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PEOPLE IN ETHANOL What Attracts Young People to the Industry? Page 28


From Cargill to Guardian Energy

Fostering Innovation

Ethanol’s Pioneer Warrior

10 Years of Bioenergy Research

Page 34

Page 40

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Page 56


Ethanol’s Efficient Producers

Page 70

Innovation Applied Proudly Serving Clients in the Ethanol Industry Rayeman Compression Dryer (RCD) • Ground-Breaking Patented Technology for DDGS • Lower Capex and Opex • Explosion/Fire Proof • Smaller Footprint/Lower VOCs • Preserves Highest Fat and/or Protein levels • Commands a Higher Price for your DDGS

Rayeman Bulk Densification Line • Bulk Densifies Materials up to 70% • Nearly Any Materials can be Processed • Opportunity to Diversify Revenue Streams • Improves and Expands Current Market Segments • Less than 2% Fines during Shipping and Handling • No Fillers or Binders • Highest Nutritional Value in Feed Supplements • May Add Vitamins and Minerals or Medication, if desired • Moisture Resistant

Rayeman Grain Cooling System • Preserves Highest Nutritional Value in the Grain • Eliminates Burning of Material • Creates Flowable Grain that Won’t Bridge • Extremely Controllable Temperatures • Can Directly Connect to Dryer • Can Be Implemented Directly off the Distillation Process • De-Clumps Dry Grain • Produces a Lighter Colored Grain • Levels of Moisture from 95% to 5% for Cooling

Rayeman Automated Tub Press System • Consumption Rate Controlled Solely through Density, Rather Than Limiters • 100% DDG or DDGS • No Fillers or Binders • 1-3 Pounds per head/per day Guaranteed • Possible to Dial in Other Feeding Rates • May Add Vitamins and Minerals or Medication, if desired • Specially Designed Tub ensures Billet Will Not Fall Out If the Tub is Kicked Over • Water/Rain resistant | 970-344-4776







The Easter Bunny and the ‘Blend Wall’ By Bob Dinneen







Sustaining Opportunities

What attracts young people to work in the ethanol industry? By Ann Bailey


Owning the Ethanol Exec Role

Jeanne McCaherty applies her Cargill experience to her new role as Guardian Energy CEO. By Luke Geiver

Racing Professionals Help Educate Consumers By Emily Skor


More Than One Way to Skin a Cat By Ron Lamberty


Pioneer Ethanol Warrior Passes


The late Bill Holmberg was a force in the early years of ethanol development. By Ann Bailey

Free Trade Needed to Maximize Biofuels’ Benefit By Bliss Baker


We Need a Disruption to Grow By Dave VanderGriend






Champions of Change

Industry researchers face the challenge of fostering innovation in a risk-adverse industrial environment. By Tom Bryan

102 BUSINESS MATTERS You Want to Expand, Now What? By Joe Leo




Working With Purpose By Tom Bryan




48 R&D

A Decade of Bioenergy Research Ethanol Producer Magazine: (USPS No. 023-974) June 2017, Vol. 23, Issue 6. 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 | JUNE 2017

Reviewing the accomplishments of the three DOE centers. By Patrick C. Miller




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KnipBio’s Microbe Technology Creates Better Fish Feed


Ethanol colocation shows great potential for producing new feed for the burgeoning global aquaculture market. By Debbie Sniderman



Driving GHG Down, Bringing Capacity Up

Marquis Energy, Hennepin, Illinois. PHOTO: MARQUIS ENERGY

A look at the 75 ethanol producers who’ve achieved efficient producer status. By Susanne Retka Schill




Yeast preferences for free amino nitrogen must be understood to provide proper nutrition, regardless the source. By Dennis Bayrock

Croda will soon offer biobased extraction aides to the ethanol industry, made from ethanol. By Min Wang

Protease Use for FAN as Urea Substitute Poses Challenges


Ethanol Producers Must Engage in Upcoming Farm Bill Debate

Farm economy challenges will require multiple changes to agricultural policy. By John Duff

6 | Ethanol Producer Magazine | JUNE 2017

Optimizing Surfactants for Increased Corn Oil Yield


Tube Bundle Cleaning Gets Automated Outlining the challenge of cleaning evaporators safely and efficiently. By Terry Gromes Jr.


Cleaning Comes With Choices

Spongeblasting one of several methods available to match the best tool to the application. By Mark Parenteau

A LEGACY OF PROVEN INNOVATION At Solenis, we are committed to helping you stay ahead of the curve. Whether you need to increase your yields, meet a regulatory requirement or reduce your costs, we’ve got you covered.





Corn oil extraction aids

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Process Aids Water Treatment Chemistries Monitoring and Control Systems

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EDITORIAL President & Editor in Chief Tom Bryan Vice President of Content & Executive Editor Tim Portz Managing Editor Susanne Retka Schill News Editor Erin Voegele Copy Editor Jan Tellmann

ART Art Director Jaci Satterlund Graphic Designer Raquel Boushee

PUBLISHING Chairman Mike Bryan CEO Joe Bryan

SALES Vice President of Operations Matthew Spoor Sales & Marketing Director John Nelson Business Development Director Howard Brockhouse Senior Account Manager/Bioenergy Team Leader Chip Shereck Circulation Manager Jessica Tiller Marketing & Advertising Manager Marla DeFoe

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 Western Plains Energy Derek Paine

2017 International Fuel Ethanol Workshop & Expo 2017 National Advanced Biofuels Conference & Expo AB Biotek ACE American Coalition for Ethanol Agra Industries Apache Stainless Equipment Corporation Applied Material Solutions, Inc. BetaTec Hop Products Bion Companies Buckman Christianson PLLP Biofuels Financial Conference CHS Renewable Fuels Marketing Cloud/Sellers Cleaning Systems Compli Associates CTE Global D3MAX LLC Donaldson Company-Industrial Air Filteration DuPont Industrial Biosciences Edeniq, Inc. EISENMANN Corporation Ethanol Producer Magazine Ethanol Producer Magazine's Webinar Series Fagen Inc. Fluid Quip Process Technologies, LLC Genesis III Growth Energy Hengye Inc. Hydro-Klean LLC ICM, Inc. InfoSight Corporation Interra Global Corporation J.C. Ramsdell Enviro Services, Inc. Jatrodiesel, Inc. Lallemand Biofuels & Distilled Spirits Leaf-Lesaffre Advanced Fermentations Louis Dreyfus Company McC Inc. Mist Chemical & Supply Company Mole Master Services Corporation Nalco Water Natwick Associates Appraisal Services NESTEC, Inc. Novozymes Orbijet, Inc. Phibro Ethanol Performance Group POET LLC Premium Plant Services, Inc. ProQuip, Inc. R.S. Stover Rayeman Elements, Inc. RPMG, Inc. Salco Products, Inc. Seneca Companies Solenis LLC Southeastern Illinois College StoneAge Sulzer Pumps Solutions, Inc. Syngenta: Enogen Terydon Inc. Thermal Refractory Tramco, Inc. Trident Automation U.S. Water Services Valicor Separation Technologies VetterTec GmbH Victory Energy Operations, LLC WestAgro Executive Brands Westmor Industries, LLC WINBCO Zeochem LLC

38 72 19 17 52 94 67 21 66 43 107 86 85 62 108 54-55 60 103 77 44 106 69 61 45 100 2 76 87 13 81 73 75 82 46 101 53 63 37 32 97 95 42 11 68 39 10 89 36 83 3 98 78-79 50 7 15 59 58 26-27 99 74 90 30 5 31 33 22-23 91 47 51 93

Customer Service Please call 1-866-746-8385 or email us at Subscriptions to Ethanol Producer Magazine are free of charge to everyone with the exception of a shipping and handling charge of $49.95 for anyone outside the United States. To subscribe, visit or you can send your mailing address and payment (checks made out to BBI International) to: Ethanol Producer Magazine Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. You can also fax a subscription form to 701-746-5367. Back Issues, Reprints and Permissions Select back issues are available for $3.95 each, plus shipping. Article reprints are also available for a fee. For more information, contact us at 866-746-8385 or Advertising Ethanol Producer Magazine provides a specific topic delivered to a highly targeted audience. We are committed to editorial excellence and high-quality print production. To find out more about Ethanol Producer Magazine advertising opportunities, please contact us at 866-746-8385 or Letters to the Editor We welcome letters to the editor. Send to Ethanol Producer Magazine Letters to the Editor, 308 2nd Ave. N., Suite 304, Grand Forks, ND 58203 or email to Please include your name, address and phone number. Letters may be edited for clarity and/or space.

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8 | Ethanol Producer Magazine | JUNE 2017


Working With Purpose Today’s young people are apparently less faithful to their employers and careers than previous generations—probably true, in general—but a brighter story is unfolding in ethanol right now. As we report in “Sustaining Tom Bryan

President & Editor in Chief

Opportunities,” on page 28, ethanol plant jobs are not beset with the triggers of job jumping: boredom, inflexibility, inadequate training and the absence of purpose. Quite the opposite, ethanol plant employees enjoy role variability, hands-on work, good training and opportunities for advancement in an industry that makes a difference in the world. The story reminds us that ethanol takes people places, including home. Because for so many ethanol plant employees, being near family and friends—having a real hometown career—is a perk that transcends generational attitudes about work. Guardian Energy CEO Jeanne McCaherty understands why people are drawn to ethanol careers in rural places. As the leader of a top U.S. ethanol production company with plants in Minnesota, North Dakota, Iowa and Nebraska, she’s enjoying the newest chapter of her storied career in biotechnology and finance. Now, as we report in “Owning the Ethanol Exec Role,” on page 34, McCaherty feels at home with renewed purpose in ethanol. A sense of mission drives so many ethanol leaders, past and present. In “Pioneer Ethanol Warrior Passes,” on page 40, we tell the inspirational story of the late ethanol proponent Bill Holmberg, a true American hero. Then, in “Champions of Change,” on page 48, we visit with four past Fuel Ethanol Workshop Award of Excellence winners about the importance of innovation advocacy. Both stories remind us how we benefit from the extraordinary passion of our industry’s most devoted people. It is not unbridled passion, but principled vision and mission fidelity that define the U.S. Department of Energy’s long-term bioenergy research. On page 56, we summarize the sizeable contributions of the agency’s three innovation hubs in “A Decade of Bioenergy Research.” After that, on page 64, we learn about high-end proteins that could potentially be blended with distillers grains to make very expensive fish food. Finally, on page 70, we outline how and why ethanol plants achieve efficient producer status with the U.S. EPA. There are now 75 plants with this regulatory distinction, some leveraging the status to increase production substantially, but most making only small jumps.


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The Easter Bunny and the ‘Blend Wall’ By Bob Dinneen

Spoiler alert: There is no Easter Bunny. Sorry, kids. That’s a fiction promoted by candy companies to sell lots

of chocolate every spring. Don’t get me wrong, I’m a big fan of chocolate bunnies, particularly those that aren’t hollow. But it’s still fiction. Here’s another fiction: the “blend wall.” Like the Easter Bunny, the blend wall mystique has been perpetuated by an economic incentive—oil companies that want to mislead consumers about the potential of biofuels and the Renewable Fuels Standard. But the truth is there is no blend wall preventing the growth of renewable fuels or the effective implementation of the RFS. According to a recent Renewable Fuels Association analysis, “Ethanol Consumption Breaks Through the Blend Wall in 2016,” U.S. Energy Information Administration data shows gasoline consumed in the U.S. in 2016 contained more than 10 percent ethanol on average for the first time ever. The data demonstrates that the blend wall is not a real constraint on ethanol consumption. Here’s a deep dive into the numbers. According to EIA data, finished motor gasoline consumption totaled 143.367 billion gallons in 2016. That volume of gasoline contained 14.399 billion gallons of ethanol, meaning the average ethanol content of gasoline consumed in 2016 was 10.04 percent. Growing consumption of E15 (gasoline blends containing 15 percent ethanol), midlevel blends (containing 20 to 50 percent ethanol) and flex fuels (containing 51 to 83 percent ethanol) was responsible for the increase in the average ethanol content of U.S. gasoline in 2016. Our analysis found that 2016 consumption of midlevel blends and flex fuels was at least 450 million gallons, and may have been more than 1 billion gallons, if the American Petroleum Institute’s assertions about ethanol-free gasoline (E0) demand are correct. Among other key findings: • National average ethanol content was 10.0 percent or higher in six of the last seven months of 2016, culminating with a record high monthly rate of 10.30 percent in December.

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• On a weekly basis, the ethanol blend rate hit a weekly record of 10.41 percent in early January 2017. • April 2015 was the last time average ethanol content was below 9.7 percent. These data undermine the assertion by API and others that the gasoline market cannot accommodate more than 9.7 percent ethanol due to purported infrastructure and vehicle constraints. • Using the most conservative assumptions, EIA data imply that 447 million gallons of midlevel blends and flex fuels containing 313 million galllons of ethanol were consumed in 2016. • Using API’s assumptions about E0 demand, however, consumption of midlevel blends and flex fuels was 1.2 to 1.7 billion gallons, which translates to between 843 million and 1.17 billion gallons of ethanol. As the analysis shows, consumers are gravitating toward E15, E85 and other midlevel blends where they are available. The oil industry can no longer claim the “blend wall” is any barrier to the effective implementation of the RFS. So, the next time you hear the petroleum industry claim the marketplace couldn’t possibly handle more than 10 percent ethanol blends, give them a basket of chocolate bunnies and tell them to scurry along. There is no blend wall. But do give them the hollow ones.

Author: Bob Dinneen President and CEO, Renewable Fuels Association 202-289-3835

EVENTS CALENDAR 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 the ethanol industry’s premier forum for unveiling new technologies and research findings. The program covers cellulosic ethanol while remaining committed to optimizing existing grain ethanol operations. 866-746-8385 |

2017 National Advanced Biofuels Conference & Expo June 19-21, 2017 Minneapolis Convention Center Minneapolis, Minnesota Colocated with the International Fuel Ethanol Workshop 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 |



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Christianson PLLP's Biofuels Financial Conference September 27-28, 2017 Radisson Blu Minneapolis Downtown Minneapolis, Minnesota Produced by Christianson PLLP and organized by BBI International, this year’s Biofuels Financial Conference is focused on the best ways to explore new options in today’s changing ethanol and biodiesel industries. By understanding risks associated with various technology and marketing initiatives, and by exploring various options for making the best use of capital and resources, attendees will learn how to create a well-managed plan for growth and change—a plan which maximizes profitability while ensuring future stability and meeting the expectations of all stakeholders. 866-746-8385 |

Together, we can increase your plant’s profitability.


888.685.3959 Please check our website for upcoming webinars |

JUNE 2017 | Ethanol Producer Magazine | 13


Racing Professionals Help Educate Professionals By Emily Skor

Consumers place a premium on the health benefit or impact of the products they purchase and consume every day. Growth Energy is focused not only on

showing consumers why ethanol is a great choice for their vehicle, but also on engaging them around the health and environmental benefits of ethanol. We know that ethanol has higher octane and that it burns cleaner and cooler than standard gasoline. This means it provides additional power while helping to maintain engine performance and longevity. We also know that ethanol reduces greenhouse gas emissions by 43 percent and replaces harmful chemicals like benzene and toluene in gasoline. These are facts about ethanol, but our mission is to translate these facts into messages that consumers relate to, care about and understand. Maintaining key partnerships is a critical element of Growth Energy’s strategy to engage consumers and give them a holistic picture of why ethanol is the right choice for their vehicle, their personal health and the well-being of our planet. We are proud to work with Kyle Mohan of Kyle Mohan Racing and Keith Holmes of Cat Can Do Racing on our engagement efforts. Both Kyle and Keith are ethanol advocates at the professional and personal levels, which is extremely important to us. Kyle Mohan not only competes in the Formula Drift Series, but as owner of Kyle Mohan Racing, he’s actively involved in a variety of professional services including custom part design, race and drift car builds, and component installation. He knows cars inside and out, and is a believer in American Ethanol on the track. For Kyle, though, the benefits of ethanol go beyond power and engine performance. As he puts it, “As a professional driver and racecar builder, I really admire the power ethanol provides to vehicles competing in world class professional motor sports series, including Formula Drift. Ethanol allows my motor to generate more horsepower while running cooler. What is also important to me and my family, who are a deep part of my race team, is an appreciation for the outdoors and minimizing our impact on the environment. In fact, my wife Adrienne is the conservation

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director of a nonprofit environmental organization in the Los Angeles area, and she is also my team spotter. She loves that ethanol is a clean fuel that doesn't add carbon to the atmosphere, reduces greenhouse gas emissions and comes from a sustainable source that is light on the land versus damaging and risky fossil fuel extraction methods. We both feel good competing on track with ethanol knowing that it’s environmentally friendly and gives me a competitive edge.” Meanwhile, Keith Holmes, owner of CK Motorsports and throttle man of the American Ethanol Cat Can Do Catamaran, brings a marine perspective to the ethanol conversation. Keith is an expert who can credibly speak to how ethanol functions in boat engines. The ethanol industry often sees misinformation circulating about issues with E10 in marine engines, and as someone who works on 1,100 to 1,200 boat engines per year, Keith is the perfect person to dispel those myths. He runs a high ethanol blend in his championship-winning boat, but values what ethanol brings beyond sheer power and performance. As Keith says, “I think of ethanol as an earth friendly fuel which helps preserve our great lakes with less carbon, making for cleaner water—one of our most precious resources for drinking, recreation and seafood. At the same time, Cat Can Do uses ethanol to power its 3,400 horsepower engines to be one of the fastest boats in the world. With its earth friendly, cleaner burning benefits and amazing power enhancement, it’s just too hard to ignore how great a fuel ethanol truly is.” In partnership with these engine experts, we are telling the story of ethanol’s many successes to the American public and driving them to truly consider their choice at the pump. And consumers are responding by reaching for higher ethanol blends like E15. Our goal is to allow American drivers to feel better about the fuel powering their lives, and through our partnerships with premier experts in performance motorsports who truly believe in ethanol, we are doing just that. Author: Emily Skor CEO, Growth Energy 202-545-4000





More Than One Way to Skin a Cat By Ron Lamberty

“There’s more than one way to skin a cat.”

When I hear that cliche, I wonder, how does anyone know that? Why does one need to know even ONE way to skin a cat, much less a demand for multiple cat-skinning techniques? But, I digress. We know the cliche means there are many ways to address a challenge, and since I have zero cat-skinning expertise, let’s talk about ways to increase retail availability of E15 and other higher blends of ethanol. From its inception, the market development program at the American Coalition for Ethanol has focused on helping station owners understand ethanol as an easy product addition that can provide a competitive advantage and a healthier bottom line. Our message has resonated particularly with single-store and small chain owners looking for differentiation from large chain and big box competitors. They can make the move to higher ethanol blends more quickly without delays caused by bulky corporate structure. And when small independent retailers introduce new fuels into the marketplace and out-compete their larger and more well-funded peers, the competition takes notice. While most of the industry’s current funding and attention is focused on large retailers, a recent study by the Fuels Institute confirms the importance of the ACE approach. The FI study gathered sales information from 620 E85 retailers, primarily to study the effect of price on E85 volume. Its findings on the price/ volume relationship were inconclusive (mostly due to inconsistency in using RINs at retail, in my opinion). However, what did come through clearly was the fact small retailers’ E85 sales dramatically overperformed those of high-volume retailers, and not just in percentage of E85 gallons versus unleaded (which one might expect). The study found the top quartile of E85 sellers are small retailers who, on average, sell two-thirds as much gasoline as the other 75 percent of retailers in the survey, but twice as many gallons of flex fuel.

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In further stark contrast, the top five E85 retailers in the study sold an average of 2,641 gallons of gasoline per day while the bottom five flex-fuel retailers averaged triple the gas volume (7,642 gallons per day); but the small gas volume stations sold 10 times as much E85—600 gallons per day versus less than 60 per day for the high-volume pumpers. Many of us have seen similar results in the field: Small retailers embrace E15 and flex fuels and make them part of their image, and ethanol blends become a large part of their sales and profits. Meanwhile, a few (at least five) of the high-volume retailers seem to be treating higher ethanol blends as a favor they’re doing for the ethanol industry, in exchange for cheap or free fueldispensing equipment. That isn’t meant to diminish the effort or importance of large retailers who are adding and aggressively marketing E15 and flex fuels. While it’s tougher to garner customers’ attention in a large, high-volume fuel location, many retailers are getting the job done with E15 and flex fuels. More importantly, the big retailers’ names add credibility to the marketing of new fuels like E15, and are key in convincing other retailers to give E15 and higher ethanol blends a try. The irony is it’s unlikely those large companies would have considered the addition had they not seen the success of some early-adopting small retailers. And, when other single store and small retailers are inspired to add higher ethanol blends because companies like Sheetz, Kum & Go, RaceTrac, Quik Trip and Casey’s have added them, ACE will be there to help, using information we’ve gathered from retailers of all sizes. Author: Ron Lamberty Senior Vice President American Coalition for Ethanol 605-334-3381


Free Trade Needed to Maximize Biofuels’ Benefit By Bliss Baker

The year is shaping up to be very significant for the ethanol industry and the role it will play in international efforts to reduce global transport emissions.From the

signing of the Canada-European Union Comprehensive Economic and Trade Agreement, to the termination of the Trans-Pacific Partnership, to speculation about Brexit and the change in outlook with the new U.S. administration, what happens in 2017 could shape the global economic landscape for years to come. While biofuels do not always make headlines in international trade discussions, the potential for the impressive growth and maturation of the global biofuels industry to be impacted by upcoming trade negotiations is very real. For the industry to continue to create jobs, reduce transport sector emissions, develop new technologies and drive down costs, a stable investment climate is crucial. The recent rise of economic populist and protectionist language used in several countries is a troubling sign as it could harm investors’ confidence at a time when the biofuels industry’s future is particularly bright. Projections for 2017 show that total global ethanol production will hold firm at 97.80 billion liters (25.8 billion gallons), continuing the trend of incremental annual ethanol production growth since 2013. The industry has achieved this resilience during a period when oil prices dropped to record lows. Bolstering this resilience, some of the favorite attacks used by opponents of the biofuels industry have finally been put to rest. The food vs. fuel issue has been conclusively disproven as realworld data has become available, and the American Petroleum Institute’s self-serving myth that 10 percent is the marketplace limit for ethanol content in U.S. gasoline has been shattered. Data from the U.S. Energy Information Administration shows that in 2016, gasoline consumed in the U.S. contained more than 10 percent ethanol on average, demonstrating that the so-called blend wall is not a real constraint on ethanol consumption. As these specious arguments are disproven by hard evidence, the enormous growth potential still available for biofuels globally becomes more clear every day. In the International Energy Agency’s World Energy Outlook for 2016, the IEA is forecasting global energy

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demand will increase by 30 percent by 2040, with a significant portion from the transport sector. Where this demand would historically have been addressed with increased reliance on fossil fuels, the global mindset has shifted. The ratification of the Paris Agreement last year established very ambitious targets for CO2 emission reductions, and set aspirational goals of shifting to a low-carbon global economy and encouraging the development of clean technologies as the basis for future growth. Ethanol, as an immediately dispatchable low-carbon transport fuel alternative, represents a key policy solution that will be integral to meeting this challenge. Multiple nongovernmental organizations have published reports since the ratification of the agreement outlining how current national policies aimed at reducing CO2 emissions from global transport activity will not achieve the targets laid out in the Paris Agreement, and that governments will have to redouble efforts to meet steeper targets in coming years. Developing low-carbon alternatives to fossil fuels while maintaining growth will require the maximization of all cost-effective options and continued investment in clean technology development. Biofuels represent an ideal solution, but for the global industry to continue to grow, international free trade and a stable investment climate is key. International trade negotiators would be extremely shortsighted to consider protectionist measures that would undermine the biofuels industry and the hundreds of billions of dollars of economic activity it represents. Creating barriers to trade would only serve to increase global reliance on crude oil and increase greenhouse gas emissions. As major economies look to negotiate trade agreements that will shape the investment outlook for the foreseeable future, it is critical that countries avoid protectionist policies. It’s time to recognize ethanol for the ideal low-carbon transport fuel alternative that it is, take the brakes off biofuels technology development and meaningfully begin the transition to a sustainable future. Author: Bliss Baker President, Global Renewable Fuels Alliance 647-309-0058



We Need a Disruption to Grow By Dave VanderGriend

There are many challenges and barriers that prohibit ethanol from freely expanding beyond E10. If these challenges are not resolved, and the barriers knocked

down, our industry’s growth curve looks flat at best. Furthermore, if gasoline consumption continues its downward trend without additional blending beyond E10, future demand for ethanol is not favorable. We must take bold steps to remove these unnecessary and unreasonable barriers in order to grow. At this year’s International Fuel Ethanol Workshop & Expo we will participate in a conversation addressing these challenges. We invite you to attend the Game Changers panel at 3:30 p.m., Tuesday, June 20, in Track 4. Urban Air Initiative will be part of a group with diverse perspectives on what can be done to disrupt the establishment in order to access higher blends. These experts will address how we can work with the auto and fuel industries, the U.S. EPA, as well as issues around infrastructure, regulation, policy and public perception. While the ethanol industry faces uncertainty under this new administration, ethanol’s value is undisputable. One of the panelists understands that better than anyone. Professional drift racer and millennial consumer Alec Hohnadell has suffered the dire health effects of gasoline aromatics first hand. Hohnadell runs E98 in his car on the Formula Drift Circuit, and not just because it’s a great race fuel that boosts his horsepower. He also chooses ethanol because it’s a healthier option, greatly reducing the toxic chemicals in the fuel he handles and what he breathes from the tailpipe. Hohnadell was diagnosed with aromatics poisoning after swimming in the Gulf of Mexico during his youth. Although it appeared to be cleaned up, toxins from the massive crude oil spill in 2010 lurked in the water. Many of the toxins that made Alec sick are the same ones found in our gasoline. After the diagnosis, Alec spent more than a year in intense treatment to clear his system from these chemicals. Once he was healthy, he got on the race track and started competing. But he also wanted to start educating his fans that they too can make a healthier

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choice with ethanol. You will be able to see his car and talk to Alec at our booth in the expo hall. While a shift in consumer demand is critical, it’s not all we need to get access to higher ethanol blends. Faulty data and regulations greatly limit ethanol’s path forward. We are all keenly aware of major industry challenges such as the need for the Reid vapor pressure waiver to be extended to higher blends. But did you know that last year, through a Freedom of Information Act request, UAI learned that fuel experts from major oil companies were responsible for supplying match blended test fuels that were used in flawed key EPA fuel studies? Not surprisingly, the results of these fuel tests incorrectly pointed to ethanol as the culprit behind rising emissions rather than aromatics. And if that isn’t enough to make you cringe, the EPA relies on these slanted test results when making policy decisions that discourage higher ethanol blends, such as in the MOVES 2014 model. Another panelist will discuss the position that the EPA has been incorrectly interpreting the law, effectively requiring the ethanol industry to prove the fuel is good. Instead, UAI contends EPA bears the burden to prove the opposite. This notion would eliminate years of unnecessary studies like what we went through with E15 and could open the door to higher blends of ethanol today. In addition, autos could certify with E30 and the vehicle would pass for all levels below. We hope to have a spirited conversation at FEW that highlights out-of-the box thinking to move past unnecessary prohibitive regulations and open the market to more ethanol. Joining Hohnadell on the panel is former Chrysler executive, Reg Modlin, Future Fuels Strategies’ Tammy Klein and Adam Gustafson, attorney with Boyden Gray & Associates. We hope you will join us for this insightful and educational conversation at FEW. Author: David VanderGriend President, Urban Air Initiative, CEO, ICM Inc. 316-796-0900


People, Partnerships & Projects

Redfield Energy celebrates 10 years of production In April, Redfield Energy joined a long list of U.S. ethanol plants surpassing 10 years of production. The 55 MMgy facility in Redfield, South Dakota, started production in the spring of 2007. Since that time, the company has produced 545 million gallons of ethanol, 1.5 million tons of distillers grains, purchased more than 194 million bushels of corn and generated $43.5 million in net income. Redfield Energy has also distributed more than $36 million to its members. The company currently has 45 employees, 12 of whom have been there since the plant’s inception. This year, the company anticipates increasing production to 63 MMgy.

Anderson, center, founded ACE 30 years ago.

NFU honors ACE founder

American Coalition for Ethanol founder Merle Anderson has received the National Farmers Union’s Meritorious Service Award for farmer advocacy and advancing the ethanol industry. Anderson founded ACE in 1987 and continues to be chairman emeritus of the association’s board. “Merle and Farmers Union share a philosophy that when family farmers do well, the entire country benefits from it,” said ACE Executive Vice President Brian Jen-

nings. “That’s what Merle saw in ethanol 30 years ago. Merle lit the match to ignite grassroots support for ethanol because he had the vision to understand what it would mean for agriculture and rural communities.” NFU President Roger Johnson added, “The strength, diversity and success of modern family farm agriculture is the result of hardworking men and women across the industry,” he said. “Throughout his life, Merle has gone above and beyond to ensure the success and well-being of family farmers, ranchers and rural communities.” ACE’s current board president Ron Alverson and two former presidents of the board, Scott Parsley and Bob Scott were also in attendance. Past recipients of the Meritorious Service Award include former members of Congress and a former U.S. president, who have made noteworthy contributions to family agriculture, humanity and Farmers Union at the state and national levels.



Retka Schill

Gibson joins EPM, Retka Schill to retire Lisa Gibson has been named managing editor of Ethanol Producer Magazine. Gibson, a native of Bottineau, North Dakota, will take over for longtime EPM editor Susanne Retka Schill, who is retiring from BBI International in late June. Gibson returns to BBI after five years with Forum Communications Co., where she was editor of Prairie Business and, before that, Agweek. Gibson has more than a decade of journalism experience and previously

wrote for and edited BBI publications from 2009 to 2012. “Lisa’s understanding of agriculture, bioenergy and trade journalism makes her a great fit for this important role,” said BBI President Tom Bryan. “We’re thrilled to have her on our team again.” Retka Schill, who has held several high-level editorial positions at BBI during her 11 years with the company, will continue writing professionally in retirement, contributing regularly to EPM and offering writing and editing services to ethanol producers and ethanol industry service companies. “Sue has played a vital role on our team for more than a decade, from writing and editing to coaching new employees and presenting at industry events,” Bryan said. “We happy that she’s chosen to keep her writing skills available to the industry.”

Sande joins Mist Chemical Mist Chemical & Supply Co. has named Joe Sande technical sales manager. Sande comes to Mist with extensive knowledge Sande of ethanol processes after more than 14 years in the sector. Sande began working in ethanol in 2001 as an operator for Glacial Lakes Energy LLC in Watertown, South Dakota. He later worked for Alltech, Lallemand and Syngenta-Enogen. At Mist, Sande will be responsible for sales calls, technical support, training and product marketing. He will work directly with Michael Welker in assisting producers with clean-in-place and fermentation challenges. Sande studied food science at the University of Wisconsin, the Siebel Institute for Brewing Microbiology, as well as several Lallemand Alcohol Schools and short courses.


Prices & Market Analyses

Natural Gas Report

US natural gas to enter global market as exports expand May 1—The U.S. DOE approved the Golden Pass liquefied natural gas (LNG) export facility in late April for exports to non-free-tradeagreement countries. The facility slated for an export capacity of 2.2 Bcf/day of LNG got Federal Energy Regulatory Commission approval earlier. While investment is not finalized and there is no solid timetable for construction, it indicates the new administration’s view of LNG exports. The “America First” message touted during the campaign and the early stages of the Trump presidency led some to believe that future LNG export approvals would be tougher to come by, but at least for now, this does not appear to be the case. In issuing the approval, DOE Secretary Rick Perry alluded to more facilities getting the go-ahead in the future. Golden Pass is on the Texas Gulf Coast and joins Sabine Pass, Cove Point, Corpus Christi, Cameron LNG, Freeport, Elba Island, Magnolia LNG and Lake Charles as projects receiving the required approvals from FERC and DOE. Jordon Cove, the pending West Coast export facility, has DOE approval, but has been tied up with environmental concerns for years. This facility, which would have more ready access to higher-priced Asian markets, appears to have gained some reCorn Report

Corn markets quiet in April; concerns rise regarding NAFTA talk

by Andy Huenefeld

cent traction. Dominion’s Cove Point project, expected online before year end, is the first East Coast facility in the queue ahead of the Elba Island liquefaction project. The remaining facilities are all located on the Gulf Coast. In addition to the roughly 2.2 Bcf per day of capacity already online at Sabine Pass, nearly 9 Bcf per day of capacity is currently under construction. The Magnolia LNG, Golden Pass, Lake Charles projects have not started construction, along with further expansions at Sabine Pass and Cameron. About 7 Bcf per day of capacity has been approved, but construction has not begun. Combined, approved exports total nearly 18 Bcf per day, which represents about 26 percent of current domestic supply. With LNG export capacity significantly ramping up over the coming years and a large percentage of that tied to long-term contracts, a major sea change in the U.S. market approaches. Not only will LNG exports bring to the table a significant demand sector that didn’t exist 14 months ago, but growing global connectivity will greatly increase the number of risk factors that impact U.S. consumers. North American natural gas will enter the global stage.

by Jason Sagebiel

May 1—The month of April was quiet, especially within the cash market. Prices eroded as managed money has been selling the corn market amidst a big U.S. carryout and a growing global carryout. Concerns regarding politics and implications that may arise from NAFTA will have potential influences on the market going forward. In the meantime, the April USDA supply/demand report was issued and no alterations to domestic ending stocks were made. However, the demand allocation for corn was amended. Corn used for feed demand continued to decline to 5.5 billion bushels, down 50 million from the previous month. This projection has eroded since the October estimate of 5.650 billion bushels. Additionally, corn demand into ethanol production has increased from October’s projection by 175 million bushels to 5.450 billion bushels in the April report. Export demand remained constant from the last report at 2.225 billion bushels. Ultimately corn carryout is forecast at 2.320 billion bushels, a 15.9 percent carryout-to-use ratio. Global corn carryout increased in the April report from 220.68 mmt to The chart illustrates the managed money position at the time of 222.98 mmt. This compares to 211.83 mmt last year and 209.82 mmt this writing and the corresponding nearby futures position. Managed in 2014-’15. The increase this year was mostly due to higher production money was holding a short of near 197,000 contracts as of April 25. in Brazil and Argentina. Comments in this column are market commentary and are not to be construed as market advice.

24 | Ethanol Producer Magazine | JUNE 2017

Regional Ethanol Prices ($/gallon) Front Month Futures (AC) $1.569

DDGS Report



West Coast






East Coast



DDGS movement shifts from containers to barge, rail May 1—Most ethanol plants finished their spring maintenance schedules by early May and got back to running at full pace. DDGS demand from Asia remains weak, so the normally robust Chicago container loading market has lost a bit of its importance as a destination for all but nearby plants. Lately, a lot of DDGS has been loaded into barges on the Ohio, Illinois and Mississippi rivers, although rain events have tempered those movements. In the domestic market, DDGS is (or should be) at full inclusion rates for all animal sector rations. Given its value of about 70 to 80 percent the value of delivered corn, and a big discount per unit of protein versus soymeal, it is hard to find an ingredient that is more economically efficient in an animal diet. As a result, we’re seeing more railcars and trucks moving product to eastern hog and southeastern poultry barns. Buyers have been looking to book the forward months


by Sean Broderick

around current spot prices, but, based on margin calculations, plants have been reluctant to sell. On the export side, the bulk markets supplied by railcars and barges have displaced a healthy amount of tonnage previously destined for containers in Chicago and East Coast ports. Turkey continues to be an important export destination, passing Mexico in March as the largest monthly volume destination. Boats are loading out of the Gulf (via barges) and off the West Coast (out of railcars). Mexico has continued to be a good destination for loaded trains, although the NAFTA discussions and resulting impacts on exchange rates, are generating more questions than answers at times. The planting season is off to an uneven start for market watchers, and events in Washington, D.C., will require continued attention as the season unfolds.

Regional Gasoline Prices ($/gallon)

Front Month Futures Price (RBOB) $1.545 Region



West Coast






East Coast



DDGS Prices ($/ton) LOCATION

June 2017

May 2017

June 2016









Buffalo, N.Y.




Central Calif.




Central Fla.




Corn Futures Prices (July Futures) Date

close, bu.

close, ton

April 28, 2017



March 28, 2017



April 28, 2016



Cash Sorghum ($/bushel) Location

April 20, 2017

March 27, 2017

April 22, 2016

Superior, Neb.




Beatrice, Neb.




Sublette, Kan.




Despite upcoming seasonal demand support, prices turn lower

Salina, Kan.




Triangle, Texas




Gulf, Texas




May 1—During the latter half of April, aggressive pressure developed in ethanol and RBOB gasoline futures trade. At the time of this writing, RBOB gasoline futures had fallen 20 cents per gallon since hitting market highs during the middle of April. This continued to increase overall wide market pressure at a time when support traditionally builds as summer driving demand starts to take hold. Prices should be solidifying, not moving lows not seen since fall of 2016. The focus on growing supplies and global trade concerns is creating some buyer uncertainty

Natural Gas Prices ($/MMBtu)

Ethanol Report by Rick Kment

in the ethanol complex, too. Ethanol prices have not tumbled as drastically as RBOB gasoline, dropping just 10 cents per gallon in the same period. Current ethanol prices within one penny of gasoline give very little discount for blending based on price spreads between products. Corn prices are expected to remain stable through most of the spring and summer, leaving production costs low, and making ethanol competitive with other energy prices heading into the summer months.



April 28, 2017

March 30, 2017

April 29, 2016





NNG Ventura




Calif. Citygate





U.S. Ethanol Production (1,000 barrels) Per Day


End Stocks

Feb 2017




Jan 2017







Feb 2016


JUNE 2017 | Ethanol Producer Magazine | 25

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SUSTAINING OPPORTUNITIES The ethanol industry provides young people with wealth of jobs. By Ann Bailey

Nineteen-year-old Marcus Niehaus sees a future in the ethanol industry. The Southeastern Illinois College student said he wants

to make a difference in the world and believes working in the biofuels business is a way he can do that. “I am an outdoors person. I love the environment and want to see it preserved and not destroyed,” Niehaus says. Besides being environmentally friendly, the alternative energy industry is made up of the kind of people Niehaus would like to have as co-workers, he says. “They seem to always be in a good mood and are well taken care of by the company.” Meanwhile, working in an ethanol plant would offer him the opportunity to do the kind of hands-on labor he enjoys. “I like being able to get a feel of what I am working on to have a better understanding of how it works,” Niehaus says. Niehaus plans to finish his associate degree in biofuels at Southeast Illinois College in Harrisburg in Spring 2018 and then hopes to land a job as an ethanol plant technician. However, he is willing to accept another position if a technician job is not available. “I would take any job they would offer to get my foot in the door and acquire some experience watching others.” DREAM JOB: Ryan Carter followed in his older brother’s footsteps, working his way up through jobs at several plants to land his dream job at Tharaldson Ethanol. PHOTO: JOHN BROSE

28 | Ethanol Producer Magazine | JUNE 2017


Tim Schneiderman works for Adkins Energy, in the town where he was born and raised. ‘It’s one of the best companies in the area to work for, with good pay, in an industry that’s going to be around for years to come.’ - Tim Schneiderman

Flexibility, Hard Work

Willingness to work at a variety of ethanol plant jobs and in various positions were key to the success of Ryan Carter, the 35-year-old general manager of Tharaldson Ethanol in Casselton, North Dakota. Carter’s work took him to plants across the United States and to Canada before Casselton, where he’s been the past six years. “I’ve taken advancement steps in my career by moving to South Dakota, Minnesota, Iowa, Indiana and New York,� Carter says. “Now

I’ve been able to have the opportunity to move back to North Dakota and advance my career working for a very well-known family, the (Gary) Tharaldson Ethanol family.� Moving up the industry ladder isn’t unique to Carter, he notes. “Some of the smartest people I have had the honor of working with don’t have a degree, but they have an interest in something they love and that has helped them to grow and to learn and has helped them move up within the company management.�

Working in the ethanol industry was a childhood dream for Carter, a Hettinger, North Dakota, native. “My oldest brother, Jason, has been in the ethanol industry for 25 years, so he started in the industry when I was 10 years old. I always wanted to kind of follow in his footsteps,� Carter says, recalling that he used visit Jason at the DENCO plant in Morris, Minnesota. After Ryan graduated from Hettinger High school in 2000, he moved to Rosholt, South Dakota, where he worked for a short time as a cook operator at Tri-State Ethanol. After an explosion at the plant forced the company to declare bankruptcy, Carter moved to Marcus, Iowa, and worked as a shift supervisor for Little Sioux Corn Processors. A few years later, ICM offered Carter a position starting up ethanol plants across the United States and Canada. “I have had a part in starting up 40 to 50 plants. I would go there for a few weeks and start up the next plant,� Carter says. All along the way, Carter has been mentored and supported by ethanol indus-

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30 | Ethanol Producer Magazine | JUNE 2017

WORKFORCE try colleagues, he says. “If one plant needs help, we’re there to answer a question. It’s kind of a big family that keeps moving forward.” Besides the camaraderie in the industry, Carter also enjoys working for an industry he can feel pride in, he says. “We’re doing good for the environment, we do a lot for the farmer, for the communities that each plant is located in. [Ethanol] is an interesting, American-made product. We’re not depending on foreign oil or foreign companies to do what we do.” At Adkins Energy LLC in Rockford, Illinois, biofuels operations manager Tim Schneiderman enjoys the challenges of continuously seeking to improve plant efficiency. Schneiderman, 38, does the certificate of analysis for each of the ethanol batches produced during his shift. He also operates the biodiesel plant and does the required testing. Schneiderman, who has worked in the industry for nearly 13 years, was employed previously at a nursing home and a food manufacturing and packaging plant. After he accepted the position at Ad-

Jill Brun wanted to work in the ethanol industry because there’s an ‘urgent and obvious need for alternative forms of fuel and energy.’ - Jill Brun

kins, he took biofuels classes at Southeastern Illinois College to learn more about the industry. He plans to continue working for Adkins Energy. “It’s one of the best companies in the area to work for, with good pay, in an industry that’s going to be around for years to come.” Meanwhile, he likes the rural area in which he lives. “It’s where I was born and raised.”

Communication Challenge

Renee Loesche is very aware of the ethanol industry’s workforce challenge as

director of curriculum and training in the Building Illinois’ Bio-economy program at Southeastern Illinois College. She believes getting the word out about the opportunities in the biofuels industry will help it attract the employees it needs to fill the positions that are open now and will open as the industry workforce ages. “What I’m seeing is that there are people out there who can do the work. The talent is out there,” Loesche says. The challenge is matching up those talented people with the job openings at the plants, she says.

JUNE 2017 | Ethanol Producer Magazine | 31


Ellie Antova believes that the ethanol industry has a lot to offer young people, wherever they may be located. ‘I would encourage college students to investigate the opportunities in this growing industry.’ - Ellie Antova

The plants’ managers need to let young people know that “we’re here and we need people,” she says. Partnering with local community colleges that have biofuels programs is a good way to find plant workers, Loesch says. Plants also can attract young workers by offering internships, hosting plant tours for community college biofuels program students and sponsoring scholarships, she suggests. “Scholarships that are as little as $250 can make a difference,” she says. Jill Brun, a 2013 graduate of Southeast Community College in Milford, Nebraska, majored in the energy generation program, focusing on biofuels energy. Brun, a lab manager at Flint Hills Resources ethanol plant in Fairmont, Nebraska, wanted to work in the ethanol industry because she believes that traditional energy sources can have a detrimental impact on the environment and that there’s an “urgent and obvious need for alternative forms of fuel and energy.” In her job as lab manager, Brun ensures that quality compliance measures are met on all final products produced at the plant. “I manage the laboratory quality control program and laboratory instrument performance. I’m responsible for reviewing all processes and fermentation data daily and I then can recommend adjustments or changes that will lead to increased efficiency and plant profitability. The ethanol industry is ever-evolving and unexpected issues arise each and every day. I enjoy the challenge of working through these problems, taking the necessary risks to find a solution, and having the ability to learn something new each day; it is a very fulfilling and rewarding experience,” Brun says. She also enjoys working with the other employees in the rural ethanol plant. “I know and have built a good relationship with every person at the site; you never pass by somebody and don’t say ‘Hello.’ It’s a great feeling to go to work and be surrounded by people that you care about and who care about you.”

Wide Variety

Besides offering job opportunities for students who want to do hands-on work at ethanol plants, the renewable fuels indus-

32 | Ethanol Producer Magazine | JUNE 2017

WORKFORCE room to grow in that company and exceed expectations for the company’s goals,” he says. Working at an ethanol plant in a rural area would be ideal. “I have lived in a rural area all of my life. I enjoy being outside and having room to perform outside tasks. I want to live in a rural area for the rest of my life, but will take a job in a city and just live outside the city in a rural environment.” Antova believes that the ethanol industry has a lot to offer young people, wherev-

er they may be located. “I would encourage college students to investigate the opportunities in this growing industry.” Author: Ann Bailey Freelance Journalist

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try also has openings for men and women who want to work on the business side of the company. Ellie Antova, global business manager for ICM, is responsible for furthering the company’s technology offerings around the world. A former aerospace industry business professional, Antova, now 32, already had a bachelor’s degree in marketing and master’s degrees in business administration and international economics when she accepted a position five years ago as business analysis manager at ICM. Shortly after Antova was hired, she enrolled in the biofuels program at Southeastern Illinois College and received a certificate in Biofuels Technology and Sustainability. “This program provided an academic foundation to the ethanol industry I was trying to navigate through,” Antova says. Initially, her job at ICM was developing an international business intelligence support system and managing ICM international trade compliance. It has evolved into a strategic planning and trade development role, she says. “My responsibilities include growing ICM’s global business initiatives through new foreign market entry, sales approach, proposal development, foreign office establishment, finance facilitation and analysis. I joined ICM for the opportunity to assist in the development of our international efforts and promote ethanol outside the United States.” Antova’s office is in a semi-rural area which gives it a small-town feel, but near the large city of Wichita, which has big city conveniences, she says. She plans to continue her career in the ethanol industry, which, she says, has opportunities at various divisions and various levels. Carter, of Tharaldson, also plans to be in the ethanol industry for the long haul. “My vision is to stay in this industry for the rest of my career and to stay with Tharaldson at this plant. I want to finish my career at this facility working at the Tharaldson ethanol plant. If it were up to me, I would love to see my children even pursuing something in this industry.” Niehaus hopes to finish his career at the ethanol plant where he begins his career in the industry. “I would like to have

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OWNING THE ETHANOL EXEC ROLE One year into her role as Guardian Energy CEO, Jeanne McCaherty has tapped into her previous experience at Cargill and the unique make-up of the ethanol industry. By Luke Geiver

It’s hard to believe that Jeanne McCaherty holds only one title for Guardian Energy Management LLC. The former Cargill executive-turned

ethanol company CEO has a master’s degree in biochemistry, has run a fermentation optimization research group, developed and operated a wet-milling research team, started a culturegrowing company, overseen a global biotechnology effort and spent time as a private equity consultant. Nearly one year after becoming CEO of Guardian Energy, a unique ethanol joint-venture organization that includes 10 ethanol producers spread throughout Minnesota, North Dakota, Iowa and Nebraska, McCaherty spoke with us about her efforts to inject previous experiences into day-to-day operations, observations on the opportunities for plant and organizational upgrades and why the ethanol industry is unlike any she’s been in before.

Letting the Past Inform the Present

After receiving her master’s degree in biochemistry, McCaherty took a position with Cargill. Her time spent working in labs, leading

research and development efforts and running big-name-backed businesses has already proven useful. “All of that tech background I have has been very useful. It is amazing how much I’m putting that to use in our business today,” she says. One of her early roles at Cargill involved working on continuous improvements for large scale fermentation, including ethanol. She called Eddyville, Iowa, home and her place of work while she was working on fermentation improvements. She has also spent time researching corn wet milling issues related to making corn starch-based products. Upon her return to Minneapolis, McCaherty led a biotechnology research group that focused on multiple areas. A fermentation optimization group studied processes to improve organisms. Another group developed and utilized gene manipulation techniques for organisms involved in fermentation processes. “When I look at what the yeast suppliers are doing today and what the enzyme suppliers are doing today, it is all very relevant to the work I did back then,” she says. McCaherty has already brought her experiences and insight from the past into the ethanol business. With vendors, she can talk in great detail about the viability and usefulness

of product claims. She is also well-versed on the technical side of fermentation, she says. “I come from a place where everything has a science or engineering answer to it,” she says. “The idea of continuous improvement and bringing scientific rigor is something I pride myself on.” That approach to the ethanol business has brought some changes to the Janesville, Minnesota, plant owned and operated by Guardian. The team is setting up lab fermenters to test new enzymes and nutrients. “There comes a time when you need to own your own destiny and look at things in detail that maybe aren’t very relative to your vendors,” she says. McCaherty hopes to test how enzymes react to different temperatures, nutrients or additives used at the Guardian facility. Previously, the team depended on vendors to supply the information, or in some cases, was unable to look at products with much detail. “The industry has been very effective at making improvements to the process and now you are getting to the point where you are at diminishing returns,” she says. “You no longer see a 4 percent increase in yields. You have to go after every 0.2 or 0.5 percent improvement to make more optimization happen.” Such improvements may not be as obvious, she adds,


JUNE 2017 | Ethanol Producer Magazine | 35

OWNING R&D: Guardian Energy's Janesville, Minnesota, facility is being outfitted with lab fermenters to test yeasts, enzymes and process parameters. PHOTO: GUARDIAN ENERGY

and could take longer to achieve than previous yield gains took.

Leveraging Ethanol’s Uniqueness

Before joining Guardian, McCaherty spent a year performing private equity consulting. She decided she wanted to get back into running a business, having a team of dedicated

people and making real products. “I wanted to be somewhere where my background would be relevant,” she says, “where our products were good and good for the environment.” McCaherty—raised on a small farm—also likes the connection her team and ethanol facilities hold to the rural community. On the business front, she was attracted to the unique opportunities present in the greater ethanol industry and at Guardian. The


joint-venture entity offers multiple sites and scale, so when improvements are found or made, she says, “we can really move the dial.” With a board made up of experienced CEOs and GMs from six independent ethanol companies, McCaherty is pleased with her options to find answers. “If I have never seen something or need information, I certainly have someone on the board that has seen it before,” she says. “Being


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able to leverage that experience and knowledge has been useful.” Since taking over nearly a year ago, she has also learned about—and has leveraged— the culture of the ethanol industry. McCaherty calls the industry “unusual” compared to her previous experiences. Although it is a massive industry in terms of production and economic impact, it is a very small industry, she explains. Many of the consultants or supplier organizations know each other. In many cases, McCaherty doesn’t have to explain the intricacies of her business when speaking to vendors for the first time. “Being able to leverage that part of the industry has been valuable,” she says. Despite McCaherty’s drive and enthusiasm to improve on a well-established ethanol operation, she still recognizes that certain efforts may not be as relevant as others. Working with existing vendors, partners and established entities is important to McCaherty. “We want to make sure we have and keep networks set up so we aren’t reinventing the wheel,” she says. For her, the network of people linked to Guardian is most important. “As a leader

I think the most important thing is to have a strong team. At Guardian, I’ve been lucky. The people have great industry knowledge and a passion for the industry,” she says. The part of the industry she is still working to navigate and understand is on the policy side. “I’ve never been in a business where policy has influenced it so much,” she says. Although she finds it challenging in some ways, she is more focused and concerned with implementing the three tenets Guardian is working towards under McCaherty’s leadership.

Triple Tenets

The first tenet is collaboration. With RPMG—Renewable Products Marketing Group, Guardian Energy’s marketing arm— McCaherty believes the larger group of ethanol operators can find answers and avenues to nearly everything ethanol related. Achieving greater scale—the second tenet of Guardian—is possible through the make-up of the group, she also says. The new research work being done at the Janesville facility is an example of how McCaherty hopes to turn a good idea into a major success by implementing

change on a large scale. The third tenant for McCaherty isn’t as easy to explain or achieve. “We also work towards excellence,” she says. According to McCaherty, excellence is a concept that is kind of a black box and difficult to truly understand or measure. But, although she freely admits she hasn’t attained it yet during her short time in the ethanol industry, McCaherty says with a calm confidence that her past successes and technical knowhow, combined with her new links to other experts in the industry, have her in a good position to lead. She’s always been in the business of finding the best, or at least better, answer to a challenge or to a position in the market. That is where her personal approach to business— especially under her new role in ethanol— comes in, she says. Based on that, Guardian Energy appears to have found a fitting leader for its future. “You want leaders who will lead an organization as if it is their own,” she says. Author: Luke Geiver BBI International Staff Editor 701-738-4944

JUNE 2017 | Ethanol Producer Magazine | 37



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ETHANOL Warrior Passes

Remembering Bill Holmberg reminds us where this industry started out, and how much was built on the efforts of early advocates. By Ann Bailey

40 | Ethanol Producer Magazine | JUNE 2017


JUNE 2017 | Ethanol Producer Magazine | 41

HISTORY When Korean and Vietnam wars veteran Bill Holmberg was buried at Arlington National Cemetery this spring, friends and family said goodbye to more than a military hero. Holmberg also was a fierce

fighter for the biofuels industry. People who knew Holmberg say he had tremendous loyalty to the ethanol industry because he believed it was critical to the sustainability of the country he fought for in two wars and loved with a patriot’s heart his entire life. Holmberg, 88, a retired Marine Corps lieutenant who received a Navy Cross died Sept. 8, 2016. In 1970, Holmberg began working for the newly created U.S. Environmental Protection Agency after retiring from the military on a medical discharge following a heart attack while serving as battalion commander in Okinawa. His family says that Holmberg, who had grown up in rural Washington, felt renewed sensitivity for the planet after witnessing the waste and devastation the Korean and Vietnam wars wrought on the planet, his obituary says. Dave VanderGriend, ICM CEO, met Holmberg several years later when Holmberg worked for the U.S. Department of Energy.

“The DOE was formed in 1977 by President Jimmy Carter with the express intent to reduce our dependence on foreign oil,” VanderGriend says. “Bill Holmberg was one of the early employees of the Department of Energy and he was on the renewable side.” Holmberg was the founding director of the DOE’s Bioenergy Technologies Office, initially known as the Office of Alcohol Fuels. “He was a big proponent of renewable energy, and, at that time, gasohol,” VanderGriend says. At the request of Holmberg, VanderGriend and his brother Dennis built a distillation tower and hauled it to Washington, D.C., where it operated on the Capitol Mall. VanderGriend continued to work with Holmberg on ethanol issues for the next 40 years. Holmberg saw a strong agriculture economy as going hand-in-hand with a strong nation, VanderGriend says. “Bill recognized that wealth comes from the ground and if we have a strong foundation around agriculture and renewable fuels in this country, we would have better air quality, we would benefit human health, we would benefit job creation and we would be using resources that we have within our country. He was big on wind farms, on solar, on fish farming, the whole circle of life.” Holmberg was so passionate about renewable fuels that when he worked for the DOE he

chartered an airplane to fly President Carter to ethanol plants, VanderGriend says. Holmberg faced a lot of resistance promoting renewable fuels, especially when oil prices were low, VanderGriend notes. “Back in (the late Ronald) Reagan’s day, he was the lone soldier out there. He didn’t have a following.” However, Holmberg didn’t let that dissuade him from promoting ethanol, VanderGriend says. “He made a believer out of this guy, then he made a believer out of that guy…. Commitment was an understatement for Bill. He breathed it (his belief in renewable fuels). Just a few months before he passed away, he was texting and sending out emails. He always had the next idea he wanted to do,” VanderGriend says. “He was a very special friend.” Holmberg’s passion for ethanol was similar to his passion for defending his country, VanderGriend says. “He was a warrior after he got out of the military, too.” Poet CEO Jeff Broin also was a decadeslong friend of Holmberg. “I remember meeting Bill at the first ethanol conference I attended.” Throughout the years, Holmberg was a tireless advocate for the ethanol industry, Broin says. That was despite a lot of challenges, especially in the early days. “I think politically, he had an uphill climb. We were an oil-based economy in the United States and he definitely



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faced an uphill battle.” Holmberg was a true biofuels visionary, Broin says. “I was talking to him in the mid-1980s and he was talking about biodiesel. He was always 10 to 15 years ahead of everyone else in what he was thinking. He was an early adopter of what would later become reality.”


Holmberg was the pioneer of the word “bioeconomy” and drove the concept to be the base of global sustainable agriculture, says BETO director Jonathan Male, in an article about the office’s origin. “His vision has gone mainstream and is now the focus of an interagency collaboration, including BETO, to triple the size of the bioeconomy by 2030,” according to the article. After Holmberg left the DOE, he received the department’s Biomass Energy Program Distinguished Service Award for his leadership and dedication to advancing the mission of BETO. Holmberg continued to work as an advocate for the ethanol industry after he retired from the DOE, serving as an aide to Nebraska Sen. Bill Nelson, chairing the Biomass Coordinating Council of the American Council of Renewable Energy and helping found the Sustainable Energy Coalition.

EARLY ADVOCATE: Tall and lanky, Bill Holmberg, left, was persistant in his advocacy for ethanol during his career at EPA, DOE and ACORE.

“Over the past three years that I have been fortunate enough to be the director of the Bioenergy Technologies Office, I have seen the ripples of Holmberg’s impact on the industry, the advancement of the Federal Bioeconomy Initiative, the opening of the nation’s first cellulosic ethanol biorefineries, a strong partnership with the Department of Defense to produce renewable jet and diesel fuels for the military fleet through the Defense Protection Act and

the growth of a nascent bioenergy and bioproducts industry,” Male says at the conclusion of his article about Holmberg. “Bill Holmberg understood the importance of bioenergy in growing our nation’s energy future and the force of his eternal optimism of reaching a thriving bioeconomy is still felt within the walls of BETO and on Capitol Hill to this day. Bill Holmberg was a giant that led the way in bioenergy.”

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ACT-79: Holmberg asked Dave and Dennis VanderGriend to build a distillation column to display on the Washington Mall for a week-long appropriate community technology event in 1979. It produced 190 proof ethanol to fuel engines during the event.

Holmberg was a longtime friend and cofounder of ACORE where, at various times throughout his career, he worked on the staff and served on the board of directors and advisory board. Several ACORE associates shared their thoughts in a tribute to Holmberg found on the organizationâ&#x20AC;&#x2122;s website: â&#x20AC;&#x153;Bill was a friend and mentor to me and many others in renewable energy. We will miss his quiet wisdom, great resolveâ&#x20AC;&#x201D;and the twinkle in his eye,â&#x20AC;? said Dan Reicher, chairman of ACOREâ&#x20AC;&#x2122;s board and executive director of the Steyer-Taylor Center for Energy Policy and Finance at Stanford University. Todd Foley, senior vice president for policy and government affairs at ACORE, said, â&#x20AC;&#x153;From my perspective having known him since the late 1980s at U.S. EPA and then working more closely with him at ACORE, Bill was all about service to his country, to our earth and, in recent years, to our organization and its mission. He was a great marine, cold warrior and champion for the environmentâ&#x20AC;&#x201D;a real hero. He was also a great leader at ACORE, terrific colleague and mentor to many of us, including those whoâ&#x20AC;&#x2122;ve been around awhile and especially young people getting their start.

He leaves an incredible legacy and will be sorely missed.â&#x20AC;? James Hewett, program manager at ACORE, said, â&#x20AC;&#x153;Bill Holmberg will forever be remembered as both a true American hero and a pioneer for the renewable energy industry. I am honored to have had the privilege of working for and learning from him. The entire renewable energy community owes a great deal to Bill for his tireless work from 1970 to his passing. We have all lost a great friend and mentor.â&#x20AC;? Tom Weirich, senior vice president of corporate relations at ACORE, said, â&#x20AC;&#x153;Bill was a hero not only on the battlefield as one of the most decorated marines in U.S. history, but also as a hero for our industry during a time when we needed direction, growth and a vision. I salute Bill for accomplishing his mission and for instilling in us, the new generation of renewable energy leaders, a cause and industry to fight for. Rest in peace, Bill, we will continue your mission.â&#x20AC;? Author: Ann Bailey Freelance Journalist

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Champions of Change

Past FEW Award of Excellence winners reflect on decades of research advocacy and leadership. By Tom Bryan

Marty Andreas, the late Archer Daniels Midland Co. executive, once followed Charles Abbas out of a boardroom after a fervent discussion about, of all things, thermophiles.

Abbas, a veteran research team leader at ADM, had just implored the company’s board of directors to renew its support of a thermophilic fermentation project. The executives were ready to drop the work before Abbas spoke up. “I went in and told them—I mean, I really told them with conviction—that the work should go on,” Abbas said. “After I left, Marty came out, shook my hand and said, ‘The board passed it. They believed in what you said because of how you said it. They saw your passion.’” That moment, for Abbas, is illustrative of the conviction researchers must convey when they champion ideas. “Believe in what you say,” he says. “Give people something to adhere to. A lot of researchers don’t think it’s their job to sell ideas. I disagree. If it’s worth fighting for, you need to stand up and show people that you’ll own it. Passion alone, however, isn’t enough. Abbas says he’s been an effective innovation champion during his three decades with ADM because he’s built rapport with plant personnel and gained the trust of company executives. Abbas practices what Steve Lewis, Poet’s chief science officer, might call poised advocacy. It’s great to be a vocal defender of your work, Lewis says, so long as your obsession doesn’t lead you off a cliff. “We all have to be kept honest,” he says, channeling author Peter Senge’s concept about balancing advocacy with inquiry. “If you consistently balance those two things—advoJUNE 2017 | Ethanol Producer Magazine | 49


2016 AWARD: ADM's Charles Abbas says effective innovation advocacy requires building rapport with plant personnel. He received the Award of Excellence from EPM editor in chief, and BBI International President, Tom Bryan in 2016.

cacy and inquiry—it will keep you honest. And you’ll move up the learning curve faster as you modify your conjecture and hypotheses with balance in mind, rather than simply advocating and ignoring.” A temperament for balanced advocacy is just one of the many characteristics that define Lewis, Abbas and other past recipients of the International Fuel Ethanol Workshop’s Award of Excellence. Since 2000, the award has been given to accomplished researchers and technical professionals who exude competency, leadership, vision and determination in the face of scientific adversity. Above all, FEW award

winners understand the power of professional constancy—like water shaping bedrock, innovation requires time and pressure—and job jumpers these guys are not. As Poet scientists and engineers pour themselves into the company’s 20 MMgy cellulosic ethanol plant in Emmetsburg, Iowa, Lewis and his team almost embrace the toll that disruptive innovation levies on its originators. While Project Liberty, a Poet-DSM joint venture, is now producing commercial quantities of cellulosic ethanol and making very real progress, Lewis says it has been a “tough, tough road … but our people never get discouraged.”

Retired USDA Agricultural Research Service scientist Kevin Hicks, the 2013 Award of Excellence winner, says an inexhaustible spirit can be useful in science, which tends to deliver a dozen failures for every one success. “You’re not going to walk into a lab and change the ethanol industry in 15 minutes,” Hicks says. “You’re going to spend the time it takes to make sure your work holds up, that it’s repeatable and stands the test of time. There’s nothing quick or easy about that.” In fact, it can take a decade to produce transformative innovation, yet today’s young scientists are unlikely to work for the same company, or even the same industry, for half that time. While researchers like Abbas, Lewis and Hicks remained faithful to a single employer for decades, today’s young scientists are less prone to occupational permanence, and that worries Abbas. “One problem is a lack of rapport,” he says. “Rapport is never developed if you keep moving around.” Abbas, who has been studying biomass conversion since he was in graduate school in the 1970s, says he has fulfilled his professional ambitions at ADM over the course of 27 years by “believing in the work” and balancing the company’s long-term aspirations with its shortterm needs. “I’ve basically spent my career chasing the same thing, but I always believed it was something I needed to accomplish in my life,” he says. “I did it by thinking short-term, mid-term and long-term. And short-term ac-

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INNOVATION tivities have sometimes dominated my time— working on the plants—but there were always bigger, longer-term projects in the distance.

Combine and Conquer

Most of Abbas’ career successes have been achieved in collaboration. Whether it was internal or external teamwork, he says, people who knew each other always worked well together. “It was rewarding to get buy-in from our business unit simply because they knew me and trusted me,” he says. “It’s the same with the plant people. I have credibility with them.” By leading teams over time and through myriad experiences, Lewis says, research managers become less like musicians and more like orchestra conductors. “It’s somewhat of a myth that innovation is the result of the lone person working in a lab,” he says, citing author Steven Johnson’s premise about the recombinant nature of innovation, which supposes that great ideas are borrowed, adapted and made better by many people over time. “It’s a back-and-forth process. So much innovation that happens today is recombinant. We’re always recombining ideas—figuring out what they are and aren’t consistent with—in a constant flux of confirmation and refutation.” Lewis warns that the benefits of recombinant research must be weighed against the risks of information overload, however. “Today, information is increasing at an exponen-

tial rate,” he says. “The problem is, the number of spurious correlations, or incorrect insights, that you can develop also goes up. So, the counterintuitive truth of living in a world with so much information is that, in some respects, innovation has gotten harder because we’re trying to find needles in bigger and bigger haystacks.” The notion of recombinant innovation isn’t lost on John Caupert, executive director of the National Corn-to-Ethanol Research Center in Edwardsville, Illinois, which has been a virtual idea incubator since its inception in 2003. “We’ve always preferred to be in a position of collaboration than competition, if for no other reason than when you compete somebody loses,” says the 2015 Award of Excellence winner. “When you collaborate, everybody involved has an opportunity to win.” Hicks, who worked at USDA-ARS for 35 years, shares Caupert’s view of collaboration. “I didn’t work for a company,” he says. “I worked for the people, and what I most enjoyed was assembling teams from the public and private sectors—companies, universities and our teams at USDA. Those groups accomplished so much more than any one of us could have done alone.” Hicks says science is about understanding nature, and scientists are at their best when they are pursuing discovery with few boundaries. That style of work defined NCERC in its early years when startup biofuels com-

2013 AWARD: Kevin Hicks, retired USDA-ARS scientist, says he enjoyed assembling teams from the public and private sectors, accomplishing more than any could have done alone.

panies virtually booked out the center. “We were working with guys who practically came up with ideas in their garage,” Caupert says. “They came here to learn more than to have us produce specific deliverables. It was a very collaborative era and it led to many discoveries along the way—improvements to processes, products, approaches, you name it.” That shifted in 2009 when the U.S. economy went south and biofuels profitability dropped off. “The pendulum swung hard and our client base went to the opposite end of the spectrum,” Caupert says. “We went from working with venture-backed startup compa-

JUNE 2017 | Ethanol Producer Magazine | 51



2015 AWARD: John Caupert leads NCERC, the National Corn-to-Ethanol Research Center.


‘When you compete, somebody loses. When you collaborate, everybody involved has an opportunity to win.’ - John Caupert


nies to working with global household names with deep pockets. Our new clients had already done years of product and technology development on their own. They were coming to us for third-party verification of their products and technologies. They came in with almost a recipe of work. For those companies, we were more of a service provider than a collaborative partner.” Today, some of the open-ended research is coming back to NCERC. “The startups are starting to return,” Caupert says. “It’s a nice blend of collaboration, discovery and commercial services.”

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52 | Ethanol Producer Magazine | JUNE 2017

Working for two of the world’s largest ethanol producers requires Lewis and Abbas to practice mostly applied research, rather than fundamental biofuels science. “For us, it’s more about taking a new or existing technology and adapting, optimizing and scaling it up in a setup that works for ADM,” Abbas says. “It’s about practical improvements that can work in our existing plants.” Abbas once gave a presentation in Japan, titled “Lost in Translation,” about why things developed at small scale often fail to work at large scale. “The analogy I used was that the guy developing technology at small scale is pushing a rock uphill whereas the guy developing technology at large scale—running fermentations in a million-gallon reactor—is on top of the hill rolling the rock down.” Abbas says years of responding to plant issues not only gave him vast experience but the credibility he needed to get support for projects he valued. “With that sort of earned credibility, you’re no longer an unknown quantity,” he says. “And I was fortunate to have been in an environment where there wasn’t that much aversion to

2007 AWARD: It's a myth that innovation is a loner pursuit. Rather, it's about recombining ideas to find workable solutions says Poet's chief science officer Steve Lewis. He received his award at the FEW in 2007 from Kevin Hicks.

Author: Tom Bryan Editor in Chief, Ethanol Producer Magazine 701-746-8385






risk. If you had an idea that would help, they were willing to try it. We never had to go through a lot of steps and layering to get things done.” Lewis agrees that innovation is more likely to flourish within companies that tolerate modest amounts of risk. Working for a large, integrated biofuels company like Poet does, however, place practical limits on risk-prone science. “Everything we do has to take safety, consistency of operations and quality control into account,” he says. “Operations guys don’t necessarily like variation, but it’s our job to sometimes take calculated risks. There’s a balance between innovation and execution, though, and you have to merge them and try to find the sweet spot.” To illustrate this balance, Lewis uses author Gary Klein’s analogy of up-arrow companies versus down-arrow companies. Down-arrow companies, such as those practicing Six Sigma, focus on reducing mistakes. “They are keenly focused on driving error out of their systems and reducing defects,” Lewis says. “But there is such a focus on minimizing that down arrow that the up arrow never gets a chance to generate anything new. And the up arrow is the thing that generates insights that lead to innovation. So, without inviting up-arrow risk you lose out on some potential for innovation.” Lewis says companies need to take risks to stumble on good fortune. 3M, for example, developed Post-It Notes by mistake. “It wouldn’t have happened in the era of Six Sigma, he says. “It was the result of making an adhesive that didn’t work well.” And serendipity is also real, Lewis says. “It’s the good result you didn’t envision—an unintended consequence that turns out to be more viable than what you were originally searching for. And I think in today’s data-driven world there could be a serendipity deficit. If you’re not hands-on, working with the information, so much of it will just go right by you.” JUNE 2017 | Ethanol Producer Magazine | 53


A Decade of

BIOENERGY RESEARCH The Department of Energy’s three bioenergy research centers have no intention of resting on their accomplishments By Patrick C. Miller

In the 10 years since the U.S. DOE established three bioenergy research centers with the goal of using science to help America grow its way to energy independence, the amount of knowledge generated toward that end is staggering. The three

centers and their partners have published 2,500 papers and generated nearly 600 invention disclosures, an average of five papers per week and five inventions per month over the decade. “That’s a rate of knowledge production that outstrips anything I thought we’d achieve when we were funded,” says Tim Donohue, director of the Great Lakes Bioenergy Research Center at the University of Wisconsin in Madison.

GLBRC, the BioEnergy Science Center at Oak Ridge, Tennessee, and the Joint BioEnergy Institute in Emeryville, California, were funded by DOE to pursue three primary objectives: develop crops optimized for biofuels production; improve enzymes and microbes for biomass conversion; and engineer pathways for advanced biofuels production. The research centers combined have produced 365 patent applications, 89 patents, 175 licenses and options, and multiple spin-off businesses, indicating that the research has practical applications leading to commercialization. Donahue points out that that some of the “George Jetson-type technology” the bioenergy centers pioneered has already moved from the realm of science fiction into reality. “We’re not into starch ethanol or the starch-based fuel business,” Donahue explains. “We’re fund-

ed to produce fuels and chemicals from the corn stalks instead of the corn starch, or from the corn cobs or switchgrass or poplar as woody biomass or leftover wood chips from the forestry industry. It’s very different, new and game-changing.” Although all of the bioenergy research centers have the same general objectives, they each brought something different to the research table. “First and foremost, we were looking at drop-in fuels for gasoline, diesel and aviation,” says Blake Simmons, JBEI’s chief science and technology officer and vice president of deconstruction. “We weren’t really focused on ethanol production. We knew that a lot of other teams were going to be proposing ethanol. We thought we’d be complementary from the portfolio perspective and intriguing to the oil and gas industry.”

TOMORROW'S BIOREFINERY RESOURCE: Processed, unprocessed and seedlings of populus deltoides, also known as the Eastern Cottonwood, are being studied at the BioEnergy Science Center at Oak Ridge, Tennessee, to determine if they can be used for ethanol production. PHOTO: OAK RIDGE NATIONAL LABORATORY

JUNE 2017 | Ethanol Producer Magazine | 57

ENERGIZED SWITCHGRASS: At left, a plot of switch grass grows at the Great Lakes Bioenergy Research Center. Finely ground switchgrass is a common biofuel feedstock for ethanol. PHOTOS: MATTHEW WISNIEWSKI, WISCONSIN ENERGY INSTITUTE

While the other centers have partners and collaborations with research entities nationally and internationally, Simmons notes that the concept for JBEI—led by DOE’s Lawrence Berkeley National Laboratory— was different. “We had this vision of an integrated research institute that would be centralized in one facility that would colocate folks from all different institutes,” he explains. “That’s

a pretty big departure from the norm and what the national labs do.” JBEI’s other national laboratory partners include the Lawrence Livermore National Laboratory, the Pacific Northwest National Laboratory and the Sandia National Laboratory. Its academic research partners are the University of California at Berkeley and Davis and the Carnegie Institution for Science.

Led by DOE’s Oak Ridge National Laboratory, BESC brought together a large consortium with 18 different research partners from around the country, each offering different capabilities in terms of intellectual resources and lab research capabilities to focus on generating biofuels from cellulosic sources. “In our case, we arrayed the entire workforce distributed across a number of

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different institutions around a single point of focus, which was mainly understanding and overcoming the phenomenon of recalcitrance,” says Paul Gilna, BESC director. “The problem with cellulosic biomass sources is that the sugars we seek are deeply complexed in the plant structures. “There’s an inherent cost associated with trying to get at those structures,” he continues. “Our goal was to study and understand—at a basic research level—the basis of recalcitrance. Having developed that knowledge, we then harnessed it to develop strategies that would get around or eliminate or reduce recalcitrance as an economic barrier to the production of biofuels.” The GLBRC, housed within the Wisconsin Energy Institute, works in partnership with Michigan State University and collaborates academically with the University of British Columbia in Canada and Texas A&M University. It supports nearly 400 researchers, students and staff in disciplines ranging from microbiology to economics to plant biology and engineering.

Placing an emphasis on collaboration and cooperation with a wide variety of public and private research partners—as well as the other two bioenergy research centers— helps GLBRC support its research goals. “I think we’ve benefitted from the ability to do this because we’ve been able to make advances that only occur when people who work in different disciplines work in a collaborative way instead of having people work only in their comfort zone or their area of main expertise,” Donahue notes.


All three bioenergy research centers can point to significant accomplishments in the renewable energy field over the past 10 years—even as the needs have changed and evolved. “In the world of biomass and plant science, we have deepened the fundamental understanding of recalcitrance,” Gilna says. “We’ve been able to pin it to a number of different systems in plant structure and

FERMENTED SWITCHGRASS: Hydrolysate is a sludgy mix of partially digested switchgrass being studied by researchers at GLBRC as a fuel source. PHOTO: MATTHEW WISNIEWSKI, WISCONSIN ENERGY INSTITUTE

broadened the scientific community’s understanding of its basis.” He explains that BESC’s research shows that other plant cell components— cellulose, pectin, xylan and lignin—contribute to recalcitrance. “When we started out


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JUNE 2017 | Ethanol Producer Magazine | 59


UNLOCKING THE ANSWERS: A researcher at the Joint BioEnergy Institute uses a high-performance liquid chromatograph to analyze aromatic compounds. PHOTO: BERKELEY LAB, MARILYN CHUNG

10 years ago, we all thought it was simply about lignin. We’ve taken that understanding and have been able to show that we can effectively reduce recalcitrance by using the knowledge of the different genetic bases of the phenomenon. We’ve been able to knock down specific gene expressions and develop

a plant that yields a higher amount of sugar than its normal counterpart.” According to Gilna, BESC’s researchers have not only demonstrated this in the lab, but also in the greenhouse and in the field where the results have shown that the plant traits are held for a number of years.

Donahue sites three broad areas of GLBRC’s accomplishments over the past decade. The first is in creating as much value from biomass as possible. “We now have very good systems to dissolve biomass and get all of the sugars,” he says. “We have microbes that can convert more of each of those sugars into fuels than we did when we started. That’s going to provide more value to an industry.” Second, researchers have demonstrated that they can generate value from lignin. “It turns out that lignin is a polymer of aromatics, and we felt there was a lot of value to be generated from lignin if we could process it into its aromatics,” he explains. “We see a potential to take that lignin and break it down and convert it into aromatic compounds that are precursors for other chemicals that industry needs and provide value to a biorefinery in the future. We’re trying to provide as much value from every gram of carbon as possible in the biomass.” Finally, Donahue says the center’s research indicates that there are better uses

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R&D for the byproducts of the process, products currently being used to generate electricity. “We think there are more valuable things to produce from that left over carbon than natural gas,” he says. “We’re very excited about where we want to go in the future to produce other products.” Simmons says JBEI’s researchers pursued different approaches to feedstocks and deconstruction technology, developments he says are both outside the norm and scientifically compelling. “JBEI has pioneered the development of advanced routes to the production of fuels from sugars for use in blendstocks by using synthetic biology,” he notes. “We’ve raised the bar for what can be achieved and expanded the tool box beyond what we originally envisioned to control and manipulate cell wall composition to improve bioenergy traits.” In the area of ethanol, Simmons says, “It’s axiomatic for us that cellulosic ethanol has to succeed.” JBEI’s goal isn’t to pick technology winners and losers, but to create a suite of technologies that enable BIOENGINEERED FUELS: Researchers in the fuels synthesis division at the JBEI lab in California have developed a biomass conversion technology that's feedstock agnostic. PHOTO: BERKELEY LAB, ROY KALTSCHMIDT

JUNE 2017 | Ethanol Producer Magazine | 61

ENERGY ON THE GROW: BioEnergy Science Center researcher Brock Carter is establishing clones of various genotypes of populs trichocarpa, the black cottonwood, as a potential biomass fuel source. PHOTO: OAK RIDGE NATIONAL LAB

the marketplace to choose the best options. “We are creating a portfolio that the entire bioenergy industry can benefit from,” Simmons says. “The same tools and same approaches that we’re using to optimize energy production can be used by the ethanol

industry. We embrace the cellulosic ethanol industry and want it to succeed.” JBEI has also developed a biomass conversion technology that Simmons says is feedstock agnostic and can be used to enhance process integration and lower costs.

Optimistic Outlook

The DOE bioenergy research centers came into existence in 2007 during the administration of President George W. Bush at a time when gasoline prices were on the

R&D rise and the need for renewable domestic energy sources was considered a national priority. Although the shale oil revolution and OPEC overproduction helped bring down the cost of gasoline, the bioenergy research centers continued to receive bipartisan support during President Barack Obama’s administration. With the fossil-fuel-friendly Trump administration now in charge, there are concerns about the future with funding renewal coming up next year. However, representatives of all three centers are confident that what they’ve accomplished in the past 10 years demonstrates the value their research provides and puts the nation on a path to a cleaner, more secure energy future. “We do what taxpayers want us to do, but we listen to industry and take their input because they have boots on the ground, steel in the ground and they know what the real challenges are,” Donahue says. “We have research approaches that are best suited for basic science or a university national lab environment because they are high risk and potentially high payoff—not the kind of thing that typically goes on in industry.” Simmons believes there’s still much to be done in accomplishing the goals DOE originally set for the centers. “For us, demonstrating a path to affordability and scalability still needs to be there,” he notes.

“There needs to be a competitive business model to produce chemicals and fuels and to convert biomass into various compounds. One of the biggest challenges and biggest opportunities is to convert biomass into renewable fuels and chemicals without throwing away a huge part of the waste stream.” Gilna believes the research conducted at BESC is important on several levels. “To no small extent, we’ve shown at the proofof-principle level and—in some cases all the way out to commercial events—that we can reduce the cost of producing a biofuel from plant sources that don’t compete for food production.” Another consideration Gilna emphasizes is the effect the three centers have had on the state of bioenergy research itself. “The impact of the centers has been as much about how we’ve done the work as what we’ve managed to do,” Gilna says. “It’s had an accelerative effect on science and developed a culture that values this approach with collaborative science.” Donahue envisions an exciting future for bioenergy as a result of the DOE research centers’ work. “What if we could empower society to have these integrated biorefineries that make fuels and chemicals just like a petroleum refinery does now?” he asks. “The economics of making differ-

ent compounds from plant feedstocks are very different than economics of making a single fuel like ethanol, because you get to sell the different products at different price points. The profit margin for the industry would be very different.” Where the program started and where it ends might be different, but Simmons is optimistic about its future. “The next 10 years are going to be great for bioenergy, although maybe different from what DOE originally conceived,” he says. “There’s still a lot of merit to the concept of a bioeconomy, and we’re still very bullish on the outcome.” Author: Patrick C. Miller BBI International Staff Writer 701-738-4923

JUNE 2017 | Ethanol Producer Magazine | 63


KnipBioâ&#x20AC;&#x2122;s Microbe Technology Creates Better Fish Feed Company develops new use for ethanol in producing aquaculture feedstock. By Debbie Sniderman

KnipBio, a Massachusetts-based biotechnology company, has developed a series of microbes that converts lowcost feedstocks into premium, nutritious, single-cell proteins that are an alternative to fishmeal in aquaculture. Its fermentation process yields a protein flour that is laden with immunity-boosting, pigment-enhancing carotenoids to produce healthier, more vibrant fish.

There is a large, urgent need for fish feed, says Larry Feinberg, KnipBio CEO. â&#x20AC;&#x153;Aquaculture is one of the best hopes to meet the swelling protein demands for people. It is currently a $110 billion market, and it is expected to double by 2030. The number of farmraised fish for every wild-caught fish will double to 2:1 in the same time, meaning the world will need 25 million new tons of fish. All of this production will come from formulated feed. The current market is a global one, with less than 1 percent of fish feed used in the U.S.

FEED TO FORK: Feeding fish and showing no harm compared to fishmeal is one thing, but how do the fish taste? KnipBio CEO Larry Feinberg says "YUM!" PHOTO: KNIP BIO

64 | Ethanol Producer Magazine | JUNE 2017


PETRI PALETTE: Starting with a single microbe, KnipBio has developed a range of advanced carotenoid strains, each with unique features, designed to satisfy the nutritional needs of specific species of fish and shrimp. PHOTO: KNIP BIO

Although we have harvested more protein for fish farms than cattle worldwide since 2013, there is a looming bottleneck based on a stable, sustainable supply of proteins and oils. We need to grow more feed to support the world we’re moving into, and

ethanol biorefineries can figure into this equation,” he says.

The Ethanol Connection

Ethanol is one potential feedstock of the multiple streams that serve as nutrition

for the KnipBio microorganisms. All forms of ethanol are being evaluated, including hydrous, neat and beer. Colocating with an ethanol plant would also be advantageous since blending the KnipBio product with DDGS could make a super-feed. “DDGS alone have been examined for fish feed, but are relatively low value,” Feinberg says. “Blending them with carotenoid containing, single cell proteins could make a better overall feed, raising the protein content from 40 to 70 percent.” “DDGS sell in the range of $150 per metric ton. A ton of our product will range from $1,500 to $3,500 per metric ton, representing the potential to significantly upgrade the value on site and diversify,” he says. “Getting into aquaculture feed offers ethanol producers the opportunity to diversify and increase output. Producing 25 million tons of fish per year will require at least 30 million metric tons of feed. That

corresponds to 100 percent of the 15 billion gallons produced by the U.S. each year. Obviously, all ethanol production is not going to fishmeal production, but the point is that the markets are massive. For all these reasons, ethanol colocation makes sense and is part of our scale-up partnership plans,” Feinberg says.

The Technology

Feinberg, with a history in second generation biofuels, founded the company in 2013 with Chris Marx who was an evolutionary biology professor at Harvard at the time. They shared a mutual vision of connecting fermentation and biotechnology to solve the world’s next big problem: how to feed mankind. “Fish protein must play a significant role in this, and with the decline of wild fish in our oceans, there’s a real sense of urgency. Ethanol-derived fish feed can be a fantastic substitute,” he says.

JARS OF FISHKNIP: KnipBio produces a diverse strain of single cell protein flour products trademarked FishKnip that can be milled into shrimp, trout and yellowtail fish feeds. PHOTO: KNIP BIO

When considering available feedstocks and possible physiological routes to solving this problem, Feinberg and Marx focused on microbial metabolism. In nature, the microbe of choice is able to eat many differ-

ent alcohols, including methanol, ethanol and glycerol. KnipBio’s process involves using a biocatalyst to make aquafeeds that more closely resemble wild diets in composition of protein, acids and carotenoids.

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FERMENTOR: KnipBio used standard fermentation equipment, with a government lab hosting pilotstage work. The ethanol from a single 120 MMgy plant can produce more than 250,000 tons of KnipBio’s trademarked FishKnip.

KnipBio’s fermentation technology produces a single cell protein product with an interesting composition. It contains proteins, amino acids, carotenoids and taurine. Plus, the technology can be tailored to more precisely meet the nutritional demand of fish or shrimp. Diets aiming to be more sustainable by lowering the use of fishmeal tend to become deficient in other areas, like the amino acid taurine, Feinberg explains. Deficits of dietary sources of taurine can be offset by providing chemically synthesized forms for taurine supplementation. The KnipBio feed product will eliminate the need for supplementation, he says, providing a biologically superior version. “Carotenoids, which are present in plants, are important for pigmenting fish and maintaining the animals’ good health and immunity. We care about carotenoids because we are accustomed to thinking salmon should look pink, and pinker salmon typically correlate with health,” he explains. KnipBio’s colorful pink bacteria are so core to the company, Feinberg shared the company’s name comes from “pink” spelled backwards.


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The origins of the bacteria itself and how it is used is the secret sauce of KnipBio. But, Feinberg says it has created a library full of bacteria with very high conversion efficiencies from both genetically modified (GM) and non-GM lineages. Some GM bacteria are used because they have the ability to derive additional products, and the ability to grow and control the process is part of the overall technology.

Startup Progress

The company was awarded a Small Business Innovation Research award in 2015 and raised more than $4.5 million funding to develop the process, products and complete pilot scale development. Initial microbiology and molecular biology work was done at corporate headquarters in Lowell, Massachusetts. Pilot scale work has been performed at a third-party contract manufacturer. The company has completed approximately a dozen feed treatment trials for salmon, trout, shrimp, yellowtail tuna and ornamental fish, and Feinberg says the company has a good understanding of the versatility of the protein source and its applications.

Bacteria in general are very efficient at converting feedstocks into proteins. What’s novel about KnipBio’s process is the biotechnology. Feinberg says this technology should scale up well with existing hardware and infrastructure. The process involves straightforward fermentation and simple post processing. KnipBio is in the process of developing partnerships to head towards demonstrating viability at a precommercial scale, and has made what Feinberg calls significant process on its first commercial-stage pilot package. It is currently seeking partnerships to demonstrate large-vessel scaleup and colocation viability.

On the Regulatory Path

According to Rick Barrows, who evaluates the nutritional value and other aspects of new products for the USDA Agriculture Research Service, new feed products used in the United States need either generally recognized as safe (GRAS) determination or an Association of American Feed Control Officials definition. “There currently is no official AAFCO definition for single cell protein ingredients to be used for animal feed, and no one has approval yet. It is

likely that AAFCO will create a new definition, but it is up to them. It’s a slow process that can typically take from one to three years,” he says. When new ingredients are used in other countries, which is where most aquaculture feed is sold, Barrows says, “each country has its own agencies that regulate what can and can’t be used as an animal feed.” “Some DDGS are already used in aquaculture, more for herbivores that can handle a higher fibrous content, like catfish and tilapia. The KnipBio product is much higher in protein and is more animal-like than plant-like, with higher lysine and thiamine levels. KnipBio has entered into the process for GRAS determination, and it is likely to be approved,” he says. Feinberg says KnipBio will complete its GRAS determination paperwork in 2017. Author: Debbie Sniderman CEO, VI Ventures, LLC

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Bringing Capacity UP Increasing efficiency is the ethanol industry’s top goal, and proving it to the U.S. EPA opens the way for expanded ethanol production. By Susanne Retka Schill

70 | Ethanol Producer Magazine | JUNE 2017


EXPANDING SOUTH: Marquis Energy doubled its capacity at Hennepin, Illinois. The new south unit appears on the right in the photo. PHOTO: MARQUIS ENERGY

JUNE 2017 | Ethanol Producer Magazine | 71





PLANNED EXPANSION: The footprint of The Andersons-Albion (Michigan) was designed to integrate the expanded capacity that came online this spring. PHOTO: THE ANDERSONS

The number to beat to be named an efficient ethanol producer is 20 percent. Under the






2007 Energy Independence and Security Act, existing ethanol plants, plus those under construction and completed by the deadline, were grandfathered into the Renewable Fuel Standard. Any expansions or new construction were required by statute to meet a threshold of a 20 percent greenhouse gas (GHG) reduction compared to the baseline gasoline fuel. Ten years later, 75 plants have achieved efficient producer status, which includes the one greenfield plant built since the RFS rule went into effectâ&#x20AC;&#x201D;Dakota Spirit AgEnergy in North Dakota. Any proposed ethanol plant must show its GHG emissions profile meets the threshold before EPA will permit it to generate renewable identification numbers (RINs). There are three that have been approved, including two corn-ethanol plants, Elite Octane in Iowa and Ringneck Energy & Feed in South Dakota, and one using barley, Montana Advanced Biofuels. For the U.S. EPA, a corn ethanol plantâ&#x20AC;&#x2122;s greenhouse gas emissions profile boils down to four numbers representing the mass and energy balances of an ethanol plantâ&#x20AC;&#x201D;bushels of corn ground, gallons of ethanol produced, cubic feet of natural gas and kilowatt hours of electricity consumed. The inputs and outputs are plugged into an EPA formula to calculate the GHG reductionâ&#x20AC;&#x201D;a formula based on the modeling done in 2010 that found the typical U.S. corn ethanol dry mill, using natural gas

and producing 100 percent DDGS, had a 16.8 percent GHG reduction compared to the 2005 baseline value of gasoline. The ethanol industry asserts that the decade-old formula needs updating. The 2010 model includes the controversial international indirect land use penalty, estimated in the rule at 32 kgCO2e/MMBtu. Another 12 kg was added for net international agriculture emissions without land use change. The international GHG penalty totals just over half of the 82 kgCO2e/MMBtu emissions assigned to corn ethanol. In the EPAâ&#x20AC;&#x2122;s GHG tool developed for the efficient producer petition process (EP3), the complex modeling done for the 2010 rule was reduced to a single emission factor for corn upstream GHG emissions: Each bushel of corn (measured at 15.5 percent moisture) gets multiplied by 9.73 kgCO2e. Industry advocates point to more updated studies and modeling that would ratchet down the international GHG penalties, not to mention the improved life-cycle emissions for corn production in the U.S.

from higher yields and more efficient fertilizer rates. Most of the 75 plants that submitted their data and were approved as efficient producers reduced GHG between 20 and 23 percent, as shown in the accompanying bar chart. The roughly dozen plants at 24 percent or better GHG reductionsâ&#x20AC;&#x201D;the highest being 34.4 percentâ&#x20AC;&#x201D;are primarily located in areas where a big portion of their distillers grains are going out as wet cake or modified distillers to nearby feeders, with the resulting drastic reduction in energy use for drying DDGS. Some plants have adopted various energy-efficient technologies. All plants can separately meter and exclude energy not used in the process, such as the electricity used in the administration building or natural gas used to dry incoming corn. The median GHG reduction of 21.4 reflects a significant improvement of nearly 5 points above the 16.8 percent GHG reduction for the average corn ethanol plant modeled by the EPA. In


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Efficient Ethanol Producers Percent reduction in life-cyle GHG emissions compared to baseline gasoline #


Letter Date




Letter Date


1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38

Absolute Energy LLC Adkins Energy LLC Andersons Albion Ethanol LLC Badger State Ethanol LLC Bushmills Ethanol Inc. Carbon Green BioEnergy LLC Cardinal Ethanol LLC CHS Annawan CHS Rochelle Commonwealth Agri-Energy LLC Corn LP Dakota Ethanol LLC Dakota Spirit AgEnergy LLC East Kansas Agri-Energy LLC E Energy Adams LLC Flint Hills Resources Camilla LLC Flint Hills Resources Fairmont LLC Flint Hills Resources Iowa Falls LLC Glacial Lakes Energy LLC - Mina Glacial Lakes Energy LLC - Watertown Granite Falls Energy LLC Green Plains - Atkinson Green Plains -Bluffton Green Plains - Obion Green Plains - Ord Green Plains - Shenandoah Guardian Energy LLC Guardian Lima LLC Guardian Energy/Hankinson Renewable Energy LLC. Heartland Corn Products Heron Lake BioEnergy LLC Highwater Ethanol LLC Husker Ag LLC Iroquois Bio-Energy Company LLC Kansas Ethanol LLC * Lincolnland Agri-Energy LLC Lincolnway Energy LLC Little Sioux Corn Processors LP

2/6/2013 6/29/2015 10/22/2015 1/29/2015 5/13/2015 9/22/2015 11/26/2014 11/26/2014 11/26/2014 12/15/2016 11/19/2015 1/29/2015 2/6/2013 6/24/2015 3/6/2014 10/22/2015 10/22/2015 10/22/2015 5/13/2015 5/13/2015 5/13/2015 3/12/2015 3/16/2016 7/27/2016 1/29/2015 1/29/2015 11/7/2013 3/12/2015 7/17/2013 5/19/2016 3/12/2015 1/29/2015 11/26/2014 6/29/2015 11/19/2015 1/29/2015 1/29/2015 11/26/2014

22 23.6 21.6 24.7 21.2 20.8 21.9 20.4 20.8 20.1 21.7 20.5 20 27.2 25 20.8 21.4 21.3 20.1 24.7 26 20.4 21.2 22.2 20.5 24.5 22 20.9 22 21.4 20.1 23.3 27.3 21.4 29.3/34.4 21 21.1 23.6

39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75

Marquis Energy LLC Marquis Energy Wisconsin LLC Mid-Missouri Energy LLC NuGen Energy LLC * One Earth Energy LLC Poet Biorefining - Alexandria Poet Biorefining - Caro Poet Biorefining - Corning Poet Biorefining - Emmetsburg Poet Biorefining - Fostoria Poet Biorefining - Gowrie Poet Biorefining - Hanlontown Poet Biorefining - Hudson Poet Biorefining - Jewell Poet Biorefining - Laddonia Poet Biorefining - Lake Crystal Poet Biorefining - Leipsic Poet Biorefining - Marion Poet Biorefining - North Manchester Poet Biorefining - Portland Quad County Corn Processors Redfield Energy LLC Red Trail Energy LLC Siouxland Ethanol LLC Show Me Ethanol LLC Tharaldson Ethanol LLC United Wisconsin Grain Producers LLC Valero Renewable Fuels - Albert City Valero Renewable Fuels - Albion Valero Renewable Fuels - AZurora Valero Renewable Fuels - Bloomingburg Valero Renewable Fuels - Charles City Valero Renewable Fuels - Fort Dodge Valero Renewable Fuels - Hartley Valero Renewable Fuels - Linden Valero Renewable Fuels - Welcome Western New York Energy LLC

11/13/2014 11/27/2013 3/12/2015 6/15/2015 6/29/2015 6/30/2016 3/13/2017 3/13/2017 3/13/2017 6/30/2016 3/13/2017 3/13/2017 3/13/2017 3/13/2017 6/15/2015 9/19/2016 6/30/2016 6/30/2016 6/30/2016 6/30/2016 1/29/2015 10/27/2016 11/26/2014 11/26/2014 5/13/2015 1/29/2015 3/12/2015 8/20/2015 9/22/2015 6/29/2015 9/22/2015 6/29/2015 11/7/2013 5/13/2015 9/22/2015 7/17/2013 5/13/2015

20.6 23 21.3 20.9/21.9 21.8 20.4 21.3 21.1 23.2 20.1 22.7 20.5 20.1 24.2 28.2 20.1 20.4 20.1 20.4 20.4 23.1 23.9 21.1 22.1 20.5 21.3 24.6 25.4 23.4 22.1 25 26.7 22 22.3 21.1 22 20.8


JUNE 2017 | Ethanol Producer Magazine | 75


the 2010 RFS rule, for example, the EPA used an ethanol yield of 2.71 gallons of ethanol per bushel of corn in its models. Today’s average yield is estimated to be 2.83 or better, and some producers report hitting yields just under 3 gallons per bushel—significant increases that make a big impact in the GHG modeling for upstream emissions from feedstock production and transport. While those improved ethanol yields and energy efficiencies are reflected in the efficient producers’ individual GHG reduction numbers, there still is that rather hefty GHG penalty for international impacts.

Capacity Creep

Getting efficient producer status opens the way for plants to expand capacity above the grandfather volumes they registered when the 2010 RFS rule went into effect. Absolute Energy was the first to get its petition approved in February 2013, before the streamlined EP3 process was created. The motivation was to expand, Absolute president Rick Schwarck says. Then at 110 MMgy,

76 | Ethanol Producer Magazine | JUNE 2017

the plant could only go 5 percent over its registered volume. Today, Absolute lists a capacity of 125 MMgy. Of all those on EPA's pathway list, only three have launched big expansions to date. Marquis Energy, Hennepin, Illinois, doubled its capacity, building a south unit adjacent to its original plant, which came online in January 2016 to reach a new capacity of 300 MMgy. The Andersons was another company that moved quickly, announcing plans in the quarterly investor call that followed the EPA determination letter. The Andersons doubled capacity at its Albion, Michigan, plant to 130 MMgy. Construction was completed in March and a company spokesman reports it has been operating beyond guaranteed capacity since then. Little Sioux Corn Processors in Marcus, Iowa, didn’t double capacity, but it made a big leap from 92 MMgy before getting efficient producer status to 135 MMgy. General manager Steve Roe says that by summer, the plant will be running at 150 MMgy. LSCP actually had room


for growth before getting the EP3 letter, he added, explaining they had registered 126 MMgy gallons as its grandfathered volume. Most expansions among the 75 efficient producers have been more modest 5 to 10 MMgy incremental increases. The majority of producers in the group are not reporting changed capacity, however, according to an analysis of Ethanol Producer Magazine plant data. Plant capacities from the spring 2014 map were compared to this spring’s map and roughly 40 had not increased their reported capacities. In updating plant data for the most recent map, a handful of facilities on the list reported plans to increase capacities between 10 MMgy and 25 MMgy. In comparing the capacities reported this year to those from spring 2014, 494 million gallons have been added since the inception of EP3, which includes just 65 MMgy from the one greenfield plant built in the past decade. Capacity as reported in the plant maps, however, is not a definitive number. When plants are called for updates, some report current run-rates, others prefer to keep the actual number confidential and report nameplate or another, lower capacity than maximum run-rate. Energy Information Agency fuel ethanol production data, another indicator of capacity, shows 14.31 billion gallons produced in 2014 and 15.33 billion in 2016, an increase of 1.02 billion. Run-rates are variable, of course, with recent market conditions favoring maximized throughput resulting in record production volumes this past year.

Record Keeping Requirement

Being cleared to expand capacity above the grandfathered amount registered with the EPA is a big plus. The down side is that it comes with additional recordkeeping. To be able to generate RINs for the added gallons, EPA

requires plants to keep records showing their daily rolling average GHG reductions meet the threshold of 20 percent or better. “Getting the efficient producer status is the easy part,” Roe says. “Getting the monitoring plan approved is a different story.” As one of the first plants to get EP3 approval, it took about six months to work with EPA to get the plan approved. LSCP added density metering equipment to get accurate daily measurements for corn consumption and ethanol production. Used in the refining industry, density meters were not common in the ethanol industry until the past three years, Roe says. Previous methods for measuring daily corn and ethanol data were not as accurate as the new equipment, and EPA would not allow a plant to go back at the end of the month and adjust the numbers based on inventory. Data for the daily records at LSCP is gathered at 9 a.m., Roe says, simply because that’s the time the natural gas supplier reads the meter. Electric meter readings, corn crushed and ethanol production data is recorded at the same time. Since LSCP set up its system, Roe adds, other monitoring equipment has been introduced to the industry, offering other options. It is important to maintain the rolling daily average at 20.1 or better, Roe says. Any gallons surpassing the grandfathered volume cannot generate a RIN unless it meets the GHG reduction threshold. While EPA starts over Jan.1 counting the grandfathered volume first, the challenge of keeping that rolling daily average on target for when that is surpassed means the plant may as well maintain it year-round, he says. Author: Susanne Retka Schill Managing Editor, Ethanol Producer Magazine 701-738-4922

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FOOD FOR YEAST: Urea is one option to add to fermentations as a source of nitrogen yeast can metabolize.

PROTEASE USE FOR FAN AS UREA SUBSTITUTE POSES CHALLENGES Understanding yeast physiology and preferences for utilizing free amino nitrogen is important to avoid yield-robbing problems. By Dennis Bayrock

Proteases have been a valuable tool to the fuel ethanol industry in aiding increased corn-oil extraction, but when used to provide yeast nutrition, many nuances need to be considered. Amino ac-

ids from proteases have the same potential as urea/ammonia to provide yeast with the nutritional nitrogen they need, but with significant differences. A proper understanding of yeast

nutrition, proteases and process operations is vital to efficient protease application. Corn mashes lack sufficient free amino nitrogen (FAN), which is defined as the biological portion of nitrogen that can be utilized by yeast. This is not to be confused with measurements of total or percent nitrogen in mash or in various chemicals. The proper amount of FAN is critical to the yeast, so much so that FAN levels should be checked with each and every change in process volumes, flow rates, composition or dilution of

mash, and yeast pitching rates at the plant. Yeasts require a minimum of 300 parts per million (ppm) FAN in a typical 750,000 gallon fermentor of corn mash at 32 percent solids.

FAN Sources

In addition to FAN dietary requirements, the type of FAN also impacts yeast nutrition. The yeast transports only certain nitrogencontaining compounds across its cell membrane. Amino acids and di-peptides cross the cell membrane by active transport and facili-

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).

80 | Ethanol Producer Magazine | JUNE 2017

FERMENTATION tated diffusion, mechanisms that require metabolic energy. Ammonium ions, in contrast, enter the cell by passive diffusion and do not incur a metabolic penalty. Individual amino acids present in many commercial yeast foods can be utilized, along with small amounts of N-containing nucleic acids in corn. The protein in corn mash, however, cannot be used directly by yeast. When dissolved in water, ammonia and aqueous ammonia form ammonium ions. Ammonia salts, such as di-ammonium phosphate and ammonium sulfate, fully dissociate into the ammonium cation and the respective phosphate or sulfate anion. Urea must first be broken down to ammonia and carbon dioxide by the yeast via the enzyme urease before the ammonia in urea can be used. If given equal concentrations, does the yeast have a preference for which order it utilizes these FAN sources? It turns out it does. Aqueous ammonia is the yeastâ&#x20AC;&#x2122;s first choice, as this source of FAN incurs no metabolic penalty, leaves behind no inhibiting anions, freely diffuses into the yeast and is a central part of yeast metabolism. Urea is the next choice, and it, too, leaves behind no inhibiting anions. However, the yeast must first produce the enzyme urease, spending energy and materials to do so. Amino acids are the next choice for FAN. One would expect that since yeast is always undergoing protein synthesis, the required amino acids should be easily acquired

Amino Acid Uptake by Yeast Additive

Relative fermentation time (h)

Initial FAN (mg N/L)

Final FAN (mg N/L)





Yeast extract
















Aspartic acid








Glutamic acid








































Control (no addition)













by scavenging the amino acids provided in the mash. If the demand can be satisfied with an existing amino acid in the media, the yeast will incorporate it without any penalty and save itself the cost of producing it from scratch. If,

however, the yeast is faced with a delay for an amino acid, the yeast will instead metabolically de-aminate any available amino acid to form ammonium and a carbon skeleton. These carbon skeletal remains are toxic, so the yeast

JUNE 2017 | Ethanol Producer Magazine | 81

FERMENTATION converts them to less-toxic fusel compounds. A build-up of fusels can create havoc in the ethanol process. Ammonium salts are last in preference for FAN. Residual anions pose a significant challenge for yeast health. Further complicating the story for amino acids is that not all 20 in a mixture are used equally by the yeast. Although most amino acids are nearly completely utilized, the length of time to complete fermentations can increase nearly four-fold, depending on the type of amino acid provided as FAN.


PROPER TIMING: Nutritional requirements must be met when yeast are actively multiplying, between 6 and 24 hours. SOURCE: PHIBRO

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What does this mean at the fuel ethanol plant? If faced with stressed yeast or a stalled fermentation, ammonia/aqueous ammonia addition gives the greatest and fastest benefit to the yeast for FAN with practically no biological side-effects. An additional benefit to using ammonia/aqueous ammonia is the simultaneous rise in pH, which alleviates stresses on the yeast from lactic and acetic acids. If faced with out-of-control, hot fermentors, changing the FAN source and timing of addition are options to slow down the yeast. In corn-based ethanol fermentation running at 33 percent solids for 55 to 75 hours, the yeast are most metabolically active between 6 and 24 hours—the time frame when the yeasts have the highest demand for nutrients. Most yeast FAN calculators in the field (including Phibro’s) calculate required ppm of FAN based on a full fermentor, with the assumption that any chemical added for FAN is instantly available to the yeast. In most situations, these assumptions and calculations are valid. However, with the use of proteases to provide FAN, this may not be the case.

Protease Use

On the surface, it makes sense to convert protein to amino acids for use by the yeast as FAN. Corn typically contains 11 percent dryweight (DW) protein and wheat 13 percent. In a 750,000 gallon fermentor operating at 33 percent solids, there is approximately 220,000 pounds DW protein that can potentially be used as a source of FAN for the yeasts. Initially used to aide corn-oil extraction, more recently ethanol producers are utilizing proteases to offset or replace urea. Offsetting urea is reasonable, but totally displacing it poses some risks.

FERMENTATION First there is potential for stuck and sluggish fermentations. Chemical FAN additions are nearly instantaneously available to the yeast. Proteases however, ideally, should complete all of the required amino acid FAN production prior to peak FAN demand, which is not always the case. As noted, yeast require most of their FAN between 6 and 24 hours into fermentation. Unfortunately, information on protease catalytic reaction rates at various mash temperatures, pH, etc., is difficult to obtain, so full understanding of FAN availability over time is unknown. A second risk is the production of toxic fusels. Regardless the source, fusel production by yeast is maximized if all FAN is depleted when the yeast is still fermenting, often at about 32 hours. Starved of FAN, the yeast cannibalizes itself and hydrolyzes internal proteins to amino acids, converting the remaining toxic carbon skeletons into fusels. In mash fermentations where FAN is mostly provided by amino acids, either directly or indirectly through proteases, fusel production increases. Numerous ethanol plants have documented large increases in fusel production and large increases in yeast inhibition to the point of complete metabolic stalling when FAN was provided by amino acids. At plants where proteases don’t replace, but only offset about 30 percent of the FAN provided from urea/ammonia, fusel increases were marginal. A third issue surrounds potential impacts on distillers grains. In a 750,000 gallon fermentor, the total protein content is approximately 220,316 pounds. To provide sufficient FAN, the protease would need to hydrolyze 8,786 pound of protein. This corresponds to a bulk loss of 4 percent protein in the fermentor, which would arguably correspond to a similar, or possibly larger, reduction in the DDGS. One cannot assume all amino acids generated by protease become yeast protein, as some will be shunted towards fusel production. In addition, when fermentable carbohydrates are depleted in late fermentation, amino acids can be used for energy production, which takes precedent over protein production. Furthermore, digestibility issues are known for yeast whole-cell protein additions to feed and it cannot be assumed that the total protein content within the yeast cell is available for the animal. The fourth potential impact may be a loss of ethanol yield and increased Mailliard reac-

tions. The Mailliard reaction occurs between amino nitrogen-containing chemicals, primarily amino acids, and reducing sugars, such as carbohydrates, glucose and maltose, to form a family of amino-sugar chemicals. The reaction rate and product formation rapidly accelerates at temperatures above 160 Fahrenheit. Mailliard reaction products influence yeast in three ways. As little as 1 percent, visible as increased darkening in solution, can inhibit yeast metabolism by up to 10 percent. In addition, the FAN and sugar components within Mailliard reaction products cannot be metabolized by the yeast, and thus represent a loss of FAN, sugar and, subsequently, ethanol. While yeast cannot metabolize Mailliard reaction products, many bacteria can. In mash, proteins have only one amino nitrogen unit that can participate in Mailliard reactions, although reducing sugars as carbohydrates are plentiful. However, once the 4,000-plus amino acids within each protein are liberated by a protease, each amino acid contains at least one amino nitrogen unit.

Together with the 180F or better liquefaction temperatures and 3 to 4 hours of holding time, Mailliard reaction products rapidly accumulate and cause a noticeable darkening of the mash. Normally, Mailliard reaction products are associated with distillation. With the large amount of amino acids in the mash when using proteases and elevated temperatures combined with the large difference in processing time in liquefaction, serious attention should be paid to the loss of fermentable sugars, FAN, ethanol yield, and potential increase in bacterial contamination. Author: Dennis Bayrock Global Director Fermentation Research Phibro Ethanol Performance Group 651-641-2826

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GROUNDBREAKER: Nearing completed, Croda’s ethylene oxide plant is pictured in March. The $170 million investment at its Delaware site enables the company to be the first to offer biobased surfactants from ethanol. PHOTO: CRODA

OPTIMIZING SURFACTANTS FOR INCREASED CORN OIL YIELD Ethanol will be used to produce bioethylene oxide as the base for oil extraction aides. By Min Wang

With its bioethylene oxide plant being commissioned this year, Croda Inc. soon will provide a range of 100 percent biobased nonionic surfactants optimized for increased corn oil yields. Surfactant is the short name of surface active agent. Soap has been made from fats and alkaline salts for millennium. An anionic surfactant, soap dominated world surfactant production before World War II. It wasn’t until between 1950 and 1960 that nonionic surfactants opened a new chapter in the detergent, food and pharmacy industries. In the 1960s, the development of steam cracking at petroleum refineries produced a low-cost ethylene suitable as an intermediate for ethylene oxide. Today, nonionic surfactants made from ethylene oxide contribute to about 45 percent of world surfactant production. Ethylene oxide (EO) used in the U.S. is currently derived solely from petrochemical

sources. In 2015, Croda Inc. invested $170 million to begin construction in New Castle, Delaware, on a bioethylene oxide plant using ethanol from biomass sources, such as corn. On schedule for completion this year, Croda soon will launch a new range of 100 percent biobased nonionic surfactants, some of which will be used as corn oil extraction aids in ethanol plants. Net greenhouse gas emissions to the atmosphere are reduced by the use of Croda’s 100 percent biobased nonionic surfactants, when compared to their petrochemically derived counterparts. Croda’s versatile bioethylene oxide plant can accept ethanol from different sources, all of which contain only carbon sequestered from the atmosphere by photosynthesis. When considered across the whole product life cycle, products made using ethanol-derived EO have a lower carbon footprint than petrochemically derived variants. At the end of the product life cycle, when the surfactant decomposes into CO2, it returns it to the atmosphere from which it was recently drawn.

EO Process

Typical EO production starts with a stream of purified ethylene derived from a petroleum source such as oil, oil byproducts or natural gas. Ethylene separated from an olefins stream within a refinery is the most common petrochemical source. Regardless of source, EO producers utilize the same technology to convert ethylene using a silver catalyst. The crude EO is then purified to a common market standard and sold as a commodity. For ethylene oxide produced via biomass feedstocks, the ethylene is separated from ethanol via chemical dehydration. Ethanol producers physically dehydrate ethanol using molecular sieves to remove tightly bound water molecules to produce pure ethanol— CH3CH2OH. Croda uses catalytic dehydration to produce ethylene, C2H4, plus water. The final step is the same as the conventional process, reintroducing oxygen to produce ethylene oxide—C2H4O. Ethylene oxide is the building block to produce surfactants. Ethylene oxide forms a

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84 | Ethanol Producer Magazine | JUNE 2017


polyethylene glycol chain (PEG) through polymerization. The water solubility of a nonionic surfactant will be determined by how much EO is added to a substance. The correlation between the PEG chain length and hydrophilicity of a nonionic surfactant was established in 1949 by William C. Griffin of the Atlas Powder Company (now Croda). Griffin developed the HLB system (hydrophile-lipophile balance) to characterize nonionic surfactants. All nonionic surfactants consist of a hydrophilic and a lipophilic group, which are what make the molecule surface active. The hydrophilic group is usually a polyethylene glycol. The lipophilic group is usually a fatty acid or fatty alcohol. The relationship, or balance, between the hydrophilic portion of the nonionic surfactant to the lipophilic portion is called HLB. Each nonionic surfactant has a HLB value ranging on a scale of 0 to 20. The higher the HLB value, the more water soluble the nonionic surfactant is.

SURFACTANT RESULTS: The average volume of corn oil extracted with 6 experimental surfactants of HLB ranged from 10 to 16. PHOTO: CRODA


Corn Oil Extraction

What is the right HLB value of a nonionic surfactant for corn oil extraction in ethanol plant? Six experimental surfactants were molecularly designed to have HLB values ranging from 10 to 16. The HLB values were calculated by how many moles of ethylene oxide were added to the surfactant. Each surfactant was added at 400 ppm dosage rate to 40 milliliters of corn stillage heated to 85 Celsius (185 Fahrenheit). After centrifugation at 7,000 rpm for 3 minutes, the volume of extracted corn oil was measured as the height of clear oil layer in the centrifuge tube. The results, shown in the accompanying chart, indicate the surfactant with an HLB of 14 provided the highest oil yield. When the surfactant with the right HLB value was added to the corn stillage, the interfacial tension between the oil droplets and continuous water phase was reduced. The oil droplets coalesce more quickly and easily to form a continuous layer and float to the top under centrifugation. With the new facility being commissioned this year, Croda will be introducing a range of 100 percent biobased nonionic surfactants with the right HLB values to be formulated into optimized blends for increased corn oil yield. Author: Min Wang Applications Manager, Croda Inc. 302-429-5374

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PART BEFORE AND AFTER: A close-up of dirt buildup on a piece of industrial plant equipment prior to cleaning and after it has been cleaned by sponge blasting. PHOTO: SPONGE-JET

CLEANING COMES WITH CHOICES Quality service providers offer wide variety of techniques, mediums to meet plant needs. By Mark Parenteau

When it comes to industrial plant cleaning, there is no one right way to effectively get the job done. In fact, ethanol plant managers have

many choices to make when deciding how to get their plant as clean as possible for optimal performance. They can choose one service provider for the entire cleaning contract, or they can hire multiple companies to perform different aspects of the cleaning. They can also choose which combination of cleaning techniques will best suit their plant’s design. Typically, a mix of wet and dry techniques is necessary for proper cleaning to protect the

different equipment used throughout the plant and to achieve optimal performance. Every method and medium has its own pros and cons, however, so staying up-to-date on available techniques and best practices can be very beneficial for plant managers. Which set of techniques is the right fit for your particular plant? Let’s review the options available.

Dry Methods

Dry ice, sand and sponge are the three most common types of dry cleaning materials. Sand blasting is a cleaning technique that has been around for centuries. While it is an affordable and effective way to clean, it

is also very aggressive and presents some risk of damage to both the equipment and the worker. Sand blasting can profile equipment, making it more susceptible to dust and grime and ultimately requiring more frequent cleanings. Also, workers who use sand to clean are exposed to increased risk of dust inhalation, which can lead to health issues. Slurry blasting—a combination of water and sand—is sometimes used as a solution to this issue. Some states have even passed regulations requiring slurry blasting to be used instead of sand blasting for outdoor applications because slurry produces a more containable waste stream as compared to sand. Some

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88 | Ethanol Producer Magazine | JUNE 2017


OEMs require sand to be used to clean their products. It is important for plant managers to know which items may have such restrictions. Other dry cleaning methods include dry ice and sponge blasting. The two techniques are comparable methods in cost and cleaning ability, but the mediums are very different. Sponge differs from other dry media in that it can be used near rotating equipment and adjacent coatings without being concerned that the material will ricochet. Premium Plant Services began offering sponge blasting in 2012 as an alternative to dry ice cleaning for duct work, energy centers, dryers and other applications, in response to plant demand. Sponge blasting is a precise method for cleaning; however, it is less powerful than some other methods. Therefore, more time is required for proper cleaning. While it does take more time, emissions and dust are not an issue when using sponge to clean, so it is a safer option than sand for cleaning crews. Sponge is also more environmentally friendly than other cleaning mediums. Sponge can be recycled multiple times on site at each job, which reduces waste. More importantly, sponge requires no water, eliminating run-off concerns and the need for auxiliary tanks to hold used water. Finally, unlike wet cleaning methods, sponge blasting leaves no slippery floors behind, doesn’t present electrical haz-



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SPONGE BLASTING WITH FEED UNIT: A worker prepares to sponge-blast equipment in an industrial plant. PHOTO: SPONGE-JET

ards and eliminates the risk of expensive pieces of equipment rusting out after the job. While it does have many positives, sponge blasting is not the perfect technique for all applications, and there are certain specific precautionary measures that should be taken. For example, plants that produce distillers grains must be extra cautious when using sponge for cleaning, particularly if the sponge medium used by the contractor contains aluminum oxide. Plant managers who choose to use sponge to clean those plants should plan for extra time


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to sweep and vacuum all nooks and crannies of the area carefully to ensure no media is left behind.

Wet Methods

Hydro blasting with water has been a top choice for industrial plant cleaning for decades, and continues to be the most popular form of cleaning for ethanol plants. The reasons are simple: It’s cost effective, fast and efficient. Hydro blasting requires the least amount of manpower of any cleaning technique, which


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is what makes it cost-effective and efficient. Hydro blasting equipment can utilize 350 HP (horsepower). Sponge blasting equipment, by comparison, maxes out at 132 HP. A wider variety of tools is available to aid in hydro blasting as well, which can speed the process. Confined spaces can be cleaned by a mechanical device, for example, which limits safety concerns for cleaning crews. By contrast, when using dry methods like sponge blasting, personnel must climb into the confined space to clean the area. It’s fairly dangerous, and some plants require a rescue team to be onsite as a precautionary measure, which increases the time and cost for the project. Water is most likely to be used to clean areas of the plant where sponge and other dry media are not useful, such as distillation units and exchangers. Additional benefits of hydro blasting include no dust, no risk of profiling surfaces, and no need to postpone service times in case of inclement weather. A little rain makes no difference when your cleaning medium is already water. Hydro blasting is not always the ultimate cleaning solution, however. Thousands of gallons of water are required for each cleaning,

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CLEANING which requires precautionary measures to prevent run-off, auxiliary tanks for holding water and other preparatory steps. Through experience, though, some service providers have greatly reduced the amount of water. Premium Plant Services has reduced the typical amount of water it uses when cleaning an energy center in a 50 MMgy ethanol plant from 30,000 gallons several years ago to less than 15,000 gallons currently, and continues to further reduce the amount of water needed for cleaning.

Choosing the Right Mix

The ideal cleaning solution for most ethanol plants is a combination of wet and dry applications. A dry medium like sponge can perhaps best be used in sensitive areas of the plant such as the energy center. And while sponge can also be used to clean structural steel, tanks and other areas, most plant managers find that its environmental benefits do not outweigh the increased cost and time for the majority of the plant’s cleaning needs. In those areas, hydro blasting continues to be the most likely choice for efficient, quality cleaning. A perfect combination, for example, could include using dry ice on the RTO economizer, sponge on the fans, and water for other areas of the plant.


Plant managers should ask questions when consulting with a cleaning contractor to find the mix of approaches that works best for their plant. A quality cleaning company will provide advice and help identify the best solu-

tions. If they don’t, seek out a company that will. Author: Mark Parenteau CEO, Premium Plant Services 888-549-1869

Your plant is unique. Your treatment options should be too. WestAgro releases DeLasan CMT TM a patent pending process treatment for corn mash used for fermentationat at fuel and beverage ethanol plants. DeLasan CMT is a leading technology that is best suited for control of organic acids in your fermentation process. The unigue product formulation, low cost, high concentration of actives, and patent pending application make DeLasan CMT unique among other fermentation treatments. Additional benefits of our DeLasan CMT program can include: • Cost reduction in your organic acid control program • Does not contribute inorganic salts • Breaks down easily into food ingredients • Improves your ethanol production • No pre-mixing required • Recognized as safe for grains • Meets the new FSMA requirements • Eliminates your need for anti-biotics

Contact your West Agro representative for more JUNE 2017 | Ethanol Producer Magazine | 91


ETHANOL PRODUCERS MUST ENGAGE IN UPCOMING FARM BILL DEBATE A drastically changed farm economy means the next bill will likely be very different than past ones. By John Duff

It is hard to believe the current Farm Bill expires in less than 18 months. Considering the arduous path

to approval taken by the Agricultural Act of 2014 (the first field hearing was held in Lubbock, Texas, in early 2010), it is ironic many of the bill’s programs reached the end of their useful lives so quickly. There are several reasons for this, but the primary culprit is a drasti-

cally changed farm economy. Although many new proposals have included minor adjustments to current programs, stakeholders— especially ethanol producers—must keep in mind the next Farm Bill is likely to look much different than past ones. Figure 1 illustrates the decline in profitability for sorghum producers. The situation for corn producers is no better, and the Food and Agricultural Policy Research Institute

projects this situation will not change anytime soon. It is hard to comprehend the magnitude of this change in farm fortunes in the U.S. since the current bill was enacted. The high point in return over variable costs, depicted in figure 1, is 126 percent higher than the projected low point. With commodity program payments at their lowest levels in a quarter century, many producers are already in need of assistance. Unfortunately, due to the structure of current

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).

92 | Ethanol Producer Magazine | JUNE 2017





key Farm Bill programs, not only has this assistance declined, but the decline itself will place significant constraints on the architects of the next Farm Bill as well. It is fitting the agriculture committees are in dire financial straits, given the producers they represent are facing their worst losses since the 1980s. Due to the rolling nature of the Agriculture Risk Coverage program’s revenue benchmark, coverage levels for producers enrolled in the program are in the midst of a precipitous decline. Figure 2 depicts the falling ARC guarantees for sorghum producers in Rooks County, Kansas. After payments of over $30 per acre in the first two years of the program, sorghum producers there face three consecutive years where the actual revenue is above the guarantee and ARC payments are $0. Figure 3 projects October 2017 corn ARC payments and illustrates the need for more assistance in the upper Midwest. This decline has helped drain the Farm Bill’s programs of baseline funding, or the funding that will be used as a starting point for the next bill. Figure 4 depicts the latest baseline projections for corn ARC and Price Loss Coverage payments from the Congressional Budget Office. The baseline projects total corn ARC payments will fall from a high of $4.1 billion in 2017 to a low of $118 million in 2022. If not for the CBO’s assumption that corn producers enrolled in ARC would switch to PLC after a hypothetical extension of the current bill, baseline funding for the next bill’s corn safety net would be almost nonexistent. Why such a steep decline? The corn market is partially to blame. ARC is based on a rolling revenue benchmark calculated by multiplying the five-year national marketing year average price by the five-year Olympic average

county yield. As long as prices stay firm, ARC complements multiple peril crop insurance by providing an additional band of coverage and added price protection. Prolonged periods of low prices, on the other hand, lower the revenue benchmark to levels where all but the most severe yield losses fail to trigger a payment.

Large ARC payments were a virtual certainty in the program’s first two years as revenue guarantees for sorghum and corn were based on five-year national marketing year average prices of $5.10 and $5.29, respectively. Today, the situation is radically different with projections pegging these benchmarks near

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$4.00â&#x20AC;&#x201D;a level completely insufficient for covering production risk. Other Farm Bill initiatives are similarly underfunded. Almost 40 programs lack baseline funding. These programs contributed $2.6 billion in five-year baseline funding to the current Farm Bill, and several have been highly beneficial to sorghum producers. For example, the bioenergy program for advanced biofuels was originally funded at $75 million over five years. Authorized by section 9005 of the Farm Bill, this program has returned over $60 million to sorghum ethanol producers since it began in 2010. This funding helped facilitate sorghum use and led to ethanol becoming the foundation of domestic sorghum demand. The commodity title has other challenges as well. The most well-known ARC problem that does not involve the budget is the possibility of large payment inequities across county lines. These possibilities can be partially remedied by a migration to the Risk Management Agency as the primary data source, but a hybridized approachâ&#x20AC;&#x201D;or even a complete restructuring of the programâ&#x20AC;&#x201D; may be necessary to fix this problem. Aside from structural changes, smaller, seemingly cosmetic modifications are also needed. For example, as credit tightens, adjustments in payment timing (i.e., payments that come sooner than 12 months after the crop is harvested) could help producers with cash flow problems. The same could be said for higher 94 | Ethanol Producer Magazine | JUNE 2017

loan deficiency payment rates; however, neither of these changes comes free of a cost. How will the next Farm Bill look given all the changes needed and the lack of baseline funding? There has been no shortage of proposals so far. Possibly the only consensus proposal involves the migration to RMA data for ARC; however, this is one of only a few simple proposals. The other relatively simple change would involve moving all producers to a PLC-type program. PLC has worked very well for many sorghum producers, and although most would rather have a strong price and receive no program payments, few would argue the coming payments will be insignificant. The final national marketing year average price is yet to be known, but current Kansas State University projections peg this price at $2.72. The resulting $1.23 price loss should translate to around $400 million in total sorghum PLC payments this October. Moving corn producers to PLC would be simple enough, but the cost would result in sticker shock. According to the CBO, the national average PLC yield for corn is 115.9 bushels, a value that would likely go up upon such a change, given most areas currently enrolled in PLC have much lower yields. Corn base acres total 94.8 million, and the current price loss (i.e., the corn reference price of $3.70 less the national marketing year average price) projected by Kansas State University is 35 cents. This implies total corn PLC payments of $3.3 billion with a participation rate


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of 100 percent. Raising the reference price from its current level to $4.00—a common proposal—increases this total to $6.1 billion. Pulling off this change in the current budget environment will be a tall order. Less simple proposals involve moving or expanding the window for calculating ARC’s rolling revenue benchmark and introducing various floors and triggers into the program’s payment calculation methodology. There are dozens of ways such changes could be implemented, so speculation and extensive modeling now will ultimately yield little insight. Instead, stakeholders should focus their attention on those more complex proposals that include specific policy prescriptions and whose impacts on grain markets can be more easily calculated. For example, significant changes to conservation programs have been proposed, and these changes could affect all of agriculture. Figure 5 maps losses in conservation reserve program (CRP) acres since their 2007 peak of 36.7 million. Most of these losses are a direct result of the 24 million-acre cap placed on CRP acreage by the current Farm Bill. Many see raising this cap as a way to curb supply and send much-needed support to rural America. The two most vocal supporters of increased conservation acreage so far have been Sen. John Thune, R-S.D., and Rep. Collin Peterson D-Minn. Thune has already introduced two pieces of legislation designed to increase conservation acreage—one focused

on a shorter-term program with added haying and grazing flexibility, and one focused on adding similar flexibility along with an additional six million acres to the current CRP program. In the House, Peterson recently made headlines when he called for an increase in CRP acres to 40 million. While a CRP increase of 16 million acres is unlikely, the chances of some level of increase along with more haying and grazing flexibility are rising. It is unclear the exact impact these changes would have on grain markets given much of the land leaving production would be marginal at best, and many fear the impact to young producers. There will undoubtedly be consequences, but additional detail will be needed for more reliable analysis. A large amount of uncertainty surrounds the next Farm Bill, and it appears the only absolute certainty is U.S. producers need assistance sooner rather than later. Regardless of whether the changes to the Farm Bill’s programs are small or large, they will need to provide significant support. Stakeholders should strongly consider making their voices heard in the coming debate. Author: John Duff Strategic Business Director, National Sorghum Producers 806-749-3478

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800-279-4757 701-793-2360 Natwick Appraisals 1205 4th Ave. S., Fargo, ND 58103 JUNE 2017 | Ethanol Producer Magazine | 95


TUBE BUNDLE CLEANING GETS AUTOMATED Showcasing the benefits of safety and production in cleaning ethanol evaporators. By Terry Gromes Jr.

One doesnâ&#x20AC;&#x2122;t have to look far to see that automation is an everyday occurrence in our lives. Your

Keurig automatically brews exactly 8 ounces of coffee to start the day. Canary automatically activates your home-security system once you walk out the door. Pandora automatically picks your song of choice as you fight through rush hour. Your Ford sedan automatically parks itself once you arrive at work. If your java and music can be successfully automated to your liking, can your tools at the workplace function in the same manner? As the importance of safety and production in the ethanol industry is being recognized, the need for automated tooling for cleaning is in high demand. The current

process of cleaning ethanol evaporators, developed around high-pressure water, relies on the worker to clean by hand. This creates an extreme environment for the worker who is holding the hose containing high-pressure water in his hands, and is the sole source of delivering this high-pressure water from one tube to another. Not only is he constantly exposed to high-pressure water and hazardous working conditions, he is faced with unavoidable worker fatigue accumulated through manual labor over a 12-hour shift, resulting in inconsistent cleaning. Replacing the hands-on worker with a hands-free mechanized tool designed specifically for tube bundle cleaning solves these problems. Standard solutions include a hose feeding device paired with a navigating appa-

ratus (commonly referred to as an indexer or positioner) to aid cleaning tube to tube. With these systems, safety is achieved by removing the worker from high-pressure water exposure. Worker efficiency is multiplied due to the hose feeding devices feeding multiple lances at once. With the former hands-on worker now operating a mechanized tool, a single worker can now double or triple his work production. Finally, the unavoidable physical fatigue of the worker over a 12-hour shift is replaced by the consistent feed of the hose feeding device, providing cleaning consistency throughout the entire bundle. Mechanized hands-free tooling successfully provides a safe and efficient solution to the generalized water-blasting industry by replacing a manual workerâ&#x20AC;&#x2122;s inconsistent physi-

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).

96 | Ethanol Producer Magazine | JUNE 2017



cal performance with controlled mechanized consistency and by removing the worker from hazardous cleaning conditions. When applied to the ethanol industry, however, multiple challenges arise in this attempt to achieve automation and production in the same scenario. Some of those challenges include: • Vertical orientation of ethanol evaporators and the limited enclosed work area is always a challenge in the ethanol industry due to limited means of transport and the small working area outside of the blast zone. • Twenty-four inch man-ways restrict the sizes of entry, thus requiring tools to fit within the confined walls and to be lightweight for transport and setup. • Navigation of a standard indexing system which travels on the X/Y axis inhibits full bundle coverage, dictated by the axial lengths and the location of the lance guide positioners. Consequently, the tool must be relocated several times within the evaporator, with the tubes along the walls ultimately still being cleaned by hand. • The single angle view of the blast zone, the direct area on the tube sheet where the cleaning is performed is another obstacle. Within a confined entry clean of an ethanol evaporator, a single line-of-sight is the only available view for the operator through the man-way, limiting his view of the tool to one angle and not providing multiple visual opportunities. • Steam, lighting and debris are elements that hinder the line-of-sight over the cleaning shift, many of which are unavoidable. The steam, which is released by the high-pressure water, has only the man-way for escape. With more steam being created than escaping, it creates a visual mask over the mechanized tooling, resulting in minimal sight when navigating from tube to tube to clean.

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3 Bottom line: Extended run time between cleanings increases profitability


JUNE 2017 | Ethanol Producer Magazine | 97



Combining the full array of modern automation tools with hands-free mechanized tooling provides multiple solutions to these restrictions when cleaning ethanol evaporators. Using a touch-screen tablet, for example, serves as a command surface to control the system. A standard Bluetooth wireless connection allows the operator to control the tool installed within the confined entry while being located outside the man-way. It removes the operator from the hazardous working area known as the blast zone and eliminates cables and hoses that can hinder movement, limiting the risk of slips, trips and falls. The on/ off control of the high-pressure water can be controlled at the tablet, eliminating an additional worker that would typically control this feature. Terydon Inc. has paired safety objectives with productivity goals in its Smart Indexing, automated tooling, which allows the operator to automatically navigate from tube to tube by a single click of the button. Smart Indexing provides a consistent navigation that, much like the feed rate of the hoses, is reliable and accurate over the course of the cleaning process. It addresses the issues of navigating with steam, low lighting and other ailments affecting the operatorâ&#x20AC;&#x2122;s line-of-sight. The addition of a patent-pending radial arm in Terydonâ&#x20AC;&#x2122;s 3A Indexing System facilitates navigating to all the tubes along the walls, avoiding hand cleaning. All the tubes in an ethanol evaporator can be accessed. Data collection and recall features also are available to help maximize efficiency by remembering feed rates, time to navigate and percentage of clean. Author: Terry Gromes Jr. Product Support, Terydon Inc. 330-879-2448

98 | Ethanol Producer Magazine | JUNE 2017


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You Want to Expand, Now What?

By Joe Leo

More than any year I can remember, there is a significant amount of dirt being moved and concrete being poured in the ethanol industry. While

all this expansion is exciting for the industry, for many of my clients this is the first time in many years they have negotiated large construction contracts. Thus, it may be useful to discuss key terms in construction contracts that are frequently overlooked. A proper understanding leads to successful construction projects and avoids unnecessary confusion and disappointment for all parties. The procedure for requesting and approving change orders is important. As with any project, the scope of work can change during construction. Adding or deleting work from the original scope of work frequently includes an adjustment to the contract price and completion date. Well-written construction contracts include procedures for proposing and approving change orders, which should be followed rigidly. Many contracts include an integration provision, which provides that any oral agreements or other discussions not incorporated into the contract are ignored. As a result, if you do not follow the change-order procedure in the construction contract, there can be a dispute later regarding whether any discussions regarding changes are binding and included in the contract. One key aspect of negotiating any construction contract is providing assurance that the work will be completed in a timely manner and according to contract specifications. One way to ensure this is to retain a portion of each progress payment to the contractor until the work has been completed and inspected and any unfinished or unsatisfactory work has been fixed. It is especially important to keep a portion of each payment as retainage instead of simply reserving the last 5 or 10 percent of the contract price, in the event the contractor ceases work in the middle of the project. If you have not retained a portion of each progress payment, you may be searching for a new contractor without any funds available to compensate for any losses. Getting lien waivers from every contractor and subcontractor is imperative and requires diligence. Before making a progress payment to the contractor, confirm which subcontractors and suppliers will be paid for the work performed and secure lien

102 | Ethanol Producer Magazine | JUNE 2017

waivers covering the work and materials for which you are making a payment. The last thing you want is to have a mechanics lien filed against your property because a supplier or subcontractor was not paid. Nothing hurts more than paying twice for work to resolve a mechanics lien and trying to collect that amount from an insolvent contractor. Work with your insurance provider to confirm that you have the necessary insurance required by your construction contracts. Have the insurance provider review the construction contract to confirm that none of the terms violate your insurance policies or require an additional insurance rider. Many construction contracts require your insurance provider to notify the contractor if the insurance coverage is terminated or changed. In my experience, insurance companies will not agree to provide this notice to someone other than the policy holder. Carefully analyze any indemnification obligations under the contract and confirm they are not inconsistent with your insurance policies. Anti-subrogation provisions in the construction contract may violate the terms of your insurance coverage. Finally, many construction contracts include dispute resolution procedures. While aiming to resolve disputes in the most efficient and cost-effective manner possible, they do not always accomplish those goals. Keep in mind if you have an arbitration provision in your construction contracts, the costs to commence arbitration, especially if the contract calls for multiple arbitrators to hear the case, can be expensive. Further, there are typically up front fees to commence the arbitration that can be costly. In some cases, using the court system instead of arbitration can be more cost effective. Author: Joe Leo Attorney, BrownWinick Law Firm 515-242-2462

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FAILURE ANALYSIS We are experienced in root cause failure analysis of ethanol plant equipment Economizers and boiler systems heat exchangers, evaporators, piping, pumps and valves, distillers grains dryers Failure modes include: Tension, shear, creep, fatigue, fretting, corrosion, erosion, wear, cavitation. DESIGN // CONSTRUCTION PLANT SERVICES // SLIPFORM WEITZ.COM


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JUNE 2017 | Ethanol Producer Magazine | 105





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2017 June Ethanol Producer Magazine  

People in Ethanol Plus: R&D

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