2020 June - Ethanol Producer Magazine

JUNE 2020

PROOF of PRIDE

Industry Rises to Hand Sanitizer Need PAGE 18

ALSO

E30’s Divergent Long Games PAGE 24

Carbon Sequestration Strategies PAGE 32

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EDITORIAL

ADVERTISER INDEX 2020 Int'l Fuel Ethanol Workshop & Expo

42

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21

BASF Enzymes LLC

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D3MAX LLC

26-27

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Ethanol Producer Magazine

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PUBLISHING & SALES

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7

Hydro-Thermal Corporation

35

ICM, Inc.

13

Interra Global Corporation

30

Interstates Companies

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Lallemand Biofuels & Distilled Spirits

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McC Inc.

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MoistTech

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NLB Corp.

36

Phibro Ethanol Performance Group

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POET LLC

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Marketing & Advertising Manager Marla DeFoe | mdefoe@bbiinternational.com

RPMG, Inc.

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9

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Solenis LLC

17

Trislot USA, Inc.

28

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23

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41

WINBCO

48

Editor Lisa Gibson | lgibson@bbiinternational.com Associate Editor Matt Thompson | mthompson@bbiinternational.com Associate Editor Luke Geiver | lgeiver@bbiinternational.com

DESIGN

CEO Joe Bryan | jbryan@bbiinternational.com President Tom Bryan | tbryan@bbiinternational.com Vice President of Operations/Marketing & Sales John Nelson | jnelson@bbiinternational.com Business Development Director Howard Brockhouse | hbrockhouse@bbiinternational.com Senior Account Manager/Bioenergy Team Leader Chip Shereck | cshereck@bbiinternational.com Jr. Account Manager Josh Bergrud | jbergrud@bbiinternational.com Circulation Manager Jessica Tiller | jtiller@bbiinternational.com

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

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4 | ETHANOL PRODUCER MAGAZINE | JUNE 2020

Contents

18

IOWA DEPARTMENT OF CORRECTIONS

JUNE 2020 VOLUME 26

24

4

AD INDEX

6

PUBLISHER'S NOTE Even When Hurt, Ethanol Producers Help

FEATURES 18 INDUSTRY

Producing to Protect

7

EVENTS CALENDAR

8

VIEW FROM THE HILL A Defining Moment GLOBAL SCENE Post-Pandemic Opportunities Emerge for Ethanol

By Brian Healy

24

MARKETPLACE

The Standoff for E30

By Susanne Retka Schill

32

An Effective Alternative to CIP Caustic

A single acid cleaner achieved positive results in trial

PROJECT

The Carbon Underground

By Brian McCluskey

46

COPRODUCT

CO2 Outlook: Consequences of the Crunch

Ethanol industry slowdown impacts carbon dioxide supply, markets

By Sam A. Rushing

Low-carbon markets, tax incentives attract producers to sequestration

By Luke Geiver

By Steve VanderGriend

50

MARKET

Divergent agency visions make E30’s future unclear

CLEARING THE AIR Validating the Need to Test Real-World Fuels BUSINESS BRIEFS

CONTRIBUTIONS 44 CLEANING

By Lisa Gibson

By Geoff Cooper

14

U.S. DEPARTMENT OF ENERGY

U.S. ethanol plants help meet hand sanitizer need

By Tom Bryan

12

32

ISSUE 6

DEPARTMENTS

10

ML PORTRAITS/ETHANOL PRODUCER MAGAZINE

38

TECHNOLOGY

Driving the Digital Transformation

Ethanol plants are virtually paperless, and getting very smart

By Susanne Retka Schill

ON THE COVER Ethanol Producer Magazine: (USPS No. 023-974) June 2020, Vol. 26, 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.

Laura Knoth, KyCorn executive director, and Mick Henderson, general manager of Commonwealth Agri-Energy LLC, are among hundreds who have stepped up to help support the industry’s effort to supply alcohol for hand sanitizer during the COVID-19 pandemic.

PHOTO: KYCORN

ETHANOLPRODUCER.COM | 5

Publisher's Note

Even When Hurt, Ethanol Producers Help The mainstream media doesn't always understand the scale and economics of ethanol production, so it wasn't surprising this spring when they framed the industry’s foray into hand sanitizer as a sort of saving grace in our darkest hour. That was understandable. It’s a good story—and you'll find it in this issue—but to be clear about what those sanitizer ventures really are, the media should understand that it is more about helping the country in a time of need than making a quick buck during the pandemic or, much less, jumping markets to replace lost volumes. It’s true that some producers achieved good short-term margins supplying alcohol for hand sanitizer—it’s helped save jobs and keep the lights on—but it is no panacea. It was simply the right thing to do, and the kind of thing our industry is always doing: helping out, pitching in, giving back. So, the real story is not just about the resiliency of ethanol producers, but the altruism of our industry during a time of despair.

In “Producing to Protect,” on page 18, EPM’s Lisa Gibson gives us a fuller perspective of this ethanol-based hand sanitizer phenomenon, visiting with three producers about the unique challenges of formulating and supplying alcohol for this emergency-time use. As Monte Shaw, executive director of the Iowa Renewable Fuels Association, put it, if just one person has been protected from the virus because of our industry’s willingness to act, it’s all been worth it.

Even as we just begin to make real headway with E15, our industry is laying the groundwork for mid-level blends that some experts believe optimize ethanol’s performance and emissions-reducing attributes in gasoline. But as writer Susanne Retka Schill reports in “The Standoff for E30,” on page 24, disparate policy objectives between EPA and USDA threaten to to hinder the latter agency’s good-intentioned plan for ubiquitous E30 in the next 30 years.

Even now, at the peak of this pandemic, our industry has not stopped looking for opportunities for growth, efficiency, and carbon intensity reduction. And, perhaps, as we climb out of the COVID-19 downturn, producer interest in low-carbon fuel mechanisms will not wane, but intensify. Along with corn-fiber ethanol and green energy, carbon capture and storage (CCS) might also offer U.S. ethanol producers a lane to sink carbon, literally. In the “The Carbon Underground,” on page 30, author Luke Geiver explains how ethanol plants in Illinois and North Dakota are leveraging federal incentives to sequester CO2 and jump into the low-carbon fuels marketplace. On a related front, be sure to read Sam Rushing’s page-50 contribution, “CO2 Outlook: Consequences of the Crunch.”

On page 36, we look at the quiet digital revolution that is, one application at a time, changing the way our industry operates and does business. Also written by Retka Schill, “Driving the Digital Transformation,” explains how hightech solutions like cloud-based data storage, mobile apps and RFID cards are making ethanol plants smarter and more efficient. Efficiency through change—ethanol’s mantra—is also brought to fore in our page-46 contribution about a stand-alone alternative to conventional clean-in-place caustics.

Stay safe. Stay strong.

Tom Bryan President BBI International

FOR INDUSTRY NEWS: WWW.ETHANOLPRODUCER.COM OR FOLLOW US: 6 | ETHANOL PRODUCER MAGAZINE | JUNE 2020

TWITTER.COM/ETHANOLMAGAZINE

Upcoming Events 2020 Int'l Fuel Ethanol Workshop & Expo August 24-26, 2020 CHI Health Center Omaha Omaha, Nebraska

From its inception, the mission of this event has remained constant: The FEW delivers timely presentations with a strong focus on commercialscale ethanol production—from quality control and yield maximization to regulatory compliance and fiscal management. FEW is the ethanol industry’s premier forum for unveiling new technologies and research findings. The program is primarily focused on optimizing grain ethanol operations while also covering cellulosic and advanced ethanol technologies.

866-746-8385 | FuelEthanolWorkshop.com

Biodiesel Production Technology Summit August 24-26, 2020 CHI Health Center Omaha Omaha, Nebraska

The Biodiesel Production Technology Summit is a new forum designed for biodiesel and renewable diesel producers to learn about cuttingedge process technologies, new techniques and equipment to optimize existing production, and efficiencies to save money while increasing throughput and fuel quality.

866-746-8385 | BiodieselTechnologySummit.com

2020 ACE Ethanol Conference August 25, 2020 CHI Health Center Omaha Omaha, Nebraska

The ACE Conference is a must-attend event for industry leadership.

Relaying timely updates on public policy, market development, board of director training, and much more, this event combines the detail of highlevel training courses with all the fun of a family reunion.

605-334-3381 | Ethanol.org/events/conference

2021 Int'l Biomass Conference & Expo March 15-17, 2021 Prime F. Osborn III Convention Center Jacksonville, Florida

Organized by BBI International and produced by Biomass Magazine, this event brings current and future producers of bioenergy and biobased products together with waste generators, energy crop growers, municipal leaders, utility executives, technology providers, equipment manufacturers, project developers, investors and policy makers. It’s a true one-stop shop – the world’s premier educational and networking junction for all biomass industries.

866-746-8385 | BiomassConference.com

Please check our website for upcoming webinars www.ethanolproducer.com/pages/webinar ETHANOLPRODUCER.COM | 7

View from the Hill

A Defining Moment

Geoff Cooper

President and CEO Renewable Fuels Association 202.289.3835

gcooper@ethanolrfa.org

These are indeed trying times. But it is in such times that real character is revealed. And the character of the U.S. ethanol industry has demonstrated itself to be resilient, innovative and extraordinarily generous.

I cannot overstate the devastation that COVID-19 has wreaked upon the U.S. ethanol industry. From the beginning of March to the middle of April, well over half of the ethanol plants in the United States either idled completely or significantly slashed output. Nearly 8 billion gallons of production came offline in just six weeks, representing 45 percent of the ethanol industry’s annual production capacity.

But the story of ethanol and the coronavirus in 2020 is not just about gallons. Other critically important products manufactured at an ethanol plant are also at risk—livestock feed, corn distillers oil and carbon dioxide gas used in food and beverage markets, wastewater treatment, medical uses, and other applications.

Given such horrific market conditions and unprecedented challenges, nobody would blame the industry if it retreated, waited for the public health crisis to pass, and became consumed solely with its own survival.

But that is just not in this industry’s DNA. When the U.S. ethanol industry sees a challenge, it steps up to help. Period. In the face of the COVID-19 scourge, many ethanol producers have volunteered to be foot soldiers in the effort to protect public health and the food-delivery systems. I have never been prouder.

Recognizing the need for significantly increased supplies of hand sanitizer to protect the general public and help stem the spread of the virus, several RFA member companies retooled to be able to produce the higher-quality alcohol used in sanitizer. And working with local partners, ethanol producers have dramatically increased supplies of ethanol for this purpose.

The switch from fuel-grade ethanol to the high-purity grades required a lot of work behind the scenes to encourage government agencies to relax burdensome regulations and remove roadblocks, at least temporarily. In response to requests and input from RFA, both the U.S. Department of the Treasury and U.S. Food and Drug Administration moved quickly to issue guidance and slightly modify regulations to enable fuel ethanol plants to increase production of the grades of alcohol suitable for hand sanitizer. More than two dozen plants are doing so now, many for the first time, working with local businesses and charities to get the product out to hospitals, first responders, the general public and those who need it the most.

Another example of the U.S. ethanol industry helping out in the fight against COVID-19 and the havoc it has wrought on our economy is our work to help maintain a reliable supply of carbon dioxide.

CO2 is used in the processing, packaging, preservation, and shipping of many foods and beverages. In addition, CO2—in different forms—is used in various aspects of the healthcare industry, and is also an important component in many municipal water treatment systems. It is a ubiquitous and critically important component of our food supply and public health. Approximately 45 ethanol plants capture and sell CO2 to a variety of customers; in fact, ethanol plants capture 3 to 3.5 million tons of CO2 annually, representing 40 percent of the national supply.

In April, the RFA joined with the beer industry, the North American Meat Institute, and the National Turkey Federation, among others, in a letter to Vice President Mike Pence stressing the importance of maintaining a reliable CO2 supply and preventing shortages of this critical product in the face of such a widespread reduction in fuel ethanol output.

Sooner or later, the nation will put this pandemic behind it. The economy will recover. Our industry will bounce back. And when we look back at this terrible crisis, we will be proud of the instrumental role the U.S. ethanol industry played in getting through it. Once again, our industry’s true character will have been revealed to a grateful nation.

8 | ETHANOL PRODUCER MAGAZINE | JUNE 2020

LOWER CARBON INTENSITY SCORES FOR ETHANOL PLANTS Solar Turbines has been helping to reduce utility bills in the ethanol industry for nearly 20 years and more recently has been lowering plants’ carbon intensity scores. Operating a Solar gas turbine-based CHP system allows plant managers to efficiently and reliably produce steam while offsetting electricity from a heavily carbon-based local grid. CHP systems can also help a site achieve EP3 Program acceptance.

Solar Turbines has installed and continues to service over a dozen gas turbines in the ethanol market and more than 16,000 units worldwide with over 3 billion operating hours. Headquartered and manufactured in the USA, Solar Turbines, a subsidiary of Caterpillar Inc., is a leading manufacturer of industrial gas turbines and compressors in the 1-25 MW size range.

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Global Scene

Post-Pandemic Opportunities Emerge for Ethanol

Brian Healy

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

Around the world, the impact of COVID-19 is astounding. From the substantive human health toll and economic stagnation it has levied on all of us, to changing how we interact with each other and accomplish what were simple daily tasks, its impacts will be lasting to us as individuals and collectively as a society and industry. Most of the impacts are still unknown.

The world is going through an unprecedented level of disruption, where every individual and industry is impacted by global restrictions set in place to reduce new cases of COVID-19. Travel bans have an impact on fuel demand in the near term, but the impacts of job losses, middle-class growth stagnation and a readjustment period from social distancing will continue to put downward pressure on demand beyond 2020.

Compounding the overall global demand decline, the lack of an agreement on crude production between the 13 Organization of the Petroleum Exporting Countries (OPEC) and swing producers, specifically Russia, sent shock waves across global energy markets that continue to reverberate. Despite a tentative agreement to reduce overall output, the agreed upon 10 percent reduction in crude production is a drop in the barrel for markets forecasting 50 to 60 percent declines in gasoline demand in the near term, averaging over the calendar year to 20 percent year-over-year reductions. The collapse in demand, coupled with marginal decreases in supply, contributes to shortages in a critical component to the ethanol industry: storage.

During this unprecedented decline in demand, the world will experience the sharpest decline in global emissions since the Great Recession, or even further. As the world returns to a new normal of economic activity and emissions-as-usual, the economic cost of abatement over this period, and other climate impacts, will be measured and discussed with renewed interest, providing a pathway to increased ethanol use as a here-and-now environmental solution for the transport sector.

At the same time, many are seeing their cities more clearly due to the decline in particulate matter emissions, further feeding into the human health narrative. During this current global crisis, to date, hand sanitizer has fostered most of the discussion around human health benefits as governments, hospitals and households look to meet the drastic uptick in demand. Ethanol producers in the United States, and globally, have responded to meet this expanded demand.

As the COVID-19 pandemic continues, the council is working diligently to engage international stakeholders to convey the continued availability of U.S. ethanol. We continue to promote the environmental benefits of expanded ethanol use, while also promoting non-fuel applications, such as its use in hand sanitizer. As travel restrictions ease, the global footprint of the council aligned with strong industry partnerships means we are positioned to follow up with in-country engagement and to resume strategic programming that supports the expanded use of ethanol in a new era as the world reemerges, post COVID-19.

10 | ETHANOL PRODUCER MAGAZINE | JUNE 2020

Monetize your CO2 emissions and increase the value of your fuel with carbon capture, utilization and storage.

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Clearing the Air

Validating the Need to Test Real-World Fuels

Steve VanderGriend Technical Director Urban Air Initiative 316.977.6222

fuels@urbanairinitiative.com

OK, I’ll admit it. Around the office and at most meetings, I can get rather passionate talking about ethanol and test fuels. I may have harped on these issues to the extreme, but I make no apologies.

Understanding fuel properties and the impact on emissions is going to determine the future of ethanol.

The Environmental Protection Agency has the ability to stop ethanol in its tracks if it rules that ethanol pollutes more than gasoline, and EPA is headed in that direction.

But there is some good news. A recently published peer-reviewed technical paper in the Journal of the Air & Waste Management Association validates core arguments we have been making at the Urban Air Initiative with respect to the way fuels are tested.

Historically, studies on emissions from ethanol blends have not used what we consider market (i.e., real-world) fuels, but are instead tested with fuels that match-blend ethanol to selective gasoline properties.

This new technical paper looked at several major ethanol emission studies, all of which assume a standard fuel is being created. The problem lies in the fact that market, or real-world fuels, rarely resemble test fuels, with octane being a key variable since toxic aromatics are used to raise octane. Splash blending ethanol at the terminal immediately dilutes the aromatic content which, in turn, reduces emissions. The aromatics are directly tied to particulate matter emissions, which this peer-reviewed paper confirms are significantly reduced when modeling real-world fuels.

What this new paper makes clear is the aromatic reduction resulting from increased ethanol volumes provides significant health benefits from lower particulate emissions. Comparing a baseline E0 fuel to E10 and E15 shows the ethanol blends are significantly better when real-world fuel blending conditions are used. This is critically important with respect to the anti-backsliding study that EPA is preparing, which could, as noted earlier, stop ethanol in its tracks.

While much of the ethanol industry’s energy has been focused on issues such as Reid vapor pressure relief, this new technical paper demonstrates the need to focus on aromatics and the fact that ethanol can significantly reduce the need for these carcinogenic octane enhancers. Clean octane from ethanol is already replacing more than 8 billion gallons of aromatics annually with E10.

The fuel economy rules from the Trump administration missed an opportunity to include a minimum octane standard, but the need for octane remains. While many automakers are devoted to developing electric vehicles, they are realistic about the timeline to get there. They know gasoline engines will remain and high-octane fuels can help achieve the modest mileage increases the administration is calling for.

Future light-duty vehicles will continue to be designed for high-octane fuels in order to increase efficiency and reduce emissions, suggesting a growing demand for clean-octane, low-carbon ethanol.

So, in a cycle of less-than-great news, a peer-reviewed technical paper supporting our long-held beliefs regarding the importance of using real-world fuels is welcomed news.

12 | ETHANOL PRODUCER MAGAZINE | JUNE 2020

BUSINESS BRIEFS PEOPLE, PARTNERSHIPS & PROJECTS

SCS approved as LCFS verification body SCS Global Services has been approved by the California Air Resources Board as a verification body for the state’s Low Carbon Fuel Standard. CARB added third-party verification requirements to the LCFS recently to ensure data accuracy and conformance with the regulation.

SCS is the only California-based verification body for the LCFS with ap-

proved auditors in North America, Central America, Brazil and Southeast Asia. SCS auditors have more than 10 years of experience in conducting assessments in the low-

carbon fuels sector, including corn ethanol, sugarcane ethanol and other biofuels.

“SCS has received approval from CARB to conduct audits remotely due to the COVID-19 pandemic, and is currently conducting fuel pathway validation services following our approved virtual site audit protocol,” said Matt Rudolph, the company’s director of fuels and biomaterials.

Valmet to supply ethanol plant automation in Austria Valmet has been selected to supply automation to an ethanol plant currently under construction in Hallein, Austria. The Finland-based company will deliver and install the technology in June, and the plant will begin operations later this year. The facil- sugar. The existing pulp mill has been using ity will produce ethanol from waste material Valmet automation technology for nearly supplied by a co-located pulp mill, utilizing three decades. a process of fermenting and distilling wood

14 | ETHANOL PRODUCER MAGAZINE | JUNE 2020

“We selected Valmet’s automation technology for our new bioethanol plant based on our positive experience with the Valmet DNA automation system in our pulp mill, and the good service and support we have received from the company over the years,” said Josef Kendlbacher, project manager at the facility.

opportunity

is everywhere if you know where to look

ETHANOLPRODUCER.COM | 15

POET.COM

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Business Briefs

ACE conference, FEW to co-locate in August The American Coalition for Ethanol has announced that its 33rd WK $118$/ annual conference will be co-located with the rescheduled International Fuel Ethanol Workshop & Expo in late August. The events will take place concurrently at the CHI Health Center in Omaha, Nebraska, Aug. 24-26, with the ACE meeting taking place on the afternoon of Aug. 25.

Due to the COVID-19 pandemic, ACE’s board decided that hosting this year’s gathering in association with the FEW is in the best in- upon the content and connections they’re able to obtain in one place terest of its members. “ACE is looking forward to returning to Oma- through this year’s partnership with BBI International,” said Brian Jenha and offering our conference attendees the opportunity to expand nings, ACE CEO.

ClearFlame Joins RFA The Renewable Fuels Association an“We are very happy to be working with nounced in May that ClearFlame Engine ethanol producers and the RFA as we conTechnologies has joined the organization. tinue to build support for our technology,” Based in Chicago, ClearFlame is a techsaid BJ Johnson, CEO of ClearFlame. “The nology company providing a patented set simplicity, availability and low cost of ethaof modifications for diesel engines that allow them to operate on nol fuel and ethanol fueling infrastructure strongly supports rapid ethanol as a substitute for petroleum diesel fuel. Opening the diesel implementation of ClearFlame’s technology and we’re eager to conmarket to ethanol has the potential to add massive additional etha- tinue this journey with the RFA.” nol demand over time.

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Industry

Producing to Protect The U.S. ethanol industry has seen a shift during the pandemic, as many plants sell or donate ethanol to be used in hand sanitizer production.

By Lisa Gibson

The prison system in Iowa has multiple advantages that make it ideal to produce hand sanitizer during a pandemic, says Cord Overton, communications director for the Iowa Department of Corrections. And

to in order to get the proper permits to produce the product.”

The Iowa partnership isn’t the only avenue ethanol plants have taken to produce hand sanitizer during the pandemic. Producers across the country are donating or selling ethanol into this temporary market to help meet demand as the industry shows signs of recovering from a dramatic production through donations of ethanol and biodiesel from downturn in April that idled or reduced production members of the Iowa Renewable Fuels Associaat nearly half of all U.S. plants. tion, more than 25,000 gallons—equivalent to 46 million doses—of hand sanitizer have been proProcess and Regulations duced and donated to state agencies and instituWhen the pandemic hit earlier this year and tions that need it most. ethanol plants saw an opportunity for 190 or 200 It started in March when Iowa Prison Indusproof, the regulations were unclear. tries was exploring options to prevent and reduce “There was a lot of confusion very early on outbreaks of COVID-19 in its prisons. Gov. Kim about everything from [World Health OrganizaReynolds connected IPI with IRFA. “That got tion] guidance, to [Alcohol and Tobacco Tax and the ball rolling on how we can start to maneuver Trade Bureau (TTB)] taxes and registration requirethrough the different regulatory hurdles that need ments, and then you have the [Food and Drug Adto be overcome in order for an entity like IPI to ministration’s] guidance and emergency formulas,” start making hand sanitizer,” Overton says. “IRFA says Monte Shaw, executive director of IRFA. really helped us better understand the regulations.

Emergency guidance from FDA allowed ethaBetween the two entities, IPI and IRFA, we were nol from fuel plants to be used, provided it met able to make contact with the partners we needed certain specs. “It wasn’t just willy nilly,” Shaw says.

COLLABORATIVE CRAFT: Laura Knoth, KyCorn executive director, and Mick Henderson, general manager of Commonwealth Agri-Energy LLC, pose with a jug of hand sanitizer outside of one of the Kentucky distilleries where the product was prepared and packaged.

PHOTO: KYCORN

ETHANOLPRODUCER.COM | 19

Industry New guidance was released in April and plants scrambled to qualify. Commonwealth Agri-Energy in Hopkinsville, Kentucky, received approval from FDA for its 200 proof to be sold to local distilleries making hand sanitizer, but Commonwealth General Manager Mick Henderson says the FDA’s components threshold is unclear. “We can operate well below that threshold. We just don’t know where it is.”

The analysis includes gas chromatography, Henderson says, as well as breakdowns of alcohols and other components. Initially, the regulatory relief issued by FDA released some “bad actors” that didn’t separate well enough and sold product that retained some conventional denaturant, Henderson says.

“If you didn’t separate, you’re one of those bad actors. You’re giving us a bad reputation.”

At least one large ethanol producer has expressed concern about the liability of supplying fuel ethanol for hand sanitizer, but producers doing it say the way the product is correctly denatured makes it suitable for this emergency use. Brian Kletscher, CEO of Highwater Ethanol LLC in Lamberton, Minnesota, says the denaturant his plant uses for ethanol going into hand sanitizer is different from a fuel market denaturant, suiting TTB requirements. Hand sanitizer producers he’s selling to know the ethanol product they have and follow FDA and TTB regulations. “As long as everybody’s following guidelines, our opinion is it’s safe for the hand sanitizer market and we’re happy to be part of the solution for COVID-19,” Kletscher says.

Prison Products

Overton says IPI is grateful to be part of the COVID-19 solution, too. At the Iowa Correctional Center for Women, ethanol comes to the production floor and inmates begin the process of blending the right amount of raw materials to produce hand sanitizer. The product is put in onegallon jugs, each containing thousands of doses, and sent to end users.

Those end users are across the state of Iowa, mostly major state agencies that have 20 | ETHANOL PRODUCER MAGAZINE | JUNE 2020

supervision of people who are at high risk of infection, such as IPI, the Iowa Department of Human Services and the Iowa Veterans Home. “We made sure we got their needs met right away,” Overton says.

Then focus switched to the rest of the state, distributed through the state’s emergency center. “We’ve been shipping thousands of gallons of hand sanitizer from our production floor at the women’s prison to the state distribution warehouse, where it is going to hospitals, day cares, jails,” Overton says.

The hand sanitizer is provided free of charge to all the end users. IPI is working to receive grant funding through homeland security to be reimbursed for the cost of production, Overton says. “Generally, vital products like this are covered for FEMA reimbursement during federal disaster proclamations.”

But the production costs are lower because IRFA donated the ethanol. The association paid some producers for their ethanol, while other producers donated, Shaw says. “At least to date, we’ve been able to provide the glycerin and the denatured ethanol to the state as a donation.

“Some of our first ethanol came from Absolute Energy and they also provided one of their technical people to work with IPI,” Shaw says. “We wanted to make sure all the safety precautions were taken and people understood what they were dealing with. I was proud that the industry also stepped up with that technical guidance, as well.”

Beyond hand sanitizer made with Iowa’s ethanol, IPI has been producing personal protection equipment (PPE), as well. “Throughout this process, IPI has been looking at a variety of products they can produce because we have very specialized abilities to shift production to produce what’s needed, and it’s done all the time in our prisons,” Overton says.

During the pandemic, the Fort Dodge Correctional facility has churned out more than 15,000 PPE gowns. At Anamosa State Penitentiary, more than 12,000 face shields have been produced. The Iowa State Penitentiary has produced 85,000 masks. It’s all

CORRECT CALCULATIONS: An inmate at the Iowa Correctional Center for Women prepares calculations to make hand sanitizer with ethanol provided from Iowa Renewable Fuels Association members.

PHOTO: IOWA DEPARTMENT OF CORRECTIONS

been donated, Overton says. “During a time of crisis like this, it’s important the people on the front lines get the things they need.

“Part of the reason we’re able to make gowns so quickly at the Fort Dodge prison is they have a very robust textile program, making uniforms for police officers, for correctional officers and fire fighters across the state of Iowa, as they place those orders,” Overton says. “So simply pivoting our production from uniforms toward making gowns wasn’t a huge shift in their production lines.

“There’s also a desire by those that are incarcerated to do the work,” he says, adding that the inmates receive an allowance for their work. “That’s also kind of unique, that you have this group of people who want to step up and help out. … They’re just happy to be able to provide something that’s needed in Iowa’s communities.”

Cord says all entities involved, from producers to regulatory agencies, were willing to “bend over backwards” to make the hand sanitizer production a possibility.

“That’s how we were able to get it done so fast.”

ETHANOLPRODUCER.COM | 21

Industry Historic Multi-Plant Effort

This spring, as the COVID-19 pandemic worsened and hand sanitizer became hard to find, U.S. ethanol producers stepped up to help the nation reestablish supply. According to the Renewable Fuels Association, more than two dozen ethanol plants retooled to be able to produce the higher-quality alcohol needed for hand sanitizer. Many have worked with craft distilleries, which are equipped to prepare and package the final product. The result has been a noticeable increase in the availability of hand sanitizer, not only in the Corn Belt, but nationwide.

Whether they sold or donated the alcohol, ethanol producers worked closely with state and federal agencies as regulatory barriers prohibiting the use of fuel alcohol in consumer sanitizers were temporarily eased.

Southwest Iowa Renewable Energy, in Council Bluffs, was among the plants that got involved. SIRE has been producing an 80%-alcohol sanitizer that's been distributed to regional hospitals, commercial enterprises and retail outlets.

SIRETIZER: Southwest Iowa Renewable Energy Regulatory Manager Justin Schultz fills a gallonsized container with hand sanitizer the ethanol producer has dubbed "SIREtizer."

PHOTO: THE NONPAREIL/JOE SHEARER

Keeping Up

Toward the beginning of the pandemic, Highwater Ethanol slowed production, then ramped back up when it found its hand sanitizer market. “We weren’t able to keep up with the demand,” Kletscher says. Now, the demand has leveled out a bit, as commercial production has been able to start catching up.

“We were down for approximately 10 days on our first initial drop in production and when 190 demand started, we ramped back up for about a week and we’ve started leveling off and feeling the market, understanding where it goes and how much is desired from our end users right now.”

Highwater has dropped overall production by about 25% and is selling 35% to 40% of its entire production as 190 proof for the hand sanitizer market. It doesn’t change the process at all, he says.

“We’ve been able to make our 190 proof meet the specs that everybody desires right now.”

Highwater has used brokers, and sold directly to manufacturers. “We’ve been all over the board,” Kletscher says. “We’ve tried to narrow it down to two end users and let them do the bulk of the handling of it and they’ve been doing a great job of that for us.”

The product goes out in tanker trucks.

Kletscher attributes Highwater’s ability to stay open during the pandemic to the hand sanitizer market. “We’re able to cash flow it, or I wouldn’t be doing it because it’s a lot of extra work for my team,” he says. “But in the end, we believe we’re doing the right

22 | ETHANOL PRODUCER MAGAZINE | JUNE 2020

thing. … For Highwater, it works. There are a lot of plants it probably wouldn’t work for.”

Shaw agrees. “I don’t want to say it’s a hassle, but you have to do it differently,” he says. “You have to be careful with things and make sure you’re doing it right.”

Spirits and Sanitizer

Commonwealth has been able to do it right and make it work.

The plant sends between 14 and 16 truckloads of 200 proof to three small, local distilleries. It started when Fort Campbell Army post asked for a supply to make its own sanitizer, Henderson says.

The first batch was made with a copper tube in a barrel, a design the Commonwealth team had come up with and sent in for analysis a few years earlier. “As much of a moonshiner process you’ve ever seen, we pulled it off and knew we needed to have a little more rigorous heat exchange for this process,” Henderson says. “With hoses and a heat exchanger borrowed from another part of the process that had been shut down, we got it in service.”

Henderson provided the ethanol for the post, and then discussed opportunities with the distilleries, initially supplying each with a free tote of 200 proof to try the WHO formula for hand sanitizer. “Three free totes became four totes a day by the end of the first week,” Henderson says. “Now those three are each doing four to six totes a day, selling online, selling to businesses.”

The partnerships are working so well, Henderson says plans

DOWN THE LINE: Highwater Ethanol LLC trucks wait to be loaded with 190 proof sold for hand sanitizer production.

are in the works to ramp up sale of the FDA-approved 200 proof.

The plant has been approved for $250,000 in funding to enhance the tankage and loadout process, allowing for a longer-term production process, post-pandemic. The revoked FDA guidance for fuel ethanol in hand sanitizer won’t affect the plan, Henderson says.

Similarly, Overton hopes to maintain a relationship with IRFA, even after the partners stop their good-will hand sanitizer production. “It’s so ‘Iowa nice,’� he says of the partnership. “I haven’t seen another state form a partnership with ethanol like we have. I think we have some life-long partners over there.�

Shaw says credit goes to Gov. Reynolds and IPI. IPI took a “get it done� approach to the project, working around regulatory hurdles to make it happen. “It all worked out and they’ve produced literally millions and millions and millions of doses of the sanitizer, so I just can’t help but think that somewhere, at least one person has been protected from the virus through this project,� Shaw says. “It’s probably more than that, but even if it’s one person, it’s pretty cool to be able to be a part of that.�

PHOTO: HIGHWATER ETHANOL LLC

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

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ETHANOLPRODUCER.COM | 23

THE STANDOFF FOR

E30 24 | ETHANOL PRODUCER MAGAZINE | JUNE 2020

Market

The US Departments of Agriculture and Energy may be just a block or two apart on Independence Avenue in Washington, D.C., but they are miles apart on their long-term outlook for ethanol.

By Susanne Retka Schill

The good: The USDA set a goal of a market-driven E30 blend rate by 2050 in its Agriculture Innovation Agenda released in February.

The bad: Under U.S. EPA rules, only flex-fuel vehicles (FFVs) can use blends of E20, E30 or E85.

And the final rule updating the corporate average fuel economy (CAFE) standards—the Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule published at the end of March—failed to extend incentives for automakers to build FFVs. And the ugly: Many are concerned that the decade’s-worth of work that went into overcoming infrastructure barriers and a Reid vapor pressure waiver for E15 will have to be replicated to expand E30 in the marketplace.

The trajectory of current policies is a mixed message for ethanol, according to the Energy Information Administration’s Annual Energy Outlook 2020, released in January. The EIA’s reference case based on current trends and policy calls for the percentage of biofuels blended into gasoline, diesel and jet fuel to increase from 7.3 percent in 2019 to a high of 9 percent in 2040 before slightly declining through 2050. Most of that growth is expected to be in biofuels other than ethanol.

The best-case scenario for biofuels in AEO2020 considers the impact of higher global crude oil prices and projects a 55 percent growth for fuel ethanol and biodiesel. “In this scenario, domestic biofuels consumption increases to 1.62 million b/d (barrels per day), or a 13.5 percent biofuels share, in 2050,” reports the biofuels summary released March 9. Doing the math, that’s 20.4 billion gallons per year of fuel ethanol, renewable diesel and renewable jet fuel combined.

EIA’s outlook demonstrates just how heavy of a lift it will be to achieve USDA’s three-fold higher goal.

But what if EIA is right about projected vehicle miles driven and fuel efficiencies, and USDA is right about reaching an E30 blend rate? The AEO2020 reference case projects motor gasoline demand dropping from 2020’s 9.3 million barrels per day (117.3 billion gallons per year) to 7.76 million b/d (97.9 billion gallons per year) by 2050. If those projections are realized, E10 would call for just 9.8 billion gallons of ethanol in 30 years. That’s lower even than this year’s pre-COVID-19 expectation of 12 billion gallons. A move to E15 would help, but essentially maintain the status quo of the best of recent years of 15 billion gallons of ethanol demand.

In contrast, an E30 blend rate would consume 29.4 billion gallons of ethanol in 30 years, based on EIA’s projections for gasoline demand.

For ethanol to continue to support the corn market as corn yields continue to grow, and for cellulosic ethanol to have any chance of finding a home in the market, ethanol blend rates will need to be closer to USDA’s vision than EIA’s projections. Efforts are underway to make that happen.

E30 for Non-FFVs

One effort has focused on getting recognition for ethanol’s high-octane advantage. For several years, advocates had been encouraged by reports from automakers that E30 is a sweet spot for achieving efficient internal combustion engine performance. To the industry’s disappointment, the SAFE Vehicle Rule lacks incentives for FFVs and rolls back increased CAFE targets outlined in the proposed rule, and it fails to provide a pathway to transition to high-octane, low-carbon fuels.

Another effort is focused on demonstrating that E30 can be safely and efficiently used as a fuel in existing nonContinued on page 28 ETHANOLPRODUCER.COM | 25

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Market Continued from page 25

Domestic Biofuel Consumption Projections (2010-2050) million barrels per day

Biofuelsâ&#x20AC;&#x2122; share of total motor gasoline, distillate, and jet fuel consumption

1.8

1.8

1.8

1.6

1.6

1.6

1.4 1.2 1.0 0.8

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8.3%

1.4 1.2 1.0

6.0%

0.8

7.3%

8.8%

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0.8

0.6

0.6

0.6

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0.4

0.4

0.2

0.2

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0

0

2010 2019 2050 Low Oil Prices

2010 2019 2050 Reference case

13.5%

0

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2010 2019 2050 High Oil Prices

6285&( 8 6 (1(5*< ,1)250$7,21 $'0,1,675$7,21 $118$/ (1(5*< 287/22.

PRICE-BASED PREDICTION: According to the U.S. Energy Information Administrationâ&#x20AC;&#x2122;s most recent Annual Energy Outlook, domestic biofuels consumption will increase to 1.62 million barrels per day, or a 13.5 percent biofuels share, by 2050, but only if oil prices are relatively high.

FFV vehicles without modification. The first big demonstration was done in Watertown, South Dakota, by Glacial Lakes Energy with support from ICM. The one-year E30 Challenge was launched in the fall of 2015, with 40 vehicles outfitted with data loggers to record information about the vehiclesâ&#x20AC;&#x2122; performance. The challenge was repeated at Glacial Lakeâ&#x20AC;&#x2122;s second location near Aberdeen, South Dakota.

The South Dakota effort has gained the support of first-term Governor Kristi Noem.

She kept her promise, made at a campaign event at Glacial Lakes Energy, and announced in her first state of the state address in January 2019 that she had launched a transition of the state fleet to using E30. â&#x20AC;&#x153;[The E30 Challenge] was a very successful initiative that opened up the door to higher blends,â&#x20AC;? says ICM CEO Dave VanderGriend.

â&#x20AC;&#x153;We were careful that we had the support of the retailers in town, the auto dealers, a mechanic that could validate if there were any issues. It was a glowing success. We had no fuel issues and we validated there was no appreciable mileage change when blending higher amounts of ethanol.â&#x20AC;?

VanderGriend adds that Wichita, the Kansas city next door to ICMâ&#x20AC;&#x2122;s Colwich headquarters, now has 13 gas stations offering mid-level blends and E85, with similar results. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re seeing significant E30 sales. I think it demonstrates that with a little bit of effort, education and promotion, E30 can be a viable fuel choice.â&#x20AC;?

In 2019, the Urban Air Initiative, led by VanderGriend, commissioned a study at North Carolina State University to independently test emissions and performance in regular nonFFV vehicles operated under various loads using E0, E10 and E25. The study, â&#x20AC;&#x153;Comparison of real-word vehicle use and tailpipe emissions for gasoline-ethanol fuel blends,â&#x20AC;? confirmed emissions improved with the higher blend, and furthermore, that octane-induced efficiency gains counter-balance the lower energy density of the mid-level blends. There was minimal gas mileage loss with the mid-level blend and non-FFV engines performed well under varied driving conditions.

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Nebraska Reprises Road Test

Nebraska is taking South Dakotaâ&#x20AC;&#x2122;s approach one step further. â&#x20AC;&#x153;We thought we could validate [E30] by doing a more scientific design, like we did many decades ago,â&#x20AC;? says Todd Sneller, the recently retired, longtime administrator of the Nebraska Ethanol Board. At the height of the gasohol movement in the mid-1970s, the Nebraska group enlisted the aid of University of Nebraska engineers to conduct a 2 million-mile test that laid the scientific foundation of the successful petition to EPA that approved 10 percent ethanol blends in 1978.

The Nebraskans began laying the groundwork for an E30 project, gathering information from South Dakota and engaging Nebraska partners. â&#x20AC;&#x153;It requires an enormous amount of cooperation from a lot of different parties,â&#x20AC;? Sneller says. Gov. Pete Rickettsâ&#x20AC;&#x2122; staff helped coordinate state fleet managers and the state patrol, and the University of Nebraskaâ&#x20AC;&#x2122;s engineering department signed on. The group sought the approval of the U.S. EPA and an E30 waiver. â&#x20AC;&#x153;We wanted to make sure we go about it in a way that complies with EPA protocols,â&#x20AC;? Sneller says. â&#x20AC;&#x153;I think the ethanol board

and other advocacy groups are trying to stay out of the way so this is viewed as a credible scientific design, executed by the University of Nebraska in cooperation with state government, and this isnâ&#x20AC;&#x2122;t viewed as something done by advocacy groups that are trying to promote a product.â&#x20AC;?

For the past year, drivers of 50 state vehiclesâ&#x20AC;&#x201D;all non-FFVsâ&#x20AC;&#x201D;have been maintaining logs and filling up with the designated fuel. Paired with similar models, half are using E10 or E15 and half are running on E30. Of those, 10 are Dodge Chargers used by state patrol officers. â&#x20AC;&#x153;Thatâ&#x20AC;&#x2122;s really interesting because those cars get used really hard,â&#x20AC;? says Roger Berry, the current administrator of the Nebraska Ethanol Board. He adds that the initial reaction from the state patrol was encouraging. â&#x20AC;&#x153;The comment when we first started was â&#x20AC;&#x2DC;that E30 has some pick up and go,â&#x20AC;&#x2122;â&#x20AC;? he says.

The preliminary results are finding no issues, Berry says. The university engineers will analyze engine performance and fuel economy in greater detail, using data collected from data loggers plugged into each vehicle. The data collected includes long-term fuel trend, vehicle speed, engine load, intake air temperature, coolant temperature, and data from sensors that indicate the amount of air flowing

'All weâ&#x20AC;&#x2122;re trying to do is demonstrate that higher blends of ethanol are safe, competitive and good for the environment.

The limitation to being out there competing is actually the federal governmentâ&#x20AC;&#x201D;EPA. Should they be focused on things that make the environment worse, or on things that make the environment better?'

Dave VanderGriend CEO ICM Inc.

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Market

COMPATIBILITY TEST: Americaâ&#x20AC;&#x2122;s first major demonstration of E30 in non-FFVs was done five years ago in Watertown, South Dakota, by Glacial Lakes Energy with support from ICM. PHOTO: ML PORTRAITS/ETHANOL PRODUCER MAGAZINE

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into the engineâ&#x20AC;&#x2122;s intake manifold and the unburnt oxygen in the exhaust. The firstyear data collection ends June 3, although the group is applying for an extension from EPA to add another two years to the project. Berry expects the engineers will take a few months to compile and analyze the first-year data before publishing a peerreviewed report.

Getting the word out on the results will be important, Sneller says, remembering how in the 1970s, the lead engineer for the 2 million-mile test spoke at every technical conference he possibly could.

Berry adds that work must continue on addressing multiple roadblocks, from pump stickers declaring â&#x20AC;&#x153;this could damage your engine,â&#x20AC;? to getting tanks and dispensers approved for E30. All Wayne dispensers now work on E25, he adds, â&#x20AC;&#x153;And weâ&#x20AC;&#x2122;ve tested that equipment up to E40 with absolutely no problems. But Underwriters Laboratory [will not change] the rating until more testing is done.â&#x20AC;? Another roadblock will be the need to get a Reid vapor pressure waiver for E30, a hurdle that took E15 a decade to overcome.

Timelines, Consumer Choice

Will the USDAâ&#x20AC;&#x2122;s vision of an E30 blend rate by 2050 be realized? A goal of

E30 in 30 years is too far out, Sneller says. â&#x20AC;&#x153;What farmer today will look to 2050 and think, â&#x20AC;&#x2DC;Everything is going to be fine by then. I can wait this out.â&#x20AC;&#x2122;â&#x20AC;? A more useful goal would be E30 by 2030, he says. â&#x20AC;&#x153;If there was a desire to really be moving on these things, there are some tools that could be brought to the forefront.â&#x20AC;?

Sneller points to the many policy shifts toward biofuels he has witnessedâ&#x20AC;&#x201D; at times there was a very strong ag rationale, energy security rose to the top during the 1970s when there were three major oil crises, and public health was the primary concern at other times. All continue to be compelling.

VanderGriend says EPA needs to get out of the way of consumer choice. â&#x20AC;&#x153;All weâ&#x20AC;&#x2122;re trying to do is demonstrate that higher blends of ethanol are safe, competitive and good for the environment. The limitation to being out there competing is actually the federal governmentâ&#x20AC;&#x201D;EPA. Should they be focused on things that make the environment worse, or on things that make the environment better?â&#x20AC;?

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

ETHANOLPRODUCER.COM | 31

Project

NEXT LEVEL: Emerging from its research and development stage, carbon capture and storage is poised to become a commercially viable endeavor for ethanol producers.

PHOTO: U.S. DEPARTMENT OF ENERGY

32 | ETHANOL PRODUCER MAGAZINE | JUNE 2020

THE CARBON

UNDERGROUND Positioning into the low-carbon biofuels marketplace, ethanol producers are moving forward with sequestration strategies.

By Luke Geiver

After more than 20 years of re- tions, depleted oilfields, coal seams or other geologsearch, sponsored largely by the U.S. ic layers below the surface with voids are all “very promising,” and offer a realistic long-term option Department of Energy, the practice for carbon management, Battelle’s team believes. of carbon capture and storage (CCS) In 2018, federal carbon storage and utilization tax credits were revamped to is poised to become incentivize the use of a self-sustaining com- There is now a market further new technology in conjuncmercial industry. “The tion with CO2 producers. for high-purity CO

2 CCS industry in the U.S. is The new 45Q tax credit prosources to take on at a turning point,” says Ana credit of $60 per ton projects without the vides drew Duguid, senior engineer of CO2 captured and stored. and CCS expert at Battelle need for government The previous version of the Memorial Institute, a national research funding. credit only provided $20, or research and development Andrew Duguid less, per metric ton. The new laboratory that has been a Battelle Memorial Institute tax credit also reduces the leading player in developing amount of CO2 that must be CCS options for two decades. produced and captured from a facility in order to Since the 90’s, Battelle researchers have ex- receive the credits. The new version sets the miniplored the potential of deep geologic formations— mum at 100,000 metric tons instead of 500,000 more than one mile below the surface—for storing metric tons.

CO2 produced from power plants, petrochemical The promise of CCS as an industry is not facilities, biofuel production plants and other in- just linked to new tax credits or better technology. dustrial sources. Deep saline or saltwater forma- CO volumes across the ethanol industry paint a 2

ETHANOLPRODUCER.COM | 33

Project clear picture of the potential for major CO2 capture, storage and usage. A 2018 study by Lawrence Livermore National Laboratory revealed that 200 existing biorefineries produce nearly 45 million metric tons annually.

Researchers looking into the economic viability of CCS found that roughly 60 percent of current CO2 emissions could be captured for less than $25 per metric ton.

According to Duguid, there is now a market for high-purity CO2 sources to take on projects without the need for government research funding. “Ethanol plants and other high-purity CO2 sources are now in the screening and planning phases for projects.”

CCS Ethanol Projects

Near Decatur, Illinois, Archer Daniels Midland has provided an example of a successful CCS project linked to ethanol production. ADM is currently injecting roughly 1 million metric tons of CO2 per year. The

34 | ETHANOL PRODUCER MAGAZINE | JUNE 2020

project has a U.S. Environmental Protection Agency approved Class VI CO2 injection permit—the main regulatory requirement for all CCS projects—and serves as an example of what other plants may expect to do as they implement their own systems.

In North Dakota, Red Trail Energy LLC announced in March that it was commencing with its own CCS project. Red Trail obtained the permits for a Class VI injection well used to sequester CO2 produced from the plant. A drill pad has been constructed and the process of drilling the injection well began in late April. According to Red Trail, its CCS project will enable the facility to store CO2 underground before selling the product to states with low-carbon fuel standards like California or others in the Pacific Northwest.

Gerald Bachmeier, Red Trail’s CEO, said the ability to capture, store and later sell carbon produced at the North Dakota ethanol facility will improve the company’s long-term financial viability.

Also this year, the DOE’s Department of Fossil Energy awarded roughly $18 million to The Board of Trustees of the University of Illinois to characterize and obtain Class VI permits that will be used to construct two sites. Carbon storage sites will be built near two locations in the state: the One Earth Energy LLC ethanol facility and Prairie State Generating Co. The sites will store a combined 6.5 million metric tons of CO2 captured annually, according to the DOE. One Earth Energy will go through a CCS assessment first, while Prairie State Generating will continue its study to determine the effectiveness of a capture system designed by Mitsubishi.

Duguid and his team have developed a full suite of CCS-related services that can help ethanol producers take on a project from start to finish. “We have built an understanding of every aspect of implementing CCS projects from screening through project operations,” he says, adding that

his team can help reduce risk, help projects work in several economic conditions and in some cases, find investors or end-users for captured and stored carbon. He also stresses that the expertise of Battelle and the promise of CO2 CCS does have a limit: CCS projects looking to claim 45Q tax credits have a Dec. 31, 2023 construction deadline.

Getting Started

Battelle features a group of geoscientists and engineering experts that have worked for decades designing or managing carbon capture, utilization or storage programs related to saline storage or carbon dioxide-enhanced oil recovery. A typical offering is phased, starting with screening for CCS storage possibilities, followed by design, construction, permitting, operations, post injection monitoring and finally decommissioning possibilities. Geology near the plant makes each project different Duguid says, but no matter the locale, each

DRILLING DOWN: A drilling team (left) readies a core bit for downhole sample collection at a well site in Red Willow County, Nebraska. Once a drill rig (right) is set-up to drill an injection well, the job is usually completed in 30 days or less.

PHOTO: BATTELLE MEMORIAL INSTITUTE

ETHANOLPRODUCER.COM | 35

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process in the project is designed to reduce uncertainty while minimizing risk.

Plants do need to consider their longterm operations and outlook with respect to CO2 production, Duguid says. If a plant intends to expand within the timeframe covered by the collection of credits (12 years from commencement of injection), plant operators should consider modeling subsurface storage volumes as they may happen throughout the life of the project.

Battelle offers different solutions based on the plant’s needs. “We have some clients that will need a full-service solution that includes the development of the project, finding investment partners, construction, injection, monitoring and reporting,” Duguid says. “Other clients prefer only some of these because they may be fully funded or plan to do their own injection, monitoring and reporting.”

In addition to the requirement of capturing at least 100,000 metric tons per year of CO2, projects must meet the EPA’s underground injection control program permit requirements. This includes having an approved monitoring, reporting and verification plan, and for those taking advantage of California’s low-carbon fuel standard, meeting the CO2 storage permanence requirements.

Because Battelle has worked on CCS projects during the research and development stages all the way through the commercialization process, the team is confident with every aspect of a project. And, Duguid says, the industry can now move forward with confidence, knowing that projects can happen, markets are open and CO2 end users and investors are primed and ready to link up with ethanol producers. “Our experience has allowed Battelle to pivot from research,” he says, “to commercial offerings that serve the ethanol industry.”

Author: Luke Geiver Ethanol Producer Magazine 701.738.4944 lgeiver@bbiinternational.com

Technology

DRIVING THE DIGITAL TRANSFORMATION For ethanol producers, everyday business is now all but paperless. From mobile apps to cloud-based data storage, smart plants are here.

By Susanne Retka Schill

Ethanol producers are no strangers to computers and automation. Distributed control systems (DCS) have been in use for decades to monitor and control fermentation and distillation. In-

deed, the needs of the ethanol industry drove innovation in computerized truck receiving and weighing to speed up truck handling, says Tim Ciucci, vice president of sales and marketing at CompuWeigh.

The SmartTruck system, deployed at more than three dozen plants now, uses a cablevel terminal at the truck scale, outfitted with a touch screen, scanner and printer, so drivers never have to leave the cab. “Truckers use an outdoor SmartTouch terminal to enter their load number and answer the FSMA declaration questions,” Ciucci says. The system takes a photo of the driver for better traceability under the requirements of the Food Safety Modernization Act. All of the documentation required for accounting and regulatory purposes for each load is digital, reducing operator errors not only in the scale room, but in the back office accounting department as well.

Ethanol producers are now taking the system’s capabilities to the next level, Ciucci says.

In addition to using RFID (radio frequency identification) cards to speed up paperwork processing, plants are recording RFID data at 38 | ETHANOL PRODUCER MAGAZINE | JUNE 2020

every point through the dumping or loading process, analyzing the time stamps to identify bottlenecks. “In the past, managers would make decisions based on their gut reactions on where the bottlenecks were,” he explains. “But once you can put metrics into it, they can see where the bottlenecks are, and if they should invest in a second scale or another dump pit.”

The increasing computerization and sophistication of truck receiving is just one example of the digital transformation spreading across the industry. Widely occurring in all sectors, the movement has several names, says Bruce Lichty, management systems lead for Christianson PLLP: The Internet of Things, Industry 4.0 or the 4th Industrial Revolution—the 1st being the machine age beginning in the 17th century, the 2nd the assembly line in the 20th century and the 3rd the introduction of computers a half century ago.

The ethanol industry has experienced the first steps of many of the transformations to come, Lichty says. “Almost all our ethanol clients have several types of presence on the internet. They have a web portal that provides business information to their growers and customers about contracts and deliveries.” Increasingly, that information is accessible on mobile devices, and in recent years, producers are taking it up a notch. “We have clients that use a bid/offer system on the web, where if there’s a striking price on a bid and offer, it generates a contract automatically.”

SMART TRUCK: Computerized terminals outfitted with RFID scanners, touch screens, document scanners and even printers speed up truck dumping by keeping drivers in the cabâ&#x20AC;&#x201D;a prime example of the ongoing digital transformation.

PHOTO: COMPUWEIGH

ETHANOLPRODUCER.COM | 39

Technology Subscription Power

on paper nor manually entered into a spreadsheet. “Our customers Digital innovations also are changing the underlying hardware love it, it saves time and accuracy. But it’s just the beginning.”

As more suppliers and buyers adopt new systems, Lichty says, and software at plants, Lichty says. In the past year, two clients, it will require careful thought and planning. “It will be like playing both managing multiple ethanol plants, have moved their data storcatch. You can’t play alone, you need somebody else to catch the age to the cloud rather than replacing their in-house servers. ball and throw it back.” The planning involves Not only are servers being replaced with learning what everyone along the value chain is cloud storage, software applications are moving The folks who planning for future upgrades, he says, so plant to cloud-based subscription services. The benfigure out how managers make the right investments in new efit for businesses, Lichty says, will be in contechnology—with the goal being to increase to make smart verting large capital investments into monthly productivity, improve accuracy and lower costs. investments in new fees. “Rather than purchasing an application and “You need to bring in a third-party advisor, hardware to run it on, and purchasing a large technology may so you don’t overlook something,” he adds, “a data server farm, it will be more of a subscrip- have the advantage trusted advisor who attends your planning meettion service.” Plants will pay for the speed and coming out of this. ings to understand the thinking at your plant. bandwidth they need for storage in the cloud Steele Lorenz Then, when everyone goes off to their daily opand they will subscribe to the business applicaFarmers Business Network erations, that advisor goes off to research and tions they use, adding modules as needed. bring in the information required for the next The move to cloud-based services also steps.”

These will be long-term planning sessions, Lichty says. “These transfers upgrade and service requirements onto the provider, promrevolutions last for a long time. You just want to be sure you’re equal ising to keep applications up to date. For an ethanol producer, that will also reduce the hours needed to maintain an in-house system to or greater than the competition, so you’re not put at a disadvantage and free a person up for other tasks. For service providers such as because you’re left in the dust.”

Following trends to anticipate clients’ needs four or five years Christianson, which offers accounting and management software, ahead has been Lichty’s role for years as a business software develupdates and changes will be done to a central application in the cloud oper.

He expects several trends to continue: rather than by performing separate revisions at individual clients’ • Unmanned collection of data that is automatically processed workspaces. and shared up and down the value chain—from the supplier For many, the digital transformation taking hold now is about or vendor to the end customer, and even the customer’s moving information—invoices, orders, meter readings, documents— customers. electronically, machine to machine, Lichty says. Nothing gets printed

40 | ETHANOL PRODUCER MAGAZINE | JUNE 2020

• 5G connectivity that enables greater processing capability in cellphones and tablets, making them more useful at greater distances from the plant office or control room.

• Robotics, smart sensors, artificial intelligence and machine learning finding new applications throughout the plant.

• Augmented reality for training, where new hires don smart glasses that immerse them in simulations, performing functions as they learn through virtual reality.

“All these pieces are slowly rolling out,” Lichty says. The challenge for individual companies will be to understand where their business partners are heading and developing a strategy to have the systems in place, so their companies are ready for the next innovative technology.

Macro Opportunities

“I think there are going to be micro things the digital technology enables, such as better sensors to provide more data to make better decisions,” says Steele Lorenz, head of sustainable business with the Farmers Business Network. “But I think there also will be macro opportunities that can now be chased for the first time.”

One pilot project Lorenz has worked on with an ethanol producer taps into new digital technologies to collect farm-level data to plug into the GREET model to determine carbon intensity (CI). Currently, the Greenhouse Gases, Regulated Emissions and Energy Use in Transportation model uses national averages for yield and inputs such as fuel, fertilizer and pesticides to calculate corn ethanol’s upstream emissions from feedstock production. Developed by U.S. DOE’s Argonne National Laboratory, the GREET model is used by California and other states that have adopted low-carbon fuel standards.

“The point is to build the case that the CI score being claimed

is accurate without boots on the ground, using everything from satellite imaging and weather data to receipts and the precision agriculture information collected by the equipment used,” Lorenz says. While the indicators available to farmers of what happened in the field are good, Lorenz adds, “they are probably not enough to build the kind of confidence the market would need to accept that CI rating.” The weather and satellite data are used to confirm a yield claim and artificial intelligence is used to spot errors and potential fraud.

The goal is to make it feasible for an ethanol producer to economically gather information from as many as 1,000 corn suppliers and claim lower-than-average farm-level greenhouse gas emissions, thus reducing the plant’s carbon intensity score. Such a program could also enable awarding carbon credits to farmers who lower their carbon intensity through conservation tillage or best fertilizer practices—a recommendation made in the recent white paper, A Clean Fuels Policy for the Midwest.

“We think market forces are going to be extremely important here, especially given what is facing the biofuel industry as a whole right now,” Lorenz adds, referring to the collapse of the oil market and COVID-19 demand destruction. In the near term, the adoption of new digital technologies is likely to focus on increasing efficiency and reducing costs, he says, but if markets or policies shift, “we could see rapid change.”

The challenge in difficult times is deciding just what steps should be taken to be ready for the future, Lorenz adds. “The folks who figure out how to make smart investments in new technology may have the advantage coming out of this.”

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

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presents Women in the Ethanol Industry 2020

RAMSENA Ramsena has managed the ethanol lab at Aemetis since it DADESHO restarted the plant in 2011, first working there when the

Manager of Quality and Regulatory Compliance Aemetis Inc., Ceres, California

plant started up as Cilion in 2008. Recently, she added the role of regulatory compliance manager to her duties.

On working in ethanol Working at an ethanol plant is like working at three plants—a mill, a brewery and a distillery. Fermentation is at the heart of an ethanol plant, but all three parts are essential to making it work. Like many ethanol plants, we’ve had process challenges, but I am most proud of how the Aemetis team overcame them. Through trial and coursecorrection, we have identified what works best in our plant operations, such as best practices that maintain yeast health and more efficient liberation of oil. I am excited and grateful to be involved in the new technologies now being adopted.

The day to day I take pride in quality assurance and control, testing everything from corn receiving through the final fuel ethanol product, ensuring all products meet specifications. Our lab personnel are experts at running tests and maintaining the integrity of lab equipment. In addition to quality assurance, I’ve recently taken on regulatory compliance. The regulatory side of the business is especially fulfilling because it feels good to contribute to work that minimizes our greenhouse gas emissions and protects the environment. We have a responsibility to our planet and to future generations.

On working with industry partners Support from BASF is great. I’ve known Brian Rayhack, our technical rep, my entire career in the ethanol industry. He’s always been available and willing to share his expertise, watching Aemetis grow and work through challenges over the years. Because our relationship is so transparent, he has a keen understanding of how our plant operates. We’ve been running BASF’s Fuelzyme since we started. It’s a robust alpha amylase that has never let us down.

On ethanol’s role in the community I take pride in being a part of the ethanol industry. I think it is remarkable that we are producing a low-carbon, clean-burning transportation fuel. Equally rewarding is working with our feed customers supplying local dairies and feedlots, who have provided good insight on animal nutrition over the years. It is both professionally and personally rewarding to be a steward of sound environmental practices.

Cleaning Each of the goals are part of the value proposition that CRC152 can offer ethanol producers if the material of construction is at least 304 stainless steel. CRC-152 is an effective cleaner because it contains a synergy between being a powerful oxidizer (i.e., its ability to remove organic deposits) and a strong acid (i.e., its ability to remove inorganic scaling). In many cases, inorganic scale such as calcium and magnesium salts, act as a scaffold to allow organic and protein deposits to attach to surfaces. This organic and protein deposit creates a food source for some tenacious biofilm that is difficult to remove. Conventional caustic CIP is not the most effective means to clean these types of deposits, as it merely scours the surface of the biofilm, leaving the rest of the deposit intact. By replacing caustic, we reduce sodium—a known yeast stressor—which helps yeast vitality. It also promotes metabolic activity while lowering bacterial contamination and the cost of antibiotics.

Clear Results, Benefits

FERM FIX: Improved plant cleanliness translated directly to reduced lactic and acetic acid levels in fermentation after an alternative to caustic was used for CIP. PHOTO: HYDRITE

An Effective Alternative to CIP Caustic In a recent trial, numerous process objectives where met when bulk caustic was replaced with a single acid cleaner.

By Brian McCluskey Now more than ever, during these uncertain and unprecedented times, ethanol plants are looking for creative solutions to help reduce costs and improve plant performance. One ethanol plant recently boosted its efficiency and efficacy by replacing bulk caustic in its cleanin-place (CIP) process.

Over the past several weeks, economic conditions have forced ethanol plants to scrutinize operating costs and examine processes. The goals for one recent ethanol plant product trial were straightforward: lower the variable costs of CIP; reduce or eliminate the need for bulk caustic and sulfuric acid; and improve the overall cleanliness of the plant to achieve lower lactic and acetic acid levels in fermentation.

Hydrite Chemical Co. was offered the opportunity to trial HydriMaize CRC-152—a single product acid cleaner that simplifies and improves the CIP process—to replace conventional caustic CIP.

As the trial commenced, CRC-152 was batched in the CIP tank containing water at the prescribed amounts in accordance with the procedure Hydrite developed. The dilute CRC-152 solution was used to clean the following unit operations: • Mash trains/coolers • Ferm fill header • Yeast prop • Fermenters The Hydrite account manager was on site for the duration of the trial to ensure the sequence started according to the guidelines and instructions provided. Within the first couple days, the customer immediately noticed an increase in lactic and acetic acid levels in fermentation. This was not unexpected as inorganic scale and latent mash containing a high bacterial loading was removed from the system artificially contaminating the downstream fermentation process. To protect fermentation performance, the antibiotic regimen was adjusted accordingly by both type and amount. Further, some potential problem areas were identified that were contributing to the bacterial loading within the plant. These areas included: a leaking valve in the ferm fill header between ferms No. 2 and No. 3; a low spot in the horizontal piping above the mash trains; and low-flow areas in the mash piping because of lower liquefaction pump pressures.

Reviewing these areas of improvement with the customer resulted in good discussion to help improve the efficacy of the cleaning program. It further bolsters the fact that Hydrite is a value-added supplier continually looking for creative solutions to help improve plant performance outside of providing chemicals.

After the first week of running CRC-152, the customer began to see drastic improvements in plant cleanliness. Evidence of this improvement was seen in the CIP tank, as a significant amount of sediment had built up over the previous week and needed to be cleaned out. Improved plant cleanliness translated directly to

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).

44 | ETHANOL PRODUCER MAGAZINE | JUNE 2020

ACIDS ABATED: HPLC data averaged over eight fermenters indicated a 46% and 41% reduction of lactic acid at 10 hours and ferm drop, respectively, when current fermenter performance (CRC-152) was compared to the baseline (caustic CIP).

Similarly, acetic acid levels were reduced 41% at both 10 hours and ferm drop.

PHOTO: HYDRITE

reduced lactic and acetic acid levels in fermentation to near baseline levels. The antibiotic demand also dropped as expected. After two to three weeks, plant metrics continued to improve with the key performance indicators (KPIâ&#x20AC;&#x2122;s) of lactic/acetic acid levels and antibiotic demand dropping to below baseline levels. Averaging lactic and acetic acid levels over eight fermenters showed at least a 40% reduction when comparing the current operation to the baseline data at both 10-hour ferm samples and ferm drop. At this point, the plant had become comfortable using CRC-152 as a replacement for caustic in its CIP program.

CRC-152 is an excellent option for plants looking to improve the efficiency and efficacy of their CIP program. Hydrite provides a very effective product along with the necessary experience to assist producers with the product conversion. The experiences from this case study and others help to clearly define the goals and objectives to minimize risk and maximize the value proposition. As it relates to the original goals of this customer, Hydrite delivered:

1. Lowered variable cost â&#x20AC;˘ Net savings over $180,000 per year â&#x20AC;˘ Antibiotic demand reduced from 4.5 pounds per ferm to 2.5 pounds per ferm (a 44% reduction) 2. Reduced/eliminated the need for bulk caustic and sulfuric acid â&#x20AC;˘ CRC-152 is a direct replacement for caustic in CIP â&#x20AC;˘ Removing caustic reduces plant alkalinity, which reduces the need for bulk sulfuric acid to pH adjust front-end process streams â&#x20AC;˘ Eliminated two bulk chemicals to help improve plant safety and operational stability 3. Improved overall plant cleanliness to reduce lactic and acetic acid levels in fermentation â&#x20AC;˘ Lactic and acetic acid levels were reduced at least 40% when compared to baseline data â&#x20AC;˘ Overall plant cleanliness was significantly improved Moving forward, Hydrite has a plan to counteract the effects from the initial burst of bacterial loading after starting the CRC-152.

Given the chemical nature of CRC-152, it is expected that biofilm and inorganic scale will be removed after the initial startup. This impact could carry through to fermentation if not treated correctly. The future strategy is to include Hydri-Maize 2759 as part of the program to help reduce any negative impacts on fermentation. Hydri-Maize 2759 is a GRAS-approved antimicrobial that contains peracetic acid.

In tandem with CRC-152, Hydri-maize 2759 will be used as a fermentation pretreatment to minimize any detrimental effects as the system is cleaned.

Author: Brian McCluskey Biofuels Sales Manager Hydrite Chemical Co. brian.mccluskey@hydrite.com

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ETHANOLPRODUCER.COM | 45

Coproduct

SUPPLY SHORTAGE: The volume of merchant CO2 sourced from ethanol plants and oil refineries has decreased dramatically during the COVID-19 pandemic.

PHOTO: ADVANCED CRYOGENICS LTD.

CO2 Outlook: Consequences of the Crunch As the U.S. ethanol industry reduced production this spring, a vital supply of commercial and industrial carbon dioxide dwindled. It must return soon.

By Sam A. Rushing Carbon dioxide is a commodity that’s present, if not always seen, in virtually every part of our lives: The foods we eat—meat, bread, spices, vegetables—are often combined with or individually quick frozen (IQF) with CO2.

The list of products using carbon dioxide is long, from paper (pulp and paper mills use CO2 for effluent treatment) to everyday metal objects and metallurgical products (CO2 is used in steel mills, welding shops and foundries). Cleaning, too, is a major application for CO2. From electronics, to ship hulls, to buildings, dry ice blasting (using so-called “rice dry ice”) uses quarter-inch extruded particles un-

der pressure to scour surfaces. And even in today’s bourgeoning cannabis industry, CBD oil extraction is enhanced via CO2. These and countless more applications for carbon dioxide make the product essential to manufacturers, commercial businesses and consumers alike.

The COVID-19 pandemic, coupled with the OPEC-Russia oil price war, has had a dramatic negative impact on the global transportation fuels sector, reducing gasoline demand by as much as 28% and causing widespread ethanol plant shutdowns and reductions in production. This, in turn, substantively depressed CO2 production from what is one of America’s top fermentation byproduct suppliers.

Out of the approximate 210 ethanol plants in the United States producing some 16 billion gallons of ethanol, about 45 ethanol plants supply CO2 byproduct to an adjacent CO2 plant, usually owned by the CO2 manufacturers. Now, the ultimate question is how far might ethanol production drop—if it hasn’t already bottomed out—and how long will the situation persist. The longer plants stay offline, the worse the CO2 supply scenario will get.

In late March, Forbes stated gasoline consumption in the U.S. will drop by 55%, due to COVID-19. Separately, it has been stated that jet fuel could drop 70% due to the pandemic.

European ethanol production is suffering, too. IHS Markit recently stated that ethanol plant shutdowns in western Europe, including plants offline before COVID-19, represent more than 1 billion liters (264 million gallons) of capacity, reducing overall production there to 4.2 billion liters (1.1 billion gallons), or down 12%, as of early April.

One bright side to the COVID-19 downturn is the use of fuel ethanol in hand sanitizer production (see “Producing to Protect” on page 18). Of course, the worldwide reduction in GHG emissions has been another appreciable silver lining to this otherwise disastrous situation. The Guardian indicated there could be a 5% reduction in global carbon emissions in 2020, or some 2.5 billion metric tons. All of this represents the fossil fuel industry’s largest annual drop in CO2 emissions on record, eclipsing the carbon slump triggered by all of the largest recessions of the last 50 years combined. The International Energy Agency warned this is not a climate triumph, but a helpful drop in emissions due to the economic meltdown experienced by too many. Through the lens of positive climate change results, this clears the air in some major cities, setting an example of the dramatic impact on air quality, driven by radical change in the production and consumption of hydrocarbon-based fuels.

This drop in CO2 emissions will also be experienced in the power-generation sector, both for coal and gas fired plants, which will see its carbon emissions drop by 6.6% this year.

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).

46 | ETHANOL PRODUCER MAGAZINE | JUNE 2020

With respect to real-world experiences, as related to biofuels and their byproducts, specifically CO2, a return to normalcy is needed.

In mid-May, the Renewable Fuels Association indicated some two-thirds of the nation’s ethanol plants had idled or reduced production, temporarily bringing the industry’s production to less than 9 billion gallons per year (annualized basis) compared to its typical 16 billiongallon-plus rate. Carbon dioxide for the merchant market, and even captive markets like enhanced oil recovery, is highly linked to the CO2 supply from ethanol plants. In fact, over 40% of the CO2 for these markets is sourced from U.S. ethanol plants. Hence, these sectors are experiencing a significant drop in product availability.

Overall, the ethanol industry supplies about 45% of all domestic CO2. Beyond the ethanol industry, CO2 is also supplied by anhydrous ammonia plants, hydrogen reforming facilities, and natural and miscellaneous sources such as ethylene oxide production facilities, natural gas processing plants and, in one case, a flue gas recovery facility.

to reduce meat temperatures and maintain fresh and frozen shipments.

In food processing, numerous applications for CO2 are critical, from stunning hogs and poultry before slaughter, to use in chilling meat to produce hamburger, patties, nuggets, and sausage. Further, CO2 gas is used in packaging food products, to enhance freshness, and in freezing systems for IQF entrees and a range of meat and allied products.

The publication Food Processing stated in

mid-April that a lack of industrial CO2 was worrying American meat processors. And Geoff Cooper, president and CEO of the RFA, recently warned The Poultry Site, that the country was “headed for a train wreck in terms of the CO2 market.” Majors in the meat and poultry processing industry, such as Cargill, have indicated they are noticing CO2 prices rising, and experts fear that supplies may be disrupted if the situation persists.

Another CO2 supply issue is product origi-

Supply Impact

Examining the CO2 supply network more closely, it is arguable that this may be the greatest supply crisis on record for merchant producers and suppliers. While major gas companies would only state that March was “challenging,” this is an obvious understatement.

The applications for CO2 in food processing are both numerous and diverse— meat, poultry and seafood operations account for the single-largest demand center within the CO2 merchant market. In fact, on average, at least 45% of CO2 is dedicated to the food sector. The soft drink, beer, and fountain service sector represents an additional 25% of demand. Collectively, the food and beverage sectors consume more than 70% of overall CO2 demand, with regional variability. The balance of product is consumed in markets such as water treatment, chemical manufacturing, metallurgical production and other uses. Dry ice is a significant part of overall usage, particularly in food processing, and specifically in the meat and poultry business, as the product is needed ETHANOLPRODUCER.COM | 47

Coproduct

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nating from the oil refining sector, specifically from reformer operations. Merchant carbon dioxide supplies are particularly stark on the West Coast and other regions where refineries supply significant volumes of CO2. All of these factors are essentially wreaking havoc on most CO2 markets and may have a significant impact on food supplies. Meat and poultry may be particularly affected because CO2 is used as a gas refrigerant for preserving packaged foods, as a liquid for freezing, chilling and generating CO2 snow, and as extruded dry ice in the processing industries.

As vital as food is, it was paper products—toilet paper and paper towels—that were in short supply during the early days of the pandemic. The nationwide hoarding of paper products, and the resultant demand surge, was a stark reminder of how critical CO2 production is to paper mills, where it is used (as a green alternative to sulfuric acid) to reduce effluent Ph.

Road to Recovery

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Full resolution with the supply of CO2 from ethanol plants will occur when existing or replacement sources become operational.

It can require nine to 12 months to build a new plant, and if replacement sources are found from other source types, such as new ammonia plants, the logistical economics will be difficult to reconcile. The cost of CO2 to the producer is highly driven by distribution costs; the cost of production is often secondary. The traditional sources are currently doing their best to supplement product, both from ethanol plants and other source types with extra capacity to offer.

If reduced ethanol production persists, and CO2 from ethanol plants largely or fully becomes unavailable, the industry will have to commit to alternative source types. If that

happens, higher selling prices for merchant CO2 will become the norm. With the current shortages, some companies are allocating product, but not without price changes.

Further, with increased distribution costs, surcharges are added, which have reportedly ranged from next to nothing to as high as $100 per ton.

The fear the CO2 industry has today is a loss of significant tonnage to alternative means, perhaps permanently. This could include converting to alternative refrigeration methods, when possible. Other examples are conceivable, most leading to a higher cost, producing less efficient results, sometimes a lesser quality, and of a less environmentally friendly nature. CO2 companies don’t want this to happen. But should the shortage continue, or grow, new source investments will have to be made, or new creative methods of producing from source types that have not been available before will have to become operational. These substitute methods could include flue gas (which requires heavy subsidies to be economically feasible) or biogas (which is not currently an accepted source type but could be). As with the anhydrous ammonia source crisis years ago, triggered by high natural gas prices, solutions were found. It is unlikely that this shortage of CO2 will persist because, upstream, the dynamics causing the ethanol market drop shouldn’t continue long term. A return to normal will soon occur, and this should be a shorter, rather than longer, disruption to our industries.

Author: Sam A. Rushing President Advanced Cryogenics Ltd. 305.852.2597 rushing@terranova.net

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Doctors, Nurses, Scientists, Front-Line Workers, Ethanol and Sanitizer Producers...

THANK YOU. Pushing Standards / Breaking Barriers /

Thank you for your continued care and dedication, through the good times and the bad. It is because of you, that we look forward to the future and the upcoming opportunities to work together.

Š2019 Lallemand Biofuels & Distilled Spirits Š2020 Lallemand Biofuels & Distilled Spirits

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