $5 million and acquire 15 percentownership in the facility. SouthridgeEnterprises has an additional joint ventureagreement with Briskul Transaccao Ltd. forthe project. Likewise, Brazilian biofuel pro-ducer Comanche Clean Energy secured$85 million in a private placement round offinancing to expand its sugarcane-basedethanol facility in São Paulo, Brazil, toapproximately 26 MMgy. EP

FEW named one of ‘Fastest 50’

BBI InternationalInc. has been named oneof Trade Show Weekmagazine’s Fastest 50after its InternationalFuel Ethanol Workshop& Expo posted award-winning growth for thesecond year in a row. Thecriteria for the awardinclude an increase inarea used for an eventand the number of exhibitors between 2005and 2007. The show expanded from 226exhibitors in 2005 to 551 exhibitors in 2007,and 26,400 square feet in 2005 to 76,800square feet in 2007. The award will be present-ed to BBI at a banquet in Baltimore inNovember. The FEW’s 25th annual event willbe held at the Denver Convention Center onJune 15-18. EP

DuPont Danisco joinsTennessee initiative

One month after refuting a report thatMascoma Corp. was dropping out of theUniversity of Tennessee’s Biofuels Initiative, theUniversity of Tennessee announced that theinitiative had partnered with DuPont DaniscoCellulosic Ethanol LLC and parted ways withMascoma. The University of TennesseeResearch Foundation, through Genera EnergyLLC, made the announcement in July. Sitepreparations for a 250,000-gallon-per-year cel-lulosic ethanol facility are to begin this fall inVonore, Tenn., with production expected tobegin in December 2009. The plant design willinclude the flexibility to take in corn stover, cobsand fiber, in addition to switchgrass. EP


BUSINESS&PEOPLE

Sponsored by

Business

Alliance for Abundant

Food & Energy launched The Alliance for Abundant Food &

Energy was launched July 24. As a coali-tion of leaders representing all aspects ofthe agricultural value chain, the allianceaims to promote the belief that agriculturecan sustainably meet both the growingdemands for food and renewable energythrough innovation. Using credible fact-and science-based education, informationand advocacy, the alliance plans to increasesupport for today’s agricultural solutionsand build an understanding of agriculture’sability to fulfill the needs of the future.Founding members of the alliance includeArcher Daniels Midland Co., DuPont,Deere & Co., Monsanto Co. and theRenewable Fuels Association. EP

EBS releases plant management software

Encore Business Solutions inWinnipeg, Manitoba, has released new busi-ness management software. CompanyMarketing Manager Shauna Allan said theRenewable Energy Agricultural Processingsoftware (REAP 2.5) was specificallydesigned for the ethanol and biodieselindustry. “Those who would primarily ben-efit include plants that require a grainaccounting software solution that can effec-tively manage lab information, preventativemaintenance, business intelligence andaccounting,” she said, adding that ethanolproducers such as United Wisconsin GrainProducers are using the software. UWGPhas been able to produce 3.01 gallons ofethanol per bushel of corn within a 48-hour fer-mentation batch. The industry average is typi-cally 2.8 gallons.EP

Agassiz Energy sues Bio-Renewable Group

Crookston, Minn.-based AgassizEnergy LLC is suing Bio-RenewableGroup—a group of contractors that con-sists of Fargo, N.D.-based WanzekConstruction, Teton Industrial Group,Utility Engineering Corp. and VogelbuschUSA Inc.—for $829,500, claiming that thegroup misrepresented itself as a corporationwith experience in designing and buildingethanol plants. According to GaryBridgeford, one of Agassiz Energy’s boardmembers, the lawsuit was filed in a federalcourt in Fargo and was still pending at presstime. Agassiz Energy has been proposing tobuild a 50 MMgy corn-based ethanol plantnear Erskine, Minn., since 2004 but sus-pended development of the project in thefall of 2007 because of “unfavorable marketconditions.” EP

Suncor receives boost from Canadian government

The government of Canada hasinvested $25 million in Calgary, Alberta-based Suncor Energy Inc. The fundingwill help the oil and gas company to dou-ble capacity at its 200 MMly (53 MMgy)ethanol production facility in Sarnia,Ontario. The St. Clair Ethanol Plant willbe the largest ethanol producer in Canadaafter the expansion is complete inSeptember 2009. To date, the facility hasreceived $12.5 million in equity invest-ments from farmers. The federal fundswill come from the $200 million, four-yearecoAgricultural Biofuels Capital Initiative,which aims to build or expand biofuelsproduction. Farmer investment is one ofthe conditions for ecoABC funding. EP

Mantra NextGen Power to develop cellulosic ethanol

Vancouver, British Columbia-basedNorthwind Ethanol Ltd. entered intoexclusive negotiations with MantraVenture Group Ltd. to create a joint ven-ture called Mantra NextGen Power Inc.that will utilize Northwind’s proprietaryprocess technology to produce cellulosicethanol. Northwind describes its processas a low-temperature acid hydrolysis ofstarch that can integrate acid hydrolysis oflignocellulose to produce low-costethanol. EP

Lignol receives British Columbia grant

Lignol Innovations Ltd., a subsidiaryof Vancouver-based technology developerLignol Energy Corp., has received nearly$2 million as part of British Columbia’sInnovative Clean Energy Fund. Lignol willuse the $1.96 million grant to support theongoing development and commercializa-tion of its process technology to convertnonfood biomass into ethanol and otherbiochemical products. Lignol believes com-mercialization of its technology could helpBritish Columbia reduce greenhouse gasemissions, use local feedstocks and con-tribute to other local technologies withstrong export potential. The Clean EnergyFund is a $25 million fund designed toaccelerate the development of clean tech-nologies. EP

St. Clair Ethanol Plant in Sarnia, Ontario, plans

to double capacity to 200 MMly.


Lyons wins awardAccording to Irish magazine

Business and Finance, Pearse Lyons,founder and president of global animalhealth and nutrition company Alltech,has been named one of the most influ-ential U.S.-Irish business leaders of 2008.Lyons created Lexington, Ky.-basedAlltech in 1980 to supply technology andproducts to the ethanol industry. Alltechalso markets a line of distillers grainsadditives. EP

People

DuPont Danisco names president

DuPont DaniscoCellulosic EthanolLLC has namedJoseph Skurla as itsnew president. Skurlawill help lead thecompany in commer-cializing cellulosicethanol using non-food feedstocks. He has 30 years of expe-rience in the oil-refining and chemicalsectors, most recently leading the devel-opment of DuPont Clean Technologies.DuPont Danisco is a joint business ven-ture between DuPont and Genencor, aDivision of Danisco A/S. EP

BBI fills two new positionsMark Yancey has

been named chiefexecutive officer ofBBI BioVenturesLLC, a wholly ownedsubsidiary of BBIInternational Inc.that will develop andoperate multiple cel-lulosic ethanol plantsin the United States.Yancey has beenemployed by BBIInternational formore than sevenyears, formerly serv-ing as the company’svice president ofproject development.

In addition, BBI International namedRafael Nieves to the newly created posi-tion of director of international businessdevelopment. Nieves previously served asthe company’s manager of internationalbusiness development and has been withBBI International for three years. EP

Business

Four join PhibroChem’sEthanol Performance Group

The Lactrol Ethanol PerformanceGroup, a part of Phibro Animal HealthCorp.’s PhibroChem Ltd. division,announced the hiring of four employeessince May 1. Neal Flickinger, fermenta-tion engineer, will be based in Kansas,focusing on growth and support of thecompany Lactrol product in theMidwest. Henry Huertas, another fer-mentation engineer, will be based inPuerto Rico, focusing on businessgrowth in the Caribbean and LatinAmerica. Stephen O’Shea, technical salesrepresentative, will support Lactrol busi-ness on the West Coast. Heidi Doering-Resch, nutritional specialist, will be basedin South Dakota, working with the com-pany’s field sales organization on issuesrelated to animal safety and nutritionwith distillers dried grains usage. EP

Iogen, Shell expand cellulose partnership

Royal Dutch Shell PLC has increasedits shareholding percentage in Ottawa-based Iogen Corp.’s subsidiary technologydevelopment firm from 26.3 percent to 50percent. The increased ownership is part ofan agreement between Iogen and Shell toextend their existing partnership for thepurpose of accelerating the developmentand production of cellulosic ethanol. Thecompanies first partnered in 2002 whenShell purchased an equity stake in Iogen.As part of the extended partnership, Shellwill also invest in Iogen and contribute tofull-scale cellulosic ethanol production fea-sibility and design assessment work beingconducted by Iogen. EP

Nieves

Yancey

OptiSwitch Technology system to boost ethanol yields

OptiSwitch Technology Corp., a high-performance semiconductor device, mod-ule and system research and developmentcompany, has developed a new process thatuses an electroporation system to increasecorn-based ethanol yields by 5 percent ormore. The project, which was performedand evaluated at the National Corn-to-Ethanol Research Center in Edwardsville,Ill., was funded with $10 million contractedfrom the U.S. Department of Defense. TyNavapanich, director of operations at SanDiego-based OptiSwitch Technology, saidthe company is currently looking forethanol plants to partner with to reachcommercialization. EP

Pearse Lyons created Lexington, Ky.-based

Alltech in 1980.

PH

OT

O: A

LLT

EC

H

COMMODITIES REPORT

Aug. 26—If you missed the January buying opportunity forwinter 2008-’09, your patience has paid off. Natural gas prices forthe upcoming winter are now back to and below the market lowswitnessed in the first quarter. As the chart shows, it has been a wildride since January. The winter 2008-‘09 strip price on Jan. 2 was$9.02/MMBtu. The market bottomed out at $8.54/MMBtu on

Jan. 23 before rallying to $14.29/MMBtu on July 3. The marketrocketed up 67 percent from its market low. Since July 3, pricesdropped dramatically to $8.76/MMBtu on Aug. 25. Will the mar-ket continue to drop or are we approaching a low? While no onecan say with certainty where the market will go, it appears thatprices in the $8.50 to $9 range for winter have been the recentfloor.

The four most notable factors that will determine the path ofprices as we move into the fall and winter follow in no particularorder: 1) storage inventory volumes, 2) oil prices, 3) hurricaneactivity and 4) winter weather. These are the primary factors wewill be following in the coming months to help discern whereprices are going. Currently, all four are supportive of low prices.Season-ending storage inventories are expected to approach lastyear’s historic high, oil prices are weak compared to prices over thepast several months, hurricane activity has been weak and there isno sign of winter yet. It is important to note that we are oftenapproaching or at a market low when the market appears to be ingreat shape.

Our recommendation is to seriously consider some coveragefor this fall and next winter using options or futures structures. EP

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

Winter prices return to early ’08 lows

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

Corn on pace for near-record year

Corn Report By Jason Sagebiel, FCStone

Aug. 26—The corn market has seen drastic volatility. The day theAugust USDA supply and demand report was released corn traded ata low near $5.04 per bushel. At press time it was trading at $6. Thatincremental move comes in less than a week for what used to be a pricemove in a corn marketing year. There is no doubt that producers andend users are in awe with price moves.

The USDA’s August supply and demand estimate yielded a largercarry-out versus the previous estimate. The corn yield was bumpedfrom 148.4 bushels per acre to 155 as crop conditions improved dra-matically since June floods. With harvested acres up 400,000 acres andyield at 155 (the second highest yield on record), production was pro-jected at 12.288 billion bushels, which is the second-highest productionon record. With carry-in of 1.576 billion bushels, total supply was slat-ed at 13.878 billion bushels, including 15 million bushels of imports.With prices down the USDA expected more demand to prosper.Ethanol and feed demand increased by 150 million and 100 millionbushels, respectively. As a result the projected ending stocks value is1.133 billion bushels, equating to a mere 8.9 percent carry-out-to-useratio.

Internationally, world coarse grain in 2008-‘09 is projected up 20.1

million tons to 1,089.1 million. World corn production is expected toincrease to 789.58 million metric tons. Most of this increase is in U.S.corn production. Brazil corn exports were decreased by 2 million met-ric tons while the EU-27 is expected to import 2.5 million metric tonsless corn in 2009. EP


COMMODITIES REPORT

DDGS Report By Sean Broderick, CHS Inc.

Ethanol Report By Spencer Kelly, OPIS

Aug. 22—Ethanol spot values close-ly followed the fortunes of corn marketsthrough most of August even as oncesolidly bullish petroleum markets showedsome severe cracks ahead of Labor Day.

Spot Chicago ethanol trading in thelow $2.30s per gallon shed some mid-August gains, and that represented a lossof more than a dime in spot values overthe last month. At the same time, NewYork Harbor barge ethanol for lateAugust/early September, which wasretreating from the low $2.50s per gallonto the upper $2.40s per gallon, showedspot price losses in the area of 22 cents.Those prices were still well up fromrecent lows reached in early August,when Chicago spots touched $2.15 pergallon.

Petroleum markets sold off sharplysince mid-July, but one of the key factorsfor ethanol appeared to be corn. For

example, one week at mid-monthChicago spot gasoline prices gained 2percent, while spot ethanol added 6.5percent. Over the same period, ChicagoBoard of Trade front-month cornfutures traded up more than 7 percent—a correlation between corn and ethanolthat some market sources noted throughmost of the month.

At Midwest racks, ethanol pricesmostly stepped lower in August, almostignoring spot market swings. In Iowa,average rack postings at $2.40 per gallonshed more than 24 cents over the month.Those in Illinois, at $2.485 per gallon,dropped more than a dime in August.Minnesota, at less than $2.395 per gallon,gave up 26 cents. EP

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

Damper remains on August prices

Source: OPIS

Source: U.S. Energy Services Inc.

*Central Valley Source: CHS Inc.

Aug. 27—As Labor Dayapproached, the distillers grains marketwas suffering from slumping prices dueto poor late-summer demand and a largeinflux of production. Five or six plantsstarted up that did not have a significantamount of feed sold, and prices, whiletrending with the price of corn, tendedto emphasize to the downside. With thecorn crop on the homestretch and cool-er temperatures approaching, buyers andsellers turned their attention to new croppricing. With values nowhere near a typ-ical percentage of cash corn, plants havebeen reluctant to lock in what buyersconsider to be market prices. So the pat-tern of unsold feed hitting the spot mar-ket will continue.

The rising dollar is not helping dis-tillers grains exports, nor are the price

increases that container companies havebeen taking to move product to thePacific Rim. Feed wheat is plentiful inmost producing regions, which is cuttinginto distillers grains demand. Barge andshipping rates, while down from theirhighs earlier in the year, are still on thehigh end of historical ranges due mainlyto the price of crude.

Elevations in the Pacific Northwestare tight, leaving the Gulf of Mexico asthe most likely bulk shipping origin.With the amount of grain business get-ting done in the Northwest and thepotential availability of doing a hold ofdistillers grains in conjunction with anoverseas shipment, the landlockedMidwestern plants suddenly gain apotential foothold in the Asian market.EP

Source: FCStone

Annual price slump returns

REGION

West Coast

Midwest

East Coast

SPOT

303.353

308.428

293.276

RACK

326.799

315.83

306.781

RETAIL

413.382

381.979

386.336

May 2008

April 2008

May 2007

598,000*

562,000

406,000

REGION

West Coast

Midwest

East Coast

SPOT

242.625

229.673

246.058

BULK TRUCK (rack)

245.6

238.64

- - - -

SPLASH/TOP OFF (rack)

286.711

267.914

287.97

DATE

Aug. 25, 2008

July 25, 2008

Aug. 27, 2007

CLOSE

6

5.96 1/2

3.53

LOW

5.98 1/4

5.88

3.48 1/2

HIGH

6.28 3/4

6.04

3.54 1/4

LOCATION

Minnesota

California*

Chicago, Ill.

Buffalo, N.Y.

Central Florida

AUG. 2008

135

180

135

150

180

JULY 2008

165

202

155

163

195

AUG. 2007

100

145

107

122

134

Source: OPIS

NYMEX

N. Ventura

Calif. Border

AUG. 24, 2007

5.62

5.40

5.37

AUG. 25, 2008

7.82

6.99

7.24

JULY 18, 2008

10.66

10.12

10.42

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

AUG. 20084.77

4.82

4.97

5.25

5.21

5.98

JULY 20085.07

5.12

5.27

5.12

5.39

5.16

SEPT. 20073.36

3.21

3.12

3.46

3.19

4.01


As the two major political parties celebrate their con-

ventions and nominees, they also craft platforms on which

candidates across the nation will run. While individual can-

didates often adopt their own agenda separate from the

party, the platform developed at each convention makes

clear the issues of importance to the party as a whole.

A draft plank in this year’s Republican Party platform

calls for an end to the federal policies that have helped

reduce America’s dependence on foreign oil by increasing

our use of renewable fuels such as ethanol. As I write this

column the draft reads, “The U.S. government should end

mandates for ethanol and let the free market work.”

As those familiar with the Renewable Fuels

Association well know, the RFA is agnostic when it comes

to politics. We do not endorse candidates, keep voting

scorecards or even have a political action committee. We

endeavor to work with all lawmakers, regardless of politi-

cal affiliation. So in pointing out this plank, we are not criti-

cizing the party. Rather, the purpose is to feverishly under-

score the importance of becoming involved in the political

process at every level of government.

We know that support for biofuels is bipartisan. But we

also know that opposition to the growth of the ethanol

industry can be found in both parties. As members of this

industry who have fought hard to make renewable fuels a

competitive alternative, we must maintain constant vigi-

lance. This means supporting policies which provide posi-

tive outcomes for biofuels while criticizing those that under-

mine our future.

On this page I recently extolled the importance of pay-

ing attention to what candidates say. Listen carefully,

understand their positions and ask the tough questions

that need to be asked. Above all else, vote.

I have no doubt that those involved in America’s

ethanol industry will be there early on Nov. 4. What I want

to encourage is the yearlong involvement necessary to

ensure that near-sighted, petroleum-blinded candidates

do not end up in places of

power that will allow them

to decimate the one indus-

try having any success

reducing America’s

reliance on foreign oil.

Whether the anti-

ethanol plank survived at

the convention wasn’t

known at press time. We

will all know by the time

you read this column. But

what I can say with

absolute certainty is that

this idea was not nirvana visited upon those developing

the platform. Rather, it originated back in a county, in a

precinct somewhere in America many weeks ago.

The fact that such a draft would even be included

stresses the critical necessity of political engagement at

every level of government. Our industry has enjoyed suc-

cess at the federal level because we have effectively taken

our message of energy security, environmental steward-

ship and rural economic renaissance to Capitol Hill. That

success has drawn increasingly ruthless smear cam-

paigns that threaten to obscure the truth just enough to

cause doubt in the minds of lawmakers about their com-

mitment to a new generation of biofuel technologies. The

fact a draft platform of one of the two major political parties

includes an anti-ethanol plank is evidence of this effort.

When the dust clears and the makeup of the next

administration and Congress comes into view, it simply will

not be enough to say we have done our job and wait two

more years for the next election cycle. We must take this

opportunity to educate new leaders and reeducate those

reelected about the vitality of an American biofuels indus-

try led by America’s ethanol producers.

VIEWFROMTHEHHIILLLL

Thinking Nationally, Acting Locally


Dinneen

Bob DinneenPresident and CEO

Renewable Fuels Association

RFAUPDATE

EPA makes right decision, denies RFS waiverIn August the U.S. EPA denied Texas Gov. Rick Perry’s renewable fuels standard (RFS) waiver request,

which would have reduced the 2008 RFS by 50 percent to 4.5 billion gallons.

Perry submitted the request in April. More than 15,000 comments were submitted to the EPA during the 30-

day public comment period. In denying the request, EPA Administrator Stephen Johnson said “The renewable

fuels standard is not causing severe economic harm.”

The required total volume of renewable fuels to be blended into the nation’s fuel supply will remain at 9 bil-

lion gallons for 2008 and 11.1 billion gallons in 2009.

“At the end of the day, the EPA rejected the waiver request for failing to present sufficient evidence showing

that the RFA was causing severe harm to the U.S. or even to the Texas economy,” RFA President Bob Dinneen

said. “Rightly, the EPA took notice of studies by Texas A&M University, Purdue University and others which clear-

ly state that skyrocketing oil prices are the main driver behind higher corn prices. These studies also lay bare the

fact that reducing the RFS would have minimal impact on the prices of corn.”

Harvard report cites biofuels importanceHarvard University’s Kennedy School of Research released a report, “Biofuels and Sustainable

Development,” that concludes the development of sustainable biofuels requires a firm commitment to the renew-

able fuels standard as well as other biofuels incentives.

The report is based on a discussion on the impact of biofuels on the global environment and economy

among 25 of the world’s top experts on biofuels, economic development and ecology. “Despite pressure from bio-

fuel critics, governments should avoid simplistic and precipitous changes in course such as rollback or moratoria

on existing biofuels mandates or incentives,” the report said.

The report urges governments to “initiate an orderly, innovation-enhancing transition toward incentives tar-

geted on multi-dimensional goals for biofuels development. These goals should include poverty alleviation, reduc-

ing new greenhouse gas emissions, increasing use of non-food feedstocks, attaining sustainable biofuel produc-

tion targets and conserving biodiversity.”

Removing current mandates would have a “chilling effect on the nascent biofuel industry,” the report said.

ww

w.e

thanolR

FA

.org


Corn crop on near-record paceDespite devastating and widespread June floods, U.S. corn farmers in mid-August were on pace to produce

the second-largest corn crop in the country’s history. The USDA’s mid-August World Agriculture Supply and

Demand Estimates said U.S. corn farmers were also poised to produce the second-highest average yield.

Average yield was estimated at 155 bushels per acre, up from July’s estimate of 148.4. Production was esti-

mated at 12.288 billion bushels.

“America’s farmers have once again responded to adversity, poised to produce the second-largest corn crop

in American history,” Dinneen said. “Their historic response should go a long way in silencing those Chicken

Littles who sought to capitalize on the devastation of this summer’s flooding to undermine and abandon America’s

movement toward cutting our dependence on foreign oil.”

© 2008 Danisco US Inc.Genencor® is a registered trademark and MAXALIQ™ is a trademark of Danisco US Inc. or its affiliates in the United States and/or other countries.

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BIObytesEthanol News Briefs

Airgas to collocate carbon dioxide plantAirgas Inc., the largest distributor ofindustrial, medical and specialty gases inthe United States, has agreed to build a450-ton-per-day liquid carbon dioxideplant at First United Ethanol LLC, a100 MMgy ethanol plant in Camilla, Ga.The carbon dioxide facility will refinethe ethanol coproduct for use in thefood, commercial and beverage indus-tries. Airgas expects the refinery to beoperational by late 2009. The ethanolplant is scheduled to begin operating inOctober.

Aventine applies for expansion projectAventine Renewable Energy Inc.applied to the Illinois EnvironmentalProtection Agency for a revised con-struction permit that would allow forexpansion of its 56.5 MMgy ethanolplant in Pekin, Ill. Aventine’s proposal,which was pending final approval by theIEPA at press time, would expand thecompany’s current capacity to 63.5MMgy. The agency has determined thatoverall emissions from the facilitywouldn’t increase beyond what isalready permitted, according to IEPAspokeswoman Jill Watson.

Milwaukee council rejects resolution to oppose RFSAt a July hearing of the MilwaukeeCommon Council’s Judiciary andLegislation Committee, the WisconsinBio Industry Alliance led an effort toeducate committee members on thebenefits of biofuels. The hearing wascalled to consider passing a resolutionthat would allow the committee tooppose the federal renewable fuels stan-dard. After ethanol supporters present-ed testimony on the benefits of biofu-els, committee members elected to takeno action on the resolution.

�continued on page 32

INDUSTRYNEWS


The ethanol industry is ontrack to meet the 9 billion-gallonrenewable fuels standard (RFS)in 2008, despite the threat of awaiver request submitted inApril. In August, the U.S. EPAdenied the request from TexasGov. Rick Perry to reduce theRFS requirement set forth in theEnergy Independence &Security Act of 2007 by 50 per-cent.

Currently, 175 ethanolplants in the United States have atotal production capacity of10.57 billion gallons. In lateAugust, the U.S. Energy InformationAdministration released its oxygenate report,which stated that ethanol facilities produced17,544 barrels of ethanol in June, bringing theyear’s production total to 4.25 billion gallonsso far. However, the RFS isn’t a productionmandate but rather a consumption mandatethat applies to refiners, blenders andimporters of fuels.

For 2009, the RFS calls for 10.5 billiongallons of conventional biofuel and 600 mil-lion gallons of advanced biofuel, whichincludes 500 million gallons of biomass-baseddiesel and 100 million gallons of undifferenti-ated advanced biofuel. The industry shouldhave no problem meeting the increased con-ventional biofuel standard, especially withanother 3 billion gallons of capacity underconstruction. However, the advanced biofuelcategory presents a new issue for the industry.Advanced biofuels in the legislation aredefined as anything other than corn-starch-based ethanol that achieves a 50 percentgreenhouse gas (GHG) emission reductionwhen compared with fossil fuels. Thus, thereis the potential for existing ethanol plantsusing feedstocks other than corn to have theirproduction qualify for the advanced biofuelscategory. Ethanol plants that use both corn

and milo for feedstocks may qualify, but theproportion of milo used isn’t clearly known.

Whether the ethanol produced by thoseplants will qualify as advanced biofuels bymeeting the 50 percent GHG reduction targetwill depend on the methodology chosen bythe EPA to calculate GHG emissions. “TheEPA is still working on its GHG criteria,” saidMatt Hartwig of the Renewable FuelsAssociation. “The ethanol industry remainsintimately involved. This is important work asit will likely inform debate about future low-carbon legislation.”

Questions still remain as to whether thecellulosic ethanol projects currently underdevelopment will be on line and producingenough ethanol to meet the 2010 RFS, whichcalls for 100 million gallons of cellulosic bio-fuel to achieve 60 percent GHG reductions.The EISA legislation gives the EPA theauthority to lower the RFS targets and adjustthe GHG reduction targets if the require-ments can’t be met. For example, cellulosicbiofuels that don’t meet the 60 percent GHGreduction target can be counted as advancedbiofuels if they meet the 50 percent target.

—Susanne Retka Schill

U.S. ethanol production to meet 2008 RFS targets

Note: measured in billion gallons

SOURCE: RENEWABLE FUELS ASSOCIATION


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INDUSTRYNEWS

The U.S. EPA won’t be releas-ing regulations to implementthe second stage of therenewable fuel standard(RFS), enacted in theEnergy Independence &Security Act of 2007, untilmid-2009. Robert Meyers,principal deputy assistantadministrator in the EPA’sOffice of Air and Radiation, toldthe U.S. Senate Committee onEnvironment and Public Works in July thatthe “RFS2” includes new elements that addcomplexity to the program. The EPA’s finalruling was previously to be issued by Jan. 1.

The RFS was first enacted in theEnergy Policy Act of 2005 and called for7.5 billion gallons of renewable fuels con-sumption by 2012. RFS2 increases the totalmandated renewable fuel volumes to 36 bil-lion gallons per year by 2022. Several otherchanges were made, as well.

For example, the original RFS estab-lished two categories of renewable fuels:conventional biofuel and cellulosic ethanol.RFS2 increases the number of renewablefuels categories to four: conventional bio-fuel, advanced biofuels, biomass-baseddiesel and cellulosic biofuels. Part of thedelay in RFS2 regulation will stem from theneed to establish systems to track the pro-duction of these fuels and demonstratecompliance with four separate standards,Meyers said. RFS2 will also include off-road gasoline and diesel fuel for the firsttime.

Cellulosic biofuels will make up mostof the new requirement under the RFS2.EISA increased the cellulosic biofuel man-date from 250 million gallons to 1 billiongallons by 2013, with additional annualincreases to 16 billion gallons in 2022. Inorder to achieve this level of production,the EPA will have to make many criticaldeterminations. For example, according to

Meyers, EISA authorizes theEPA in certain circumstances

to adjust the cellulosic bio-fuel standard to a levellower than what wasspecified in the law.However, it also requiresthat if the EPA adjusts

the standard, it must alsomake credits available for

compliance purposes and pro-vide instructions on how to establish

a specific price for these credits.EISA also requires the EPA to apply

life cycle greenhouse gas (GHG) standardsto each category of renewable fuel. Meyerssaid the EPA has done a substantialamount of work on life cycle analysis overthe past year, and has made significantadvances in its methodology, data inputsand assessment of land use changes.However, he anticipates extensive com-ments from all stakeholders on both lifecycle analysis inputs and methodologybefore these rules are put into place.

RFS2 also changed the definition ofrenewable fuel feedstocks in a fundamentalmanner. The new law limits the crops andcrop residues used to produce renewablefuel to those grown on land cleared or cul-tivated, either actively managed or fallow,and non-forested before the enactment ofEISA. Meyers said the EPA will have tohave extensive contact with the USDA, theU.S. Trade Representative, and farmers andlands to create appropriate and enforceableregulations on this. The EPA has startedthese discussions, Meyers said, and plans tocontinue this dialogue throughout the reg-ulatory process. EISA also requires thatforest-related slash and tree thinnings usedfor renewable fuel production not comefrom federal forestlands.

—Jerry W. Kram

EPA to revise RFS in 2009

�continued from page 30



Louisiana to pursue hydrousethanol, blender pumpsThe Louisiana Department of Agricultureand Forestry’s Division of Weights andMeasures will monitor the performance ofblender pumps and hydrous ethanol blendsin separate four-year pilot programs estab-lished in the state’s new advanced biofuelsinitiative. The initiative calls for a decentral-ized network of small advanced biofuelplants and offers income tax credits on thefirst 10 MMgy of production through2012. The legislation targets state-growncrops other than corn that require lesswater and nitrogen than corn while beingtolerant to extremes in moisture, high tem-peratures and marginal soils.

USDA: No penalty-free release for CRPCiting the summer drop in commodityprices and the built-in reduction inConservation Reserve Program acres in thenext few years, Secretary of Agriculture EdSchafer said the USDA won’t allow land tobe released penalty-free from the CRP.Schafer pointed out that the 2008 farm billlowered the cap on the total number of

INDUSTRYNEWS

Mid-Missouri Energy inks landfill gas deal

Minneapolis, Minn.-based U.S. EnergyServices Inc. and Chicago-based Integrys EnergyGroup Inc. have entered into an agreement withJohnson County Landfill in Shawnee, Kan., thatwill supply renewable landfill gas to farmer-ownedcooperative Mid-Missouri Energy Inc.’s 40 MMgyethanol plant in Malta Bend, Mo. U.S. EnergyServices estimates that the deal, which wasannounced in late July, will displace more than 90percent, or approximately 3,300 million Britishthermal units of the natural gas used at the planteach day.

U.S. Energy Services will provide Mid-Missouri Energy with biogas management servic-es, including economic use impact analysis, ther-mal value management services and offtake agree-ment negotiation. U.S. Energy Services workswith energy providers to manage natural gas, elec-tricity and alternative fuel needs.

Integrys Energy Services is a nonregulatedenergy supply and services company that servesresidential, commercial, industrial and wholesalecustomers in developed competitive markets inthe United States and Canada.

Mid-Missouri Energy General ManagerGreg Bower said the organizations were able tonegotiate a price that allows the co-op to offsetpart of its gas costs by using the renewable fuel topower the plant.

The operation will move the pipeline-qualitygas approximately 150 miles along PanhandleEastern Pipeline’s interstate pipeline from the 800-acre Johnson County Landfill, which is ownedand operated by Deffenbaugh Industries Inc., tothe ethanol plant. First opened in 1995, theJohnson County Landfill is scheduled to close in2027 due to exhausted capacity.

Although many ethanol plants are displacingpart of their thermal requirements, no otherplants displace as high a percentage of its fossilfuels with a waste-derived fuel, according to U.S.Energy Services.

—Anna Austin

Mid-Missouri Energy Inc.'s ethanol plant is located

in Malta Bend, Mo.

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In the biofuels industry, you make decisions every day that

can help — or hinder — your future success. At Kennedy

and Coe, we can help ensure that you capitalize on every

opportunity. Our knowledge and experience in the industry

can help you identify opportunities that can signifi cantly

impact your cash fl ow each year. So you can be sure that

the path you choose is the right one.

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

Not your average accountants.SM

The “e” mark and the “stylized e” are registered service marks of the Ethanol Promotion and Information Council. Used with permission.

SOMETIMES, CHOOSING THE WRONG PATH CAN COST A LOT MORE THAN YOU THINK.

KAC.10442_EPM_Dir_7.5x3.375_4C 1 7/24/08 11:08:47 AM

INDUSTRYNEWS

Automakers work to expand ethanol useGeneral Motors Corp., the

largest automaker in the world,posted a $15.5 billion loss for thesecond quarter of 2008, the third-worst quarterly performance in thecompany’s history. Despite the loss-es, Candace Wheeler, a technical fel-low at GM who has focused on sus-tainable transportation for the past12 years, said the company is com-mitted to its “advanced technologystrategy,” which includes flexible-fuel vehicle manufacturing and thepromotion of alternative fuels suchas E85.

In July, the company formedan alliance with the NationalGovernors Association to expand E85 infra-structure and availability throughout eightunspecified states within the next year. “Theinfrastructure development for E85 needs toexpand now if the nation is to be ready forthe significant growth in ethanol comingfrom new sources,” said Beth Lowry, GMvice president of environment, energy andsafety policy. GM will contribute to theexpansion project by connecting fuel retailerswith available grants for infrastructure instal-lations and conversions, as well as offer itsassistance in determining the best location

for E85 pumps. The company has expertisein expanding E85 availability. According toGM, the company has helped to bring 300E85 pumps on line over the past three years.

GM also recently hosted a one-day “bio-fuels backgrounder” for media representa-tives to promote biomass-based biofuels,which the company sees as one step in theladder to reaching energy independence. Thebiofuels session included presentations fromplant genomics firm Ceres Inc., MascomaCorp. and BlueFire Ethanol, as well as GM.Wheeler told attendees that GM’s strategy

involves a gradual progression in fuelusage from petroleum to biofuels,electricity and ultimately hydrogen.The company’s current view is thatbiofuels—specifically ethanol—remain the best near-term energyalternative to oil.

GM plans to increase the num-ber of flexible-fuel vehicle (FFV)models it produces to 18 in 2009 andsaid that half of its total productionwill be FFVs by 2012, provided thatthe infrastructure is in place to sup-port it.

Ford Motor Co. has also workedto expand E85 infrastructure inrecent years. The company has a

long-standing relationship with VeraSunEnergy Corp., one of the largest ethanol pro-ducers in the world. In 2006, Ford andVeraSun partnered to open the Midwest E85Corridor, allowing travelers to drive betweenKansas City, Mo., and Chicago alongInterstate 55 and Interstate 70, fueling exclu-sively with E85. Ford currently offers sevenFFV models and plans to add more in 2009.

—Kris Bevill

General Motors says half of its total vehicle production will be FFVs

by 2012.

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acres allowed in the CRP program from39.2 million to 32 million acres. With 34.7million acres now enrolled, contracts on1.1 million acres were set to expire Sept.30. In a year, another 3.8 million acres incontracts will expire, followed by 4.4 mil-lion acres in 2010.

MSW-to-ethanolprojects announcedFulcrum Bioenergy Inc. plans to build a$120 million, 10 MMgy waste-to-energyplant called Sierra BioFuels in StoreyCounty, Nev. Construction will begin laterthis year with operation slated for 2010.The plant will convert 90,000 tons ofmunicipal solid waste (MSW) into synthesisgas annually. The gas will be then be con-verted into ethanol. Similarly, British chem-ical company INEOS announced plans tobegin producing commercial quantities ofethanol from MSW within two years.

Report: Miscanthus requiresless acreage for ethanolUniversity of Illinois researchers reportedin the journal Global Change Biology that

INDUSTRYNEWS

Cellulosic pilot plant starts operation in Montana


AE Biofuels Inc. brought its pilot-scaleethanol plant in Butte, Mont., on line in Augustand since then has begun work to prove out itstwo individual cold-cook enzyme platforms.“We’re trying to differentiate ourselves from ourcompetitors, so by having two enzymes—one forstarch and one for cellulose—we can run an inte-grated facility where you use both feedstocks,” saidTodd Casper, vice president of the company’sproject development division.

Clifford Bradley, coinventor of the AEBiofuels pilot process, said the company’s first taskis to perfect the simultaneous integration of starchand cellulose hydrolysis. “We’re talking corn andcorn stover,” he told EPM. “We designed the cel-lulose pretreatment system to use a conventionaljet cooker to keep capital costs down. We can doan alkaline pretreatment or an acid, but we likealkaline. It’s milder and less messy.” He said thecompany’s technology can obtain cellulases capa-ble of hydrolyzing both cellulose and hemicellu-lose from a single culture.

For corn stover, the gallons-per-ton conver-sion ratio is still unknown, but it will be the subjectof ongoing work in the Butte plant. Bradley saidthe company achieved 84 gallons of ethanol perton of wheat straw, which included 62 gallonsfrom the cellulose fraction and up to 22 gallonsfrom the pentose sugars. The plant is scaled toproduce up to 150,000 gallons of ethanol per year.

Later this year, the company will test sugarcanebagasse. “Our idea is that by using both enzymesystems and converting a plant to no-cook, we canintegrate corn- and cellulose-derived ethanol andactually put them in the same fermentor,” Bradleysaid. Work to optimize pentose fermentation isalso moving forward.

Still, AE Biofuels isn’t excluding convention-al ethanol plants. Andy Foster, president of AEBiofuels subsidiary American Ethanol, said thecompany’s technology can most immediately beoptimized in existing facilities. “Ethanol producersare a captive audience, and they’re constantly look-ing for ways to reduce operating expenses,” hesaid.

—Ron Kotrba

AE Biofuels’ new 150,000-gallon-per-year pilot plant will

be used by the company to optimize two cold-cook

enzyme platforms, one for corn and the other for biomass

hydrolysis.

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INDUSTRYNEWS

DOE backs cellulosic ethanol, energy policiesThe U.S. DOE recently doled out a variety of funds to

accelerate the development of cellulosic ethanol produc-tion. The recipients, which included academia, business-es and an association, are exploring many feedstockoptions and process technologies to help our countryreduce its dependence on foreign oil.

On July 31, the DOE awarded grants totaling $10million to 10 universities and research institutes under ajoint DOE-USDA program that began in 2006 to advancefundamental research in biomass genomics, and further theuse of cellulosic plant material for bioenergy and biofuels production.Colorado State University was awarded $1.5 million, the highestamount, to explore rice plants, according to Jan Leach, a professor inthe department of bioagricultural sciences and pest management atCSU, and lead researcher on the project. For a complete list of awardwinners, read the August EPM Web exclusive at www.ethanolproducer.com.

Amherst, Mass.-based SunEthanol Inc. was awarded a $750,000contract from the DOE in August, the company’s fourth from theDOE this year. The award, a follow-up to the successful completion ofa one-year Phase I grant, will help advance the development and com-mercialization of the company’s patented Complete CellulosicConversion process that uses its QMicrobe technology, whichSunEthanol claims can convert a wide range of plant and organicmaterials directly into ethanol. “The projects are underway in stages,”said Jef Sharp, SunEthanol’s executive vice president. “Things are mov-ing very quickly.”

BlueFire Ethanol Fuels Inc. recently received its firstinstallment of a DOE grant initially awarded in March 2007

for the development of BlueFire Mecca LLC, a 17 MMgycellulosic ethanol plant near Palm Springs, Calif. Thefacility will use wood wastes and other refuse-derivedbiomass as feedstocks. According to BlueFire President,Chairman and Chief Executive Officer Arnold Klann,

the company intends to break ground on the plant nextyear. Start-up is expected before 2010. To help with this

endeavor, BlueFire announced Aug. 1 that it had signed anagreement with Amalgamated Research Inc. for the exclusive rights toits Simulated Moving Bed Chromatographic Separation Technology.The technology will specifically aid BlueFire’s acid hydrolysis process,which converts cellulose to ethanol, by recovering 99 percent of theentrained sugars in the acid/sugar stream. “This is history-making, andwe’re excited because we believe we’re going to be building many moreof these facilities in the future,” Klann said.

In an effort to support energy policies at the state level, the DOEawarded $850,000 to the National Governors Association, which isseeking to develop and deploy cleaner sources of energy to power vehi-cles, homes and workplaces more efficiently. This goal is part of a cleanenergy initiative set forth by Minnesota Gov. Tim Pawlenty, whoseNGA chairmanship ended July 14. The DOE funding will support oneyear of the five-year plan, and more funding will be issued in the future,according to Christopher Cashman, spokesman for the NGA.

—Bryan Sims


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

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

Mature Maintenance Management Software for the Growing Ethanol Industry

800.922.4336www.mapcon.com [email protected]

LDAR Inspections

Preventative Maintenance

Asset Management

Inventory Management

Work Order Management

Project Management

For over 25 years, MAPCON has been

producing high-yield results in facilities like Platte Valley

(left) as well as many other ethanol plants.

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using miscanthus to produce ethanolrequires less than half the acreage of cornor switchgrass. To offset 20 percent of thenation’s consumption of gasoline, only 9.3percent of current agricultural acreagewould be required to grow miscanthus ver-sus 25 percent for corn or switchgrass, thereport said. Researchers found that miscant-hus yields more biomass than corn, pro-duces green leaves earlier and stays greenlonger.

Idaho Ethanol Processing to undergo improvementsIdaho Ethanol Processing Inc., a 5 MMgyethanol plant in Caldwell, Idaho, thatclosed in 2004 will undergo changes afterED&F Man Group reopened the facilityin 2007. Improvements will cost $3 mil-lion to $5 million, and are expected toboost production 30 percent by targetingpinch points in the old plant and focusingon improved energy efficiency. The facili-ty, being leased from J.R. Simplot, usespotato, beverage and sugar industry wasteas feedstocks. EP

INDUSTRYNEWS

Congressmen show pipeline supportSeveral congressmen from the

Midwest are pushing for legislationthat could improve the feasibility ofethanol pipelines. In particular, twopieces of legislation were introducedon both sides of Congress in July andhave been referred to the applicablecommittees.

U.S. Sens. Tom Harkin, D-Iowa,and Richard Lugar, R-Ind., introducedthe Biofuels Pipeline Act of 2008,which would give pipeline owners thatmove ethanol the same tax benefitsthey receive for moving petroleumproducts. Currently, a provision in thetax code prevents publicly traded part-nerships (PTPs), which build and oper-ate most liquid pipelines, from moving forwardwith biofuels projects. Under current laws, PTPsmust earn 90 percent of their income from explo-ration, transportation, storage or marketing ofdepletable natural resources, including oil, gas andcoal. Renewable fuels aren’t currently included inthe law. The act would change the tax code, allow-ing PTPs to earn qualified income from transport-ing, storing or marketing any renewable liquid fuelapproved by the U.S. EPA. The measure wasreferred to the Senate Finance Committee.

U.S. Reps. Leonard Boswell, D-Iowa, and LeeTerry, R-Neb., introduced the Renewable Fuel

Pipeline Act, which would amend theEnergy Policy Act of 2005 to provideloan guarantees for projects to constructrenewable fuel pipelines. It would alsoincrease the loan guarantee rate to 90percent. The act was referred to variousHouse committees, including theCommittee on Energy and Commerce,and the Committee on Transportationand Infrastructure. On Aug. 20, Boswellheld a press conference in Iowa to high-light the need to improve the infrastruc-ture for transporting ethanol from theMidwest to the rest of the country.Representatives from Magellan PipelineCo., the Iowa Corn GrowersAssociation and the Iowa Renewable

Fuels Association also participated.Also in July, South Dakota Gov. Mike Rounds

appointed seven people to the South DakotaUnderground Pipeline Task Force, which was cre-ated to review the status of existing and proposedwater, natural gas, ethanol and refined petroleumpipelines in South Dakota. It will also assess theadequacy of state laws and regulations regardingthose pipelines. The task force held its first meet-ing Aug. 14. It must present findings to Rounds byDec. 1.

—Erin Voegele

Harkin

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INDUSTRYNEWS

Wood-to-ethanol demo plant comes on lineGulf Coast Energy Inc.

began operating its demonstra-tion-scale wood gasification plantin Livingston, Ala., in August. Thesynthesis gas that it produces fromthe wood will be converted intoethanol, according to Scott Hazen,executive vice president for thecompany.

The demonstration plant’smain feedstock source will bewood waste from the city ofHoover, Ala., a suburb ofBirmingham located 100 milesnortheast of Livingston. Eighty-five percent of Hoover’s city fleetruns on renewable fuels, including180 vehicles that use ethanol,according to Tony Petelos, mayorof Hoover, and Gulf Coast Energy will be sell-ing the ethanol that it produces back to Hoover.Hoover recently delivered eight tons of woodwaste to the Livingston facility.

Hazen said ethanol production at the plantwill be intermittent. “We have a commitmentwith Hoover to process what we get from themthrough our demonstration plant, and so we'llrun it at least enough to do that,” he said. “Plus,for any [research and development] that weneed to do, we will have some other feedstock.

It would be at least enough to satisfy Hoover'sneeds, plus any additional needs that we have.”Hazen added that the venture is “not complete-ly a commercial enterprise, but we actually willbe selling product out from there.”

The Gulf Coast Energy project has beenin the works for two-and-a-half years, Hazensaid. The company was formed in April 2007.While the demonstration plant is operational,the company will begin designing a commercial-scale facility and will work to obtain all of the

necessary funding for theendeavor.

Hazen said the company’sprocess can produce 215 gallonsof ethanol per dry ton of woodwaste. Petelos said Hoover hasenough wood waste to produce350,000 to 400,000 gallons ofethanol per year.

Initially, the company willprocess only wood, but it coulduse other feedstocks, such asswitchgrass, Hazen said.However, converting wood toethanol is a natural choice inAlabama, he added. “With thecost of corn and the cost ofprocessing ethanol with tradi-tional technologies, plus the

yields that we get with our process being signif-icantly higher than any we found out there, itwas just a lot of due diligence that pointed us inthis direction,” he said. “Being in Alabama, thewood industry is very established. All of the har-vesting and transportation issues have beenworked out. It was an easy choice for us.”

—Ryan C. Christiansen

Gulf Coast Energy Inc., a demonstration-scale wood gasification plant in

Livingston, Ala., began operation in August.

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LACTROL antimicrobial targets only Gram-positive bacteriawhich negatively impact ethanol production, so it’s a superb ethanol processing aid. In addition, LACTROL antimicrobial isthe only antimicrobial with an FDA “No Objection” letter for the use of co-products in animal feeds that were derived from ethanol fermentation.

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INDUSTRYEXPANSION COMPLETEPLANT EXPANSIONPROJECT COMPLETENEW PROJECT

Ethanol Plant Construction

espite the financing challenges that proposed ethanol

plants are facing today, the facilities that secured funding

and began construction have been moving forward and

meeting time lines—a positive sign among negative press

coverage in the mass media these days. In this month’s list, for exam-

ple, five facilities have started production, and 13 plan to do so by the

end of October.

Northeast Biofuels LLC started production at its 100 MMgy corn-

based ethanol plant in Volney, N.Y., in early August. The facility is the

easternmost ethanol plant in the United States and should help to

increase availability in the Northeast.

Also in August, VeraSun Hartley LLC, a 110 MMgy corn-based

ethanol plant in Hartley, Iowa, announced start-up. Construction of this

facility was completed in June, but the company announced it would

delay production until market conditions improved. It did the same with

its ethanol plants in Hankinson, N.D., which started up a month later,

and Welcome, Minn. In the company’s second-quarter earnings report

released Aug. 11, it said the Welcome facility is aiming for a September

start-up, along with its facility in Dyersville, Iowa. VeraSun’s only other

ethanol plant currently under construction in Janesville, Minn., is slat-

ed for completion by the end of the year.

Patriot Renewable Fuels LLC, a 100 MMgy facility in Annawan,

Ill., started grinding corn in the last week of August. White Energy

Plainview LLC was confirmed at press time to have been operational

since May.

Poet Biorefining-North Manchester hosted its grand opening Sept.

11, celebrating the start-up of its 68 MMgy corn-based facility in North

Manchester, Ind.

If all 13 plants scheduled to start production by the end of October

reach their goals, then this plant construction list will look drastically dif-

ferent in the coming months. IGPC Ethanol Inc. in Aylmer, Ontario;

Indiana Bio-Energy LLC in Bluffton, Ind.; Pacific Ethanol Stockton LLC

in Stockton, Calif.; Platinum Ethanol LLC in Aurthur, Iowa; Poet

Biorefining-Fostoria in Fostoria, Ohio; Route 66 Ethanol LLC in

Tucumcari, N.M.; and the two VeraSun facilities in Dyersville and

Welcome planned to start production by the end of September.

Bridgeport Ethanol LLC in Bridgeport, Neb.; Cilion Ethanol LLC in

Keyes, Calif.; Ethanol Grain Processors LLC in Obion, Tenn.; First

United Ethanol LLC in Camilla, Ga.; and Poet Biorefining-Marion in

Marion, Ohio, plan to start production in October. Cardinal Ethanol LLC

in Union City, Ind., said it plans to start construction this fall. Together,

these 13 facilities total approximately 1.07 billion gallons of ethanol.

After these plants have started production, only 22 plants will remain

under construction.

One unique facility currently on the list is Louisiana Green Fuels

LLC in Lacassine, La. According to press contact Randal Johnson, the

company will be using sugarcane as a feedstock in the same manner

as the South American ethanol industry. The feedstock will be supplied

by an adjacent facility and various state sugar mills. The ethanol facil-

itiy will also process sweet sorghum, which has been planted and will

be harvested twice a year for sugar extraction. The sugarcane bagasse

and other solids left over from processing will be burned in a boiler to

generate steam power for the ethanol plant and adjacent sugar plant.

The company will also be able to sell power back to the local grid and

produce biofertilizers with the remaining waste. This is the first of four

facilities that the company plans to build in the state. After the other

facilities are built, the facility in Lacassine will be expanded from 25

MMgy to 100 MMgy. The goal is to meet this final goal by 2012.

—Jessica Sobolik

Several Facilities Near Completion

D


To provide updates to this list, contact Bryan Sims at (701) 738-4950 or [email protected].

Northeast Biofuels LLC

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Construction Represents 3.6 Billion Gallons Annually


Bionol Clearfield LLC

Location Clearfield, Pennsylvania Ethanol marketer Bionol Clearfield

Design/builder Fagen Inc. Distillers grains marketer Land O’Lakes

Process technology ICM Inc. Carbon dioxide marketer N/A

Capacity 110 MMgy Broke ground February 2008

Feedstock corn Target start-up date December 2009

Synopsis of progress

Foundations are being poured.

Archer Daniels Midland Co.

Location Cedar Rapids, Iowa Ethanol marketer Archer Daniels Midland

General contractor undeclared Distillers grains marketer undeclared

Process technology undeclared Carbon dioxide marketer undeclared

Capacity 275 MMgy Broke ground June 2007

Feedstock corn Target start-up date first quarter 2010


N/A

Archer Daniels Midland Co.

Location Columbus, Nebraska Ethanol marketer Archer Daniels Midland

General contractor undeclared Distillers grains marketer undeclared

Process technology undeclared Carbon dioxide marketer undeclared

Capacity 275 MMgy Broke ground July 2007

Feedstock corn Target start-up date third quarter 2009


N/A

Cardinal Ethanol LLC

Location Union City, Indiana Ethanol marketer Murex

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



Feedstock corn Target start-up date fall 2008


Work on rail loop was slated for completion by the end of August. Gas lines are complete. Distillers grains

load-out swing arms have been placed in grain-receiving area. Overhead doors are being constructed, and

all conveying equipment has been placed on silos for distillers grains and grain-drying area. Piping is being

installed throughout tank farm. The stack is erected, and most ductwork and piping are underway.

Cardinal Ethanol LLCP

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Aventine Renewable Energy-Aurora West LLC

Location Aurora, Nebraska Ethanol marketer Aventine Renewable Energy

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

Process technology Delta-T Corp. Carbon dioxide marketer undeclared

Capacity 113 MMgy Broke ground September 2007



Construction was on schedule, but no further information was available at press time.

Aventine Renewable Energy-Mt. Vernon LLC

Location Mt. Vernon, Indiana Ethanol marketer Aventine Renewable Energy

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





Construction was on schedule, but no further information was available at press time.

Bridgeport Ethanol LLC

Location Bridgeport, Nebraska Ethanol marketer Poet Ethanol Products

Design/builder ICM Inc. Distillers grains marketer Colorado Agri Products

Process technology ICM Inc. Carbon dioxide marketer undeclared


Feedstock corn Target start-up date October 2008


Piping and electrical work is nearly complete. Start-up is slated for Oct. 16.

Cilion Inc.

Location Keyes, California Ethanol marketer Eco-Energy

General contractor Harris Construction Distillers grains marketer Western Milling

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




Piping and electrical work continues. Staff hiring is complete.


First United Ethanol LLC

Location Camilla, Georgia Ethanol marketer Eco-Energy

Design/builder Fagen Inc. Distillers grains marketer Palmetto Grain Brokerage

LLCProcess technology ICM Inc. Carbon dioxide marketer Airgas Inc.

Capacity 100 MMgy Broke ground January 2007



Construction is approximately 95 percent complete in the process area. Construction of the energy center is

approximately 90 percent complete. Construction of the water treatment building is approximately 95 percent

complete. Construction of the grains-handling area is approximately 85 percent complete.

GreenField Ethanol

Location Johnstown, Ontario Ethanol marketer Commercial Alcohols

General contractor SNC-Lavalin Group Distillers grains marketer Commercial Alcohols


Capacity 200 MMly (53 MMgy) Broke ground October 2006



Construction of corn silo is complete. Work continues on the distillers grains and water buildings.

Hawkeye Renewables

Location Menlo, Iowa Ethanol marketer Eco-Energy

Designer/builder Fagen Inc. Distillers grains marketer undeclared



Feedstock corn Target start-up date fourth quarter 2008


N/A

Hawkeye Renewables

Location Shell Rock, Iowa Ethanol marketer Eco-Energy

Designer/builder Fagen Inc. Distillers grains marketer undeclared





N/A

Highwater Ethanol LLC

Location Lamberton, Minnesota Ethanol marketer RPMG



Capacity 55 MMgy Broke ground November 2007

Feedstock corn Target start-up date May 2009


Phase II site preparation, including underground piping, is approximately 80 percent complete. Most founda-

tion work is complete. Process building is approximately 40 percent complete. Off-site water mains are

installed. Water treatment and fire protection systems are scheduled to be finished by the end of October.

Rail siding and spur are being installed.

Clean Burn Fuels LLC

Location Raeford, North Carolina Ethanol marketer undeclared

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

Process technology Katzen International Carbon dioxide marketer undeclared


Feedstock corn Target start-up date September 2009


Distillers grains building is erected. Equipment is on-site, along with more than 100 contract workers. Grain

silos are being built.

Ethanol Grain Processors LLC

Location Obion, Tennessee Ethanol marketer Aventine Renewable Energy

Design/builder Fagen Inc. Distillers grains marketer undeclared


Capacity 100 MMgy Broke ground December 2006



Electrical and piping work is nearly complete. Various loose ends are being tied up.

E Caruso LLC

Location Goodland, Kansas Ethanol marketer undeclared

General Contractor JMC Engineering/Agri-Systems Distillers grains marketer undeclared

Process technology JMC Engineering/Agri-Systems Carbon dioxide marketer N/A




Process building is erected, and nearly all equipment is installed there. Piping is nearly complete, and electrical work

is underway. Work continues on connecting the grain-handing area to the process building. Construction of the

water treatment and water cooling systems, and the distillers grains area, is also underway.


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

Indiana Bio-Energy LLC

Location Bluffton, Indiana Ethanol marketer Aventine Renewable Energy

Design/builder Fagen Inc. Distillers grains marketer Indiana Bio-Energy





At press time, corn grinding was slated to start Sept. 10. Leading up to that, piping was complete, and elec-

trical work continued. Scale house and roads were nearly complete. Water, equipment and instrumentation

testing was underway.

Homeland Energy Solutions LLC

Location Lawler, Iowa Ethanol marketer Green Plains Renewable Energy

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


Capacity 100 MMgy Broke ground May 2007

Feedstock corn Target start-up date March 2009


Foundation work is underway. Silos are erected, and buildings are being erected.

Kawartha Ethanol Inc.

Location Havelock, Ontario Ethanol marketer undeclared

General contractor Profab International Distillers grains marketer Thompson's Ltd.


Capacity 80 MMly (21 MMgy) Broke ground October 2007

Feedstock corn Target start-up date February 2009


Process building and fermentation tanks are being erected. Distillers grains area is complete.

Louisiana Green Fuels LLC

Location Lacassine, Louisiana Ethanol marketer undeclared

General contractor Praj Industries Ltd. Distillers grains marketer N/A

Process technology Louisiana Green Fuels Carbon dioxide marketer undeclared

Capacity 25 MMgy Broke ground April 2008

Feedstock sugarcane/sweet sorghum Target start-up date mid-2009


Dirt work continues, and foundations for buildings are being poured. One of three equipment shipments is on-

site.

IGPC Ethanol Inc.

Location Aylmer, Ontario Ethanol marketer Eco-Energy

General contractor North America Construction Ltd. Distillers grains marketer Furst-McNess


Capacity 150 MMly (40 MMgy) Broke ground August 2007

Feedstock corn Target completion date September 2008


All major construction is complete, and some minor wiring is being finished. Corn is arriving on-site.

Northeast Biofuels LLC

Location Volney, New York Ethanol marketer Noble Americas Corp.

General contractor Lurgi Inc. Distillers grains marketer Perdue Farms

Process technology Lurgi Inc. Carbon dioxide marketer BOC Gases


Feedstock corn Target start-up date August 2008


Production began in early August. Congratulations Northeast Biofuels LLC!

Project Complete

NEDAK Ethanol LLC

Location Atkinson, Nebraska Ethanol marketer Eco-Energy

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

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




N/A


1-800-827-1662 • www.interstates.com

ELECTRICAL CONSTRUCTION • ELECTRICAL ENGINEERING • AUTOMATION • INSTRUMENTATION

Pacific Ethanol Stockton LLC

Location Stockton, California Ethanol marketer Kinergy Marketing

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


Capacity 50 MMgy Broke ground April 2007



According to the company’s second-quarter earnings statement released Aug. 11, construction of this plant is

on-schedule and “nearing completion.” No other information was available at press time.

Platinum Ethanol LLC

Location Arthur, Iowa Ethanol marketer Hawkeye Gold LLC

Design/builder Fagen Inc. Distillers grains marketer Hawkeye Gold LLC





At press time, this project was still on track for a Sept. 18 start-up. The finishing touches were being applied

in mid-August, including employee hiring and training, piping and electrical work, road paving, and building

insulation.

Patriot Renewable Fuels LLC

Location Annawan, Illinois Ethanol marketer Murex






Corn grinding began in the last week of August. Congratulations Patriot Renewable Fuels LLC!

Project Complete

One Earth Energy LLC

Location Gibson City, Illinois Ethanol marketer Eco-Energy

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


Capacity 100 MMgy Broke ground October 2007

Feedstock corn Target start-up date March 2009


“Fantastic” weather is allowing more than 200 workers on-site to quickly move ahead with construction. Grain-

receiving building is erected. Rail and water pipelines are being installed. Work on distillers grains wet pad

is underway. Cooling tower foundations are being poured.

Poet Biorefining-Fostoria

Location Fostoria, Ohio Ethanol marketer Poet Ethanol Products

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

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

Capacity 68 MMgy Broke ground August 2007



No further information was available at press time.

Poet Biorefining-Marion

Location Marion, Ohio Ethanol marketer Poet Ethanol Products



Capacity 68 MMgy Broke ground May 2007



No further information was available at press time.

Poet Biorefining-North Manchester

Location North Manchester, Indiana Ethanol marketer Poet Ethanol Products



Capacity 68 MMgy Broke ground third quarter 2007



At press time, a grand opening ceremony was scheduled for Sept. 11. Congratulations Poet Biorefining-North

Manchester!

Project Complete

Northwest Renewable LLC

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

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

Process technology Lurgi Inc. Carbon dioxide marketer undeclared


Feedstock corn Target start-up date second quarter 2009


Preliminary foundation work is complete. Additional construction will continue once a redesign of the facility

is complete.


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Route 66 Ethanol LLC

Location Tucumcari, New Mexico Ethanol marketer undeclared

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

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


Feedstock corn/milo Target start-up date September 2008


Finishing touches, including piping and electrical work, are being applied.

Southwest Iowa Renewable Energy LLC

Location Council Bluffs, Iowa Ethanol marketer Lansing Ethanol Group

Design/builder ICM Inc. Distillers grains marketer Bunge





Road and rail work continues. Electrical work in grain-receiving area is underway. Administration building was

slated to be occupied in early September.

Tharaldson Ethanol LLC

Location Casselton, North Dakota Ethanol marketer Green Plains Renewable Energy

Design/builder Wanzek/Valley Engineering Distillers grains marketer Verde Bioproducts Inc.

Process technology Vogelbusch Carbon dioxide marketer N/A




Progress is being made, but no further information was available at press time.

VeraSun Dyersville LLC

Location Dyersville, Iowa Ethanol marketer Provista

Design/builder Fagen Inc. Distillers grains marketer VeraSun Energy





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

VeraSun Hartley LLC

Location Hartley, Iowa Ethanol marketer VeraSun Energy






Construction was completed in June, but start-up was delayed until market conditions improved.

Congratulations VeraSun Hartley LLC!

Project Complete

VeraSun Janesville LLC

Location Janesville, Iowa Ethanol marketer Provista




Feedstock corn Target start-up date fourth quarter 2008


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

VeraSun Welcome LLC

Location Welcome, Minnesota Ethanol marketer VeraSun Energy






Construction is complete, but start-up has been delayed until market conditions improve. In its second-quar-

ter earnings report released Aug. 12, the company said it’s aiming for a third-quarter start-up.

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 May 2008


This facility started production in May. Congratulations White Energy Plainview LLC!

Project Complete

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When Verenium Corp.

officially opened its $60 million demon-

stration-scale cellulosic ethanol produc-

tion facility just outside of Jennings, La.,

in May, it was a great day for the com-

pany and the community. Nearly 100

people attended the event, but as soon

as it ended, it was back to business as

usual on the property that houses both

the 1.4 MMgy demo plant and

Verenium’s pilot-scale facility.

Before summarizing the plant's

purpose in his remarks at the grand

opening ceremony, Verenium President

and Chief Executive Officer Carlos Riva

said he looks forward to making cellu-

losic ethanol production a reality. The

plant was built to validate Verenium’s

processes and economic criteria, as

well as to provide a basis for engineer-

ing design that the company can use

for its future commercial-scale facilities.

One of Verenium’s strengths has

been its specialty enzymes division,

headquartered in San Diego. However,

the entire third floor of the demo plant in

Jennings is devoted to enzyme produc-

tion and development, as well.

Researchers in Jennings have the abil-

ity to work with real-world applications

and share that information with the lab

in San Diego. “While current enzyme

performance is satisfactory in providing

an economic design basis for the com-

mercialization of Verenium's ethanol

process, work to increase enzyme per-

formance and yield, and lower cost, will

be an ongoing process,” says Kelly

Lindenboom, Verenium’s vice president

of corporate communications.

The facility began start-up in May

and expects to reach the optimization

phase by the end of the year. So far, the

plant has been using sugarcane

bagasse and energy cane as feed-

stocks. A steady supply of both is being

delivered to the plant by Cajun Sugar

Co-op, which is comprised of approxi-

mately 70 sugarcane growers within 90

miles of the plant. Co-op member and

lifetime farmer Joe Judice works 2,100

acres of farmland around the area bay-

ous and is happy to contribute feed-

stock to Verenium. He has been on the

short end of falling sugar prices in

recent years and says energy crops will

become a viable alternative for farmers

who are struggling to make ends meet.

He was one of a handful of farmers who

agreed to grow energy cane on an

experimental basis for Verenium, and

he says he has been extremely

pleased with the results. He says ener-

gy cane has been easier to grow than

sugarcane and that it’s a good option

for him to plant on some of his margin-

al land. However, he plans to continue

growing sugarcane, as well, while work-

ing to find the right balance of energy

crop and food crop. “If we lose the abil-

ity to feed ourselves, we’re in big trou-

ble,” he says. The co-op is extremely

supportive of Verenium, and members

believe that having a cellulosic ethanol

plant in their community will present

new and exciting possibilities for area

residents.

In early August, approximately

three months after start-up, Verenium

and oil titan BP Corp. announced an

18-month collaboration to advance

commercial-scale cellulosic ethanol. As

part of the agreement, BP is giving

Verenium $90 million in exchange for

rights to current and future technology

held within the partnership, production

facilities, and agronomics expertise.

The Jennings facility played a signifi-

cant role in attracting BP to Verenium.

Sue Ellerbusch, president of BP

Biofuels North America, says

Verenium’s proven technology and sci-

entific expertise, along with its commit-

ment to use nonfood feedstocks, made

it the ideal partner for BP’s advanced

biofuels itinerary. Research conducted

as part of the BP-Verenium partnership

will be carried out at the Jennings facil-

ity.

Verenium was also one of two

companies selected in July to receive

$40 million from the U.S. DOE to make

cellulosic ethanol cost-competitive by

2012. Verenium will use the funding to

continue its activities in Jennings. The

process technology being used there

has also been marketed in Asia and

served as the example for Tokyo-based

Marubeni Corp.’s pilot cellulosic ethanol

facility in Sarubeni, Thailand, which offi-

cially opened in late July.

—Kris Bevill

Big Things Happening in the Bayou

VERENIUM CORP.

LOCATION Jennings, La.

GENERAL CONTRACTOR Verenium Corp.

PROCESS TECHNOLOGY Verenium Corp.

CAPACITY 1.4 MMgy

FEEDSTOCK sugarcane bagasse, energy cane, Sundan grass

ETHANOL MARKETER Verenium Corp.

DISTILLERS GRAINS MARKETER N/A

CARBON DIOXIDE MARKETER N/A

BROKE GROUND February 2007

START-UP DATE May 2008


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Remote sensing technol-

ogy initially developed for satellite

imagery is being applied on the

ground to fine-tune fertilizer appli-

cations. GreenSeeker sensors

developed by NTech Industries Inc.

in Ukiah, Calif., in cooperation with

Oklahoma State University, use

optical sensors that emit and cap-

ture red and near-infrared light to

sense crop vigor. The GreenSeeker

sensors are mounted on a fertilizer

applicator and coupled to the equip-

ment’s variable rate applicators.

NTech Chief Operating Officer

Ted Mayfield explains that in corn,

the amount of nitrogen available

from natural sources such as min-

eralization or rainfall can vary wide-

ly from year to year. Looking at uni-

versity nitrogen response trials,

there are growing seasons when

crop yields on plots with no applied

nitrogen equal plots with high levels

of nitrogen. GreenSeeker aims to

capitalize on that phenomena.

“Getting the rate right for this year is

a huge component that

GreenSeeker is trying to accom-

plish,” Mayfield says. In addition,

the sensors identify crop variability.

“This part of the field isn’t doing

very well,” he says as an example.

“Let’s not waste nitrogen on it. This

part of the field looks pretty darn

good, but not as good as the refer-

ence strip. That’s where we’re

going to get a good economic

return on added nitrogen.”

When planting a field, a farmer

applies a high rate of nitrogen on a

calibration strip that is generally the

width of the applicator to be used

for topdressing. The rest of the field

gets enough nitrogen to get the

crop off to a good start, but well

below the optimal level. “Say the

farmer generally puts on 150

pounds of nitrogen per acre,”

Mayfield says. “He will apply 75 to

80 pounds on the whole field, and

on a reference strip, he puts down

180 pounds.” When the corn crop is

between the eight- and 12-leaf

stage, the farmer goes out with the

GreenSeeker sensors mounted on

his applicator and calibrates the

equipment against the strip that

received the high nitrogen rate.

Then, the rig is run over the entire

field, applying a variable rate of

nitrogen based on the sensors’

readings. “We’re going to pick up

areas of the field where there are

less healthy plants or thin stands,

and less nitrogen will be applied in

those areas,” he says. An example

would be areas with stunted plants

that flooded during the season.

Mayfield says with high fertiliz-

er prices, interest in the technology

is increasing from the handful of

producers who tried it when

GreenSeeker was introduced four

years ago. “Nitrogen is 25 (percent)

to 35 percent of the cost of produc-

tion in raising corn,” he says.

Costing approximately $22,000, the

system has given a payback in the

first year in some cases, he adds,

and it’s expected to return the

investment in two years in fertilizer

cost-savings.

The GreenSeeker sensors can

be added to a variety of equipment.

Some producers mount the sensors

on the toolbars of nitrogen side-

dressers. Others mount the sen-

sors on high-clearance spray rigs

that have been fitted with drop noz-

zles to dribble the additional nitro-

gen between the rows.

GreenSeeker can be used with liq-

uid, dry or anhydrous formulations,

and is compatible with existing rate

controllers. “It’s all about trying to

make the grower more efficient,”

Mayfield says. “We’re trying to max-

imize the return they get on the

money invested in nitrogen. The

great thing is that it’s good for the

environment, too, because if you

only put on the nitrogen that the

plant is going to uptake, then it’s not

going to get out into the environ-

ment.”

—Susanne Retka Schill

GreenSeeker Matches Nitrogen to Crop Needs

PHOTO: NTECH INDUSTRIES INC.


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At press time, VeraSun

Energy Corp.’s 110 MMgy ethanol

plant in Dyersville, Iowa, was sched-

uled to begin production by the end of

September. EPM spoke with Plant

Manager Pat Hogan, who brings a

unique international perspective to the

heart of the U.S. ethanol community.

Q: Tell us about your background

and how you came to work for

VeraSun.

A: I was born in Canada, where I

attended my first year of school

before my parents moved the family to

New Zealand. There, I completed my

schooling and began my professional

career. Having lived there for 28

years, I consider myself a Kiwi.

My career began in the dairy

industry, making cheese. I moved into

biofuels when I began work at Anchor

Ethanol, where I was a fermentation

operator. Eventually, I was promoted

to operations manager and was

responsible for three distilleries.

In 1995, I attended the Alcohol

School in Lexington, Ky., and instant-

ly fell in love with the United States—

subsequently making the decision

that I needed to move there some-

how. I tried unsuccessfully for five

years to obtain a U.S. work visa

before being advised to return to

Canada first and refocus my efforts

toward the United States at a later

date.

In 2000, I began working as

operations manager for API Grain

Processors in Red Deer, Alberta.

Within a year, my wishes to live in the

United States were granted, and I

accepted a position in Louisville as

plant manager for Parallel Products,

producing fuel-grade ethanol from

beverage waste. Due to restructuring

and a plant closure, I was laid off in

2003 and didn’t reenter the ethanol

industry until 2007 when I became a

plant manager for U.S. BioEnergy

Corp. (now VeraSun Energy Corp.). I

was plant manager for the U.S. Bio

facility in Ord, Neb., and trained staff

at U.S. Bio facilities in Marion, S.D.,

and Hankinson, N.D., before finally

landing the plant manager role in

Dyersville, where I reside with my wife

Janie.

Q: How does the renewable fuels

industry differ between the United

States, Canada and New Zealand?

A: While I was working in New

Zealand, the renewable fuels industry

was nonexistent, but it has recently

gained momentum with a focus

toward non-grain-based ethanol, such

as cellulosic and other alternatives.

The ethanol produced at the three

plants I managed was used for indus-

trial, potable and pharmaceutical

applications with the remainder being

exported primarily to Asia.

The Canadian biofuels industry is

in its infancy, much like the U.S.

industry was 20 years ago. The

Canadian government is providing

research and start-up grants to kick-

start the industry.

Q: How did you become interested

in the ethanol industry?

A: Totally by accident! I began my

career out of high school in New

Zealand, working for the New Zealand

Dairy Research Institute, making

cheese. While there, I attended

Massey University and earned my

diploma in dairy technology. I had the

opportunity to meet people from the

mainstream dairy industry, including

one classmate who worked at an

ethanol plant. The ethanol facility was

part of a dairy plant, as are all three

ethanol distilleries in New Zealand.

Soon, I was in the ethanol business

and haven’t looked back since.

Q: What is the status of the

Dyersville plant and how have you

been involved in the project?

A: The Dyersville plant is currently

under construction. We are in the

process of hiring and training staff,

and general preparations in anticipa-

tion of start-up. We are all excited and

looking forward to the plant start-up.

Q: Was your plant affected by the

spring flooding that mainly affect-

ed Cedar Rapids (70 miles south-

west of Dyersville)?

A: VeraSun Dyersville has very good

drainage, and there was no flooding

on the construction site. A few staff

members had problems getting home

on a few occasions due to flooding

and road closures.

Q: What are your management

strategies?

A: Empowering staff to make deci-

sions and manage their daily tasks,

allowing them to take responsibility

and accountability for their work. I try

to take a consultative and collabora-

tive approach to decision-making and

management of the plant to ensure I

get buy-in from staff and am fully

apprised of all the facts. My best strat-

egy though is to remove the clutter so

you can see the trees through the for-

est.

—Kris Bevill

A Kiwi in Corn Country

NamePat Hogan

TitlePlant Manager

PlantVeraSun Dyersville LLC

CompanyVeraSun Energy Corp.

CareerVeraSun Energy Corp./U.S. BioEnergy Corp.Plant ManagerApril 2007-Present

Parallel Products/U.S. LiquidsLouisville, Ky.Plant ManagerFebruary 2001-January 2003

API Grain ProcessorsRed Deer, AlbertaOperations ManagerJune 2000-February 2001

Anchor EthanolNew ZealandDistillery/Operations ManagerSeptember 1987-May 2000

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According to a report released

by the U.S. Energy Information

Administration in late August, U.S. ethanol

production fell slightly in June to 17.5 mil-

lion barrels, compared with 18.5 million

barrels produced in May. May’s figures

were the highest so far this year, and with

the number of ethanol plants coming on

line continuing to grow, ethanol blending

and spot sales are also on the rise. Some

major ethanol producers have been profit-

ing from increased ethanol sales, which

were reflected in their quarterly earnings

statements.

�Pacific Ethanol Inc. posted net

sales of $198 million in its second-quarter

earnings statement, a 74 percent increase

compared with $113.8 million during the

same period last year. The company said

the increase was primarily due to substan-

tial growth in sales volume, coupled with

higher average sales prices. Pacific

Ethanol’s sales volume rose to 66.8 million

gallons compared with 43.9 million gallons

during the same quarter a year ago.

�Brookings, S.D.-based VeraSun

Energy Corp. posted record revenues of

more than $1.01 billion in its second quar-

ter, compared with $170 million during the

same period last year. Total revenues

included sales of ethanol, distillers grains,

the company’s branded VE85 and corn.

�The Andersons Inc. reported a

record net income of $45.6 million on rev-

enues of $1.1 billion in its second quarter

compared with a net income of $25.5 mil-

lion during the same quarter last year. The

company’s Grain & Ethanol Group

achieved a record operating income of $20

million, a significant increase from the

same quarter last year when it posted $12

million. “Income from the company’s

ethanol joint ventures also rose during the

quarter,” the financial statement said,

although the company wouldn't give a

specifc amount.

�Houston-based Marathon Oil

Corp. took a hit, reporting a net income of

$774 million in the second quarter, com-

pared with $1.5 billion during the same

quarter last year. However, the company's

ethanol blending in gasoline rose approxi-

mately 38 percent from 40,000 barrels per

day last year to 55,000 barrels per day this

year.

�Aventine Renewable Energy

Holdings Inc. posted a $1.9 million sec-

ond-quarter net loss compared with a

$12.6 million gain during the same quarter

last year. Despite the loss, the ethanol pro-

ducer and marketer reported that it sold a

record 220.3 million gallons of ethanol dur-

ing this quarter.

�Archer Daniels Midland Co. posted

profits of $372 million in its fourth-quarter

earnings statement, down from $954.8

million during the same quarter last year.

Boosted by gains from asset sales a year

earlier, ADM’s revenue rose 78 percent to

$21.78 billion, up from $12.21 billion.

�Jacksonville, Fla.-based trans-

portation company CSX Corp. posted a

record profit of $385 million in its second

quarter, compared with a $324 million prof-

it during the same quarter a year ago.

Revenue increased to $2.9 billion, up 15

percent from the same period last year, in

eight of the company’s 10 markets, includ-

ing ethanol transportation.

—Bryan Sims

:BU

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Ethanol Sales Improve Quarterly Earnings

54 ETHANOL PRODUCER MAGAZINE OCTOBER 2008

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If a plant advertises, employs

salespeople or delivers products

out-of-state it may have nexus—a

tax term used by the federal govern-

ment to define a business presence

or activity within a state. Every state

has nexus rules and employs gov-

ernment personnel to search for

unregistered companies not paying

income or sales-and-use taxes

inside its borders. If a plant is audit-

ed and has not followed state nexus

rules, the cost could be significant.

On the other hand, a plant may often

pay too much in sales tax and may

be due a tax refund of thousands of

dollars.

As a former tax auditor cover-

ing the Great Lakes, Great Plains

and Ohio Valley regions, Kennedy

and Coe’s Carole Brady has 17

years of first-hand experience with

state tax laws. She says that many

plant managers have overpaid

sales-and-use taxes, and are due a

refund. “On the purchase side, a

plant manager might miss paying

sales tax on supply items or repair

parts,” Brady says. “They might

have a good handle on fixed assets

and big pieces of machinery but

when it comes down to repairs,

greases, oils, propane, gases, ware-

housing equipment or

machinery, there are a lot

of ‘what ifs.’”

Brady says activities

can include using con-

tractors, maintaining a

sales office, warehouse

or distribution center,

advertising via flyers, print

ads, radio, TV, mail or

phone, participating in

trade shows and deliver-

ing products in a personal vehicle.

“I would review a plant’s out-of-

state activities, such as where

advertising dollars are spent and if

salespeople are authorized to

approve credit and make agree-

ments,” she says. “One state has a

threshold where a business can

attend five trade shows, while anoth-

er requires a plant to register before

attending only one. If you advertise

every week, a state may want you to

register, but if you’re only advertising

twice a year it might be OK.”

If Brady finds an overpayment

of sales tax for a plant, she will file

for a refund. Most often a plant

would be due these overpaid dol-

lars. If she finds a busi-

ness has not paid taxes

appropriately when pur-

chasing big items, correc-

tive measures would be

put in place.

It doesn’t matter what

accounting firm performs

a plant’s state or federal

income taxes. Brady says

an interactive review can

be a one-time service that

can save a plant thousands of dol-

lars in the long-run.

“Managers don’t think about

this issue, or if they haven’t been

audited yet, they think, ‘What’s my

risk?’” Brady says. “But it’s critical to

know the depth of the law on state

tax.”

Jesse McCurry is a business devel-

opment specialist at Kennedy and

Coe LLC. Reach him at jmccurry

@kcoe.com or (316) 691-3758.

Overtaxed and Under-Reviewed:

A Simple Way to Save MoneyBy Jesse McCurry

McCurry

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s crush margins shrink,

owners of existing ethanol

facilities are under signifi-

cant pressure to reduce

costs and boost revenues.

Further, new market partici-

pants implementing second-generation

technologies with the backing of the lat-

est incentives have changed the compet-

itive landscape for the early industry

movers. These dynamics require plant

managers to investigate incorporating

new technologies and equipment into

existing facilities to optimize yields and, in

some instances, create additional rev-

enue streams from new coproducts.

Management should consider the impact

such optimization activities have on oper-

ational documents such as previously

executed financing or development

agreements, technology licenses or per-

mits.

The following are some common

project-related documents that should be

examined when investigating optimiza-

tion activities or technological modifica-

tions to the plant.

Technology licenses: As part of

the initial construction and development,

a technology license agreement is often

a key document included in the overall

construction or document package. It

includes language governing a plant’s

use of the initial process technology,

including certain duties and obligations

related to technological modifications. A

close examination of the license agree-

ment and the licensor’s intellectual prop-

erty rights is warranted in the face of opti-

mization strategies that involve techno-

logical modifications.

Financing documents: Any modi-

fications should be investigated with the

active participation of the company’s

lender. For those companies still subject

to a term loan, several restrictions require

lender review of and consent to any sig-

nificant changes to the plant. A review of

all financial and operational bank

covenants is warranted, as a number of

provisions might be triggered by such

proposed investments in optimizing a

facility.

For example, how will such activi-

ties affect current debt/leverage ratios,

new debt restrictions, capital expenditure

limits, cash flow sweeps and/or other use

restrictions on cash flows from earnings?

Additionally, in most instances, before

approving new capital investment,

lenders will need to review revenue

enhancing and payback projections to

ensure such figures are based on sound

and reasonable assumptions. Also, the

lender likely has a blanket lien on all

existing and future acquired assets. This

is key to the extent management is seek-

ing to finance plant modifications from a

source other than its current lender. In

such instances, each lender will likely

need to agree to appropriate subordina-

tion and intercreditor arrangements.

Finally, if financing optimization

activities, the lender will likely require col-

lateral assignment of relevant project

agreements and warranties, such as any

technology license agreement, opera-

tional agreement or equipment war-

ranties.

Off-take agreements: As the pri-

mary documents governing the genera-

tion of revenue for the biofuel plant, man-

agement is wise to give the off-take

agreements a thorough review in the

face of any plant optimization activities.

The issues to consider in such instances

range from the potential for any slow-

down or shutdown in production that may

be necessary in any plant upgrade to the

effect such technology changes may

have on the quality of the fuel produced.

A production delay or the failure of such

production to meet applicable specifica-

tions or ASTM standards as negotiated in

the off-take agreement can have a direct

negative effect on the cash flow of the

facility.

Permits and site control issues:

The effect that any proposed optimiza-

tion projects may have on a facility’s envi-

ronmental controls cannot be over-

looked. With regard to both air and water,

such activities can trigger management’s

need to obtain new or revised permits.

Physical changes or changes in the

method of operation that may result in

increased or modified air emissions or

changes to water appropriation and/or

water discharges at the plant require reg-

ulatory review to determine if additional

permitting is required. It is important to

note that such regulatory review is

required even if the increased air emis-

sions or changes to water appropriation

and/or water discharges will meet exist-

ing permit limits.

John Eustermann is an attorney with

Stoel Rives LLC. Reach him at

[email protected] or (208) 387-

4218. Randy Shefman is an attorney with

Hogan & Hartson LLP. Reach him at


7338.

The Implications of Plant Optimization ActivitiesBy John Eustermann and Randy Shefman

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.

AEustermann Shefman

EQUIPMENT


Production efficiency is critical in this tough economic environment. A U.K.-based company

is working toward commercial availability of its ethanol reactor tower, which uses atomized

steam to release intracellular starch in the cook process to boost fermentation efficiency.

EPM takes a look at this technology.

By Ron Kotrba

62

olume is king when input costs are lowbut when margins collapse, it alwaysplays second fiddle to efficiency. Aperfect cook and fermentation process

utilizes 100 percent of the feedstock’s starch; how-ever, as evidenced by ongoing comprehensiveanalyses of distillers grains, the industry is notthere yet. According to the assistant research direc-tor of the National Corn-to-Ethanol ResearchCenter, Yan Zhang, the average content of residualsugars found in distillers grains is about 8 percenton a dry-matter basis. “If an ethanol plant cannotoptimize its cooking process, or if it drops the fer-mentor based on fermentation time instead of theextent of fermentation completion, it is very easyto have high levels of residual sugars in distillersgrains,” she says.

A U.K.-based company, Pursuit DynamicsPLC, is preparing to go commercial with its PDXEthanol Reactor Tower, a device for pretreatingslurry with atomized steam and pressure. RickEastman, president the company’s U.S. subsidiary,Pursuit Dynamics LLC, says the technology wasoriginally developed for marine power.

“It actually pumps by virtue of this annularnozzle that atomizes the steam into a flow of liq-uid, which causes a vacuum pressure reaction,” hesays. “So downstream there’s a vacuum andupstream there’s pressure. That causes an explo-sion, or cell rupture, and that’s what we are seeingin our starch conversion—we are seeing morestarch at less destructive temperatures than with ahydroheater, for example.” The PDX ERT hasapplications ranging from food ingredient mixing,

V

PHOTO: PURSUIT DYNAMICS

Pursuit Dynamics’ Ethanol Reactor Tower, shown here on the side of a liquefaction tank, may help boost ethanol

production efficiency through cell disruption from high-impact steam and in a series of individually controlled reactors.

EFFICIENCYIN DYNAMIC PURSUIT OF

EQUIPMENT


EQUIPMENT

to fire suppres-sion, to wort boil-ing and brewing,but it’s the equip-ment’s ability toboost ethanol pro-duction efficiencythat is of interest.

Major test tri-als were conduct-

ed on the PDX ERT in December2007 at NCERC, which is on the cam-pus of Southern Illinois University inEdwardsville, Ill., says director JohnCaupert. NCERC research directorBrian Wrenn oversaw the project butbecause of a confidentiality agreement,Wrenn could not disclose any informa-tion at press time. However, PursuitDynamics chief technology officerJens Thorup presented informationand data gathered from its tests atNCERC at the International FuelEthanol Workshop & Expo this year.First, though, EPM takes a closer look

at what the reactor is and how it works.

The Inner WorkingsThe reactor tower is installed

between the slurry and liquefactionprocesses of an ethanol plant. Insteadof the corn being milled, slurried andpumped directly to the liquefactiontank, the slurry enters the ERT prior topassing through to liquefaction. Insidethe ERT are multiple reactor modules,each equipped with individual controlsto optimize the temperature profile.“To get fully dispersed phases in ourreactors we like to start at a tempera-ture well below the final liquefactiontemperature, which is 185 degrees[Fahrenheit],” Eastman says. “We’re atabout 125 degrees, requiring minorprocess modifications to keep thatslurry tank under the gelatinizationtemperature.”

The ERT is positioned on the sideof the liquefaction tank and, by way ofvacuum, the slurry mixture moves

inside the bank of reactors where high-ly atomized steam, coming from theconditioning chamber wrapped aroundthe core of the reactor, is injected intothe slurry stream causing impact. “Thatcauses a fully dispersed condensationphase, which brings it back to between12 and 15 pounds of pressure,”Eastman says. “There’s tremendousimpact there. It happens in four stagesin what’s a fairly small reactor. Thenthere is a final heater—like a trimheater—which is a PDX nozzle, andthen the slurry is deposited into the liq-uefaction tank.” Again, the tempera-ture of each stage is controlled throughthe use of automated steam valvesfeeding each one of the reactor banks.Through significant steam impact andmaterial disruption there is instant acti-vation of all of the starch, includingthe hard to get to intracellular starch.“What we’re doing is separating all ofthe starch from the cellulose in thecorn kernel,” Eastman tells EPM.

Eastman

EQUIPMENT

In addition to making more starch-es available for downstream fermenta-tion, the steam conditioning and lowtemperatures reduce so-called hotspotsand starch degeneration from what’scalled Maillard Reaction loss. TheMaillard Reaction, named for chemistLouis-Camille Maillard, who thorough-ly investigated this phenomenon in theearly 1900s, is a temperature-inducedreaction between sugars and aminoacids. It’s what causes the browning ofmeat, for instance, when it’s cooked. Ifthe cook temperature of the slurry istoo high, it may render some otherwisefermentable sugars unfermentable. Ofnote, on the back end of ethanol pro-duction high dryer temperatures andthe Maillard Reaction are responsiblefor the over-browning of distillersgrains, which degrades the amino acidsdigestibility.

Test TrialsThe equipment trial conducted at

NCERC was benchmarked against a

conventional jet cooker. At this year’sFEW Thorup presented results fromdata collected during the third-partyevaluation testing. A 14 percent boost

in ethanol yield was achieved. “That’sfrom the added starch recovery andactivation,” Eastman says. In an eco-nomic environment as tight as it is

Starch

Prote

inHem

icell

Cell Fat

Other

Lignin

Tota

l

120%

100%

80%

60%

40%

20%

0%

Compositional Analysis

Maximum Conversion

PDX Conversion

Conventional Conversion

Corn Yellow Dent #2Conversion to fermentable sugars

PDX yield upliftfrom conventional

including cellulose: 24%PDX yield uplift

from conventional: 14%

SOURCE: PURSUIT DYNAMICS

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EQUIPMENT

today, a 14 percent increase in ethanol yield appears to be aremarkable achievement.

The pretreatment device not only improved ethanolyields by double-digit numbers, but according to Thorup italso reduced liquefaction time by 75 percent. Since the grainslurry has been significantly disrupted in the ERT prior toliquefaction, it also means that far fewer alpha amylaseenzymes are needed because much of the starches have beenmade accessible. This allows fewer enzymes to do more.Thorup said a 50 percent reduction in alpha amylase use wasdocumented from the NCERC trials. Lastly, he said a 30 per-cent reduction in fermentation time resulted from pretreat-ing the slurry with Pursuit Dynamics’ ERT.

The first full-scale production trial ofthe ERT is currently underway at PacificEthanol Inc.’s 40 MMgy plant inBoardman, Ore. Tim Raphael, communi-cations director for Pacific Ethanol, tellsEPM the testing is going well so far. Inmid-August it was too early for the testingto have yielded any results but Raphaelsays they are all hopeful and will have hardproduction data once the testing is complete.

“It’s a matter of installing the technology and thenbeginning to integrate it into the process to see what thatdoes through the systems at the plant,” Raphael says. “Thenwe’ll be ramping things up to see what it does for productionat the plant—to see how well it integrates into our process.”

Eastman says while it is premature to talk about results,he says initial work at the Boardman plant indicates they areaveraging a yield increase of more than 10 percent. “It’sgoing well,” he says. “Of course we’ve encountered someups and downs like any trials.”

It’s no accident that Pacific Ethanol is the first companyto test Pursuit Dynamics’ ERT in a full-scale trial. “I wasinvolved in and responsible for building and owning a por-tion of the first dry-grind ethanol plant in California,”Eastman says. “It was built in conjunction with WesternMilling.” That plant is in Goshen, Calif., and has since beensold to Altra Biofuels. “A former colleague of mine, NeilKoehler, was driving Pacific Ethanol,” he explains. “He dis-cussed with me the possibility to cooperate rather than com-pete on some projects. So it was with Pacific Ethanol, astheir director of technology, that I was introduced to PursuitDynamics and PDX technology.”

Future Possibilities Although there may not be many more greenfield corn-

ethanol plants built in the United States, Eastman says thereare tremendous retrofit possibilities. “We can walk into all of

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Raphael


EQUIPMENT

the 160 or so ethanol plants existingtoday and make a difference,” he tellsEPM. Rather than ethanol plants flat-out paying the capital expenses to buyone of these reactor towers, Eastmansays the company is looking at a recur-ring income (i.e. royalty) model. “We’dlike to share 20 percent of the benefits,so for example if the overall benefit isa dollar, we’d like 20 cents on an ongo-ing basis.” There may be some signingcosts too, but Eastman says thosewould be relatively low. “It’s not mil-lions of dollars by any stretch of theimagination,” he says.

In addition to “generation one”enhanced starch activation, PursuitDynamics is also investigating how itsERT can pretreat corn fiber (genera-tion 1.5) and second-generation feed-stocks such as corn cobs. What is char-acterized as generation 1.5, convertingcorn fiber, entails conventional ethanolproduction utilizing the ERT betweenslurrying and liquefying, followed byconventional processing and distilla-tion after which the stillage would be

targeted. “We’re looking at the fiberthat’s been taken all the way throughthe cook and distillation processes andattacking it again,” Eastman explains.According to Thorup, ethanol yield isboosted 24 percent higher than con-ventional processing when using a jetcooker instead of an ERT that not onlyactivates more starch but also “attacks”the already-processed corn fiber onceagain. Recycling the already-cookedmaterial back through the productionprocess elevates the per-unit proteinand fat content in the resulting dis-tillers grains because the cellulose andhemicellulose portions of the cornhave been reduced and converted intoethanol. Impact trials on second-gener-ation feedstocks, such as wheat straw,have also shown preliminary signs ofsuccess. EP

Ron Kotrba is an Ethanol ProducerMagazine senior writer. Reach him at

[email protected] or (701)

738-4942.

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TECHNOLOGY


PHOTO: PHIBROCHEM

Bayrock in PhibroChem's new laboratory in St. Paul, Minn.

TECHNOLOGY

PhibroChem, the New Jersey-based supplier of antimicrobials for

the ethanol industry worldwide, recently opened a new laboratory

in St. Paul, Minn., dedicated to expanding its customer service

diagnostic work, research and development for the next

generation of products for the biofuels industry.

By Jessica Ebert


IN THE LAB

TECHNOLOGY

s the management teams ofcurrently producing ethanolplants work to scrape by andcontinue operating in the wake

of record-high corn prices one company isgearing up to offer these producers a wayto potentially increase their bottom lines.By keeping ethanol plants healthy throughthe control of microbial contamination,plant managers can prevent the develop-ment of a problem that leads to a loss inprofits. To that end, PhibroChem, which isbased in Ridgefield, N.J., but has a globalreach, recently opened a new diagnosticsand research and development lab inMinnesota to cater to the evolving biofuelsindustry.

PhibroChem is a division of PhibroAnimal Health Corp., a global companyfocused on manufacturing and marketingperformance chemicals including productsfor the ethanol, paint and coatings, person-al care and metal finishing industries, andproducts for animal health and nutrition.About eight years ago, the company decid-ed to establish a research and develop-ment, and a customer service laboratorybased in Saskatoon, Saskatchewan,Canada. The primary charge of the lab,which at the time was staffed with five peo-ple, was to analyze diagnostic kits comingin from the field. These kits can be likenedto a first aid kit for an ethanol plant. Toidentify microbial contamination, samplesare taken from areas such as the yeastpropagation tanks, heat exchangers andfermentation mash. These samples are col-lected, packaged and sent to a diagnosticlab where technicians spread the samplesonto agar growth medium. The microbesthat grow on the surface of this gelatinoussubstance can then be identified and anappropriate control strategy employed.

An additional goal for the lab was toconduct research toward the developmentof products to effectively manage micro-bial contamination in ethanol plants. Oneof these products is Lactrol, a proprietarycombination of virginiamycin and dex-trose used to control the growth of bacte-ria responsible for the production of lacticacid and acetic acid. These acids are toxic

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to yeasts and lead to lower yields and pro-ductivity in the ethanol production process.Lactrol is the only product currentlyapproved for ethanol fermentation by theU.S. Food and Drug Administration.

But balancing both mandates—cus-tomer service and product development-proved challenging. In the past, there weresome weeks the lab handled about 15 diag-nostic kits, translating into more than 3,000microbial plates manually treated. As thecompany's customer base increased overthe years, the company came to the realiza-tion that a new facility would be required toprovide a higher level of customer serviceand continue to support basic research anddevelopment capabilities, explains DennisBayrock, who has been involved with theSaskatoon lab since its inception and willnow manage the research and developmentportion of the new lab.

Divide and Conquer“Fast-forward to about six months

ago and that vision became a reality,”Bayrock says. PhibroChem’s EthanolPerformance Group announced the open-ing of its new lab, located at the UniversityEnterprise Labs on the campus of theUniversity of Minnesota in St. Paul, in mid-March. The UEL is a nonprofit, public-pri-vate partnership created to provide labora-

tory space for bioscience companies. Thefacility currently houses 29 companies thatemploy more than 250 people. Locating atthe UEL was deemed an advantageouschoice by Bayrock because the twin citiesof Minneapolis and St. Paul are a courierhub, many of the company’s current clientsand its target clients are located in theMidwest and finally, the Twin Cities offeran attractive technical service base. “Therewere a lot of pluses to moving toMinneapolis/St.Paul,” Bayrock says. “I canconfidently say that there is no other labo-ratory like this.”

The new lab will be split into two divi-sions, each with its own manager and man-dates. On the customer service side ofthings, Wayne Mattsfield, a trained micro-biologist with experience at the MinnesotaDepartment of Health and the MinnesotaPollution Control Agency in the areas ofindoor air quality and microbiology and inwater treatment, will continue the compa-ny’s tradition of providing diagnostic serv-ices to the industry. With a culture collec-tion of about 500 microbes isolated fromethanol plants across the globe and a newstate-of-the-art instrumentation capability,the currently operating lab is well equippedand continues to meet its main customerservice mandate. By investing in equipmentsuch as an automated plate counter and

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73

Pictured is a bank of ten-7 liter fermentors, fully automated with data logging capabilities.

PH

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TECHNOLOGY

new plating technologies, the lab is able to respond to customerneeds within 48 hours, Mattsfield says. The response includes, fill-ing requests for diagnostic kits, receiving those kits and settingthem up for microbial and chemical analyses, generating and ana-lyzing the data based on these tests and then providing an inter-pretation for the data including recommendations for improvingproduction through process changes or the application of antimi-crobials.

In addition to maintaining this traditional service offered byPhibroChem’s customer service lab, employees at the new lab willalso wear two other “hats,” Mattsfield explains. The first willinvolve internal work to evaluate products and new technologies."We anticipate that these technologies will provide our customersbetter support with respect to [potential] future regulatory issuesand [distillers dried grains] analysis," Mattsfield says. The secondhat will involve training in basic laboratory techniques andprocesses common to the ethanol industry such as fermentation.“I think we’ll look back in a year from now and just be amazed atthe additional things we’re going to be able to offer and theprogress we’ll be making in adding to some of the basic thingswe’re doing now,” Mattsfield says.

In terms of the research and development of new productsfor bacterial control in ethanol plants, the company has a numberof patents and products in the pipeline that will soon be releasedfor trials, Bayrock says. “We're making sure we're rigorous in all


The UEL laboratory is near the University of Minnesota campus in St. Paul.

PH

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TECHNOLOGY

aspects of product development,” he says. “We want to beabsolutely convinced that every product that Phibro's EthanolPerformance Group develops will work effectively for a customerto help control harmful contamination. Uncontrolled contami-nants cost the industry millions of dollars in lost profits everyyear.”

The new lab will also offer an opportunity to explore andanticipate the kinds of organisms that will likely be involved in the

contamination of cellulosic ethanol plants. The microbes associ-ated with these plants will likely be as varied as the feedstocks—ranging from agriculture waste to molasses—that these facilitieswill be based on, therefore a greater understanding of how thesemicrobes grow and develop in these different environments willbe needed. “Our mandate is to understand precisely what theseparticular organisms are, and under what conditions they flour-ish,” Bayrock explains. “Are they different from the corn-basedflora? Are they different from the molasses-based flora? And ifso, do our current products work against them or do we need todevelop other products to service those organisms too?”

Overall, the two divisions will be founded in the success ofthe Saskatoon lab with its diagnostic and product developmentservices but with an eye to the future, the lab will aim to grow itsrepertoire of offerings to service a rapidly evolving industry. “Upin Saskatoon we quickly outgrew our facilities, which limited theservices we were able to offer our clients,” Bayrock explains. “Weare able to and are on the verge of offering more to our clients inthe future than we ever could have in Saskatoon,” he adds. “Thislab fills a much-needed gap both for education and training as wellas for understanding how bacterial contaminants affect an ethanolplant.” EP

Jessica Ebert is a freelance writer for Ethanol Producer Magazine.

Reach her at [email protected].

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FEEDSTOCK

In the ethanol world barley may be corn’s poor cousin, but

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the U.S. mid-Atlantic region.

By Susanne Retka Schill


BarleyBeefing Up

FEEDSTOCK

arley may just step out ofcorn’s shadow and becomea respectable ethanol feed-stock as a result of the

research being conducted by the USDAAgricultural Research Service and plantbreeders at Virginia Polytech Institute.ARS researchers at the EasternRegional Research Center inWyndmoor, Pa., believe that the UnitedStates could produce 1 billion to 2 bil-lion gallons of ethanol from barley, notto mention the potential for an equalamount of cellulosic ethanol from thestraw once cellulosic technology iscommercially viable.

For the past two decades, however,U.S. barley acres have declined, largelybecause prices were well below $2 perbushel. In the mid-Atlantic region, theacreage decline was accompanied byweakening feed demand as larger oper-ations replaced small farms that onceraised barley for their own on-farmfeed needs. While barley has a betterbalance of amino acids than corn, thehull and its high fiber and beta-glucancontent limit its use in poultry andswine diets. A relatively cheap, plentifulcorn supply available for import fromthe Midwest helped to move barleyinto the shadows as a feed crop.

Consequently, U.S. productiondropped from a high of more than 590million bushels in the mid-1980s to 180million bushels in 2006. Lately, howev-er, production has increased as priceshave reached $5.40 to $6.40 per bushel.In fact, USDA forecasts 218 millionbushels of barley will be produced thisyear.

Virginia producers planted 28 per-cent more acres in response to lastyear’s higher prices, says WadeThomason, Virginia Tech extensionagronomist. Barley has potential as anethanol feedstock because it is a betteroption than winter wheat for doublecropping with soybeans, he explains.Barley’s early maturity allows it to beharvested a couple of weeks beforewheat in the spring. That has a signifi-cant impact on the soybean crop that’splanted after the harvest. “Plantingafter the first of May you lose one-halfbushel per day in soybean yields,”Thomason explains. The earlier barleyharvest allows for earlier soybeanplanting, which can lead to a four to 10bushel per acre increase in yields.

Additionally, barley is a low-inputcrop that requires 30 to 40 pounds ofnitrogen per acre in the fall; if neededmore nitrogen can be top-dressed in

the spring. With good management,producers are getting 130 to 140bushels per acre, although the stateaverage yield is in the mid-80 bushelsper acre, Thomason says. Averageyields are brought down by growerswho plant barley primarily as a covercrop, which requires minimal manage-ment. Depending on the stand, thefarmer may harvest it for grain before

B


Winter barley is approaching corn’s value as an

ethanol feedstock thanks to variety improvements

and new processing technology.

FEEDSTOCK

seeding the summer crop. Barley yieldsin Virginia compare with average cornyields of 120 bushels per acre and 200bushels on the top end, he adds. Cornyields are often hurt because theregion’s soils can’t hold enough mois-ture to carry it through hot summerdays when rains can’t make up for highevaporation and transpiration rates.

Breeding Better BarleyBarley breeders have made great

strides to improve the crop’s perform-ance, focusing on heavier test weightsand the development of hulless vari-eties. “We needed to make the gradefor international markets as well aslocal feed markets,” Thomasonexplains. Older varieties would oftenrespond to poor harvest weather or dryspells by producing light, 43- to 45-pound test weight grain. Test weightsfor the new hulled varieties are comingin at the mid-50s while the hulless vari-eties are approaching 60 pounds perbushel.

In breeding hulless varieties,Virginia Tech researchers address bar-ley’s limitations. The hulls, which makeup 12 percent to 15 percent of the ker-nel weight, are a non-nutritional com-ponent that make barley less desirable

in poultry or swine rations, and its highsilica content is abrasive to millingequipment. While barley is oftenhulled, or pearled, Virginia Techresearchers have developed hulless cul-tivars with a loosely attached hull thatis easily lost during harvest.

Other issues have surfaced whenconsidering barley as an ethanol feed-stock. “Barley isn’t usually thought ofas a good candidate for fuel ethanol

feedstock because it typically has anabrasive hull and a lower starch contentthan corn,” says Kevin Hicks, researchleader of ERRC’s Crop ConversionScience and Engineering ResearchUnit. “And it contains a troublesomepolysaccharide, beta-glucan, whichmakes barley mash too viscous to mix,ferment and distill economically.” Thelow-starch content in older barley vari-eties—50 percent to 55 percent com-

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Barley and Ethanol's Performance

Three barley varieties are compared in this chart, showing an earlier feed barley compared

with newer hulled and hulless varieties developed at Virginia Tech. Along with starch content

and test weight, it shows differences in beta-glucan levels and neutral detergent fiber (NDF).

SOURCE: ARS ERRC

FEEDSTOCK

pared with corn’s 72 percent—results inlower ethanol yields. The newer hullessvarieties developed at Virginia Tech,however, are achieving starch contentcloser to 60 percent.

In addition, researchers have beentrying to break down the 3 percent to 7percent beta-glucan content of barleyinto fermentable sugars. Hick’s team atERRC is collaborating with Genencor, adivision of Danisco, to developenzymes that will do the job. TheEuropeans have long used beta glu-

conase enzymes to reduce the viscosityof barley in ethanol plants, says JohnNghiem, a crop conversion scientist andchemical engineer at ERRC. The teamhas identified a second enzyme to breakdown the beta-glucan more completely,boosting ethanol yields by convertingthe problematic beta-glucan. They haveachieved ethanol yields of 2.05 gallonsper bushel using the popular hulled vari-ety called Thoroughbred, and 2.41 gal-lons per bushel using one of the hullessvarieties.

Another member of the team,Robert Moreau, an ARS lead scien-tist and chemist, is looking at value-added coproducts from barley. Whilewhole grain barley has a low 2 per-cent oil content, the fines from hul-less barley contain 10 percent oil,which when extracted have health-promoting properties contained inthe high levels of phytosterols and aform of vitamin E calledtocotrienols. “Physterols lower bloodcholesterol,” Moreau says.“Tocotrienols lower blood choles-terol and are active against sometypes of cancer.”

Converting Barley to Biofuel

Osage BioEnergy LLC hopes tobreak ground in Hopewell, Va., thismonth on its first barley-basedethanol plant. Other plants are beingdeveloped in Carlisle, S.C., and ChaseCity, Va., with a fourth location near-ly finalized. The fledgling ethanolproducer is a sister company toOsage Inc., a veteran ethanol mar-keter in the Southeast and Mid-Atlantic regions. Earlier this yearOsage BioEnergy landed a $300 mil-


Nghiem and Hicks at the ARS ERRC in

Pennsylvania have been working to improve

barley’s performance as an ethanol feedstock.

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scale test runs now,” Stone says. Feedingtrials follow next. Preliminary analysesshow the barley meal has protein con-tent between 40 percent and 45 percentand contain between 9 percent and 11percent fat. With such good numbers,the company has decided to call thecoproduct barley protein meal to differ-entiate it from the problematic wholegrain/nonenzyme treated barley dis-tillers grains.

Barley may become the feedstockof choice in the Mid-Atlantic and

California barley growing regions as ithas the potential to match corn ethanolyields, and as a winter crop it wouldn’tcompete with summer food crops. Withbreeding improvements and improvedprocess technologies, it might even get asecond look in the Northern Plainsgrowing region where barley acres havealso disappeared in recent years. EP

Susanne Retka Schill is an EthanolProducer Magazine staff writer. Reach her

at bbiinternational or (701) 738-4922.

lion equity investment from FirstReserve Corp. to help fund the con-struction of the four plants.

The 55 MMgy ethanol plantswill utilize the ethanol plant technol-ogy developed by KatzenInternational Inc., a company withextensive experience in wheat- andbarley-based ethanol plants inEurope. “The throughput rates forcorn and barley in the Katzenprocess are the same,” says OsageChief Operating Officer Joel Stone.Earlier in his career, Stone wasinvolved in developing the only otherbarley-based ethanol plant in theUnited States at Walhalla, N.D. Theplant, now owned by Archer DanielsMidland Corp., was built in the 1970sby local farmers and investors to uselocally produced barley. It closed andlater reopened as a corn ethanolplant, which is the feedstock that’scurrently used at the 28 MMgy plant.“The biggest issue is that barley ishard to grind—it eats up hammermills,” Stone says. “And, like oats, ithas high levels of beta-glucan, whichcreates extremely high viscosity lev-els when heated.” In addition, whenusing whole-grain barley, the dis-tillers grains are sold at a deep dis-count to corn distillers grainsbecause the hull and high fiber sendthe protein content down to 20 per-cent.

Somewhat analogous to frac-tionating corn before processing,Stone says Osage plans to dehull thebarley before processing. “Withdehulling we end up with a barleyprotein meal that has a valuebetween corn gluten meal and soy-bean meal,” he says. “It’s actuallycloser to soybean meal in its aminoacids.”

Osage will use the enzyme treat-ment developed by ERRC andGenencor to further improve thequality of the barley ethanol coprod-uct. “We are in the middle of large-

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CELLULOSE


BUILDING BETTER ENERGY CROPSSeeds will play a vital role in the advancement of the crops needed to produce

second-generation biofuels. EPM talks to Ceres Inc., a seed plant genomics firm,

about its now widely available commercial energy crop seed and the switchgrass

seed it is offering for the 2009 planting season.

By Kris Bevill

CELLULOSE


eferring to his slender 6-feet-6-inch frame, Ceres Inc. Presidentand Chief Executive Officer Richard Hamilton says that hepersonifies two of the traits his research team would like toperfect in switchgrass and other energy crops. The taller and

skinnier each plant is, the more yield farmers will be able to coax out ofevery acre. So short plants beware—if Hamilton and his staff have theirway those plants’ days are numbered.

That’s the gist of genetic engineering. Got floppy plants? Make them

more rigid. Need them taller, shorter, greener, disease or drought-resistant?No problem. Well, it’s not quite that easy. However, when listening toHamilton talk about the work of the 120 employees at Ceres’ laboratory inThousand Oaks, Calif., it’s all in a day’s work. Researchers in the Los Angelessuburb spend their time examining specimens and altering genes with thegoal of making significant changes to the way crops grow and respond toenvironmental factors so that farmers can grow more productive crops—and in turn provide the world with more efficient, cost-effective fuel.

R

CELLULOSE

During a tour of the laboratory, Hamiltonexplains that by applying the same technologyused in the Human Genome Project, Ceresresearchers have sequenced more than 70,000plant genes since the company was founded in1997. New technology continues to speed theprocess of gene sequencing, allowing for ever-increasing numbers of genes to be sequenced ona daily basis. Gary Koppenjan, Ceres corporatecommunications manager, says there aremachines available today that can sequence 1 mil-lion base pairs per day, compared with the 1,000base pairs per week that Hamilton was able tosequence as a graduate student two decades ago.That means ethanol producers have a betterchance of one day having a constant supply ofthe perfect energy crop. Hamilton says that theperfect crop has optimized architecture (the talland skinny part), and is a deep-rooted perennialthat is easily propagated. He’s confident Ceres isclose to producing seed for the perfect energycrop.

Ceres’ modified Human Genome Projectprocess begins when researchers sequence theplant DNA. After discovering the plant’s genesand their functions, scientists can then determinethe gene’s potential use. Improvements can thenbe made to the plants genetic make-up—onegene at a time. It’s a painstaking process, but“we’re scientists,” Hamilton says. “We like to con-trol everything.” Since 1997, Ceres researchershave discovered genes that boost biomass yields,reduce nitrogen applications and increase toler-ance to drought, cold and salt. The companyowns exclusive rights to more than 40 U.S. and


Hamilton is pictured next to a stand of mature

switchgrass at the company’s greenhouse in Thousand

Oaks, Calif.

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foreign patents and has applications pend-ing for hundreds more patents.

Focus on EnergyA healthy international debate has

been waged for some time now concern-ing the use of genetically modified crops.Hamilton is not bothered by skepticsbecause he believes the public can draw adistinction between modified plants thatare grown for food and those that aregrown for fuel. When confronted withthat skepticism, Hamilton argues that genemodification is necessary. No agriculture isnatural, he says. It’s a uniquely humanactivity that has been under developmentfor only the past 10,000 years. Consideringthat land plants first appeared 400 millionyears ago, Hamilton makes his point thatagriculture is a recent phenomenon thatshould be continually improved.

At Ceres the focus is on energy , butthat's not to say the company has neverworked with traditional row crops. In thebeginning, researchers at Ceres workedwith more traditional crops such as cornand soybeans and served as a gene andtrait provider for traditional row crop seedcompanies. But Ceres’ specialty has alwaysbeen developing technology, Koppenjansays. The focus of that work has shiftedtoward the development of seed for ener-gy crops. “We’ve always been more of thetechnology development platform com-pany,” Koppenjan says. “Now we’re taking

that same technology and applying it tocrops that historically haven’t received a lotof plant breeding and technology.”Switchgrass, miscanthus and sorghum arethe energy crops that Ceres’ researchersbelieve have the most potential and are thefocus of current studies.

The advancements made by Ceres’researchers will contribute greatly to theadvancement of energy crops and second-generation biofuels. Hamilton’s resolutionand commitment to the matter is clearwhen he speaks about the future of biofu-els in the United States. He compares theestablishment of cellulosic biorefineries tothe flat-screen TV market. “The first feware going to be very expensive, but the keyis to get the first few built so we can workto drive down the cost,” he says. If com-paring biorefineries to televisions, then asteady supply of feedstock would be theelectricity needed to turn them on.

What Comes First?The balancing act between creating a

new feedstock supply and building a newbiorefinery poses the “chicken and egg”question. Which comes first? Ceresemploys the philosophy that “seed in theground” and “steel in the ground” happensimultaneously. According to its plan,identifying the location for a cellulosicethanol production facility and feedstockshould be done in conjunction. The firstyear of a plant’s existence will consist of

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Ceres stores tens of thousands of seeds for experimental plants.

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�Continued on page 91

CELLULOSE

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Collaboration and CompetitionThe advancement of the cellulosic ethanol industry will

require the work of many organizations and researchers, as

will the development of feedstock to produce the fuel. Ceres

has a long list of collaborators, including the Chinese

Academy of Ag Sciences, the National Renewable Energy

Laboratory and the USDA. Below are details about two of

Ceres’ most notable multiyear collaborations.

�ICM Inc.: As part of this collaboration, announced inearly February, Ceres will provide seed to area farmers who

will then sow thousands of acres of switchgrass and other

energy crops over the next three years at ICM’s St. Joseph,

Mo., biorefinery. The plant will be a demonstration-scale

facility designed to test the crops’ conversion efficiency, fuel

yield and economic viability.

�Samuel R. Noble Foundation Inc.: Established in2006, this long-term collaboration was designed to develop

and commercialize new biomass feedstock crops. As part of

the agreement, Ceres has access to switchgrass varieties

developed by breeders at the Noble Foundation.

Ceres isn't the only company developing cellulosic

feedstocks, other U.S. companies are also involved in the

advancement of energy crops nationwide.

�Mendel Biotechnology Inc.: Mendel is Ceres’ clos-est competitor. The Hayward, Calif.-based company is also

working toward the production of energy crops, but is focus-

ing its efforts on miscanthus and sorghum. Company

President Neal Gutterson says he thinks the two crops will

make an excellent package to offer farmers and refineries in

the future. “We have identified our first seed and clone prod-

ucts of miscanthus and those are in an experimental prod-

uct development phase,” he tells EPM. Product trials are

being conducted on those specimens throughout the

Midwest. Gutterson sees energy crop seed production as a

long-term game and projects the market for those products

won’t really develop for the next three to five years. “Early

to the middle of the next decade we see an increased

demand for the product and we’re preparing our miscanthus

products to be able to deliver when the market begins to

grow significantly,” he says. Sorghum seeds could be avail-

able next year, but Gutterson doesn’t see the demand for it.

Mendel will market its seeds under the BioEnergy

Seeds brand, and plans to begin making its products avail-

able early next decade. More information about Mendel

Biotechnology can be found at www.mendelbio.com.

�Monsanto Co.: The giant of the genetic agricultureworld, Monsanto has produced cotton, corn, oilseed and

vegetable seeds for years. According to the company,

Monsanto is committed to broadly licensing its technology

to other companies around the world and providing farmers

with seeds that are genetically superior with unique biotech-

nology traits. More information about Monsanto can be

found at www.monsanto.com

CELLULOSE

the construction of the facility, whilethe growers are establishing the peren-nial feedstock. Year two will be the start-up. The plant will run start-up phaseswhile the growers harvest the first yearof feedstock, which will amount toapproximately 50 percent of the crop’spotential. By year three, the operationshould be up and running on both ends.The biorefinery will be able to reach itsfull capacity and growers will be able toharvest the top yields available fromtheir crops. That’s the plan anyway.

Questions remain on both sides ofthe cellulosic production chain.Biorefineries want to be reassured thatample feedstock supplies will be avail-able. Farmers want a signed contract tosupply a business with the crop beforethey invest their efforts and bankrollinto planting and harvesting.

One possible solution to the stand-off could be the Biomass CropAssistance Program. This new programis part of the Food, Conservation andEnergy Act of 2008, more commonlyreferred to as the Farm Bill. The pro-gram aids in the establishment and pro-duction of crops that will be used toproduce energy. After the producer’spotential BCAP project area has beenapproved, funding will be provided tothe producer on an annual basis and willcover up to 75 percent of the cost ofestablishing a perennial crop, includingthe cost of seeds and planting. BCAPcontracts will be valid for five years forperennial and annual crops, and 15 yearsfor woody biomass. However paymentsto the grower will be reduced once theproducer begins delivering crop to abiorefinery, or uses the crop for any-thing other than energy production.

Koppenjan says BCAP could cer-tainly help Ceres’ business and the saleof its seeds. At press time, the companywas preparing to debut its Blade EnergyCrops seed business. Koppenjan saysCeres expects to sell its energy cropseeds to growers who “want to getahead of the curve” as well as to biore-fineries interested in testing the prod-

uct. The company is offering five seed vari-etals of switchgrass this fall so that cropscan be planted during the 2009 growing sea-son. The EG 1101 and EG 1102 varietalshave been bred to prosper in lowlandranges, while the Blackwell and Trailblazervarietals are intended for the southernupland range. One varietal, Sunburst, is awinter hardy switchgrass seed that wasdesigned for the northern Great Plainsregion. In addition to providing seed, Ceresplans to establish a grower’s guide to assistits customers as they establish these new

crops. It will take two years for switchgrassstands to become fully mature, butHamilton says they do expect some com-mercial harvest to occur in the fall of 2009.At press time, a selling price for the seed hadnot been established. EP

Kris Bevill is an Ethanol ProducerMagazine staff writer. Reach her at kbevill

@bbiinternational.com or (701) 373-8044.

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ENZYMES


PHOTO: NOVOZYMES

Novozymes' Fuel From Grain Discovery group researches first-generation biofuels. The researchers pictured are, left to right, Katie

Mevs, research associate; Guilermo Coward-Kelly, senior scientist; Joyce Craig, senior scientist; Jim Liu, staff scientist I; Chee L. Soong,

senior scientist; Daniel Weed, scientist; Anne Glud Hjulmand, senior manager; Darnell Bailey, research associate; Randy Deinhammer,

staff scientist II; John Mathews, associate scientist; James Palmer, research associate; and Jeremy Saunters, research associate.

ENZYMES


Two enzyme companies, Novozymes and Genencor, have made plans to branch out

into the Midwest to better serve their ethanol producing customers in the Corn Belt.

By Suzanne H. Schmidt

If You Build it …

ENZYMES

eing situated in the heart ofthe U.S. corn and ethanolproduction region has itsadvantages. The communi-

ties of Blair, Neb., and Cedar Rapids,Iowa, have attracted the attention oftwo of the world leaders in enzymeproduction. Novozymes choseNebraska for its newest productionsite and Genencor, a division ofDanisco, is expanding its educationalbase in Iowa with the building of anApplications and Training Center ofExcellence. These companies are pro-ducing easily assessable products fortheir customers in the Midwest andNorth America. While each company’sfocus is unique, both are important forthe future of ethanol production.

Novozymes’ decision to build afacility in the Midwest was based onseveral factors, first and foremostbeing logistics. Railways and mainroads are in close proximity to itsbuilding site in Blair. Transportationcosts vary by shipping location, “butit’s one of the key reasons we chose toput our next factory in the Midwest, tominimize transportation costs,” saysPoul. Ruben Andersen, global directorof biofuels for Novozymes. The mar-ket for this facility will generally befocused on North American ethanolproducers, “but we do export enzymesacross the world,” Andersen adds.

The enzymes used to produce fuelethanol are usually shipped in liquidform, which is the cheapest and sim-plest option. Once produced, the liq-uid enzymes are loaded into trucks andtankers. These loads can weigh up to20 tons and are generally moved bytrains or trucks. The enzymes can besent by airplane, but typically aren’tbecause of the cost.

The enzymes need to be handledproperly as they generally have a yearshelf life at room temperature“Enzymes are biological, just like milkor beer or any other biological materi-

al,” Andersen says. Depending on thepreparation of the enzymes, somemust be kept at about 41 degreesFahrenheit.

Novozymes also had to considerthe terrain, water supply, travel routesand what it would do with the effluentstream, which must be purified bybiological rinsing to break down theremaining nutrients in the processwastewater, Andersen says. “The endproduct of the effluent stream is a fer-tilizer that’s used in fields in the UnitedStates, Denmark and China,” he says.Although the exact method of distrib-uting the waste product is still beingdetermined for the Nebraska site,Andersen expects it will be a pipelinesystem. “We have a pipeline in at ourDenmark facility and at our enzymefacility in North Carolina,” Andersenexplains.

Novozymes searched the globefor an ideal location for its newestplant before settling on Blair, a com-munity of about 7,512 residents. Theenzyme company considered SouthAmerica and China for a productionsite before deciding to build in theUnited States, where a majority of itscustomer base is located. But thenthere was the question of where tobuild in the United States. “We werelooking in the Corn Belt states,” says


B

Novozymes expects to hire nearly 100 employees

upon completion of its new enzyme production

facility in Nebraska.

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Peder Holk Nielson, executive vicepresident and head of Novozymesbusiness.

Novozymes found that Nebraskahas the resources it needs. “Energy atthe right price was essential and incen-tives by the state had a role to play heretoo,” Nielson says. The community hasalso shown support for the project.“We approved $800,000 of our eco-nomic development funds to helpNovozymes make the decision tolocate here, so from a communitystandpoint we have been very positiveand very supportive of the wholeindustry,” says Rodney Storm, Blair cityadministrator. The facility has thepotential to be an economic boom forthe community. “The impact on Blairwill be significant as an investment injob creation, and it puts us in a betterposition to be more competitive inglobal energy projects,” says RichardBaier, the director of the NebraskaDepartment of EconomicDevelopment. “We were able to securea site for [Novozymes] adjacent to theBlair Biorefinery Campus, and it’s agood fit.” Although Blair is a smallcommunity, it is about 25 miles fromthe Omaha metropolitan area, whichwill help meet the need for high-techworkers. Beyond these benefits,Novozymes has a relationship with

Cargill Inc.’s ethanol plant in Blair. “Ithink that the state put together a greatincentive package and we showed themwe sure wanted them here inNebraska,” Baier adds.

The enzyme production facilitywill be built on 30 acres of Nebraskaplains. The new facility will cost $80million to $100 million dollars.Novozymes expects to break ground inlate 2008 and have enzymes ready foruse in 2010.

The facility will initially focus onsupplying enzymes for the corn-basedethanol industry and for cellulosicethanol start-ups. The main concernnow is whether the cellulosic ethanoldemonstration plants will be ready forthose enzymes in 2010. “It may bemore like 2011, but we will be supply-ing these demonstration plants,”Nielson says. “This new plant will havethe infrastructure to continue growingthe cellulosic ethanol enzymes businessinto the next decade.” The facility isspecially designed and can adapt tochanges in science and technology.“The way we look at it is initially wecan bridge over into Blair with ourplant and depending how the technolo-gies pan out we can build many differ-ent kinds of technologies in the 2011to 2012 timeline,” Nielson says.

Novozymes says its investment in

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97

Novozymes chose this site in Blair, Neb., for its new enzyme production facility because of its proximity to

the Corn Belt.

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the Midwest is not just about producing a product, it’s a com-mitment to the people, the industry and the area. “In moreregional terms, we will also want to be a part of creating jobsin ethanol,” Nielson says. Novozymes initially expects to hire100 employees.

The Novozymes enzyme production facility brings a tech-nological edge to Blair. “I think it’s a wonderful example ofhow you may think it’s a little area, but next thing you know,they have a high tech company moving in and it actually is avery competitive area,” Nielson says.

The size of the facility and the investment leave no doubtabout Novozymes’ commitment to the ethanol industry andits North American customers. “We do this as a long-terminvestment,” Nielsen says. “This plant will sit there for thenext 50 years, so take this as a commitment to a long-termdevelopment of bioenergy and biofuels in the Midwest.”

Tip-Top Training in Cedar RapidsNovozymes is not the lone enzyme producer moving to

the Midwest. Genencor is expanding its facilities, but it is tak-ing the educational route by building a 20,000-square-footApplications and Training Center of Excellence. Genencorrecently broke ground on its $4.6 million facility in CedarRapids, which will provide state-of-the-art training for ethanolproducers and carbohydrate processing customers. The facili-ty is expected to be complete by the spring of 2009.

“Genencor has been focused on meeting the needs of thegrain processing enzyme market since its inception,” says TroyWilson, vice president and business unit manager ofGenencor’s global grain processing business unit. “That led usto locate our principal manufacturing and applications labora-

These images illustrate the layout, above, and the expansion

potential, below, of the new enzyme production plant in Blair, Neb.

The facility is designed to allow Novozymes to have flexibility to

adapt to cellulosic ethanol technology changes. The image below

shows the potential growth of the plant.

SOURCE: NOVOZYMES


ENZYMES

the media regarding the use of food toproduce fuel. Both companies say thatdespite these challenges, they are com-mitted to their customers and develop-ments in the Midwest.

The enzyme maker is also a welcomeaddition to the Cedar Rapids community.“Genencor’s decision to locate its newCenter of Excellence in Cedar Rapids is aclear sign that we have made some gooddecisions in the growth and developmentof our community,” Cedar Rapids Mayor

Kay Halloran said in a press release.“Genencor has been a part of thatgrowth and development, by providinghighly skilled jobs to our residents andserving as a community leader. We arevery excited to see Genencor continue togrow in Cedar Rapids.” EP

Suzanne H. Schmidt is an Ethanol ProducerMagazine staff writer. Reach her at


4972.

tories in the Midwest beginning inthe 1980s. In the past five years,we've invested over $50 million incapacity expansions to keep pacewith the rapid expansion of the fuelethanol industry, building the Centerof Excellence is the natural nextstep.”

The Center of Excellenceenhances Genencor’s service to itscustomers who produce fuel alcoholand sweeteners. The training centerwill consist of “a laboratory, pilotplant, training classrooms and addi-tional office space,” Wilson says. “Itwill house the applications develop-ment and technical service team.”Nearly 20 experts will be on hand toprovide assistance to customers.

The facility will have two mainsections for applications develop-ment and technical service.Applications development uses inno-vation to meet customers’ needs.Technical service addresses specificcustomer questions. Some questionsthat will be addressed at the educa-tion center are to determine the phy-tate content in distillers dried grainswith solubles and how fermentorsolids correlate with yield. “Our cus-tomers look to us to answer ques-tions about alternative feedstocks,”Wilson says. “The facility will allowus to collaborate in answering thesequestions. It will also enable cus-tomers to continue their profession-al development.”

The training center will be avail-able for ethanol plant staff to receiveextensive instruction. “We will con-duct initial and ongoing training ses-sions for plant personnel includingoperators, lab personnel and man-agement,” Wilson says. This willcombine classroom presentationswith hands-on work in the applica-tions and analytical laboratories.”

The ethanol industry has facedsome challenges in the form of highfeedstock costs and criticism from

General Managers

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Grain MerchandisersCommodity Specialists

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TRANSPORTATION

PHOTO: SAFE HANDLING INC.

Rail-to-Truck ETHANOL TERMINALS


Large rail terminals that can handle ethanol unit trains are poised to be an integral part of transporting the fuel in the

future. The ability to quickly and inexpensively move ethanol long distances becomes more important as our renewable

fuel consumption increases. Several companies have recognized this opportunity and are adding ethanol capacity.

By Erin Voegele

TRANSPORTATION


he ability to economically and efficiently shipethanol long distances is expected to be the keyelement in the successful implementation ofthe renewable fuels standard (RFS) created by

the Energy Independence & Security Act of 2007. TheRFS calls for ethanol consumption to increase from 9 bil-lion gallons this year to 36 billion gallons in 2022. At thoselevels, consumption must increase approximately 400 per-cent in less than 15 years.

Much of that ethanol will likely continue to be pro-duced in the Midwest, with the heaviest demand remainingconcentrated along the East and West coasts. Proper trans-portation infrastructure will be crucial to delivering ethanolto these markets outside the Midwest. A significant portionof this transportation will likely take place by rail.However, railcars and tracks aren't the only infrastructureneeded for rail transportation. Ethanol transloading termi-nals at both the destination markets and point of origin areessential to providing quick, efficient and economic railtransportation. As ethanol shipments continue to increase,large terminals capable of handling unit trains are expect-ed to be a necessary component to effectively serve keymarkets.

According to John Schmitter, a rail transportation con-sultant who is involved in the biofuels industry, approxi-mately 70 percent of U.S. ethanol production is currentlyshipped by rail. This level is expected to remain relativelystable as the industry moves forward. Although, there hasbeen some concern over the railroad’s future capacity, andits ability to handle increased ethanol shipments, Schmittersays it is important to put the amount of projected ethanolshipments into perspective. Even as ethanol productionand shipments continue to increase, ethanol will barelyconstitute 1 percent of total rail volume, and railroads willhave plenty of capacity to handle that.

However, rail capacity is only one element of efficientrail transportation. The ability to ship unit trains ofethanol, as opposed to single manifest cars, is important toensuring quick and affordable ethanol shipments. RobertWhite, the Ethanol Promotion and Information Council’sdeputy director, explains the importance of large ethanoltransloading terminals. “The continued involvement of

T

TRANSPORTATION

those larger facilities that can handlemultiple cars—or, in fact, a unit train—will ultimately lower [freight prices]because the more people who have totouch the fuel—the more times it hasto be touched—the more money willbe spent on freight,” White says. Everypenny saved on shipping is a pennythat can be passed on to the consumerin the form of lower prices.Transportation will continue to be animportant aspect of consumer accept-ance because of its impact on the priceat the pump, he says.

Although no comprehensive list ofcurrent ethanol rail terminals is knownto exist, Schmitter says that approxi-mately nine U.S. rail terminals can cur-rently handle a unit train of ethanol,with nearly eight more in various stagesof planning and development.

Terminals in OperationSafe Handling Inc., a bulk product

transportation and toll processing

company, operates two rail terminals.One is in Mount Pleasant, Pa., approx-imately 45 miles southeast ofPittsburgh. The other is in Auburn,Maine. Both terminals have the capaci-ty to transload ethanol. “We are nothanding unit trains,” says Andy Meyer,Safe Handling’s vice president of sus-tainability. “The market we are in does-n’t need unit trains, so they are notunit-train terminals.” Although Meyerdoesn’t classify the terminals as unit-train terminals, the Pennsylvania loca-tion can handle 145 railcars, while theMaine location has capacity for 210.

Each of Safe Handling’s terminalscan transload 180,000 gallons of fuelper day. The company is in the processof doubling the Pennsylvania termi-nal’s capacity. “Pennsylvania has been agiant success for us,” Meyer says. “Weare scrambling to keep up withdemand. We are in the process of dou-bling our capacity, and that is alreadysold out.”

Meyer says the decision to handleethanol was a natural extension of thecompany’s business. Safe Handlingalready had the rail space, fire suppres-sion, containment, trained staff andutilities. Although ethanol represents arelatively small portion of the productsSafe Handling transloads, the companyis expecting demand and shipments to

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Ethanol is transloaded from rail to truck at Safe

Handling’s Pennsylvania location.

TRANSPORTATION

grow. “It has been a great business forus,” he says. “We are pleased with thebusiness, and it has allowed us to createjobs.”

Although Safe Handling’s termi-nals do not offer barge access, Meyersays be believes most ethanol rail ter-minals currently handling unit trains ofethanol are located on marine termi-nals that can fill barges. He says thatthe markets served by Safe Handling’sterminals don’t require unit trains orbarges of the product because peoplesimply aren’t using that much ethanolright now.

Several other companies are work-ing to add ethanol capability to theirterminals. U.S. Development GroupLLC currently operates four rail termi-nals in Houston, Dallas/Fort Worth,Texas, Baltimore, and Linden, N.J. Allfour locations have the capability totransload unit trains of ethanol.According to Meg Martin, a U.SDevelopment Group spokesperson,

the company’s experience handlingethanol has allowed their business togrow. The company expects to addadditional ethanol capacity in thefuture.

Kinder Morgan Energy ProductsL.P., one of the nation’s largest pipelinetransporters and terminal operators,operates approximately 68 rail termi-nals. Currently, only one terminal has

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U.S. Development’s Dallas/Ft. Worth location has the capacity to transload unit trains of ethanol.

TRANSPORTATION

the capability to transload a unit trainof ethanol. That terminal is in Lomita,Calif., and has been in operation formore than two years. According toJohn Mahon, Kinder Morgan’s directorof business development for renew-able fuels, the company expects to addethanol capacity to additional rail ter-minals in the future.

Alternatively, Iowa-based ManlyTerminal LLC is serving the producer,Midwest-based side of the market.Located within 300 miles of where 50percent of our nation’s ethanol is cur-rently produced, and within 100 milesof a billion gallons of annual produc-tion, Manly Terminal is positioningitself to be an integral element of out-going ethanol shipments. Although theterminal’s primary business currently issingle manifest cars, the companyexpects unit-train shipments ofethanol to increase in the future.

“We have the capability to buildunit trains with multiple customers’

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Manly Terminal has the ability to build unit trains of ethanol with multiple customers’ railcars.

TRANSPORTATION

cars in that unit,” says Lee Kiewiet,Manly Terminal’s president. This canbe highly beneficial to smaller produc-ers. By consolidating the volumes ofseveral small producers into one unit-train shipment, those producers canoften get a much better price on logis-tics and car turns.

The company is in the process oflaunching a trading platform that willallow Manly Terminal users to buy andsell ethanol in order to complete unit-train shipments. For example, if a pro-ducer needs 20 cars to fill out a unittrain, that producer can place a bid onthe gallons needed to fill out the unit.“We believe that with the addition ofthis trading floor, it is really going toincrease our flows,” Kiewiet says.

Moving AheadAlthough railroads will be able to

accommodate increased ethanol ship-ments in the future, overall rail capaci-ty will be constrained, Schmitter says.

Ethanol shippers will have all thecapacity they are willing to pay for asrailroads are private businesses thathave the ultimate mandate of makingmoney. “Ethanol is good business forthem, and as long as it remains so,they’ll handle it,” Schmitter says.

As White notes, the opening ofethanol rail terminals obviously pro-vides more opportunity, but doesn’tnecessarily translate into increasedethanol usage; at least not immediately.“I think that as we move forward andmore product becomes available … wewill need those high-volume opportu-nities to unload at fuel destinations,”White says. “For products we areinvolved with, especially on marketdevelopment, where we are looking notonly at E85, but also midlevel blendsbetween E10 and E85, we need to havethat volume and we need to have it atan economic price.”

While investments in infrastruc-ture such as ethanol rail terminals may

not be imperative to serving most oftoday’s markets, those in the trans-portation industry seem to be recog-nizing the potential need for thesetypes of facilities. Having the properinfrastructure in place is a preconditionto increased ethanol usage in thefuture. These facilities become evenmore important as ethanol use increas-es due to the RFS—and the likelihoodthat a midlevel blend will beapproved—and should help regionalmarkets adapt and ensure that produc-ers have a ready market for ethanolproducts. EP

Erin Voegele is an Ethanol ProducerMagazine staff writer. Reach her at

[email protected] or (701)

373-8040.

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SAFETY


Transporting ethanol safely via rail begins at the ethanol plant or terminal.

Story and Photos By Ryan C. Christiansen

SAFETY


SAFETY

n many cases, only the six or eightsteel bolts that tighten the manwaycover on a general service tank carstand between an ethanol producer

with a perfect rail shipper safety record andthe producer with a nonaccidental release(NAR) of ethanol on his hands. When anethanol producer releases a tank car to therailroad, as the shipper, the producer isresponsible for any NARs during ship-ment.

The Association of AmericanRailroads defines a hazardous materialsNAR as “the unintentional release of ahazardous material while in transportation(including loading and unloading) anddoesn’t involve an accident,” including“leaks, splashes, and other releases fromimproperly secured or defective valves, fit-tings, and tank shells, and also includesventing of non-atmospheric gases fromsafety relief devices.”

According to the AAR, the vastmajority of reported NARs involve smallquantities of a product. However, asethanol rail shipments continue to increase,so do NARs, prompting ethanol producersand rail companies to work together toreverse the trend.

Ethanol Traffic IncreasingAcross the board, Class I rail carriers

in the United States and Canada are report-

ing that the upward trend in ethanol pro-duction and consumption has been a sig-nificant contributing factor to the overallincrease in rail shipments of agriculturalproducts from the Midwest to coastal des-tinations, especially to the Eastern UnitedStates.

According to the AAR, 85 percent ofethanol is shipped from the Midwest statesof Illinois, Nebraska, Iowa, South Dakota,and Minnesota. Norfolk Southern Corp.reported moving more than a billion gal-lons of ethanol from plants west of the

Mississippi to eastern destinations in 2007.Burlington Northern Santa Fe

Railway earned a record $2.7 billion dollarsin 2007 for shipping agricultural products.The railroad said that overall, shipments inthe category increased by 6 percent, whichincluded record levels of ethanol.

According to the AAR, railcar loads ofethanol in the United States increased frommore than 25,000 in 2001 to almost150,000 in 2007. The Federal RailroadAdministration said that as of 2006, therewere a total of 275,000 tank cars on therails capable of hauling ethanol. Accordingto American Railcar Industries, a tank carthat is designed to carry ethanol can costbetween $80,000 and $90,000.

Ethanol rail traffic is expected to con-tinue to rise. According to the RenewableFuels Association, the U.S. ethanol industryhas 134 plants in 26 states that produced6.5 billion gallons in 2007. The currentoverall capacity is 7.2 billion gallons.Meanwhile, 77 plants with a capacity of 6.2billion gallons are under construction.

Investing in InfrastructureTo handle the increasing traffic, rail

companies are investing more in infrastruc-ture. Overall Class I railroad spendingincreased to an estimated $9.4 billion in2007, up from $5.7 billion in 2002, accord-ing to the AAR. Union Pacific Corp.,

I


Students examine the many styles of top valve

arrangements atop the GATX TankTrainer tank car.

SAFETY

which links 23 states in the western two-thirds of the country, reported investingmore than $1 billion in its overall railroadinfrastructure, including the parts of itsnetwork that serve the ethanol-producingstates of Iowa, Minnesota, and Nebraska.The company has dedicated part of itsworkforce to assisting ethanol producerswith choosing locations for new ethanolplants and in developing the necessary railinfrastructure for those plants.

Ethanol Tops for NARsIf you were trainspotting somewhere

near the nexus of Minnesota, Iowa,Nebraska and South Dakota, you mightthink that the locomotives there were haul-ing primarily tank cars filled with ethanoland covered hoppers filled with corn ordistillers grains. But to put things in per-spective, ethanol comprises less than one-half of 1 percent of total rail traffic in theUnited States, according to the AAR.Despite this low profile, however, the ship-ment of ethanol in railcars continues toloom large on hazardous materials safetydata charts.

Before shipping, ethanol is denaturedwith 2 percent to 5 percent natural gaso-line to render the product undrinkable.According to the U.S. Department ofTransportation Hazardous MaterialsRegulations, the shipping name for this

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Loading Racks Increase Safety

Because tank cars have top railings that are only 28 to 32 inches high, the use

of a harness, lanyard, and cable or a loading rack are recommended when someone

is working on top of the car. It can be suggested, however, that such safety equip-

ment should be required.

“If you stand up and take a ruler or tape measure and put it on the floor behind

you and then raise it up to [the height of a tank car’s top railing], you'll see that,

regardless of how tall you are, it's right around your knee or maybe a little taller,” said

Michael Kenan, technical specialist for SafeRack Inc. in Sumter, S.C. “Would you

want to be on top of that tank car without any fall protection or access?”

Ethanol is a fluid that requires loading and unloading operators to routinely climb

atop tank cars. Kenan said OSHA’s general duty clause requires operators to have

fall protection. The top railing on a tank car is not enough, he said.

“A lot of this equipment is up north in the wind and ice,” Kenan said. “If you slip

and you're falling backwards, [the top railing] is actually going to provide a pivot point

for you to fall. It's not going to give you any safety.”

Kenan said using a lanyard, bottom harness and cable will help prevent some-

one from hitting the ground during a fall, “But really,” he said, “that’s just fall restraint,

and we sell those products, too, but what you really want is fall protection,” such as

loading racks with gangways, platforms, handrails, and mid-rails. “If you’re using

tools, you can walk out there carrying the tools instead of having to climb up a lad-

der with a wrench stuck in your mouth,” he said.

Another reason you don’t want to depend on using a harness, lanyard, and

cable for safety around ethanol is because ethanol is flammable, Kenan said. “If you

catch on fire or if there is a fire at the site and there is a possibility of that tank explod-

ing, you don't want to have to stop and unhook yourself from anything,” he said.

“You're going to be running as fast as your little legs will carry you. You're going to

want to have access and fall protection that will offer safe egress.”

Kenan said providing loading racks for workers will not make an ethanol produc-

er more money, but it will pay off in safer, happier workers and might prevent poten-

tial losses due to personal injury claims.

SAFETY

mixture is “Alcohols, N.O.S.,” meaning“alcohols, not otherwise specified.”Alcohols, N.O.S. was the top commodityfor cumulative NARs from 2005 to 2007.

There were 186 NARs for Alcohols,N.O.S. during the past three years, up from126 during 2003 through 2005 whenAlcohols, N.O.S. ranked third overall. Therise in NARs for Alcohols, N.O.S. is a“trend of interest,” according to the AAR.The trend for Alcohols, N.O.S. is concern-ing at a time when the total number ofNARs for all commodities is trendingdownward. There has been a 46 percentreduction in overall NARs for all com-modities since 1996 and the total numberof NARs each year leveled off at about 700in 2004.

Unfortunately, there isn’t just one badapple spoiling the whole barrel. In 2007, 35individual shippers had one NAR and 11had multiple NARs. However, while theindustry as a whole is taking a step back,some ethanol producers have been recog-nized for their rail safety practices. Forexample, BNSF’s Annual ProductStewardship Award recognizes companiesfor the safe transportation of hazardousmaterials by rail. The ethanol producerswho were recognized by BNSF for 2007included Abengoa Bioenergy Trading U.S.LLC, AGP Corn Process Inc., ArcherDaniels Midland Co., Big River Resources

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Automated Rail Safety Systems

General service tank cars have specialized equipment to ensure the safe ship-

ment of product. Spray-on linings protect the seven-sixteenths-of-an-inch carbon-

steel tank and the product from one another. The cars are tested to withstand 500

pounds-per-square-inch of pressure. Double-shelf couplers prevent the cars from

becoming disconnected vertically while traveling.

After a loaded tank car is sent on its way, the railroad uses manual safety checks

and automated systems to be sure that product is transported safely.

�Hunting Trucks: The stub still under-frame of a general service tank carincludes two trucks, one at each end of the car. The trucks are equipped with draft

components for coupling cars, and the car’s wheels, axles and brakes. The parts of

a truck fit together like a jigsaw puzzle, which helps the truck to adjust to turns and

grades and prevent derailment. The weight of the tank car keeps the trucks together.

The excessive side-to-side motion of a truck on a rail car is called hunting.

According to Salient Systems Inc., hunting trucks contribute to the wear of rails and

rail cars and increase fuel consumption. Severely damaged trucks can cause derail-

ments. Railroads use Salient’s Hunting Truck Detector to identify trucks that exhibit

excessive side-to-side motion so that the trucks can be repaired or replaced.

�High-Impacting Wheels: Hand brakes that are set when a train is in motioncan cause flat spots on the wheels of a truck. According to Salient, wheels with

spalling, shelling, slid flat, or out-of-round characteristics impart excessive impact

loads on rails. High-impacting wheels can dissipate the horsepower of a train,

degrade the tracks, and reduce the life of wheel bearings and other car components.

Ultimately, faulty wheels can cause derailments.

Salient’s wheel impact load detector uses a series of strain gage load circuits

that are welded directly to the neutral axis of a rail to continually monitor and meas-

ure the vertical forces that are exerted by each wheel of a passing train. Wheels that

need repair or replacement are reported to the railroad.

�Faulty Bearings: If a bearing seal is blown and grease is lost, bearings canbecome hot and cracked. According to Vipac Engineers and Scientists Ltd. the derail-

ment of trains caused by wheel bearing faults is a significant issue in the rail trans-

port industry. There are more than 2,500 bearings on a typical 320-car train and the

failure of just one bearing poses a safety risk.

Vipac’s RailBAM rail bearing acoustic monitoring system listens to wheel bear-

ings as rail cars roll by and provide railroads with advanced warning of bearing fail-

ures so that they can be repaired or replaced.


LLC, Chief Ethanol Fuels Inc., ChippewaValley Ethanol Co., Glacial Lakes EnergyLLC, Husker Ag LLC, KAAPA EthanolLLC, Nebraska Energy LLC, Poet EthanolProducts, Red Tail Energy, StandardEthanol, Trenton Agri Products LLC andVeraSun Energy Corp.

Loose Bolts to BlameThe manway cover on a general serv-

ice tank car is primarily opened during load-ing and again to vent the tank duringunloading, according to an AAR survey.Shippers use the visual gauge at the man-way as the primary instrument for detectingthe liquid level in the tank. There is a safetyvalve that will relieve internal pressure fromthe tank during shipment or in the unlikelyevent of a fire. Safety valves are typicallymounted to a stand-alone safety valve noz-zle, although they may be mounted to thefittings cover plate, as well. In 2007, the topspecific cause for NARs for general servicetank cars in ethanol service was loose man-way cover bolts. Loose bottom-outlet valvecaps, misapplied liquid product valve plugsand open liquid product valves were alsosignificant contributors.

When tightening manway cover bolts,it is recommended that a star pattern isused and to make multiple passes throughthe bolts, increasing the torque with eachpass until the desired torque is achieved. It

is important to apply the recommendedtorque for each specific application and touse a torque wrench when doing so. Theamount of torque required varies with thetype and size of gasket being used, the sizeand number of bolts, and whether the boltsare lubricated or dry. Shippers should con-sult their tank car manufacturers or leasingcompanies for information about howmuch torque to use.

According to the AAR, while mostshippers report using the star pattern whentightening manway cover bolts, more than

half report not having a specific torquerequirement for tightening the bolts.

Training is AvailableThe AAR routinely captures data con-

cerning NARs in the United States andCanada. When a threshold number of inci-dents from a specific shipper are reached,the AAR notifies the company and asks formore information about follow-up actionsthe shipper is taking to address the causesof the NARs.

While ethanol producers are encour-

SAFETY

The archetypical GATX TankTrainer tank car includes the many styles of top valve arrangements, bottom

outlet valves, and safety devices found on all types of tank cars. TankTrainer students are invited to walk

through the inside of the car’s tank to see how the valves operate.


SAFETY

aged to have standard safety proceduresand training in place, some rail companiesprovide training services.

Railcar leasing company GATX Rail,for example, offers GATX TankTrainersessions, which include classroom instruc-tion inside an air-conditioned boxcar, aswell as hands-on instruction in, on andaround the GATX TankTrainer tank car.GATX held four TankTrainer sessionsJuly 15-16 at the Manly Terminal nearManly, Iowa, tailored specifically for peo-ple in the rapidly expanding biofuels indus-try. Most of the GATX tank car fleet isdedicated to hazardous materials service,which includes products ranging fromethanol and diesel fuel to liquefied petrole-um gas and anhydrous ammonia.

Classroom instruction inside theGATX boxcar includes information aboutthe anatomy of tank cars and importantsafety procedures and regulations. Theclassroom time is followed by a tour of thearchetypical TankTrainer tank car, whichincludes the many styles of top valvearrangements, bottom outlet valves, andsafety devices found on all types of tankcars. Students are invited to walk throughthe inside of the car’s tank to see how thevalves operate.

GATX has one TankTrainer unit andconducts approximately 15 trainings eachyear. Most of the classes are held at a cus-tomer location at the request of the cus-tomer. The TankTrainer program has beenin operation since 1993.

The AAR’s Non-Accident ReleaseReduction Program, meanwhile, has pro-duced a video entitled “Getting to Zero,”which is designed to impress upon thosewho load or unload hazardous materials intank cars the importance of reducingNARs on rail. The video explains howNARs impact the safety of railroad work-ers, citizens along rail systems, the environ-ment, a shipper’s customers, and the load-ers and unloaders themselves. The 10-minute video can be ordered from the fol-lowing address: Association of AmericanRailroads, Publications Department, 50 FStreet N.W., Washington, D.C., 20001, orby calling (202) 639-2124. EP

Ryan C. Christiansen is an EthanolProducer Magazine staff writer. Reach him

at [email protected] or

(701) 373-8042.

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GATX TankTrainer instructor Stu Fuqua talks to students at the front of the GATX SchoolHouse boxcar.

PROFILE

PHOTO: VICTORY ENERGY OPERATIONS LLC


PROFILE

When John Viskup and Jim Sponder established Victory Energy

Operations LLC in 1999, ambitions were high—but neither expected

the company to hit the milestones it has in such a short time. In less

than 10 years the company has grown from 3 to 320 employees.

By Anna Austin


VictoryA Taste of


PROFILE

f being victorious in the busi-ness world requires a companyto grow by leaps and boundsthen Victory Energy

Operations LLC is aptly named.Victory Energy began in then 29-year-old company President John Viskup’shome with three employees. Less than10 years later, the company occupies a170,000 square foot building inCollinsville, Okla., and has 320employees. In its first year, VictoryEnergy supplied 10 boilers to cus-tomers; today that number surpasses300.

Victory Energy has become aleading boiler supplier to a variety ofmarkets, largely within the ethanolindustry. In 2007, the company real-ized more than $121 million in sales.With that kind of growth it’s not sur-prising that the company’s motto is“Full steam ahead!” In May,Entrepreneur Magazine ranked VictoryEnergy No. 15 on its 2008 Hot 100list, a ranking of the fastest growingcompanies in the United States.Additionally, it was ranked No. 1 in themanufacturing sector. Nearly 21 mil-lion companies were on the magazine’spreliminary list, which EntrepreneurMagazine said included new businessesthat are making a major impact on theeconomy based on their revenue andthe jobs that are created as a result ofthat growth. The Hot 100 are expectedto employ more than 15,000 individu-als by 2009, an increase from a com-bined total of 517 employees on theirfirst day of business. No other boilermanufacturing company has ever beenrecognized for such an accomplish-ment. “Being ranked first in manufac-turing—we were surprised and hon-ored at being recognized outside ofour specific market,” Viskup says.

“The ultimate vision of ourorganization was to produce a higherquality steam generation system thatwould provide a better value to our

customers,” says Viskup, who isdescribed by Victory Energy MarketManager Charles Swallow, as someonewho “lives and breathes boilers.”“The goal was to produce competitiveproducts and services, execute well,and continuously improve and main-tain a high level of customer satisfac-tion,” Viskup continues. “We continueto meet—and exceed—these goals, aswe diversify into new markets anddevelop innovative ways to meet theneeds of a growing customer base.”

Gaining MarketshareIn 2001, Gopher State Ethanol in

St. Paul, Minn., was losing the battlewith odor and emission complaintsfrom the community—problems gen-erated from the plant’s productionprocess. “The Victory team had anidea,” Viskup says. “Why not attach aheat recovery steam generator (HRSG)to a thermal oxidizer? The oxidizerwould burn off the volatile organiccompounds while the HRSG wouldrecover the heat and generate moresteam in the process. The systemworked, and it worked well.”

That same year the InternationalFuel Ethanol Workshop & Expo washeld in St. Paul, and the company wasallowed to discuss the benefits of ther-mal oxidation technology to ethanolindustry representatives. News of thetechnology spread through the indus-try like wildfire, Viskup says.

It was smooth sailing for awhile,but because new technology can neverbe rendered fool proof, the company’sfirst major issue surfaced. There was aproblem with the plant’s thermal oxi-dizer—a structure which another com-pany had supplied—but was attachedto Victory Energy’s boilers. The deci-sion to stand by the product, regard-less of that factor, was made withouthesitation. “From this point on, every-one in the industry knew that VictoryEnergy had integrity,” Viskup says.

I


PROFILE

“They knew we would support the industry that had sup-ported us.”

The problem was remedied and Victory Energyremained a reputable company.

Product PrideVictory Energy manufactures heat recovery steam gen-

erators and watertube package boilers, with a focus in thebiorenewable fuels and solar energy industries. In addition toboiler systems, Victory Energy offers a range of auxiliaryequipment, including ductwork, main stack assemblies, econ-omizers, de-aerators, control systems, and feedwater systems.The company also offers in-house transportation servicesfor all of its products, making Victory Energy a single-source supplier. “Every boiler is a custom boiler,” Viskupsays.

The team at Victory Energy begins the boiler construc-tion process for a specific plant by developing the thermaldesign and size of the boiler, and incorporating job-specificrequirements for steam capacity, temperature and pressure,fuels available, emission limitations and space limitations.When necessary, a one-eighth-scale model may be engi-neered in order to test the boiler pre-installation.

Victory Energy says its heat recovery boiler is one ofthe most flexible, cost-effective and technologicallyadvanced units on the market. “Our fintube design allows usto manufacture our boilers with the smallest footprint in theindustry, and greatly reduces radiant heat lost to containenergy costs,” Viskup says. Today, U.S. EPA emissions

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PROFILE

requirements must be met for a plant toremain operational, he adds. VictoryEnergy’s HRSG boilers are able tocapture heat during processing and usethat heat to supply steam to the plantfor the manufacturing process. TheHRSG boiler serves other industries as

well, including cogeneration, municipalsolid waste and other pollution controlfacilities.

The Voyager “O” type andDiscovery “D” type boilers are alsopopular products.

Catering to CustomersVictory Energy’s customers don’t

have to worry about piecing together aconfusing puzzle. “You’ll never receivea bucket of bolts from Victory,”Viskup says. The company has devel-oped a tag-and-crate system that clearlyindentifies each part and provides step-by-step directions to enable quick con-struction, he adds. To ensure that easeof construction, Victory Energy offersan operator training program foremployees and recurring training pro-grams to keep veteran employees up-to-date on its technology.

A spare parts department is alsoopen 24 hours a day, and guaranteesdelivery within 24 hours of ordering.What makes the process even easier forcustomers is that each one has a spareparts list on file, which is tailored totheir plant and boiler system. If pre-ferred, Victory Energy can also set upan online order page for each of itscustomers.

‘We continually inspire our

employees to assist in the

development of new products

and technologies. Together, our

team has had a hand in

changing the world we live in—

one day at a time.’

—John Viskup, president of Victory Energy

If a boiler requires repair time thatcould negatively impact a plant, amobile rental boiler is available fortemporary installation, which is anoth-er 24-hour-a-day service that Victory

Energy offers. “The extra effort thatwe put forth each and every day helpsus keep on track with the goals that wehave set within our team,” Viskup says.“We believe that the moment we stop

moving toward accomplishing ourgoals, we become the obstacle.”

In the future, Victory Energywants to diversify the application of itstechnologies, focusing on ways that itsproducts and services can further ben-efit the biorenewable industries.

Victory Energy’s honest, dedicatedintent to serve its customers, accompa-nied by a desire to find solutions to allwants and needs is something that res-onates throughout the company.Viskup credits the success of the com-pany to its employees. “It largely stemsfrom them,” he says. “We continuallyinspire our employees to assist in thedevelopment of new products andtechnologies. Together, our team hashad a hand in changing the world welive in—one day at a time.” EP

Anna Austin is an Ethanol ProducerMagazine staff writer. She can be reached

at bbiinternational.com or 701-738-4968.

PROFILE

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INDUSTRY


INDUSTRY

Despite record-high corn prices, most ethanol producers have managed to stretch their

dollars to keep operating at or near break-even. Now that corn prices have started to

come down to a more manageable level, producers’ margins could start to improve.

By Bryan Sims


DollarMaking the Most of Every


INDUSTRY

he recent bombardment ofinformation, or misinforma-tion, by the mass mediaabout what’s behind high

food prices spurred a spate of globalindictments. Politicians blame specula-tors. Speculators blame the FederalReserve and a weak U.S. dollar. Freetraders blame countries with agricultur-al subsidies. Countries with agriculturalsubsidies blame free traders, and thenthere’s everyone’s favorite scapegoat theethanol industry. Although ethanol pro-ducers would like to see their industryget more positive press coverage, theyhave more pressing issues to attend to,such as the volatile corn market.

Just when ethanol producersthought corn prices could get no higher,summer floods ravaged the centralMidwest in mid-June—the worst in 15years—damaging crops and causingcorn prices to again spike to historic lev-els. Chicago Board of Trade July cornfutures closed at a record $7.42 perbushel, which was up 25 percent from

less than $6 per bushel that same monththe previous year. At press time, howev-er, prices had started to come down sig-nificantly, trading on the CBOT atabout $5.28 per bushel. December corncontracts in June were locked in at $7.86per bushel, which equaled a decline of$2.68.

According to Robert Wisner, biofu-els economist for Iowa StateUniversity’s Ag Marketing ResourceCenter, the decline in corn prices indi-cates just how the commodity directlyaffected operating margins for ethanolproducers and their products. “That’s areduction of 89 cents per gallon in thecost of producing ethanol versus what

we encountered in mid- to late-June,”Wisner tells EPM. Lower corn priceswere accompanied by lower prices forethanol’s coproduct distillers grains.“We’ve seen about a 28 percent drop inthe value of dried distillers grains andthat’s going to vary a little bit dependingon where the ethanol plant is located,”he says. “So we’ve seen on the valueside, with the ethanol and the dried dis-tillers grains together, about a 73 centdrop in value there and 89 cent drop incorn prices; in other words, per gallonof ethanol from the lower corn price.”

With the steady decline in cornprices, operating margins showed signsof stabilizing and producers experi-

T ‘We’re actually seeing a disconnect between the gasoline price and the ethanol price now and more of areconnect between the price movement in corn and theprice movement in ethanol.’


INDUSTRY

enced slight break-even to marginalprofits. “Clearly, the crush spread hasimproved since bottoming earlier thissummer and certainly right now ethanoleconomics are no where near as bad asthey were at their lows,” says PavelMalchanov, alternative energy analystfor Raymond James & Associates inHouston. “When we look at the crushspread evolving from its levels of earlyJune—this is of course with corn priceshitting the $7 per bushel level—itreached almost zero at one point and asof [August], it’s actually north of 80cents per gallon. So, clearly the econom-ics have improved.”

Input, Output Prices AreFavorable—For Now

According to Malchanov, the priceof ethanol today is about as high as ithas been since 2006, as prices have seenan upward trend in the spot market.According to the CBOT, July ethanolfutures contracts closed at $2.89 per gal-lon, up approximately 20 percent from

$2.40 a barrel before the floodingoccurred. Ethanol futures contractsmoved slightly higher following addi-tional buying interest in corn futuresmarkets in August. September contractsposted a 4.4 cent gain, closing at $2.18

per gallon, but the sharpest gains havebeen posted in the October contract,which is the production levels that willbe affected most by corn price increas-es, according to Rick Kment, biofuelsindustry analyst for DTN. “A lot of that

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Corn Futures Price Per Bushel Ethanol Futures Price Per Gallon

SOURCE: DTN

Corn Versus Ethanol Prices

INDUSTRY

has to do with the rally in the corn market,” he says. “We’reactually seeing a disconnect between the gasoline price and theethanol price now and more of a reconnect between the pricemovement in corn and the price movement in ethanol.”

This summer’s high oil price environment did helpincrease the demand and subsequently the production of

ethanol. According to the EnergyInformation Administration, U.S. ethanoloutput in May jumped 10 percent; from 1.7million barrels in April to 18.5 million barrelsin May. The EIA also noted in its monthlyAugust “Petroleum Supply Monthly” thatrefinery utilization dropped to an astounding85.9 percent of capacity compared with a yearago when the utilization rate was 91.8 percentof capacity. “The blenders are very aware of

the economics behind ethanol production,” says Tom Wapp,ethanol market analyst and risk management advisor forUnited Bio Energy, which provides risk management consult-ing and market advisory services for ethanol producers. “Theyneed the ethanol and it’s very profitable and economical forthem to use the ethanol in their blending but they don’t wantto pay any more for it than they have to. So they’re followingthat corn market closely to make sure that there’s enough mar-

gin in the market for theethanol producers to be ableto continue to produce it,”he says. In addition to thedecline in corn prices, discre-tionary blending by oil refin-ers and the recent decline ingasoline and crude oil prices

have contributed to ethanol’s steady price.National average gasoline prices at the pump fell to $3.86

on Aug. 6 from its record high of $4.11 on July 16, accordingto data compiled by the American Automobile Association.Experts expect a further retreat in gasoline prices because ofthe demand issues.

But there are still some challenges for ethanol producers,Malchanov says. “Obviously, corn prices remain at historicallyelevated levels,” he says. “Meanwhile, the price of ethanol,while quite high in absolute terms, remains below gasoline. Sothe spread between the two remains negative as it indeed hasbeen for nearly a year now.”

Couple this with the price volatility of natural gas, whichfires most ethanol plants, and operating margins are com-pressed. However, there is a silver lining behind that cloud asnatural gas prices were starting to fall in August based onstronger U.S. supplies.

Hedging, Swapping Key to SurvivalIndustry analysts and experts agree that for ethanol pro-

ducers to survive in a volatile market climate, producers mustemploy hedging and/or cash swapping strategies to protectthemselves against price fluctuations in the corn and ethanolmarkets.

‘The presence of volatility and risk are becoming a factof life for ethanol producers and the importance ofpreparing to handle that risk will only continue toincrease.’

Kment


“It’s definitely been a rollercoaster ride,” Malchanov says.“Depending on where companies were hedging their corncosts across that commodity price curve over the past sixmonths, will of course influence their profitability.”

According to Wapp, producers have been in the midst ofa “mentality shift” from attaining length on the corn side whileselling ethanol to lock in margins to protecting themselvesagainst the long corn exposure as they did during the flood inJune. “On the way up, people got enamored with long cornpositions and it obviously worked well for them,” Wapp says,adding that current ethanol producers should have enoughcorn coverage to be profitable through the third quarter ofthis year, although profitability will likely start to drop offsharply as they enter the fourth quarter and work throughtheir remaining corn coverage.

“You wanted to have long corn positions in place as thismarket was going up. Ethanol was going up with it so as longas you had those long positions in place you felt pretty good,”Wapp says. “But, it was very easy to lose sight of the fact thatthe higher we went and the longer your corn position got themore downside exposure you were all of a sudden picking upon the corn and when this market turned over that became akey factor to start paying attention to.”

When corn prices were at their peak in the early summermonths, there was speculation that it might have been moreprofitable for ethanol producers to sell their corn on the openmarket rather than using it to make ethanol. According toWapp, there were limited occurrences of that, but it didn’thappen on a wide scale. “Ethanol plants are generally reluctantto do that,” he says. “Most independent plants feel they arethere to produce ethanol. A lot of the plants aren’t even set upto sell corn out of their plant.”

On the ethanol side, Wapp encouragesplant managers to carefully analyze fixed andvariable expenses to accurately assess break-even requirements and to coordinate grainpurchasing with ethanol sales and cover allnecessary expenses to ensure protectionagainst temporary price swings.

“Cash sales on ethanol have been pret-ty difficult to accomplish on this decline inprices,” he says. “The buyers are well aware of what has beentranspiring and they want to see a bottom formed in the cornbefore they’re willing to step out and commit anything on apriced basis on the ethanol side. That’s pretty much left plantslooking at a swap market or over-the-counter environment tohedge that ethanol against.”

Looking ahead to the close of this year, experts believerisk will be an inevitable element to the business of ethanolproduction. However, proper due diligence on hedgingapproaches will ultimately lead to successful operations.

“The presence of volatility and risk are becoming a factof life for ethanol producers and the importance of preparingto handle that risk will only continue to increase,” Wapp says“There’s going to be plenty of risk moving forward for plantsin the next year, but if you’re prepared and positioned correct-ly it also gives you an opportunity for reward as with high cornprices because—if you’re ready for them—higher ethanolprices also come with it.” EP

Bryan Sims is an Ethanol Producer Magazine staff writer. Reach

him at [email protected] or (701) 738-4950.

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Wapp


The claims and statements made in this article belong exclusively to the author(s) and

do not necessarily reflect the views of Ethanol Producer Magazine or its advertisers.

All questions pertaining to this article should be directed to the author(s).

n increased demand for corn andproduct capacity in the marketmakes it critical for ethanol plantsto ensure that operations are fully

optimized to avoid profit erosion fromincreasing feed and decreasing productprices. As a result, it is prudent for ethanolproducers to consider whether their plantsare being operated as efficiently as possible.This means maximizing ethanol yield andproductivity, and the number and value ofcoproducts, while minimizing waste andenergy use.

Optimization approaches can be divid-ed into three categories 1) process—feed-stock preparation, fermentation or down-stream separation as related either to physi-cal or chemical processes, 2) energy—relat-ed primarily to heating, power or dryingoptions, or choice of plant fuel type, and 3)wastes/coproducts—minimizing, reusingor finding new applications for unwantedproducts and increasing the value or yield ofdesired coproducts.

This article, the first in a three-partseries, focuses on this first category andreviews options through which established

ethanol plants can achieve process-relatedoptimization goals. While they cover a rangeof different approaches, these options allstrive to improve ethanol yield and/or pro-ductivity by 1) allowing operation with ahigher sugar feed concentration, 2) allowingoperation with a higher ethanol productconcentration, or 3) decreasing processtime. All of the options presented havebeen either demonstrated or proven tosome extent but are not currently in wide-spread use or considered standard. Themost notable are discussed below. A moredetailed discussion of these and additionaloptions can be found in the full-length ver-sion of this three-part series, available atwww.EthanolProducer.com.

Fractionation PossibilitiesThe wet mill process inherently

includes technology that fractionates or sep-arates corn into its components upfront,thereby achieving more efficient fermenta-tion and a greater number of higher-valuecoproducts. However, the wet mill processis more complex and costly relative to themore common dry grind process. As a

result, several modifications have beendeveloped to incorporate some of the wetmill fractionation benefits into the lessexpensive dry grind process. The simplestoption is to employ dry fractionation. Dryfractionation is a process by which the moreeasily removable germ and pericarp fiber aremechanically separated from the corn ker-nel without soaking. Other fractionationapproaches such as quick germ, enzymaticmilling and Maize Processing Innovator'sQuick Germ/Quick Fiber process have alsobeen developed to improve the purity ofseparated coproducts relative to that of dryfractionation, but at a cost and complexitystill lower than that of a wet mill process.Another alternative is to incorporate frac-tionation at the backend of the process toseparate purer coproducts from distillersdried grains with solubles. An example is theElusieve Process used to recover pericarpfiber through a sieving step. The local mar-ket and coproduct demand must be evaluat-ed to determine whether fractionationmakes sense and which version is most eco-nomical for a given plant.

OPTIMIZATION

A

Emerging ProcessOptimizationOpportunities for Ethanol FacilitiesBy Philip A. Marrone, Kenneth R. Liberty and David J. Turton


OPTIMIZATION

Increased Enzyme Thermal

Stability/EfficiencyThe alpha-amylase and glucoamylase

enzymes used in the liquefaction and sac-charification steps of ethanol production,respectively, have different preferredprocess conditions (i.e., temperature, pHand concentration). Adjustment of theseconditions during production to accommo-date each step costs time and money in theform of added chemicals and energy, andcan impact the performance of microor-ganisms downstream. At the same time, itwould be preferable to operate all steps atas high a temperature as possible to mini-mize reaction time and kill contaminantbacteria.

Discovery or development ofenzymes that are stable and active at hightemperatures under the same process con-ditions (e.g., pH of 4.5 and temperature of194 degrees Fahrenheit or higher) couldsignificantly improve the overall rate ofstarch hydrolysis, and thus ethanol produc-tion, by combining fast kinetics with no orminimal batch adjustments. With advancesin molecular biology techniques, manyresearchers and enzyme manufacturershave not only been able to screen large

numbers of microorganisms for potential-ly useful enzymes, but also further alterthese selected enzymes to better functionunder the conditions desired. For example,researchers have recently reported discov-ery of a glucoamylase enzyme from a bac-terial source that was optimally active at 194degrees Fahrenheit and a pH of 5.5 to 6,which would allow saccharification to takeplace under the same conditions as lique-faction without any parameter adjustment.

Self-Contained EnzymesWith the advent of genetic modifica-

tion techniques, it is now possible to cus-tom engineer both feedstock and microor-ganisms needed for ethanol production toself-produce starch hydrolysis enzymes orother desired attributes. Having the neces-sary enzymes already present wouldstreamline the hydrolysis and fermentationprocesses. Work is being performed todevelop hybrid corn strains that will con-tain starch-hydrolyzing enzymes in theendosperm and/or an increased percentageof starch. Researchers are also trying todevelop strains that include the genomeresponsible for producing cellulase, whichwould help with the critical need to reducethe cost of cellulosic ethanol production.

With respect to microorganisms,genetically modified yeast cells have alsobeen developed to produce hydrolyticenzymes for either starch or cellulose.These organisms are able to hydrolyze astarch or cellulose feedstock directly withless pretreatment, followed by immediatefermentation of the released glucose. Aswith all genetically modified organisms, thedownside is the unknown long-term risksand associated negative public perception.

Contaminant Bacteria

Reduction Without AntibioticsMany of the same operating condi-

tions that provide an optimal growth envi-ronment for fermenting yeast are also goodfor the growth of undesirable microorgan-isms such as lactic acid bacteria, which uti-lize valuable glucose. While antibiotics havetraditionally been used in the ethanol indus-try to control contaminant bacteria popula-tions, this approach is becoming increasing-ly unpopular for several reasons including


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promotion of increasingly resistant bacterialstrains, more stringent government regula-tions or bans, and high expense.

In the absence of antibiotic use,options for controlling contaminant bacteriapopulations include more frequent batchsterilization, operation of liquefaction, sac-charification and fermentation steps in min-imal time or simultaneously, or addition ofdisinfectants or natural substances known toinhibit bacterial growth without fosteringtolerance. Recently, several ethanol plantshave utilized a commercial version of keyacid extracts from hops shown to stop bac-terial growth and achieve promising results,particularly in handling bacterial strains thathave become antibiotic-resistant.

Improved Yeast PerformanceThere is significant incentive to increase

the thermal, ethanol and osmotic toleranceof yeast cells to decrease fermentation time,increase final ethanol concentration andincrease feed concentration, respectively,while also limiting production of unwantedbyproducts. An increase in the thermal tol-erance up to 140 degrees Fahrenheit (com-pared to the current maximum of 95degrees Fahrenheit) is predicted to substan-tially decrease fermentation time by about25 percent due to faster kinetics alone. Ifcombined with improvements in enzymethermal tolerance, it may be possible tooperate hydrolysis and fermentation steps ata single, high temperature, thereby savingenergy costs involved in adjusting condi-tions from one step to the next and, in turn,decreasing process time.

Further improvement in ethanol toler-ance has been hindered due to the discoverythat several genes must be manipulated toalter this trait. Nevertheless, progress contin-ues to be achieved in this regard. For exam-ple, genetically modified versions ofSaccaromyces cerevisiae have exhibited statisti-cally significant improved cellular viability intests even up to ethanol concentrations ashigh as 20 percent, compared to the stan-dard 13 percent to 15 percent. Genetic engi-neering may also be able to “reprogram”cells to produce less undesirable byproductsor even to metabolize five- and six-carbonsugars, which is of interest for cellulosicethanol process development.

Very High Gravity FermentationDeveloped originally at the University

of Saskatchewan, the very high gravity(VHG) fermentation process utilizes a high-er concentration of solids and can achievehigher ethanol concentrations than the stan-dard process. VHG requires feeds contain-ing 27 percent by weight dissolved solids orgreater. At these high solids concentrations,most feeds are too viscous to handle effi-ciently. Thus, an important part of the VHGprocess involves preparing a mash with asufficiently high solids content and anacceptable viscosity. This can be achieved byemploying one or more of several options:addition of enzymes, double mashing, oraddition of adjuncts (a high-sugar feed sup-plement such as grain hydrolysate, sugarcanejuice or molasses). Ethanol concentrationsas high as 23 percent by volume have beenseen with a feed concentration of 38 per-cent by weight solids at 68 degreesFahrenheit, with lower ethanol concentra-tions at higher temperatures. While the con-ditions necessary for the highest ethanolconcentrations may not be practical on alarge scale from an economic perspective, itis reasonable to expect to achieve ethanolconcentrations in the range of 18 percent byvolume using VHG.

There are several clear advantages toVHG fermentation relative to conventionalfermentation, including increased plantthroughput, lower water and energy usage,and decreased reactor size. The insolublenon-starch material also has a higher valuesince it is separated before fermentation andfree of yeast biomass. On the other hand,VHG fermentation is more complex thanthe standard process, requires equipmentdesigned to handle the higher viscosity feed,and may require yeast strains that have aninherently higher ethanol and osmotic pres-sure tolerance for the best results. Over thepast decade, VHG fermentation has beensuccessfully tested at the pilot-scale and iscurrently being incorporated in some full-scale plant designs focused on achievinghigh ethanol concentrations.

Extractive FermentationThe toxicity of ethanol to yeast limits

its final concentration during fermentation

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.


and thus the amount of feed that can be fer-mented per batch. If ethanol is removedfrom the fermentation reactor as it isformed, however, its concentration can bekept at a value that would permit cell activi-ty and fermentation to continue unhindered.Such a concept is referred to as extractivefermentation. To achieve this goal, a waymust be found to selectively remove ethanolfrom the fermentation broth in the reactorwithout impeding the fermentation reaction.

Early attempts to continuously removeethanol from fermentation broth focusedon vacuum fermentation or liquid-liquidextraction methods. In recent years, a moreeffective means of ethanol removal hasinvolved the use of semi-permeable mem-branes. Membranes have the significantadvantage of keeping the broth and solventliquid phases separate, allowing the transferof ethanol without contaminating either liq-uid phase. Impregnated polymer-basedmembranes, zeolite membranes and micro-porous hollow-fiber membranes are exam-ples that have been successfully tested inrecent years. Most of these options forextractive fermentation have been exploredonly at a bench-scale size and would clearlyincrease the complexity of the fermentationsystem relative to the current standard sim-ple tank reactor. While scale-up is not trivial,the concept holds great potential. Resultsverify the improved performance expectedwhen the cell-inhibiting ethanol concentra-tion is restricted to an acceptable level.

Yeast ImmobilizationIn an immobilized cell system, the yeast

cells are constrained to a limited, definedvolume. Typically, they are imbedded orbound to a solid support structure, either onthe surface or within a porous medium, andused in a continuous flow system. The mostwidely used method of immobilization isthrough physical entrapment within a spher-ical, porous polymer matrix.

Many studies have shown improvedethanol productivity and higher feed con-centration tolerance in immobilized cellreactors versus traditional batch reactorswith freely suspended yeast cells. This maybe a result of decreased ethanol concentra-tion near the cells due to constant removaland/or alteration of the cell membrane

through the immobilization process to allowfor enhanced transfer of substrates into andout of the cell. Other advantages include nocell washout, higher productivity due tohigher cell density and better protection, andbetter control of the microbial environ-ment. However, it is also clear that masstransfer constraints can significantly hinderethanol production kinetics and nutrienttransfer, depending on the material anddesign of the support structure and the par-ticular conditions of operation. Whether thepotential for greater ethanol productivityand avoidance of cell washout balances thegreater system design and operational com-plexity of an immobilized cell systemdepends on the specifics associated with agiven ethanol plant and therefore needs tobe evaluated on a case-by-case basis.

Summary of Process

Optimization OptionsThe options presented here are all cur-

rently at various levels of maturity, withsome beginning to be implemented nowand others still at a research/bench-scalelevel. With some, it is just a matter of timebefore widespread full-scale use, while oth-ers may never fully mature to the extent nec-essary to be economically viable exceptunder limited circumstances. Each has itsown unique advantages and disadvantagesthat must be weighed with respect to thedesign and economics of a specific plant todetermine whether it is worthwhile to imple-ment. However, all of these options repre-sent the best process improvement modifi-cations currently available and hold suffi-cient potential and promise to warrant eitherconsideration or careful observation of fur-ther development to determine whetherthey may be applicable for a particularethanol plant. EP

Philip A. Marrone is a chemical, Kenneth R.

Liberty is a biochemical engineer and David J.

Turton is a civil engineer with Science

Applications International Corp. Reach

Marrone at [email protected] or (617) 618-

4686. Reach Turton at david.j.turton@saic

.com or (443) 402-9209.

OPTIMIZATION





he prospect of increasing crudeoil prices and $4- to $5-per gal-lon gasoline has consumers and

politicians lashing out. U.S. politicianshave singled out scapegoats for high oil,gasoline and diesel prices. Included onthis list are oil companies, whose recentearnings are perceived to be a windfall.There are also public suspicions of collu-sion between oil companies in price-set-ting and widespread price gouging. Somepoliticians are now calling for aggressive

enforcement of anti-trust laws, impositionof price controls ongasoline and otherfuels, and institutinga windfall profits taxon large oil compa-nies.

It is also widelyperceived that the

ethanol industry has been unduly favoredand that increased production of cornethanol is solely responsible for higherfood prices. Many politicians are calling

for the government to eliminate the taxcredits now being received byethanol/gasoline blenders, the agricultur-al subsidies received by corn growers andthe tariffs on imported ethanol.

What is not widely discussed in thecurrent energy policy debate are ways theU.S. government can best support the pri-vate sector in finding solutions to existingenergy problems. This article revisitssome of the mistakes made by govern-ment intervention in the energy sector. Italso explores a range of positive incen-tives that ought to be considered to sup-port development of a robust biofuelsindustry in the United States.

Overcoming ObstaclesTo date, the United States has access

to enough crude oil to supply its refiner-ies, but more reliance on foreign oil hasmade U.S. refiners vulnerable to supplydisruptions and oil price spikes. Periodicseasonal and regional shortages of fuelsare occurring more frequently and con-tributing to price increases. There is an

admitted shortage of refinery capacity inthe United States and no new refinerieshave been built in the country in the past30 years. The reasons for this include theincreased cost to build and maintainrefineries, intensive environmentalrequirements, low returns on refineryinvestment, and increased volatility inrealization of acceptable refinery mar-gins.

The biofuels industry faces similarobstacles. The renewable fuels standardwill require many more first- and second-generation biorefineries to be built in thenext 10 years, requiring large private sec-tor capital investments. In addition, stablesupplies of affordable biorefinery feed-stocks have to be developed, and highfuel prices will also be needed to makeinvestments in economically viable biore-fineries. Because biorefinery technologyis constantly being improved, those nowinvesting in biorefineries are at risk ofhaving their facilities become premature-ly obsolete.

POLICY

T

Punitive MeasuresIneffective in the Energy SectorBy Tim Sklar

Sklar


POLICY

Past Punitive MeasuresIn early 1971, in response to high

inflation rates Congress passed legislationallowing the Nixon administration to

freeze prices and wages. Six months afterthe “freeze,” Nixon’s Cost of LivingCouncil lifted price controls on all but theenergy sector. The Federal Energy Office(FEO) was temporarily established toadminister price controls on "old oil,"which is the amount of oil produced inthe U.S. in the base year 1972, and refinedpetroleum products. What happened overthe next 10 years of price controls is illus-trative of what would happen today ifprice controls were used as a means oftrying to keep fuel consumers happy.

In early 1973 the Oil Producing andExporting Countries-(OPEC) oil embar-go caused price increases in U.S. refinedproducts. It severely impacted the supplyof home heating oil, as the FEO ceilingprices would not allow refiners to recovertheir increased costs. The FEO was thenforced to allow oil companies to increaseheating oil prices in order to increase sup-plies. In the winter of 1973-‘74 heatingoil prices increased again, and FEO re-imposed price ceilings on heating oil. Afurther run-up of imported oil prices


reduced the amount of refined productsthat major integrated refiners normallyresold to independent refiners and mar-keters. In response, FEO created a two-tiered price control regimen on domesticoil producers, allowing new productionof domestic oil to sell at market prices.FEO also decontrolled a number ofrefined products, but not transportationfuels. This attempt at partial decontrolfailed.

FEO’s new rules became too com-plex to enforce, as most refiners wereable to reallocate their increased crude oilcosts among all products, allowing themto sell controlled products at marketprices. Many refiners were unable to com-pete, as they only had access to decon-trolled oil. To remedy this, the FederalEnergy Administration (FEA) estab-lished the Oil Entitlements Program inorder to equalize profits across refinersand prevent small U.S. crude oil produc-ers from closing. It didn’t work, as lower-cost domestic, or old, oil quickly disap-peared when refiners and oil traders hasaccess to oil used in “foreignization”schemes. Some of these schemes wereillegal but FEA was unable to effectivelyenforce these rules on old oil. FEA madea number of attempts to amend the OilEntitlements Program but they only suc-ceeded in creating further distortions.

President Jimmy Carter wisely put pricecontrols on hold in 1979, and PresidentRonald Reagan did away with them short-ly after he took office, as they no longerserved a useful purpose.

Clearly, the lesson is that price con-trols on energy do not work except forshort periods, and even though we arefacing similar market pressures today weshould not repeat the mistakes made inthe 1970s.

After decontrolling oil prices in1980, Carter reached a legislative com-promise with Congress, allowing for thepassage of a windfall profits tax on crudeoil producers, as he feared that decontrolwould lead to steep price increases. Thistax went into effect March 1, 1980, andlasted through January 1988. It was anexcise tax on domestic oil production andproduced a modest amount of tax rev-enues, none of which was returned toconsumers or taxpayers. In 1986, theprice of oil collapsed and windfall profitstax collections were greatly reduced afterserving no useful purpose. This tax alsoproved to be counterproductive, con-tributing to the reduction of domestic oilproduction by 3 percent to 6 percent andled to an increase in foreign oil importsby 8 percent to 16 percent. As with pricecontrols, this punitive measure providedno direct benefit to the consumer and

may have contributed to higher energyprices.

Recent Government Actions,Proposals

In 2005, Congress enacted a progres-sive piece of energy legislation titled theEnergy Independence and Security Actof 2005. The Energy Bill, which wasupdated with the Energy Independenceand Security Act of 2007, recognized theneed for a number of energy initiatives,one of which is the mandate to produce36 billion gallons per year of renewablefuels in 15 years. Unfortunately, this legis-lation does not provide funding for meet-ing this mandate and assumes that theprivate sector can find the funds.

Both candidates running for thepresidency have announced their energypolicies and recognized the need for anumber of positive government incen-tives to facilitate increases in secure andclean energy supplies and to promoteenergy conservation. These initiatives areexpected to encourage investment inalternative energy, but the candidates aresplit over how to achieve these goals. Inparticular, they are split on corn ethanolsubsidies and extending subsidies to sec-ond-generation renewable fuels, and onfunding of renewable energy programs.

The Senate Democrats have pro-

POLICY


posed placing a windfall profits tax on thefive largest oil U.S. companies in order toraise as much as $150 billion for an ener-gy fund. This fund is to be used to sup-port a range of projects, including sec-ond-generation biofuels plants and biofu-els distribution fuel infrastructure. Sen.Barack Obama has also announced awindfall profits tax as part of his energyplan. This would impose a windfall taxpenalty on the top-grossing oil compa-nies on oil they sell at more than $80 perbarrel.

Industry testimony taken at a recentSenate hearing on high oil and gas pricesincluded a number of ideas that couldprove useful in promoting developmentof renewable fuels. Two different, andperhaps controversial, ideas include 1)providing government incentives forincreased parity between petroleum dieseland biodiesel, and between E85, E10 andgasoline, and 2) increasing user taxes onfuels to reduce demand and to fund need-ed energy projects.

Ethanol Part of the SolutionIf the existing Energy Bill’s renew-

able fuels standard is met, 10 percent ofU.S. fuel requirements will be suppliedfrom renewable fuels. The investment todo this is significant, requiring $11 billionin four years, $46 billion in 10 years and$105 billion in 15 years.

Corn-based ethanol still has a majorrole to play in meeting the mandate. Itcurrently provides most of this nation’srenewable fuel, roughly 8.7 billion gallonsper year. By 2015, corn ethanol produc-tion is expected to peak at 15 billion gal-lons per year, supplying 42 percent of the36 billion gallons per year mandate. Tomeet this mandate, the corn ethanolindustry must remain viable, but it maynot if the government changes the sub-sidy ground rules and arbitrarily elimi-nates tax incentives.

The renewable fuels standard alsorequires that by 2022, 58 percent of thetotal biofuels produced be second-gener-ation, with cellulosic ethanol providing 76percent of this 21 billion-gallon-per-yearrequirement.

The government will have to takesteps to stimulate private sector invest-ment in biofuels plants and related infra-structure if the RFS is to be met. Therewill be a need for more research anddevelopment grants, tariff protections,tax holidays during ramp-up, acceleratedamortization of investment in new tech-nologies, and low-cost government-backed project financing and governmentloan guarantees. In addition, convention-al fuel surtaxes may need to be employedto support the higher cost of distributingand marketing advanced biofuels.

The U.S. DOE’s Loan Guarantee

Program already offers loans and loanguarantees for biofuels projects. Thisprogram provides a set of rules for qual-ifying projects and project sponsors forsuch loans and loan guarantees. However,the $38 billion now authorized for loanguarantees will more than likely have tobe increased. Obtaining Congressionalapproval for such increases should not bea problem, as this program does not cre-ate a drain on the U.S. Treasury or U.S.taxpayer unless a default occurs.

To develop biofuels projects inwhich local communities would have astake, joint venture arrangements such asbuild-operate-transfer financing shouldbe considered in order to attract localunits of government or regional authori-ties as one of the project’s partners.

Finding organizations to blame andpassing punitive measures against them iscounterproductive. The measures pre-sented here illustrate ways that the U.S.government can facilitate private sectorinitiatives in biofuels. Such backingshould only be offered if proposed proj-ects adequately address energy policygoals and meet due diligence standardsfor commercially viable projects. EP

Tim Sklar is the president of Sklar and

Associates. Reach him at sklarincdc@aol

.com or (202) 257-5061.

POLICY





arbon dioxide is one of thegreatest challenges with respectto emissions control and green-

house gas minimization. From a globalperspective, some 75 million tons perday are emitted into the atmosphere, ofwhich—in the best case—25 milliontons are absorbed by the oceans, whichare approaching a point of high satura-tion. The oceanic sink for carbon emis-sions is not an answer but a naturalmechanism to absorb an ever-growingsum of carbon dioxide emissions, drivenby an ever-hungry world with extraordi-nary energy demands. The world’soceans are in trouble, losing marinehabitats in part due to oceanic acidifica-tion.

Extraordinary and ever-growingenergy demands are driven by the inter-nal combustion engine, as well as coal-and natural gas-fired power plants.Power plants alone can account for upto 40 percent of the total carbon emis-sions in some developed economies.Growing demand for the internal com-

bustion engine, due to the lack of otheraffordable or technically viable optionsfor day-to-day transportation, will befueled by huge growth forecasted forgrowing economies in China and India.This means an increase in greenhousegas emissions. Ethanol has been afriendly and hopeful means to mitigatethis extraordinary global problem.

The carbon dioxide industry, as aso-called merchant trade, could have aglobal, annual consumption of up to 22million metric tons, of which the UnitedStates produces 40 percent. The busi-ness is growing at less than 3 percentannually. The ethanol sector, withrespect to the supply of raw carbondioxide into the merchant gas schemewithin the United States, accounts forabout 40 percent of the total amount ofraw gas. Byproduct from anhydrousammonia production, reformer opera-tions, ethylene oxide and concentratednatural wells are other options for sup-ply of raw gas to the merchant trade.

On the other hand, ethanol has

been the saving grace for the carbondioxide industry, as natural and ammo-nia sources have been and will continueto be lost in recordnumbers. An ethanolproject can yield a sig-nificant multimilliondollar additional rev-enue stream to thesuitable ethanol proj-ect. The location ofsuch revenue opportu-nities should be fullyevaluated in order to squeeze out asmuch revenue for the ethanol producer.When taking this into consideration, andthe growth of both grain- and cellulose-based technologies, certain new ethanol-based carbon dioxide plants will moveforward specific to regional marketopportunities. Of course, a finite num-ber of new plants for merchant carbondioxide will be developed in the yearsahead in North America.

Globally, this issue is also subject tomarket forces, but a need remains to

BYPRODUCT

C

Carbon Footprint, TradeEvolving with Industry By Sam Rushing

Rushing

BYPRODUCT

handle the politics, economics andphysical control of the growing car-bon emission problem. Some meth-ods to handle excess carbon dioxideinclude enhanced oil recovery (whichdoes not fully sequester the product),various conceptual sequestrationschemes, and the development ofnew types of carbon sinks, many ofwhich are conceptual at best.

Carbon Trading, Energy Bill’s Impact

Years ago, the concept of carbontrading was not much of a consider-ation. Today, however, the market ingreenhouse-gas emissions could welloutpace the traditional commoditiesmarkets and become the largest trad-ed commodity. This is not overstated,but also an opinion of the U.S.Commodities Futures TradingCommission. Globally, the carbontrading market was worth more than$60 billion in 2007. However, theUnited States accounted for a smallportion of this sum. Approximately$50 billion of this overall sum was


carried out under the European Union’semissions trading scheme, with practi-cally the full balance carried out underthe Kyoto Protocol. Some estimatesshow the global carbon market would beworth more than $3 trillion by 2020,assuming the United States should par-ticipate via a form of cap-and-trade pro-gram to limit carbon emissions, as wellas a version of the current KyotoProtocol. Carbon markets impact thepower, oil, gas and coal markets as well.Cap and trade is essentially a ceilingplaced on the emissions of companies,whereby the unused quota is traded withone another. This mechanism shouldensure that carbon emissions are cut atthe lowest possible cost. Such a mecha-nism will likely become a federal man-date in 2009, which is one step towardpositive thinking surrounding emissionsreduction.

The United States consumes

approximately 190 billion gallons ofgasoline and diesel fuel per year, ofwhich about 65 percent, or 124 billiongallons, is derived from foreign sources.This foreign reliance was a major driverin the passage of the EnergyIndependence and Security Act of 2007.

The act did not address the need toincrease electricity growth demands,plus numerous additional energy issues.However, it does address the mostimportant and demanding issue relatedto energy today. Crude oil as a primarytransportation energy source will bereduced under the Energy Bill. Themeans of reducing gasoline will takeplace through corporate average fueleconomy increases representing a reduc-tion in gasoline use by 1.1 million bar-rels per day in new vehicles while insert-ing 36 billion gallons per year of renew-able fuels into the fuel supply.

The provisions are essentially on

target at this time from a realistic view-point covering government mandates,which has not been possible for boththe consumer and industry to handle ontheir own since the oil crisis of the1970s.

Carbon footprint is the commonterm surrounding the growing concernabout greenhouse gases. Companies andindividuals are seeking a means to devel-op a more accurate picture of theiremissions, particularly in terms of sup-ply chain, life cycle, and other factorssurrounding emissions. Life cycle essen-tially considers all phases of the productdevelopment from raw materialsthrough consumption and disposal. Thegreenhouse gas protocol is probably themost widely used international account-ing tool for government and businessleaders to understand, quantify andmanage greenhouse gas emissions. Theprotocol is about 10 years old and is a

BYPRODUCT

Cap-and-trade scenarios are a future option in the United States as a means of working toward trying to cut carbon emissions.

partnership between the World BusinessCouncil for Sustainable Developmentand the World Resources Institute,which is working with government enti-ties, businesses and various environmen-tal groups to develop a new generationof credible and tangible programs formanaging climate change problems.

Over the past year, many companiesand stockholders have been evaluatingthe greenhouse gas protocol to developnew guidelines on supply chain and life-cycle greenhouse gas emissions account-ing capabilities. In turn, the WorldResources Institute and the WorldBusiness Council for SustainableDevelopment outlined a survey to assessthe need for new guidelines. The surveywas sent to 400 companies, stockholdersand industry experts. Approximately100 replies sent a clear answer for thegreenhouse gas protocol to develop newguidelines on this subject. The result isaction to develop a consultation processand develop new guidelines on supplychain and life-cycle greenhouse gasaccounting and reporting during 2008.The ethanol industry is a key compo-nent.

Ethanol Plant EffectsSince the United States began the

development of ethanol as a transporta-

tion fuel, use has grown from 175MMgy in 1980 to 4.9 billion gallonsannually in 2006. Virtually all of thisethanol has been produced from corn.During this growth period, corn farm-ing productivity has grown dramatically,and energy use in the typical ethanolplant has been reduced, in some cases by50 percent. Most corn-based ethanolplants are fueled by natural gas, whichhas skyrocketed in price. The high pricefor natural gas has brought about aswitch to other fuels, such as wood chipsand coal. The wide range of ethanolplant types and process fuels, combinedheat and power, and distillers wet grainsare some factors defining plant types.The range in plant types yields distinctlydifferent energy and greenhouse gasemission effects on a full fuel-cyclebasis. This means that greenhouse gasemission impacts vary significantly, froma 3 percent increase when using coal toa 52 percent reduction when using woodchips. The end result is an examinationof plant types, whereby corn ethanolproduction can move toward a moresustainable path.

Cap-and-trade scenarios are afuture option in the United States as ameans of working toward trying to cutcarbon emissions. With the Energy Bill,the effects should be an eventual reduc-

tion of gasoline usage in new cars whileinserting 36 billion gallons per year ofrenewable fuels into America’s market.The logical renewable fuel is ethanol.The placement of the greenhouse gasprotocol should yield new guidelines onsupply chain and life-cycle greenhousegas accounting and reporting. All of thisrepresents a new generation of pro-grams for managing climate change,which is good news for the ethanolindustry. As the ethanol industry trans-forms into more efficient forms of pro-duction, corn-based ethanol will yieldmore efficient and viable forms of pro-duction for tomorrow’s non-petroleumfuel options. The future developmentsin cellulose are another direction where-by lower emissions and greater efficien-cies are available as a transportation fuelversus the shrinking global supply ofpetroleum products.

Ethanol as a low-carbon fuel, alongwith future ethanol industry plant mod-ifications and developments, fits wellinto life-cycle evaluation and assessmentof the industry from feedstock to thefinal fuel product and handling of car-bon dioxide emissions. EP

Sam A. Rushing is the president of Advanced

Cryogenics Ltd. of Tavernier, Fla. Reach him at

[email protected] or (305) 852-2597.

BYPRODUCT





ncreased corn prices, inclementweather, decreased ethanol pricesand record-high crude oil have put

the ethanol industry on a rollercoasterride the past few months. Due to a com-bination of these factors, the industryhas suffered from having an agriculturalproduct as a raw material and selling itsprincipal product on an energy marketin which prices dance to a different tune.

Market conditions make ethanolyield increases critical, often distinguish-ing the difference between profit andloss. For the purposes of understandingthis situation more clearly, let’s use anexample of a 50 MMgy corn-basedethanol plant using locally grown cornin the U.S. Midwest.

First, industry stakeholders havebecome used to talking about yield in amanner that someone would find odd ifnot used to the terminology of theAmerican farmer. Yield is discussed ingallons of absolute ethanol per bushelof corn. This doesn’t tell us everythingneeded to know how much alcohol can

be obtained from a bushel of corn.Alcohol is produced by converting thestarch in corn. Corn oil, protein, huskand water are not converted into alco-hol. Therefore, the amount of alcoholobtained from a bushel of corn is deter-mined by how much starch the corncontains. How many of the billions ofgallons of U.S. ethanol are producedfrom corn paid for based on its starchcontent? How many ethanol plants evenhave an instrument capable of measur-ing the starch content of incomingcorn?

Consider a 50 MMgy ethanol plantwith a yield of 2.65 gallons per bushel.It would need to purchase approximate-ly 18.9 million bushels of corn per year.The plant would spend approximately$66 million per year on corn if the aver-age bushel price was $3.50. This is by farthe plant’s largest expenditure, and thealcohol yield is vital in determining itsprofitability.

Now consider what an increase inyield of 0.1 gallons per bushel would do

for the plant, assuming the same quanti-ty of corn is used. Production wouldreach approximately 52 MMgy, anincrease of 1.9 mil-lion gallons. If thatalcohol was sold for$2 per gallon, plantrevenue would beincreased by $3.8 mil-lion per year. Thisrepresents more than5 percent of theannual costs of cornand is a relatively modest yield increaselikely within the reach of most ethanolproducers.

When corn prices are high andethanol prices are low, increased yieldbecomes critical to the bottom line. Thepast few months have brought a slow-down in planned ethanol facilities. Yieldincreases—not just throughput—become critical in order for the industryto continue successfully moving for-ward.

The difference between throughput

FERMENTATION

I

Yield Remains Key toDetermining ProfitabilityBy Dave Kelsall

Kelsall

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As the largest, independent risk management firm in renewable fuels, we work

with ethanol and biodiesel plants to maximize operating profitability, expand

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we provide unique market intelligence and industry expertise, which provides our

customers with a competitive advantage.

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FERMENTATION

and yield is that throughput adds vol-ume but at the requirement of addi-tional materials, energy and othervariable costs. Because of this, theadditional benefit of throughput isgenerally subject to the percentage ofplant profitability being applied toany benefits.

Yield improvement does notrequire additional materials, energyor other variable costs and is general-ly 100 percent additional profit.Additionally, if the alcohol concen-tration is increased in addition toincreased ethanol volume, energycosts will also be lowered as well.This adds further to the additionalalcohol contribution gained by yieldincreases.

Accurately Measuring YieldWhen dealing with items as var-

ied as a bushel of corn, it’s importantto accurately measure the yield ofeach fermentation batch (most plantsmake 500 or more batches per year)and control that yield so it’s immedi-


ately known whether it was above orbelow average, and why. This is thesecret of fermentation management andwhy it is so critical.

Most modern ethanol plants havecomputer process control systems thatcontinuously monitor the plant anddetermine trends within the facility.Commonly known as a distributed con-trol system (DCS), it scans plant devicesevery few seconds. One way to measureyield is to measure the mash density inthe slurry vessel every few seconds tocalculate the average mash density overthe fermentor fill period. If the accurate

average mash density and final alcoholcontent of the fermentor is known,yield can be determined by dividing thedrop alcohol (as measured by high-per-formance liquid chromatography) by theaverage mash density. The units of thisyield measurement are not gallons perbushel, but percent alcohol per unit ofmash density. However, this techniqueisn’t perfect.

A true measure of yield is deter-mined by the gallons of ethanol perpound of starch. Considering the con-straints of modern measurement meth-ods, the alcohol level per unit of mash

density offers an easily measured figurethat is extremely accurate. Further, theDCS can calculate the standard devia-tion of this yield measurement. A graphof the yield against a fermentation batchnumber can then be plotted.

A cause must be determined whenethanol yield falls outside of plus-or-minus one standard deviation. Knowingwhy things are going well or poorlyallows plant management to take actionsthat improve the process and continual-ly improve yield. One way to achievethis is to ensure that processing aids areoperating in an environment suitable for

FERMENTATION

Plant size (MMgy)

50

100

$194,000 $965,000 $1,900,000 $645,000 $3,225,000 $6,450,000

$388,000 $1,930,000 $3,800,000 $1,290,000 $6,450,000 $12,900,000

Value of average ethanol increase (throughput) Value of average ethanol increase (yield)

0.10% 0.50% 1% 0.10% 0.50% 1%

* based on $2 per gallon ethanol

SOURCE: LALLEMAND ETHANOL TECHNOLOGY

Profitability of Fermentor Final Alcohols Improvement Based on Annual Averages (in dollars)*

Project ManagPlant Engineers R&D Scientistsngineers Lab Tech

Safety Managers Environmental SpecialistsMaintenance Managers Maintenance Personn

QC Man

ControllersShift SupervisorsSalesOperator

Staffing the Biofuels Industry

(866) 746-8385

[email protected]

www.biofue lsrecru i t ing.com

Biofuels RecruitingBBI International


optimal yield. This includes making surethat pH and temperature are within theoperating parameters for both yeast andenzymes. Yeast optimization is a criticalarea within fermentation. Yeast must bein its growth phase, which producesethanol 33 times faster than any otherphase, in order for it to produce ethanolat its full potential. Yeast needs propernutrition in order to maintain its vitalityand produce ethanol as long as possible.

In the current market, it is essentialto monitor the yield of every batch ofalcohol that the plant produces. Whenso much of the cost of running a plantis locked into the raw material, the yield

of every batch is important to overallprofitability. The efficiency of fermenta-tion determines the bottom line forevery ethanol plant. Yield is made in thefermentor and modest yield improve-ments can significantly affect profitabil-ity.

Remember, the only thing thatmakes alcohol is yeast (a living cell). Atbest, the percent efficiency of the con-version of starch to alcohol is about 92percent. The remainder goes to growingyeast, glycerol, organic acids (lactic andacetic) and higher alcohols. Optimizingthe conversion from starch to ethanolrequires a good, trusted partnership

between enzyme and yeast suppliers.Knowing how to optimize the fermenta-tion process can lift yields to higher lev-els.

Adapting these recommendationscan help prolong profitability duringtimes of economic difficulty.Fermentation management and yieldmaximization is a trend that will contin-ue to pay back ethanol producers intothe future. EP

Dave Kelsall is the technical service manager

for Lallemand Ethanol Technology. Reach him

at [email protected].

FERMENTATION

Plant size (MMgy)

50

100

$377,000 $1,890,000 $3,780,000

$754,000 $3,780,000 $7,560,000

Value of annual yield improvement (in gallons per bushel)

0.01 0.05 0.10

SOURCE: LALLEMAND ETHANOL TECHNOLOGY

Effect of Improving Annual Plant Yield (in dollars)





oming off of the largest corncrop in United States history in2007 and facing favorable corn

prices, 2008 promised to provide anoth-er bin-bursting crop. Like 2007, thedemand for corn would be equally aslarge. Unfortunately, Mother Nature hadother plans and caused notable concernfor many corn growers and ethanol pro-ducers.

Some worry the supply generatedfrom the 2008 corn crop will not be ableto support the still-growing demand,while others believe supply will not bean issue and that corn prices could dropto the $5 range for the remainder of2008 and into 2009. With harvest seasonwell underway, many scenarios exist forwhat the 2008 corn crop might hold andits long-term implications for both corngrowers and ethanol producers.

Early Supply and Demand Projections

In the past few years, the large gainsin the corn market have been spurred by

increased demand. However, as newcrop speculation carried corn pricesabove $6 per bushel, the market funda-mentals shifted as traders began reactingto worries over supply—not demand.

The first indication that supplymight be an issue came in May, when theUSDA projected the United Stateswould use 12.76 billion bushels of corn,3.95 billion bushels of which would gotoward ethanol production. This left anestimated 763 million bushels in endingstocks, which are bushels not in usefrom immediate demand. The endingstocks are essentially what the UnitedStates will have in reserve or inventory.This number, in percentages, is alsoreferred to as the stocks-to-use ratio.

Over the past 20 years, the UnitedStates has on average kept 15.9 percentof its yearly corn crop in reserve.According to the USDA’s May projec-tions, the increased demand for cornwill leave the United States with only 5.9percent in reserve. This by mostaccounts would be considered extreme-

ly low.These lower stocks-to-use ratios

helped fuel speculation of a supply-driv-en corn market and pushed marketprices higher during the early summermonths. As summerprogressed, tradersproved to be sensitiveto conditions thatmight affect the corncrop’s yields, furtherhampering the overallsupply. As a result,market prices wereincreasingly volatile,moving as much as 15 cents each day fordays on end.

Much of the movement seen in themarket was based on new crop specula-tion. The same concerns over yields willdetermine how the corn market reactsafter harvest.

Yield projections have variedthrough the summer. In late July,Agriculture Secretary Ed Schafer saidthe USDA projections indicate that,

CORN

C

Analyzing the Complex2008 Corn CropBy Elaine Kub

Kub


CORN

despite crop problems in parts of the country includingflooding in Iowa, U.S. corn farmers are still expected to raisethe second-largest crop in history.

Schafer’s comments helped reassure the market thatproduction would not be an issue. However, taking intoaccount this year’s much lower-than-average stocks-to-useratio, corn and ethanol producers should keep a watchfuleye on factors influencing the crop’s yields.

A shift in yields, even as small as five to 10 bushels peracre, can have a significant impact on the stocks-to-useratio. When examining the potential yields for this year’scorn crop, it is important to look at what factors might havealready had an effect.

Effects on YieldsOne of the biggest struggles corn growers faced in

2008 was a late start to planting. A late planting season altersthe time during summer when the stalks begin to tassel andsilk and kernels are pollinated. If this stage occurs duringthe hotter parts of summer, pollination will struggle andnegatively affect yields.

Wet and cooler-than-average conditions kept mostCorn Belt farmers out of the fields until late May. Althoughfarmers were able to catch up and put crops in the groundbefore June, most lagged about one week behind schedule.At press time, it was difficult to determine how many acreshave been affected by insufficient pollination and what, ifany, effect it will have on the overall yields.


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The widespread flooding acrossIowa and along the Mississippi Rivercreated a surge in corn prices. Pricessoared from $5 to nearly $8 per bushelwith the prospect of losing millions ofvaluable corn acres. After the initialreaction subsided, prices began to levelout to a more neutral area between $5and $6.

It is possible, however, that somereverberation from the June floodingmay be seen. Although it was estimatedthat the damage was not as significant asfirst believed, poor field drainage andwaterlogged crops could affect yields.The effect will be best measured oncethe corn is completely harvested. Withmillions of acres in question, the mar-kets will have a more fundamental reac-tion once the final numbers are tallied.

Late-season weather is always aconcern for corn growers, particularlywhen impacted by a late planting season.A late start causes corn to have shallowroots and not be as resistant to strongwinds that accompany severe weather.Hail is another summer weather hazard.

As the temperatures begin to shift in thefall, hail becomes a decreasing threat forcorn growers. When corn stalks becomeuprooted by strong winds or battered bylarge hail, these are considered to beunrecoverable losses.

Frost is another weather conditionthat might worry some farmers this year.

In most years, freezing temperatures arelooked at favorably in corn country dur-ing the late harvest season because thecold weather can help speed up the dry-ing process. As a result producers do notneed to spend as much money to artifi-cially dry the grain for storage.

Due to the late planting and slower-

CORN

Price and Profitability Scenarios of Corn

SOURCE: DTN


planting technology. If this is the caseand we have larger ending stocks thancurrently projected, and assumingdemand remains stable, prices will stabi-lize and could possibly remain in the $5range. At this price point, farmers willremain comfortably profitable, but withrising seed and fertilizer costs corn pro-ducers might need added price incen-tives to replant corn instead of otherprofitable crops in 2009.

In the second scenario, dependingon how tight the inventory supplybecomes due to a loss in yield per acre,corn prices could rise significantly. Sincesupply is elastic but the demand is cur-rently less so, prices could easily reachnew all-time highs. If this is the case,ethanol producers could see a difficult2009 but expect relief as the fundamen-tals of supply and demand correct them-selves in a 12- to 13-month cycle.

Generally speaking, with a supply-based spike in prices, farmers would

most likely enter 2009 ready to plant asmuch corn as possible to capitalize onthe higher prices, which will bring pricesback down to more relatively reasonableprices. At the same time a supply-drivenprice spike might help to slightly curbthe growing demand.

Corn producers have their “cus-tomers” in mind this and every year.Although they would have preferred toprovide as much profitably producedcrop as possible at prices that wouldkeep their ethanol- and livestock-pro-ducing customers successful, circum-stances beyond their control may havechallenged their 2008 product to such adegree that not everyone’s needs will bemet. EP

Elaine Kub is a grains analyst at DTN.

For more information, visit www.

dtnprogressivefarmer.com.

CORN

than-average crop development, an earlyfrost will not be looked at as favorably.DTN agricultural meteorologist BryceAnderson forecasted a 20 percent to 25percent chance for early frost for much ofthe northern Corn Belt including thenorthern 40 percent of Iowa, northeastNebraska, far northern Illinois, and all ofMinnesota, the Dakotas, Wisconsin andMichigan.

Of this area, the biggest threat is inthe Dakotas, western and southwesternMinnesota, and northwest Iowa, accord-ing to Anderson. The average first frostdate is mid-to-late September in NorthDakota, late September in South Dakota,and approximately Oct. 1 in southwestMinnesota and northwest Iowa.

Looking AheadThe 2008 corn crop essentially holds

two likely scenarios. First, despite theadversity, the corn crop produces averageor above-average yields. Second, thecrops faced too many irrecoverable yieldlosses, further tightening the U.S. corninventories.

In the first scenario, the nationaltrend-lines traditionally show better yieldseach year as a result of better genetics and

At this price point, farmers will remain comfortably profitable,but with rising seed and fertilizer costs corn producers might needadded price incentives to replant corn instead of other profitable crops in 2009.

EVENTS CALENDAR

Next Generation Biofuel Markets

October 6-7, 2008Hotel Okura

Amsterdam, Netherlands

This fourth annual event will bring together key

players to address the latest developments in cre-

ating the cost-competitive, industrial-scale produc-

tion of next-generation biofuels technologies.

Agenda topics will include commercialization,

financing and investing, global developments, cel-

lulosic ethanol and other biomass-based fuel, and

feedstocks such as switchgrass and sorghum.

+44 207 801 6333

www.greenpowerconferences.com

Clean Energy Asia October 7-10, 2008

Grand Hyatt

Singapore

This event is divided into four topics: ethanol and

biofuels, carbon finance, waste to energy, and solar

energy. The ethanol and biofuels segment will

cover the development of ethanol in Asia, feedstock

reliability, next-generation biofuels, pricing and trad-

ing, advanced technology, and industry standards

and certification.

+65 6322 2771

www.terrapinn.com/2008/ethanol/conf.stm

RINWorld SummitOctober 16-17, 2008

Renaissance Dallas Hotel

Dallas, Texas

This summit will cover the basics of renewable

identification numbers (RINs), the tracking system

that will enforce the renewable fuels standard

(RFS) implemented in the Energy Independence &

Security Act of 2007. Agenda topics will also review

how producers should report RINs to the U.S.

EPA, blending, credit trading and certification.

Speakers include Texas Gov. Rick Perry, who

requested a waiver from the RFS in April, and

Clayton McMartin, president of Clean Fuels

Clearinghouse, a company that helps the ethanol

industry meet RFS requirements.

(575) 377-3369

www.rinsummit.com

Bio-Fuels Thailand November 12-13, 2008

Centara Grand at CentralWorld

Bangkok, Thailand

This seventh annual event’s keynote address will

provide a market overview, and address pricing

and challenges of ethanol in Thailand.

International perspectives will be presented, along

with technology strategies and other critical con-

cerns for the biofuels industry. A roundtable panel

will discuss E85, and a tour of the Thai Agro

Energy Ethanol Plant, and PTT Research and

Technology Institute, will be available to attendees.

(66 02) 254 8321-4

www.abf-asia.com/project/c908($).pdf

Biofuels Markets AfricaNovember 20-21, 2008

Cape Town, South Africa

The approval of the Biofuel Industrial Strategy for

South Africa in December provides fresh impetus

for the country’s biofuels market, along with a foun-

dation and road map to advance the market. The

initial 2 percent biofuels penetration scenario total-

ing 105 MMgy will create 25,000 jobs, according to

the strategy. This third annual conference will bring

together executives from across Africa to discuss

strategies to enhance development of a sustain-

able, regional biofuels industry.

+44 207 801 6333

www.greenpowerconferences.com

Canadian Renewable Fuels Summit

December 1-3, 2008Hilton Hotel Lac Leamy

Hull, Quebec

Themed “Growing Beyond Oil,” the Canadian

Renewable Fuels Association’s fifth annual event

will continue to discuss the progress, challenges

and opportunities facing the Canadian biofuels

market. It will focus on policy and marketing, and

will be attended by a number of industry represen-

tatives from all levels of the ethanol and biodiesel

industries.

(519) 576-4500

www.canadianrenewablefuelssummit.com


International Distillers GrainsConference & Trade Show

October 19-21, 2008Indianapolis Marriott Downtown

Indianapolis, Indiana

This event will seek to educate and empower the

end users of distillers grains, and enhance customer

outreach activities worldwide. The agenda includes

topics such as distillers grains supply and demand;

exports, particularly in Asia; fractionation; and global

feeding trends, especially in poultry, swine and cat-

tle.

(719) 539-0300

www.distillersgrainsconference.com

World Biofuels SymposiumOctober 19-21, 2008

Tsinghua University

Beijing, China

This fourth annual event, organized by BBI

International Inc., will explore the world energy

issues that China currently faces, specifically in

regard to biofuels. Agenda topics will include biofu-

els policy in China compared with Brazil, the United

States, Europe and Singapore; Chinese agriculture

and food supply; life cycle analyses; blending; feed-

stocks; cellulosic ethanol; enzymes; coproducts;

and plant optimization.

(719) 539-0300

www.worldbiofuelssymposium.com

World Ethanol 2008November 3-6, 2008Le Meridien Montparnasse Hotel

Paris, France

This 11th annual event, hosted by F.O. Licht, will

feature top industry experts, including senior repre-

sentatives from the oil and automotive industries,

and assess the outlook for agricultural commodities

and nonfood feedstocks. The conference includes

an ethanol production workshop, a risk manage-

ment seminar and an exhibition hall. Last year, the

conference attracted more than 800 delegates from

58 countries.

+44 (0) 20 7017 7499

www.agra-net.com/worldethanol

Waste to Energy: International Exhibition &

Conference for Energy fromWaste and Biomass

December 10-11, 2008Bremen Exhibition & Conference Centre

Bremen, Germany

This fourth annual event will discuss waste as a

resource for the production of biogas, biofuels and

more. Agenda topics will include material flow

management, separation and sorting, residues,

shredding and grinding, and power and biogas

plants. Biofuels, ethanol in particular, will be dis-

cussed in a breakout session.

+49-421-3505-347

www.wte-expo.com

National Ethanol ConferenceFebruary 23-25, 2009

San Antonio Convention Center

San Antonio, Texas

This event will cover the industry’s impact on the

U.S. economy, the environment, food prices and

the international market. A record of nearly 2,500

people attended in 2008. An agenda will be avail-

able as the event approaches.

(202) 289-3835

www.ethanolrfa.org

International Fuel EthanolWorkshop & ExpoJune 15-18, 2009

Denver Convention Center

Denver, Colorado

This will mark the 25th anniversary of the world’s

largest ethanol conference, which was recently

recognized by Trade Show Week magazine as

one of the Fastest 50 events in the United States

for the second consecutive year. More details will

be available as the event approaches.

(719) 539-0300

www.2009few.com



EPM MARKETPLACE

Ag Products & Services

Grain Origination Services

Agnetic, LLC

317-696-2824 blog.agnetic.com

Hybrid Corn

Pioneer Hi-Bred International, Inc.

800-247-6803 www.pioneer.com

Associations/Organizations

Trade

API Credit Exchange

202-682-8192 www.api.org/ace

Ethanol Promotion & Information Council (EPIC)

402-932-0567 www.drivingethanol.org

Chemicals

PhibroChem

800-223-0434 www.lactrol.com

Anti-Microbial

Ferm Solutions

859-402-8707 www.ferm-solutions.com

Lallemand Ethanol Technology

800-583-6484 www.ethanoltech.com

North American Bioproducts Corporation

866-342-7026 www.na-bio.com

PhibroChem

800-223-0434 www.lactrol.com

CIP

Univar USA Inc.

402-733-3266 www.univarusa.com

Desiccant

Gordon Technologies

570-279-8086 www.gtsieve.com

Water Treatment

Fremont Industries Inc.

952-445-4121 www.fremontind.com

Yeast

Fermentis-Division of SI Lesaffre

800-558-7279 www.fermentis.com

North American Bioproducts Corporation

866-342-7026 www.na-bio.com

Cleaning

Dryer Systems

Hydro-Klean, Inc.

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

Inland Waters

313-841-5800 www.inlandwaters.com


800-369-5500 www.senecacompanies.com

Ductwork

Hydro-Klean, Inc.


Inland Waters




Emergency Spill Response

Hydro-Klean, Inc.


Inland Waters




Fans

Hydro-Klean, Inc.


Inland Waters




Filter Media

Hydro-Klean, Inc.




Heat Exchanger

Hydro-Klean, Inc.


Inland Waters




Hydro-Blasting

Hydro-Klean, Inc.


Inland Waters


Plate-Frame

Hydro-Klean, Inc.


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Railcars

Hydro-Klean, Inc.


Inland Waters




Smoke Stack

Hydro-Klean, Inc.


Inland Waters




Tank Cleaning Equipment

Spraying Systems Co.

630-665-5000 www.spray.com

Tank Cleaning Services

Hydro-Klean, Inc.


Inland Waters


Professional Environmental Cleaning Services

402-212-0949 www.professionalECS.com



Construction

Buildings—Modular

Fabrication

Macomber Welding & Fabricating, Inc.

616-698-0819 www.macomberwelding.com

VAL-FAB Inc.

877-482-5322 www.valfab.com

W. Soule & Company

1-877-976-8531 www.wsoule.com

Grain Storage

Coverall Building Systems

800-268-3768 www.coverall.net

Insulation

Mavo Systems

763-788-7713 www.mavo.com

Mayes Coatings, Inc.

866-93MAYES www.mayescoatings.com

Miller Insulation Co, Inc.

701-258-4323 www.millerinsulation.com

Mechanical

Mid-States Mechanical Services, Inc.

800-950-0279 www.mid-statesmechanical.com

W. Soule & Company

1-877-976-8531 www.wsoule.com

Plant Construction

Agra Industries, Inc.

715-536-9584 www.agraind.com

Agri-Systems

406-245-6231 www.agrisystems.net

CYC Construction

402-333-1652 www.cycconstruction.com

With all contact information placed in

one convenient location, EthanolProducer Magazine not only contains

top editorial content but also a useful

directory in each publication. Whether a

first-time advertiser wanting to raise

awareness of your business or a

frequent display advertiser looking for

added exposure, EPM Marketplace is

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EPM MARKETPLACE



EPM MARKETPLACE

Reimer Welding Inc.

218-773-0886 www.reimerwelding.com

Wanzek Construction,Inc.

701-282-6171 wanzek.com

Railroad Tracks

R & R Contracting, Inc.

800-872-5975 www.rrcontracting.net

Railworks

913-888-4091 www.railworks.com

Volkmann Railroad Builders, Inc.

262-252-3377 www.volkmannrr.com

Tanks

DCI, Inc.

320-252-8200 www.dciinc.com

Eagle Tanks, Inc.

888-678-0698 www.eagletanks.com

WINBCO Tank Company

641-683-1855 www.winbco.com

Consulting

Business Plans

ICM, Inc.

316-796-0900 www.icminc.com

Environmental

Air Resource Specialists,Inc.

970-484-7941 www.air-resource.com

ICM, Inc.


Inland Waters


Seneca Companies


TKDA

651-292-4602 www.tkda.com

Feasibility Studies

Harris Group Inc.

206-494-9422 www.harrisgroup.com

Groundwater Services

Leggette, Brashears & Graham, Inc.

651-490-1405 www.lbgweb.com

Personnel Recruiting

SearchPath of Chicago

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

Plant Optimization

Granatus Consulting, Inc.

218-773-0005 www.granatusinc.com

Harris Group Inc.


Terratec Biofuels of Solutia

800-742-1476 www.TerratecBiofuels.com

Project Development

Ethanol Productions

813-968-6867 [email protected]

Harris Group Inc.


Public Relations

Lanser Public Affairs, LLC

262-797-7876 www.lanserpublicaffairs.com

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EPM MARKETPLACE

Quality Assurance

Eurofins Scientific, Inc.

551-580-9140 www.eurofinsus.com

Regulatory

Air Resource Specialists.Inc.

970-484-7941 www.air-resource.com

Risk Management

National Fuel Marketing

303-996-6781 www.NationalFuelMarketing.com

Education

Iowa BioDevelopment

641-969-4167 www.iabiodevelopment.com

Iowa Biofuels Training International

641-969-4167 www.biofuelstraining.org

Employment

Recruiting

Hobbs & Towne

610-783-4600x108 www.hobbstowne.com

SearchPath of Chicago

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

The Richmond Group USA - BioEnergy Search Division

804-285-2071 www.trgbioenergy.com

Engineering

Civil

Antioch International, Inc.

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

TKDA


Control Systems

Bachelor Controls

785-284-3482 www.bachelorcontrols.com

Control System Integrators, Inc.

319-377-6538 x19 www.csystemi.com

Design/Build



Agri-Systems


Delta-T Corporation

757-941-0188 www.deltatcorp.com

ECE Design

312-235-6960 www.ecedesign.com

Ethanol Productions


GS CleanTech Corp.

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

ICM, Inc.


Wanzek Construction, Inc.

701-282-6171 wanzek.com

Process Design

Agri-Systems


ChemSim

781-248-5057 www.chemsim.com

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

Ceco Abatement Systems, Inc.

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

ICM, Inc.


Analytical Instruments

Anton Paar

+1-804-550-1051 www.anton-paar.com

Perten Instruments, Inc.

801-936-8165 www.perten.com

Blowers & Fans

FlaktWoods

716-845-0900 www.flaktwoods.com

Robinson Industries, Inc.

724-452-6121 www.robinsonfans.com

Boiler Systems

Factory Sales and Engineering, Inc.

985-867-9150 www.fsela.com

Rentech Boiler Systems, Inc.

325-794-5701 www.rentechboilers.com

Catwalks

Lean Technologies LLC

701-352-9620 www.leantechnologiesllc.com

Centrifuge Repair

Nosnhoj Services Inc.

317-887-6436 www.nosnhojinc.com

Grading, sampling, mycotoxins, proximates, residues, GMOs.QA / QC Consulting: HACCP, GMPs, SOPs, NIR calibrationCo-products: Quality assurance testing; Lot certification; Export assistance

[email protected]

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EPM MARKETPLACE



EPM MARKETPLACE

Centrifuges

Westfalia Separator,Inc.

201-784-4322 www.wsus.com

Combustion Equipment

Eclipse.Inc.

815-637-7213 www.eclipsenet.com

John Zink Company LLC

800-421-9242 www.johnzink.com

Computer Software

dbc SMARTsoftware, Inc.

770-427-7633 www.dbcsmartsoftware.com

Encore Business Solutions

204-989-4330 www.encorebusiness.com

John Deere Agri Services

770-238-5100 www.johndeereagriservices.com

Summit Software, Inc.

800-433-5724 x 181 www.summit-soft.com

Control Systems

FeedForward, Inc.

770-426-4422 www.feedforward.com

Kahler Automation Corp.

507-235-6648 www.kahlerautomation.com

SoftPLC Corporation

512-264-8390 www.softplc.com

Control Systems—Distributed

Control System Integrators, Inc.

319-377-6538 x19 www.csystemi.com

Conveyors—Enclosed

Grisley Components, Inc.

303-756-6474 www.grisley.com

Conveyors—Pneumatic

Blower Engineering

800-388-1339 www.blowerengineering.com

Gusmer Enterprises, Inc.

847-277-9785 www.gusmerenterprises.com

Distillation Equipment

SRS Engineering Corporation

800-497-5841 www.srsengineering.com

Dryers—Flash

Barr-Rosin,Inc.

630-659-3980 www.barr-rosin.com

Dryers—Fluid Bed

Aeroglide Corporation

919-851-2000 www.aeroglide.com

Dryers—Other

Davenport Dryer, LLC

309-786-1500 www.davenportdryer.com

Dryers—Ring

Barr-Rosin,Inc


Dryers—Rotary Drum

Barr-Rosin,Inc.


Aeroglide Corporation

919-851-2000 www.aeroglide.com

FEECO International, Inc.

920-468-1000 www.feeco.com

ICM, Inc.


Ronning Engineering Company, Inc.

913-239-8118 www.ronningengineering.com

Emission Monitoring Systems

MonitorTech Corp.

866-682-6771 www.monitortechgrp.com

Emissions Testing & Reduction

Lantec Products, Inc.

617-265-2171 www.lantecp.com

Evaporators

GEA NIRO Inc

410-997-8700 www.niroinc.com

HRS Process Technology, Inc.

623-915-4328 www.hrs-americas.com

Fermentors

WINBCO Tank Company


Filters

Eaton Filtration

800-656-3344 ext 581 [email protected]

Larox

301-543-1200 www.larox.com/cpi

Filtration Equipment

BWF America

800-733-2043 www.bwf-america.com

W.S. Tyler

1-800-321-6188 www.wstyler.com

Fractionation—Corn

Buhler Inc.

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

Cereal Process Technologies

217-779-2595 www.cerealprocess.com

FWS Technologies

204-487-2500 www.fwsgroup.com

Sturtevant Inc.

781-829-6501 www.sturtevantinc.com

Gas Detectors

UE Systems, Inc.

914-592-1220 www.uesystems.com

Gaskets

Allegheny Coupling Company

814-723-8150 www.alleghenycoupling.com

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EPM MARKETPLACE

Grain Handling & Storage

Sukup Manufacturing Co.

641-892-4222 www.sukup.com

Heat Exchangers

Custom Metalcraft Inc.

417-862-0707 www.custom-metalcraft.com

Munters - Des Champs Products

540-291-1111 www.deschamps.com

Instrumentation

Endress+Hauser,

317-535-2174 www.us.endress.com

Instrument Associates

708-597-9880 www.instrumentassociates.com

Process Sensors Corp.

508-473-9901 www.processsensors.com



Shimadzu Scientific Instruments

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

WIKA Instrument Corporation

888-945-2872, x5127 www.wika.com

Jet Cookers

ProSonix Corporation

800-849-1130, x. 801 www.pro-sonix.com

Laboratory—Equipment

Astoria-Pacific International

800-536-3111 www.astoria-pacific.com



Laboratory—Supplies

Midland Scientific, Inc.

800-642-5263 www.midlandsci.com

Laboratory—Testing Services

Ethanol Lab Training


Eurofins GeneScan, Inc.

504-297-4330 www.gmotesting.com

Midwest Laboratories

402-334-7770 www.midwestlabs.com

Romer Labs, Inc.

636-583-8600 www.romerlabs.com

SGS North America, Inc.

281-478-8234 www.sgs.com/alternativefuels

Trilogy Analytical Laboratory

636-239-1521 www.trilogylab.com

Loading Equipment

Hemco Industries, Inc.

877-347-7106 www.hemcocpm.com

SafeRack

866-761-7225 www.saferack.com

Maintenance Services

Joule’ Industrial Contractors

[email protected] www.jouleinc.com

Maintenance Software

Mapcon Technologies, Inc.

800-922-4336 www.mapcon.com

Mills—Hammer

CBT Wear Parts, Inc.

888-228-3625 www.cbtwearparts.com

Prater-Sterling

630-679-3254 www.prater-sterling.com

CPM/Roskamp Champion

800-366-2563 www.cpmroskamp.com

Millwright

Agri-Systems


Mixers

KINEMATICA, INC.

631-750-6653 www.kinematica-inc.com

Moisture Analyzers



Sartorius Mechatronies-Omnimark

800-835-3211 www.sartorius-omnimark.com

Molecular Sieves

Gordon Technologies

570-279-8086 www.gtsieve.com

Vaperma, Inc.

418-839-6989 www.vaperma.com

Zeochem, LLC

502-634-7600 www.zeochem.com

Motors

Trico TCWind, Incorporated

320-693-6200 www.tricotcwind.com

www.wika.com

Contact Hardy Orzikowski for more information and to schedule your instrument review.888.945.2872 ext. [email protected]

Made in the U.S.A.

Pressure Gauge

Solutions for the Ethanol Industry

R


EPM MARKETPLACE

Pipe

American Stainless & Supply

800-845-5511 www.americanstainless.com

ISCO Industries

800-345-4726 www.isco-pipe.com

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 & Temperature

WIKA Instrument Corporation

888-945-2872, x5127 www.wika.com

Pressure Vessels

WINBCO Tank Company


Process Control

Harris Group Inc.


Pumps

ITT Industries Goulds Pumps

315-568-2811 www.gouldspumps.com

Watson-Marlow Bredel Pumps

800-282-8823 www.watson-marlow.com

Yamada America, Inc.

800-990-7867 www.yamadapump.com

QA Test Products



Phenomenex

310-212-0555x3328 www.phenomenex.com

RTO Media



Resource Recovery

Eco-Tec, Inc.

905-427-0077 www.eco-tec.com

Safety

SimplexGrinnell

800-746-7539 www.simplexgrinnell.com

Seals

Aesseal Inc.

865-531-0192 www.aesseal.com

Utex Industries, Inc.

432-333-4151/800-873-0946 www.utexind.com

Sensors

Electro Sensors

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

Separation Equipment

Puritan Magnetics, Inc.

248-628-3808 www.puritanmagnetics.com

Separators

Westfalia Separator,Inc.

201-784-4322 www.wsus.com

Steel Suppliers

Chapel Steel


Outokumpu Stainless

847-517-4050 www.outokumpu.com

Sandmeyer Steel Company

215-464-7100 www.sandmeyersteel.com

Storage—DDGS

Laidig Systems, Inc.

574-256-0204 www.laidig.com

Structural Fabrication

Cherokee Steel Fabricators, Inc.

903-759-3844 www.cherokeesteelfabricators.com

Tanks



Brown-Minneapolis Tank

281-252-9809 www.bmt-tank.com

CMC Letco Industries

417-831-1528 www.cmc-letco.com

Federal Equipment Company

800-652-2466 www.fedequip.com

Greenberry Industrial

541-757-8458 www.greenberryinc.com

Paragon Trailer Sales

800-471-8769 www.paragontrailer.com

WINBCO Tank Company


Thermal Energy

American Waste Removal

505-417-9933 www.americanwasteremoval.com

Thermal Oxidizers

ICM, Inc.


Pro-Environmental, Inc.

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

Turbines—Gas

Kawasaki Gas Turbines

281-970-3255x18 www.kawasakigasturbines.com

[email protected]

PROVENRELIABILITYfor VOC, CO & PM

ABATEMENT

EISENMANN CorporationCrystal Lake, Illinois


EPM MARKETPLACE

Your Ad HERE


EPM MARKETPLACE

Used Equipment

VOC Scrubbers



Valve Actuators

Rotork Controls,Inc.

585-247-2304 www.rotork.com

Valves

Central States Group

800-318-2747 www.centralstatesgroup.com

Check-All Valve Mfg. Co.

515-224-2301 www.checkall.com

Metso Automation

508-852-0215 www.metsoethanol.com

North American Safety Valve

800-800-8882 www.nasvi.com

Wastewater Treatment Services

Biothane Corporation

856-541-3500x501 www.biothane.com

Water Treatment

Aquatech International Corporation

724-746-5300 www.aquatech.com

Siemens Water Technologies

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

Ethanol Production

Existing Producers

Louis Dreyfus Commodities

402-844-2680 LDCommodities.com

Future Producers

Syntec Biofuel, Inc.

604-648-2092 www.syntecbiofuel.com

Finance

Accounting

Christianson & Associates PLLP

320-235-5937 www.christiansoncpa.com

Kennedy and Coe, LLC

800-303-3241 www.kcoe.com

Appraisals

Natwick Associates Appraisal Services

800-279-4757 www.natwick.com

Due Diligence

Harris Group Inc.


Equity Procurement

Greenman Funding


Jordan, Knauff & Company

312-254-5900 www.jordanknauff.com

Insurance

Armor Companies, Inc.


ERI Solutions, Inc.

316-927-4294 erisolutions.com

Lender Representatives

Greenman Funding


Mergers & Acquisitions

Thomas Group Capital

404-504-6050 www.thomassec.com

Risk Management

First Capitol Risk Management

800-884-8290 www.firstcapitolrm.com

R.J. O’Brien

800-621-0757 www.rjobrien.com

Software—Accounting

Encore Business Solutions

204-989-4330 www.encorebusiness.com

Summit Software, Inc.

800-433-5724 x 181 www.summit-soft.com

Legal Services

Attorneys

BrownWinick Law Firm

515-242-2400 www.biofuellawyers.com

Dorsey & Whitney LLP

612-343-8275 www.dorsey.com

Faegre & Benson, LLP

612-766-6930 www.faegre.com

Stoel Rives LLP

612-373-8800 www.stoel.com/biofuels

Marketing

Distillers Grains

CHS, Inc.

651-355-6271 www.chsinc.com

Gavilon

402-595-5678 www.gavilon.com

Hawkeye Gold, LLC

515-663-6429 www.hawkgold.com

Fuel Ethanol

Atlas Renewable Energy, LLC

800-884-8290 www.atlasenergyllc.com

C&N Ethanol Marketing Corp.

952-854-6675 www.candncompanies.com

Gavilon

402-595-5678 www.gavilon.com

Noble Americas Corporation

626-585-1705 www.thisisnoble.com

Provista Renewable Fuels Marketing

651-355-8519 www.provistafuels.com


EPM MARKETPLACE

Transportation

Heavy Highway Transport

Landstar Carrier Group

920-487-3877 www.landstar.com

Rail

Ameritrack RailRoad Contractors, Inc.

765-659-2111 www.ameritrackrailroad.com

Blacklands Railroad

903-439-0738 www.blacklandsrailroad.com

Rail Consulting

Antioch International, Inc.

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

TKDA


Rail Ties

Thompson Industries, Inc.

317-859-8725 www.thompsonindustries.net

Railcar Moving

Heyl & Patterson Inc.

412-788-9810 www.heylpatterson.com

Shuttlewagon

816-767-0300 www.shuttlewagon.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

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.

With all contact information placed in

one convenient location, Ethanol

Producer Magazine not only contains

top editorial content but also a useful

directory in each publication. Whether a

first-time advertiser wanting to raise

awareness of your business or a

frequent display advertiser looking for

added exposure, EPM Marketplace is

the perfect solution.

EPM MARKETPLACE


EPM MARKETPLACE


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

www.BiomassMagazine.com

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

[email protected].

EXPANDING?UPGRADING?

Keep Your Plant Runningwith our In-Stock Stainless PVF

Robert-James Sales—the leading distributor of in-stock stainless pipe, fittings, valves and flanges—got yournew plant up and running when it was built. Now look to us to service all your continuing MRO requirements.Over 80% of all orders are shipped the same day from our nine regional warehouses. We also ship the largersize products up to 54” in diameter demanded by the biofuel processing industry today.

Buffalo, NY 800-666-0088Cleveland, OH 800-777-0820Cincinnati, OH 800-777-2260Chicago, IL 800-777-2008Indianapolis, IN 800-777-0510Minneapolis, MN 800-777-1355South Plainfield, NJ 800-777-1858Raleigh, NC 866-493-8834Tavernier, FL 305-852-1694www.rjsales.com

Free Product CDContact the Robert-James Sales locationnearest you and ask for a freecopy of our comprehensive,up-to-date CD. It outlines our stainless product lineincluding reference charts,graphs and tables to help you calculate what your processing plant needs.

Stocking

a full r

ange of

2205 Duplex in 1/2" to 24"

poet.com

Documents

October 2008 Ethanol Producer Magazine