INSIDE: ETHANOL CO 2 CEMENTS CARBON REDUCTION FEBRUARY 2017
TRANSITIONS Ethanolâ€™s Prospects in the New Administration Page 30
Continuous Improvement in Water Use and Treatment
Innovations in Pelletizing DDGS and Stover
11 NATIONAL SERIES OWNER CHAMPIONSHIPS 1ST OWNER TO WIN CHAMPIONSHIPS IN ALL THREE NATIONAL SERIES
GROWTH ENERGY AMERICA’S FUEL AWARD WINNER
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FEBRUARY 2017 VOLUME 23
VIEW FROM THE HILL
What Blend Wall? Why Facts Trump Rhetoric Every Time By Bob Dinneen
Trumping Obama on Biofuels
Industry advocates weigh in on ethanol's prospects in the new administration. By Ann Bailey
Water: Lifeblood of the Process
Forging a New Path for Biofuels in 2017 By Chris Hogan
Doing the Math, Part 4 or 5 By Ron Lamberty
Many factors are involved in recycling the maximum amount of water. By Susanne Retka Schill
US Must Maintain Its Leadership on Biofuels By Bliss Baker
Pelleted Feed Innovation from Nebraska
CLEARING THE AIR
The Promise of Ethanol in an Unknown Political Climate By Doug Durante
New President, Same Path By Tom Bryan
Ethanol CO2 & Concrete Cement a Relationship
Chicago ready mixed incorporates ethanol coproduct. By Ann Bailey
Legislative Uncertainty Calls for Vigilance By Joe Leo
ON THE COVER
Trump on the campaign trail PHOTO: PATRICK MILLER, BBI INTERNATIONAL
Ethanol Producer Magazine: (USPS No. 023-974) February 2017, Vol. 23, Issue 2. Ethanol Producer Magazine is published monthly by BBI International. 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.
4 | Ethanol Producer Magazine | FEBRUARY 2017
Densification enhances DDGS and stover feed products. By Ann Bailey
54 BEST PRACTICES
Reverse Osmosis System Operation and Monitoring
Three performance variables can be used to schedule cleaning before fouling becomes severe. By Wes Byrne
Bright Future Ahead for Ethanol Exports Reviewing trends in the top 10 countries buying U.S. ethanol. By Richard Weiner
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VOLUME 23 ISSUE 2
ADVERTISER INDEX EDITORIAL President & Editor in Chief Tom Bryan email@example.com Vice President of Content & Executive Editor Tim Portz firstname.lastname@example.org Managing Editor Susanne Retka Schill email@example.com Associate Editor Ann Bailey firstname.lastname@example.org News Editor Erin Voegele email@example.com Copy Editor Jan Tellmann firstname.lastname@example.org
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EDITORIAL BOARD Ringneck Energy Walter Wendland Little Sioux Corn Processors Steve Roe Commonwealth Agri-Energy Mick Henderson Pinal Energy Keith Kor Aemetis Advanced Fuels Eric McAfee Poet Scott Teigen Western Plains Energy Derek Paine
2017 International Fuel Ethanol Workshop & Expo ACE American Coalition For Ethanol Agra Industries AOCS American Oil Chemists Society BetaTec Hop Products Buckman CHS Renewable Fuels Marketing Corval Group D3MAX LLC Direct Automation DuPont Industrial Biosciences Durr Systems, Inc. EISENMANN Corporation Fagen Inc. Fluid Quip Process Technologies, LLC Growth Energy Hydro-Klean LLC ICM, Inc. Indeck Power Equipment Co. J.C. Ramsdell Enviro Services, Inc. Lallemand Biofuels & Distilled Spirits Louis Dreyfus Company Mole Master Service Corporation Nalco Water Natwick Associates Appraisal Services Novozymes Phibro Ethanol Perfomance Group POET LLC Premium Plant Services, Inc. RPMG, Inc. R.S. Stover Seneca Companies Separator Resorations, LLC Solenis LLC StoneAge Syngenta: Enogen Sukup Manufacturing Co. Thermal Refractory U.S. Water Services WINBCO
65 17 25 53 63 44 23 18 34 50 68 3 41 27 22 2 51 9 39 57 47 24 31 30 40 33 67 15 32 52 46 38 19 11 26 13 35 56 5 45
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6 | Ethanol Producer Magazine | FEBRUARY 2017
New President, Same Path The ethanol industry was ostensibly split on the presidential election, and we should assume Donald Trump and Hillary Clinton received roughly equivalent support from our sector. All in all, both ag-based and
President & Editor in Chief firstname.lastname@example.org
renewable industries were leery of Trump because he reflected change and unpredictability. His aggressive trade reform rhetoric, in particular, was somewhat concerning to our industry, which is enjoying near-record exports and tends to overcome trade spats on its own. Now, with Trump in the White House, we are holding the president to his word on protecting ethanol, and hoping his hard-charging ways work to our advantage over the next four years. Not long ago, an ethanol plant CEO told me, quite bluntly, that President Obama was “absolutely terrible for biofuels,” and that it would be hard to do worse under Trump. You’ll see that sort of sentiment reflected, directly and indirectly, in our page-28 cover story on our industry’s political shake-up under Trump. As EPM’s Ann Bailey reports in “Trumping Obama on Biofuels,” the ethanol industry is hoping that the new president’s pro-business, anti-regulation leanings help us expand E15 while supplying more fuel and feed to consumers with less draconian regulation. Trade reformation, too, could be good for ethanol and distillers grains exports, but that largely depends on China. Last month, I said our industry will be fine under Trump, and I meant it. It’s appropriate that we are cautiously supportive of the president, but we should not lend our confidence to his cabinet picks. The men Trump has selected to run the U.S. EPA and DOE, Scott Pruitt and Rick Perry, respectively, have been unfriendly to ethanol—or at least the renewable fuel standard (RFS)—in the past. Pruitt and Perry are good Americans, but it’s a stretch to play these guys off as positive for biofuels. If Pruitt is confirmed, I think we’d all be happy if his EPA simply didn’t disrupt the current trajectory of the RFS. Our appeal to Pruitt should be akin to the Hippocratic Oath—“first, do no harm,” please. Speaking of doing no harm, our industry’s incredible reduction of water use is the subject of our page-36 feature. In “Water: Lifeblood of the Process,” EPM’s Susanne Retka Schill reports on how today’s complex water reduction and recycling strategies must carefully account for downstream system impacts, while protecting the process. Then, in “Pelleted Feed Innovation from Nebraska,” on page 42, you’ll find out why ethanol plants are being tapped by enhanced feed product companies trying to capitalize on the ready-made inputs of DDGS and corn stover. Another story about coproduct innovation, “Ethanol, CO2 and Concrete Cement a Relationship,” on page 48, explains how a Canadian company is using ethanol plant carbon dioxide to strengthen and add value to concrete. Heavy reading, indeed.
FOR INDUSTRY NEWS: WWW.ETHANOLPRODUCER.COM OR FOLLOW US:
TWITTER.COM/ETHANOLMAGAZINE FEBRUARY 2017 | Ethanol Producer Magazine | 7
VIEW FROM THE HILL
What Blend Wall? Why Facts Trump Rhetoric Every Time By Bob Dinneen
Reps. Bill Flores, R-Texas, and Peter Welch, D-Vt., introduced legislation during the last Congress that would cap ethanol blends in the U.S. transportation pool to no more than 9.7 percent by volume and have vowed to reintroduce the measure in the new Congress. But the bill represents a solution in
search of a problem. Here’s why. Oil companies argue that blending above 9.7 percent will hurt consumers, damage engines and increase cost. Really? Recent data from the U.S. Department of Energy—and analyzed by the Renewable Fuels Association—shows that fuel supplies in 25 states and the District of Columbia in 2015 already contain more than 10 percent ethanol. The national average ethanol blend rate was 9.91 percent, according to the latest available data published by DOE’s Energy Information Administration. A deep dive into the data is interesting (for more information, see accompanying map). In Minnesota, for example, ethanol comprised 12.5 percent of the gasoline pool in 2015. Not coincidentally, ethanol flex fuels such as E85 are available at roughly one out of every eight stations in the Gopher State. In Iowa, gasoline contained an average of 11.5 percent ethanol in 2015, up from 10.3 percent in 2014 and just 9.5 percent in 2013. Ethanol also exceeded 10 percent of gasoline consumption in 2015 in coastal states like California, Oregon, New Jersey, Massachusetts, Connecticut and even Louisiana. For the first time, not a single state had average ethanol content below 9 percent in 2015, the data showed. Vermont ranked last in average ethanol concentration at 9.18 percent. In 2014, the national average ethanol content was 9.83 percent and 22 states (plus the District of Columbia) were above 10 percent, on average. I expect the 2016 figures to be even higher.
8 | Ethanol Producer Magazine | FEBRUARY 2017
Given this reality, it makes no sense to cap ethanol blends at the arbitrary 9.7 percent blend level, when data for both 2015 and 2014 shows states are already blending above that level. It’s like trying to put toothpaste back in the tube. Why would we want to go backwards? The renewable fuel standard is delivering on its promise to expand consumer access to lower-cost, cleaner fuel options at the pump. The so-called blend wall has been reduced to a pile of rubble. So, when you hear Congressmen Flores and Welch and their Big Oil supporters bloviating about this ethanol cap nonsense, point them to the facts. Half of U.S. states blended above 10 percent ethanol on average in 2015 and I expect that number to only grow. There is no blend wall, period. Author: Bob Dinneen President and CEO, Renewable Fuels Association 202-289-3835
2017 National Ethanol Conference February 20-22, 2017 Hilton San Diego Bayfront San Diego, California The 2017 National Ethanol Conference: Building Partnerships, Growing Markets provides attendees with an exclusive opportunity to engage key decision makers and industry executives while networking and learning about the latest technologies and government policies. 202-315-2466 | www.nationalethanolconference.com
2017 International Biomass Conference & Expo April 10-12, 2017 Minneapolis Convention Center Minneapolis, Minnesota Organized by BBI International and produced by Biomass Magazine, this event brings current and future producers of bioenergy and biobased products together with waste generators, energy crop growers, municipal leaders, utility executives, technology providers, equipment manufacturers, project developers, investors and policy makers. It’s a true one-stop shop—the world’s premier educational and networking junction for all biomass industries. 866-746-8385 | www.biomassconference.com
2017 International Fuel Ethanol Workshop & Expo June 19-21, 2017 Minneapolis Convention Center Minneapolis, Minnesota From its inception, the mission of this event has remained constant: The FEW delivers timely presentations with a strong focus on commercial-scale ethanol production— from quality control and yield maximization to regulatory compliance and fiscal management. The FEW is also the ethanol industry’s premier forum for unveiling new technologies and research findings. The program extensively covers cellulosic ethanol while remaining committed to optimizing existing grain ethanol operations. 866-746-8385 | www.fuelethanolworkshop.com
2017 National Advanced Biofuels Conference & Expo June 19-21, 2017 Minneapolis Convention Center Minneapolis, Minnesota With a vertically integrated program and audience, the National Advanced Biofuels Conference & Expo is tailored for industry professionals engaged in producing, developing and deploying advanced biofuels, including cellulosic ethanol, biobased platform chemicals, polymers and other renewable molecules that have the potential to meet or exceed the performance of petroleum-derived products. 866-746-8385 | www.advancedbiofuelsconference.com
FEBRUARY 2017 | Ethanol Producer Magazine | 9
Forging a New Path for Biofuels in 2017 By Chris Hogan
Donald Trump won’t be our first president to use Twitter, but it’s increasingly clear that he will be our first Twitter president. Not long ago, breaking news was born
in a crowded press conference, and consumers looked to newspapers and broadcast journalists to learn the latest about the forces shaping our world. Today, the traditional news media is where we go to hear what others are saying about something we first learned about on social media. It’s a topsy-turvy world, and those who cannot keep up risk being left behind. It’s also an incredible opportunity for an industry like ours, with great news to share and a widespread network of passionate biofuel advocates who can help introduce our product in places that we have never been before. That’s why Growth Energy is hard at work strengthening the lines of communication between farmers, advocates, consumers, retailers, automotive experts, policymakers and community leaders from all walks of life. Together, this network will be the driving force for change that brings new options to the pump in areas of the country where blends like E15 are an unknown quantity. Through research and experience, we have learned that meaningful change requires meaningful conversations. Millennials, women, environmentalists and other fast-growing groups are far more likely to purchase and support ethanol when they’ve first been given an opportunity to learn about its benefits. But these can’t be the same conversations taking place in the D.C. Beltway or the Corn Belt. Lawmakers need to hear about the surplus of grain that threatens to derail rural economies and the maneuverings of Saudi Arabia to manipulate global energy prices. Both are great reasons to support homegrown biofuels, but, outside of Washington, neither argument has the motivating power of a trusted neighbor sharing an easy tip for keeping their engine running well while protecting the air we breathe. These are the voices that must be mobilized to change consumer behavior and drive demand for ethanol. And when consumers speak, they have the power to reshape how our leaders in Washington approach solutions to challenges like energy security, climate change, economic
growth and public health—all of which demand a robust commitment to biofuels. One of the best assets we have in this effort is our partnerships with retailers. According to the Association for Convenience and Fuel Retailing, there are more than 156,000 fueling stations across the country. About half of all these gas stations are unbranded and do not sell fuel under contract with one of the major oil refiners. That means they are free to make biofuels like ethanol a major part of their businesses, and it means that we have tens of thousands of potential allies coming faceto-face with consumers every day. In some cases, this is our best chance to reach drivers who may never have come within 100 miles of a corn field or have never seen a biorefinery churning out homegrown fuel. To harness this power, Growth Energy, through the Prime the Pump initiative, has already established partnerships with retail chains in 28 states, where consumers have access to higher blends at the pump and are learning about cleaner, more affordable fueling options. They are hearing about E15 from trusted voices, and when they seek to learn more, we’ve made the information easy to find, easy to read, and easy to share at www.GetEthanol.com or via one of its affiliated social media channels. Best of all, the GetEthanol fuel finder makes it simple to find the nearest E15 or E85 station, so that drivers can always take advantage of the high-quality options offered by our retail partners. Growth Energy plans to build upon these efforts. We will be on the ground, forging new partnerships and continuing to tell our story. And we’ll be online, providing reliable and tailored resources designed to meet the very different needs of consumers, reporters, social influencers, regulators or lawmakers. These tools will ensure that advocates of every stripe—from Midwestern farmers to East Coast moms to university researchers—have the opportunity to get their voices heard in the mediums where today’s consumers are getting their information. Together, we’ll lay a groundwork of consumer education that helps to drive consumer demand for biofuels, like E15, and ensure that our public policy priorities have the vocal support necessary to stand out from the pack
Author: Chris Hogan Vice President Communications and Public Affairs Growth Energy 202-545-4000 CHogan@growthenergy.org
10 | Ethanol Producer Magazine | FEBRUARY 2017
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Doing the Math, Part 4 or 5 By Ron Lamberty
Within a couple months of starting as market development director at the American Coalition for Ethanol, I got kicked under the table by a couple of fellow ethanol supporters for answering questions about petroleum marketers’ E10 pricing philosophy in a way that made marketers seem … well, rational. I made it sound like station operators sold ethanol-blended gasoline based on what they paid for it, rather than being out to ruin the ethanol industry or please Big Oil overlords. I made it sound that way because, for the most part, that’s what they did. Sure, there were (and are) retailers out there who just don’t like ethanol in any of its forms (mostly due to a fervent belief in anti-ethanol mythology), but they are the exception, not the rule. Back then, I was defending retailers who weren’t selling E10 for 5 cents less than regular, even though the tax on ethanol blends was 5 cents less than straight gas. At the time, ethanol usually cost more than gasoline, and E10 cost 2 to 3 cents more than straight gas. The cost flipped to 2 or 3 cents less than regular unleaded when the blenders’ tax credit was applied, and street prices reflected those differences. So, when an ethanol advocate chewed out a retailer for not sharing the tax credit, I offered that explanation and got kicked. Over the past couple of years, I’ve been in a similar situation, when people reported retailers who “weren’t selling E85 at the right price.” The assumption by ethanol supporters is that the retailer is overpriced either to make a ridiculously high margin, or to “prove” no one wants to buy flex fuel. Since you’re reading this, and can’t kick me, I’ll tell you that’s hardly ever the case. Almost without exception, I can find out why a location prices flex fuels the way it does by asking one question: “How are you handling your RINs?”
12 | Ethanol Producer Magazine | FEBRUARY 2017
The answer is usually a blank stare, or “The what?” or “My supplier takes care of that RIN stuff,” and that nonanswer answer tells me the issue isn’t the retailer’s E85 selling price, it’s the E85 buying price. In most cases, the retailer’s mark-up on flex fuels is the same as other fuels, but no RIN value is reflected in the wholesale cost of E85 from the supplier. RINs, renewable identification numbers, are used by obligated parties to demonstrate compliance with the renewable fuel standard (RFS). If a retailer buys E85 “at the rack,” it’s probably actually E70; and, more importantly, the RIN value is rarely reflected in a discounted price for the fuel. Flex fuel rack prices are more competitive in markets where there are multiple suppliers, but in most cases, refiners argue they have to turn in RINs to comply with the RFS, so it makes no sense to give away the value of a RIN when they can’t sell it to recoup that value. That’s why refiner rack prices for “clear” gasoline have an additional 8 to 12 cents per gallon markup—to pay for the RINs they’ll have to buy for that unblended gas. (Refiners that complain about having to buy RINs don’t mention additional margin from clear gasoline, do they?) If it’s fair for a refiner to markup clear gas (it is), then E70 should be marked down to reflect the extra RINs it creates. A refiner selling a thousand gallons of E70 gets 700 RINs. After giving EPA the RINs it requires for the 300 gallons of gas in the blend (at about 10 percent, that’s almost 30 gallons), the refiner has nearly 670 extra RINs. Using the refiners’ clear gas upcharge “math,” those extra RINs should knock the E70 price down 50 to 80 cents per gallon. At those numbers, I would expect very few calls about high E85 prices. And even fewer kicks. Author: Ron Lamberty Senior Vice President American Coalition for Ethanol 605-334-3381 email@example.com
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US Must Maintain Its Leadership on Biofuels By Bliss Baker
What an interesting year we had in 2016: historically low oil prices, unprecedented international cooperation on climate action and a drawn-out U.S. presidential election. The lifting of sanctions against Iran and increased production
from Russia, combined with a refusal from OPEC member countries to limit production, drove crude prices to recent lows. This situation continued until the end of the year when OPEC member countries, joined by limited cooperation from Russia, finally reached an agreement to limit output in an attempt to encourage some price recovery. It remains to be seen how long these agreements will last and what their impact will be, but one thing is clear, the persistently low oil prices seen in recent years has not stopped international momentum toward taking meaningful steps to reduce emissions. In spite of less-than-ideal circumstances, 2016 saw increased international recognition of the significant opportunities presented by biofuels to support the transition to a low-carbon global economy. Multiple nongovernmental organizations published reports outlining the potential to significantly increase biofuels use on a cost-efficient basis to 2030 and public and private organizations have started to form international coalitions focused on developing specific policy solutions. The most significant development on this front was, of course, the speedy passage and ratification of the first binding international agreement to limit global emissions at COP21 in Paris. The Paris agreement’s entry into force last year formalized emission reduction plans for 197 countries, and provided a framework for individual national targets. Of these, more than 80 either already have biofuelssupportive policies in place, or have signaled the intent to introduce them. These pledged commitments from some of the world’s largest economies have provided the Paris agreement with a legitimacy that distinguishes it from all previous attempts to reign in global emissions. Time will tell what specific policy action countries will take in response to these unprecedented political commitments, but for now, all eyes are on the U.S. and the new administration to see what changes in policy direction are planned.
With the passing of the renewable fuels standard (RFS) in 2005, the U.S. established itself as the clear global leader in biofuels production and research and development, with its policy framework being repeatedly emulated in countries around the world. The importance of the RFS in supporting the establishment of a strong domestic biofuels industry cannot be overstated and is directly responsible for the subsequent success of the industry in contributing to the diversification of the domestic energy supply mix, supporting energy independence and strengthening rural economies. Despite this success, concern about the potential for significant policy shifts has resulted in international leaders adopting a “wait and see” approach. At the COP22 convention held in Marrakech, Morocco, at the end of 2016, negotiations were decidedly less activist than just months earlier due to the uncertainty surrounding the outcome of the U.S. presidential election and the potential for U.S. withdrawal from the Paris agreement. This hesitation was understandable given some of the campaign statements about wanting to “cancel” or “renegotiate” the Paris agreement and expressing skepticism about human activity causing climate change. After the election, though, the president-elect offered more conciliatory language on these issues. He acknowledged “some connectivity” between human actions and climate change and has said he has an “open mind” about the Paris agreement. Far less ambiguous has been the emphasis on the need to reduce dependence on foreign oil and a commitment to keeping jobs in the U.S. President Trump is on the record describing the RFS as “an important tool in the mission to achieve energy independence for the U.S.” He has urged the U.S. EPA to “ensure that biofuel ... blend levels match the statutory level set by Congress under the RFS.” The economic impact of the standard is significant. The economic activity supported by ethanol production in the U.S. amounted to more than 350,000 direct, indirect and induced jobs in 2015. It remains to be seen whether the new president will pursue U.S. withdrawal from the Paris agreement and roll back policies designed to reduce GHG emissions, but what isn’t in question is the overall positive impact of domestic ethanol production. Author: Bliss Baker, President, Global Renewable Fuels Alliance 647-309-0058 firstname.lastname@example.org
14 | Ethanol Producer Magazine | FEBRUARY 2017
CLEARING THE AIR
The Promise of Ethanol in an Unknown Political Climate By Doug Durante
With more than three decades in Washington, I have certainly seen changes. Dealing with turnover in
administrations and Congress is a fact of life here. But there is change, and then there is change. To say we are entering uncharted waters in 2017 would be an understatement, to say the least. Every new year and every new Congress presents a host of unknowns, but nothing like what we are seeing this year. But that uncertainty also holds some excitement and promise as to the art of the possible. How the new administration deals with some of the pressing issues we are facing may be unclear but, as the saying goes, we don't know what we don't know. The good news is we do know the ethanol industry is a good fit for a new era of regulatory reform and free market principles. With the renewable fuel standard (RFS) having matured in terms of demand-pull for the corn ethanol sector, we need to look for new markets and demand. We should be able to work with the new administration and capitalize on a new attitude in Washington based on removing unnecessary and burdensome regulations that thwart innovation and investment. As we enter 2017, our mission at the Clean Fuels Development Coalition and in our partnership with the Urban Air Initiative hasn't changed. We believe we can significantly improve fuel quality and protect public health through higher blends. We can also help reduce carbon and allow automakers to produce high-gas mileage, highperformance vehicles. While it is likely we will see a de-emphasis on carbon reduction and climate change at the federal level, there are still going to be many pockets of opportunity for ethanol. We want to continue to educate policymakers as to the true carbon footprint of corn ethanol. California and many other states remain committed to low-carbon fuels and numerous businesses and municipalities are going to remain on the low-carbon pathway. In addition, even if there is a slight rollback in automobile fuel economy standards, automakers will continue to develop more efficient cars to gain a competitive edge. Clean, lowcarbon and competitively priced octane is key to that scenario.
16 | Ethanol Producer Magazine | FEBRUARY 2017
So much of the focus and questions raised as to the future of ethanol and the RFS has been directed to the new president. It certainly appears Trump recognizes what we all know to be true, which is that domestic ethanol is an economic engine of rural America and needs to be supported. That said, Congress has ultimate jurisdiction over the RFS and we can expect a continual stream of bills to limit or repeal it. However, any changes to the RFS would require amendments to the Clean Air Act and there is little appetite in Congress to open that Pandora’s box because of the other issues that would follow. So it shifts the focus back to the administration and what can be done to address concerns of Congress to make it a win-win for everyone. The answer to that question lies at the door of the U.S. EPA. A partial list of actions EPA could take include the following, all of which require no federal funds and none of which would require legislation: • Allow the RVP waiver to apply to all ethanol blends because vapor pressure actually decreases as volume increases. • Approve an E30 certification fuel. • Approve E30 for distribution through legacy pumps and for use in legacy vehicles. • Reinstate vehicle mileage credits to encourage E30-optimized vehicles. • Correct the MOVES model that would limit ethanol blends. • Enforce the aromatic toxic caps on gasoline. • Raise the minimum octane requirement for all gasoline. • Update ethanol’s life-cycle analysis as required by law. Enacting this wish list gets more ethanol into the pool. It would shatter the myth of the blend wall while bringing down RIN prices and creating new, market-driven demand values for ethanol. So, while we don't know what we don't know, we do know what we do know. And that is that ethanol presents unique energy, economic and environmental benefits and should be a key building block for us to move forward. Author: Doug Durante Executive Director, Clean Fuels Development Coalition Cfdcinc@aol.com 301-718-0077
BUSINESS BRIEFS People, Partnerships & Deals
Syngenta has appointed Ron Wulfkuhle as the new head of Enogen corn enzyme technology. Wulfkuhle brings over 30 years of Wulfkuhle agricultural industry experience to the position. Most recently, he served as head of GreenLeaf Genetics, which was fully acquired by Syngenta in 2010. Wulfkuhle replaces Jack Bernens, who retired at the end of December.
Pennsylvania Gov. Tom Wolf has announced Continental Carbonic Products Inc. plans to construct a 45,000-square-foot liquid carbon dioxide facility in Clearfield County, Pennsylvania, and purchase equipment to operate a dry ice manufacturing facility. The facility will source carbon dioxide from Pennsylvania Grain Processing LLC. As part of the agreement, Continental Carbonic is expected to enter a long-term land lease with the ethanol producer. The project is expected to create 60 new full-time jobs over the next Acting on behalf of North European three years and retain 10 existing positions. Bio Tech Oy, St1 has begun the analysis Dürr Systems Inc. has announced and signed letters of intent with Alholmens Kraft and UPM for a sawdust-based ethanol the award of an order for one Dürr Ecoplant in Pietarsaari, Finland. The proposed pure RL60 rotary valve regenerative thermal production capacity of the plant is 50 mil- oxidizer (RTO) from Corn LP, a Goldfield, lion liters (13.21 million gallons) per year. Iowa-based ethanol producer. Dürr said Corn LP chose the system based on an adGreen Biologics Inc., the U.S. subsid- vantageous comparison of projected mainiary of Green Biologics Ltd., a U.K. indus- tenance costs and downtime, along with trial biotechnology and renewable chemicals the system approach to automated bakecompany, recently announced a strategic out for removal of particulate plugging. partnership with HOC Industries, a custom Valero Renewable Fuels Co. LLC, blender, packager and distributor of consumer and government products, headquar- a subsidiary of Valero Energy Corp., has joined the Renewable Fuels Assotered in Wichita, Kansas.
ciation. Valero operates 11 corn ethanol plants and is the third-largest ethanol producer in the U.S with total annual production capacity of 1.4 billion gallons per year. Abengoa Bioenergy Biomass of Kansas recently closed the $48.5 million sale of its cellulosic ethanol plant located in Hugoton, Kansas, to Synata Bio in an auction conducted under the Bankruptcy Code. Ocean Park acted as exclusive sellside advisor to Abengoa. Ocean Park was involved in all facets of this transaction, including securing the debtor-in-possession financing, developing the marketing strategy, contacting over 200 parties in the sales process, and generating interest from multiple bidders in the auction. The Iowa Renewable Fuels Association has elected its board of directors, officers and executive committee for 2017. New officers will serve a one-year term during the 2017 calendar year. Those elected include Eamonn Byrne of Lakeview Plymouth Energy as president, Steve Bleyl of Green Plains Inc. as vice president, Bill Howell of Poet Biorefining – Coon Rapids as treasurer, Derek Winkel of Renewable Energy Group
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Inc. as secretary, and Monte Shaw as executive director. Elected to join the IRFA officers on the executive committee for 2017 are Tom Brooks of Western Dubuque Biodiesel, Craig Willis of Archer Daniels Midland Inc., and Rick Schwarck of Absolute Energy. The European renewable ethanol association (ePURE) has named Emmanuel Desplechin as its new secretary general, replacing Robert Wright. Desplechin Desplechin, who joined ePURE in 2013, previously served as the association’s director for government affairs, and has a long career in the ethanol sector. Prior to joining ePURE, Desplechin held public affairs positions with the Danish biotech company Novozymes, and UNICA, the Brazilian sugarcane industry association, and has been secretary general of the Industrial Ethanol Association. The Iowa Renewable Fuels Association has added Cassidy Riley as its new communications director. Riley’s responsibilities include media and member relations, social media and Web communi-
cations, promotion of biodiesel and biodiesel coproducts, and many other duties. Riley most recently worked as the Central Iowa Field Director for Sen. Chuck Grassley’s 2016 reelection campaign. Prior to the The Renewable Fuels Association has campaign she clerked in the Iowa House of Representatives for Rep. Tom Moore. announced the addition of KAAPA Ethanol Ravenna LLC to its membership. In SepLeaf Resources recently announced a tember, KAAPA Ethanol Holdings closed collaboration with Novozymes to further on its acquisition of the former Abengoa increase the yields and efficiency associated Bioenergy ethanol plant in Ravenna, Newith its Glycell biomass conversion tech- braska. The facility uses 33 million bushels nology, which operates at low temperature of corn to produce 90 million gallons of and pressure, and uses crude glycerin as a ethanol per year. KAAPA Ethanol Holdrecyclable reagent. The process deconstructs ings owns and operates another facility in plant biomass and produces concentrated Minden, Nebraska, and its latest addition cellulose and hemicellulose sugars. As part brings the company’s combined ethanol of the collaboration, Novozymes will use its production capacity to 170 MMgy. This is expertise in biotechnology to customize its the company’s second producer membership portfolio of enzymes to the Glycell process. to RFA. The goal of the collaboration is to design a highly tailored enzyme package that allows the Glycell process to achieve superior performance, quality, and reliability for the production of high-value renewable chemicals. SHARE YOUR INDUSTRY NEWS: To be included in the Business Briefs, send information (including photos and logos, if Leaf and its development partner, Claeris available) to Business Briefs, Ethanol Producer Magazine, 308 LLC, will then incorporate Novozymes’ tai- Second Ave. N., Suite 304, Grand Forks, ND 58203. You may email information to email@example.com. lored enzyme package into the biomass pre- also Please include your name and telephone number. treatment section of integrated biorefineries.
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Prices & Market Analyses
Natural Gas Report
Natural gas prices unsteady in fourth quarter 2016 Dec. 30--Natural gas prices exhibited increased volatility in the fourth quarter of 2016 compared to previous months. NYMEX futures contracts deliverable through March 2018 swung widely in response to drastic changes in near-term temperature outlooks and historically large draws from natural gas stockpiles. Beginning in early November, the prompt-month continuation has traded in a range of more than $1.45 per MMBtu, or about 56 percent, testing $4 per MMBtu on Dec. 28 for the first time in over two years. The January futures contract surged into expiration, rolling off the board at $3.93 per MMBtu, the highest NYMEX expiration since December 2014 and about 70 cents per MMBtu above the December settlement. A strong cold snap in mid-December brought record low temperatures to parts of the country and led to a dramatic spike in natural gas demand. The result of the cold was felt in storage inventories, which had previously hit a record high above 4 Tcf in November. Following two weeks of intense cold combined with a much tighter fundamental
by Andy Huenefeld
backdrop, natural gas stocks fell to a steep deficit to year-ago levels and behind the five-year average for the first time since May 2015. Given forecasts that showed a return of widespread below-normal temperatures in January, it was likely that the market would be contending with at least one more stretch of historically large storage withdrawals. Conditions are continuing to line up that favor a higher-price environment in 2017 than has been experienced since at least 2014. Storage inventories, which traditionally help dictate price levels across the country, are poised to round out the winter at a steep deficit to year-ago levels. This means that the market will need to see a much stronger injection season next summer to see stockpiles fill to healthy levels ahead of next winter. Without a strong recovery in domestic production and some level of pullback in natural gas usage from power generators, a scenario could play out that sees inventories at extremely low levels prior to winter 2017-'18. This would lead to even more upside for prices and continued market volatility.
Corn markets to remain flat; ethanol supports local values Dec. 30â€”The corn market was subdued during December. The market tested the $3.65 price level only to run into resistance, falling back into a range-bound trade around $3.50. The December USDA report made no changes to the current domestic supply-demand scenario, although it adjusted the global outlook. World corn carryout increased by 4.47 mmt to 254.94 mmt, stemming from builds in China, Vietnam, Brazil and Russia. This compares to 244.80 mmt and 245.39 mmt in the past two years, respectively. As the new year progresses, the market will focus on several factors. First, will there be any significant changes in the January supply-demand table and will the money flows adjust in the grain complex? Second, will the U.S. dollar have a significant impact on both commodity values and our ability to maintain a strong export program? In the physical corn market, flat price will be the key in the movement of corn until post-planting, when space and time factors prompt movement. Profitable ethanol margins will support local corn values and potentially add support to futures values. Other corn end-user margins will need to be monitored because they have the ability to strengthen demand or, conversely, add to the already massive projected carryout. South American
by Jason Sagebiel
weather could add some premium to corn values, as it has in soybeans, but corn will be less sensitive to those potential issues. The acreage battle has already begun, encouraging more soybean acres to be planted this spring. Corn could see support as it attempts to maintain acres. Comments in this column are market commentary and are not to be construed as market advice.
20 | Ethanol Producer Magazine | FEBRUARY 2017
Regional Ethanol Prices ($/gallon) Front Month Futures (AC) $1.632
DDGS Report by Sean Broderick
very expensive, priced almost three times higher than DDGS. At the same time, distillers has been priced at or below the price of cash corn. Feeders have been quick to see the value of distillers grain both as a protein and energy source. Logistics are affecting the market, with domestic rail cars moving slower than normal, while barge freight is at 10-year lows. Warmer weather in the spring should make the river/gulf more viable for exports. The next president should make things interesting for exports and the value of the U.S. dollar, resulting in entertaining markets to watch.
Regional Gasoline Prices ($/gallon)
Front Month Futures Price (RBOB) $1.681 Region
1.986 SOURCE: DTN
DDGS Prices ($/ton) Feb. 2017
153 SOURCE: CHS INC.
Corn Futures Prices (March Futures) Date
Dec 30, 2016
Nov 30, 2016
Dec 30, 2015
128.214 SOURCE: FCSTONE
by Rick Kment
Aggressive RBOB gasoline buying supports ethanol futures Dec. 30â€”Ethanol traders spent the last couple months of 2016 trying to keep pace with the energy and corn markets, which is expected to continue into early 2017. Ethanol futures saw wild shifts through December, with prices gaining and losing more 20 cents per gallon. Renewed buyer support was developing through the complex at the time of this writing, with the focus primarily on energy markets. RBOB gasoline futures posted gains of over 29 cents per gallon in the last month, and have rallied over 45 cents per gallon in the past month and a half. Concerns surrounding future trade issues, OPEC's decision to cut overall crude oil production, and strong domestic demand through the winter have added to the counter-seasonal
Domestic feeders up DDGS inclusion rates; export markets shift Dec. 30â€”As the year came to a close, a lot had happened to the DDGS market, especially on the export front. China upped its antidumping penalties, making it noncompetitive as a destination for U.S. DDGS. At this writing, Vietnam is not allowing U.S. DDGS into the country, due to disagreements regarding fumigation. Until those events, those two had been the most promising Asian importers for the past couple of years. Not having them as destinations will make it more challenging. Domestically, DDGS has begun to find its way into more rations, after a slow start due to the warm fall. U.S. soymeal is
rally, which has set the pace for ethanol trade through the last quarter of the year. The volatility in ethanol prices continues to create some uncertainty as far as longterm movement and direction of the market. Even though first-quarter 2017 demand is expected to remain sluggish along traditional demand patterns, the potential that these higher prices will continue to hold is expected to keep buyers active in the market through the first weeks of the year. Currently, ethanol futures are holding a 5-cent discount to the RBOB gasoline market. This relationship is expected to continue to adjust significantly, but the direction of RBOB gasoline prices will likely heavily affect overall market moves in ethanol trade.
Cash Sorghum ($/bushel) Location
Dec. 22, 2016
Nov. 28, 2016
Dec. 17, 2015
SOURCE: SORGHUM SYNERGIES
Natural Gas Prices ($/MMBtu) LOCATION
Dec. 28, 2016
Nov. 28, 2016
Dec. 29, 2015
SOURCE: KINECT ENERGY GROUP
U.S. Ethanol Production (1,000 barrels) Per Day
SOURCE: U.S. ENERGY INFORMATION ADMINISTRATION
FEBRUARY 2017 | Ethanol Producer Magazine | 21
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DISTILLED Ethanol News & Trends
Ethanol production in MMgy 2010
SOURCE: NATIONAL RENEWABLE ENERGY LABORATORY
NREL: Ethanol production up 2.8 percent in 2015
www.ldcom.com 24 | Ethanol Producer Magazine | FEBRUARY 2017
GETTING THE RIGHT PRODUCT TO THE RIGHT LOCATION, AT THE RIGHT TIME
The National Renewable Energy Laboratory recently released its 2015 Renewable Energy Data Book showing U.S. ethanol production increased by nearly 2.8 percent in 2015, reaching approximately 14.7 billion gallons. The report notes the increase was realized despite continued ethanol and gasoline price decreases. In 2015, Iowa had the largest corn ethanol production capacity at 3.9 billion gallons per year. The U.S. produced 57 percent of the worldâ€™s ethanol in 2015, followed by Brazil at 28 percent. Ethanol was at $2.42 per gallon on a gasoline gallon equivalent in 2015, compared to $3.12 per gallon in 2014. U.S. biodiesel production increased slightly to 2.09 billion gallons (2.23 billion gasoline gallons equivalent) in 2015 from 1.98 billion gallons in 2014. The U.S. led the world in biodiesel production, followed by Brazil, Germany and Argentina. Biodiesel was at $2.66 per gallon on a gasoline gallon equivalent in 2015, compared to $3.60 per gallon in 2014.
Canada to implement clean fuel standard In November, the government of Canada announced plans to develop a clean fuel standard. A statement issued by the government notes the standard would be flexible and designed to promote the use of clean technology and lower carbon fuels. It would also promote alternatives, such as electricity, biogas, hydrogen and renewable fuels. The primary objective of the program is to reduce greenhouse gas (GHG) emissions by 30 megatons per year by 2030. The government said the proposed clean fuel standard would feature a performance-based approach by setting requirements to reduce the life-cycle carbon intensities of fuels supplied in a given year, based on life-cycle analysis. Unlike renewable fuel mandates, the approach would not prescribe particular low-carbon fuels or technology that must be use. Rather, it focuses on emissions reduction. Environment and Climate Change Canada is expected to publish a discussion paper on the proposed program in February.
,QGXVWULHV E15 approval status for non-FFV vehicles E15 approved by automaker
E15 approved by U.S. EPA only
RFA: Most model year 2017 vehicles approved for E15 use by manufacturers An analysis recently conducted by the Renewable Fuels Association has determined more than 80 percent of new 2017 model year vehicles are approved by the manufacturer for the use of E15, up from approximately 70 percent for 2016 model year vehicles. According to the RFA, Hyundai Motor Co. has approved the use of E15 for the first time in Hyundai and Kia vehicles, which represent approximately 8 percent of the light-duty vehicle market. Chrysler, General Motors and Ford, which represent a combined 45 percent of the U.S. market share, all clearly approve the use of E15. Other automakers offering E15 approval for model year 2017 vehicles include Honda, Toyota, Volkswagen Group, and Tata Motors, which is the maker of Land Rover and Jaguar. Nissan Motor Co., Mazda, Subaru and The Daimler Group, which is the maker of Mercedes-Benz, continue to exclude E15 from fuel approvals and warranty statements.
EPA sets 2017 CWC prices The U.S. EPA has set the cellulosic waiver credit (CWC) price for 2017 at $2, up from the 2016 CWC price of $1.33. According to the EPA, for any year that the projected volume of cellulosic biofuel production is less than the applicable volume of cellulosic biofuel set in the Clean Air Act, it must reduce the required volume of cellulosic biofuel for that year to the projected volume and provide obligated parties the opportunity to purchase CWCs. The price of CWCs is set using a formula specified in the CAA. According to documents published by the EPA, the price of CWCs is the greater of 25 cents or $3 minus the wholesale price of gasoline, with both figures adjusted for inflation.
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DISTILLED Ethanol News & Trends
Retrofitted Minnesota ethanol plant begins n-butanol production Following two years of development, Green Biologics Inc., the U.S. subsidiary of U.K.-based Green Biologics Ltd., has begun operations at its biorefinery in Little Falls, Minnesota. The company acquired the former Central MN Ethanol Coop LLC facility in late 2014 and retrofit the facility to produce n-butanol. The facility is now known as Central MN Renewables LLC. In December, David Anderson of Green Biologics said the plant had already made its first customer shipment and noted facility operations were going well so far. “We have a nice pipeline of customers lined up, and it’s pretty exciting times,” he said. “We’re going to ramp up production, and that will take from anywhere from 12 to 18 months, before it’s running at full capacity. But we’re meeting orders right now, which is always a nice thing.” The first order was shipped out via bulk tank truck and in drums to a customer in the U.S., he said, but added that the company is working on capabilities to enable shipping to European customers as well.
UNDER NEW OWNERSHIP: Synata Bio Inc. submitted the winning bid in the sale of Abengoa’s cellulosic ethanol plant, which celebrated its grand opening in 2014. PHOTO: ABENGOA
Synata Bio purchases Hugoton cellulosic plant In November, the U.S. Bankruptcy Court of the District of Kansas approved a $48.5 million bid submitted by Synata Bio Inc. for the purchase of Abengoa Bioenergy Biomass of Kansas, a cellulosic ethanol plant located in Hugoton, Kansas. The transaction was expected to close in December. According to the court documents, the sale included the 25 MMgy nameplate cellulosic ethanol production facility and electric cogeneration plant at Hugoton, Kansas,
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along with about 400 acres of land. It included furnishings and equipment, supplies and vehicles, and feedstock inventory. It excluded the intellectual property contained in the process and license agreements with Abengoa Bioenergy New Technologies LLC. Court documents also indicate Synata’s bid included an agreement to use best efforts to resolve an issue with the U.S. DOE related to a 2007 award made to ABBK.
FTC: Ethanol industry remains unconcentrated The Federal Trade Commission recently issued its 2016 Report on Ethanol Market Concentration. As in previous years, the report concludes that U.S. ethanol production remains unconcentrated. The FTC is required to issue the annual report by the Energy Policy Act of 2005. The analysis aims to determine whether there is sufficient competition among industry participants to avoid price setting and other anticompetitive behavior. The report shows the ethanol industry has become less concentrated since 2005. When compared to 2015, the level of concentration has remained largely unchanged. More than 100 firms currently produce, or are capable of producing, ethanol. The largest ethanol producerâ€™s share of domestic capacity is approximately 11 percent, unchanged from its share in 2015. From July 2015 through June 2106, ethanol production was up 3 percent when compared to the prior 12 months, increasing from 14.6 billion gallons to 15 billion gallons. Production capacity, including capacity under construction, increased to 15.8 billion gallons per year. The FTC noted this marks the third consecutive year capacity has increased.
US ethanol production sets new record Data released by the U.S. Energy Information Administration shows the U.S. ethanol industry set a new production record the final week of 2016, with production reaching an average of 1.043 million barrels per day the week ending Dec. 30. The new record replaces one set earlier in the month, when ethanol production reached an average of 1.04 barrels per day the week ending Dec. 9.
As of the end of 2016, the U.S. ethanol industry has surpassed the 1 million barrel per day production mark only 24 times, all since November 2015. Prior to November 2015, the ethanol production record sat at 994,000 barrels per day, which was set the week of June 19, 2015.
ON BIOFUELS Ethanol industry advocates believe Trump administration will be friendlier to ethanol than the previous one. By Ann Bailey
Last fall, a few weeks before the 2016 presidential election, Renewable Fuels Association President and CEO Bob Dinneen concluded an Export Exchange session on how a new administration might affect global trade by saying that citizens really wouldn’t know any specifics until the crop was in the bin. A few months later, the majority of the crop is in the bin, but there are still a few fields left to be harvested. Voters elected Donald Trump president and Mike Pence vice president on Nov. 8, and in the ensuing weeks, Trump appointed former Texas governor Rick Perry as U.S. Energy Secretary and Oklahoma Attorney General Scott Pruitt as U.S. EPA administrator. By press time in early January, several Cabinet positions, including U.S. Agriculture Secretary, still were unfilled and many assistant secretary and administrator positions remained open. “The whole government hasn’t come together, so we’re beginning to get it in the bin, but it’s not completely there,” Dinneen says. Though it wasn’t clear who Trump would pick to complete his administration, Dinneen is confident the new president will be friendly to ethanol.
“He was very supportive in the campaign of ethanol, generally, and the RFS (renewable fuel standard), specifically,” Dinneen says. “He visited several plants. He kicked the tires. I think he understands what ethanol means to rural communities. I think he understands what ethanol means to consumers. I think he understands what it means in terms of adding American energy, and he’s all about American energy, so I’m optimistic.” Besides being supportive of the RFS, Dinneen believes Trump’s plan to repeal regulations also will benefit the ethanol industry. “We have a slew of regulations that provide no environmental benefit, that provide no consumer benefit, that just get in the way of economic growth 28 | Ethanol Producer Magazine | FEBRUARY 2017
FEBRUARY 2017 | Ethanol Producer Magazine | 29
‘I think [Trump] understands what ethanol means to consumers. I think he understands what it means in terms of adding American energy, and he’s all about American energy, so I’m optimistic.’ Dinneen
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30 | Ethanol Producer Magazine | FEBRUARY 2017
and, even though Carl Icahn has been designated as the regulatory czar, I think that our message—that these are regulations that don’t make sense for the refiners or consumers— will resonate,” Dinneen says. “For example, our effort to secure the 1-pound waiver, to eliminate the disparity between E10 and E15 and other higher-octane blends on volatility, on regulations, may gain some traction in this administration where it did not in the previous administration.” And while it is true that Trump has not been a fan of free trade agreements, he has been “an indefatigable defender of American industry,” he says. As such, Dinneen believes that Trump will defend American businesses, like ethanol, when there are trade disputes. “I could see, in some of our trade issues, a real advocate in the White House and someone who will stand up with us, as opposed to watching us fight some of these trade battles. Quite frankly, that will be a refreshing change.”
Growth Energy CEO Emily Skor also expresses confidence the new president and his administration will be advocates for ethanol. “We would expect for President Trump to follow through on the strong support of ethanol that he expressed throughout this campaign, both in the primaries and the rest of the campaign,” Skor says. “From the start, he has been a very strong advocate of ethanol, of the renewable fuel standard, of commitment to get Americans greater access to renewable fuel because it’s good for the consumers’ pocketbooks, it’s good for America, for American jobs, for rural America. That’s what we expect from a Trump administration.” The American Coalition for Ethanol also expects the Trump administration will be ethanol friendly, says Brian Jennings, ACE executive vice president. “We expect the Trump administration to be supportive of ethanol, based on the strong support he demonstrated for ethanol on the campaign trail,” Jennings says. “Particularly in Iowa, Donald Trump on multiple occasions, forcefully made it clear that he is for ethanol, that he is for the renewable fuel standard, that he understands the benefits of ethanol. I know he toured one or two, maybe more, ethanol plants in Iowa while campaigning, so he got to
see first-hand the technology, the innovation, the efficiency that ethanol plants showcase. We just feel very confident that support for ethanol complements what President Trump wants to focus on when it comes to supporting American jobs, supporting the American economy, providing regulatory relief to American energy. We feel like the priorities we have for ethanol complement the priorities that he has for ethanol very well.”
‘[Trump] toured one or two, maybe more, ethanol plants in Iowa while campaigning, so he got to see firsthand the technology, the innovation, the efficiency that ethanol plants showcase. … Ethanol complements what President Trump wants to focus on when it comes to supporting American jobs, supporting the American economy, providing regulatory relief to American energy.’
The Flip Side
Still, Jennings does have some concerns about the appointments of Pruitt and Perry, he says. “I don’t think there’s any other way to describe it,” Jennings says. “As governor of Texas, Rick Perry was a strong opponent of the renewable fuel standard. He petitioned EPA to waive the RFS. As attorney general of Oklahoma, Scott Pruitt filed a friend of the court brief supporting the American Petroleum Institute and the American Grocery Manufacturers Association and others in their efforts to overturn EPA’s approval of E15. It ultimately failed. Scott Pruitt, also, as attorney general of Oklahoma called the RFS ‘unworkable,’” Jennings says. But Tom Buchanan, Oklahoma Farm Bureau president doesn’t believe that ethanol supporters have to worry about Pruitt. “The first thing that I would want the rest of the nation to know about (former) Attorney General Scott Pruitt of Oklahoma is that he is a very fair man and equitable in his decisions that I have seen come down.” Although, Oklahoma does not have a lot of corn acres, the state’s Farm Bureau understands the significance of the RFS to corn farmers and ethanol producers across the United States, Buchanan says. “I would also want people to understand that President Trump has said that he believes in the renewable fuel standard and will be a supporter of that, and I should tell you, as a nominee to the EPA, I believe that Scott Pruitt will follow the wishes of President Trump. “(Former) Attorney General Scott Pruitt has shown in Oklahoma not to be an interpreter of statutes, but to implement statutes and to defend statutes and states’ rights, and I look for that same thing to occur when he goes to (Washington) D.C. as administrator of the EPA,” Buchanan says. I look for a complete turnaround for agriculture and what the FEBRUARY 2017 | Ethanol Producer Magazine | 31
‘We need to sit down and make sure the people who are implementing the policies understand what Trump means when he says, “I want to be supportive of greater access to renewable fuels and we want to have a strong renewable fuels standard.’’’ Skor
nation has seen from administrators who want to interpret and put their own slant or an administration’s slant on their program, on the EPA implementation of statutes, to one that will be an EPA administrator who absolutely implements the intent of the Congressional legislation, not his own interpretation,” Buchanan says. “What I’ve seen the EPA do in the recent past is to pick winners and losers in the energy industry and that is not what I believe a Scott Pruitt administrator of EPA will do.” Jennings acknowledges that Trump has expressed support for ethanol, but history has
shown that things could change once he assumes office, he says, and that means that the industry needs to be proactive.
Advocating for Ethanol
“It doesn’t take a lot of memory to remember that, as a senator, Barack Obama was an enthusiastic supporter of ethanol and the anticipation was, once he became president, we would see his administration provide enthusiastic support for ethanol,” Jennings says. “However, his two EPA administrators, Lisa Davis, the first, and Gina McCarthy, the current and longer-serving, have not been enthu-
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siastic supporters of ethanol. In fact, it can be argued, despite the fact that Barack Obama supported ethanol on the campaign trail, it was his EPA that took RFS off track for a twoto three-year period by reducing the volumes below what Congress had called for in the statute, by buying into the oil company blendwall myth and by artificially holding back how much ethanol American consumers could use,” Jennings says. That’s why he believes the ethanol industry should make sure the administration carries out his vision and publicly supports ethanol. The American Coalition for Ethanol issued a call to action in December asking its members to contact their U.S. senators. “Every cabinet position requires a confirmation vote in the U.S. Senate,” Jennings says. “Scott Pruitt needs 51 votes in the U.S. Senate before he can lead the EPA. We’ve called on our senators, because they will be meeting with Scott Pruitt for coffee or lunch or on a one-on-one basis, to get to know him before they vote for or against his confirmation. We’ve encouraged senators to do their jobs and that is, to vet Scott Pruitt carefully, to ask him about his past opposition to the RFS, his past opposition to E15, to ask him whether he will stand with President Trump to now be for the renewable fuel standard, to now be for E15.” Skor believes that it is important that the ethanol industry work with the incoming administration and get down to specifics. “We need to sit down and make sure the people who are implementing the policies understand what Trump means when he says, ‘I want to be supportive of greater access to renewable fuels and we want to have a strong renewable fuels standard,’” Skor says. “What does that mean exactly, when you get to the nitty gritty details? It’s up to us sit down and have an ongoing conversation of what that means and how do we work together to make sure that the policies reflect the priorities of President Trump. I think the confirmation hearings are a very important part of that process and we look forward those hearings in the weeks ahead,” she says. Author: Ann Bailey Associate Editor, Ethanol Producer Magazine 701-738-4976 firstname.lastname@example.org
(88 8) 5 4 9 1 86 9 . Hibbing, MN • Dubuque, IA • Tracy, MN
32 | Ethanol Producer Magazine | FEBRUARY 2017
36 | Ethanol Producer Magazine | FEBRUARY 2017
WATER: Lifeblood of the Process
Successful water reduction and recycling require close attention to treatments and system impacts in ethanol production. By Susanne Retka Schill
Water is the lifeblood of an ethanol plant: Mixed with ground corn in the mash to be fermented; cascading down the sides of the cooling tower where its evaporative cooling powers are used to cool the fermentation broth and other processes; clearing emissions in the scrubber; washing tanks and pipes; circulating through the plant to be reclaimed, cleaned and used again. As the industry has improved its efficiency and recycling, water use has dropped by more than half in the past two decades, to an
FEBRUARY 2017 | Ethanol Producer Magazine | 37
WATER industry average of 2.7 gallons of water used per gallon of ethanol produced, as reported in 2012 by the Energy Resources Center at the University of Illinois at Chicago, the most recent industry survey data. In 2016, the center’s Steffen Mueller was still citing that as the average, even as some in the industry were reporting water use levels at, or just below, 2 gallons. Reducing water usage requires recycling water wherever possible, and in about a quarter of the nation’s ethanol facilities, recycling has advanced to the point where no waste water is being discharged.
In Keyes, California, Aemetis Advanced Fuels, has maximized water recycling and, indeed, has no discharge permit. Phil Cherry, plant manager, explains the plant brings in 32 gallons per minute (gpm) of fresh water from its two wells that gets incorporated into the 800 gpm of water flowing through the plant. The poor-quality well water, high in silica content, is cleaned using a reverse osmosis system. Other systems used at the plant include a cold lime softener and chemical pH adjustments. The cooling tower is a big user of water, along with the CO2 scrubber. Water flows through the scrubber, to the vacuum
pump and fusel oil decanter, making its way back to the front of the plant. Additionally, about 270 gpm of water is recovered as side stripper bottoms and evaporator condensate and reused at the front end of the plant. “It’s continuous thing,” Cherry says. “We need very good water going into the boiler and cooling towers. As that water circulates, the used water goes back into the process.” The cost for the water treatment systems in the Aemetis plant is high, not far behind the plant’s energy cost. Such extreme water recycling would cause many ethanol producers to hesitate, and not because of the cost. Many in the ethanol industry would fear multiple shutdowns from build-ups of fusels or bacterial contaminants that inhibit fermentation or from scaling issues in pipes and heat exchangers. With a 364-days-per-year run rate, Aemetis shows it can be done. Designed by a plant engineer with decades of experience in the dairy industry, such performance wouldn’t be possible without paying close attention to the water treatment regimen, although the plant’s high run rate is also due to unique features such as multiple redundancies and isolation valves that make it possible to do regular maintenance on the fly.
Total Water Recovery
The Poet network of provides another example of successful maximum recycling of water. Since 2010, when it filed for a patent on its Total Water Recovery system, Poet has implemented some form of the recovery system in all its biorefineries. “With 28 plants, including Project Liberty, the one thing I can definitively say is that no two plants are alike,” says Neil Anderson, vice president of operations. “We have plants that use municipal water, plants that use water from a gravel pit quarry, which is surface water. Plants use lake water or cooling pond water from a power plant, or from shallow wells, deep water wells and grey water from municipal water treatment. “When we embarked on the total water recovery initiative, we set the goal to reduce water usage and also stop discharging when and where possible. That means you have to swallow that water in the process,” Anderson says. Due to the varying water sources for each plant, exactly how water is treated and where the recycled streams are used varies. “Beyond the total water recovery process, there are other water streams in the plant that use process water that is not filtered,” Anderson says. “We have engineers that are very good at identifying what the opportuni-
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WATER ties are. We go after that to nip away at it— where are the 5 gpm or 10 gpm where we can save water? When we do identify ways to do that, we share that across the group so all the plants can take advantage of it.”
U.S. Water has worked with a number of dry-grind ethanol plants to achieve zero liquid discharge (ZLD). The company estimates 5 to 6 percent of the industry is considering ZLD, on top of the roughly 9 percent it has already helped convert. “In addition, we feel that at least 25 percent are in the process of evaluating water-reduction projects,” says Randy Meyer, chief sales officer. The drive to reduce water use is motivated by three pressures, he suggests: regulatory, economic and societal. Water cost and, in some cases, scarcity, have plants looking at new water sources, plus the plants that discharge—still the vast majority of the industry—are finding that in each permitting cycle, the limits get tighter and the number of constituents to track increases. “Regulations are targeting constituents such as sulfates, total dissolved solids, phosphate, selenium, chloride, nitrogen, ammonia and others. In addition to the constituents being regulated, discharge limitations vary from state to state, and even from plant to plant, depending on the condi-
WATER HOGS: Water use is highly variable and plant specific. Solenis' estimates of the biggest water consuming systems in an average plant are shown in the pie chart. SOURCE: SOLENIS
tions of the stream or watershed receiving the discharge,” he says. New solutions for water treatment are needed every year, Meyer says. “It would be typical for a plant to start out using just a small RO to treat boiler makeup. As discharge regulations change, they’ve had to consider added solutions such as a filtration system to remove the iron and reduce conductivity, or even install a cold lime softener or evaporative crystallizer, depending on the
severity of the regulations. We constantly have to migrate the solution. Every plant is different based on operating parameters, the quality of water and source of water, the components in the discharge stream, as well as the permit.” Plants face multiple choices when planning water treatment upgrades. In addition to considering water makeup components, it is important to pay attention to operational efficiencies, such as preventing scale and
FEBRUARY 2017 | Ethanol Producer Magazine | 39
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CLEAR, CLEAN WATER: A cold lime water softener, pictured above, is one of multiple systems used for ethanol plant water treatment. PHOTO: US WATER
corrosion in the boilers, cooling towers or heat exchangers. Sodium and sulfate levels in water used for fermentation should be reviewed. Ion mitigation may be needed to remove components like phosphates or chlorides. Meyer says there are more than 20 system components that can be utilized for water treatment. Filtration systems can be installed, which includes reverse osmosis. Solids separation can be accomplished through precipitation or flotation, which then require systems for managing those solids. Some ethanol producers may have the resources to invest in capital-intensive upgrades, while other plants may opt for systems that are less expensive to install, though more costly to operate.
Meyer says the top-five systems to review for improvements and upgrades in ethanol water treatment programs include reverse osmosis units, softeners, pressure filters, programming and automation and cybersecurity. The company will work with a plant to phase-in upgrades, with the first stage put in place that facilitates the next upgrade when needed.
Andrew Ledlie, marketing manager North America for Solenis, describes another focus area—making sure that in the effort to reuse water, system protections are not compromised. “We’re starting to see customers who open up the piping in the
WATER cooling towers and while the plant may be 10 years old, the piping looks like itâ€™s 25 years old.â€? The ethanol industry is somewhat unique in recycling cooling tower blowdown, he says. â€œWhen you go into other industriesâ€”we participate in mining, hydrocarbon processing, chemicals and pulp and paperâ€”you donâ€™t have the limitations from a water treatment perspective of water that might end up in a food product. Even in the food and beverage industries, the water treatment is very separate from the food side. They donâ€™t put cooling tower blowdown in the front of the plant.â€? Solenis is applying a technology used in other industries to monitor the impact of the alternative water treatments being used in the ethanol industry to avoid issues in the distillers grains coproduct. The companyâ€™s performance monitoring equipment simulates real-time conditions in a heat exchanger, for example, to measure fouling and corrosion levels and monitor the effects of adjustments to water treatment. â€œThen
you can see in real time whether youâ€™re going in the right direction,â€? Ledlie says. Some plants may think all is well because heat exchangers or chillers are not getting scaled, but high corrosion and biofouling will limit the lifespan of the equipment and reduce energy efficiency and throughput. There are multiple tradeoffs to consider, when evaluating water treatment, he says. The cooling tower, for instance, is the biggest direct user of water in an ethanol plant, with the majority of the water being evaporated, leaving a concentration of minerals and solids. RO units are often used to remove the minerals and solids in cooling tower makeup water to reduce the sludge left behind. â€œBut running an RO system can use about 40 percent of the amount of electricity used to run the fans and the pumps in the cooling tower,â€? Ledlie says. And, ironically, RO systems reject a certain amount of water. â€œItâ€™s not an invalid strategy, but there is an energy penalty, and youâ€™re not actually saving all that water.â€?
If continuous improvement has been the story for water treatment the past two decades, whatâ€™s in store ahead? Meyer suggests that regulations pertaining to phosphates and sulfur compounds are going to continue to receive attention in the near term. Poetâ€™s Anderson says more efficient cooling towers would be an exciting development. Further water recycling may be possible in the future, as well, he suggests. As plants develop ways to capture more energy, the benefits include more condensates that can become part of recycled water flows. Indeed, perhaps one day, so much water will be recovered that not only will water discharge permits become a thing of the past, but the ethanol plantâ€™s signature steam plume may disappear as even more water is wrung out and recycled. Author: Susanne Retka Schill Managing Editor, Ethanol Producer Magazine firstname.lastname@example.org 701-738-4922
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FEBRUARY 2017 | Ethanol Producer Magazine | 41
Pelleted Feed Innovation from Nebraska Big in ethanol and corn, the state’s corn stover and distillers grains resources are being tapped for new, enhanced feed products from two emerging companies. By Ann Bailey
Two Nebraska companies are turning pellets into profit. Pellet Technology USA in Gretna and Platte Valley Distillers in Ord
are making pelletized feed, one from corn stover and the other from distillers grains. Pellet Technology’s commercial plant was expected to have its first commercial-scale plant online in January enhancing stover for feed. Platte Valley has the pleasant challenge of trying to keep up with demand for its distillers pellets. Ethanol Producer Magazine checks in with management at the two companies to learn more about the processes and progress.
Pellet Technology USA
Founded by Russ Zeeck, an ethanol and soybean processing industry veteran, Pellet Technology USA has operated its commercial demonstration facility plant in Gretna, Nebraska, for several years. The first production facility, coming on line in York, Nebraska, was built in collaboration with ICM Inc., says Joe Luna, PTUSA business strategy manager. The York plant has a production capacity of more than 200,000 tons annually, using corn stover and other ethanol coproducts to make pellets used for a variety of livestock feeds “We have different products for cow-calf, for growing, finishing, confining,” Luna says. Pellet Technology is focusing on direct distribution of the pellets to its customers, he says. FEBRUARY 2017 | Ethanol Producer Magazine | 43
DG NUGGETS: Platte Valley Distillers densifies distillers grain and markets it through Furst-McNess. Using no binders, the pellets or cubes have a three-year shelf life, the company says. PHOTO: PLATTE VALLEY DISTILLERS
The company purchases the corn stover used in the pellets from farmers located within 50 miles of York. â€œWe receive large square bales,â€? Luna says. PTUSA has crews available to bale the stover, if the producers prefer that. â€œWe have some farmers who have the next generation of their families taking roles on the family farm, and they like to do it themselves, and we have others who like to have somebody come and bale the fields for them,â€? says CEO Randy Ives. Once the stover is at the plant, Luna says, â€œwe have a patented handling, processing and logistics system. Pretty much everything is proprietary from the way we store the corn stover bales, to the way weâ€™re add-
ing value to them inside the facility, to the way weâ€™re delivering them to customers on the back end.â€? Another part of Pellet Technologyâ€™s process that is unique is that it has a â€œvery safe and very scalable grinding and particle sizing process,â€? Luna says. There is a history of inconsistency when it comes to grinding corn stover, but Pellet Technologyâ€™s process breaks tradition. â€œYou have a lot of inconsistency. You have a lot of waste and dust, so we have a process that eliminates that and allows us to take very big pieces of machinery and turn them into precision instruments. Part of that was learned through trial and error.â€? A few years ago when Pel-
let Technology USA conducted its initial feed trial at the University of Nebraska, the company learned that it actually had too much control over the particle size, Luna notes. â€œWe can make a consistent particle size very, very small, but for some animals, such as cattle, a longer fiber is needed.â€? Pellet Technology learned how to adjust particle size, depending on the type of livestock being fed, Luna said. The companyâ€™s pellets contain different ingredients, based on the species and type of ration. Pellet Technology may expand into supplying pellets for fuel production, but for now is focusing on livestock feed. It does not plan to license its pellet produc-
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PELLETS tion technology. “One of the things that we want to bring as value to the market is consistency. We have plans to be owners, operators of the facilities in order to bring the most consistent feed to our customers,” Luna says. “We plan on starting to look toward our next location in 2017 with the idea that the following year the plant could be sited and built, according to what we learned from the first plant, and operational sometime in late 2018,” Ives says. The second plant will likely be located in the Midwest. Ives believes that Pellet Technology USA will benefit its farmer customers who sell the corn stover to the company by giving them a market for their stover that has become a headache for some farmers as yields have grown, Ives notes. “Some of the producers will see checks of $30, $40 to north of that, per acre. Additional revenue really makes a difference in these hard times. We can take something that traditionally has been seen as low value and add value, creating a product that is unique in
the industry.” Producing pellets from corn stover and ethanol coproducts, of course, also is beneficial to the ethanol industry, Ives notes. “My background has been ethanol for 20-some years, and before that, soy crush. All the work that has been done turning distillers into nationally known, and globally known, value-added feed has been a lot of fun. This is the next generation. We truly are creating a next-generation feed where abundant ag residues and coproducts of the future can be combined in new ways that are more sustainable than today.”
Platte Valley Distillers
Customers of the cubes and pellets produced at Platte Valley Distillers in Ord are buying them as fast as the company can make them, says co-owner Tom Kruml. “Everything we can produce is getting sold.” Platte Valley Distillers’ uses a patented process to make cubes and pellets. The process increases the density by 2.3 to 2.5 times in cubes that are 7/8 inch in diameter and from 2.5 to 3 inches long and pellets
that are 7/16 inch in diameter and about an inch long. The products contain no additives, relying on corn oil content to help seal the product, unlike most other cubes and pellets that contain a binder or agent, Kruml notes. The company has patented the technology that facilitates pelleting without binders. “It literally is pure distillers grains and that’s what separates these cubes and pellets apart from anything else that is out there,” he says. The pellets and cubes have a shelf life of up to three years, Kruml adds. Platte Valley Distillers buys most of its feedstock from ethanol plants across Nebraska. The company has the capacity to produce 30,000 tons of distillers grains products annually. Kruml’s company markets the cubes and pellets through FurstMcNess, which sells them to cow-calf producers and ranchers who background and creep-feed calves. The pellets and cubes are shipped to customers in 12 states including Texas, Idaho and Wyoming and exported to China, Canada, Mexico and Korea.
FEBRUARY 2017 | Ethanol Producer Magazine | 45
ENHANCED STOVER: Pellet Technology USA makes pellets from corn stover and ethanol coproducts for feed. PHOTO: PELLLET TECHNOLOGY USA
Besides producing and marketing pelleted feed, Platte Valley Distillers also is working to develop a new drying system for distillers grains. A prototype is being developed at the company’s processing plant in Ord, Kruml says. “We actually have it in place now, where we can take wet or modi-
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fied distillers grains and not use a conventional grain dryer like the ethanol plants do, to make it into dried distillers grains, then produce the pellets and cubes.” The process reduces energy costs significantly. Most grain dryers are heated with natural gas or propane, but Platte Valley Distillers’ drying process is different, says Gaylord
Boilesen, production manager and co-owner. “We’re using electricity to heat the extruder, but once we get it started, we heat a lot of it by just sheer energy between the screws and the extruders.” The screws in the extruder barrel turn in opposite directions, which pinches the commodity. Similar to a food extruder, heat energy is created as the distillers grains are forced through the screws. “We heat and release. When we release it, we take pressure off which is released into the air as steam,” Boilesen says, adding that the drying process doesn’t run nearly as hot as a conventional dryer, reducing operating costs. Platte Valley Distillers developed the drying process so it could take wet and modified distillers grains and remove the moisture so they could be classified as DDGS before being made into pellets and cubes, Kruml says. “We’re expanding the types of distillers grains feedstocks we can use because a lot of the ethanol plants do not have the drying capacity to make dried distillers grains. They can make wet or modified and that’s it. What we’re trying to do is open up the availability of the feedstocks.” Initially, Platte Valley Distillers focused on production of the pellets and cubes, but now perfecting the drying process has become important to the company, Kruml says. “There are a number of ethanol plants that are taking a look at that.” “There is interest,” Boilesen concurred. He believes the drying process has potential to be a winner with ethanol company clients. The process is environmentally friendly and, because it doesn’t have to heat the distillers grains to as high of temperatures as dryers do, the nutritional value of the grain is maintained better than if it is dried, Boilesen says. Author: Ann Bailey Associate Editor, Ethanol Producer Magazine firstname.lastname@example.org 701-738-4976
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BIG POURS: Chicago's Ozinga has begun injecting carbon dioxide sourced from an ethanol producer into its concrete. PHOTO: OZINGA
48 | Ethanol Producer Magazine | FEBRUARY 2017
Ethanol CO2 & Concrete
Cement a Relationship
CarbonCure Technologies strengthens concrete while reducing carbon footprint. By Ann Bailey
Carbon dioxide from a Wisconsin ethanol plant is strengthening the cement in pours at sites in Chicago.
Ozinga, a fourth-generation, family-owned business in Illinois has installed CarbonCure technology at its downtown Chicago ready mixed plant. CarbonCure Technologies Inc., based in Halifax, Nova Scotia, licenses its technology to about 40 U.S. and Canadian customers, most of them concrete producers like Ozinga, says Jennifer Wagner, vice president of sustainability. CEO Robert Niven, a clean-tech developer, founded CarbonCure Technologies nine years ago and after several years of research and development, launched it commercially in 2012. The company promotes its technology as lowering greenhouse gas emissions while improving the material performance of concrete. “Once we were commercialized, our initial focus was on concrete blocks, or masonry. Since then we’ve expanded to the much larger ready mixed industry, or poured concrete, which is where we operate today,” Wagner says. “We are paid a license fee,” she continues. “The concrete producer pays us on a monthly basis to use the technology.” It is more cost-effective for their ready mix customers to purchase the gas from sources that are near their plants—a power plant, fertilizer plant, or, as in the case of Ozinga, an ethanol plant, she says. CarbonCure’s customers buy the CO2 from third-party gas suppliers, which typically are multinational corporations supplying companies such as Coca Cola and Pepsi Cola. Ozinga purchases its CO2 from Helget Gas, Elk Grove Village, Illinois. Helget captures the gas from a Wisconsin ethanol plant, says Shaun Albeck,
FEBRUARY 2017 | Ethanol Producer Magazine | 49
beverage gas specialist, sales. He declined to name the ethanol plant, but notes that it is one of several in the Midwest where Helget captures CO2, selling all grades of the gas to customers from bars to restaurants and now, concrete companies. “We are direct to the consumer for the concrete industry,” Albeck says. “Not only do we provide the CO2, but we also provide the equipment for the CO2—bulk tanks and any other equipment that would be necessary.” Helget Gas delivers the CO2 to CarbonCure in liquid form and it is stored in a 3,000 liter bulk tank. Helget Gas refills the tank as needed.
CarbonCure’s concrete customers, such as Ozinga, install bolt-on technology, Wagner says. “The CO2 is injected into concrete where it becomes sequestered. It actually is converted from gas to a solid; it is converted into calcium carbonate, commonly known as limestone,” she says. “To make concrete, all of the ingredients, including
50 | Ethanol Producer Magazine | FEBRUARY 2017
the sand, stone, water and cement, are blended together in a large-scale mixer. At this point, we add the CO2. As soon as the CO2 is added, a chemical reaction takes place where the CO2 Jennifer Wagner forms a bond with the cement particles to form nanosized solid calcium carbonate particles. It’s these nanoparticles that give concrete its additional strength. It’s called a seeding reaction, so a small amount of CO2 can provide a significant benefit to the manufacturer.” Ozinga learned about CarbonCure at a National Ready Mixed Concrete Association convention, says Paul Ozinga, executive vice president. “People were talking about it and we were approached by CarbonCure. They came by and told us what it was, what the process was. We found it very
interesting with a lot of opportunity, so we decided to go forward with it. We first started talking about it two years and then implemented the system about six months ago,” Ozinga says. There are several reasons Ozinga decided to adopt the CarbonCure technology. “There are economics that play into it. There are environmental reasons that play into it. There are performance reasons that play into it,” he says. “Obviously, any time we can reduce the carbon we emit, that is a good thing.” Cement is a key ingredient in concrete and also one of the largest industrial emitters of carbon dioxide. By putting the carbon dioxide back into concrete, not only does it repurpose the CO2, it also improves the compressive strength, which allows concrete producers to reduce the amount of cement in the mix design, Ozinga says. “With increased strength, we can reduce the cement content in a mix. By taking cement out of a mix, we further reduce the carbon footprint of concrete products.” Ozinga es-
timates that the CO2 replaces from 3 to 6 percent of the cement in the mix. â€œItâ€™s a win-win where the producers are able to reduce their costs and save money,â€? Wagner says. â€œThey also are able to claim (carbon) credits where there is a system in place. In places like California, British Columbia or Ontario, CO2 reductions can provide carbon offset revenue, which creates even more value for the customer. Itâ€™s sort of the icing on the cake that makes this even more economically favorable.â€? Most of CarbonCuresâ€™ customers are companies in the Northeast and Southeast, but the company is growing, Wagner says. â€œWeâ€™re expanding very quickly and many of our customers are large companies that have dozens or even hundreds of concrete plants. What weâ€™re seeing is, they test the technology at one or two plants and if they like what they see, and so far all of them do, they quickly expand across their fleets of plants. It wonâ€™t necessarily take us long to be available pretty much everywhere in
ECONOMIC BENEFIT: Ozinga estimates carbon dioxide replaces 3 to 6 percent of the cement in its ready mixed pours. PHOTO: OZINGA
North America. We have pockets where we are seeing exponential growth, so we are building on those markets; weâ€™re seeing most of the growth along the eastern seaboard, from Atlanta, up through to the Carolinas, D.C. and Boston.â€? Typically, when companies, such as ethanol plants, look for places to put the
CO2 that is emitted, they think of geological carbon capture and storage, which is putting the gas in abandoned mines or aquifers, Wagner notes. â€œBut this concept of CO2 utilization is emerging. Instead of thinking of CO2 as a waste material, we are thinking of it as an asset where you can use CO2 to actually make better products. Weâ€™re
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CARBON INNOVATION: CarbonCure uses captured CO2 to improve products. PHOTO: CARBONCURE
applying this concept of CO2 utilization to concrete, which is the most abundant man-made material on earth, so it’s a game changer for global CO2 emissions.” Down the road, Ozinga likely will increase the amount of CO2 it uses in its concrete, Ozinga says. “When we get data under our belt, we intend to continue to expand and grow how much we’re utilizing.” “Ozinga was founded on the principal of service to others; service to our colleagues, to our customers and to our community,” Martin Ozinga IV., Ozinga president said in a statement announcing the installation of CarbonCure technology at the company. “The CarbonCure technology allows us to further serve our community by being better stewards of the environment.” Adaption of the technology made sense for the family business founded in 1928 by Martin Ozinga Sr., a Dutch immigrant. “We faced many challenges over the past decade because of the economic recession,” said Ozinga’s president. “The recession forced us to reflect on our true purpose as a company, which is to serve others and to provide high-quality products. We look forward to continuing to grow as a company with CarbonCure as a partner.” Reducing carbon’s concrete footprint is appealing to architects, engineers and building developers. Rand Ekman, chief sustainability officer for Chicago architectural firm HKS Inc., is an advocate for carbon reduction emissions within the design community. “As architects, we have a responsibility to understand and mitigate the environmental impacts of the building materials we use,” he said in a statement offering his congratulations to the Ozinga family for leading the industry with the CarbonCure innovation. Author: Ann Bailey Associate Editor, Ethanol Producer Magazine email@example.com 701-738-4976
52 | Ethanol Producer Magazine | FEBRUARY 2017
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PHOTO: U.S. WATER SERVICES
REVERSE OSMOSIS SYSTEM OPERATION AND MONITORING Cleaning when fouling solids are most easily removed maintains membrane life, restores performance. By Wes Byrne
CONTRIBUTION: 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).
54 | Ethanol Producer Magazine | FEBRUARY 2017
BEST PRACTICES The way a reverse osmosis (RO) system is operated and monitored can affect its performance and membrane longevity. Operating
with too high a flow rate can cause scale formation or an increased rate of membrane fouling. The extent of these problems will be apparent in three RO performance variables, which can be used as a basis for when membrane cleaning should be performed. Cleaning before fouling becomes too severe will make it easier to fully restore original RO performance without the use of aggressive cleaning chemicals and, in so doing, maintain the membrane life. In a well-designed RO system, small particles will move along the membrane surface through the RO array until exiting in the concentrate stream. But, if there is a particularly high concentration of particles or if the RO is operated too aggressively, particles can become overly concentrated next to the membrane surface because of high water permeation or low flow across the membrane surface. The particles may then coagulate into larger particles that are more likely to stick to the membrane surface or get caught in the membrane spacing material. This will result in an increase in the pressure required to obtain the same permeate flow rate. RO systems are usually operated by adjusting the membrane feed pressure as needed to achieve the desired RO permeate flow rate. This may be accomplished by using a variable frequency drive (VFD) to control the highpressure pump motorâ€™s rotational speed, or it may be achieved using a throttle valve located directly downstream of the pump. With VFD control, the adjustment for achieving a desired permeate flow rate may be automatic. The RO system will also have a concentrate stream throttle system to achieve the desired concentrate stream flow rate. This system may include an orifice plate or, more commonly, the concentrate flow rate would be adjusted with a valve, either manually or automatically controlled. Along with the permeate and concentrate flow meters, pressure sensors are installed in the system piping to monitor the membrane pressure entering the membrane elements, the concentrate pressure exiting the membrane
and possibly the pressures within the plumbing manifolds that connect the membrane vessel stages. A permeate pressure sensor may be needed, especially if there is significant or variable permeate back-pressure on the system. The electrical conductance of the water streams is used to monitor how well the RO is removing dissolved salts from the raw water. A percent salt rejection for the system is calculated by subtracting the permeate conductivity from the feed stream conductivity and then dividing this value by the feed conductivity. (The original calculation for the RO salt rejection is based on total dissolved solids concentrations accurately established in laboratory measurement.) The salt rejection percentage is probably the most well-watched performance variable indicating how well the RO system is working, since salt removal is the primary reason for having the RO. Additional monitoring instruments may be needed if there is variability in the feed water characteristics, such as if a chemical is being added. If the water acidity changes naturally or as a result of chemical addition, then the water pH should be continuously monitored as it can have a dramatic impact. If chlorine is being removed upstream of the RO, an online chlorine monitor or possibly an oxidation-reduction potential (ORP) monitor may be used to warn against the presence of chlorine in the RO feed stream.
Critical Monitoring Variables
Monitoring the percent salt rejection is important, but it is limited in its ability to communicate the state of the RO membrane and not a good gauge of membrane fouling or scale formation. With the exception of calcium carbonate scale, most types of fouling or scale will not impact salt rejection until the RO system performance is severely impacted and then it may be too late to restore performance by cleaning. The relative ability for water to permeate the RO membrane can be tracked using a variable called the normalized permeate flow rate, which is the RO permeate flow rate standardized for the effects of operating pressures, dissolved salt content and water temperature. The feed-to-concentrate pressure drop tracks the resistance to the passage of water through the flow channels of the various membrane
elements in the RO system array. It is the difference between the pressure entering the membrane vessels and the pressure exiting the vessels. This value may be calculated for the entire RO vessel array, or if interstage pressures are available, it can be calculated for the individual vessel stages. If flow rates are not kept constant when operating the RO, it will be necessary to standardize the pressure drop for the effect of the changing flow rates in calculating normalized pressure drop values. This then allows direct comparison of these values over time, regardless of whether any flow rates have changed. Small suspended particles or salt particles that coat the RO membrane surface will cause the RO normalized permeate flow rate to decline. Larger particles that get caught within the membrane flow channels and subsequently block the flow through the membrane elements will cause the normalized pressure drop to increase, specifically in the stage where the blockage is occurring, as well as for the entire system. If something in the water is chemically reacting with the RO membrane, the effect of this will likely be apparent in the normalized permeate flow rate and possibly in the salt rejection. For example, if chlorine is allowed to come into contact with the RO membrane, the extent of membrane oxidation will be apparent as an increase in the normalized permeate flow rate soon followed with a decline in RO salt rejection. A thorough understanding of the state of the RO system can thus be gained by routinely calculating and graphing the salt rejection and the normalized performance variables. But their values may be misleading if any of the instrument readings from which the variables are calculated are inaccurate. It is absolutely critical that monitoring instruments be routinely calibrated and repaired or replaced, if their readings are clearly in error.
Chemical cleaning is a routine requirement for most RO systems. The necessary cleaning frequency for maintaining original RO performance is related to how well the RO pretreatment equipment prevents scale formation and reduces the concentration of suspended solids entering the RO. The concentration of biologi-
FEBRUARY 2017 | Ethanol Producer Magazine | 55
GOOD PERFORMANCE: The performance variables of a stable RO system are shown in this Internet-accessible graph. SOURCE: US WATER SERVICES
cal particles in the RO feed stream as well as activity directly within the RO must also be minimized. As these fouling solids or scale particles are allowed to accumulate within an RO system over time, the solids will often change in their characteristics and become more resistant to cleaning. Clay and biological materials will com-
press against the membrane surface and become chemically resistant as water is squeezed out. Scale formations may change from being primarily calcium carbonate, which is relatively easy to clean, to calcium sulfate, which is much more difficult to remove. If fouling is allowed to proceed to the point that dissolved salts cannot easily diffuse back into the bulk stream
going through the membrane elements, various salts may precipitate within the pocket of fouling solids directly next to the membrane surface. The RO system should be chemically cleaned while the extent of fouling is minor as based on the normalized RO performance variables. Most of the RO membrane manufactur-
Thermal Refractory Solutions & Maintenance Give the Thermal team a call today! 612-751-2010 www.thermalrefractory.com We are your Ethanol Refractory Experts! We know your energy center and can provide superior results on your RTO, TO, Boiler, or Dryer. We have installers based from 3 different locations to provide a fast & cost effective solution for your plant. We understand the importance of your operation and will provide the results you need to be running smooth. 56 | Ethanol Producer Magazine | FEBRUARY 2017
DECLINING PERFORMANCE: The chart shows an RO system with a decling normalized permeate flow rate. SOURCE: US WATER SERVICES
ers recommend cleaning before these normalized variables change by 15 percent. By limiting the extent of fouling or scale formation before cleaning, it becomes much more likely that the fouling solids will be removed using standard cleaning procedures, which then restores the original system performance. This then improves the mobility of particles and dissolved
salts, and so restores the original fouling rate. In summary, operating an RO with the intended flow rates may reduce the potential for membrane fouling. The extent of fouling or scale formation is best monitored using normalized permeate flow and pressure drop, which then can be used to determine when to clean the RO while the fouling solids are most
easily removed. This will make it possible to fully restore original RO performance and maintain membrane life. Author: Wes Byrne Consultant, Membrane Technologies, U.S. Water firstname.lastname@example.org
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FEBRUARY 2017 | Ethanol Producer Magazine | 57
BRIGHT FUTURE AHEAD FOR ETHANOL EXPORTS
Charting the trends in top importing countries. By Richard Weiner
Every year, the United States ranks as one globe. The top 10 countries receiving U.S. ethanol exports in compiled from various U.S. government sources, are listof the largest exporters of ethanol in the world, 2014-’15, ed below, followed by each one’s share of total U.S. exports. shipping to more than 25 countries around the 1. 2. 3. 4. 5.
Canada – 30% Brazil – 15% South Korea – 8% Philippines – 8% China – 8%
6. 7. 8. 9. 10.
India – 6% Mexico – 4% Netherlands – 3% Tunisia – 3% United Arab Emirates – 3%
CONTRIBUTION: 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).
58 | Ethanol Producer Magazine | FEBRUARY 2017
EXPORTS Following an analysis of U.S. government forecasts for exports of ethanol and foreign government forecasts for imports, I predict these countries will be the top 10 importers of U.S. ethanol 1. 2. 3. 4. 5.
China (up from 5) Canada (down from 1) Brazil (down from 2) Philippines (holding at 4) India (up from 6)
6. 7. 8. 9. 10.
in 2016-’18, ranked from 1 to 10. The comparison to the 2014-’15 ranking is shown in brackets.
South Korea (down from 3) Peru (not ranked) Mexico (down from 7) Jamaica (not ranked) Singapore (not ranked)
While the top 10 countries to which U.S. ethanol producers export their products may vary from year to year, the overall amount of ethanol sold overseas will only continue to increase. The trends from 2014 to 2018 clearly indicate that developing countries, such as China, Brazil, India and South Korea, will require more and more ethanol from the United States as demand for fossil fuel replacements continues to grow and governments enact more stringent renewable fuel standards. Even though ethanol exports to Canada and Europe may stagnate or decline, the demand for ethanol from
the world’s largest developing nations will secure the place of the United States as one of the leading ethanol exporters for years to come. From that vantage point, the future of ethanol exports from the United States is very bright indeed. Author: Richard Weiner Vice President, Biofuels Practice Group Chair Fredrikson & Byron PA email@example.com 612-492-7000
1,000 METRIC TONS ETHANOL = 335,000 GALLONS 1,000 BARRELS = 42,000 GALLONS 1,000 LITERS = 264 GALLONS
U.S. exports of fuel ethanol to China are expected to grow exponentially in the next two years. China’s 12th Five-Year Plan, which ended Dec. 31, establishes the goal of producing 4 million tons of ethanol, but the 2016 forecast for domestic ethanol production is set at only 2.5
million tons. This leaves a shortfall of 1.5 million tons of ethanol that will have to be imported in 2016-’18. Furthermore, ethanol imported into China is far cheaper than domestically produced ethanol because of China’s relatively high domestic corn prices.
FEBRUARY 2017 | Ethanol Producer Magazine | 59
U.S. exports of ethanol to Canada will remain relatively steady in 2016-’18, with a slight increase at the end of 2017. The economic slowdown in Canada due to low oil prices is expected to reduce demand for
U.S. exports of ethanol to Brazil will rise significantly in 2016-’18. The Brazilian federal government has recently raised federal taxes on gasoline, which will increase the competitiveness of ethanol as com-
U.S. exports of ethanol to the Philippines will decline significantly in 2016-’18. Higher tariffs on ethanol imported from the United States, as compared to tariffs on ethanol imported from Asian countries, are 60 | Ethanol Producer Magazine | FEBRUARY 2017
imported ethanol. In addition, lower rates of discretionary blending will result in a decline in imports from the United States.
pared to fossil fuel. Furthermore, some Brazilian cities and states have reduced the tax on ethanol, which will further stimulate ethanol imports.
expected to continue to put U.S. ethanol imports at a distinct disadvantage. The amount of U.S. ethanol imported into the Philippines may decline by as much as 16 percent.
U.S. exports of ethanol to India will increase dramatically. Imports of ethanol are expected to reach 440 million liters in 2016 and 700 million liters in 2017, a year-to-year increase of 36 percent. The United
U.S. exports of ethanol to South Korea will see a slight increase in 2016-’18. The increased use of ethanol, both domestic and foreign, will play an important role in South Korea’s goal of cutting greenhouse
U.S. exports of ethanol to Peru will rise slightly in 2016-’18, allowing Peru to break into the top 10 countries for ethanol from the United States. Ethanol imports are forecast at 80 million liters by the end of
States will continue to be the largest exporter of ethanol to India. In 2016-’18, imported ethanol will sell at about the same price as domestically produced ethanol.
gas emissions in the next decade. In addition, South Korea is expected to put in place more stringent renewable fuel standards and increase its ethanol tax credits in the next few years.
2016, an increase of 5 million liters over 2015. At the same time, domestic ethanol production is expected to decline by 33 percent from 2015 to 2016. FEBRUARY 2017 | Ethanol Producer Magazine | 61
U.S. exports of ethanol to Mexico will decline significantly in 2016’18. Ethanol continues to be more expensive than its petroleum-based equivalents in Mexico, which means that its current use is limited to
U.S. exports of ethanol to Jamaica will grow substantially in 2016’18. Jamaica currently has an E10 mandate that will increase the need for imported ethanol in the coming years. This is good news for the
U.S. exports of ethanol to Singapore will hold steady in 2016-’18. In the countries of Southeast Asia that purchase their ethanol from Singapore, the relatively low cost of imported ethanol will drive greater 62 | Ethanol Producer Magazine | FEBRUARY 2017
research projects only. A government subsidy for ethanol would correct this situation, but there does not seem to be any political support for this measure in the near future.
United States, which is and will continue to be the leading exporter of ethanol to Jamaica.
demand for discretionary blending. In the future, larger amounts of imported ethanol will be required in order to achieve the environmental goals mandated by the countries that rely on Singapore for their ethanol.
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Legislative Uncertainty Calls for Vigilance By Joe Leo
At the start of a new year, clients frequently ask what they should focus on from a legal perspective.
This year, more than others, represents a time of uncertainty due to the significant shift in power at the federal level. Legislative uncertainty will likely continue throughout 2017. With a new administration that assumed office in January, along with a different balance of power in Congress, there are likely to be significant legislative and regulatory changes that take effect throughout the year. However, if someone tells you they know what legislative changes to expect in 2017 and when those changes will be implemented, I would ask them for their crystal ball. While even casual observers expect there will be changes, some of which may be radical departures from prior laws and regulations, the focus of the new administration and Congress and the speed with which they will implement these changes is unknown. As a result, vigilance is key to keeping abreast of these changes. The most significant changes will likely be in the areas of employment law, tax reform, environmental regulations and healthcare, though it is anyone’s guess as to which areas will be the initial focus of the Trump administration. Each of these areas will have an impact on the ethanol industry. Some may be welcome additions, including the potential for greater market access for ethanol and reduced environmental compliance burdens. However, there is always a risk that the renewable fuels standard (RFS) and other key market access legislation may be changed or abandoned. It is anticipated that the Trump administration will have a very different view of employment laws compared to the Obama administration. Recently, a federal court in Texas issued a temporary injunction that blocked implementation of the Department of Labor’s new federal overtime rules scheduled to take effect Dec. 1. The federal overtime rules were a key initiative of the Department of Labor under the Obama administration, but will not likely be a priority of the Trump administration. Further, I would expect that other employment-related laws will be a key focus of the new administration and will likely lead to new rules for employers.
64 | Ethanol Producer Magazine | FEBRUARY 2017
Tax reform will also likely be a key focus of the Trump administration that will be supported by Congress, although the exact scope and mechanism of these changes remain to be seen. Many companies that have chosen to be taxed as a partnership (such as limited liability companies) may find that converting to a corporation provides more certainty and comparable tax burdens for their investors. A significant reduction in business taxes could significantly impact tax structuring decisions made by companies. Environmental regulations appear to be a key focus that could improve market access for the ethanol industry. While Trump stated his support for the ethanol industry and the RFS, Congress’ support for these initiatives is not as clear. This could force the ethanol industry to focus on protecting its market share and the RFS even with the support of the Trump administration. It is possible the ethanol industry could see further legislation seeking to revoke the RFS this year. Healthcare reform will be a major focus of the new administration and Congress in 2017 and could result in the most disruptive changes faced by businesses in the United States. Regardless of one’s position on healthcare reform, any changes to the system could have wide ranging effects which will likely impact nearly all employers. If the Trump administration moves forward with a radical change to the Affordable Care Act, it could require employers to carefully consider the benefits they provide to their employees. While there are a significant number of questions and very few answers, the best advice is to stay up-to-date on these potential legislative changes. There may be bumps along the way, but there will undoubtedly be opportunities in 2017 that will allow your companies to grow. Author: Joe Leo Attorney, BrownWinick Law Firm 515-242-2462 firstname.lastname@example.org
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