April 2010 Ethanol Producer Magazine

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contents

vol. 16 no. 4

features 44 CORN Gumming up the Works Widespread wet corn presents challenges to ethanol producers, from too little dryer capacity to molds and corn dried at too high temperatures.

–By Holly Jessen 50 POLICY Setting Boundaries with the Low Carbon Fuel Standard Ethanol headed to California must be registered with CARB beginning in July. Many details still need to be worked out.

–By Anna Austin 56 EMISSIONS Measured Expectations EPA’s new GHG reporting rules excluded ethanol as a source category for now, yet many plants will need to report their stationary combustion sources.

–By Kris Bevill

62 RACING Ethanol: Growing It, Burning It and Breaking Records An Oklahoma farmer and self-proclaimed set a land speed record by optimizing his Mustang to burn E85.

–By Luke Geiver

62 4

ETHANOL PRODUCER MAGAZINE

April 2010

contents departments

contributions

8 Editor’s Note Sign of a New Era

By Susanne Retka Schill 9 Advertiser Index 10 Events Calendar 14 The Way I See It The Right Strategy at the Right Time

By Mike Bryan

68

16 View From the Hill Ethanol’s Agenda Item No.1: Extend the Tax Incentives

By Bob Dinneen 18 Drive Ethanol-Optimized Engine A Major Breakthrough for Producers

By Tom Buis

68 DEHYDRATION Methods for Expanding Ethanol Dehydration Debottlenecking by targeting the right improvements expands production and optimizes energy use.

20 eBio Where is the Consistency?

By Robert Vierhout

–By Felipe Tavares, Jansley Pascoal and Bruno Maia

22 Taking Stalk Stepping up Sorghum Use

By Bill Greving 24 Legal Perspective Reorganization and Investment Opportunities in the Ethanol Industry

By Bradley R. Kruse 26 Business & People 28 Commodities

72

30 BIObytes 32 Industry News

72 INTELLECTUAL PROPERTY Next-Generation Biofuels: Establishing, Protecting and Profiting from Technology Rights Trade secrets and patents are both legally protected and must be handled correctly.

–By Charles Richard

6

74 Marketplace Ethanol Producer Magazine: (USPS No. 023-974) April 2010, Vol. 16, Issue 4. Ethanol Producer Magazine is published monthly. Principal Office: 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. Periodicals Postage Paid at Grand Forks, North Dakota and additional mailing offices.

POSTMASTER: Send address changes to Ethanol Producer Magazine/ Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, North Dakota 58203.

ETHANOL PRODUCER MAGAZINE

April 2010

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Sign of a New Era

O

ne could almost hear a sigh of relief emanating from the Heartland when the final rule for the renewable fuels standard became public. The draconian impacts of the U.S. EPA’s proposed rule have been sidestepped. We report the basics of the news in this issue and will explore its implications further next month. The EPA struck a balance between competing interests.

The environmentalists appear to be satisfied with the rule, based on the initial press releases we saw and the lack of a media outcry following the Feb. 3 release. After all, it took the New York Times a week to get around to an editorial on the new rule, which it headlined “Sensible Rules for Ethanol.”

The final rule was simultaneously posted to the EPA Web site and announced at a news conference of cabinet heads releasing the strategy to move biofuels forward in order to meet the 36 billion gallon target by 2022. The administration’s Biofuels Interagency Working Group made up of the EPA, U.S. DOE and USDA revealed a strategy that is strongly pro-biofuels, with an explicit acknowledgement that advanced biofuels will be built upon a healthy conventional biofuel sector.

“To reach and exceed our biofuels targets, we will need to take a new strategic approach that continues to support the existing biofuels industry and accelerates the creation and rapid commercial deployment of new technologies so our nation’s efforts to establish an advanced biofuels industry are met,” says the working group’s document titled, “Growing America’s Fuel—An Innovation Approach to Achieving the President’s Biofuels Target.”

Success in meeting these targets would bring many benefits to the United States, the administration strategy says, “including new jobs and greater economic vitality in rural America, increased energy independence, reduced economic vulnerability to volatile oil prices and uncertain supplies, technological and industrial leadership in renewable biofuels, and reduced global warming pollution. In short, America will be in firmer control of its energy future.”

A notable feature in the strategy is an acknowledgement that the strategy will be regional in nature.

In fact, the recognition of regionalization may be the most significant feature, if it indeed signals a shift in policy approach to not attempt to make one policy fit all situations. In other words, corn ethanol makes sense in the Midwest. The strategy should be to stimulate use of E85 in that region. In the Southeast, it makes sense to work on advanced biofuels based on energy cane or woody resources. “Having such regional strategies will allow logistics and transportation systems to be optimized, as well as expand new supply chain opportunities across rural America,” the working group document says. Realizing the promise of a new era in agriculture through renewable fuels in a thriving bio economy will require just this sort of regional optimization.

Speaking of new eras, let me introduce the new EPM team. In January, I became editor of Ethanol Producer Magazine. Former editor Kris Bevill and associate editor Erin Voegele are leading the launch of a new magazine from BBI International, Industrial GHG Solutions. The expertise they’ve gained in reporting EPA policy and greenhouse gas issues for this magazine will be expanded to cover the topic and emerging industry surrounding the monitoring and mitigation of greenhouse gases. Replacing them on the EPM staff are Holly Jessen and Luke Geiver. With the help of our colleagues at BBI International, we will continue the company tradition of covering the ethanol industry in depth. We welcome your feedback, news tips and industry insights.

Susanne Retka Schill, Editor sretkaschill@bbiinternational.com

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ETHANOL PRODUCER MAGAZINE

April 2010

AdIndex www.EthanolProducer.com E D I T O R I A L Susanne Retka Schill Editor sretkaschill@bbiinternational.com

Holly Jessen Associate Editor hjessen@bbiinternational.com

Luke Geiver Associate Editor lgeiver@bbiinternational.com

Jan Tellmann Copy Editor jtellmann@bbiinternational.com

P U B L I S H I N G Mike Bryan

&

S A L E S

Chairman mbryan@bbiinternational.com

Joe Bryan

CEO jbryan@bbiinternational.com

Tom Bryan

Vice President tbryan@bbiinternational.com

Matthew Spoor

Vice President, Sales & Marketing mspoor@bbiinternational.com

Howard Brockhouse

Executive Account Manager hbrockhouse@bbiinternational.com

Jeremy Hanson

Senior Account Manager jhanson@bbiinternational.com

Marty Steen

Account Manager msteen@bbiinternational.com

Bob Brown

Account Manager bbrown@bbiinternational.com

Gary Shields

Account Manager gshields@bbiinternational.com

Jessica Beaudry

Subscriptions Manager jbeaudry@bbiinternational.com

Jason Smith

Subscriber Acquisition Manager jsmith@bbiinternational.com

Marla DeFoe

Advertising Coordinator mdefoe@bbiinternational.com

A R T Jaci Satterlund

Art Director jsatterlund@bbiinternational.com

Sam Melquist

Graphic Designer smelquist@bbiinternational.com

Elizabeth Burslie

Graphic Designer bburslie@bbiinternational.com

65 & 68 59 25 23 62 72 78 57 2 56 19 53 63 49, 52, 58 & 64 39 & 73 40 41 3 67 48 15 & 79 80 47 5 12 & 13 42 73 36 11 69 46 7 21 37 17 43 38 71

2010 Advanced Biofuels Workshop 2010 International BIOMASS Conference & Expo 2010 International Fuel Ethanol Workshop & Expo 2010 National Ethanol Conference Agra Industries Inc. Angel Yeast Co., LTD Biomass Magazine BrownWinick Law Firm Burns & McDonnell Check-All Valve Mfg. Co. Church & Dwight Co, Inc. Cima Energy, LTD CPM Roskamp Champion EISENMANN Corp. ethanol-jobs.com Fagen Inc. FCStone, LLC Fermentis - Division of S.I. Lesaffre Gamajet Cleaning Systems, Inc. Gavilon Genencor® - A Danisco Division Growth Energy Hydro-Klean Inc. ICM, Inc. Inbicon Indeck Power Equipment Co. Industrial GHG Solutions Lindquist & Vennum PLLP MAC Equipment Nalco Co. Natwick Associates Appraisal Services Novozymes Pioneer Hi-Bred International, Inc. Pro-Environmental, Inc. Renewable Fuels Association Resonant BioSciences Vogelbusch USA, Inc. Wabash Power Equipment Co.

SUBSCRIPTIONS Ethanol 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.

BACK ISSUES AND REPRINTS Select back issues are available for $3.95 each, plus shipping. To place an order, contact Subscriptions at (701) 746-8385 or service@bbiinternational.com. Article reprints are also available for a fee.

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

Please send correspondence to: Ethanol Producer Magazine 308 Second Ave. N., Suite 304 Grand Forks, ND USA 58203 Phone: (701) 746-8385 Fax: (701) 738-4927 Advertising information online: www.EthanolProducer.com

LETTERS TO THE EDITOR We welcome letters to the editor. Send your letter to: Ethanol Producer Magazine Letters, 308 Second Avv. N., Suite 304, Grand Forks, ND 58203 or e-mail to sretkaschill@bbiinternational.com. Letters should include the writer’s full name, address and telephone number, and may be edited for purposes of clarity and space.

ETHANOL PRODUCER MAGAZINE

April 2010

COPYRIGHT © 2010 by BBI International

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EVENTS CALENDAR

Corn Utilization and Technology Conference June 7-9, 2010 Future Energy Conference: The Business of Renewable Energy & Efficiency April 21-22, 2010 Oregon Convention Center Portland, Oregon The conference will focus on project developers, service and equipment providers, energy end users, utilities, government and others involved in building the new energy economy.

Advanced Biofuels Workshop June 14, 2010

Atlanta Hilton Atlanta, Georgia The program has been expanded to include current topics related to corn, such as land use issues and greenhouse gas emissions, aquifers, water quality and usage in corn agriculture, life-cycle analyses of new technologies and plenary sessions addressing these issues. The program will include sessions on wet and dry milling processes, biocatalysts, gene transformation technology, health and nutrition, unique specialty corns, new products and revenue streams.

America’s Center St. Louis, Missouri In its third year, this BBI International one-day workshop focusing on advanced biofuels will be co-located with the Fuel Ethanol Workshop & Expo to be held June 14 to 17 in St. Louis. The full range of advanced biofuels from biomass-based diesels to cellulosic ethanol and other biofuels will be covered in workshops dealing with research, project development, feedstock development, environmental performance and more. www.advancedbiofuelsworkshop.com

www.futureenergyconference.com/

April

www.corntechconf.org

May

June

Aug

2010 Farm to Fuel Summit August 11-13, 2010

International Biomass Conference & Expo May 4-6, 2010

International Fuel Ethanol Workshop & Expo June 14-17, 2010

Minneapolis Convention Center Minneapolis, Minnesota This Biomass Magazine-sponsored conference will unite current and future producers of biomass-derived power, fuels and chemicals with waste generators, energy crop growers, municipal leaders, utility executives, technology providers, equipment manufacturers, project developers, investors and policymakers. Future and existing biofuels and biomass power producers will be able to network with waste generators and other industry suppliers and technology providers as well as utility executives, researchers, policymakers, investors, project developers and farmers.

America’s Center St. Louis, Missouri This Ethanol Producer Magazine-sponsored conference provides the global ethanol industry with cutting-edge content and unparalleled networking opportunities in a dynamic business-to-business environment. It is the largest, longest-running ethanol conference in the world. The event delivers timely presentations with a strong focus on commercialscale ethanol production, new technology, and nearterm research and development.

Rosen Shingle Creek Orlando, Florida This fifth annual summit is an opportunity for industry leaders and stakeholders to learn, network and strategize to advance the development of renewable energy in Florida. Florida’s Farm to Fuel initiative was developed to promote the production and distribution of renewable energy from Florida-grown crops, agricultural wastes and other biomass. More than 500 attendees from academia, industry and government participated in last year’s summit. www.floridafarmto

www.fuelethanolworkshop.com

www.biomassconference.com

10

ETHANOL PRODUCER MAGAZINE ETHANOL PRODUCER MAGAZINE• April April2010 2010

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The Way I See It

The Right Strategy at the Right Time An enormous amount has been written about the final rule for the renewable fuel standard (RFS2) and the statements from the White House in support of biofuels development. One thing that has not been written about—and perhaps can only be fully appreciated by those who have been involved in the ethanol industry for many years—is, in a word, progress!

My tenure goes back 26 years, others go back even further. Over the years, the battles that have been fought on state and federal levels could fill volumes. It seems at times that we take two steps forward and three steps backwards, but when one looks at the span of the past 25 years, it’s clear that the major direction has always been forward.

Those opposed to ethanol have driven more stakes in its heart than a bad Dracula movie. But you just can’t kill an idea whose time has come. The slash and burn tactics used by ethanol detractors have failed time and time again. They have failed because ethanol is the right strategy at the right time in history.

We certainly applaud the commitment to biofuels demonstrated by the Obama administration. The words of vindication contained in the RFS2 will go far to help establish ethanol as a future fuel. The reality, however,

is, that when faced with the alternative of “more oil” or domestically produced fuel, even with its blemishes, what other choice do we really have? As strategies are being feverously drafted to reduce our GHG emissions, improve our energy security, and get people back to work here in America, I ask again, do we choose more oil or domestically produced clean energy?

History is replete with failures, but seldom does something fail when it addresses a fundamental problem.

Ethanol addresses a fundamental problem facing America and the world, the need for clean, home-grown energy.

Of all the seemingly unsolvable problems that the world faces, energy does not have to be one of them. We have solutions to our energy needs. Not just one solution, but multiple solutions. It’s time we unanimously adopt those solutions, and move on to other problems that are far more pressing.

That’s the Way I See It!

Mike Bryan Chairman mbryan@bbiinternational.com

14

ETHANOL PRODUCER MAGAZINE • April 2010

VIEW FROM THE HILL Ethanol’s Agenda Item No.1: Extend the Tax Incentives On the heels of what I consider to be the best National Ethanol Conference the Renewable Fuels Association has ever hosted, the industry is re-energized, recommitted and refocused on the challenges at hand. The return to modest profitability, the implementation of the renewable fuels standard and the end to the general malaise throughout the economy all contributed to a sense of guarded optimism at the February conference in Orlando, Fla. Still, this optimism did not and cannot tint the glasses through which this industry views the year ahead.

Addressing expanded ethanol blending, growing infrastructure needs, and the methodology by which carbon is counted, will all require the collective efforts of the industry. Important as these issues are, there is no issue of greater importance on Capitol Hill this year for the ethanol industry than a long-term extension of the tax incentives for all sources of ethanol.

The expiration of the Volumetric Ethanol Excise Tax Credit and the corresponding secondary tariff on imports at the end of 2010 must be avoided. To understand the importance of these policies to ethanol, one needs look only to the biodiesel industry. As I stated in the State of the Industry address at the NEC, “This CANNOT be us!”

To be sure, extending the tax incentives for all ethanol will not be easy. Many opponents of ethanol simply don’t believe that America should be developing domestic, renewable industries to challenge the monopoly of petroleum. Others question the necessity of tax incentives when a mandate is already in place. Adding confusion and uncertainty is the polarized and dysfunctional climate in Congress, amplified by looming elections in November. Moving appropriate legislation forward will be no small feat as gridlock is likely to be the norm in 2010.

These hurdles are not insurmountable and can-

not prevent the industry from aggressively pursuing its goals. Continuing the tax incentive available to oil companies who blend ethanol is a critical policy underpinning of the Obama administration’s stated goal to realize America’s biofuel potential.

First, as the example of the biodiesel industry demonstrates, tens of thousands of jobs are at stake.

It isn’t a question of whether ethanol will be used— the RFS requires it. The real question is from where will the ethanol come? In a time of economic uncertainty, it would seem foolish and shortsighted to put at risk the well-paying jobs of tens of thousands of Americans in favor of imports of ethanol from countries with less stringent worker rights than the U.S., to put it diplomatically.

Second, the tax incentive makes fiscal sense. In a straight dollars in/dollars out comparison, the ethanol industry returned $3.4 billion MORE to the federal treasury than was spent in the VEETC in 2009, not to mention tax revenue generated in states and communities across the country, nor the savings from fewer oil imports.

Third, the renewable fuels standard is a floor, not a ceiling. Making the RFS the be-all end-all for renewable fuel use would handcuff the innovation

by Americans seeking renewable energy answers to our fossil fuel addiction. Removing the market-based incentives for increased ethanol use effectively caps the market and discourages the very innovation that the country demands.

This is not the last time my column this year will touch on this issue that is of critical importance to the future of the industry. I encourage all of you to contact the RFA with your questions, reach out to your members of Congress, and continue being the unmitigated and unmatched force unlocking the potential of America’s renewable fuel potential.

Bob Dinneen President and CEO Renewable Fuels Association 16

ETHANOL PRODUCER MAGAZINE • April 2010

RFA

The voice of the ethanol industry.

Since 1981, the Renewable Fuels Association (RFA) has been the authoritative voice of the ethanol industry. Our efforts have yielded an unequaled record of legislative and regulatory victories. But we consider our track record just the beginning, and are expanding our efforts with a focus on market development.

The RFA is a trusted source for reliable LQIRUPDWLRQ DQG VFLHQWLĂ€F DQDO\VLV IRU the industry, policymakers, and media alike. The RFA is the leading expert on ethanol standards and guidelines for safety. We are also the preeminent authority on E10 and E85.

The RFA is a member-centered, member-driven organization. Join with us to help build a strong future for the industry. For more information, visit www.ethanolrfa.org, or call (202) 289-3835.

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DRIVE Buis

Ethanol-Optimized Engine A Major Breakthrough for Producers

By Tom Buis

A

t Growth Energy, we are constantly looking for new ways to demonstrate the opportunities domestic ethanol provides our nation. We saw a major opportunity emerge earlier this winter, when Growth Energy and Ricardo Systems, a global leader in engine innovation, unveiled a 10-month joint project to demonstrate that engines designed specifically for ethanol can match regular gasoline and diesel for both fuel efficiency and power performance.

This is an enormous breakthrough for our industry. The Growth Energy-Ricardo project will prove that ethanol is a viable fuel—that its unique fuel properties, particularly its highoctane and high-oxygen levels, coupled with its low-carbon, renewable and sustainable qualities, make it the fuel of the future.

In short, the Growth Energy-Ricardo project will demonstrate that engine technology can finally catch up with fuel technology.

Ricardo’s ethanol boost direct injection (EBDI) engine is designed to burn any mix of ethanol and gas up to E85. The engine block is half the weight of a traditional diesel engine, which can allow as much as an additional 500 pounds of payload for a traditional V6. In fact, Ricardo engineers told me that the more weight the engine is pulling, the greater the power the ethanol can provide the engine. And, at blends of E40 to E50, the EBDI engine improves on the fuel economy of regular gasoline engines by as much as 10 percent. Think about that: One of the biggest criticisms of ethanol is that engines lose mileage when burning ethanol. But this engine proves that the problem isn’t the fuel—it’s the engine. An engine designed specifically to burn ethanol, as opposed to a gasoline engine that is burning ethanol, can tap those fuel qualities that make ethanol a desirable alternative to fossil fuels.

18

To demonstrate the full potential of this new technology, our two companies will be putting the EBDI engines into a pair of heavy-duty pickup trucks. Those trucks will be run through the usual kinds of rigors of everyday driving around the country. That includes highway cruising, stop-and-go city driving, and hauling heavy payloads. Our intention is to prove that a variety of ethanol blends, used as a fuel in the ethanol-optimized engine, make ethanol a terrific replacement for both regular gasoline and diesel.

Growth Energy and Ricardo shared a booth at the Washington, D.C., Auto Show in late January, and held a press conference to announce the project. The story was picked up by an array of automotive industry newspapers and media outlets, and major news outlets including USA Today, the Wall Street Journal and “Voice of America.”

We all know why domestic ethanol is an effective alternative to gasoline refined from foreign oil. Ethanol is renewable. We will never run out as long as we can farm or turn waste like corn stover or woodchips into cellulosic ethanol.

As a domestic fuel, ethanol makes us less dependent on foreign oil, and that, in turn, makes our nation less susceptible to cartel-driven price shocks to our economy. And, ethanol creates jobs—particularly, well-paying jobs in our smaller, rural communities where we need to create the kind of jobs that can keep our young people at home.

So look for more information about the Growth EnergyRicardo engine project on our Web site and in the news. You may even see one of our EBDI-powered pickup trucks in your town this year.

Tom Buis is CEO of Growth Energy, www.growthenergy. org.

ETHANOL PRODUCER MAGAZINE • April 2010

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eBIO INSIDER Vierhout

Where is the Consistency?

By Robert Vierhout n 2008 and 2009 when the European regulators were discussing the criteria that would constitute a sustainability scheme for biofuels and bioliquids (a biofuel used for electricity production), the general feeling was that this was just the first step. Next would be the sustainability of biomass used for electrical generation, heating and cooling. Once this all was in place, the next big step would be sustainability criteria for all agricultural crops whatever their end-use—food, feed and fiber, alike. Perhaps one day, even oil would have to be produced in a sustainable way with the result of stopping non conventional oil production.

Thus, it was no surprise that in the final law on renewable energy the European Commission was instructed to determine whether a sustainability scheme for energy uses for biomass was needed, based on the best available scientific evidence. The report was due in December and, though still not out, a recently leaked draft has taken many by surprise. The message is clear: no obligatory European sustainability scheme for biomass. The same EC department that designed the law on biofuels, strangely enough, only “recommends” the use of sustainability schemes for biomass.

The argument for this liberal approach is that “the current legal framework gives certain assurances of sustainable use of biomass for energy produced in the EU.” The commission also acknowledges that imports of biomass will grow substantially in the years to come if Europe wants to fulfill its targets on renewable energy. It is precisely the non-EU origin of the biomass that concerns many, knowing that the EU legal framework on forest management does not apply outside Europe. It therefore doesn’t make sense to take such a liberal approach.

If I remember right, the reason for setting up a detailed and rather bureaucratic sustainability scheme for biofuels was precisely the need to guarantee imports were “good” biofuels. Now, why in

I

20

the case of biomass for electricity, heating and cooling is there less reason for concern than in the case of biomass for transport fuel?

It beats me. Why the inconsistency? Is it because of the higher greenhouse gas saving that burning of biomass achieves? Are there no land use problems when growing biomass for those other end uses? Is potential deforestation no longer an issue?

It seems to me the same risk of unsustainable production of biomass occurs if the biomass is used for electricity, heating and cooling, even within the EU, and a consistent, rigorous sustainability scheme makes sense.

There are two other reasons why it makes sense.

Similar products should be treated equally under the law.

Consider a farmer growing maize (corn) with a buyer who wants to make biofuel. The farmer needs to track fertilizer use, previous crops on the land, water use, etc., with all to be certified by an independent auditor. If, however, the buyer will use the maize for making biogas to produce electricity there are no requirements.

The choice of the farmer seems obvious unless he receives a nice premium from the biofuel producer. It is clear that the biofuel producer will not operate in a level playing field.

The second reason to be consistent is that if politicians and EU member states ultimately agree with the commission, we will miss an opportunity in further applying principles of sustainability.

If indeed we feel that all crops need to be grown sustainably, and if indeed we believe that oil needs to be produced sustainably, we should not stop with biofuels.

If we do not have the nerve to enlarge the scope for the use of sustainability schemes beyond biofuels, then one can only conclude that the concept of sustainability perhaps was invented just to make life tough for biofuels. Food for thought, I would say.

Robert Vierhout is the secretary-general of eBIO, the European Bioethanol Fuel Association. Reach him at vierhout@ebio.org.

ETHANOL PRODUCER MAGAZINE • April 2010

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TAKING STALK Greving

Stepping up Sorghum Use

By Bill Greving enry Ford once said, “You can’t build a reputation on what you are going to do.” Those words ring true for many of us who have witnessed the benefits of sorghum as a feedstock in the ethanol production process.

Now, one may feel it’s a stretch to think that such a quote would align us in some way with pizza. Yes, you read it correctly, pizza. But what I’m specifically talking about is the recent marketing campaign for Domino’s Pizza.

The Ann Arbor, Mich.-based pizza giant recently responded to criticism that their pizza crust was “bland,” to put it mildly, by launching a makeover campaign to address those concerns. They admitted that an informal survey found some thought that not just the crust, but the sauce, was lacking in flavor. Domino’s executives took the criticism to heart, and as many have seen over the past several months, launched an advertising campaign touting a new recipe. Some may call it a slick marketing gimmick, but the bottom line is that the company didn’t bury the survey results, or quietly tweak the pizza. They admitted that improvement was needed.

Rewind to the February issue of Ethanol Producer Magazine reporting the results of a survey United Sorghum Checkoff Program commissioned by Agri-Energy Solutions Inc. on the use of sorghum in the ethanol industry.

The results were revealing. Some respondents expressed concern that grain sorghum production in the U.S. could not meet its demand potential. For those of us committed to meeting the needs of both ethanol and sorghum producers, this underscored the need for a comprehensive education program. We didn’t bury our heads in the sand. We implemented strategy based on these research results.

The Sorghum to Ethanol Plan (STEP) was created to assist sorghum producers in finding markets for their crops in ethanol, as well as assist ethanol producers by bring-

H

22

ing sorghum growers together and aggregating supplies.

Additionally, STEP will work to provide information to all parties on sorghum-to-ethanol, distillers grains, transportation logistics, and more. We believe our goals are well within range: increase the inclusion rate of grain sorghum for ethanol production by 50 percent by 2011 and take advantage of the opportunities that are available for sorghum in ethanol as they exist today.

A focus group of key ethanol plants has been approached to determine the main issues affecting the amount of sorghum in the ethanol production process. The predominant factors associated with the amount of sorghum purchased by ethanol producers include the availability of sorghum to meet their needs, opportunities to bid on sorghum, and opportunities to market the distillers grains.

We’re taking the STEP program on the road over the next six months with a series of four meetings being held every 35 days in separate locations. Agri-Energy Solutions Inc. will conduct these meetings along with sorghum checkoff staff for sorghum growers and ethanol producers. We’ll also meet with feedlot managers, dairy managers and nutritionists to assist in advancing sorghum distillers grains in these most critical markets.

I hope we’ll be visiting a city near you within the Sorghum Belt. In Kansas, Garden City, Smith Center and Wichita are on the schedule. In Texas, we’ll hold a meeting in Lubbock.

We’re looking at ways to create a win-win situation for sorghum and ethanol producers. We must work together to advance renewable fuels. To once again cite the words of Henry Ford, “Coming together is a beginning. Keeping together is progress. Working together is success.”

Bill Greving is chairman of the United Sorghum Checkoff Program. Reach him at wand@ruraltel.net.

ETHANOL PRODUCER MAGAZINE • April 2010

Climate of Opportunity Thank You to All Our Sponsors!

Energy Efficiency & Renewable Energy

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LEGAL PERSPECTIVE Kruse

Reorganization and Investment Opportunities in the Ethanol Industry

By Bradley R. Kruse he recent successful Chapter 11 reorganization of Pine Lake Corn Processors LP, an ethanol production facility in Steamboat Rock, Iowa, demonstrates the significant protections and benefits provided by the Bankruptcy Code for businesses experiencing financial difficulties, and the improved overall strength of the ethanol industry.

In December 2008, having lost its operating line of credit, and with poor crush spreads leaving little or no profit margin, Pine Lake was forced to cease production and file for protection under Chapter 11 of the Bankruptcy Code. However, through the hard work and loyalty of its employees and management, coupled with improving crush spread margins and the cooperation of certain of its creditors, Pine Lake was able to use the tools provided by the code to promptly restart its production of ethanol and to ultimately complete a successful reorganization of its business.

A key component to Pine Lake’s success and one of the cornerstones of bankruptcy law are the automatic stay provisions, which generally prevent creditors from taking any action to collect a debt against the debtor or to obtain possession of the debtor’s property. The benefit of the automatic stay is that it provides debtors with much needed breathing room in order to allow them to reorganize their business affairs, restructure their financing arrangements, and seek new investments. Because of the automatic stay, Pine Lake was afforded the opportunity to delay payment on outstanding unsecured debt obligations and continue its business operations while crush spreads and its cash flow improved.

Another key component is the executory contract provisions which allow a debtor to reject (i.e., terminate) existing contracts which the debtor deems unfavorable or unprofitable. In Pine Lake’s case, these provisions enabled Pine Lake to reject a num-

T

24

ber of unprofitable forward contracts for the purchase of corn.

The code also contains provisions that require parties to promptly pay the debtor any outstanding debts or otherwise to turn over to the debtor any of the debtor’s property. These provisions were especially helpful to Pine Lake in expediting the payment of various large receivables that provided much needed operating capital.

Other provisions of the code enable a debtor to propose a plan of reorganization that extends the maturity date and/or changes interest rates or any other terms of outstanding securities. Pine Lake used these provisions to modify the maturity dates and interest rates of its loan and credit facilities, thereby providing it with significantly increased cash flow.

In addition, many other provisions in the code provide troubled companies with powerful tools with which to solve their financial difficulties. Other provisions also provide potential investors or purchasers of assets with benefits and protections not available outside of bankruptcy, such as the ability to purchase assets free and clear of existing liens, claims and encumbrances.

With crush spreads much improved over what they were in late 2008 and early 2009, there is improved opportunity and options for ethanol producers experiencing financial difficulty to successfully reorganize their businesses, as well as for potential investors and purchasers of ethanol assets to utilize provisions of the Bankruptcy Code to their advantage.

Bradley R. Kruse is a member of the bankruptcy and renewable fuels practice groups at BrownWinick Law Firm, and was lead reorganization counsel to Pine Lake Corn Processors in its Chapter 11 reorganization. He can be reached at (515) 242-2460 or brk@ brownwinick.com.

ETHANOL PRODUCER MAGAZINE • April 2010

Business&People Ethanol Industry Briefs

ScottMadden Inc. and Ascendant Partners Inc. have joined forces to help renewable energy companies secure project financing, combining ScottMadden’s energy and clean tech expertise with Ascendant Partners’ experience in project finance. Both firms have worked on numerous U.S. DOE and USDA loan guarantee applications, advanced energy tax credits and other production and investment tax credit applications.

In addition to their application experience, they are certified loan application reviewers for the DOE. The firms have developed detailed methodologies, templates and work plans for each of the DOE and USDA funding mechanisms, which eliminates the guesswork and errors while significantly improving the efficiency of the process, according to the announcement of the joint initiative.

Greenergy International Ltd., a UK biofuels supplier, and Bauche Group, a France-based agricultural commodities business, have a new joint venture to sell sustainable Brazilian ethanol in Europe.

Greenergy will have a 70 percent stake in Greenergy Brazil, to be headquartered in Sao Pau-

26

lo, and Bauche the remaining 30 percent. Greenergy has worked with suppliers in Brazil since 2007 to develop and implement environmental and social sustainability criteria. Bauche has extensive trading relationships with Brazilian mills. In 2010, traded volumes of Brazilian ethanol are expected to exceed 158 MMgy, according to Greenergy. Of that, half will be supplied by Greenergy to the UK market.

William J. Brady joined cellulosic developer Mascoma Corp. as CEO in January, after 23 years with Cabot Corp., a chemical industry leader. Brady will also serve on the boards for Mascoma and Frontier RenewBrady able Resources LLC, the cellulosic ethanol plant under development in Kinsross, Mich. “Bill has extensive experience running large commercial divisions for a major chemical company, which is exactly the skill set we need as Mascoma transitions into a commercial enterprise,” said Mascoma Chairman Bruce Jamerson. Acting president Jim Flatt will continue as executive vice president, research and de-

velopment/operations and Jamerson will continue as chairman of Mascoma and Frontier.

John McCarthy has become CEO and president of Qteros Inc., Massachusettsbased developers of cellulosic ethanol. McCarthy joined Qteros from Microbia Inc. where he served as chief business officer of the developer of bio-based specialty chemicals for largescale industrial applications. Prior to Microbia, McCarthy was executive vice president for Verenium Corp. where he helped with the successful merger and integration of Celunol and Diversa and the subsequent creation and execution of the industry’s precedent-setting strategic corporate partnership with BP plc. Venture capitalbacked Qteros is working on a one-step microbial conversion process based on its patented and trademarked Q Microbe.

Investors include, among others, Venrock Associates, Battery Ventures, BP Ventures, Soros Fund Management LLC and Valero Energy Corp.

BinMaster Level Controls and Digi International have collaborated on the development of BinMaster’s BinLink Web-based bin, tank and

silo monitoring solution, which enables remote wireless inventory management. The system includes BinMaster SmartBob2 and SmartBob-TS1 sensors, which are mounted on the bins, and a Digi Connectport X gateway, which runs the SmartBob application to provide bin level measurement data that can be accessed easily via the Internet.

Trace Environmental Systems marked 15 years in the business of providing emissions monitoring systems. The New Jersey-based company provides continuous emissions monitoring systems as well as predictive emissions monitoring systems that can lower the operational costs of stack monitoring. Its data acquisition software was groundbreaking when developed, and remains the only user configurable product of its kind, according to the company. The company has provided monitoring solutions for a number of biofuels facilities.

Joule Biotechnologies Inc. appointed Troy Campione senior vice president of corporate development. In this newly created role, he will lead

ETHANOL PRODUCER MAGAZINE • April 2010

Sponsored by

Joule’s business development strategy and execution, including negotiating partnership and development agreements. Most recently, Campione worked with Solazyme, and prior to that at Symyx Technologies and ExxonMobil. Joule has a patent-pending Helioculture technology using engineered organisms and its SolarConverter system for direct production of advanced biofuels and chemicals.

Glycos Biotechnologies Inc. appointed Daniel Monticello to direct laboratory operations for the company as vice president, research and development. He also will be responsible for overseeing the company’s ongoing demonstration and commercialization efforts in Latin America. With more than 20 years of work in industrial biotechnology, most recently Monticello cofounded Molecular LogiX Inc., an earlystage biotechnology company.

GlycosBio has focused on the metabolic engineering of microbes to consume multiple nonsugar-based, low value feedstocks for the production of sustainable chemical intermediates and advanced ethanol.

ZeaChem Inc. announced it has successfully

scaled up its process technology to a 5,000-liter unit that achieved commercially acceptable acetic acid concentration levels on the first fermentation run, while exceeding ZeaChem’s time goals.

The company is using acetogens, familiar organisms in wastewater treatment, to produce acetic acid from mixed sugars and hydrolyzates derived from cellulosic biomass. Acetic acid is the first step in a hybrid biochemical and thermochemical process for creating cellulosic ethanol and bio based chemicals. The company received a $25 million U.S. DOE grant in December and plans to build a 250,000 gallon facility in Boardman, Ore., as the next step in commercialization.

ATEC Steel, an affiliate in the Tank Connection Affiliate Group, has acquired a 60,000-square-foot manufacturing plant in Baxter Spring, Kan. The addition will allow expansion of the company’s specialty steel construction and pressure vessel product lines, as well as its coating applications. ATEC operates a second, 100,000-square-foot,

ETHANOL PRODUCER MAGAZINE • April 2010

state-of-the-art facility in Baxter Spring and a 55,000-square-foot facility in Gardena, Calif. In a separate announcement, Tank Connection and Laidig Systems Inc. are creating an affiliate relationship to serve the industry with their complimentary product lines. Laidig is a global provider of dry bulk silo storage reclaim systems.

Archer Daniels Midland Co. appointed Matthew Bruns to vice president, corn processing. Moving over from export trading in the grain group, Bruns will oversee ethanol trading and sales as well as the corn business unit’s commodity risk.

In its Dec. 31 quarterly financial report, ADM reported a big increase in net earnings from its bioproducts division. Total ADM corn processing profits for the quarter were $290 million, with sweeteners and starches bringing in $171 million and bioproducts bringing in $119 million, compared to a $111 million loss in the second quarter of the 2008 fiscal year. ADM’s

quarterly report also noted the start up of its ethanol dry mill in Columbus, Neb., would add 300 MMgy in capacity; the completion of cogeneration projects will provide cost-effective process steam and electricity at plants in Clinton, Iowa, and Columbus, Neb.; completion of the Brazilian joint venture sugarcane ethanol plant; completion of an expansion at its corn wet mill in Decatur, Ill.; and continuing construction on an ethanol dry mill in Cedar Rapids, Iowa.

Genencor, a division of Danisco A/S, received the Frost & Sullivan 2009 New Product Innovation Award for Biomass Enzymes. The award was granted for Genencor’s Acellerase product line, which industry analyst Frost & Sullivan said provides “significant advantages that make it stand out from the competition.” EP SHARE YOUR INDUSTRY BRIEFS To be included in Business & People, send information (including photos and logos if available) to: Industry Briefs, Ethanol Producer Magazine, 308 Second Ave. N., Suite 304, Grand Forks ND 58203. You may also fax information to (701) 746-8385, or e-mail it to sretkaschill@bbiinternational.com. Please include your name and telephone number in all correspondence.

27

COMMODITIES REPORT

Natural Gas Report

REX pipeline changes basis, pricing nation-wide Feb. 26—As several natural gas pipeline projects reached completion over the past year, the physical delivery structure for natural gas, and consequently basis, has changed for much of the country.

The completion of the Rockies Express Pipeline (REX) dominated, allowing supplies previously destined for the Midwest to flow to higher-priced eastern markets. With each segment’s completion, prices have declined in the newly accessible regions. The net effect of the pipeline completion a year ago has been to decrease basis nationally, bringing traditionally higher-priced eastern regions down and strengthening the Midcontinent and Rockies. REX has “sold out” firm capacity and can deliver a formidable 1.8 billion cubic feet per day (bcf/d) from the Rockies to eastern Ohio—3 percent of U.S. supply. In response to the volumes and takeaways from REX into six pipelines, a new Platt’s Index pricing point for the Lebanon Hub has been developed. Depending on access to REX gas, much of the region has benefited by increasing and diversifying its supply base beyond Gulf of Mexico, Midcontinent, and local producers to include the Rockies.

So what about Ruby? With the intent to make Rockies gas

By Brad Smith, U.S. Energy Services Inc.

available to other regions, the proposed Ruby Pipeline project is similar to REX and would stretch 675 miles from the Opal hub in Wyoming to an interconnection at Malin, Ore. With a 42-inch transmission pipe and a design capacity of 1.5 bcf/d, Ruby could influence the basis in the Rockies and the West coast. At the moment, the project is under Federal Energy Regulatory Commission review. Should it obtain approval early this year, the project would move to the construction stage with an in-service date of March 2011. The obvious regional effect would be to raise basis costs in the Rockies, Canada, and the Midcontinent while lowering costs in the Northwest. During peak demand periods, the pipeline would allow the Northwest to source Rockies gas as a competitive alternative to Canadian supply. This year may create an incentive for the $3 billion project as the Northwest will primarily source gas from a pool of declining Canadian exports, while suffering from fiveyear-low water levels that the EIA predicts will lower hydro power generation by 8 percent. EP Brad Smith, price risk manager, can be contacted at bsmith@ usenergyservices.com.

Corn Report

By Jason Sagebiel, FCStone

Corn market trading on big crop, tight carry-out to use ratio Feb. 19—The corn market has been range bound since January’s surprise report. The only market-moving ideas are the increasing Argentine corn crop and U.S. and global wheat stocks. Plentiful global wheat supplies could limit upside movement of corn for feed regardless how the dollar trades. World wheat ending stocks are 195.86 million metric tons, versus 164 a year ago.

In the February report, the USDA reduced estimated corn carry-out. Despite the record U.S. corn crop, the carry-out to use ratio rests at just 13.1 percent. As corn demand grows each year it is imperative that production stays in pace. The USDA increased corn for ethanol by 623 million bushels from last year to 4.30 billion bushels this marketing year while lowering corn for exports and other industrial uses by 50 and 11 million bushels respectively.

Feed demand remained unchanged from the previous month, although projections increased from 5.25 to 5.55 billion bushels year on year.

The U.S. corn market awaited the resurvey of producers issued in March that could impact yield and/or acres harvested. In addition, the first look at U.S. planted acres was to be released in late March. Potential planting delays from snow cover, excess moisture, and unharvested crops weigh upon traders’ minds. Another concern will be corn quality as temperatures warm.

28

The chart shows ethanol use and the average USDA farm price per bushel for corn. This year is the first since 2006-’07 where corn prices are below the trend despite increasing demand. EP

ETHANOL PRODUCER MAGAZINE • April 2010

COMMODITIES REPORT

DDGS Report

($/gallon as of Feb. 19) - Front Month Futures Price (AC) $1.70

RACK

REGION

SPOT

West Coast

1.84

2.12

Midwest

1.75

2.05

East Coast

1.835

2.02

By Sean Broderick, CHS Inc.

Tight rail backlogs shipments, saturates local markets Feb. 19—Domestic DDGS prices weakened in February, with export markets staying firm. Container markets were still very strong, especially in Chicago and the West Coast, with much of the increase attributed to China. New transload areas popped up in places like Fargo, N.D., St. Paul, Minn., Savannah, Ga. and Chesapeake, Va. Product movement is expected to continue increasing to the Pacific Rim, and container logistics and product quality will continue to be hot topics.

With this year’s weather, railroads have struggled to move product, though they are expected to eventually catch up on DDGS shipments.

Given the tight car situation, increasing amounts are forced into local truck markets. As a result, we are seeing

Regional Ethanol Prices

more wetcake than normal, saturating nearby markets. Sellers are fearful how it will play out this summer, when demand traditionally weakens.

In exports, to date, China has not officially approved DDGS imports creating uncertainty that may lead to reluctant U.S. exporters and could shorten the duration of the contracts that do get written, as traders try to minimize risk. Currently, bulk shipping rates to Asia favor West Coast over the Gulf by almost $15 per metric ton, so those that ship to the river will have a problem matching the carry in the corn market. With the South American harvest approaching and spring planting approaching in the U.S., it will not be a boring summer for market watchers. EP

SOURCE: DTN

Regional Gasoline Prices ($/gallon as of Feb. 19) - Front Month Futures Price (RBOB) $1.9295

REGION

SPOT

West Coast

1.9503

2.035

Midwest

1.8265

1.9035

East Coast

1.9161

2.0138

RACK

SOURCE: DTN

DDGS Prices ($/ton) LOCATION

APRIL 2010

MARCH 2009

APRIL 2009

Minnesota

95

105

130

Chicago

122

133

140

Buffalo, N.Y.

125

135

145

Central Calif.

159

171

173

Central Florida

146

152

168 SOURCE: CHS Inc.

Corn Futures Prices DATE

(May. corn, $/bushel)

HIGH

LOW

CLOSE

Feb. 12, 2010

3.75 3/4

3.69

3.373 1/4

Jan. 12, 2010

4.29 1/4

4.03

4.03

Feb. 12, 2009

3.86

3.76

3.76

Ethanol Report

SOURCE: FCStone

By Rick Kment, DTN Biofuels Analyst

Economic challenges threaten ethanol support Feb. 19—Ethanol prices continued to erode through mid-February as corn futures moved significantly lower due to lack of investment trader interest. In addition, energy markets suffered from a lack of upward movement in the economy. The Dow Jones Industrial Average dropped below 10,000 for the first time this year, and news of other debt and solvency issues of global countries remained in the front of most traders’ minds. Prices of gasoline fell nearly 20 cents per gallon in the month, but the outlook on the economy did not use the price decline to increase demand. The long, cold winter season that was relentless in most of the country limited travel for many consumers.

The outlook for gasoline demand re-

mained strong heading into summer with RBOB gasoline futures posting significant premiums in deferred contract months. This meant traders were willing to put off buying activity until later when they expect demand to be better, instead of making purchases in the front month March contract.

Ethanol contracts remained cautious at best with traders following the weakness in the corn market, as well as lower gasoline prices. The expectation of higher demand for gasoline through the late spring and summer months helped uphold ethanol demand expectations, but in mid-February there was ample product available for usage and demand was sluggish through most regions of the country. EP

ETHANOL PRODUCER MAGAZINE • April 2010

Cash Sorghum Prices ($/bushel) FEB. 13, 2010 JAN. 15, 2009 FEB. 12, 2009 Superior, Neb. Beatrice, Neb. Sublette, Kan. Salina, Kan. Triangle, Texas Gulf, Texas

3.12 3.02 2.80 3.26 3.11 3.91

3.17 3.09 2.84 3.21 3.12 3.96

2.86 2.79 2.81 3.02 2.74 3.69 SOURCE: Sorghum Synergies

Natural Gas Prices

($/MMBtu)

MARCH 2010

FEB. 2010

MARCH 2009

NYMEX

4.816

5.274

4.056

N. Ventura

5.000

5.860

3.960

Calif. Border

4.860

5.660

3.230

SOURCE: U.S. Energy Services Inc.

U.S. Ethanol Production Output November 2009

786,000

October 2009

741,000

November 2008

686,000

(barrels/day)

SOURCE: U.S. Energy Information Administration

29

BIObytes Ethanol News Briefs

PHOTO: PETROBRAS

Flex-fuel turbine generates power in Brazil Petrobras Brazil is generating electricity using ethanol in Juiz de Fora, Brazil. The 43.5 megawatt GE turbine, which was converted from natural gas for flex fuel use, began operating Dec. 31. Emission testing from Dec. 31 to Jan. 13 showed nitrogen oxide emissions were reduced 30 percent from natural gas. The turbine is located in a power generating park with 14 thermoelectric plants running on natural gas, 12 on oil and 15 small hydroelectric plants.

Brazil President Luiz Inacio Lula da Silva, center, inaugurated the ethanol-run turbine Jan. 19. Dilma Rousseff, far left, is chief of staff, and Edison Lobao, second from right, is minister of mines and energy.

Governors back biofuels

Ohio producers form new association

The governors in the state. Wisconof Ohio and Wisconsin’s Gov. Jim Doyle talked about the rapid sin praised biofuels in their State of the State expansion in renewaddresses, both on able energy producJan. 26. Ohio’s Gov. tion, specifically ethaTed Strickland lauded nol plants. He asked the fact that the state legislators to quickly Strickland pass the state’s Clean had gone from zero ethanol production in 2007 to 295 Energy Jobs act to create new MMgy produced at four plants jobs.

Three Ohio ethanol producers have formed the Ohio Ethanol Producers Association to promote the industry. “We wanted to make sure that our agenda and our contributions were being considered by the legislature,” said Mark Borer, general manager of Poet Biorefinery in Leipsic, a 60 MMgy ethanol plant. Also members of the group are Poet plants in Fostoria and Marian, 50 MMgy and 68 MMgy facilities, respectively.

The group will take on the role that Buckeye Renewable Fuels Association had in the past, Borer said. That association disbanded last year amid market pressures.

SunOpta lands China deal, receives Canadian funding SunOpta BioProcess Inc. will supply a major ethanol producer in China with equipment for cellulosic ethanol production. The plant intends to install the equipment in a demonstration facility scheduled for com-

30

pletion late this year. SunOpta has also been awarded $5.5 million in funding from Sustainable Development Technology Canada to aid in the design and construction of a cellulosic facility in the Greater Toronto area.

Ohio’s fourth operating ethanol plant is The Andersons Marathon Ethanol LLC, a 110 MMgy facility located in Greenville. The Valero-Bloomberg ethanol plant, a 110 MMgy facility near Bloomberg, is expected to restart later this year. Two others, AltraBiofuels Coshocton Ethanol LLC, in Coshocton, and Greater Ohio Ethanol LLC, Lima, are also in the process of restarting.

The ethanol industry has significantly impacted Ohio’s economy in recent years, especially the rural economy, Borer said. The industry has invested nearly a billion dollars and created many jobs.

ETHANOL PRODUCER MAGAZINE • April 2010

CEOs request change in DOE loan guarantee Eleven CEOs of the nation’s leading cellulosic ethanol companies sent a letter to U.S. DOE Secretary Steven Chu and members of the Senate Energy Committee prior to a Feb. 11 committee hearing acknowledging the support for cellulosic ethanol development through the renewable fuels standard and grant funding, but expressing concern that biofuel developers might have difficulty using the loan guarantee program.

Specifically, the program requires a long-term, fixed-price offtake agreement as a determining factor in evaluating whether a project has a reasonable prospect of repayment as required in the law establishing the loan guarantee. “This approach,” the letter states, “drives a systematic bias toward lending for power generation projects that can obtain state-sanctioned, long-term

power purchase agreements due to the regulated structure of the electric power industry. By contrast, the liquid fuels marketplace does not operate within such a framework; long-term, fixed-price forward contracting mechanisms, offering assurance of predictable future revenue streams, simply do not exist in our target markets.”

Signatories included the CEOs of Abengoa Bioenergy, BlueFire Ethanol, Coskata, Enerkem, Frontier Renewable Resources, Ineos Bio, Iogen, KL Energy, Mascoma, Range Fuels and Verenium. Notably, Abengoa announced in January that it had teamed up with Mid-Kansas Electric Co. LLC to develop a cellulosic ethanol and power plant in Stevens County, Kan., to produce 15 MMgy of ethanol and 75 megawatts of power per year.

ISO tackles sustainability standard The International Organization for Standardization announced the formation of a new committee, Sustainability for Bioenergy, to formulate its international sustainability standard.

ISO aims to use international expertise during discussions dealing with social, economic and environmental aspects of production and use of bioenergy. With 29 countries already involved as participants or observ-

ers, the project on bioenergy may take three years or until the end of 2012. Brazil and Germany will provide both secretariat and leadership duties for the project.

The U.S. and China will serve as observers. According to Maria Lazarte, communication officer for ISO, the U.S. will, “follow the process” but will not participate in the vote. The ISO hopes the standard makes bioenergy more competitive.

Poet landfill gas project wins award A landfill gas project that transports methane gas from a Sioux Falls, S.D. landfill through an 11-mile pipeline to a Poet LLC ethanol plant in Chancellor, S.D., was awarded by the U.S. EPA. Poet pays the city for the methane, believing that when combined with waste wood, the ethanol plant could be powered entirely from renewable energy.

James Moe, Poet chief operating

officer, said the award signifies the importance of renewable energy. “We want to use renewable energy to power our production processes as well.” Poet also recently announced it has implemented a water recycling system in its Preston, Minn., plant that will reduce water use 13 percent and help recycle 19 million more gallons of water per year.

ETHANOL PRODUCER MAGAZINE • April 2010

Novozymes North American vice president Adam Monroe points to a bundle of shredded paper similar to those used to make “trashahol.”

Fiberight, Novozymes partner on ‘trashanol’ Novozymes Inc. and Fiberight LLC produced an advanced biofuel from government waste paper for the 2010 Washington Auto Show held in January as part of a “Ride ’n Drive” event allowing government officials to test drive vehicles using the “trashanol.”

The advanced biofuel com-

bined Novozymes CTec and HTec enzymes with Fiberight’s process. In other news, Novozymes received an Advanced Energy Manufacturing Tax Credit of $28.4 million from the Obama administration in January towards the construction of its new enzyme facility in Blair, Neb.

31

Final RFS rule qualifies all corn ethanol, launches new online RINs system Corn ethanol dodged a bullet when the final rule to implement the revised renewable fuels standard was released Feb. 3.

Under the proposed rule, no corn ethanol made the greenhouse gas (GHG) reduction target in the U.S. EPA modeling used to evaluate different fuel pathways. While plants were grandfathered in that were in production or had begun construction at the time the Energy Independence and Security Act became law in Dec. 19, 2007, the poor performance of corn ethanol in the proposed rule’s GHG calculations would have been devastating for plants that began construction after that date.

“We listened to public comment and worked closely with the USDA,” said EPA Administrator Lisa Jackson at the news conference announcing the release of the rule. She noted there were three major areas that changed the GHG ratings for corn ethanol.

“On crop productivity, the data we used was not right,” she said.

The EPA also changed the way it considered coproducts, and the indirect land use modeling was broadened beyond the initial 40 nations to include 160 nations, which changed the numbers, she said. Jackson admitted the low GHG scores for corn ethanol and soy-based biodiesel constricted market investment, and said the final rule should give investors renewed confidence in biofuels.

“Based on what we know now, including indirect land use change (ILUC), there is no basis to exclude these fuels.”

In releasing the final rule, the EPA said it had made multiple modifications to the models used and quantified the uncertainty associated with many components. “EPA is confident that its modeling of GHG emissions associated with international land use is comprehensive and provides a reasonable and scientifically robust basis for making threshold determinations,” the background statement to the life-cycle analyses portion of the final rule says.

The EPA determined: Ethanol produced from corn starch at a new natural gas, biomass, or biogas-fired facility using advanced efficient technologies will meet the 20 percent GHG emission reduction threshold compared to the 2005 gasoline baseline Biobutanol from corn starch also meets the 20 percent threshold

32

Ethanol from sugarcane complies with the applicable 50 percent reduction threshold for advanced biofuels For cellulosic ethanol and cellulosic diesel, the pathways modeled by EPA for feedstock and production technology would comply with the 60 percent GHG reduction threshold for cellulosic biofuel Similarly, biodiesel from soy oil also will meet the 50 percent GHG threshold.

In addition to the feedstocks and fuel pathways that were modeled in the development of the rule, the EPA mentions five categories of feedstock that are expected to have less or no ILUCs including: Crop residues such as corn stover, wheat straw, rice straw, citrus residues Forest material including eligible forest thinning and solid residue remaining from forest product production Secondary annual crops planted on existing crop land such as winter cover crops Separated food and yard waste including biogenic waste from food Perennial grasses including switchgrass and miscanthus Other feedstocks were not yet sufficiently modeled, EPA said, but will be included in a rulemaking later this summer. Among the crops named were grain sorghum ethanol, woody pulp ethanol and palm oil biodiesel. EPA is also establishing a process where by biofuel producers or importers can petition the agency to consider a new fuel pathway for eligibility. “EPA will use the data supplied in the petition to evaluate whether the information for the fuel pathway, combined with information developed in this rulemaking for other fuel pathways, is sufficient to allow EPA to determine whether the new fuel pathway qualifies,” the background to the rule says.

While the industry was pleased that corn ethanol (and soy biodiesel) would meet GHG reduction targets, it was not happy that international indirect land use impacts were still part of the GHG analysis. “While we appreciate that EPA recognizes the uncertainty of ILUC, the fact remains that ILUC is still in the rule,” said Tom Buis, CEO of Growth Energy. “This puts the cart be-

ETHANOL PRODUCER MAGAZINE • April 2010

Each year, the EPA will determine the amount of biofuels required to meet the renewable fuel standard for the following year. For 2010, the volume of cellulosic ethanol in the standard was reduced drastically to just 6.5 million ethanol-equivalent gallons. The new system for renewable identification numbers will distinguish the four types of renewable fuels. With RFS2 rules becoming effective July 1, the first year will be a mix of RINs1 and RINs 2.

The 2010 standards shown below represent the fraction of a refiner’s or importer’s gasoline and diesel volume, which must be renewable fuel.

Cellulosic biofuel Biomass-based diesel Advanced biofuel Renewable fuel

percent 0.004 1.10 0.61 8.25

fore the horse, and our position is that ILUC should not be applied in regulation until we have a thorough, long-term study of the issue.” The Renewable Fuel Association also reported disappointment over “oft-challenged and unproven theories on ILUC.” However, the RFA called the final rule a workable program that showed GHG benefits of ethanol compared to gasoline. “At the end of the day, the RFS is public policy that can and will work effectively,” the RFA said. The American Coalition for Ethanol also said it was pleased that the final rule reflected the fact that corn ethanol has an advantage over gasoline. Still, ACE said, the regulations seriously underestimate ethanol. “We don’t believe the agency’s overall assessment of ethanol’s GHG reduction potential was good enough or accurate,” said Brian Jennings, executive vice president of ACE. ILUC is a theory based on computer modeling, not real-life data and if removed from the RFS, corn ethanol

ETHANOL PRODUCER MAGAZINE • April 2010

would represent a 61 percent reduction in GHG emissions, ACE said.

On the same day the RFS final rule was released, the heads of the USDA, U.S. EPA and U.S. DOE demonstrated the administration’s support for biofuels in the first report from the Biofuels Interagency Working Group, created in May. “First-generation corn grain ethanol is a critically important renewable fuel source that is lowering our reliance on foreign petroleum dependent fuels, and cellulosic ethanol will soon be contributing as well. Advanced next generation biofuels will be one of the nation’s most important industries in the 21st century,” the report says. The interagency working group calls for greater coordination of efforts across the agencies and “strong management for results using a regional supply chain systems approach that ensures all fuels produced are compatible with the U.S. transportation fuel infrastructure.”

Two weeks after the final rule was released, conference goers at the National Ethanol Conference packed an early morning session Feb. 17 to learn more details. EPA representatives laid out the new EPA Moderated Transaction System, a Web-based reporting system that will be used to generate, sell, buy, separate or retire renewable identification numbers (RINs). The new platform expands the existing RINs system used for conventional corn ethanol to also track advanced biofuels, cellulosic ethanol and biomass-based diesel. Those producers already using RINs 1 were encouraged to register immediately and begin testing EMTS. RINs 1 will continue to be traded until July 1 when the RFS2 takes effect. All parties will have to register anew, since there is no mechanism to import those already using RINs 1. Producers must register 60 days prior to beginning production, or by July 1. Ethanol plants grandfathered into the act must register their permitted capacity to determine the gallons of qualifying fuel production.

Any expanded capacity will be required to meet the 20 percent GHG reduction threshold.

The final rule and supporting background and documents can be found on the EPA Web site at www.epa.gov/OMS/ renewablefuels/#regulations.

—Holly Jessen, Luke Geiver and Susanne Retka Schill

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‘Climate of Opportunity’ evident at NEC Bob Dinneen, president and CEO of the Renewable Fuels Association, painted a picture of an industry rebounding from recession in his remarks to the 1,300 people who attended the National Ethanol Conference held Feb. 15-16 in Florida. “Over the past decade—and especially over the past year—we have taken everything that the economy and all our adversaries could throw at us,” he said, “and we’re still standing— strong, united, and focused on the future.”

Despite a difficult economy, the ethanol industry grew by 15 percent last year and saw 14 plants reopened, eight plants started and capacity increased by 1.5 billion gallons, he reported. The industry continued to provide jobs, reduce greenhouse gas emissions and reduce oil imports. Still, Dinneen’s optimism was tempered by the challenges facing the industry. “We must break through the blend wall, we must address questions

about ethanol’s carbon footprint, and, most importantly, this year we have to extend the tax incentive and the offsetting secondary tariff for ethanol fuels,” he said.

With the NEC being held just only two weeks after the renewable fuels standard (RFS2) final rule was released, speakers addressed its impact in several presentations.

Indirect land use change (ILUC) modeling used in the final rule did improve the outlook for biofuels, although many were very disappointed it was included at all. RFS2 was “fundamentally flawed by the slavish devotion to the ill-conceived notion” of ILUC, Dinneen said. Conference-goers also learned more about the U.S. EPA’s new system, the Web-based EPA Moderated Transaction System, which is expected to be easier to use and reduce errors in tracking renewable identification numbers needed for RFS2 compliance.

In another presentation, six companies reported progress towards commercial-scale cellulosic ethanol production facilities in a panel moderated by U.S. DOE spokesperson Valri Lightner, who restated the agency’s support, specifically pointing to the loan guarantee program the department plans to use to support mainly cellulosic ethanol projects. “Those efforts are moving a little more slowly than we first anticipated,” she admitted.

A brief synopsis of the six reports given illustrated the pace of project development: Range Fuels Inc., Soperton, Ga., construction completion February 2010 Verenium Corp., Highlands County, Fla., break ground 2010, production 2012, second site in development Abengoa Bioenergy, Hugoton, Kan., break ground 2010, production 2012

RFA president and CEO Bob Dinneen, left, and Nathanael Greene, far right, of the Natural Resources Defense Council exchange comments during the Washington Insiders panel held at this year’s National Ethanol Conference. Others on the panel included, left to right, Jon Doggett, National Corn Growers, John Eichberger, National Association of Convenience Stores, Shane Karr, Alliance of Automobile Manufactures, and Marty Durbin, American Petroleum Institute.

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ETHANOL PRODUCER MAGAZINE • April 2010

Bob Dinneen, president and CEO of RFA, gives his state of the industry address at the National Ethanol Conference, held Feb. 15 to 17 in Orlando, Fla.

Mascoma Corp., Kinross, Mich., currently in design engineering and permitting Coskota Inc., southwest U.S., working on financing Iogen Corp., sites selected, next step financing Speaking on oil investment in ethanol, Tom McKinlay, senior vice president of manufacturing for Murphy Oil USA, gave a thought- and laughter-provoking presentation. Before coming to the NEC, he said, he didn’t realize foreign oil was more feared than the EPA. “We don’t fear foreign oil,” he added. “Foreign oil is not bad. … Canada looks fairly cuddly from where I stand.” Murphy Oil believes the ethanol industry will, after a period of volatility, grow dramatically. Last fall the company purchased one of the bankrupt Vera-

Sun facilities, a 110 MMgy ethanol plant in Hankinson, N.D. “Ethanol is cheap gasoline, that’s why we’re in ethanol,” he said, adding that the company is proud to be in the business. Still, McKinlay firmly stated that the answer is not ethanol—it’s actually foreign oil, which will continue to make up the bulk of fuel in the United States.

Several speakers addressed the blend wall. Cliff Cook, senior vice president of supply, distribution and planning for Marathon Petroleum Company LLC, said he didn’t believe the public wanted or was ready for E85 or blender pumps. Later, Karl Doenges, executive director of Protec Fuel Management, said E85 is critical for going beyond the blend wall, and said it’s a misconception that E85 is a lower value product. It might have to be priced lower but that doesn’t mean the bottom

ETHANOL PRODUCER MAGAZINE • April 2010

line will be lower, as market forces such as rising oil prices and RFS2 will establish demand. “The room for growth is phenomenal and that will continue to accelerate,” he said. With the Big Three automakers pledging to make half their vehicles flex fuel by 2012, there’s a big need for more E85 infrastructure particularly in states such as California and Florida, where the majority of flex-fuel vehicles (FFV) are located, but few E85 stations exist. In some areas, Doenges said, there are 800 FFVs to one E85 station. Thirty-six billion gallons of biofuels can’t be met by E10, E15 or likely not even blending, Dinneen said in his address. “We must also prime the pump for continued market development in higher ethanol blends and E85 by dramatically expanding the availability of blender pumps.”

General Motor’s Tom Stephens also talked about infrastructure needs. The vice chairman of global product operations for GM said the company strongly supports blender pumps. Today, 66 percent of E85 fueling stations are located in the Midwest, where only 19 percent of FFVs are, he said. GM doesn’t believe there is one silver bullet and is interested in other alternative fuels, electric vehicles and hydrogen although it does believe liquid fuels, including ethanol, are the most cost-effective, near-term solution. “The promise of biofuels is real and it’s all our job to get the job done,” he said.

Another notable moment at the conference was when Ron and Diane Fagen received RFA’s first-ever membership award, recognizing their contribution to the industry for their leadership in plant construction.

—Story and photos by Holly Jessen

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Several plants bought, resume production From California to Pennsylvania and many states in between, ethanol plants continue to come online, be recommissioned and new projects move forward.

In Production Production resumed at Pacific Ethanol Inc.’s 60 MMgy Magic Valley plant in Burley, Idaho, in early January. The plant had been idle since February 2009. Due to unfavorable market conditions, the company’s subsidiaries filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code in a restructuring effort for the Idaho facility and its other plants in Stockton and Madera, Calif., and Boardman, Ore. In mid-March, the plant in Burley was the only one back in production. “The plant is running good and they are moving rapidly to work out the kinks to get back to full capacity,” said Paul Koehler, vice president of Pacific Ethanol.

The first commercial-scale plant in Pennsylvania started producing ethanol at the end of 2009. Bionol Clearfield LLC, a 110 MMgy plant in Clearfield, Pa., was performance testing in early February. Although not in the Corn Belt, it is located in what the company considers a gateway to New York blending terminals.

“We are just starting to break into that marketplace,” said Roger Schmidt, general manager. The new plant has a corn supply agreement with Lansing Trade Group, headquartered in Overland Park, Kan., although currently, up to 75 percent of its corn is sourced from Pennsylvania and eastern Ohio, Schmidt said.

In another first, construction was completed on the first corn-based ethanol plant in North Carolina. In early February,

Clean Burn Fuels LLC’s 60 MMgy facility began commissioning with the first grind anticipated for early April, according to Doug Archer, general manager. Although plant completion has taken longer than first expected, Archer said the delayed opening may be advantageous. “The market has started to turn,” Archer said.

“Instead of a volatile market, we are looking at a pretty flat, even market, and the industry is doing really well right now.”

The retrofit project at Tharaldson Ethanol plant in Casselton, N.D., was nearly complete in February. ICM Inc. started work building a new energy plant at the recently completed 110 MMgy plant in November. ICM has been contracted to manage the plant and employs about 50 people at the location.

Resuming Production Built in the 1980s, this legacy ethanol plant, formerly known as Sun Energy, was purchased by Nexsun Corp., which plans to double capacity to 6 MMgy. The company expected to start upgrades in late February or early March and reopen the modernized plant by early summer, according to Alex Park, vice president of project development with Nexsun. “When I say modernize, we want it to run as efficiently as possible to produce as much ethanol as possible per bushel of feedstock,” he said. “We have to automate the plant, to put in processes that monitor it constantly with computers, instead of people turning knobs.”

The purchase of Renew Energy, a 110 MMgy plant in Jefferson, Wis., was finalized by Valero Renewable Fuels Co. LLC, which bid on the facility in a December bankruptcy auction. Al-

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ETHANOL PRODUCER MAGAZINE • April 2010

though William Blair & Co. and Bankers’ Bank, the lead secured creditor named Valero as the winning bidder after the auction, Iowa-based All Fuels & Energy unsuccessfully disputed that in court. The company then tried offering Valero $100 million for the plant, which was not accepted. “We took their calls as a courtesy,” said Bill Day of Valero’s corporate communications department, “but the transaction closed and Valero now officially owns the plant. We intend to operate it.”

AE Biofuels entered into a three-year agreement with Cilion Inc., the owner of a California ethanol plant that has been idle since April. The 55 MMgy plant in Keyes, Calif., will operate under the name AE Advanced Fuels Keyes and is expected to restart production in late spring. Initially the plant will continue to use corn as its main feedstock with plans to utilize up to 25 percent agricultural residues. “Our goal for cellulosic production is the first half of 2011,” said Andy Foster, president and chief operating officer.

An 85 MMgy ethanol plant owned by Sunco Inc. in Fulton, N.Y., will be retrofitted by ICM Inc. Sunoco, a leading manufacturer and marketer of petroleum and petrochemical products, purchased the idled facility in mid-2009. According to ICM, the Sunoco plant will begin receiving corn and resume operations in July. Speaking on the project, Michael McKee, general manager of Sunoco’s ethanol business, said, “ICM has the knowledge and experience to make this project a success. We are pleased to join with ICM to complete this important work and begin operating the facility.”

Cellulosic Ethanol Advances A grand opening for a cellulosic ethanol demonstration facility in Vonore, Tenn., was held Jan. 29. The DuPont Danisco Cellulosic Ethanol LLC and University of Tennessee/Genera Energy LLC project began producing ethanol in mid-January. The 74,000-square-foot facility has the capacity to produce 250,000 gallons of ethanol from corncobs and switchgrass and is preparing DDCE’s integrated technology for commercial production by 2012.

Joule Biotechnologies Inc. leased land in Leander, Texas, for a cellulosic ethanol pilot plant that is expected to be operational later this year. The Cambridge, Mass.-based company will be scaling up its trademarked Helioculture technology to produce ethanol from microorganisms. Currently, tests show the process yields ethanol in excess of 6,000 gallons per acre, per year. “We’re taking it one step further with a pilot plant,” said Felicia Spagnoli, company spokesperson, adding that the goal at the pilot plant will be to optimize the system and drive up productivity rates. The company estimates full-scale, commercial production utilizing their microbial-based process will yield 25,000 gallons per acre, per year of ethanol.

—Holly Jessen

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photo: Kinder Morgan

Pipeline, terminal, E85 plans move forward

KMP continued expansion of its Tampa ethanol facility, adding a 100,000 barrel tank.

As ethanol distribution demands increase, infrastructure planning continues to expand.

Magellan Midstream Partners LP has joined with ethanol giant Poet LLC to assess the feasibility of a 1,800-mile ethanol pipeline.

Starting in Davison County, S.D., the proposed pipeline would connect ethanol production facilities in the Midwest to distribution outlets in the northeast U.S., ending in Linden, N.J. Based on a report done by consulting firm LECG Inc., the capacity of the pipeline would equal 240,000 barrels of ethanol a day, an amount of more than 3.5 billion gallons annually.

For both parties, the proposed pipeline is not only the next step for ethanol distribution efficiency, but a necessary component for the future of the ethanol industry. “Pipelines are the most cost efficient, safest and most reliable mode of transportation for liquid energy,” Mike Mears, chief operating officer of Magellan said. “Construction of a large-scale renewable fuel pipeline complements the national objective of creating quality jobs while increasing transportation efficiencies for the growing renewable fuels industry.”

The Biofuels Interagency Working Group, with members from the USDA, DOE and the U.S. EPA recently released an agenda outlining a way to achieve President Barack Obama’s biofuels target. Job creation, a contributing factor of Obama’s biofuels target, is something Poet CEO Jeff Broin believes will happen with the construction and

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use of the proposed pipeline. “This project has the clear environmental benefit of dramatically reducing carbon emissions from traditional ethanol transportation, and this latest report shows its important impact on our economy. Ethanol continues to play a large role in the new energy economy taking shape in the U.S.” According to the report, 80,000 jobs would be created during the construction of the pipeline with 1,100 permanent jobs available for pipeline operation. Even with the promise of new jobs and environmental benefits, the pipeline feasibility depends on a DOE loan. “The status of our study resides in Washington,” Bruce Heine of Magellan said. “We are working with Congress to modify the loan guarantee program with the DOE.” The DOE loan program was not equipped to handle an 1,800mile pipeline according to Heine. Until the loan status from the DOE gets resolved, the pipeline will have to wait, but the expansion of blending terminals and pumps by other infrastructure players will move forward. Kinder Morgan Energy Partners LP recently partnered with U.S. Development Group, an ethanol blending and handling company. As part of the joint agreement, KMP acquired three USD train ethanol terminals in Linden, N.J., Baltimore, Md., and Dallas, Texas, for a total of approximately $195 million. The terminal acquisition will create a nationwide distribution network of ethanol handling facilities connected by rail, marine, truck and pipeline, according to KMP. The train terminal acquisitions bring KMP investments in the renewable fuels handling business close to $500 million. Although the joint venture agreement is not currently developing a pipeline, Dan Borgen, president and CEO of USD noted the changes the partnership will bring to ethanol movement. “We look forward to partnering

with Kinder Morgan, a national leader in fuel transportation and storage, to revolutionize the way that biofuels are delivered to the market.

The venture will offer immediate, significant efficiencies for our customers.”

KMP believes the formation will also help customers on all three coasts. Along with USD partnership, KMP has added ethanol handling capacity at its Orlando, Fla., terminal with the addition of a 100,000 barrel storage tank. KMP is currently building new unit rail car ethanol loading facilities, in Richmond, Calif., and Houston, Texas.

The push for infrastructure expansion doesn’t just stop with the transportation sector. The DOE has awarded Growth Energy a $200,000 grant for the expansion of E85 blending stations in the states of Virginia and Washington. The award, one of eight given to support existing retail ethanol fuel locations, will also be given to the states of Arkansas, California, Florida, Georgia, Michigan, Missouri and Texas.

The stations will be selected according to proximity to key highway corridors and areas with higher concentrations of flexible fuel vehicles.

The general plan for each state is to retrofit existing pumps for E85 use or install new pumps. “By increasing the use of ethanol in America,” Tom Buis, CEO of Growth Energy said, “we will create new green -collar jobs, reduce our dependence on foreign oil, strengthen our national security and improve the environment.”

The DOE’s funding for blender pumps indicates the ongoing infrastructure build-out, but Growth Energy, like KMP and Poet, is still awaiting information regarding funding details.

—Luke Geiver

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Canadian government orders biofuels study Canada is looking into the environmental impact of biofuels. Environment Canada solicited companies to complete an assessment of the ecological footprint of biofuel production facilities in Canada. The contract is for $65,000 and completion is expected this spring.

“The commissioning of this study does not presuppose that there are any harmful effects from these facilities,” a spokesperson for Environment Canada told EPM, “nor does it change the government of Canada’s commitment to renewable fuels.” According to the request for proposals, Canada’s emission modeling anticipates significant greenhouse gas (GHG) emission reductions from renewable fuels.

The Canadian government is following through with its commitment to establish regulations for renewable fuels in the fuel supply. Those regulations are expected to

be published early this year, as part of the government’s broader renewable fuels strategy to reduce GHG emissions. “The strategy requires 5 percent renewable content of gasoline by 2010,” the spokesperson said.

“Canada also intends to implement a requirement for 2 percent renewable content in diesel fuel and heating oil by 2011, or earlier, subject to technical feasibility.”

Still, Environment Canada’s scientists need more information and, most importantly, they need it from a Canadian context.

The study will help them understand the environmental performance of biofuels, the document said. That performance is expected to vary, depending on the type of feedstock used, processes, scale of operations, location of the facilities and coproduct use.

“Liquid biofuels were initially viewed as an overall environmentally beneficial alternative to traditional hydrocarbon-based liquid

fuels,” the document said. “However, recent studies in the United States suggest that this might not always be the case.”

The goal of the study is to provide information on the environmental implications of biofuel production in Canada in a more comprehensive and detailed way. The report will: List all biofuel plants operating in Canada Provide real data from at least 10 ethanol and biodiesel facilities Summarize the data, identifying trends and possible benchmark targets Not long after Environment Canada called for companies to submit proposals for the study, the Canadian government passed out funding to 16 clean technology companies. Sustainable Development Technology Canada announced $58 million in funding, $13 million of which was earmarked for

Husky Energy in Lloydminster, Saskatchewan, is one of 16 ethanol plants operating in Canada. The 130 MMgy plant produces ethanol using wheat.

proposed cellulosic ethanol plant projects.

The 16 projects awarded funding represent many of the country’s main economic sectors, from energy and transportation to waste management. “Our government con-

tinues to help bring innovative renewable energy technologies from idea to marketplace,” said Lisa Raitt, minister of natural resources. “Investing in these projects will stimulate the growth of a domestic clean

ETHANOL PRODUCER MAGAZINE • April 2010

energy industry, create high-quality jobs for Canadians and help protect our environment.”

Awarded up to $7.5 million was a 12 MMly (3.17 MMgy) pilot plant proposed by Ferme Olivier Lépine Inc., a St. Alexis, Quebec, company. The consortium, according to the SDTC, has developed a “unique integration of processes from other industries to produce ethanol and important coproducts from otherwise unused agricultural waste materials.”

The second project was a 2 MMly cellulosic ethanol pilot plant proposed by SunOpta BioProcess Inc., Brampton, Ontario, that was awarded up to $5.5 million. The company has developed a process to produce ethanol from wood chips. A byproduct of the process is food-grade xylitol.

—Holly Jessen

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Iowa RFA pushes for state E10 mandate A new study citing the positive contribution of the biofuels industry to Iowa’s economy has drawn interest from those in the ethanol industry, and action from legislators. The study, titled, “Contribution of the biofuels industry to the economy of Iowa,” was issued in January and ranks Iowa as the nation’s leader in biofuels output, with ethanol from the state accounting for nearly 30 percent of U.S. ethanol production. According to the study, Iowa is expected to benefit from continued expansion and development in the industry over the next decade, but the Iowa Renewable Fuels Association notes an ethanol shortfall in the state. “Iowa is lagging behind the rest of the country in ethanol use,” Monte Shaw, executive director of IRFA said. “Ethanol fuel blends sold in Iowa remain close to 75 percent while the rest of the nation stands at 80 percent.”

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Now, new legislation passed by the Iowa State Senate Agriculture Committee has Iowa one step closer to catching up with the rest of the nation. At the IRFA Summit held in January, Shaw spoke on ethanol’s impact to Iowa’s economy and referenced the study. According to the study, done by LECG LLC, ethanol and biodiesel make up 8 percent of Iowa GDP, or about $11.5 billion. The IRFA also proposed an E10 mandate requiring all motor vehicles to use the 10 percent blend. In 2006 the IRFA proposed a similar mandate predicated on boosting E10 use and after four years, it appears legislators are listening.

The E10 Fuel Quality Standard legislation (SF107) was go to the full Senate after passing a voice vote in February. The bill, which would require all gasoline sold for highway use (exemptions from highway use include outboard motors, power tools and

lawn equipment) contain at least 10 percent ethanol, was initially introduced by Sen. Jack Kibbie. “Iowans should be proud of their renewable fuels industry,” Kibbie said.

“People need to understand that without ethanol, corn and farmland would be worth about half as much as they are today.”

According to the LECG study, locallyowned ethanol plants make up a full third of production capacity, and account for almost half of the existing ethanol fuel plants in Iowa. To produce 3.2 billion gallons of ethanol, the industry spends roughly $5 billion, mainly on corn used to produce ethanol.

Shaw expects the bill before the Iowa legislature will aid ethanol in securing a new segment of the market if the U.S. EPA approves an expanded blend limit from 10 percent to 15 percent. “The expansion to E15 won’t mean a hill of beans if there is

ETHANOL PRODUCER MAGAZINE • April 2010

PHOTO: IOWA RENEWABLE FUELS ASSOCIATION

Monte Shaw, executive director of the IRFA, speaks at the IRFA summit about the problem of the 15 billion gallon cap for corn ethanol in the national renewable fuels standard.

no incentive for retailers to pump it,” Shaw said. Although bills such as SF107 have appeared before, some note that there is now a change in thinking. Sen. Thomas Courtney said people finally recognize the positive impact of ethanol. “People have learned that ethanol works. This idea that it harms your engine is BS.” Even with the changed attitude and first-round success of an E10 mandate in Iowa, Shaw believes there are still problems to address. “We’re obviously pleased,” Shaw said. “But this was the first step in the long process.” One of the problems Shaw pointed out relates to the new RFS2 ruling.

“By declaring that corn ethanol achieves the necessary GHG reductions,” Shaw said, “it will allow corn ethanol production beyond the 12 billion gallons that were grandfathered. Over time, some plants may expand or there may be new projects that take the

capacity closer to the 15 billion gallon cap for corn ethanol.” But IRFA believes the idea of an arbitrary 15 billion gallon cap is a long-term problem for the corn ethanol industry and needs to be addressed.

Shaw and others remain hopeful the E10 mandate will ultimately pass. Rep. Annette Sweeney echoed a sentiment among many in the state legislature. “I know there’s interest in the bill,” she said. “And there will be more once the case is made for how important the ethanol industry is to Iowa.”

Unfortunately, in mid-March news reports indicated the bill died before reaching a Senate vote after Senate leadership chose not to schedule a debate on the bill. “This is very disappointing,” Shaw said. “I think we had the support. But if the bill isn’t brought up for debate there’s little we can do.”

—Luke Geiver

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April 2010

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orn growers brought in another big harvest, with record yields reported in spite of a late spring. But delayed planting brought a delayed harvest, and with it a big year for wet corn. Paul Bertels, director of economic analysis for the National Corn Growers Association, says he heard of farmers taking off corn anywhere from 14 to 40 percent moisture in the nation’s 2009 harvest. The Renewable Fuels Association reported it too. “Initial 2009 harvest reports in many locations show grain moisture ranging from 25 percent to 30 percent, as opposed to the more typical harvest levels of 18 percent to 23 percent,” according to a RFA report on corn quality.

All that wet corn creates problems for many ethanol plants. Glacial Lakes Energy LLC, a 100 MMgy ethanol plant in Mina, S.D., typically accepts corn of 16.5 percent moisture or lower. This year the corn coming in was a couple percentage points higher.

At maximum, the plant’s hammer mills can handle about 18 percent moisture corn before the wet corn gums up the works. “That’s probably even pushing it,” says Jason Wambach, corn merchandiser at the plant.

Although most ethanol plants don’t have on-site corn dryers, Glacial Lakes is installing one as well as increasing storage capacity and adding a receiving pit. The $2.75 million project, which was financed partially through state economic development money, was on track to be completed in March.

Glacial Lakes-Mina made the decision to install the dryer because 2009 was the second wet year in a row. In fact, Wambach says, in 2008 the ethanol plant had to shut down ethanol production for a few weeks while waiting for corn to be dried off site. “This year we didn’t have to shut down,” he says, “but we did have to trim down.”

RFA listed several things besides drying the corn that ethanol producers should be aware of in a high moisture year, including the importance of visual inspection, sampling and grain grading, testing for mycotoxins, grain cleaning, dust suppression and quality assurance of distillers grains.

Wet Start to Finish The trouble started when planting got off to a slow start in 2009. Farmers were kept out of wet fields by cool temperatures and frequent rain showers. By May 10, corn planting in the 18 major corn states was only 48 percent complete—significantly behind normal, according to USDA’s 2009 crop production summary.

That, in turn, delayed harvest. The final crop progress report came unusually late, on Dec. 22, says Anthony Prillaman, National Agricultural Statistics Service agricultural statistician. At that time, 95 percent of the U.S. corn crop was estimated to be harvested, with 5 percent remaining in the field.

North Dakota, which was hit the hardest by a late planting season and delayed harvest, only had 68 percent of its corn crop harvested by Christmas.

With such a late harvest, it was very difficult to dry down that corn naturally. By November, field drying nearly stops completely, Bertels says. Corn that is more than 16 or 17 percent moisture needs heat to dry.

If it doesn’t, it quickly spoils. The high moisture corn coming in this year strained farmers and grain elevators that didn’t have the needed drying capacity.

David Spickler, commodity manager for Blue Flint Ethanol, a 50 MMgy plant in Underwood, N.D., says the season started off with a mycotoxin scare that spooked distillers grains customers who demanded testing to prove toxin levels were under the acceptable limit. “Almost all of the corn we’ve brought in has had some sort of mold on it,” he explains. Blue Flint put testing procedures in place very rapidly to meet the unexpected need. Fortunately, testing revealed the problem wasn’t as bad as feared. Up through February, the plant hadn’t found mycotoxin levels anywhere near the limit, Spickler says.

“We’re going to be diligent in testing,” he adds. “We’re still testing every day.” In fact, they’ll probably continue testing their corn for mycotoxins until the remainder of the 2009 corn crop is used.

The next concern is storage damage— something Blue Flint started seeing as early as late January. As the months progress, nobody is really sure what the corn will look

ETHANOL PRODUCER MAGAZINE

April 2010

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North Dakota has the most unharvested corn due to late planting and a wet fall.

like coming out of storage. “It’s definitely a concern what this looks like when we get to May, June, July, August,” he says.

Monitoring Stored Grain With 65 percent of Iowa’s corn supply going to ethanol production, Charlie Hurburgh, an agricultural engineer and grain storage expert, pays close attention to how high moisture corn has affected ethanol plants. The professor at Iowa State University runs the extension program on grain quality. In Iowa, as in most states, corn yields were good but moisture content was way up.

There just wasn’t enough drying capacity to deal with all that wet corn. As a result, some people handled incoming corn well, while others fell flat on their faces. “There have been a number of instances of outdoor piles of corn spoiling, literally spoiling, turning black or brown,” Hurburgh says.

In past years, 15 percent to 16 percent moisture was considered safe storage. This year, the best case scenario was drying corn to at least below 20 percent, putting it into storage with aeration and getting it cold to the point of freezing, he says. The thing to

ETHANOL PRODUCER MAGAZINE

keep in mind is that if corn goes into storage with toxins on it, it will come out with toxins. “This year’s corn has about half the storage life as normal corn,” he tells EPM. It’s not so much of a problem in Iowa, but Hurburgh has heard stories of 10 times the FDA limit of vomitoxin on corn. This toxin got its name from what happens when livestock eats vomitoxin-contaminated grain.

“A pig eats too much of it, guess what he does,” he says.

All this adds up to a need for vigilance on the part of ethanol plants. The fact is, due to the value of corn, sellers have an incentive to blend bad corn into good corn. Hurburgh stresses that ethanol plants need to pay close attention to the quality of the corn coming into their plants—perhaps even using a third party grain grader. “Don’t have your sloppiest guy doing the grading this year,” he says.

“If [ethanol plants] don’t pay attention, I’ll level with you, sellers of grain understand very quickly which plants are grading well, and which aren’t.”

Hurburgh actually sees this as a good thing for the health of the industry. The fact that there wasn’t enough corn storage and drying capacity this year will prompt building

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and expansion. And, if the ethanol industry consistently demands good quality corn supply and rejects poor quality corn that will be good in the long run too. “That’s going to force some changes all the way through the system,” he says.

54 hour EtOH Decreases with Drying Temperature 13.40

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- 3% decrease in ethanol yield was observed - GA1 is glucoamylase, GA2 is premium glucoamylase - Ethanol %w/v is a measure of the concentration of ethanol indicating percentage, by weight, and per unit volume of beer.

SOURCE: NOVOZYMES

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So what happens when corn is aggressively dried down in a high moisture year?

Will that have any effect on ethanol output? Researchers from Novozymes, Randy Deinhammer, staff scientist, and Anne Glud Hjulmand, director of research and development, described an experiment that started with whole corn dried under mild conditions. The corn was rehydrated to the moisture level farmers were finding in the fields this fall and then dried back down to 85 percent dry solids, representing typical corn coming into an ethanol plant.

The variable in the lab experiment was the temperature the corn was dried at, Deinhammer says. Corn was dried at 120 degrees Fahrenheit, 170 degrees and 230 degrees.

After that, researchers turned the corn into ethanol in the lab, grinding it with a hammer mill and utilizing Novozymes enzymes in the conversion process. The researchers found as drying temperatures increased, the accessibility of starch in the ethanol decreased, resulting in reduced outputs of ethanol. For one thing, the amount of free sugar in the fermentation mash was reduced, he says. Secondly, the product started browning, which could also result in lowered ethanol yields. With corn dried at the highest temperature, at 230 degrees F., there was a 3 percent loss in ethanol yield. “The more aggressively you dry the corn, the more ethanol you lose,” Hjulmand says.

The other variable in the experiment was the type of glucoamylase used. The Novozyme researchers did find that using a premium product did increase ethanol output, but could not overcome the entire loss.

“It’s something that is happened during the grain drying process,” says Hjulmand. “You cannot repair it 100 percent.” EP Holly Jessen is associate editor of Ethanol Producer Magazine. Reach her at (701) 738-4946 or hjessen@ bbiinternational.com.

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isi o c e D y r nda u o B m Cyc e e f i L Syst l o than E n r o C The

POLICY

LUC Indirect Effects UC, Direct L t en Equipm

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Setting Boundaries with the

Low Carbon Fuel Standard

Soil C ns, Emissio ion Vegetat GHG n emissio

Despite strong opposition, in January, California approved implementation of a low carbon fuel standard. The California Air Resources Board is now preparing biofuel producers for compliance and anticipates many challenges in ensuring fairness and accuracy.

By Anna Austin

50

ETHANOL PRODUCER MAGAZINE

April 2010

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alifornia Gov. Arnold Schwarzenegger's 2007 executive order called for a reduction of at least 10 percent in the carbon intensity of California's transportation fuels by 2020, while instructing the California Environmental Protection Agency to coordinate activities between the University of California, the California Energy Commission and other state agencies to develop policies to meet the 2020 target.

Considered a large hit to the oil indusETHANOL PRODUCER MAGAZINE

April 2010

try—as, according to the CEC, California alone uses more gasoline and diesel than any country in the world besides the U.S. as a whole—the California policy also negatively affected the corn-based ethanol industry.

Groups such as the Renewable Fuels Association and Growth Energy have fought against it since its inception. In December, those groups and others filed law suits against the California Air Resources Board, on grounds that the low carbon fuel standard (LCFS) would virtually eliminate domestic ethanol

and counter state goals to reduce carbon emissions from motor vehicles, claiming a blatant disregard for current information related to the lifecycle greenhouse gas (GHG) emissions associated with corn ethanol that have resulted in significant overestimation of its carbon intensity. The groups claim California’s LCFS interferes with federal law, and is contrary to the Constitution’s Commerce Clause.

Still, the California Office of Administrative Law approved the LCFS for 51

POLICY

their fuel/feedstock gets to the plant location, and will choose the appropriate carbon intensities from a look-up table CARB has provided, based on information about their facilities and feedstocks.

CARB will take biofuel registrations from February to May according to Littaua.

Though California will need more advanced biofuels to meet the standard, she says, conventional biofuels are expected Complying with LCFS to play a continued role in the “CARB recently posted a state fuel market. draft biofuel producer registraThe LCFS requires a gradtion form, and we’re requesting ual reduction in carbon-intense public comment,” Littaua says. “In fuel, and is weighted toward February, registration started with later compliance years, when information on plant processes— CARB believes the standard will information about co-firing, fuel be met with new, advanced bioRenee Littaua used at facilities, feedstocks used, manager, CARB fuel facilities. “We projected 24 coproducts produced—and an fuels section new potential biofuel facilities in explanation of the physical pathCalifornia by 2020, including 18 way a producer’s fuel takes to gets new cellulosic ethanol and six new biodiesel to California.” A producer will be required facilities,” Littaua says. CARB continues to to provide a map to CARB explaining how develop the LCFS, with a board of experts implementation in mid-January, and the first reporting date is quickly approaching.

Meanwhile, CARB is moving forward with educating and preparing California biofuel producers. Renee Littaua, manager of CARB fuels section, says the first reductions aren’t required until 2011, but the first reporting requirements are due by July 1—pushed back a month from the original date.

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seeking the best science available and though progress is being made, she adds, there are many issues hanging such as developing accurate and fair biofuel carbon life-cycle analyses.

University of California-Davis researcher Alissa Kendall says some key challenges have emerged as biofuel life Alissa Kendall cycle analyses have been assistant professor, implemented in California civil and and questions that need to environmental be answered before biofu- engineering, University of el carbon intensity can be California-Davis accurately certified.

Key Challenges A biofuel life cycle is different than other life cycles, according to Kendall, as farm activities such as cultivation, growing and harvest are combined with industrial activities and the natural environment, making the system harder to model than an engineered one. “Life-cycle [analysis] is simple in terms of steps, but when we actually account for all the different inputs and outputs of the system, it gets complicated fast,” she says.

As many facilities use aggregated inputs from many suppliers, things get complicated when determining what kind of emissions went into producing each of the feedstocks and biofuels. “Can we capture that geographic variability that we need to get these verifications right?” Kendall questions.

GHGs for imported biofuels present a whole new challenge because it’s nearly impossible to verify the accuracy of data collected, she adds. “It’s going to be even harder to figure out where things are grown, where they’ve been moved and all other steps in the biofuel lifecycle. I think this is going to be a really big challenge and it might mean that we end up only being able to certify biofuels from large industrial partners who are able to go through our certification process.”

Another outlying question from biofuel producers is how market-mediated effects of producing biofuels are reliably calculated, with proper consideration of how coproducts are valued and credited. “Climate

ETHANOL PRODUCER MAGAZINE

April 2010

POLICY

change-related policies and efforts tend to just focus on GHG emissions and don’t consider coproducts such as distillers dried grains (DDGs),” Kendall admits. “This is a valuable resource and we want in some way to credit the ethanol for the production of DDGs. We assume the DDGs have some value in the market that will displace the essentially ‘business as usual’ products in the market—in this case, cattle feed, which is usually corn and soybean meal. If I introduce DDGs into the market then I displace all of the soybean meal and some of the corn, so ethanol will be credited for displacing these products in the market.”

There is a caveat, however, as markets change dynamically. “If I introduce a huge quantity of DDGs, it suppresses feed prices and meat is cheaper so people eat more meat, upping demand and suddenly I’ve expanded my market for feed and meat rather than displacing something from the market,” she says. “Another problem is that coproducts are known to not displace anything, just create a new market for a material. One of the biggest challenges is when you look at these studies, there is very little

ETHANOL PRODUCER MAGAZINE

transparency on assumptions behind how the study does coproduct allocations, and if you do it statically, it probably isn’t applicable two or three years down the road. So we have this challenge—to figure out how to do coproduct allocation more transparently and more dynamically so it reflects real market conditions.”

Beyond lifecycle complexity, geographic variability and coproduct accounting, there are more issues to consider.

Carbon for Thought A problem with impact assessments, a key element of biofuel lifecycle analyses, is that they are usually performed without spatial or temporal information, Kendall says. “For climate change gases it seems it’s okay, mostly because when putting CO2 in the atmosphere it doesn’t matter where, it essentially has the same effect, which is much easier than criteria pollutants which are spatially dependent.”

When predicting impacts, how far into the future should they be projected? “For global warming we look at 100 years, which I think is too far,” she says. “Looking at cli-

April 2010

mate change emissions and changing them into CO2 equivalent, we always use 100 years and this is something we might want to reconsider. The impact of GHG scales with the time it has to sit in the atmosphere and act, and we often ignore this in studies. And, what happens when we address the timing and GHG emissions from capital investments, things such as machinery and plants put up to produce biofuels. If I account for the timing of these investments, the GHG intensity CO2 equivalent per liter goes up. In the case of cellulosic ethanol, it goes up by 10 percent. Time matters, and as we get better at producing low carbon fuels, the timing for these capital investments becomes very important. We need to decide whether we’re willing to ignore time.” EP Anna Austin is a BBI International associate editor. Reach her at aaustin@ bbiinternational.com or 701-738-4968.

53

EMISSIONS

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ETHANOL PRODUCER MAGAZINE

April 2010

EMISSIONS

Measured

EXPECTATIONS

The U.S. EPA will begin requiring participants of its mandatory greenhouse gas emissions reporting program to use prescribed methods on April 1.

How do these methods differ from the best practices that have been used until now and what changes should producers look out for in the future?

By Kris Bevill

ETHANOL PRODUCER MAGAZINE

April 2010

55

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T

he word “flexible” doesn’t necessarily spring to mind when describing U.S. EPA regulations. The agency is known more for its hardline stance on following the rules, but perhaps that is because EPA rule usually isn’t a lead-in for future regulation, as is the case for its greenhouse gas (GHG) emissions reporting rule. The Mandatory Reporting of Greenhouse Gases Rule required all identified participants to begin collecting emissions data using “best available monitoring methods” on Jan. 1. The agency stresses that its goals for this program are to be flexible with reporters while at the same time acquiring the most accurate data available. By early February, most reporters seemed to have a handle on what was expected of them, but it remains to be seen just how flexible the agency really is when it comes to implementing the required reporting procedures.

Starting April 1, participants who have not received an extension must begin using the EPA’s required monitoring methods to measure emissions. The EPA plans to analyze the emissions data on an annual basis beginning March 31, 2011, and use it to develop a range of potential Clean Air Act GHG policies and

programs. It is vital the agency obtain the most consistent and accurate data possible, which is why it developed the required emissions monitoring methods.

When finalizing its methodologies, the agency considered the short timeframe participants had for compliance as well as existing methodologies available through other emissions reporting programs. “Our view was that we did not need, in most cases, to reinvent the wheel,” says Bill Irving, chief of the program integration branch in the EPA’s climate change division. “We looked at the purpose of the rule, which was to provide rigorous and accurate information on economy-wide emissions for the development of future policies and programs under the Clean Air Act [and] we noted that we had an accuracy requirement, but also that this was not a cap and trade program or other reduction program. We think the outcome strikes an appropriate balance in terms of accuracy and cost to the reporters. There is not full flexibility with these methods—we do need a base level of accuracy and rigor. But within certain subparts there are choices reflecting the circumstances of different types and sizes of facilities. We think that’s a good thing.”

Who, What and How So what are these choices and methods?

As EPA standards go, it’s complicated to say the least. There are approximately 42 source categories for emissions and each has its own required monitoring methods, as outlined in the EPA’s 261-page final rule. “It’s one of those ‘devil in the detail’ things where you really need to go to the specific source category to figure out what your compliance obligations are,” says Jonathan Dettman, a partner at Minneapolisbased Faegre & Benson LLP and lead lawyer for the firm’s climate change and sustainability practice. Because ethanol was left out of the final rule as a source category, only producers whose Jonathan Dettman facilities emit more than partner, 25,000 tons of carbon di- Faegre & Benson oxide equivalent (CO2e) annually from stationary combustion sources are required to participate in the reporting program. Those producers are lumped into the EPA’s general stationary source category for

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Since 1958 West Des Moines, Iowa USA ETHANOL PRODUCER MAGAZINE

April 2010

EMISSIONS

Estimated Covered Entities, Emissions and Costs by Subpart (2006$) Subpart

Subpart C

General Stationary Fuel Combustion Sources Subpart H Cement Production Subpart S Lime Manufacturing Subpart Y Petroleum Refineries Subpart AA Pulp and Paper Manufacturing Subpart HH Landfills Subpart NN Suppliers of Natural Gas and Natural Gas Liquids Subpart QQ - Motor Vehicle and Engine Manufacturers Coverage Determination Costs for Non-Reporters

Number Covered of Entities

Downstream Emissions (million metric tons, CO2 equivalent)

Share

First Year Capital Costs (Million)

Share

3,000 107 89 150

220.0 86.8 25.4 204.7

6% 2% 1% 5%

$10.5 $5.4 $4.9 $1.6

27% 14% 12% 4%

$25.8 $6.8 $5.3 $6.1

20% 5% 4% 5%

425 2,551

57.7 91.1

2% 2%

$14.8 $1.3

37% 3%

$8.6 $12.4

7% 9%

1,502

0.0

0%

$0.0

0%

$6.8

5%

317

NA

NA

$0.0

0%

$8.6

7%

NA

NA

NA

NA

NA

$17.2

13%

category for stationary combustion sources .

Reporters at this level must use Continuous Emission Monitoring Systems for data collection. However, the EPA is giving facilities additional time to upgrade their CEMS by allowing them to use lower tier level calculation methods for 2010. All Tier 4 reporters must begin using CEMS on Jan. 1, 2011.

The good news for ethanol producers who must report is that the vast majority fall

First Year Total Annualized Costs (Million)

Share

SOURCE: U.S. EPA

reporting. The stationary source category covers about one-third of all of the approximately 10,600 facilities subject to the rule. “It’s a pretty significant category and even that category is split out into four separate tiers depending on what sort of facility and the size of the facility and the amount of emissions that a facility may have,” adds Dettman.

Tier 1 of the stationary source category allows the reporter to use company records to show annual fuel consumption. Those records, together with fuel-specific default high heat values and default CO2 emission factors, can be utilized to calculate annual emission rates. Tier 2 also allows company records to be used to demonstrate annual fuel consumption, but also requires measured fuel-specific high heat values along with default CO2 emission factors.

Tier 3 begins the required use of measuring equipment. Producers in this category may use company records to show annual fuel consumption for solid fuels, but must use fuel flow meters to measure liquid or gas fuel consumption. In addition, Tier 3 participants must periodically measure fuel carbon content.

Tier 4 is the most stringent reporting

into Tiers 1 or 2 of the rule, which allows for the simplest compliance measures. “The ethanol facilities that we’ve worked with are all falling into Tier 2,” says James Wu, GHG services manager at Air Resource Specialists. His company has advised approximately 20 ethanol producers on reporting compliance, at facilities with production capacities ranging from 50 MMgy to around 100 MMgy. “The plants that produce 100 MMgy or more have the po-

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EMISSIONS

tential to be kicked into Tiers 3 or 4, however, they pipeline natural gas so they’re exempted [from those tiers],” he says.

No Big Deal?

Because the required monitoring methods for Tiers 1 and 2 of the stationary source category allow the use of company records, it’s expected that compliance shouldn’t be difficult for ethanol producers. However, every kind of compliance comes with a cost. The EPA estimates that total national annualized cost for participants in the first year will be $132 million and $89 million in subsequent years. Stationary combustion sources are expected to incur approximately 26 percent of the costs in the first year. This equates to just “cents on the ton” according to Irving. However, Dettman points out that the EPA might not have considered the indirect costs of compliance in its calculations.

“While the EPA appears to have done its homework, it remains to be seen whether the implementation costs of this new rule will be

as advertised,” he says. “In terms of monitoring equipment, it isn’t really expensive. But I don’t know if the EPA is factoring in the other compliance costs that may go with it. For example, implementing a system within a facility to systematically gather this type of data may mean developing record-keeping requirements or systems. There’s also a learning curve. The initial expense for the first couple of years may be greater in terms of investment of personnel and time. So, there will be some upfront investment for companies, especially those that fall within the more rigorous requirements. These are regulatory compliance obligations and companies are going to want to be sure they get this right. That’s going to involve some investment on their part.”

Wu says that while compliance may not be exactly difficult, managing it might be a bit more than a typical plant manager can handle.

“It’s not overly complex—the EPA has clarified some aspects of the rule— but it’s difficult for a plant manager to track something that’s very new and still being clarified by the EPA.”

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He adds that once the ethanol-specific category becomes finalized, there will probably be more requirements for producers.

Noncompliance and Future Considerations The EPA has endeavored to educate program participants on the reporting rule’s requirements. In February, the agency said it had connected with 6,500 people through webinars and seminars disseminating compliance details to those affected by the rule.

“We think it is critical to get the understanding of the provisions and rule out there to the affected sources,” Irving says. “That’s by far the most important thing for ensuring compliance with the rule. [However,] it’s inevitable that there’s not always 100 percent compliance with every rule.”

Noncompliance can range from failure to report to failure to calculate emissions following the specified methodologies. The Clean Air Act allows flexibility in determining the appropriate punishment for noncompliance, according to Irving. The agency will take a facilitative approach as its first step and save the maximum punishment, fines of $37,500 per day, as a last resort.

While producers begin collecting data on their stationary combustion sources this year, it will be important to keep an eye on changes to the current rule and possible additional compliance measures for 2011. The EPA continues to evaluate ethanol as a specific source category and expects to issue its final decision later this year. This could mean producers will be responsible for collecting more data on emission sources throughout their facilities and the category could be expanded to include plants not currently required to report. Also, pending legislation could change the rules. “It was Congress that requested this rule and if they give us more instructions then, yes, we’d have to come back and look at whether this reporting program meets all the requirements of any additional Congressional action,” Irving says. EP Kris Bevill is an editor at BBI International. Reach her at kbevill@bbiinternational. com or (701) 850-2553.

ETHANOL PRODUCER MAGAZINE

April 2010

USE

ETHANOL: GROWING IT, BURNING IT AND BREAKING RECORDS A home-grown, corn-fueled race car tops 255 mph on Rockett Brand E85.

By Luke Geiver

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nol racing blend suitable for he Bonneville high performance vehicles.

Speedway on “We had to develop a consisUtah’s baked tent E85 blend because the white Salt Flats racers wanted that. They were should be the last place to using the pump E85 and wantfind a farmer from Oklaed a more specific blend,” says homa. But Brent Hajek, a Rockett Brand President Jack farmer and self-proclaimed Brent Hajek Day. Racers were hoping to utigearhead from Ames, Okla., farmer/gearhead, lize the higher octane and cooldoesn’t always do what he Hajek Motorsports ing qualities of E85 fuel to gain should. On Oct. 11, Hajek, an edge in competitive racing, hundreds of miles away he explains, and because each from his 4,000-acre farm, blending station carries a difin the middle of harvest, ferent formulation of E85, the watched his dream vehicle inconsistencies from blend to speed across the flat earth blend were making it difficult at the Utah racetrack. The to tune the cars and optimize E85-powered Ford Musthe qualities of the alcohol tang built by Hajek and in E85. Combined with other his gearhead crew set a Jack Day uncontrollable variables such land speed record at just president, Rockett as weather or air temperature, over 255 miles per hour. Brand Racing Fuels the race teams expecting posiNow, Hajek believes that by tive results from ethanol fuel breaking records in an E85powered Mustang, he’s showing that were not getting what they wanted. “In a race car, there are so many variables,” the future of ethanol is coming fast.

As a third generation farmer, Day says, “The car, the tires, the track.”

Hajek started the development of the When Rockett Brand set out to develop Mustang to promote his product, corn. a higher quality E85 fuel they kept one “I started this because the service sta- goal in mind, consistency. Day explains tions around me offered no ethanol,” that a consistent fuel lets you focus on Hajek says. “They say ethanol doesn’t the variables you can’t control. “We perform, is hard on your engine. As a know how it is going to perform before farmer I wanted to promote my crop. it ever gets to the races,” Day said, “and And, I like a good challenge.” Hajek’s ultimately, it gives a higher horsepower challenge, building a race car capable of opportunity at a lower cost.”

“We had developed the fuel and going fast, burning ethanol and breaking records began as a gearhead farm- hooked up with Brent very early in the er’s fantasy and now has the attention game,” Day says. Hajek likes the cost of such companies as Ford Racing Co., of fueling his high performance MusMonsanto, and Rockett Brand Racing tang with E85, and to truly promote his Fuel, which have supported the project product, he provides corn from his own in different ways. “We got MIT gradu- fields to make the ethanol used in his ates, we got engineers, scientists, it is car. Now, the Illinois-based company just amazing. Gearheads out here in the president and the Oklahoma farmer are middle of nowhere, we can meet in the record breakers. And the feat was not in middle and come up with some amaz- a special class for ethanol-specific fuel, which shows the potential and ability ing stuff,” he says. of ethanol, according to Hajek. “You The Right Stuff are either in the gasoline class, or fuel While Hajek was hatching his class, and fuel means about everything. dream in Oklahoma, Illinois-based We are lobbying for an ethanol class Rockett Brand was developing an etha- right now.” The Mustang competed in

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the open fuel class at Bonneville, going against blends such as nitro-methane.

Using E85 was a major reason the Mustang reached such high speeds, Hajek adds, because ethanol burns cooler. “The more air going through the car the more drag. We were able to actually block off the front of the vehicle to avoid that drag.”

Bearings

The Right Driver Another facet of Hajek’s love of racing contributed to finding the right driver to help break the record. Hajek has created a museum devoted to cars in the old school building in his home town. The museum in Ames showcases models driven by everyone from Dale Earnhardt to Jungle Jim. “So many of these junk cars from my heroes you could buy for nothing years ago. No

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one was collecting muscle cars back then,” he says. Today the museum continues to add models even though Hajek notes the prices of the cars he’s looking for are dramatically higher.

One of the museum cars—a 1969 Mach 1 Mustang driven by racing legend Mickey Thompson—inspired Hajek in finding a driver for the 2009 Mustang. Forty years after Mickey ran a blue Mach 1 on the barren Bonneville track, Hajek thought it fitting to put Mickey’s son Danny Thompson behind the wheel of the souped-up car. To explain the significance of reaching a speed well over 200 mph, Hajek adds, “There are more people that have scaled Mt. Everest than are in the Bonneville 200-mile class.”

Setting the land speed record has those outside of racing circles watching. Last year Hajek spoke at the World Ethanol Summit in Sao Paulo,

Brazil. “The people down there were really supportive and excited about ethanol. The thing they were most concerned about was the food thing,” he says. Most of the questions he answered during the summit dealt with the food versus fuel debate, although he adds that in all of his time spent developing, running, and promoting his E85 Mustang, everyone other than those worried about food have been supportive. “It amazes me how receptive everyone has been in the whole process. The fact that I’m a farmer and doing something green is cool to people. We have mutual respect from other racers and the scientists and engineers are watching to see what we can do.” As for answering those at the summit worried about food, he says he’s learned through his days in farming, “We could cover this world up with corn.”

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To continue his allegiance to ethanol, Hajek has begun production of a new flex-fuel race car, a 2011 Mustang. This time Hajek is going further with biobased products. Along with the use of E85, the car will be made with bioplastic side panels provided by Ford. “The hood and fenders are all soy-based plastic. The advantage to the soy plastic body panels is the weight. The soy is lighter and not petroleum-based plastic. This stuff is renewable, more earth friendly,” he explains. As for Rockett Brands involvement, Day says the partnership will continue, along with the production of E85 racing fuel. “We see an opportunity with this fuel. When the fuel is used as it supposed to be used, it does what it is supposed to do.”

A trip back to Bonneville to attempt new records at the track is planned, although Day, who’s been to the speedway before and says everyone should visit the track at least once, doesn’t know if he will be there for the next record breaking attempt. “Whether I’m there or not the fuel is going to perform.”

As for Hajek being there to watch the newest version of his dream car on the salty ground in Utah, he does have chores to do at his farm, but, he’s shown to be anything but the typical Oklahoma farmer. “He is what this sport needs,” Day says.

When asked about the possibility of his own cars earning a spot in the Hajek Motorsport Museum in Ames he responds, “We are out of cars to collect. We have taken these new cars, the Mustangs, and made our own history.” EP Luke Geiver is an associate editor of Ethanol Producer Magazine. Reach him at (701) 738-4944 or lgeiver@ bbiinternational.com.

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DEHYDRATION. BY FELIPE TAVARES, JANSLEY PASCOAL AND BRUNO MAIA Contribution

Expanding Ethanol Dehydration A number of alternative methods are available for debottlenecking cooling water systems and the molecular sieves that are used for ethanol dehydration.

Ethanol is gaining wide popularity as an alternative fuel as the value of diminishing crude oil reserves increases and research is directed toward the possibilities of employing biomass materials for fuel. Current U.S. policies are motivating ethanol dehydration companies in Central American and Caribbean countries to increase production capacity either by starting new plants or expanding existing ones. Expansion is often preferable as it usually involves a better ratio between throughput expansion and capital costs than new construction. Besides that, a plant upgrade will take less time than building an entirely new unit.

Central American and Caribbean countries import relatively high quantities of ethanol, nor-

Figure 1. Percentage of Fuel Ethanol U.S. Imports

mally from Brazil, although little is destined for domestic consumption. These countries reprocess the product, usually converting hydrated ethanol into anhydrous ethanol and then exporting it to

the U.S. Not only is value added to the product through dehydration, but the stopover and further processing means the ethanol being exported to the U.S. avoids the 2.5 percent duty and 54 cent-per-

gallon tariff on Brazilian ethanol, thanks to the trade agreements and benefits granted by the Caribbean Basin Initiative and the Central American Free Trade Agreement. The CBI limits the

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).

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total amount of ethanol allowed to be exported to the U.S. to just 7 percent of the previous year’s entire domestic consumption. To date, all CAFTA nations combined with CBI countries have not come even remotely close to meeting this gap. Nevertheless the percentage of U.S. imports from CBI and CAFTA nations have rapidly increased in recent years (see Figure 1).

Ethanol is readily produced through fermentation yielding a dilute aqueous solution of ethanol, normally 8 to 10 percent by weight. Further concentration of the ethanol by traditional distillation processes produces an azeotrope containing about 5 percent water by weight. Azeotropes are a mixture of two or more liquids that cannot easily be separated by distillation. To prevent phase separation during storage, ethanolblended gasoline should contain at most only small amounts of water, generally 1 percent or less by volume. Thus, ethanol used in the U.S. for blending must be substantially anhydrous.

The energy requirement for final azeotropic distillation to achieve anhydrous ethanol is very high, and various means for a more energy-efficient dehydration process have been reported.

Most current ethanol dehydration facilities rely on hydrophilic zeolite molecular sieves. Zeolites can be both size- and sorption-selective for water, thereby achieving a high selectivity for water, particularly 3A zeolites that exclude ethanol but not water.

Cooling Water System Issues Debottlenecking improves profitability if one is aware of specific issues and targets the right improvements. In many projects the cooling water system

is the production-limiting factor.

A number of design options for debottlenecking cooling water systems are outlined below. Picking the best alternative is not a trivial task.

Upgrade cooling tower capacity: The obvious way that comes to everyone’s mind for improving the heat load removal in a process is to upgrade the cooling tower (CT). This can be made by installing a new tower cell or by replacing the entire tower with a new one with higher capacity and/or efficiency.

Improve cooling tower maintenance procedures: Proper maintenance and operating procedures may increase CT performance without major capital expenditures. The performance of the CT depends not only on maintaining the proper water/air ratio, but it is also based on the assumption that the water and air are thoroughly mixed and properly distributed, the most significant factors affecting the thermal performance of the CT. Installation of air cooler: Air coolers can be installed in the process or in the water system before the CT to reduce the heat load of the CT, which in turn reduces water recirculation and thus increases the tower efficiency by reducing cold and hot water temperatures. Special care should be taken with layout and installation space, operation noise and electric energy consumption.

Installation of seawater heat exchanger: For facilities located near coastal areas, the use of cold seawater is yet another way to decrease the return temperature of the hot cooling water, with the cooling tower being replaced with a cooler system using cold seawater. Advantages in using seawater include a nearly constant quality in its chemical

ETHANOL PRODUCER MAGAZINE

April 2010

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DEHYDRATION. BY FELIPE TAVARES, JANSLEY PASCOAL AND BRUNO MAIA Figure 2. Comparative Analysis of Debottlenecking Alternatives

Upgrade CT Capacity CT Maintenance Procedures Air Cooler Seawater Heat Exchanger Hot Blowdown Retubing of Condensers Replacement of Condensers Tube Bundles Direct Heat Integration w/o Mech. Compression Direct Heat Integration w/Mech. Compression Indirect Heat Integration

Various debottlenecking alternatives are rated on a scale of one to four (with one being low and four high) for capital cost, debottlenecking potential (DBN), energy efficiency (steam economy), environmental impact (EHS concerns), the complexity of the project and expected time to complete the upgrade (execution duration). Blue dots mean direct relation (the more, the better for one’s project), while red dots mean inverse relation (the less, the better for the project).

analysis, a nearly constant temperature and ample availability. The drawback of this alternative is the environmental impact related to the hot water discharged to sea.

Extraction of hot blowdown: If the cold blowdown is changed to hot blowdown, the heat load of the cooling tower is reduced because the flow rate to the CT is decreased.

Retubing of condensers: The overall heat transmission coefficient for stainless steel is 9.4 Btu per hour per foot per degree Fahrenheit (at 212°F), which is much smaller when compared with copper’s coefficient – 218 Btu/hr/ft/°F at 212°F. In this way, the replacement of stainless steel tubes by copper tubes would increase the condenser heat transfer efficiency.

Replacement of condenser tube bundles: The change of the condenser’s tube bundle with another using a different geometry with more tubes would increase the heat transfer area surface, increasing the heat exchange capacity and decreasing

May 3rd

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April 2010

the cooling water consumption considerably if the condensers are the bottleneck.

Consider Heat Integration In general, plant modifications and revamps that increase capacity and introduce other improvements will also change equipment design conditions which, in turn, lead to an offset between optimal and actual energy consumption. An optimization study can point out ways to reduce energy consumption through improving process integration, often through simpler and more elegant heat recovery networks that require less steam and cooling water. Heat integration usually incorporates one of three methods: 1. Direct heat integration without mechanical compression: A heat exchanger can be installed to totally condense a part of the dry-ethanol vapor stream leaving the molecular sieves by exchanging heat with the hydrated-ethanol feed entering the process.

2. Direct heat integration with mechanical compression: The aforementioned direct heat integration can be boosted by the use of mechanical compressors. In this case, the dry-ethanol vapor stream leaving the molecular sieves is compressed, raising its temperature and allowing a higher energy exchange with the hydrated-ethanol feed entering the molecular sieves. The process creates room for the condensation of more dryethanol vapor, increasing the debottlenecking potential. Furthermore, that compressed dryethanol vapor stream could be used, in part, to vaporize the regenerated ethanol from the molecular sieves.

3. Indirect heat integration: A heat exchanger can be installed to totally condense a part of the dry-ethanol vapor stream. The condensation process will generate low-pressure steam that will be boosted by the highpressure steam from boilers using an ejectorgenerating, medium-pressure steam that, in turn, will be used to vaporize the regenerated ethanol from molecular sieves and, optionally, part of the hydrated-ethanol entering the process.

ETHANOL PRODUCER MAGAZINE

Increasing production from ethanol dehydration facilities to accommodate growing dry ethanol needs can be accomplished by building new units or by debottlenecking existing capacity. Even when new plant construction is the ultimate answer, debottlenecking of existing facilities is usually examined

April 2010

as an option and often is an attractive method for increasing production with minimal risk. The accompanying table presents a comparative analysis of each alternative reported here. (See Figure 2) EP

felipe.tavares@intratec.us or (713) 821-1745. Jansley Pascoal and Bruno Maia are technical managers at Intratec Solutions. Reach them at jansley.pascoal@ intratec.us and bruno.maia@ intratec.us.

Felipe Tavares is president and CEO of Intratec Solutions LLC. Reach him at

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INTELLECTUAL PROPERTY. BY CHARLES R. RICHARD Contribution

Next-Generation Biofuels: Establishing, Protecting and Profiting from Technology Rights Patents and trade secrets may protect and profit owners, but do they not guarantee a monopoly.

Developing next-generation biofuels, and marketing the technology and resulting products, is an exciting and potentially very profitable enterprise. Much capital is required to accomplish this, however investors may have legitimate concerns.

How can investment risk be reduced and profits increased?

One approach is to establish and protect technology rights, and avoid losses by respecting rights of others. Technology rights in the form of patents and trade secrets may be used to protect and increase market share by creating a significant barrier to possible competition. Direct profits are available through licensing.

This article provides a general

overview of technology rights, but given space limitations, certain details, exceptions and topics are not discussed. For particular situations, readers should consult a properly licensed attorney.

Patents and Trade Secrets Defined Patents are national governmental grants of the right to exclude others for a set length of time from making, using, offering to sell, selling or importing an invention in/into that country. Patents often effectively give holders a monopoly in practice, but since patents provide a right to exclude others and not a right to practice per se, patents do not give true monopoly rights.

grants, but both are Trade secrets are legally protected. To information used in a business that may establish and maingive it an advantage tain trade secret proover competitors who tection, a system is do not know them. needed to keep seMultiple entities may cure, current and detailed documentation legally hold or use the Charles R. Richard same trade secret if of the trade secret independently devel- patent attorney, with access limited to Washington, D.C. “need to know� withoped, properly licensed or properly reverse in the business (absent engineered. There can usually be a secrecy agreement). Trade secret only one patent per invention per rights are lost if the information country, however, and licensing is becomes public. There may be civil limited accordingly. Many things remedies in the form of monetary can be trade secrets, from process damages and injunctions or cease technology to customer lists, while and desist orders and criminal not patentable. penalties available for trade secret Unlike patents, trade secrets misappropriation. do not involve governmental The concealment required to

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).

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protect trade secrets and the public use that occurs when exploiting them may eventually prohibit their patenting.

There is even a danger that “Company A” might patent technology that “Company B” previously established as a trade secret, and “Company A” will then sue “Company B” for patent infringement.

Basic Requirements for U.S. Patents There are few restrictions on patentable subject matter, and patents may claim processes, machines, manufactures, compositions of matter and improvements on these. “Products of nature” can raise subject matter issues, but such compositions enhanced by human involvement and processes for enhancing them are frequently patentable.

There are three major patenting requirements found in sections 101, 102 and 103 of the patent code.

Any indication of usefulness in the patent application is sufficient to meet the utility requirement of section 101.

The section 102 requirement for novelty defines “prior art events” that render an invention unpatentable.

Although materials known for centuries, like ethanol, are not patentable since they lack novelty, compositions containing them may be patentable. New processes to make “old” materials may be patentable also.

Section 103’s requirement, non-obviousness, is based on the prior art events for novelty, but is distinct. A

patent will not be issued if differences between the invention and the prior art are such that the invention would have been obvious at the time of invention to a person having ordinary skill in applicable technology. The U.S. Patent and Trademark Office usually makes an initial determination on a patent claim’s obviousness by determining whether all claim parts are present in the prior art (usually some assembly of patents or other printed publications), and whether there was suggestion there for the combination.

An initial determination of obviousness by the USPTO can often be successfully challenged.

best mode to carry out the invention contemplated by the inventor(s) at the time of filing; this best mode cannot be kept as a trade secret.

U.S. patent law also charges applicants with a “duty of candor” requiring applicants to disclose any prior art or prior art events discovered by time of filing or later until patent issuance.

Failing to do so may render a patent unenforceable. While there is no prior art search requirement, a thorough search before filing is recommended since amendments regarding overlooked prior art may be impossible.

Applications are usually published after 18 months.

Patent term is generally 20 U.S. Patent years from the earliest filing Applications date. By contrast, trade seTo get a patent, an in- crets are private and without ventor files an application term limit, but rights are lost that must “pass” examination if made public. (get through “prosecution”) in the USPTO. Important Patent Infringement application parts include the Direct infringement is “specification” (explaining the unauthorized making, usthe invention, uses, how it ing, offering to sell or selling is made and practiced) and a patented invention when/ “claims” (which in final form where a patent is in force, or set the scope of any patent is- importing the invention into a suing). country when/where the patApplicants must give ent is in force. There may be written description of their liability for inducing or coninvention in their application tributing to infringement by and cannot later introduce others, and even for certain amendments to the claims not activities outside the grantsupported by their original fil- ing country. Defenses may ing. The law requires that an include claim invalidity and application be “enabling”, inequitable conduct (breachthat is, contain sufficient in- ing the duty of candor) but formation for a person with ignorance of the patent is ofordinary skill to make and use ten no excuse. Remedies may the invention without “undue include monetary damages experimentation.” The appli- and injunctions. cation must also disclose the

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April 2010

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INTELLECTUAL PROPERTY. BY CHARLES R. RICHARD International Differences Patent law worldwide is fairly consistent, while trade secret law is more variable. Patents are only really effective in the country where granted, but most countries routinely grant patents on inventions made elsewhere upon proper application. The “absolute novelty” requirement is probably uni-

or trade secrets from one or more countries derived from internal research, licensed or purchased. Portfolios are managed to maximize value and can facilitate trade and manufacture in the U.S. and abroad, while offering protection from competitors and bringing in liManaging censing revenue.

Technology Rights Separate business entities Portfolios of technology rights may include patents are often formed to develop

versal outside the U.S. Generally in the U.S., “first to invent” is the standard, and elsewhere “first to file” is probably the rule. The duty of candor and best mode requirements are probably unique to the U.S.

and market technology and resulting products such as next-generation biofuels, as well as to hold related technology rights. The type of entity selected may be important. For example, general partnerships may offer tax advantages and require few formalities, but do not shield owner personal assets. Classic corporations usually shield owner’s personal assets from liability for corporate bad acts, but there are usually double taxation of profits and many formalities.

Limited liability companies usually avoid double taxation, owners assets are generally shielded from liability for LLC bad acts and formalities are often minimal.

Regardless of entity, owners are usually personally liable for their own bad acts and taxes on profits received.

Businesses and specific technology rights may be owned by one or more entities. In the U.S., joint patent owners may exploit a patent without the permission and with no accounting to other owners, absent a prior agreement. Inventors are considered the owners of U.S. patents, unless assigned, and there may be a contractual or implied duty to assign (and similarly for trade secrets). Inventions made involving U.S. federal funding or state university research may have ownership restrictions.

A survey of U.S. patents and published applications shows much recent activity in areas of interest to readers. In one major U.S. patent class/subclass for cellulosic ethanol, there were 11 patents issued and 45 patent applications published in 2009 alone. There are numerous other patent class/subclass groupings in related technology areas. The situation internationally is similar. And while it can’t be tracked as patents are, trade secret activity is likely very high as well. EP Charles R. Richard is a patent attorney and attorney-at-law based in Washington, D.C. Reach him at crobrich@yahoo.com or www. crichardlaw.com.

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Emergency Spill Response Hydro-Klean, Inc. 515-283-0500

www.hydro-klean.com ETHANOL PRODUCER MAGAZINE

April 2010

EPM MARKETPLACE Tank Cleaning Services

Consulting

Hydro-Klean, Inc. 515-283-0500

Environmental

Seneca Companies 800-369-5500

www.hydro-klean.com

Aquaterra Environmental Solutions, Inc. 877-913-8200 www.aquaterra-env.com www.senecaco.com Cantley Inc. 865-360-4080

Construction

ICM, Inc. 877-456-8588

Fabrication Agra Industries, Inc. 715-536-9584 Andy J.Egan Co. 616-791-9952 VAL-FAB Inc. 877-482-5322

www.agraind.com www.andyegan.com www.valfab.com

www.icminc.com

Seneca Companies 800-369-5500

www.senecaco.com

Feasibility Studies Harris Group Inc. 206-494-9422

www.harrisgroup.com

Insulation

Management Services

Petrochem Insulation 707-644-7455 www.petrocheminc.com

ICM, Inc. 877-456-8588

Management

Plant Optimization

Marcus Construction Company 800-367-3424 www.marcusconstruction.com

Harris Group Inc. 206-494-9422

Railroad Tracks

ICM, Inc. 877-456-8588

www.icminc.com

www.harrisgroup.com www.icminc.com

Project Development Plate-Frame Hydro-Klean, Inc. 515-283-0500

Harris Group Inc. 206-494-9422

www.harrisgroup.com

www.hydro-klean.com

Safety Railcar Spill Response Hydro-Klean, Inc. 515-283-0500

Rail Safe Training, Inc. 712-212-4145 www.railsafetraining.com www.hydro-klean.com

Employment

Railcars Hydro-Klean, Inc. 515-283-0500

Recruiting www.hydro-klean.com

S.E Weinstein Company 800-258-1701 www.seweinstein.com

Scrubbers Hydro-Klean, Inc. 515-283-0500

SearchPath of Chicago 815-261-4403, x100

Engineering

Smoke Stack Hydro-Klean, Inc. 515-283-0500

Design/Build

Tanks www.hydro-klean.com

Tank Cleaning Equipment Cloud/Sellers Cleaning Systems 800-234-5650 www.sellersclean.com Gamajet Cleaning Systems Inc 877-GAMAJET www.gamajet.com Spraying Systems Co. 630-665-5000

www.searchpathofchicago.com

www.hydro-klean.com

ATEC Steel 620-856-3488

www.atecsteel.com

J.C. Ramsdell Enviro Services, Inc. 877-658-5571 www.jcramsdell.com Westmor Industries 320-589-2100

www.westmor.biz

Alaqua Inc.

Evaporators, Crystallizers, Distillation, Columns, Solvent Recovery, Heat-Exchangers, Process Engineering 7004 Boulevard East, Ste.28A Guttenberg, NJ 07093 USA Tel: 201.758.1577 Fax: 201.758.1522 info@Alaquainc.com

www.alaquainc.com

www.spray.com

ETHANOL PRODUCER MAGAZINE

April 2010

75

EPM MARKETPLACE Superior Industries 320-589-2406

Process Design ICM, Inc. 877-456-8588

Fractionation-Corn www.superior-ind.com

Conveyors–Pneumatic

Buhler Inc. 763-847-9900

Process Engineering Associates, LLC 865-220-8722 www.processengr.com

MAC Equipment, Inc. 816-891-9300 www.macequipment.com

Cereal Process Technologies 217-779-2595 www.cerealprocess.com

Process Design-Cellulose

Cooling Towers

Crown Iron Works 651-639-8900

Delta Cooling Towers, Inc. 800-BUY-DELTA www.deltacooling.com

ICM, Inc. 877-456-8588

Corn Oil Recovery

MOR Technology, LLC 618-522-8324 www.mortechnology.com

www.icminc.com

Industrial Services Done Right Specialty line cleaning Waste Transporation Ultra-High Pressure Hydro-Blasting (40,000 psi) Custom Designed Waste Reduction Programs

ICM, Inc. 877-456-8588

www.icminc.com

DDGS Diesel

Distillation Equipment SRS Engineering Corpration 951-526-2239 www.srsbiodiesel.com

Dryers-Fluid Bed www.aeroglide.com

www.aeroglide.com/ethanol or call +1 919-851-2000

76

www.carbis.net www.determan.com

www.icminc.com

ICM, Inc. 877-456-8588

www.icminc.com

www.icminc.com

Moisture Analyzers

www.icminc.com

Dust Control Systems MAC Equipment, Inc. 816-891-9300 www.macequipment.com

Perten Instruments, Inc. 801-936-8165

www.perten.com

Molecular Sieves Fermentors www.intersystems.net

WINBCO Tank Company 641-683-1855

Grace Davison Renewable Technologies 410-531-8731 www.gracebiofuels.com www.winbco.com

Conveyors–Mechanical U.S. Tsubaki 847-459-9500

Carbis, Inc. 800-845-2387 Determan Brownie, Inc. 800-835-6074

Conveyors–Drag Intersystems 800-228-1483

Laboratory-Testing Services

Maintenance Software ICM, Inc. 877-456-8588

Revere Control Systems 800-536-2525 www.reverecontrol.com

www.perten.com

Loading Equipment

Dryers-Rotary Steam Tube ICM, Inc. 877-456-8588

Laboratory-Equipment

Midwest Laboratories, Inc. 402-829-9877 www.midwestlabs.com

www.perten.com

Control Systems

www.perten.com

Insulator

Perten Instruments, Inc. 801-936-8165

Custom Rotary Driers for DDGS & Biomass Feedstocks

ICM, Inc. 877-456-8588

Perten Instruments, Inc. 801-936-8165

Instrumentation

Miller Insulation Co., INC 701-297-8813 www.millerinsulation.com

Visit Buhler Aeroglide at

Analytical Instruments

www.mccormickconstruction.com

Perten Instruments, Inc. 801-936-8165

www.iisgllc.com

Equipment & Services

www.icminc.com

Grain Handling & Storage 763-477-4774

Dryers-Rotary Drum

Zac Cudney Zac.Cudney@IISGLLC.com 313-841-5800 24-Hour Service: 800-992-9118

www.crowniron.com

McC, Inc.

Total-Yield Diesel from Distillers 402-640-8925 www.total-yield.com

Buhler Aeroglide 919-851-2000

www.buhlergroup.com/us

Filtration Equipment www.ustsubaki.com

Fluid Engineering 814-453-5014

ICM, Inc. 877-456-8588

www.icminc.com

www.fluideng.com ETHANOL PRODUCER MAGAZINE

April 2010

EPM MARKETPLACE Pro-Environmental, Inc. 909-989-3010

Parts & Services ICM, Inc. 877-456-8588

www.icminc.com

www.pro-env.com

Valves Check-All Valve Mfg. Co. 515-224-2301

Process Control Harris Group Inc. 206-494-9422

www.harrisgroup.com

www.checkall.com

Wastewater Treatment Services

VFTechnical Services, LLC 423-794-6747 www.vftechserv.com

ADI Systems Inc. 1-506-452-7307

www.adisystemsinc.com

Productivity Enhancements ICM, Inc. 877-456-8588

www.icminc.com

Pumps The Source for Waste-to-Energy Systems

PeopleFlo Manufacturing 847-929-4774 www.peopleflo.com

ADI’s waste-to-energy systems produce renewable energy to offset electrical and natural gas expenses.

Valley Equipment Co. Inc. 423-753-3541 www.valleyequipment.com

QA Test Products

Water reuse/reclamation

Perten Instruments, Inc. 801-936-8165

Biogas recovery, scrubbing and utilization systems

www.perten.com

Eliminate surcharges and meet stringent effluent limits

Scales-Truck Weigh-Tec Inc. 1-800-461-4153

ADI Systems Inc. 1.800.561.2831 systems@adi.ca

www.truck-scales.com

ATEC Steel 620-856-3488

www.adisystemsinc.com

Hydro-Klean, Inc. 515-283-0500

Tanks Agra Industries, Inc. 715-536-9584

Thermal Oxidizers

www.agraind.com www.atecsteel.com

Spokane Industries Inc. 509-921-8868 www.spokanemetalproducts.com

EPM MARKETPLACE 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.

ETHANOL PRODUCER MAGAZINE

April 2010

www.hydro-klean.com

ICM, Inc. 877-456-8588

www.icminc.com

UEM, Inc. 561-385-7515

www.uemgroup.com

Yield Enhancement EdneiQ, Inc. 310-592-4158

www.EdeniQ.com

Finance Appraisals Natwick Associates Appraisal Services 800-279-4757 www.natwick.com

Due Diligence Harris Group Inc. 206-494-9422

www.harrisgroup.com

Insurance ERI Solutions, Inc. 316-927-4294

erisolutions.com

77

EPM MARKETPLACE Mergers & Acquisitions

Research & Development

Moglia Advisors 847-884-8282

Dynamometer Testing

www.mogliaadvisors.com

Roush Industries 734-779-7736

Legal Services Attorneys

Transportation

BrownWinick Law Firm 515-242-2400 www.biofuellawyers.com

Marine

WOHLSIFER & ASSOCIATES, P.A. 850-219-8888 www.wohlsifer.com

Odin Marine, Inc. 203-969-3400

www.roush.com

www.odingroup.com

Rail

Marketing

Ameritrack RailRoad Contractors, Inc. 765-659-2111 www.ameritrackrailroad.com

Fuel Ethanol CHS Renewable Fuels 651-355-6271

www.chsinc.com

Rail Consulting Rail Safe Training, Inc. 712-212-4145 www.railsafetraining.com

Ultra-High Pressure Hydro-Blasting (40,000 psi) Custom Designed Waste Reduction Programs

Zac Cudney Zac.Cudney@IISGLLC.com 313-841-5800 24-Hour Service: 800-992-9118

www.iisgllc.com Miscellaneous Maas Companies 507-424-2640

www.maascompanies.com

bs.com www.ethanol-jobs.com www.ethanol-jobs.com www.ethanol-jobs.com www.ethanol-jobs.com www.ethanol-jobs.com www.ethanol-jobs.com www.ethanol-jobs.com www.ethanol-jobs.c

Waste Transporation

om www.ethanol-jobs.com www.ethanol-jobs.com www.ethanol-jobs.com www.ethanol-j

s.com www.ethanol-jobs.com www.ethanol-jobs.com www.ethanol-jobs.com www.ethanol-jobs.com www.ethanol-jobs.com www.ethanol-jobs.com www.ethanol-jobs.com www.ethanol-jobs.c

Specialty line cleaning

Salco Products, Inc. 630-783-2570 www.salcoproducts.com ob

Industrial Safety Done Right

Railcar Parts

om

Market Data

www.ethanol-jobs.com www.ethanol-jobs.com www.ethanol-jobs.com www.ethanol-jo

Nelson Ink Promotional Products 218-222-3831 www.nelsonink.com

78

ETHANOL PRODUCER MAGAZINE

April 2010

WE ARE GROWTH ENERGY. YOU ARE, TOO. WE’RE A GROUP OF LEADING ETHANOL COMPANIES DEDICATED TO FUELING AND FEEDING THE WORLD THROUGH ETHANOL AND AGRICULTURE.

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