2020 February Ethanol Producer Magazine

FEBRUARY 2020

MARKETABLE

MOLECULE Opportunities in Ethanol-to-Ethylene PAGE 22

ALSO

Challenging EPA’s Blend Restriction PAGE 30

Digital Defense PAGE 42

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EDITORIAL

ADVERTISER INDEX

Editor Lisa Gibson | lgibson@bbiinternational.com Associate Editor Matt Thompson | mthompson@bbiinternational.com Copy Editor Jan Tellmann | jtellmann@bbiinternational.com

ART Vice President of Production & Design Jaci Satterlund | jsatterlund@bbiinternational.com Graphic Designer Raquel Boushee | rboushee@bbiinternational.com

PUBLISHING & SALES CEO Joe Bryan | jbryan@bbiinternational.com President Tom Bryan | tbryan@bbiinternational.com Vice President of Operations/Marketing & Sales John Nelson | jnelson@bbiinternational.com Business Development Director Howard Brockhouse | hbrockhouse@bbiinternational.com Senior Account Manager/Bioenergy Team Leader Chip Shereck | cshereck@bbiinternational.com Circulation Manager Jessica Tiller | jtiller@bbiinternational.com Marketing & Advertising Manager Marla DeFoe | mdefoe@bbiinternational.com Marketing & Social Media Coordinator Dayna Bastian | dbastian@bbiinternational.com

EDITORIAL BOARD Ringneck Energy Walter Wendland Little Sioux Corn Processors Steve Roe Commonwealth Agri-Energy Mick Henderson Aemetis Advanced Fuels Eric McAfee Western Plains Energy Derek Peine Front Range Energy Dan Sanders Jr.

2020 International Fuel Ethanol Workshop & Expo AgCountry Farm Credit Services AGI Tramco Archangel, LLC BetaTec Hop Products Bion Companies Cleaver-Brooks CoBank CTE Global, Inc. D3MAX LLC DSM Bio-based Products & Services DuPont Industrial Biosciences Ethanol Producer Magazine's Top News Fagen Inc. Fluid Quip Technologies, LLC Growth Energy ICM, Inc. J.C. Ramsdell Enviro Services, Inc. Lallemand Biofuels & Distilled Spirits Mole Master Services Corporation Natwick Associates Appraisal Novozymes Phibro Ethanol Performance Group POET LLC RPMG, Inc. Solenis LLC Sukup Manufacturing Co. Trinity Rail Group Victory Energy Operations, LLC WINBCO

20 9 24 46 21 39 32 47 40 28-29 11 56 33 33 13 2 17 35 15 26 45 5 19 51 38 7 55 3 25 27

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Contents

22

BRASKEM

FEBRUARY 2020 VOLUME 26

DEPARTMENTS 4

AD INDEX

8

EDITOR'S NOTE

9

EVENTS CALENDAR

10

VIEW FROM THE HILL

30

GLACIAL LAKES ENERGY LLC FILE PHOTO

12

GLOBAL SCENE

14

CLEARING THE AIR

Ethanol Advocacy and Global Emissions Reduction

By Brian Healy

FEATURES 22 MARKETS

The Versatile Ethanol Molecule A look at promising alternative markets

By Susanne Retka Schill

30

BUSINESS BRIEFS

54

MARKETPLACE

42

FILE PHOTO

CONTRIBUTION 48 CLEANING

Caustic CIP Optimization

Challenges and solutions to prevent contamination

By Dennis Bayrock

POLICY

Roadblock to Higher Blends UAI issues legal challenge to EPA’s restrictions

By Matt Thompson

36

All the Wrong MOVES

By Dave VanderGriend

16

NEBRASKA ETHANOL BOARD

ISSUE 2

Versatile and Newsworthy

By Lisa Gibson

At the Table, or On the Menu?

By Geoff Cooper

36

EDUCATION

Blended Curriculum

Nebraska offers retailer training on E15

By Lisa Gibson

42

INFORMATION TECHNOLOGY An Ounce of Prevention

Avoiding cyber security incidents

By Matt Thompson

ON THE COVER

LanzaTech’s first commercial-scale plant in China, pictured, is using flue gas from a steel mill to feed ethanol-producing bacteria. It has produced over 10 million gallons of ethanol since starting up in May 2018.

PHOTO: LANZATECH

Ethanol Producer Magazine: (USPS No. 023-974) February 2020, Vol. 26, 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.

6 | ETHANOL PRODUCER MAGAZINE | FEBRUARY 2020

ETHANOLPRODUCER.COM | 7

Editor's Note

Versatile and Newsworthy

Lisa Gibson EDITOR lgibson@bbiinternational.com

I’m pretty proud of our cover headline, “Marketable Molecule.” It’s catchy, sure, but it’s also true.

A quick drop of a water molecule from ethanol and you have ethylene, a chemical used as the basis of countless products and materials from synthetic fibers to plastics. Ethanol has a place in that market, and projects to take advantage of that opportunity are ongoing around the world.

In our cover story, starting on page 22, freelancer Susanne Retka Schill explores those opportunities and speaks with the developers behind the projects. Ethanol-to-ethylene can reduce the carbon footprint of plastics and packaging, reduce health impacts of cooking oil use in Africa, or create a more environmentally friendly jet fuel. The possibilities are truly fascinating.

Speaking of opportunities, the Reid vapor pressure waiver for E15 seems to have boosted summertime sales. But, most of us know it’s come with some problems, too. The Urban Air Initiative is sounding the alarm on the rule’s language and how it limits blends higher than E15. The rule also treats retailers with blender pumps as refiners, subjecting them to stricter regulations. UAI has been public with its actions on the rule, but seems to be standing alone among trade groups in this particular fight. Some experts in the ethanol industry say the U.S. EPA might not interpret the rule as a cap at E15, but UAI isn’t satisfied with that. “Simply hoping the EPA interprets the rule in a favorable way for ethanol is not a risk we are willing to take,” one source says. It’s an interesting read and it starts on page 30.

And post-E15 waiver, retailers are beginning to take notice of the blend’s benefits. In Iowa, four stations added E15 over the summer of 2019. The Nebraska Ethanol Board has begun offering free workshops to retailers in the state who want to learn more about the blend and what requirements they need to meet to sell it. With about 30 attendees at each of two workshops so far, the NEB says feedback has been positive and retailers have been most interested in infrastructure and equipment. Find out more about the workshops and hear from retailers who attended, starting on page 36.

Finally, this issue of Ethanol Producer Magazine delves into cyber threats. We talk to a producer who has been the victim of ransomware, actually paying the demanded amount to unlock and access his own data. Simple measures can expose a plant to cyberattacks, and the experts we talked to have suggestions to avoid them. It’s on page 42.

The marketable ethanol molecule brought us tons of news leads and hooks for this month. We sorted through them, and with the help of our editorial board, chose the most relevant and interesting from a producer’s perspective. It seems our little molecule is both versatile and newsworthy. Read up.

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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 the ethanol industry’s premier forum for unveiling new technologies and research findings. The program is primarily focused on optimizing grain ethanol operations while also covering cellulosic and advanced ethanol technologies.

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View from the Hill

At the Table, or On the Menu?

Geoff Cooper

President and CEO Renewable Fuels Association 202.289.3835

gcooper@ethanolrfa.org

We’re only halfway through the 116th Congress and, already, there have been nearly 40 legislative proposals and resolutions introduced to tackle climate change and cut U.S. carbon emissions. Lawmakers from both sides of the aisle are bringing ideas to the table, including everything from the provocative “Green New Deal” to renewable electricity mandates to rejoining the Paris climate agreement to stimulating investment in carbon capture and sequestration. While few, if any, of these proposals are expected to go anywhere immediately, their sponsors are sending a clear message: Legislative action aimed at curbing carbon emissions and combating climate change is coming.

And it isn’t just in the halls of Congress that climate change is dominating policy discussions—it’s on the presidential campaign trail as well. Every Democratic candidate running for president says reducing carbon emissions is a top priority. Some, like investor Tom Steyer, have made climate change the defining issue of their campaigns. As for the incumbent, President Donald Trump told world leaders in December that “climate change is very important.”

As is often the case, the escalating political discourse around climate change is merely a reflection of escalating public discourse. People are talking about climate change more than ever before. And, as evidenced by the fact that Time magazine’s 2019 Person of the Year is a 17-year-old climate activist, public opinion on the importance of reducing carbon emissions continues to trend in one direction only. In fact, a recent Morning Consult poll found that 69 percent of adults report “worrying about climate change” and support taking action.

So, where does that leave us? How does ethanol fit into the discussion? Whether we are “at the table or on the menu” for the emerging climate change debate is entirely up to us.

From RFA’s perspective, the ethanol industry should not just have a seat at the table—we should be helping lead the conversation. We have a great story to tell. With ethanol, we don’t have to wait and hope for major technological or economic breakthroughs; the fuel is available now at a low cost to drive decarbonization of our liquid fuels.

The U.S. Department of Energy, California Air Resources Board, Oregon Department of Environmental Quality, U.S. Department of Agriculture, and others already recognize that grain-based ethanol reduces greenhouse gas (GHG) emissions by 35 to 50 percent compared to gasoline. Emerging technologies promise to boost that reduction to around 70 percent in just the next few years, according to USDA. Further, CARB data shows that ethanol is responsible for 22 million metric tons of GHG reduction from California’s transportation sector since 2011—more than any other low carbon fuel.

RFA is already actively engaged in many initiatives and policy discussions to ensure ethanol’s carbon bona fides are properly represented and understood. We are setting ethanol up to succeed in existing and future policy frameworks focused on reducing GHG emissions from transportation.

In addition to continuing our work to solidify and expand ethanol’s role under existing Low Carbon Fuel Standard programs in California and Oregon, we are working with stakeholders in New York, Colorado, Washington and other states where LCFS programs are being investigated or developed.

We have also collaborated with a diverse group of stakeholders on a potential Clean Fuel Standard for the Midwest. This program would leverage the unique strengths and resources of the Midwest region, use the best available science and modeling tools to assess life cycle carbon intensity, and ensure all fuels are judged fairly using consistent metrics. Having a successful “Midwest model” available could be very helpful to our industry if—or, more likely, when—conversations about a national LCFS kick into high gear.

Finally, at the federal level, RFA is working with industry partners to promote a Low Carbon Octane Standard that would transition our current 87 octane regular gasoline to something around 94 octane. Under this standard, the required octane boost must come from octane sources that achieve significant GHG reductions compared to gasoline. This program would simultaneously enable more fuel-efficient engines, reduce tailpipe GHG emissions, and deliver additional savings at the pump for consumers.

While it’s hard to know exactly where the debate over climate change policy will end up, one thing seems certain: Definitive action to curb carbon emissions is coming. Are you ready for it?

10 | ETHANOL PRODUCER MAGAZINE | FEBRUARY 2020

Global Scene

Ethanol Advocacy and Global Emissions Reduction

Brian Healy

Director of Global Ethanol Market Development U.S. Grains Council 202.789.0789 bhealy@grains.org

COP25, the 25th United Nations Climate Change conference, wrapped up in December, leaving in its wake a clear need for enhanced advocacy regarding the benefits of ethanol and the contributions its expanded use has for carbon emissions reductions.

In 2015, countries participating in this annual event made nationally determined commitments (NDCs) for curbing carbon emissions, and at the end of this year, those same countries will measure their initial progress and report on it at COP26.

What does that mean for the ethanol industry?

Between now and then, we must collectively advocate for greater ethanol use globally as a component of the low-carbon transport solution—one that offers the population environmental, human health and economic benefits while offering the industry a role for trade.

The Global Ethanol Summit held last October in Washington, D.C., made clear to all energy consumers that energy diversification represents an opportunity to achieve emissions reductions. In years past, the dialogue surrounding ethanol use and ethanol policies has focused on the ability to produce the product domestically.

While feasible for some countries where factor endowments are favorable and where policies got off the ground, the conversation stalled in others that want to make reductions but lack domestic feedstock.

Those countries are almost completely reliant on imported energy and yet apathetic to a transportation energy matrix that includes imported ethanol, simply because it is imported. There is overwhelming supporting evidence on the compatibility of higher-level ethanol blends and engine technology, with current infrastructure, product mobility and various climate conditions.

Our industry must advocate moving beyond the current standstill and status quo of renewable fuels frameworks that exist on paper into the realm of implementing energy diversification. We must find a way to jump the hurdles and push through the barriers to expand substantively and more quickly ethanol’s role in this change—even if it’s only incremental at first.

Ethanol provides a pathway to achieve the reductions to which these countries have committed. It is available globally and it provides a proven pathway to success of our industry—a true energy diversification solution.

By 2022, the U.S. Department of Agriculture estimates average greenhouse gas (GHG) reductions will reach 50 percent nationwide.

The solution to achieving these commitments is already in our hands.

Both 2020 and 2025 will be critical benchmarks for how ethanol and environmental advocates have advanced and elevated the role of ethanol in the overall climate dialogue.

The success of COP partners’ NDCs is inextricably linked to further inclusion of ethanol, its producers and its importers. To get there, we must work together as a unified industry, develop smart trade policies and promote the environmental, human health and economic benefits of ethanol relative to other energy sources.

12 | ETHANOL PRODUCER MAGAZINE | FEBRUARY 2020

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Clearing the Air

All the Wrong MOVES

Dave VanderGriend

President, Urban Air Initiative CEO, ICM Inc. 316.796.0900

davev@icminc.com

Some years ago, Tom Cruise played a talented young athlete in a movie called “All the Right Moves.”

Well, we’re not in Hollywood and this isn’t a movie where we get to write the script. What is playing out in front of the ethanol industry is the reality of all the wrong MOVES—the Mobile Vehicle Emissions Simulator (MOVES) model. This U.S. EPA model is part of a perfect storm forming that could send ethanol further backwards after a year of low prices, shrinking markets and a constant erosion of the Renewable Fuel Standard.

A key provision of the RFS was a required anti-backsliding study that was viewed as a firewall to ensure ethanol and other renewables would not lead to a deterioration, or backsliding, of clean air standards. So once again our fate is in the hands of EPA, which is currently conducting this study, relying heavily on the MOVES model and the seriously flawed data that was used to create it. This model indicates ethanol blends increase various emissions, creating a triple threat to future ethanol use. First, states are required to use this model when developing state implementation plans (SIPs) to comply with federal clean air standards. Second, this model will be used by EPA to establish ethanol volumes post-2022 when the RFS becomes largely discretionary. And third, the anti-backsliding study will be the justification for a permanent reset of RFS volumes.

At the Urban Air Initiative, we have conducted numerous studies challenging EPA data that went into this model, including comments we filed back in 2017.

Certainly, models are needed to assist states to make the right fuel choices, but those models are only accurate to the extent the data inputs are accurate. And the problem lies in the fact that the test fuels and procedures were designed by the petroleum industry. That is akin to asking Chevy to rate Fords, or having Coke design a taste test for Pepsi.

But this is fixable. We need parity in fuel blending and testing. EPA is required to use the best available science and is simply not doing so. All the affected parties need to be involved in the process, which means oil, ethanol and automakers. We are working with these stakeholders on a fuel blending guide that will be completed later this year. It’s a step toward creating consistency in fuel testing.

Yet the ramifications of faulty and flawed emissions data cannot be overstated. Deliberations over SIPs are taking place right now in areas like Colorado’s Front Range where they are considering elimination of any ethanol blend. Congressionally mandated studies are being prepared. And the post-2022 RFS requirements are being developed.

We have all worked too hard for too long in our industry to be considered a dirty fuel and let this storm take shape. Our governors can play a key role, given that states are responsible for complying with clean air standards. Let’s communicate to these state leaders that ethanol is the clean air choice and tell EPA to make the right MOVES and fix its models.

14 | ETHANOL PRODUCER MAGAZINE | FEBRUARY 2020

PUSHING STANDARDS BREAKING BARRIERS

MAKING THE IMPOSSIBLE POSSIBLE Pushing Standards / Breaking Barriers /

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Pushing past the standards to find better fermentation solutions is in our DNA. With a proven track record, we’ve helped produce more ethanol than any It’s what LBDS does. other fermentation company. But we aren’t satisfied with that.

LBDS continues Whether your ethanol plant is taking small steps or giant leaps, LBDS is here to make your impossible, possible. to explore possibilities to optimize For over three decades, we’ve helped our partners produce more alcohol throughand ourbreak proven fermentation fermentation new production solutions. LBDS is continuing to explore every possibility to optimize your operation andabout break being new a barriers.

(Something production barriers. partner today and tomorrow) At LBDS, we’re always at the fermentation forefront. ©2019 Lallemand Biofuels & Distilled Spirits

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BUSINESS BRIEFS PEOPLE, PARTNERSHIPS & PROJECTS

MN Biofuels recognizes E15 retailer The Minnesota Bio-Fuels Association named Hutchinson CoOp its 2019 Distinguished Retailer in Bloomington on Dec 13.

“Hutchinson Co-Op was a recipient of the highly successful Biofuels Infrastructure Partnership program,” said Tim Rudnicki, executive director at MN Biofuels. “It began offering E15 at the end of 2018 and today E15 sales comprise nearly half of its fuel sales.”

Hutchinson Co-Op also offers E30 and E85.

“We believe in offering high quality products that are also environmentally friendly and made in Minnesota,” said Dean Brehmer, station manager at Hutchinson Co-Op.

Besides the award, MN Biofuels also released its 2019 Annual Report to its producer and vendor members.

The report highlighted the various projects the organization undertook during the year as well as the many challenges the industry faced in 2019.

“By all accounts 2020 may be just as challenging as 2019. But with your ongoing support, we will continue to fight on behalf of Minnesota’s ethanol industry and deliver tangible results,” Rudnicki said.

USGC promotes Qian The U.S. Grains Council promoted Stella Qian to manager of global ethanol programs in the organization’s Washington, D.C., headquarters. Her new role follows the promotion of Lucas Szabo to manager of global ethanol market development.

Qian Qian previously served the USGC as manager of trade teams, joining the organization in 2012. In this capacity, she coordinated planning and travel logistics for teams visiting the U.S. on trade missions.

In her new position, Qian will help scale up global ethanol resources, implement programs and develop strategy for ethanol market development efforts.

“During her tenure at the council, Stella has made critical contributions throughout the Unified Export Strategy process, in program standardization and leading China ethanol training efforts—preparing her to make immediate and lasting contributions in our effort to expand global ethanol trade,” said Brian Healy, USGC director of global ethanol market development. “Stella’s institutional experience will further build cohesion and integrate the ethanol effort across all program areas and offices, a critical element for long-term success.”

Qian is originally from Hangzhou, China. She is a graduate of George Washington University, where she earned a master’s degree in tourism administration with a concentration in event and meeting planning.

Gevo appoints chief financial officer Gevo Inc., a renewable fuels and chemicals manufacturer, has appointed Lynn Smull as chief financial officer.

“I’m glad to have Lynn join our team,” said Patrick R. Gruber, Gevo’s CEO. “He has a lot of experience in project financing and energy projects, both extremely relevant to us. Lynn is a good fit and I expect him to hit the ground running.”

Before joining Gevo, Smull most recently served as chief financial officer of One Energy Enterprises LLC. He has 30 years of

16 | ETHANOL PRODUCER MAGAZINE | FEBRUARY 2020

finance and commercial experience on corporate, investment banking and private equity platforms including Calpine Corp., Bank of America, Salomon Brothers and Bechtel. Smull has managed large capital raisings, mergers and acquisitions transactions and corporate finance and accounting functions in the renewable and conventional power and energy sectors, as well as in several other heavy infrastructure sectors.

Business Briefs

Lee Enterprises adds new team member Lee Enterprises Consulting, a bioeconomy consulting group, has added Sushil Adhikari to its team of experts. Adhikari has a Ph.D. in Biological Engineering and is a Professional Engineer, currently serving as the director for Adhikari the Center for Bioenergy and as an alumni professor in the Biosystems Engineering Department at Auburn University. He teaches biosystems engineering and conducts research related to biofuels and bioproducts, especially in the field of thermochemical conversion, with his research efforts focused on biomass gasification, pyrolysis, algae liquefaction and upgrading, anaerobic digestion and hydrogen production. Adhikari has published 110 peer-reviewed journal articles and eight book chapters

and has been cited more than 6,800 times. He has received numerous awards and recognition, including being named as a “World’s Most Influential Mind” by Thomas Reuters in 2014.

“Dr. Adhikari’s work has been supported by the National Science Foundation, the U.S. Department of Agriculture, the Department of Energy, the Electric Power Research Institute, the Southeastern SunGrant, the Alabama Agricultural Experiment Station and many others,” said Wayne Lee, CEO of Lee Enterprises. “His work with us will be in the areas of thermochemical conversion, biomass gasification, pyrolysis, algae liquefaction and upgrading, anaerobic digestion, and hydrogen production, and we could not be more pleased to have this depth of talent in our group.”

Kemin Biofuels hires new senior field technical sales manager Kemin Biofuels hired Jim Kacmar as a senior field technical sales manager. Kacmar will focus on the company’s growing portfolio of enzymes and fermentation aids with emphasis on cellulosic ethanol production. “We are very excited to announce that Jim has joined our team,” said John Phillips, Kemin Biofuels leader. “His broad industry experience coupled with rigorous technical knowledge and personal integrity will allow us to further the interests of all our customers. Kemin Biofuels is a young but fast-growing entity in the ethanol and broader biofuels industry.”

Kacmar comes from Edeniq Inc., where he was director of engineering and operations and responsible for pilot-scale testing of new technologies, ensured U.S. EPA- and California Air Resources

Board-compliant trial performances, oversaw engineering and field service teams, and successfully registered multiple EPA- and CARBapproved cellulosic ethanol pathways. He is an industry-recognized expert in cellulosic ethanol production and a sought-after presenter at industry events.

“It is with tremendous enthusiasm that I accepted the position at Kemin,” Kacmar said. “The company has the right attitude towards both team members and customers and, as a family-owned U.S. company that has been in business for 58 years, it has the principled approach to conducting business that I was seeking. That attitude, along with its technological resources, has positioned us to meet the needs of customers now and in the future.”

Pink at the Pump raises over $20,000 Iowa drivers raised over $20,000 for breast cancer research and support services simply by choosing cleaner-burning Unleaded88 during the fourth annual Pink at the Pump campaign, cosponsored by the Iowa Renewable Fuels Association and Iowa Corn Promotion Board.

Seventy-four retail stations donated 3 cents of every gallon of Unleaded88 sold from Oct. 1 through Oct. 31 to the National Breast Cancer Foundation and The Hormel Institute. Unleaded88, also known as E15, is a fuel containing 15 percent ethanol and is approved for use in all 2001 and newer vehicles.

“We are thrilled that this year’s Pink at the Pump campaign featured a record number of participating stations and raised a record-

18 | ETHANOL PRODUCER MAGAZINE | FEBRUARY 2020

breaking amount of funds for such a worthwhile cause,” said Cassidy Walter, IRFA communications director. “Pink at the Pump is an exciting promotion because not only does it support such important research and services, but it shines a light on the fact that biofuel blends like Unleaded88 are reducing the amount of toxic emissions coming out of our tailpipe and helping keep our air cleaner and healthier to breathe.”

“We truly appreciate every consumer who chose homegrown Unleaded88 at the pump during October,” said Kelly Nieuwenhuis, ICPB director and farmer from Primghar, Iowa.

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Markets

THE VERSATILE

ETHANOL MOLECULE Ethylene, with a similar molecular structure to that of ethanol, has enormous market opportunity around the world.

By Susanne Retka Schill

Knock a water molecule off to synthetic fibers, plastics and ethanol and you’ll get ethylene, packaging. Global ethylene production C2H4—the most widely pro- in 2016 was greater than 150 million metric with more than half going to produce duced organic chemical globally tons, polyethylene. that is the basis for scores of The biggest problem for ethanol proother chemicals and hundreds ducers is that virtually all of that ethylene (maybe thousands) of products, currently is produced from either crude oilfrom antifreeze and surfactants based naptha or natural gas-based ethane, with shale gas promising to be the lowest-

22 | ETHANOL PRODUCER MAGAZINE | FEBRUARY 2020

cost feedstock for years to come in the U.S. But fossil sources are losing favor among those looking to reduce carbon footprints. And that represents a big opportunity for ethanol producers.

At 2 percent, the market share for biobased polymers is still quite small, with 7.5 million metric tons produced in 2018, according to the German Nova-Institute. But while liquid transportation fuel demand is

MASTER OF MARKETS: Petron Scientech provided the technology for the Jilin Zhongxin Chemical Group plant located in Jilin, China. It converts both ethanol to ethylene and ethylene to ethylene oxide.

PHOTO: PETRON SCIENTECH

forecast to decline in the decades ahead, a United Nations Global Chemicals Outlook projects the size of the global chemical industry—conventional and biobased—to double by 2030.

“We’re looking to capture a small percentage of the growth that’s going to happen in these chemicals,” says Frank Liotta, executive vice president and chief operating officer of New Jersey-headquartered

technology provider Petron Scientech Inc. New capacity is being added every year to keep up with demand, he adds, especially for polyethylene and glycols.

Petron’s technology has been converting ethanol to renewable chemicals for nearly 30 years. “Originally, we got into it because there were companies that needed ethylene and it was either too expensive to ship in or the company did not want to in-

vest billions of dollars to put a cracker in to produce ethylene.” The investment cost per unit to produce ethylene from ethanol is only 15 to 20 percent of the cost to produce it in a steam cracker, he explains. Ethanolto-ethylene is a catalytic process followed by distillation for purification, with yields better than 99 percent.

Petron is working with partners through its sister company, BioChem, to

ETHANOLPRODUCER.COM | 23

Markets

develop fully integrated biorefineries in India and Portugal. Integrating the ethanol production process with ethylene reduces processing costs and eliminates logistic costs for transporting ethanol, Liotta says.

Completion of the first plants is expected in 2022 and 2023.

While the U.S. has just one ethanolto-ethylene and ethylene oxide (EO) plant (Croda in Delaware), Petron has more than one U.S. customer considering its modular technology. “In those cases, they would be buying the ethanol and producing ethylene oxide on the site where they make surfactants or other EO derivatives,” Liotta says.

On-site production of ethanol-based EO is competitive, he says, if you factor in the increasing cost of shipping the hazardous chemical.

Biopolypropylene has been in Brazilian petrochemical manufacturer Braskem’s

portfolio for a decade. Braskem’s plant converts close to 500 million liters (130 million gallons) of sugarcane ethanol first to ethylene and then into 200,000 tons of polyethylene annually, at full capacity. “We have hundreds of clients globally, primarily using it for bottles and packaging, but also for automotive parts and other products,” says Marco Jansen, circular economy and sustainability leader for Europe and Asia.

Expecting to see continued double-digit growth that’s closer to 20 than 10 percent each year, Jansen says Braskem is currently evaluating expanding capacity.

“In general, although it doesn’t have the image, plastics are one of the more sustainable products, because of low energy consumption compared to glass or paper,” he says. “The problem is it is so durable. Its negative image is more due to waste than the product itself.” Rather than working to-

ward biodegradable plastics, which would return the carbon to the atmosphere, he suggests recycling is the better approach to concerns about the environmental impact of plastic waste.

Sugarcane as the ethanol feedstock adds to the plastic’s sustainability profile, because of its carbon footprint as a perennial crop and the standard industry practice of generating electricity from waste streams. Braskem also has developed its own sustainable ethanol sourcing program that looks at biodiversity, the use of fertilizer, production practices and social and environmental programs, verified with external audits. “It’s very broad,” Jansen says.

“We look to be sure all the regulations are obeyed and for improvement projects that indicate the suppliers are trying to become more sustainable from both social and environmental aspects.”

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Taking Flight

Jet fuel from ethanol is another promising market with potential to grow.

“The aviation sector is crying for sustainable aviation fuels,” says Freya Burton, chief sustainability officer for LanzaTech.

The company is in the engineering stage of scaling up the catalytic conversion of ethanol to synthetic paraffin kerosene— alcohol to jet fuel, or ATJ. Developed in partnership with the U.S. Department of Energy’s Pacific Northwest National Laboratory, LanzaTech has taken the PNNL process from bench to pilot scale, and is now planning a 10 MMgy demonstration commercial-scale plant at its Freedom Pines research facility in Soperton, Georgia. “That’s where we scale up other chemicals that we make besides ethanol,” Burton says. “We expect mechanical completion of the ATJ in 2021, and are looking at about 10 MMgy for the first site, scaling up to 30 MMgy facilities, almost in parallel.” LanzaTech will be sourcing sustainably produced ethanol, not producing it on-site in Georgia.

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facility from failed cellulosic developer Range Fuels. Since 2012, LanzaTech has used the facility as a research center to develop its hybrid process that uses industrial or biomass-based gases to grow bacteria, which, in turn, produce ethanol or other chemicals.

The ATJ has been used in two test flights, one to Europe and the other to Japan, and has met ASTM standards for synthetic jet fuel, with blending allowed up to 50 percent. The potential market is substantial. Total global fuel consumption by commercial airlines totaled 95 billion gallons in 2018.

In addition to ATJ, LanzaTech is working with its Chinese partners to develop new markets beyond fuel blending.

“We’ve taken some of the ethanol and are converting it into PET for consumer goods, synthetic fiber for apparel or packing materials,” Burton says. The commercial-scale plant recycling steel production emissions came online last year in May and has produced more than 10 million gallons since, Burton says. “The scale up is going well.” Other projects are in various stages of engineering, with those in

Belgium, India and South Africa recycling waste gases, and the Aemetis project in California using LanzaTech technology to convert gasified agricultural residues to cellulosic ethanol.

Export

The U.S. Grains Council is looking to capitalize on the growing interest in industrial ethanol, ATJ and bioplastics as a potential outlet for U.S. ethanol exports. Speakers from India and Nigeria addressed the topic at the Global Ethanol Summit last October and the council is working on research that will be released later this year.

At the Global Ethanol Summit, Rakesh Bhartia, CEO of India Glycols Ltd., described his company as a pioneer in using ethanol to produce bioglycols, bioethylene oxide and derivatives. With the second-largest population in the world and a growing economy, India has no petroleum reserves of its own. The U.S. Department of Agriculture’s Foreign Agricultural Service’s 2019 Global Agricultural Information Network report on India biofuels projects the country’s 2019 ethanol consumption will reach a record 3.8 billion liters, of which 2.6 billion liters will be produced domestically. As the country does not allow ethanol imports to be used for fuel, its domestic supplies are used for gasoline blending, which is expected to reach a 5.8 percent blend rate in 2019—a record, but far from the country’s E10 goal. Imported ethanol is used to fill the demand for industrial ethanol, which in 2018 totaled 633 million liters.

The second speaker at the summit described the situation in his West African nation of Nigeria where industrial ethanol is primarily used in pharmaceuticals and consumer products. Olaoluwa Bamikole, consultant and founder of Zenith Agroethanol Nigeria, explained that although the country allows E10, very little is used

as there are no blending facilities. Furthermore, about 60 percent of the nation’s 200 million people live in economically poor rural areas with few cars.

“The USGC’s objective is to export ethanol, but unfortunately, the present government does not want that,” Bamikole says. “They want to develop local production. I wish an American company would show interest in developing ethanol plants here. We have cassava and can use sorghum, molasses and corn.”

A USGC report following a November trade mission to Nigeria and nearby Ghana noted Nigeria was the 14th largest market for U.S. ethanol, importing 18 million gallons in the 2018-’19 marketing year to supplement its domestic cassava-based ethanol production.

Bamikole points to another potential market for ethanol in African nations reliant upon firewood and kerosene for cooking stoves—an issue of indoor air quality and, in the case of firewood, the safety of the young girls who traditionally collect it.

Bamikole estimates that if all families in Nigeria alone, with its population of 200 million, used 1 to 2 liters of ethanol per day for cooking, it could amount to 42.8 billion liters annually.

Cooking fuel, industrial ethanol, jet fuel, bioplastics—opportunities exist for alternative and lucrative markets. “Should you have downturns in the fuel market, you would have chemical markets to give some diversification of their product mix,” Liotta says.

“We see ethanol as this amazing substrate,” Burton says. “It is easily transportable. We can make it from a variety of feedstocks, and turn it into fuel and products that would otherwise come from fossil resources.”

Author: Susanne Retka Schill Freelance Journalist retkaschill@yahoo.com

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Policy

ROADBLOCK TO

HIGHER BLENDS The U.S. EPA’s rule allowing year-round sale of E15 is a monumental achievement for the ethanol industry, but might also stymie growth for higher blends. Challenges to the rule could take the issues to court.

By Matt Thompson

REQUEST FOR REVIEW: Operators of blender pumps like this one would be classified as fuel manufacturers under the U.S. EPA’s rule allowing year-round sale of E15. Urban Air Initiative, along with other entities, has sent a petition to EPA asking it to review the rule. Jump Start is one of the retailers that has signed on.

PHOTO: URBAN AIR INITIATIVE

30 | ETHANOL PRODUCER MAGAZINE | FEBRUARY 2020

ETHANOLPRODUCER.COM | 31

Policy The U.S. EPA’s move to allow the year-round sale of E15 is an important stepping stone toward the ethanol industry’s goal of making mid-level blends a more mainstream choice for drivers.

And while it’s been celebrated as a major achievement, there are some limitations to the rule. Specifically, the rule limits blends higher than 15 percent ethanol, says the Urban Air Initiative and a group of ethanol advocates who have challenged that portion of the rule in court. “We believe that there’s nothing more important to the growth of our industry than to have the ability to sell mid-level blends,” says Dave VanderGriend, president of UAI. “I’m specifically talking about blends like E20, E25, E30, any of those type of blends is what the fine print of this rule is going to severely limit moving forward.”

VanderGriend told Ethanol Producer Magazine in August, when the petition was filed, that the organization supports the provision that allows the year-round sale of E15, but “EPA is notorious for slipping in little comments here and there that, I would say, create ambiguity around some of the nuances of this rule.”

The Fine Print

The language in the E15 rulemaking under fire seeks to block the use of fuels with blends between 16 and 84 percent ethanol from being considered substantially similar to certification fuel. “According to the 1990 Clean Air Act, you have to have a product that is similar to the products used in certification fuel, and if you do, you can use varying amounts,” VanderGriend says.

“We believe, according to the law, you’re allowed to blend more ethanol under the substantially similar rule, and this rule looks to block that ability.”

Trevor Hinz, director at UAI, says, “They used the sub-sim argument to approve E15 and if they would have used the same argument and same data to approve E15, there’s no reason they shouldn’t have approved E20. So our perspective is, ‘If E15 was OK using the same interpretation and data, why didn’t you approve E20?’”

In addition to limiting blends higher than E15 and lower than E85, UAI says the rule places burdens on fuel retailers using blender pumps to dispense mid-level blends. They say the rule classifies those retailers as fuel manufacturers or refiners. So UAI has submitted a petition for review to EPA. “Essentially the E15 RVP rule now considers blender pump operators who are selling anything above E15 and less than E85 fuel manufacturers or refiners and subject to the same administrative requirements that a refiner would be subject to,” Hinz says. “We’re simply saying that’s contrary to EPA’s authority. It’s arbitrary, capricious and abuse of discretion or otherwise not in ac-

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32 | ETHANOL PRODUCER MAGAZINE | FEBRUARY 2020

PROBLEMS AT THE PUMP: The fine print in the U.S. EPAâ&#x20AC;&#x2122;s E15 rule classifies blender pump operators as fuel manufacturers, making them subject to the requirements of refiners.

PHOTO: URBAN AIR INITIATIVE

ETHANOLPRODUCER.COM | 33

Policy

cordance with the law, so we’ve asked EPA to go back and reconsider that.”

Despite the issues that could arise for retailers who are selling mid-level blends, Hinz says UAI says only two small retailers have signed the petition: Jump Start and Jackson Express. Both declined to comment for this article. “I think we’re the only ones in the industry that has brought this aspect of the RVP rule to light and I guess we don’t have as loud a megaphone as other industry stakeholders have,” Hinz says.

Hinz says some people think EPA will interpret the rule differently from how UAI has. “That’s fair,” he says. “However, our concern is, we don’t feel EPA always has our industry’s best interests in mind, and if they have the opportunity to interpret something that prohibits our industry from growing, there’s a likelihood that they’re going to use that at some point in the future and that gives us cause for pause and honestly gives us a lot of heartburn. … Our point of view is that as long as the current rule is written as it is, EPA has capped the ethanol industry at E15. Simply hoping the EPA interprets the rule in a favorable way for ethanol is not a risk we are willing to take.”

Hinz says retailers who are using blender pumps and selling blends higher than E15 should continue to sell their fuel.

“I wouldn’t change any direction at this point,” he says. “We’re certainly continuing to encourage our retail operators to sell mid-level blends and having great success.

In many of our stations, E30 is outselling E10. So it’s proving that, if given the chance, consumers will purchase high-quality, low-carbon mid-level blends.”

Education for retailers, however, is important, Hinz says. “We would be more than happy to talk to any blender pump retailer. We can make our attorneys available to talk to them, so they can understand the language that gives us concern in the rule.

So that would be my first recommendation, to educate themselves on what the issue is.”

Beyond creating undue burden for retailers using blender pumps, Hinz says the issue also raises concern with the amount

of money spent installing the pumps through programs like the U.S. Department of Agriculture’s infrastructure development grants. “If EPA prevails and is able to use this language to cap the industry at E15, from our perspective, that’s a huge hit to the return on investment for those blender pumps,” he says.

Other Voices

South Dakota Farmers Union has also signed onto the petition and supports the lawsuit. Doug Sombke, president of SDFU, says although his group represents growers, the issue is broader than just supporting the corn growers. “Why would you make such a rule? EPA is supposed to clean things for us and make things better for us environmentally and for our health. And this just doesn’t do that. It stops it at E15, which we know isn’t high enough to remove all the poison that’s in gasoline.”

Sombke says there hasn’t been much discussion within the industry about the restrictions on higher blends, as the industry waits for the agency to take action. “I think that they’re just waiting for action to be taken by EPA and the lawsuit, so I think that’s why,” he says. The Renewable Fuels Association and The American Coalition for Ethanol declined to comment for this article. Growth Energy did not respond to requests for comment before print.

Hinz says waiting is the next step for both the blender pump issue and the restrictions on mid-level blends. “Regarding the petition for reconsideration, EPA has acknowledged they are considering our request; we do not know when the EPA will render their decision,” he says. “Regarding the petitions for judicial review filed in the U.S. Court of Appeals, we are awaiting the court to issue a briefing schedule. Once a schedule is set, we will finalize and submit to the court our arguments.”

The restrictions on higher blends is also important for Glacial Lakes Energy in South Dakota. GLE is another of the petitioners, and the company has been a vocal advocate for using E30 in nonflex fuel vehicles via its E30 Challenge. Jim Seurer, CEO

34 | ETHANOL PRODUCER MAGAZINE | FEBRUARY 2020

of GLE, along with other ethanol advocates, said in a recent letter to South Dakota Gov. Kristi Noem, “The importance of the GLE E30 Challenge is that multiple studies show E30 blends work in all standard light-duty vehicles (‘legacy vehicles’) on the road today. … Unless EPA reverses course and recognizes that E30 blends can be legally sold and used in legacy vehicles, our companies and other E30 supporters will challenge EPA’s indefensible misinterpretation in the courts.” Seurer adds that, unless EPA accepts comments regarding E30, he expects a legal challenge to be filed when the SAFE Rule is finalized.

Sombke says the SAFE rule also will be crucial. “We’re actually looking forward to when they bring out the SAFE rule and we’re going to really stand strong on that issue, and I think that’s where we really win,” he says. “This [mid-level blend restriction] would be a setback, there’s no doubt about it, but where we really win would be in the SAFE rule.”

Sombke also applauds both Noem’s and GLE’s efforts in promoting E30 blends. “Gov. Noem has really stepped up to the plate and taken this all on, along with Gov. [Tim] Walz of Minnesota,” he says.

“We’ve encouraged other states to do the same thing, and I think that as Gov. Noem and Gov. Walz go forward, they’ll get more interest.”

No Threat to Year-Round E15

VanderGriend says filing the lawsuit and the petition weren’t meant to undermine the year-round sale of E15 but was an offensive—rather than defensive—strategy.

“If we don’t take this step, you can’t take it back. You can’t do it later,” he says. “This is the only strategy to really force EPA to clarify the rule around blender pumps and higher blends of ethanol. Are they going to try and limit that? This is the only way we see today to bring this to the surface; to force the dialogue in the discussion with EPA about mid-level blends.”

Hinz says although their actions raise concerns with portions of the rule to allow

CHALLENGING TIMES: Glacial Lakes Energy in South Dakota has been a vocal advocate for using E30 in nonflex fuel vehicles through its E30 Challenge. GLE is one of several entities challenging the U.S. EPA’s limit to blends higher than E15.

PHOTO: GLACIAL LAKES ENERGY

the sale of E15 year-round, they’re supportive of the decision to grant the RVP waiver to E15, and their actions shouldn’t impact the summertime sale of the fuel.

“Our attorneys have assured us there’s almost zero chance that EPA would remand the rule because of our issues with the language in two or three places,” he says.

VanderGriend agrees. “This is not a petition that harms the E15 rule in any way, shape or form. It really says, ‘EPA, you didn’t go far enough. Your testing for E15 also included E20, so why limit it to E15?’”

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Education

Phil Smith, Aurora Cooperative Elevator Co., Aurora, Nebraska

Mike Joy, Nebraska State Fire Marshal fuels safety division

BLENDED CURRICULUM

The Nebraska Ethanol Board offers workshops to help retailers learn more about E15 and higher blends. Other states offer help with grant application processes, or are pushing for legislative encouragement for mid-level blends.

By Lisa Gibson PHOTOS: NEBRASKA ETHANOL BOARD

36 | ETHANOL PRODUCER MAGAZINE | FEBRUARY 2020

Ron Lamberty, senior vice president of the American Coalition for Ethanol

E15 Retailer Workshop attendees in Kearney, Nebraska, on Aug. 25 listen to a presentation from Randy Gard, chief operating officer of Bosselman Enterprises.

Attendees of the E15 Retailer Workshop Nov. 13 in Norfolk, Nebraska

Randy Throop (foreground) and Mike Joy, both representing the Nebraska State Fire Marshal fuels safety division

ETHANOLPRODUCER.COM | 37

Education Considering updating his fuel dispensers, Dan O’Neill, president and CEO of Kwik Stop Convenience Stores, attended a Nebraska Ethanol Board E15 Retailer Workshop.

Now, O’Neill will be adding blender pumps for E15, E30 and E85 at five Kwik Stop locations.

O’Neill is one of many attendees of the NEB’s workshops—one held in August and one in November—who had positive feedback, says Roger Berry, administrator with NEB. Each meeting has hosted about 25 to 30 attendees representing retailers of varying sizes, and many who didn’t have E15 capability before are now looking into it, Berry adds. The workshops are designed to cover the process of preparing to sell

E15 blends and higher, from start to finish.

“We’re getting together all of the steps for retailers to start installing higher blends,” Berry says, adding that the education focuses not just on E15. “We’re calling it E15 workshops, but we’re focusing on higher blends.”

He doesn’t have an official count of how many retailers have walked away from the sessions ready to move forward with E15, but says he has heard from several who are “getting the wheels in motion.”

In Class

NEB’s workshops are held in a classroom setting and broken down into a few sessions. First, a fire marshal speaks to the group, then a representative from weights and measures outlines labeling, then another speaker addresses equipment needs, a retailer details his or her own experience, and finally, financial resources are explored.

Infrastructure is usually the biggest obstacle and the main topic attendees want to discuss, Berry says.

Douglas Rasmussen, refined fuel and lubricants leader at Frontier Cooperative in Brainerd, Nebraska, attended the November workshop and says the fire marshal and speakers representing other retailers were particularly valuable. “Hearing from other companies tell about their experiences was not only interesting, but I gained what I would call valuable insight to the process,” he says.

“That’s crucial,” Berry says of retailer input. “They’re learning from someone who is doing it.”

O’Neill adds that input from weights and measures experts was crucial, as well.

“There has been some confusion on the part of operators regarding what we can and cannot sell, when we can sell it, and how it needs to be labeled,” he says.

Workshops have had speakers from ethanol trade groups on their agendas, too.

The next is Feb. 20 in Lincoln. The idea is to keep hosting them around the state to encourage retailers to sell higher blends and answer any questions they might have about

38 | ETHANOL PRODUCER MAGAZINE | FEBRUARY 2020

it. Berry says the workshops were prompted by the Reid vapor pressure waiver for E15.

After the waiver was granted, NEB saw a need to answer questions and offer education to retailers to get them started, he says.

Other Resources

Cassidy Walter, director of communications for the Iowa Renewable Fuels Association, says the state doesn’t have workshops, but IRFA does offer guidance on funding sources—such as the Iowa Renewable Fuels Infrastructure Program—for retailers looking to install pumps.

“We don’t find that retailers have a hard time here in Iowa,” Walter says of the lack of need for educational sessions. “We can help them understand the [Iowa Renewable Fuels Infrastructure Program] grant process. Iowa regulations are pretty straightforward. We don’t see that retailers struggle to understand regulations.”

At least four stations in Iowa added E15 after the waiver in summer of 2019, she says. “That in itself is evidence to me that retailers are looking at that.”

In South Dakota, the Ethanol Producers Association was instrumental in securing ongoing legislative appropriations for South Dakota’s ethanol infrastructure fund in 2018, says Dana Siefkes-Lewis, president of the SDEPA and chief administrative officer of Redfield Energy LLC in Redfield, South Dakota. Siefkes-Lewis says the fund is designed to award incentive grants to retailers for purchase and installation of blender pumps and tanks and associated piping, storage systems and equipment; for purchase of pumps and pump equipment to dispense gasoline containing up to 85 percent ethanol; and to encourage increased use of ethanol.

“SDEPA is currently focused on statewide policies to promote the use of higher biofuel blends that benefit consumers, retailers, farmers, municipal governments and taxpayers across South Dakota,” SiefkesLewis says.

South Dakota, Iowa and Nebraska aren’t alone. Many states with ethanol pro-

duction have programs aimed at expanding the sale of E15 and higher blends, some with a focus on educating retailers.

Berry says Nebraska’s retailer workshops could be a roadmap for other states to use as they focus on helping new and more retailers offer E15. “I would encourage all states to do this,” he says.

“I think anyone who wants to remain relevant in the retail fuel industry should attend this workshop,” O’Neill says. “If

nothing else, to stay educated on trends, regulations and guidelines. It is especially important now to support our state ag economy.”

Author: Lisa Gibson Editor, Ethanol Producer Magazine 701.738.4920 lgibson@bbiinternational.com

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Information Technology

AN OUNCE OF PREVENTION With a global rise in cyber threats—including within the ethanol industry—experts offer security tips and best practices.

By Matt Thompson

It’s the stuff of action movies and suspense novels: Criminals are holding something or somebody for ransom. What was once a far-fetched story line is now an increasingly real concern: ransomware. In these incidents, malicious software is installed on a computer or computer system, preventing users from accessing data unless a ransom is paid to the hackers.

Melissa DeDonder, senior associate at Kcoe Isom, says, “I would say, just a general statement, all industries have experienced an uptick in cyberattacks, and it’s going to continue to be an uptick unless those companies begin to do something to protect their data and their customer data.” She adds that several of the company’s ethanol plant clients have had a cyberattack of some sort in the past year or so.

And those attacks can have a big impact on an ethanol plant. Lyle Schlyer, president of Calgren Renewable Fuels, which operates a plant in California and one in Kansas, says both of the company’s plants have been victims of ransomware. “I think they’ve tried to hit us—I have no idea whether it’s multiple groups or the same group—twice at each facility,” he says. And, unfortunately, preparing for and responding to such attacks has become the cost of doing business. “No reasonable amount is too much to pay to have the latest and greatest firewalls and the like, but yet we still get hit,” Schlyer says.

And once a company has been breached, DeDonder says, that company is more likely to be breached again. “For these clients that have already had ransomware, word’s going to get around that that was paid, and those bad guys are going to know how to hit you again,” she

RENEWABLES RANSOM: Calgren Renewable Fuels has been hit with ransomware at both its California (pictured) and Kansas locations. The malicious software holds data hostage until the victim pays a ransom to regain access.

PHOTO: CALGREN RENEWABLE FUELS

ETHANOLPRODUCER.COM | 43

Information Technology

says. Schlyer agrees and says the company fully expects to be hit again.

Full Protection

Schlyer says since the breaches, the company has made changes to try to prevent future attacks. He says access to the plants’ distributed control systems is limited. “We do not allow anybody to touch the systems that actually run the plants,” he says. “We have DCS systems, and they are not connected.”

And while the systems aren’t connected to the internet, there are still threats to the system plant managers should be aware of, according to Carson Merkwan, business development manager for Direct Automation. He says many plants hold to the philosophy that because the DCS isn’t connected directly to the network, it’s protected from hackers. “That isn’t true because what will happen is that invariably, you’re going to end up with a vendor that wants to have data pulled in from one of their PLC scans. … And we’ve seen that happen several times—people bypass a firewall to get something in and, if they leave that set up where the firewall’s bypassed, within a few days they’ll probably have something like crypto locker on their system.”

He adds that seemingly innocent acts, like plugging in a USB drive or charging a cell phone through a computer’s USB port can be potential sources of breaches. “These things are kind of sneaky, but not only that, you have to get updates once in a while,” Merkwan says. “If you’re sitting there with a DCS that’s been isolated for five years and then you expose yourself for one second, there are so many things out there that could hurt a system that hasn’t been updated in that long. It wouldn’t take long for it to do a lot of damage.”

Up to Speed

Because there are so many potential avenues for hackers to access a system, DeDonder and Merkwan agree that training employees in cyber security is one of the most important factors in preventing breaches. “You’ve got to train managers and operators and everybody,” Merkwan says. “We don’t want to be stringing cable across networks, across firewalls and bypassing firewalls. We don’t want to be plugging in USB sticks into the networks that are supposed to be isolated. We’re going to make sure those are locked down and secure.”

DeDonder agrees. “Anybody that has any type of email, internet access, anything, needs to be trained as to what a phishing attack would look like,” she says. “People are your biggest risk.

They’re also your biggest safeguard, so I think that is one of the most important things.”

She also suggests regular tests to make sure those employees stay up to date on cyber security techniques. “Test those people,” she says. “Make sure you have a phishing email go out once a quarter or once a month or whatever it might be to make sure that it comes through and they really are trained appropriately.”

Some tips for recognizing phishing or hazardous emails include verifying any links embedded in emails to make sure they’re directing to the correct sites. “If there’s something that you want to go to, just go to a browser and type it in yourself,” DeDonder says. “If it comes from a source that you know, but it seems a little odd, just try to think critically about it,” she says. She also says to be wary of emails from known sources that ask you to act quickly.

“Anything that’s urgent usually should raise a red flag. And if it’s something

44 | ETHANOL PRODUCER MAGAZINE | FEBRUARY 2020

like that, reach out to that person directly and say, ‘Hey, did you send this?’ before you actually just jump on it.”

DeDonder and Merkwan also suggest inventorying all a plant’s IT assets. DeDonder says it’s important for plant managers to know exactly what pieces of IT equipment a plant owns, how those assets are connected to the network, and what their potential vulnerabilities are.

“The first thing we do when we go to a plant is take an inventory of what they have for firewall, switches, are they managed or unmanaged,” Merkwan says.

Outside Assistance

Working with a company to help secure firewalls, network connections and backup data is also important. DeDonder says Kcoe ISG, a joint venture between Kcoe Isom and ISG Technologies, offers a network health check, as do several other IT companies. “We basically go in and our software will crawl around your system and figure out what you actually have,” DeDonder says.

“Once we figure that out, we can go in and create a roadmap that says these are the vulnerabilities and these are the things that we recommend you do to make sure the data and the customer data is safe.”

Direct Automation also offers a service that monitors a plant’s networks at all times. “This firmware and software can not only alert us and call us and tell us something’s happening, but also shut it down automatically,” Merkwan says.

That’s important, he adds, as not all cyber security breaches are as visible as a ransomware attack is. “If it’s somebody that’s coming in hacking your system, you might not even know for a whole year,” he says. “In that type of situation,

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SERVER SECURITY: Experts say it's important to inventory all equipment, like this distributed control system rack, to determine a plant's potential vulnerability to cyber incidents.

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800-279-4757 701-793-2360 CONSTANT VIGILANCE: Even a plant's distributed control system can be a potential avenue for cyber criminals. Carson Merkwan of Direct Automation says seemingly innocent acts like using a USB port to charge a cell phone could expose a plant to a cyber security breach.

PHOTO: DIRECT AUTOMATION

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Information Technology

you’re going to want to have something installed on your system that’s monitoring for weird traffic and there’s not a whole lot of ethanol plants that have that.”

But despite a plant’s best efforts, breaches will still happen, the experts say, and when they do, there are several ways the situation could play out.

Merkwan says it’s important to have contingency plans in place in the event of a breach. “Hopefully they have a plan in place before that happens. They’ve taken images of their system so worst-case scenario— you can’t dig out that virus, you can’t find it—you can always go back to the latest image. So hopefully they’re doing that frequently and completely. And we always do that with our clients. We make sure, worstcase scenario, hopefully we can just reboot to the last best version and usually it’s only a couple days old, at most.”

But, Schyler says, backups may not always offer data protection. He says in one incident, the hackers were able to locate and encrypt the plant’s backup data. “We have the cyber insurance for that sort of thing, subject to deductibles,” he says. “We immediately reached out to our carrier and asked for their advice, because obviously we’re going to keep them on the hook. And surprisingly, they suggested we pay the ransom.” He adds that, although he was skeptical, after paying the ransom, the hackers provided the key to unlock and access the plant’s data.

DeDonder says that’s the position some insurance companies take, but she doesn’t necessarily agree with it. “If you pay it, you’re now increasing your odds of getting hacked again because everybody knows that you paid it. If you pay it, you don’t necessarily know that they’re going to

give you that key.” Instead, they could ask for more money, she says. “You don’t really know what’s going to happen if you pay it.”

But, as in Calgren’s case, there may be no other options. “If they don’t have a backup, they’ve lost all their files, unless they pay that Bitcoin,” Merkwan says. “So they have to do a little internal evaluation of ‘Are those files worth whatever the hacker’s asking for?’”

And Schlyer says the risk of a cyber security breach is something all ethanol plant managers should be aware of. “You only have to get hit by these things once to understand that this is a real issue and you have to be prepared for it,” he says.

Author: Matt Thompson Associate Editor, Ethanol Producer Magazine 701.738.4922 mthompson@bbiinternational.com

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Cleaning

DEGRADATION PROGRESSION: The three samples show degradation from fresh caustic (left), caustic sampled from a fermentor at the start of CIP (center), and caustic sampled from the caustic tank (right).

PHOTO: PHIBRO ETHANOL PERFORMANCE GROUP

CAUSTIC CIP OPTIMIZATION CIP brings unique challenges to ethanol, but they can be overcome.

By Dennis Bayrock

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).

48 | ETHANOL PRODUCER MAGAZINE | FEBRUARY 2020

Fuel ethanol plants utilize cleaning-in-place (CIP) procedures to prevent bacterial contamination and optimize plant performance. Most unit operations at

a plant use CIP as part of a standard operating procedures (SOP) program. Typically, plants depend on using 2.5 to 5 percent weight by volume (w/v) caustic solutions and the CIP guidelines related to time, temperature, titer (solution concentration) and solution turbidity to properly clean multiple locations within the plant.

Caustic not only has excellent cleaning capabilities, but also has unique disinfection properties not found in other cleaners. Saponification, for example, hydrolyzes fats and oils to free fatty acids and glycerol.

Caustic also causes saponification in the lipid membranes of yeasts and bacteria. This destroys the cell’s integrity and is fatal. The higher pH of caustic solutions also directly impacts the cell’s ability to uptake nutrients such as amino acids and sugars. These transport mechanisms in the cell membrane rely on a pH gradient across the cell membrane in order to properly operate. By raising the pH, this pH gradient is removed and can cause nutrient starvation.

In most CIP SOPs, an acid wash is also implemented to remove mineral deposits that caustic solutions typically do not remove.

A few measures can optimize pre-rinse and caustic CIP practices.

CIP Challenges

Significant challenges exist for fuel ethanol plants to effectively use caustic as part of their CIP programs. Unlike CIP procedures in other industries, the corn used to create mash in dry-grind fuel ethanol plants contains significant amounts of carbohydrates, proteins, oils and insoluble

CELL SAPONIFICATION: Destruction of the yeast cell membrane by caustic.

PHOTO: PHIBRO ETHANOL PERFORMANCE GROUP

fiber. CIP challenges specific to fuel ethanol plants include: thorough and effective primary rinsing; limiting exposure of caustic solutions to carbon dioxide; accurately analyzing caustic concentration of CIP; and monitoring solids contamination in CIP solutions.

The primary rinse of pipes and vessels with process water must be thorough and extensive to be effective. The addition of a surfactant detergent cleaner, such as PhibroClean, to the rinse cycle will improve the overall effectiveness of the CIP process by removing more material before the caustic CIP cycle.

Without effective rinsing, the remaining deposits can form an excellent scaffold for bacteria to colonize as a result of the increased surface area created. Research on fouling and bacterial contamination has shown that, depending on the particle size of deposits, the potential surface area for colonization can increase by over 400 percent compared to a clean, deposit-free surface. Insufficient rinsing also allows organic material in mash to chemically neutralize caustic, reducing and compromising

its strength and effectiveness. In addition, multiple studies show chemical byproducts can be generated from Maillard reactions that form furfural, n-substituted glycosylamines, acetaldehyde, and dioxins, which are known to be inhibitory when recycled back to yeast.

Improper rinsing will also lead to insoluble particle accumulation in the recycled caustic solution. Not only will these particles displace the volume of caustic (which requires more frequent additions of fresh caustic to the system), but they will also be recycled in subsequent CIP cycles and increase the risk of bacterial contamination.

In addition, the Maillard reaction byproducts from the cleaning process and unreacted components of the mash (a result of carryover to the caustic tank) will also recycle, providing nutrients for contaminating bacteria at other locations in the plant.

Carbonates—insoluble hard crystals— form when caustic is exposed to carbon dioxide. In distillation, carbonates can be dissolved and removed with the addition of an acid-based cleaning system, but it is advantageous to reduce or eliminate their for-

ETHANOLPRODUCER.COM | 49

Cleaning

POINTING OUT PROBLEMS: Issues associated with mash and caustic overlap in modified CIP sequences.

PHOTO: PHIBRO ETHANOL PERFORMANCE GROUP

mation through better caustic CIP management. Typically, the strength of this caustic solution is periodically refortified with fresh caustic, but any carbonates within the tank are not usually removed until the plant decides to purge the caustic tank.

Formation of carbonates also neutralizes the strength of caustic solutions.

Therefore, the reuse of caustic solutions containing carbonates will ultimately reduce the actual strength of the caustic solution, provide increased colonization power of bacteria when crystals are deposited in pipes and vessels, and decrease the overall effectiveness of CIP within the plant.

To prevent these effects from occurring and to enhance CIP effectiveness, periodic purging and full turnover of the content of the caustic tank with fresh caustic solution should be implemented as a regular part of any CIP program. The frequency of these purges varies between fuel ethanol plants depending on their overall CIP program.

It is also critical to accurately monitor caustic strength to ensure it is maintained at its target concentration. Most ethanol plants check the concentration of their caustic solution with pH and with a titration using a single indicator (usually phenolpthalein in a

one-point titration procedure). The advantages of a one-point titration procedure are that it is inexpensive, convenient, rapid and provides reasonable accuracy when determining the concentration of pure uncontaminated caustic solutions.

However, a one-point titration procedure will overestimate the concentration of a caustic solution if there are any carbonates or any organic carryover from mash in the CIP solution. To overcome this limitation, the Warder titration method can be used.

The Warder procedure expands the one-point phenolphtalein titration to a two-point titration using methyl orange.

The phenolpthalein end-point is titrated first (determines caustic concentration) followed by titration in the same flask to the methyl orange end-point (determines carbonate concentration). Simple calculations can then be performed to determine the concentrations of each and thus the true concentration of caustic in CIP. The Warder procedure is simple to perform, and only introduces one additional titration in the same flask to the base one-point titration procedure.

50 | ETHANOL PRODUCER MAGAZINE | FEBRUARY 2020

Monitoring the amount of solids (carbonates and insoluble materials) in CIP caustic solutions is important to indicate how quickly the sediment level increases over time. Close monitoring of solids buildup can give an indication of whether sufficient flushing was performed in the initial rinse cycle of the CIP process and will also give the plant another metric that can be used to gauge when the recycled caustic needs to be purged and refreshed.

This monitoring can be as simple as drawing samples from the spent caustic tank, allowing them to cool in a graduated cylinder, and recording the amount of settled bulk precipitate.

The addition of a detergent cleaner such as PhibroClean to the pre-rinse and caustic CIP solution improves CIP effectiveness while providing potential savings in caustic usage. When applied during the pre-rinse cycle, PhibroClean removes organic material that would otherwise remain in place, reducing the potential for caustic solution degradation. PhibroClean addition to the caustic CIP solution will lead to better cleaning results through its detergent action, facilitating the use of lower-strength caustic CIP solutions, resulting in potential net savings in overall CIP costs.

Proper and effective CIP practices can reduce the severity and frequency of bacterial contamination at ethanol plants, improve ethanol yields, optimize heat transfer and energy inputs and reduce the need for hydroblasting. Addressing the challenges inherent in using CIP to clean and sanitize mash-based fermentations reduces issues with bacterial contamination and improves plant operational efficiency.

Author: Dennis Bayrock Global Director, Fermentation Research Phibro Ethanol Performance Group 651.641.2826 dennis.bayrock@pahc.com

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