May 2014 Ethanol Producer Magazine

INSIDE: FEW CELEBRATES 30 YEARS OF EXCELLENCE MAY 2014

Separation Know-How

Technology Ramps Up Corn Oil, Ethanol Yield

Page 28

Plus

Market Growth Apace With Demand

Page 34

Chemicals, Enzymes Boost Extraction Rates

Page 54

Co-location Reality

Page 60

www.EthanolProducer.com

BROUGHT TO YOU BY GROWTH ENERGY. From advocating for ethanol on Capitol Hill, to validating higher ethanol blends through NASCAR®, to calling out Big Oil with a national television campaign, Growth Energy is there for the producers and supporters of the ethanol industry.

We know we’re in a battle, but we’re ready for the fight.

Learn more at GrowthEnergy.org

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CONTENTS

MAY 2014

DEPARTMENTS 6

EDITOR'S NOTE

7

AD INDEX

10

THE WAY I SEE IT

VOLUME 20 ISSUE 5

FEATURES

Reinvesting in Change

By Tom Bryan

Lies, Repeated Often Enough, Become Fact

By Mike Bryan

11

EVENTS CALENDAR

12

VIEW FROM THE HILL

14

DRIVE

16

GRASSROOTS VOICE

18

EUROPE CALLING

New Horizons

By Bob Dinneen

28

34

TECHNOLOGY

UTILIZATION

New technology separates multiple coproducts

By Holly Jessen

Demand increases for biodiesel, feed and exports

By Chris Hanson

Beyond Corn Oil Extraction

Ready Markets Soak Up Corn Oil

Serving Those Who Serve By retired Army Gen. Wesley K. Clark Naturally Driven to Innovate

By Brian Jennings A Remarkable and Crucial Year

By Robert Vierhout

40

54

EVENT

ADDITIVES

A look back at FEW before the 30th anniversary event in June

By Tom Bryan

Chemicals and enzymes ratchet up yield

By Susanne Retka Schill

Three Decades Strong

Optimizing For More Oil

20

BUSINESS BRIEFS

22

COMMODITIES

24

DISTILLED

44

BUSINESS MATTERS

CO-LOCATION

46

MARKETPLACE

66

TALKING POINT

Companies move forward on construction projects

By Ron Kotrba

OSHA Alive and Well With Budget Increase

By Alexander F. Logemann

Prepare Now for Summer’s Upcoming Flowability Challenges

By Kurt A. Rosentrater ON THE COVER The VFrac development team stands in the company’s Dexter, Mich., facility.

PHOTO: BOB FORAN PHOTOGRAPHY

Biodiesel: Coming Soon to an Ethanol Plant Near You

60 CONTRIBUTIONS

64 CARBON Lowered Drying Costs From Corn Oil Removal Impact Carbon Accounting

CARB no longer accepts default values, since parameters vary widely

By James M. Ramm

Ethanol Producer Magazine: (USPS No. 023-974) May 2014, Vol. 20, Issue 5. Ethanol Producer Magazine is published monthly by BBI International. Principal Office: 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. Periodicals Postage Paid at Grand Forks, North Dakota and additional mailing offices. POSTMASTER: Send address changes to Ethanol Producer Magazine/Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, North Dakota 58203.

4 | Ethanol Producer Magazine | MAY 2014

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Each day offers the opportunity to transform the potential of your ethanol plant. Reinvent your performance and growth potential with our advanced chemistries, unique application insights and practical expertise.

Together, we will transform multiple parts of your operation—boost corn oil yields, drive production efficiencies and find inventive new ways to cut costs. Discover the full potential of your plant today.

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® Registered trademark, Ashland or its subsidiaries, registered in various countries ™ Trademark, Ashland or its subsidiaries, registered in various countries * Trademark owned by a third party © 2012, Ashland AD-11650

EDITOR'S NOTE

Reinvesting in Change This June, our industry’s mainstay summer conference turns 30. We’re excited about this milestone, and for fun, we’ve loaded 12 pages with photos of some memorable moments at the International Fuel Ethanol Workshop & Expo. Join our walk down

Tom Bryan

President & Editor in Chief tbryan@bbiinternational.com

memory lane, starting on page 40, with more than three dozen pictures of the people, places, awards and presentations that longtime FEW attendees will surely recognize.

The 30th annual FEW agenda is now finalized and online. You might think that, after three decades, it would become difficult to find new ways to continue “Linking Industry with Innovation,” but just the opposite is true. The FEW’s strong 2014 agenda, like each issue of this magazine, reminds us that our industry is in a state of constant change and discovery.

The focus of this issue, corn oil, is a virtual study in our industry’s predilection for progress. It’s not that corn oil extraction itself is new—90 percent of America’s ethanol plants are doing it—but the way it is still unfolding is fascinating. This issue looks closely at how new progressions of mechanical extraction technology, along with the aid of chemicals and enzymes, are allowing producers to develop tailored solutions to optimize oil production and recover the product inside of exacting parameters.

In our page-28 cover story, “Beyond Corn Oil Extraction,” we learn that not only is oil recovery still advancing, but Valicor Separation Technologies LLC is doing so in a way that is in harmony with existing plant technology and “forward compatible” with the next-generation biofuels ambitions of so many of today’s producers.

The importance of fine-tuning corn oil extraction comes up in our cover story and again in our page-54 feature, “Optimizing for More Corn Oil.” Senior Editor Susanne Retka Schill examines our industry’s enterprising use of chemicals to improve oil recovery and maximize the payback on mechanical extraction systems. In addition to chemical enhancement, Retka Schill reports that a number of producers are now using an enzymatic approach to enhance oil yields, with impressive results.

As extraction techniques are optimized, it’s good to know the marketplace for corn oil is strong. Staff Writer Chris Hanson reports in “Ready Markets Soak Up Corn Oil,” on page 34, that corn oil from ethanol plants is now the No. 2 U.S. feedstock, behind soybean oil, for biodiesel production. Not all ethanol plants, however, are content selling corn oil; some are incorporating biodiesel production on site. In our page-60 feature, “Biodiesel: Coming Soon to an Ethanol Plant Near You,” Biodiesel Magazine’s Ron Kotrba catches up with two Illinois ethanol plants that are making corn-oil-to-biodiesel happen.

After 30 years, it’s simply amazing to see America’s ethanol plants still reinvesting in change. See you at the FEW.

FOR INDUSTRY NEWS: WWW.ETHANOLPRODUCER.COM OR FOLLOW US: 6 | Ethanol Producer Magazine | MAY 2014

TWITTER.COM/ETHANOLMAGAZINE

ADVERTISER INDEX AOCS American Oil Chemists

VOLUME 20 ISSUE 4

Ashland Water Technologies 2014 Fuel Ethanol Workshop & Expo 2014 National Advanced Biofuels Conference BBI Project Development BetaTec Hop Products

EDITORIAL

Buckman

President & Editor in Chief Tom Bryan tbryan@bbiinternational.com

Cloud/Sellers Cleaning Systems

Vice President of Content & Executive Editor Tim Portz tportz@bbiinternational.com

DuPont Industrial Biosciences Fagen Inc.

Managing Editor Holly Jessen hjessen@bbiinternational.com

Fluid Quip Process Technologies, LLC

Senior Editior Susanne Retka Schill sretkaschill@bbiinternational.com

Foundation Analytical Labratory

News Editor Erin Voegele evoegele@bbiinternational.com

Greenbelt Resources Corporation

Staff Writer Chris Hanson chanson@bbiinternational.com

Growth Energy

Gamajet Cleaning Systems, Inc. GreenShift Corporation Hydrite Chemical Co.

Copy Editor Jan Tellmann jtellmann@bbiinternational.com

Hydro-Klean LLC ICM, Inc.

ART

INTL FCStone Inc.

Art Director Jaci Satterlund jsatterlund@bbiinternational.com

Iowa Economic Development Authority Jatrodiesel, Inc.

Graphic Designer Raquel Boushee rboushee@bbiinternational.com

Lakos Separators and Filteration Lallemand Biofuels & Distilled Spirits

PUBLISHING Chairman Mike Bryan mbryan@bbiinternational.com

Magnetec Inspection, Inc.

CEO Joe Bryan jbryan@bbiinternational.com

Nalco, an Ecolab Company

Mist Chemical & Supply Company Natwick Associates Appraisal

SALES

Novozymes Phibro Ethanol Performance Group

Vice President of Operations Matthew Spoor mspoor@bbiinternational.com

POET-DSM Advanced Biofuels

Business Development Director Howard Brockhouse hbrockhouse@bbiinternational.com Senior Account Manager Chip Shereck cshereck@bbiinternational.com

RPMG, Inc. Syngenta: Enogen Tower Performance, Inc.

Marketing Director John Nelson jnelson@bbiinternational.com

Valicor Separation Technologies

Circulation Manager Jessica Beaudry jbeaudry@bbiinternational.com

Victory Energy Operations, LLC

Verenium Vogelbusch USA, Inc

Traffic & Marketing Coordinator Marla DeFoe mdefoe@bbiinternational.com

Wabash Power Equipment WB Services, LLC West Salem Machinery WINBCO

25 5 69 32 9 19 24 63 72 15 8 26 49 31 21 2 53 20 11 58 67 56 51 3 62 50 38 37 57 71 13 39 17 47 33 52 43 65 45 36 59 27

Customer Service Please call 1-866-746-8385 or email us at service@bbiinternational.com. Subscriptions to Ethanol Producer Magazine are free of charge to everyone with the exception of a shipping and handling charge of $49.95 for any country outside the United States, Canada and Mexico. To subscribe, visit www.EthanolProducer.com or you can send your mailing address and payment (checks made out to BBI International) to: Ethanol Producer Magazine Subscriptions, 308 Second Ave. N., Suite 304, Grand Forks, ND 58203. You can also fax a subscription form to 701-746-5367. Back Issues, Reprints and Permissions Select back issues are available for $3.95 each, plus shipping. Article reprints are also available for a fee. For more information, contact us at 866-746-8385 or service@bbiinternational.com.

Advertising Ethanol Producer Magazine provides a specific topic delivered to a highly targeted audience. We are committed to editorial excellence and high-quality print production. To find out more about Ethanol Producer Magazine advertising opportunities, please contact us at 866-746-8385 or service@bbiinternational.com. Letters to the Editor We welcome letters to the editor. Send to Ethanol Producer Magazine Letters to the Editor, 308 2nd Ave. N., Suite 304, Grand Forks, ND 58203 or email to hjessen@bbiinternational.com. Please include your name, address and phone number. Letters may be edited for clarity and/or space.

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COPYRIGHT Š 2014 by BBI International TM

MAY 2014 | Ethanol Producer Magazine | 7

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THE WAY I SEE IT

Lies, Repeated Often Enough, Become Fact

By Mike Bryan

The U.S. ethanol industry is energized (rightly so) by the uptick in the ethanol export market. At the same time, it is unfortunate that we rejoice

over a growing export market when we consume 130 billion gallons of gasoline annually in America. The question that needs to be asked is why would we have to export anything when ethanol is such a small percentage of the total market?

Ethanol is restricted to a 10 percent blend level, in many cases, while battling tooth and nail to achieve a 15 percent blend over strong opposition, when other countries like Brazil utilize much higher blends, trouble free. It’s not a technical issue, it’s a political issue and even the politicians who side with the oil industry know it’s not a technical issue.

There has been ample fodder for the anti-ethanol folks, food vs. fuel, deforestation, land use, consumer concerns, drivability and more, all generously provided by the oil industry under the cover of independent research, humanitarian concern and consumer protection. These are fabricated tales of the highest order, yet for those who want to see the demise of the ethanol industry, it’s all the information they need to wage war on ethanol and agriculture in general. There is no need to concern oneself with the facts, you can easily ignore the truth and hide from reality, because you have have been well-armed with tales of woe to help make your case on behalf of the oil industry. As the saying goes, “Lies repeated often enough become fact.”

Whether it’s food, ethanol, plastics or pharmaceuticals, American agriculture has a leg up on oil. Professor Thomas Johnson of the University of Missouri has co-authored a

10 | Ethanol Producer Magazine | MAY 2014

paper on the benefits to rural economies of a robust bioenergy industry. This includes not only biofuels but a range of biomanufactured products. The rural economy of America is poised for great things and biofuels are just tip of the iceberg.

It’s time that agriculture assumes its rightful place in the economic future of America. Not just as a provider of food, but as an environmentally responsible provider of a wide range of products that are now often petroleum-based. We have to move away from the idea that crops can only be used to feed people, we need to abandon the fear of genetically modified crops that can significantly improve yields and shed the shackles that have bound us to the antiquated belief that if you use crops for anything other than feeding people, it’s somehow a sin against humanity.

Agriculture provides a pathway to a bright, domestic and economically sound future. When the oil wells today are nothing more than rusted relics of the past, American farmers will still be producing an exciting array of renewable and environmentally responsible products, while helping feed the world.

That’s the way I see it!

Author: Mike Bryan Chairman, BBI International mbryan@bbiinternational.com

EVENTS CALENDAR International Fuel Ethanol Workshop & Expo June 9 -12, 2014 Indiana Convention Center Indianapolis, Indiana Now in its 30th year, the FEW provides the global ethanol industry with cutting-edge content and unparalleled networking opportunities in a dynamic business-to-business environment. The FEW is the largest, longest running ethanol conference in the world—and the only event powered by Ethanol Producer Magazine.

866-746-8385 | www.fuelethanolworkshop.com

National Advanced Biofuels Conference & Expo October 13-15, 2014 Hyatt Minneapolis Minneapolis, Minnesota Produced by BBI International, this event will feature the world of advanced biofuels and biobased chemicals— technology scale-up, project finance, policy, national markets and more—with a core focus on the industrial, petroleum and agribusiness alliances defining the national advanced biofuels industry. With a vertically integrated program and audience, this event is tailored for industry professionals engaged in producing, developing and deploying advanced biofuels, biobased platform chemicals, polymers and other renewable molecules that have the potential to meet or exceed the performance of petroleum-derived products.

866-746-8385 | www.advancedbiofuelsconference.com

National Ethanol Conference February 18-20, 2015 Gaylord Texan Resort & Convention Center Grapevine, Texas The NEC provides attendees with timely information on critical regulatory, marketing and policy issues facing the ethanol industry. Experts will speak to the current market situation, and address how we as an industry can continue to grow through innovation, new technologies and feedstocks, and by developing more diverse and global markets.

International Biomass Conference & Expo April 20-22, 2015 Minneapolis Convention Center, Minneapolis, Minnesota Organized by BBI International and produced by Biomass Magazine, this event brings current and future producers of bioenergy and biobased products together with waste generators, energy crop growers, municipal leaders, utility executives, technology providers, equipment manufacturers, project developers, investors and policy makers. It’s a true one-stop shop—the world’s premier educational and networking junction for all biomass industries.

866-746-8385 | www.biomassconference.com

VIEW FROM THE HILL

New Horizons

By Bob Dinneen

As President Obama and the U.S. EPA deliberate what to do with the renewable fuel standard, the U.S. ethanol industry understands that no matter what happens with that program, we will still need to build demand to assure continued growth and stability.

Increasingly, that new demand is coming from beyond our shores.

Last year, the United States exported 621.5 million gallons of ethanol to countries both large and small and from every corner of the globe. Canada, the Philippines, Brazil, Mexico and the United Arab Emirates represent just a handful of the different markets U.S. producers sent product in 2013. Clearly, the demand for high-octane, low-carbon ethanol knows no

the works. That was a resoundingly successful venture and

border. U.S.-produced ethanol is now the lowest-cost liquid

additional trips are being planned as we look to expand exports

transportation fuel on the planet. Any nation desiring to give

into Asia.

their consumers some relief at the pump knows they need our

We will continue to push forward into new markets.

The RFA has created an Export Enhancement program

fuel.

The Renewable Fuels Association is at the forefront of the

with Growth Energy and the U.S. Grains Council. We are

effort to expand ethanol markets abroad. Last October, the

committed to seizing upon new market opportunities. This is

RFA led a trip to northern Brazil through the U.S. Department

only the beginning.

of Commerce and the Brazil-U.S. Business Council, setting up matchmaking sessions to connect U.S. ethanol producers with businesses looking to import the low-cost fuel. That trip alone led to $20 million in ethanol sales, with another $9 million in

12 | Ethanol Producer Magazine | MAY 2014

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

DRIVE

Serving Those Who Serve By retired Army Gen. Wesley K. Clark

We often talk about National Security in broad terms. We discuss the financial implications of relying on foreign oil, or the economic risks of importing our energy, but we often overlook the greatest national interestâ&#x20AC;&#x201D;our service members.

When we focus on our national security, we often forget that our sons, daughters, brothers and sisters are the ones who are directly responsible for carrying out the task of preserving and protecting our freedoms. Regardless of political views or opinions, we can agree that the selfless actions of our soldiers, sailors, airmen, Marines and Coast Guardsmen throughout the recent conflicts deserve our honor and respect.

As Memorial Day approaches, I wanted to focus on what Growth Energy members have done to support our service members and veterans. Last year, Growth Energy launched the Fueling Our Forces program, which raised more than $100,000 through our membership, for the Armed Forces Foundation. This year, we are on track to far exceed that amount.

The AFF is dedicated to supporting active-duty military personnel, National Guardsmen, Reservists, military families and veterans. Since 2001, the AFF has provided more than $75 million in assistance by covering travel, hotel rooms, home mortgages, car payments and everyday bills to enable families to stay at the side of their loved ones sides during treatment and recovery from wounds suffered during war.

With the launch of the Help Save Our Troops campaign, the AFF proactively educates Americans about the hidden wounds of war, including post-traumatic stress disorder and traumatic brain injury, and advocates for those troops and veterans who have suffered these hidden wounds. The ultimate goal of Help Save Our Troops is to reduce military suicides.

14 | Ethanol Producer Magazine | MAY 2014

Growth Energy is truly dedicated to those who defend us, but we also seek to minimize the need for them to deploy abroad. By reducing the need for foreign energy, we reduce the potential for future conflicts in tremulous regions to protect petroleum imports.

Our members work tirelessly to produce a domestic fuel that not only strengthens our energy independence, but also develops jobs and preserves our environment.

Biofuels are essential to the future energy security of our nation. They strengthen our economy, create jobs that cannot be outsourced and revitalize our rural communities throughout the nation. We cannot continue to use our military forces for the protection of foreign oil imports. The current system simply is not sustainable and costs our nation billions each year by exporting our money to foreign oil magnates who artificially manipulate the cost of their product. We, as a nation, then ask our military men and women to protect the shipping lanes for that oil, through treacherous regions, costing us millions more in blood and treasure.

We cannot afford to continue importing foreign oil. We cannot afford to divert our essential national security assets, purely for energy security. By continuing to promote and validate ethanol as a viable alternative to our oil addiction, we help protect our nation and reduce the potential danger for our fighting men and women. I invite you to continue your support of our servicemen and women and to keep fighting for our nationâ&#x20AC;&#x2122;s energy future.

Author: retired Army Gen. Wesley Clark Co-chair of the Growth Energy Board of Directors 202-545-4000 info@growthenergy.org

GRASSROOTS VOICE

Naturally Driven to Innovate

By Brian Jennings

President Eisenhower didn’t know how right he was when he said “Farming looks mighty easy when your plow is a pencil and you’re a thousand miles from a corn field.” Today, thanks in large part to

ethanol, plows and pencils have been replaced by no-till and precision agriculture.

The unrivaled speed of technology adoption in agriculture and biofuels is just another benefit of the renewable fuel standard (RFS). More than any policy enacted by Congress, the RFS has spurred the production of corn, ethanol and ethanol coproducts more efficiently and with less environmental impact. While oil is becoming more difficult to find, expensive to drill and harmful to the environment, ethanol is becoming more sustainable, efficient and cleaner.

Today, farmers apply fewer inputs to produce larger crops on the same land. In 2013, they produced nearly 160 bushels of corn per acre, twice as much corn per acre of land than when the first cell phones were introduced in the 1980s. A recent University of Illinois-Chicago study found that as corn farmers and ethanol producers continue to innovate, ethanol results in 60 percent fewer greenhouse gas (GHG) emissions than gasoline, and, state-of-theart technology has improved ethanol’s energy balance to a more than 2 to 1 ratio.

Meanwhile, the days of easy oil are over. Finding oil compressed-tightly within rocks and far below the land or sea is more energy-intensive than ever before.

As ethanol has helped restore profitability to agricultural production, farmers can afford to adopt new technologies and practices to conserve water and soil and produce more bushels of grain using fewer inputs. According to a survey by Purdue University, the use of auto-steer for fertilizer application has increased 11 percent and auto-steer is now in use on nearly two-thirds of farms.

Precision agriculture and GPS auto-steer technology have saved North Dakota’s farmers nearly 12 percent of fuel costs, according to North Dakota State University.

Biotech crops have also played a role in helping farmers become more efficient. According to the USDA, about half the total land used to grow crops (169 million acres) in the U.S. was

16 | Ethanol Producer Magazine | MAY 2014

planted to biotech varieties in 2013. These biotech crop traits have saved farmers time, reduced insecticide use and enabled the use of less toxic herbicides. In 2013, more than 18 million farmers in 27 countries planted biotech crops, with adoption rates increasing more than a hundredfold since 1996. For the first time in 2013, 123,500 acres of drought-tolerant corn was planted and more drought-tolerant crop varieties are in the pipeline. Ask seed companies and farmers and they’d tell you none of this progress was possible without ethanol.

Farm families’ home place is also their workplace. They drink the water and eat the food from their own land. In order to fulfill the hope and dream of virtually every farmer that the next generation succeed them on the home place, the first priority is to leave the farm in better condition than when the last generation passed it on.

Before 1940, the organic matter contained in crop residues was often mistakenly considered problematic, and efforts to rid fields of this organic matter were called “trash management.” Today, however, thanks to better research and conservation practices such as no-till, scientists and farmers know that crop residues, such as corn stalks leftover from harvest, increase the amount of organic matter and contribute to the overall health of soil. Modern-day farmers understand that organic matter is the lifeblood of soil and scientists now consider the content of soil organic matter as the most important measure of productivity. Soil with large stocks of organic matter absorb and hold more water and crop nutrients, resist erosion and grow higher yields using less fertilizer. There is strong emerging evidence that farmers who utilize no-till to plant corn are able to increase soil health and even sequester carbon by leaving crop residue on their fields. In fact, soil test databases show that increases in organic matter in corn fields can reduce corn ethanol’s GHG footprint by 60 percent or more compared to gasoline.

Farmers and ethanol producers will continue making these important improvements as long as federal policy doesn’t punish those of us who are naturally-driven to innovate. This is just another reason why we need to keep the RFS intact.

Author: Brian Jennings Executive Vice President American Coalition for Ethanol 605-334-3381 bjennings@ethanol.org

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EUROPE CALLING

A Remarkable and Crucial Year

By Robert Vierhout

There are signs that the European Union this year will see an increase in fuel ethanol production that outpaces the growth we have had the previous three years. The expectation is that

we will see around a 7 percent increase in output. Itâ&#x20AC;&#x2122;s still modest compared to the timeframe 2007 to 2010 when we had double-digit growth numbers.

It not necessarily a sign of getting back to the double-digit growth era but it is encouraging that under very difficult market and political circumstances industry output for this year might be above the average of the past three years.

Market circumstances are indeed difficult this year even though imports are lower and grain prices have come down considerably compared to previous years. There are basically two reasons for making it a difficult market. First, EU member states are slowing down the pace with which they increase the blending rate of biofuels. That is disappointing. Also, due to a number of reasons, gasoline consumption is decreasing. Less gasoline consumption means, in most cases, less ethanol consumption than expected.

The lower level of imports and relative low grain prices may play to our benefit but the market remains oversupplied. Even though my good friend Bob Dinneen, president and CEO of the Renewable Fuels Association, claims that Europe needs imports to be able to comply with demand, he seems to forget that the EU has around 7.5 billion liters of installed production capacity for fuel use.

Demand is not even reaching 5 billion.

The oversupply situation has caused prices to come down for about the past year. Recently, the spread between the supply of T1 (imported, duty not yet paid) and T2 (imported/domestic, duty paid) became positive for the first time ever. Some European producers are now also exporting but others had to shut down some of their production lines. All in all, a rather mixed picture but a remarkable one.

2014 will also be a crucial year both at political and policy level.

This month European elections for a new Parliament will result in an important shift in political powers. The expectation is that an

18 | Ethanol Producer Magazine | MAY 2014

influx of more nationalistic minded politicians could undermine the agenda of renewables.

In the second half of this year, the European Parliament will appoint a new European Commission. This new commission will propose a major set of bills that will determine the energy and climate policy for the 2020s decade.

The challenges for the industry are substantial, considering that the European Commission in force has already put plans on the table for how the post-2020s policy should look. These plans are not to our liking, as I already indicated two months ago. Even though the Commission proposes a renewable energy target of 27 percent by 2030, it has moved away from continuing a policy that has worked well in the past four years.

It is crucial that the industry succeed in convincing the new Parliament and the new Commission that no continuation of a renewable energy target for transport means more greenhouse gas emissions in the transport sector, no real investment and production of cellulosic ethanol and a missed opportunity to create more jobs, especially missed opportunities in the rural sector.

Finding new biofuel champions is what we need to do. And we had better find these champions sooner than later. Part of that exercise is a carefully orchestrated information campaign that needs to underline all the benefits of ethanol and will deal, once and for all, with all the myths that have been created around our industry.

The biggest challenge, however, is finding closure on the indirect land use change saga. If we are unable to do so, the European Commission, many members of the European Parliament as well as several nongovernmental stakeholders will keep pushing for ending support for biofuel use after 2020.

2014 could well turn out to become the year that determines the long-term future of biofuels in Europe.

Author: Robert Vierhout Secretary-general, ePURE Vierhout@epure.org

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Campbell

Earnest

Chad Campbell was recently promoted to plant manager of Aventine Renewable Energy Inc.â&#x20AC;&#x2122;s plants in Aurora, Neb. He will be responsible for overseeing future operations, including repair and maintenance of the 45 MMgy Nebraska Energy LLC plant and the 108 MMgy Aventine Aurora West Delta-T plant.

Campbell has eight years of experience in the biofuels industry. Aventine also recently promoted Chandi Earnest as director of quality control for the companyâ&#x20AC;&#x2122;s 165 MMgy wet mill and dry mill plants in Pekin, Ill. Earnest joined Aventine in 2008 as a fermentation specialist and lab manager at the Mt. Vernon, Ind., facility. She previously worked for Lallemand Inc. as a technical sales representative.

People, Partnerships & Deals

The National Corn Growers Association has announced that Rick Tolman will step down as CEO of the NCGA at the end of September. He has been with the organization for 14 Tolman years, and has spent 37 years working in agriculture. The NCGA is expected to announce members of a CEO search committee soon.

Valero Energy Corp. has announced that Bill Klesse will step down as the companyâ&#x20AC;&#x2122;s CEO, effective May 1. He will remain a Valero director and chairman of the board.

Joe Gorder, who was Klesse named Valeroâ&#x20AC;&#x2122;s president and chief operating officer in 2012, will take on the role of CEO. He has also been elected a director by the board of directors and will join the board immediately. Klesse spent his entire 45-year career

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with Valero and its predecessor companies.

Gorder has been with Valero and its predecessors for 27 years. The company also recently announced that Gene Edwards, its executive vice president and chief development officer, will retire effective April 30. Edwards began his career with Valero in 1982.

Alverson

Soverign

The American Coalition for Ethanol has elected its 2014 board officers. Ron Alverson, founding chairman and current board member of Dakota Ethanol was reelected president of the ACE board of directors.

Duane Kristensen,

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general manager of Chief Ethanol Fuels, was elected vice president of the board. Dave Sovereign of Golden Grain Energy was elected secretary.

Archer Daniels Midland Co. has promoted Juan Luciano to president. He is the 12th person to serve as president in the companyâ&#x20AC;&#x2122;s 112- history, and assumes the role in addition to his position as chief operLuciano ating officer. Luciano oversees the commercial and production activities of ADMâ&#x20AC;&#x2122;s corn, oilseeds and agricultural services businesses, as well as its research, project management and risk management functions. He will continue to report to ADM Chairman and CEO Patricia Woertz. Luciano joined ADM in 2011 after spending 25 years at The Dow Chemical Co., where he most recently served as executive vice president and president of the performance division.

Berchtold

Wolfe

Arisdyne Systems Inc. has add three new members to its team to prepare the company for new installations, service the existing customer base and continue to Wearsch build its reputation as a leading technology provider in the field of ethanol and oil enhancement with its proprietary Controlled Flow Cavitation technology. The new team members include Nick Berchtold, chief financial officer; Andrea Wearsch, marketing and business development associate; and James Wolfe, field service engineer.

Greg Krissek was recently appointed CEO of the Kansas Corn Growers Association, Kansas Corn Commission and Kansas Grain Sorghum Producers Association. He has nearly 25 years Krissek of experience in agriculture, ethanol, renewable energy and public policy. Krissek previously served as assistant secretary at the Kansas Department of Agriculture, director of operations at Kansas Corn and Kansas Grain Sorghum, director of government affairs at ICM Inc. and manager of Kennedy and Coe LLC. He replaces Jere White, who announced his retirement in February.

Southwest Iowa Renewable Energy has joined the Renewable Fuels Association. The company operates a 120 MMgy ethanol plant in Council Bluffs, Iowa. In addition to ethanol, the facility produces more than 330,000 tons of dried distillers grains annually. SIRE also produces corn oil coproduct. The company was formed in 2005 and began commercial production in early 2009.

MAY 2014 | Ethanol Producer Magazine | 21

COMMODITIES

Prices & Market Analyses

Natural Gas Report

Cold winter, other factors boost natural gas prices March 21— The coldest winter in the past 10 years bundled a host of factors that lifted regional spot prices to unheard-of levels in the shale era. Spot prices spiked above $40 on three separate occasions at Ventura and the price differential between the monthly New York Mercantile Exchange settlement at Henry Hub in Louisiana and the regional Ventura monthly index widened from a discount of 8 cents in December to a premium of $5.64. Understanding the dynamics wreaking havoc on regional prices can help natural gas consumers assess the risk of a repeat performance in the next winter.

The key underlying factor driving the regional premiums was weather related demand. Storage inventories were drawn down rapidly from December through March. With less gas in storage available to meet peak demand days, pipelines relied more heavily on gas transported from producing areas of the country. This asymmetry between supply available at the field and pipeline transportation capacity limits was crucial to driving the differential between market and field pricing hubs to painful levels for many natural gas consumers.

A number of logistical issues created further complications. In late January, a significant source of supply for the midwest market was interrupted, when Transcanada’s Emerson natural gas lateral

by Ben Straus

experienced an explosion, completely cutting off supply to Viking pipeline. A second natural gas pipeline experienced challenges in providing sufficient compression to move gas up from the Southwest and the Gulf Coast throughout the month of February.

Corn Report

Corn prices up, supported by potential global turmoil in Europe March 21— March was a strong month for the corn market with May futures trading to the $5.02 level. With that type of price action the producer was actively rewarding the market allowing basis levels to relax.

Support was steady and gradually led by potential global turmoil in Eastern Europe and by global demand. The Ukraine will be second or third largest exporter of corn this year. Last year, Ukraine was fourth behind the U.S., Brazil, and Argentina. It has exported a record amount thus far and is expected to export an additional 158 million bushels of corn and 92 million bushels of wheat. There hasn’t been failure to meet export obligations to date but traders have definitely added a risk premium to the grain markets in case the situation escalates.

U.S. corn export sales continue to outpace the USDA projection leading to the increase for the marketing year. Export sales are projected at 1.625 billion bushels compared to 731 million bushels last year. Corn for ethanol demand has remained steady at 5 billion bushels but that figure is expected to slightly decline in the future due to plant slowdowns. Nonetheless, the market will be anticipating the stocks report and new crop plantings at the end of March. This will 22 | Ethanol Producer Magazine | MAY 2014

by Jason Sagebiel

set the tone for spring and summer trading coupled with a weather market. With the planting acreage prospects traders will begin to pencil in yields and determine an outcome for next year’s supply and demand table.

The graphic illustrates why politics in Eastern Europe has had an impact on corn values.

Regional Ethanol Prices ($/gallon) Front Month Futures (AC) $2.815 Region

Spot

Rack

West Coast

3.925

3.785

Midwest

3.150

3.050

East Coast

4.290

3.465

DDGS Report

SOURCE: DTN

Logistics problems plus demand result in tight supply March 21â&#x20AC;&#x201D; A look back at the past month can be summarized with one word: Logistics. Railroads encountered a myriad of shipment problems due to cold, snow and overcapacity. This has been an ongoing issue west of the Mississippi but the weather really had a severe impact on the rail lines leading to the East Coast. A lot of the ethanol had been heading east from the Midwest plants and the major rail issues that had been impacting dried distillers grains with soluables (DDGS) all winter in the West were now affecting the ethanol movements to the East as well.

Consequently, plant runtimes slowed dramatically.

DDGS demand has been steady. The slowdown in ethanol production, even though it was a small amount year over year, had a big impact on DDGS availability, and there was significant difficulty

Regional Gasoline Prices ($/gallon)

Front Month Futures Price (RBOB) $2.895

by Sean Broderick

getting enough DDGS cars into Chicago.

That tightness does look to continue into April and probably May. In spite of that, prices have been sluggish, as there is no new demand until the third and fourth quarters of 2014. More deferred time frame trade is starting to be seen, at levels around 115 to 120 percent the value of local corn.

The hope of nicer weather bodes well, particularly in the eastern U.S., although the western U.S. will still suffer due to strong rail demand. There are still going to be contracted DDGS tons that will need to be fulfilled in the second quarter, but the demand and the market pricing generally weakens as the weather gets warmer. All eyes will be on planting conditions. Another factor is what China decides about whether to take U.S. corn.

Region

Spot

West Coast

2.886

3.119

Midwest

2.791

2.837

East Coast

2.656

2.947 SOURCE: DTN

DDGS Prices ($/ton) Location

May 2014

Apr 2014

May 2013

Minnesota

240

180

235

Chicago

260

225

270

Buffalo, N.Y.

260

220

258

Central Calif.

330

280

305

Central Fla.

292

262

296 SOURCE: CHS Inc.

Corn Futures Prices

(May Futures, $/bushel) Date

High

Low

Close

Mar 21, 2014

4.81

4.76

4.79

Feb 21, 2014

4.63

4.56 1/4

4.59

Feb 7, 2013

7.23 1/2

7.26 1/2

7.33 SOURCE: FCStone

Cash Sorghum ($/bushel) Location

Ethanol Report

Supply shortage fears spike ethanol prices

by Rick Kment

March 21â&#x20AC;&#x201D; Trade in the ethanol market seems to indicate additional aggressive buying activity. Traders are focusing on supplies that seem to tighten week-afterweek, even when production levels are starting to increase.

Over the past two months, ethanol futures prices increased more than $1 per gallon. The April contract has moved to the highest price for front-month futures since August 2011.

Traders are looking for additional support as corn markets continue to show moderate strength over the near future and there is very little indication that supplies

Rack

will grow significantly through the spring and early summer months. As seasonal driving demand starts to increase, there will be even more need to secure shortand long-term supplies by end users on the coasts. Spot ethanol prices are well over $4 per gallon across the East Coast; West Coast locations are nearing the $4 per gallon threshold.

Given the stability in gasoline prices so far this spring, a swift shift to lower demand is not expected. But if this supply tightness continues, expect some market reaction during peak summer demand.

Mar 28, 2014

Feb 7, 2014

Mar 28, 2013

Superior, Neb.

6.71

4.46

6.71

Beatrice, Neb.

6.65

4.14

6.65

Sublette, Kan.

6.76

4.30

6.76

Salina, Kan.

6.75

4.44

6.75

Triangle, Texas

6.77

4.37

6.77

Gulf, Texas

7.30

5.57

7.30

SOURCE: Sorghum Synergies

Natural Gas Prices ($/MMBtu) Location

Dec 31, 2013

Mar 25, 2014

Mar 26, 2013

NYMEX

4.42

4.41

3.98

NNG Ventura

4.86

6.07

4.29

CA Citygate

4.64

4.96

4.30

SOURCE: U.S. Energy Services Inc.

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

Month

End Stocks

JAN 2014

914

28,344

17,086

DEC 2013

949

29,405

16,419

JAN 2013

804

24,935

16,419

SOURCE: U.S. Energy Information Administration

MAY 2014 | Ethanol Producer Magazine | 23

DISTILLED

Ethanol News & Trends

EPA to improve RFS pathway approval process The U.S. EPA has announced it is taking action to improve the petition process for new renewable fuel pathways under the renewable fuel standard (RFS) program. The process is expected to take approximately six months.

The improvements are expected to enable more timely and efficient decision making. The agency has outlined three specific elements the improvement process will include. First, a Lean government exercise will be undertaken to improve the quality, transparency and efficiency of the EPA’s internal review process. Second, the EPA will improve guidance for petitioners, including step-by-step instructions and application templates for different types of petitions.

Finally, the EPA will launch a more automated review process for petitions using previously approved feedstock and well-known production technologies.

It is recommended that parties who are considering filing new pathways delay until the improvement process is complete. The EPA, however, has indicated it will continue to review high-priority pending petitions during the interim.

Preliminary ILUC results (g/MJ) Biofuel

2009

2014

Range

Corn ethanol Sugarcane ethanol Soy biodiesel Canola biodiesel Sorghum ethanol

30 46 62 n/a n/a

23.2 26.5 30.2 41.6 17.5*

13.1-40 13.5-44.1 17.6-52.1 24.8-70.2 10.9-28.4*

*Only about 1,200 runs completed SOURCE: CARB

CARB to propose LCFS amendments, releases preliminary ILUC revisions The California Air Resources Board held public workshops on the state’s Low Carbon Fuel Standard and the related issue of indirect land use change (ILUC) in March. A re-adoption concept paper released by CARB as part of the event discusses potential amendments to the LCFS it plans to introduce this year. Of interest to the biofuels industry, the board is proposing a two-tiered system for fuel pathways and producer facility registration under which conventionally produced first-generation fuels would fall into the first tier, while next-generation fuels

Some chemical companies focus on this

and any fuels that are produced using an innovative method would fall into a second tier.

CARB also indicated it believes that some post-2015 curve smoothing of the LCFS standards will be needed, but there are currently no plans to change the average carbon intensity target of 10 percent by 2020. As part of the workshops, CARB also released preliminary results of updated ILUC modeling efforts that demonstrate reduced carbon intensity values for corn ethanol and other biofuels.

or that

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24 | Ethanol Producer Magazine | MAY 2014

tailoring chemistries to boost production and increase profitability — from evaporator efficiency to corn oil recovery to water treatment issues. To find out more or to schedule a system audit, contact your Buckman representative or email ethanol@buckman.com.

.

DISTILLED

Aventine replaces boilers at Pekin ethanol plants Aventine Renewable Energy is replacing three aging coal boilers with natural gas-fired boilers at its ethanol plants in Pekin, Ill. The improvement is one component of an ongoing two-year strategic plan to bring the plant back up to and above original production levels.

The Pekin complex includes a wet mill ethanol plant and smaller Fagen Inc.-designed dry mill ethanol plant and a food- and feed-grade yeast plant. Together, the ethanol plants have a combined capacity of 160 MMgy. Mark Beemer, who became CEO of Aventine in December 2012, said the previous management team put zero capital expenditure into the facilities for seven or eight years. As a result, the three plants were doing poorly.

Following its September 2012 transition from a publicly traded company to a private company, Aventine completed fundraising for repair and maintenance work at the Pekin complex. A capital expenditure program of roughly $30 million commenced in June 2013. As a result, the facility has already broken its records for ethanol production.

Ethanol Impacts Jobs GDP (in millions) Ethanol production Construction Agriculture R&D Total Direct Indirect Induced

RFA study cites impact of ethanol industry The Renewable Fuels Association has released a study conducted by ABF Economics that examines the impact of the ethanol industry on job creation, the economy, household income, and foreign oil displacement.

The study notes that approximately 210 ethanol plants in 28 states were in operation at the close of last year. Together, those facilities have an estimated combined nameplate capacity of 14.9 billion gallons. An additional 167 million gallons

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of capacity were under construction as of the end of 2013, with 82 million gallons of that volume being cellulosic and advanced capacity.

Regarding coproducts, the report estimates the U.S. ethanol industry produced 35.2 million tons of distillers grains last year, along with 2.9 billion pounds of corn oil. These products have an aggregate market value of approximately $8.8 billion.

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A Joint World Congress with the Japan Oil Chemists’ Society MAY 2014 | Ethanol Producer Magazine | 25

DISTILLED

SD kicks off E15 trial In March, South Dakota Gov. Dennis Daugaard announced the state was launching a six-month E15 trial using state fleet vehicles.

As part of the initiative, E15 is being made available at four major state fueling sites in Brookings, Pierre, Rapid City and Sioux Falls.

The state will fuel flex-fuel vehicles (FFVs) and some of its newer non-FFVs with E15.

South Dakota’s fueling sites currently provide primarily E10 for its fleet vehicles. FFVs, however, make up more than 58 percent of the state fleet.

After the trial, the state will evaluate how the use of E15 affected the fleet and determine how to efficiently utilize homegrown ethanol in the future.

“South Dakota is a large ethanol producer, and our state has significantly benefitted from the ethanol industry,” Daugaard said. “The goal is to use more of our homegrown fuel by using E15, the newest fuel in the marketplace.”

26 | Ethanol Producer Magazine | MAY 2014

Iowa Sales of E85 (in million gallons) 2013 2012 2011 2010 2009

Q1

Q2

Q3

Q4

1.83 2.32 2.52 1.61 1.12

2.62 2.31 3.7 2.77 1.79

3.61 2.78 2.57 2.85 1.96

2.78 1.66 1.94 2.08 1.66

Iowa RFA: State set E85 sales record The Iowa Renewable Fuels Association recently announced that the state set a new E85 sales record last year. Iowa Department of Revenue data shows that total E85 sales reached 10.85 million gallons in 2013, a 20 percent increase over 2012 sales.

During the fourth quarter alone, more than 2.78 million gallons of E85 was sold in Iowa, setting a new record for the quarter.

Sales during the three-month period were

up more than 67 percent from the sale quarter of 2012.

“Record Iowa E85 sales prove the federal renewable fuel standard is working as intended, and the EPA should not reverse course on the policy as they have proposed,” said IRFA Policy Director Grant Menke, noting that E85 is currently sold at more than a $1 discount to gasoline at the wholesale level.

DISTILLED

Ethanol blends addressed in Tier 3 rule The U.S. EPA has finalized its Tier 3 Motor Vehicle Emission and Fuel Standards. The rule makes E10 the new federal emissions test fuel and finalizes specifications for E85 test fuel for flex-fuel vehicles (FFVs). The EPA said the rule’s detailed specifications for the E85 emissions test fuel will resolve uncertainty and confusion in the certification of FFVs designed to operate on ethanol blends.

Within the rule, the EPA also indicated that it will allow vehicle manufacturers to request approval for an alternative certification fuel, such as E30, for vehicles that may be optimized for such an ethanol blend.

The EPA indicated it intended to finalize in-use fuel quality standards for E51 to E83 and possibly E16 to E50 as well, but was unable to do so in time for inclusion in the final rule. Those standards could be finalized in a follow-up rulemaking.

SCALING UP: William Shopoff, Vertimass chairman (in back), and ORNL inventors (left to right) Chaitanya Narula, Brian Davison and Martin Keller display the technology they developed.

PHOTO: OAK RODGE NATIONAL LABORATORY

Startup licenses ethanol-to-hydrocarbon process California-based startup company Vertimass LLC has licensed a technology developed at Oak Ridge National Laboratory that converts ethanol into a hydrocarbon blend-stock. The technology, developed by ORNL’s Chaitanya Narula, Brian Davison and Martin Keller, uses an inexpensive zeolite catalyst to complete the reaction.

Vertimass Chairman William Shopoff said that his company plans to move quickly to make a bolt-on technology easily accessible to ethanol producers. “We hope to move from the laboratory

scale to a commercially available technology within four to six years,” he said.

Preliminary ORNL analysis in collaboration with the National Renewable Energy Laboratory shows the process could be retrofitted into existing plants at various stages of ethanol purification. The process produces minimal amounts of ethylene byproduct and tests indicate the catalyst can be operated at relatively low temperatures and pressures, and can be regenerated under mild conditions.

MAY 2014 | Ethanol Producer Magazine | 27

TECHNOLOGY

MORE THAN CORN OIL: Company co-founder Tom Czartoski stands in Valicor's Dexter, Mich., facility.

PHOTO: BOB FORAN PHOTOGRAPHY

28 | Ethanol Producer Magazine | MAY 2014

TECHNOLOGY

Beyond Corn Oil Extraction

A new corn oil technology developed by a fluid purification company offers multiple coproducts, improved ethanol yield and water balance, and other benefits.

By Holly Jessen

Valicor Separation Technologies LLC has developed a new modular system that doesn’t just extract one coproduct, it fractionates multiple coproducts, including more distillers corn oil as well as fiber and high protein animal feed.

The company announced in late February that it had received a U.S. Patent and Trademark Office notice of allowance for its Valicor Stillage Fractionation Technology, known as VFrac. Valicor already has Corn Oil Separation Systems, its first-generation corn oil separations technology, installed at 40 ethanol plants. As of March, the company was building its VFrac modular system at its Dexter, Mich., facility in advance of instillation at two dry mill ethanol plants. “Following midyear startup, we should have some good operating data on both the ICM plants as well as the Delta Ts,” says Chris Mahoney, director of Valicor’s advanced separations group.

MAY 2014 | Ethanol Producer Magazine | 29

TECHNOLOGY

GOLDEN OPPORTUNITY: Jennifer Aurandt conducts fermentation trials to evaluate residual starch and other process enhancements.

PHOTO: BOB FORAN PHOTOGRAPHY

The $4.5 million fractionation system has a 12- to 18- month payback. In addition, it’s complimentary to fine grind technology.

Ethanol plants with front-end fine grind systems already installed won’t have issues with higher suspended solids, or fines, and can gain the benefits of VFrac with one fewer module installed. “It actually reduces the cost of our system,” Mahoney says.

The company got its start in 1997 as Solution Recovery Services, separating and purifying industrial fluids. Today, Valicor is 100 percent employee-owned and has continued working in the industrial space while also diversifying into food and beverages, as well as the pharmaceutical and nutraceutical industries. About eight years ago, the company began working on biofuels technologies, starting with biodiesel and then moving into ethanol, says Tom Czartoski, president, CEO and co-founder of the company.

Specifically, it was the company’s work

30 | Ethanol Producer Magazine | MAY 2014

on separation technologies for algae that led Valicor down the path of corn oil recovery. “We put a considerable effort into microalgae, and microalgae was an interesting challenge by way of a single cell that contains proteins, carbohydrates and oils. And we focused on developing a technology to accommodate those compounds, or separate them into streams,” he says. “Those developments led us back into the ethanol space to apply that technique to separating proteins and separating oil.”

Big Benefits

In developing its second generation corn oil technology, Valicor achieved several goals. The first was to develop a process that works outside the midevaporator, to avoid any confusion with existing corn oil technologies. As a result, VFRAC separates corn oil from stillage, not concentrated stillage. “We wanted to move away from the patent litigation and all the legal issues

that surrounded all that,” says Douglas Corey, industry manager, who started working for the company when there were only eight employees.

After speaking to ethanol producers, Valicor identified key concerns for the new technology. The first was maximizing coproduct revenue, not just through corn oil recovery, but other coproducts as well.

Another goal was improving ethanol fermentation. The energy efficiency and operation of the evaporator train were also targets. Finally, the company aimed for preparing for the next stage of cellulosic and clean fiber technologies, once they become a reality. “We call it a forward compatible technology because where it is in the whole stillage stream it really lets you get at those cool things in the kernel of corn,” says Phil Schoof, senior vice president.

The technology’s hydrothermal treatment allows for separation of more corn oil. In fact, VFrac can pull out 1.2 pounds of corn oil per bushel of corn. And that’s without the use of any additional chemicals to increase yield. “This technology does away with that operating expense need,” Schoof says.

A key feature of the technology is tunability—or the option to separate more or less corn oil, depending on market demands. Most customers only want to take out about 1 pound per bushel of corn oil, leaving 7 percent fat content in the distillers grains, Mahoney says. That allows plants serving different feed markets, which prefer different fat levels in distillers grains, to aim for different corn oil content targets, adds James Bleyer, Valicor program manager, leader of the company’s biofuels R&D division and inventor of VFrac.

The technology is also tunable in the amount of high protein meal, or VPro, it separates. This additional coproduct is similar to corn gluten meal produced at a wet mill. “We want to pull out enough protein to create this high-value protein product

TECHNOLOGY

Take Advantage of Economy of Scale

SMALL SCALE

(50,000 to 2M GPY)

Commercially Viable Modular Ethanol Production Systems

Available Features Include:

PROTEIN GOLDMINE: Tom Sibson weighs out a sample of VPro, high protein coproduct, similar to corn gluten meal, currently under development as an animal feed product.

• Patent-Pending Membrane Dehydration Module • Automated Remote Control • Feedstock Flexibility • 24/7 Monitoring & Support

PHOTO: BOB FORAN PHOTOGRAPHY

without being deleterious to the existing DDG production,” Bleyer says. “In other words, the existing DDGs have a certain specification that has to be met and, just like we don’t want to pull out too much of the oil, we don’t want to pull out too much of the protein, so that DDG won’t meet that spec.”

Separating out the high protein VPro reduces total distillers grains volume by about 10 percent, says Jennifer Aurandt, technology development program manager. The new coproduct contains about 50 percent protein, about 8 percent oil and is lower in fiber than distillers grains. Early feed trials done at the University of Georgia show VPro has higher total metabolizable energy and increased lysine availability. “We’re excited about this high protein meal and the fact that we can

Visit us in Paso Robles, CA or at other installations

888.995.GRCO (4726) info@greenbeltresources.com GRCO:OTC MAY 2014 | Ethanol Producer Magazine | 31

TECHNOLOGY

How VPro stacks up to other feed ingredients DDGS

Corn Gluten Meal

VPro

Soybean Meal

Crude Protein

27

60

50

44

Crude Fat

10

2.5

10

0.5

Crude Fiber

7

2

5

7

Total metabolizable energy

2,829

3,695

3,500

3,344

Lysine

0.79

1.02

1.73

2.86

(percentage) (percentage) (percentage)

(kcal/kg)

(percentage)

tune it to what the industry likes,” she says.

“If they want less oil, like corn gluten meal, if they want more oil, whatever the animal nutritionist needs to formulate their diet.”

The separations process also creates stickwater, a low-solids liquid stream, fractionated from the whole stillage, Bleyer says. Recycling stickwater in the evaporator

train, for example, has advantages over using thin stillage, which makes evaporators prone to fouling and less energy efficient.

Stickwater can also be recycled to the front of the ethanol plant, where the reduced solids mean the ethanol plant can process more corn while maintaining the same target solids levels in the cook process, he said.

All in all, the VFrac technology allows for better water balance.

In fact, sending cleaner recycled water to the front of the plant actually results in better fermentation, Mahoney says. While the number can vary, depending on the amount of residual starches a plant has, testing has shown the technology can result in a 1 to even 2 percent increase in ethanol yield.

Finally, the technology is able to remove fiber, which can be used as a cellulosic ethanol feedstock, among other things.

“There’s other high-value opportunities for that fiber, other than cellulosic ethanol, cur-

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32 | Ethanol Producer Magazine | MAY 2014

TECHNOLOGY

rently under development, Bleyer says. â&#x20AC;&#x153;It could be an important coproduct for an ethanol plant in the future.â&#x20AC;?

Valicor is continuing R&D in separating different components of the corn kernel and different applications for the coproducts. On the corn oil side, currently, the two big demand drivers for the coproduct are the animal feed industry, specifically poultry, and biodiesel plants. â&#x20AC;&#x153;If we can make products that are better for either one of those customers, thatâ&#x20AC;&#x2122;s a great value add,â&#x20AC;? Aurandt says.

Corey considers VFrac part of the next evolution of the ethanol industry. â&#x20AC;&#x153;I think you are going to see that the dry mill ethanol market, the longer it exists, the more it matures, will move the coproduct stream much closer to what you find in a wet mill ethanol market,â&#x20AC;? he says. â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s only the natural progression.â&#x20AC;?

Author: Holly Jessen Managing Editor, Ethanol Producer Magazine 701-738-4946 hjessen@bbiinternational.com

HOT COPRODUCT: Technician Olivia Hayden analyzes corn oil quality in Valicorâ&#x20AC;&#x2122;s analytical lab.

PHOTO: BOB FORAN PHOTOGRAPHY

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UTILIZATION

BIODIESEL INPUT: Marquis Energy LLC markets some of the corn oil it produces to one of Renewable Energy Groupâ&#x20AC;&#x2122;s biodiesel plants.

PHOTO: MARQUIS ENERGY LLC

34 | Ethanol Producer Magazine | MAY 2014

UTILIZATION

Ready Markets Soak Up Corn Oil Distillers corn oil, produced at the majority of ethanol plants today, is in high demand.

By Chris Hanson

As production of corn oil has increased at ethanol plants, utilization by biodiesel plants, the animal feed industry and the export market have kept pace. Looking

specifically at biodiesel, between 2011 and 2013, use of corn oil as a biodiesel feedstock grew by a whopping 245 percent, according to U.S. Energy Information Administration numbers.

“There’s significant demand today for corn oil, and that’s reflected in the pricing,” says Joseph Riley, general manager of FEC Solutions, which began buying corn oil in 2005 or 2006. “There’s a premium for corn oil today, and I think that’s going to continue to be a driver in the market. I think, relatively speaking, it’s a short-term opportunity for the feed market, and biodiesel will continue to price it out of the feed market.”

Prior to 2000, the corn oil market was relatively small. It grew rapidly in 2008, however. That was the year that Renewable Products Marketing Group and other companies began marketing ethanol coproducts. Currently, RPMG markets corn oil for 12 plants that produce more than 170 million pounds of corn oil annually.

MAY 2014 | Ethanol Producer Magazine | 35

UTILIZATION

OTHER FUELS: Corn oil can also be used as a feedstock for renewable diesel, providing another outlet for the ethanol coproduct.

PHOTO: MARQUIS ENERGY LLC

Main Markets

Corn oilâ&#x20AC;&#x2122;s role as a popular feedstock choice in the biodiesel arena is quite apparent and growing, which made 2013 a great year for corn oil-derived biodiesel. More than 1.04 billion pounds of corn oil were utilized for biodiesel production by the end

of 2013, an EIA biodiesel production report showed, making it the second most popular feedstock choice. During the second half of 2013, corn oil finally broke the 100 million pound mark not once, but on three separate occasions.

Corn oil producers have options to sell within local markets, as well as destination

markets, says Riley. Locally, the oil can be transported via truck to nearby biodiesel plants or feed producers. In the case of Marquis Energy, the company is located relatively close to one of Renewable Energy Groupâ&#x20AC;&#x2122;s biodiesel plants, says Tom Marquis, director of marketing at Marquis Energy LLC, which installed corn oil separation

UTILIZATION

The Specialist in Biofuels Plant Appraisals • • • • MOLD CONTROL: Corn oil has potential to help address powdery mildew disease in organic farming applications.

PHOTO: JH BIOTECH

units in 2008. REG is one of the leading North American biodiesel producers with a 257 MMgy capacity and has been using the feedstock since 2007. “Our freight to their facility is pretty reasonable, so that has been the best market for our plant,” Marquis added.

In order to send the oil to other markets within the United States or to export it to foreign markets, producers not located on a rail line would need to utilize a transloading station to transfer the oil from a truck to a railcar. Once the oil is in the railcar, it can be transported greater distances to biodiesel plants and exporting facilities in other states, such as Louisiana and California, he adds.

“The Californian biodiesel market is favoring corn oil from a carbon-related standpoint.”

“These renewable diesel plants in Louisiana are big plants and some of their feedstock is corn oil,” Marquis explains. The Diamond Green Diesel

facility, a joint venture between Valero Energy Corporation and Darling International Inc., uses corn oil with other feedstocks to produce 137 MMgy of renewable diesel, he added. “So those are big, multifeedstock plants, but even if a portion of it is corn oil, that’s still a lot of demand for corn oil.”

Some foreign markets are also beginning to use the extracted corn oil for biofuel production. For instance, Neste Oil, uses the corn oil to help produce its NExBTL renewable diesel fuel. The company added corn oil as one of its biofuel feedstocks in July and produced more than 1.2 million metric tons of renewable fuel using distillers corn oil, along with other waste and residual materials.

Although biodiesel production seems to be the hottest market for corn oil, its use as a feed additive cannot be easily dismissed. “Right now, our biggest customer is the biodiesel market. They

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UTILIZATION are a very large user of distillers corn oil,â&#x20AC;? says Matt Niemeyer, corn oil merchandising manager at Renewable Products Marketing Group LLC. â&#x20AC;&#x153;Feed is a close second.â&#x20AC;?

Poultry feed applications seem to be the most popular sector of the feed market, but other groups are beginning to emerge, such as swine feedlots looking for another fat source Niemeyer says. â&#x20AC;&#x153;Perdue Farms Inc. has been a pretty big buyer of corn oil into poultry feed, I believe,â&#x20AC;? Marquis recalls, â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;ve shipped some railcars to another poultry operation.â&#x20AC;?

'These corn oil-based products will be used on pretty much any organic crop. Everything from all the high-end berry crops to vegetables.' â&#x20AC;&#x153;The good thing about it is that it is a vegetable-based source of energy versus an animal fat or animal-based product,â&#x20AC;? Niemeyer says. Spreading that data through word-of-mouth and research to

potential consumers is one way corn oilâ&#x20AC;&#x2122;s popularity has been growing, he adds.

With corn oil meeting the growing needs of the biodiesel and feed industry, producers may need to examine ways to improve the handling and transportation of the material, especially during colder winter months. There may be some improvements in how the industry handles corn oil to maintain its quality in order to become a better export possibility, Marquis says. â&#x20AC;&#x153;Thereâ&#x20AC;&#x2122;d be more potential for export if there were ways to maintain quality.â&#x20AC;?

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38 | Ethanol Producer Magazine | MAY 2014

Although the potential for corn oil exists in other markets, it is not yet widely being taken advantage of. Some are thinking of the edible corn oil market, however, advancing into that market would require greater regulation, processing and, of course, capital spending. â&#x20AC;&#x153;Thereâ&#x20AC;&#x2122;s a lot of cleanup, refining and deodorizing that would need to occur,â&#x20AC;? Riley explains. â&#x20AC;&#x153;It would have to be an identical product to a shelf-stable Mazola oil, so there would be significant processing and loss to be able to achieve that standard. The FDA and USDA would also have to give their approval.â&#x20AC;?

While breaking into the food-grade market seems quite intimidating, there may be additional opportunities in other industrial chemical markets. One possibility is pesticide and fungicide applications for organic farming and greenhouse applications. California-based, JH Biotech manufactures and researches biotechnologies for safer farming applications. It produces the GC-3 organic fungicide and GC-Mite organic insecticide using corn oil.

Unlike petroleum-based pesticides and fungicides, the corn oil pesticides provide the user a much safer application.

With the petroleum pesticides, the user usually needs to be properly trained and licensed by the state and wear multiple items of protective clothing, says Donald Lester, product manager at JH Biotech. â&#x20AC;&#x153;As a manufacturer, you have to go through

UTILIZATION “It’s pretty simple, but it’s pretty effective.”

Some of the biggest customers in this arena are commercial-scale, organic farmers and people who tend small, organic gardens. Medicinal marijuana farmers also prefer using the pesticide due to its safety, Lester says. “They grow indoors so the humidity is very bad; they don’t ventilate a lot so you got the powdery mildew fungus growing in there, and they usually get insect problems, usually with aphids. “They don’t

want to spray indoors with a bunch of toxic stuff, so they always use the organics.”

Currently, California is the biggest, organic producing and consuming state, Lester says. “These corn oil-based products will be used on pretty much any organic crop. Everything from all the high-end berry crops to vegetables.”

Author: Chris Hanson Staff Writer, Ethanol Producer Magazine 701-738-4970 chanson@bbiinternational.com

BIG IN BIODIESEL: A sample of corn oil sits next to Renewable Energy Group Inc. biodiesel produced from the ethanol coproduct.

PHOTO: BOB MODERSOHN

a lot more testing and approval processes from the EPA to get them on the market.”

Regarding extra processing, corn oil does not have to be a certain grade before being used in pesticide or fungicide production, Lester says. “All pesticides have to be approved by the EPA and they have a list of what they call generally recognized as safe ingredients that you can put into pesticides.

If you use everything on that list, it makes it really easy for a manufacturer to get the product registered, and corn oil is on the list.”

Corn oil, which can be combined with other ingredients, will kill soft-bodied insects by plugging up breathing tubes on their body, Lester says. The oil can also combat powdery mildew disease that can affect numerous types of crops, such as squash, cucumbers and melons. “It puts an oily coating on the leaf, then the fungus doesn’t get the chemical signals it needs to find its way into the plant,” Lester explains.

MAY 2014 | Ethanol Producer Magazine | 39

EVENT

TRUE SPIRITS: David Kelsall (1945-2008) of Lallemand Biofuels & Distilled Spirits (above left) was awarded the FEW’s High Octane Award in 2007. The award presenter, BBI International co-founder Kathy Bryan (1945-2009), received the same award in 2009.

MILWAUKEE’S BEST: Working together, Fagen Inc. CEO Ron Fagen and Wayne Newton of Australia’s NPH Farming Syndicate cut the expo ribbon at the 2006 FEW in Milwaukee, Wis.

SURVEY SAYS: At the 2003 FEW in Sioux Falls, S.D., industry technology providers faced off against producers in a memorable mock game show dubbed “The Family Fuel.” On the technology team was (left to right) consultant Greg Heuer, Gunter Brodl of Vogelbusch, Dave Vander Griend of ICM, and Bib Swain of the former Delta-T Corp.

GOOD ADVICE: In a rare appearance, Martin Andreas of Archer Daniels Midland Co. takes the stage at the 2005 FEW in Kansas City, Mo., to praise the biofuels industry for its success.

Listening intently are RFA President and CEO Bob Dinneen (right) and Joe Jobe, CEO of the National Biodiesel Board.

40 | Ethanol Producer Magazine | MAY 2014

GLOBAL GATHERING: Today, the FEW draws attendees from 30 countries. Here, Dehua Liu of Bejing, China’s Tshinghua University, shares his perspectives on ethanol at the 2005 FEW in Kansas City, Mo.

AT THE MICROPHONE: Raphael Katzen, the late founder of Katzen Engineering, was famous for his challenging speaker enquiries at the FEW. Here, he is pictured at the 2008 FEW in Nashville, Tenn.

SARY A N NIVER y

THE SHOWMAN: Mike Bryan, BBI International chairman and co-founder, gives his annual opening statement at the 2006 FEW in Milwaukee, Wis. Now living in Australia, Bryan will once again return to the FEW in Indianapolis, Ind., this June.

Three Decades Strong The International Fuel Ethanol Workshop & Expo will celebrate its 30th anniversary in June in Indianapolis, Ind. With plant personnel making up more than a fourth of its 2,000 attendees, the worldâ&#x20AC;&#x2122;s longest-running ethanol event is still â&#x20AC;&#x153;Where Producers Meet.â&#x20AC;?

By Tom Bryan

Throughout its first decade, the International Fuel Ethanol Workshop & Expoâ&#x20AC;&#x2122;s well-known acronymâ&#x20AC;&#x201D;FEWâ&#x20AC;&#x201D;was truly apropos. To say it was a

small conference back then would have been an understatement. The FEW began in the summer of 1985 as a 40-person gathering in St. Louis. Those who were there remember the workshop being more of a technical retreat for a fledgling industry than a global ethanol production forum. There were no exhibitors. There was no elaborately decorated general session stage. There werenâ&#x20AC;&#x2122;t even breakout sessions.

It was a one-room meeting for a devoted group of industry colleagues who believed in ethanol and wanted to see the industry grow. â&#x20AC;&#x153;The technical fellowship that grew out of the early workshops and conferences such as FEW is one of the strengths that still catalyzes the efficiency that this industry strives for today,â&#x20AC;? says Bob Sutthoff, technical sales director at Enzyme Development Corp. and the person who spearheaded the FEW in its early years.

Growth would not come quickly, for the ethanol industry or the FEW. In the decade that followed that inaugural FEW huddle, the conference remained small, growing in step with the unhurried expansion of the U.S. ethanol industry. The eventâ&#x20AC;&#x2122;s momentum picked up in the â&#x20AC;&#x2122;90s as 200 people attended in 1993, about 400 in 1997, and nearly 700 in 1999. Year by year the numbers picked up as modern dry mill corn ethanol plants were being constructed across the Corn Belt. In 2002, the FEW reached a tipping point, becoming a 1,000-person event with deep international reach.

In the half-decade that followed, the ethanol industry grew at a whirlwind pace, and so did the conference. Nearly 3,500 people attended the FEW in Milwaukee in 2006 as the ethanol plant construction boom hit stride. The conference reached its attendance high mark in 2007 when 5,000 people returned to St. Louis, followed by 4,000 attendees in Nashville in 2008. By the spring of 2009, however, the industryâ&#x20AC;&#x2122;s rapid pace of growth had fallen off dramatically. The brunt of the banking collapse and the onset of the Great Recession hit the ethanol industry hard, but the industry didnâ&#x20AC;&#x2122;t abandon its favorite summer gathering.

More than 2,100 industry professionals showed up in Denver for the 2009 FEW, establishing a new normal attendance. Despite the industryâ&#x20AC;&#x2122;s challenging times, the resolute commitment of its leading producers, service providers and technology companies ensured the showâ&#x20AC;&#x2122;s ongoing success.

Constancy has defined the FEW since 2009, as it has attracted over 2,000 attendees and 350 exhibitors five years running. More importantly, the FEW draws more than 500 ethanol plant personnel each yearâ&#x20AC;&#x201D;principally managementâ&#x20AC;&#x201D;living up to its billing as the place â&#x20AC;&#x153;Where Producers Meet.â&#x20AC;? Today, the FEW remains the largest, longestrunning ethanol event in the world, representing an ethanol industry that, in the U.S. alone, is a $44 billion industry capable of producing 14 billion gallons of ethanol annually. ď&#x20AC;¸ ONLINE This year's FEW will be held in Indianapolis, Ind., June 9-12. Early bird registration ends April 28. Visit www.ethanolworkshop.com for details.

MAY 2014 | Ethanol Producer Magazine | 41

EVENT

A SHARED STAGE: Last year, the heads of all three U.S. ethanol industry associations, RFA, Growth Energy and the American Coalition for Ethanol, sat down together for an “Association Roundtable.” Joining BBI International’s Tom Bryan, were (left to right), Growth Energy’s Tom Buis, ACE’s Brian Jennings and the RFA’s Bob Dinneen.

ETHANOL’S ORATOR: Renewable Fuels Association President and CEO Bob Dinneen has keynoted the FEW more than anyone else. His summer legislative updates always draw a crowd. Here, Dinneen speaks to the industry at the 2011 FEW in Indianapolis.

SERIOUSLY, GUYS: BBI International’s Mike Bryan gets a laugh out of four ethanol producers during the 2003 FEW’s general session game show (see additional photo on page 40). On the “Producer Team” were (left to right) Russ Abarr of New Energy Corp., Danny Allison of Abengoa Bioenergy Corp., Ray Defenbaugh of Big River Resources and Gregg Hayes of Cargill.

42 | Ethanol Producer Magazine | MAY 2014

THE BIG PICTURE: Over the years, many FEW general sessions have featured leading researchers, economists and academics who help attendees understand industry issues more broadly. Iowa State University professor Charles Hurburgh joined a forward-leaning discussion on corn at the 2010 FEW in St. Louis.

PUMPED UP: As midlevel ethanol blends started to emerge in 2008, Mick Henderson of Commonwealth Agri-Energy (left) took the stage with the RFA’s Robert White (then with EPIC), along with Ralph Groschen (now retired) of the Minnesota Department of Agriculture and Ron Graves of Oakridge National Laboratory.

SARY A N NIVER y

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The Stages of FEW As FEW attendance has grown, particularly from 2002 to present day, the scale and scope of its general sessions also expanded. Each

year, BBIâ&#x20AC;&#x2122;s program team reserves one or two â&#x20AC;&#x153;big topicâ&#x20AC;? issues for the general session.

It has become a tradition to include keynote speeches from high-profile industry leaders like RFA President and CEO Bob Dinneen and Growth Energy CEO Tom Buis, who will keynote this yearâ&#x20AC;&#x2122;s FEW in Indianapolis on June 10. Itâ&#x20AC;&#x2122;s also become customary to feature ethanol plant general managers and other industry thought leaders on the showâ&#x20AC;&#x2122;s big stage each June. Hereâ&#x20AC;&#x2122;s a look at some memorable general session moments from the past decade.

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FAST TRACK DISCUSSION: The 2011 FEW general session had a memorable NASCAR theme. Here, Growth Energyâ&#x20AC;&#x2122;s Tom Buis interviews NASCAR Brian France. The keynote conversation was followed by a panel that included other NASCAR executives as well as representatives of Poet, Novozymes and the National Corn Growers Association.

ZZZ YLFWRU\HQHUJ\ FRP )2//2: $ /($'(5 MAY 2014 | Ethanol Producer Magazine | 43

EVENT

THE DEVELOPER: Ethanol industry veteran David Kolsrud of DAK Renewable Energy received the FEW’s High Octane Award in 2008 for spearheading the development of several ethanol plants over the course of his career.

HIGH PERFORMANCE: ICM’s Dan Schwartzkopf (right) took home the 2013 High Octane Award. Schwartzkopf began promoting ethanol as a racing fuel in the early ’90s and eventually worked on ethanol implementation with the Indy Racing League and the National Hot Rod Association.

LOOKING NORTH: In 2005, BBI International’s Mike Bryan presented Patrick Foody Sr., the founder of Canada’s Iogen Corp., with the Distinguished Service award. Foody spent most of his career developing processes that would make cellulosic materials highly digestible to enzymes for the production of biofuels.

VISIONARY THINKING: In 2010. Poet Chairman (then CEO) Jeff Broin received the FEW’s High Octane Award. Broin has now worked in the industry for 28 years and has grown Poet into one of the largest ethanol production companies in the world.

44 | Ethanol Producer Magazine | MAY 2014

IT’S ABOUT HELPING: ICM Inc. CEO Dave Vander Griend, who built his industry-leading ethanol plant design, construction and support company around the principle of helping plants run efficiently and correctly, won the FEW’s Distinguished Service award in 2003.

SARY A N NIVER y

Recognizing Our Best Seeing an opportunity for the ethanol industry to recognize individuals who attain considerable technical success or otherwise dedicate their career to the advancement of the ethanol industry,

BBI International began its FEW awards tradition in 2000, presenting the first Award of Excellence to Raphael Katzen, the late founder of Katzen International. The following year, Dick Gadomski of Process Systems Inc. received the first Distinguished Service Award (now called the High Octane Award), and the FEW awards tradition was born.

In the past 13 years, the FEW has awarded 21 industry professionals with either the Award of Excellence or the High Octane Award, the former recognizing individuals who have made significant contributions to the ethanol industry through their research or technology, and the latter recognizing a person whose passion and unstoppable pursuits have significantly benefited the ethanol industry.

From 2000 to 2006, the awards were presented on an alternating basis. Starting in 2007, both awards are now presented annually. Last yearâ&#x20AC;&#x2122;s recipients were Kevin Hicks of the USDAâ&#x20AC;&#x2122;s Agricultural Research Service (Award of Excellence) and Dan Schwartzkopf of ICM Inc. (High Octane Award). ď&#x20AC;¸ ONLINE The deadline for this year's awards nomination process is May 9. Visit www.fuelethanolworkshop.com and click on Awards for more information.

STILL ANSWERING: After spending more than 30 years working in ethanol, industry consultant Larry Johnson was awarded the High Octane Award in 2012. Johnson developed a name for himself as the â&#x20AC;&#x153;Ethanol Answer Manâ&#x20AC;? in the â&#x20AC;&#x2122;80s while administering an educational and marketing program in Minnesota to advance E10.

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MAY 2014 | Ethanol Producer Magazine | 45

EVENT

GOING BIG: By 2008, FEW participants began to see increasingly large and often interactive expo displays as industry service and technology providers ramped up their trade show presence. Poet was one of several companies with an eye-catching exhibit in Nashville.

WATER TOWER: U.S. Water brought its FEW expo display to a new elevation last year, deploying a lofty, interactive kiosk below a revolving circular sign. In addition to exhibiting, U.S. Water also sponsored and presented at the 2013 FEW.

TRAIT SHOW: Enogen, a Syngenta company, sponsored the FEW’s expo grand opening in 2012. BUILD-OUT BUSTLE: The FEW expo floor was abuzz with activity in 2005 Here, Enogen’s David Witherspoon cuts the expo ribbon as BBI International’s Tom Bryan (left) and with nearly 2,700 industry professionals coming to Kansas City, Mo., as ethanol plant construction activity was quickly mounting.

Joe Bryan (right) assist.

GLOBAL STRENGTH: Fagen Inc. has sponsored many of the FEW’s expo grand openings over the years. Here, CEO Ron Fagen and Bamidele Ololade of Nigeria cut the expo ribbon in St. Louis, signaling the opening of the 2007 event.

46 | Ethanol Producer Magazine | MAY 2014

GROWTH OPPORTUNITY: In 2010, leaders of Growth Energy cut the ribbon at the FEW grand opening in St. Louis. Participating (left to right) was Growth Energy CEO Tom Buis, Greg Krissek of ICM, Steve McNinch of Western Plains Energy, Jeff Broin of Poet (holding scissors), Dave Vander Greind of ICM, and Bernie Punt of Noble Mansfield (formerly of Siouxland Energy and Livestock Cooperative).

SARY A N NIVER y

The Expo Experience The FEW expo is the largest ethanol industry trade show experience in the world, with more than 2,000 people participating each year. Notably, more than 500 upper-level ethanol plant personnelâ&#x20AC;&#x201D;one fourth of

the total attendanceâ&#x20AC;&#x201D;go to the FEW seeking new opportunities and tailored solutions to the unique challenges they face. The event has been named one of Tradeshow Weekâ&#x20AC;&#x2122;s â&#x20AC;&#x153;Fastest 50â&#x20AC;? expos, and today features more than 350 exhibitors, including suppliers and technology providers, equipment manufacturers and other service providers such as ethanol and coproduct marketers, risk management companies and providers of ethanol plant financial services. Hereâ&#x20AC;&#x2122;s a look at some notable FEW expo views and moments.

POP OF COLOR: DuPont made a bold statement at the 2012 FEW with a large, vibrantly colored expo display.

More than 350 exhibitors were on hand for the show in Minneapolis, Minn.

EVENT

BUILDING BASICS: Over the past decade, the FEW has hosted many preworkshop seminars, some attracting hundreds of participants. Here, a speaker fields questions about how lenders structure ethanol plant debt. More than 300 people attended this 2007 seminar.

BACK AND FORTH: The breakout sessions at the FEW are particularly well known for allowing audience interaction.

Time is allotted at the conclusion of each panel for a question-and-answer period. Here, longtime FEW attendee Jim Hettenhaus engages an FEW speaker from a floor microphone.

SCALING UP: The FEW’s breakout sessions often take on ambitious, even provocative topics. Philip Madson, president of Katzen International, is a perennially stimulating FEW speaker. Here, Madson shares his views on incorporating cellulosic ethanol into existing starch-based ethanol plants with “generation 1.5” technologies.

ASTUTE AUDIENCE: FEW presenters speak to audiences that are well-trained and highly knowledgeable. Speakers understand that producers turn to the FEW for operational and management guidance that helps them operate their facilities more efficiently and profitably.

48 | Ethanol Producer Magazine | MAY 2014

POPULAR PANELS: Today, the FEW breakout sessions are divided into four tracks. The most popular panels, individually, attract 300-plus attendees, eclipsing the entire attendance of early FEWs.

SARY A N NIVER y

Technical Talks The FEW is perhaps best known for its informative technical breakout sessions. The format of the eventâ&#x20AC;&#x2122;s concurrent sessions has changed over the years, but the aim of its contentâ&#x20AC;&#x201D;and the criteria of its presentationsâ&#x20AC;&#x201D;has remained constant. Still â&#x20AC;&#x153;Linking Industry with Innovation,â&#x20AC;? the FEWâ&#x20AC;&#x2122;s breakout sessions include four tracks, 24 panels and over 100 speakers and moderators. Tracks include: Production and Operations; Leadership and Financial Management; Coproducts and Product Diversification; and Cellulosic and Advanced Ethanol.

ď&#x20AC;¸ ONLINE The 2014 FEW technical sessions are now online. Visit www.fuelethanolworkshop.com and click on Agenda to view the program.

REAL RESEARCH: Nearly a fourth of all FEW speakers hold doctorates today, which isnâ&#x20AC;&#x2122;t surprising given the highly technical nature of modern ethanol production. Here, Dr. Yanhong Zhang of the National-Corn-toEthanol Research Center speaks to 2011 FEW attendees about distillers grains mycotoxins.

MAY 2014 | Ethanol Producer Magazine | 49

EVENT

A FEW POINTERS: Ethanol plant tours, when available, are an important part of the full FEW experience. Going back to the mid-’90s, FEW attendees have been offered tours of dozens of U.S. ethanol facilities. Here, East Kansas AgriEnergy hosts an FEW tour in 2005.

ON TRACK: The “Brickyard Bash” at the Indianapolis Motor Speedway Hall of Fame Museum was a popular attraction for 2011 FEW attendees. Located on the grounds of the famed Indianapolis 500, participants got a taste of the raceway’s high-octane history.

TOUGH COMPETITORS: At the 2003 FEW, ICM’s Dave Vander Griend and Poet’s Jeff Broin went headto-head in a decidedly leisurely mini-motorcycle race at the J&L Harley Davidson dealership in Sioux Falls, S.D. About 1,200 people attended that year’s FEW.

Come to Booth #307 and learn about Mist’s new CIP innovations to clean less and produce more!

50 | Ethanol Producer Magazine | MAY 2014

BUCKIN’ BIOFUELS: Those who were at the special event at the 2005 FEW will remember a lot of denim and cowboy hats at the Benjamin Ranch in Kansas City, Mo., where a few daring FEW attendees tried their hand at riding a mechanical bull.

SARY A N NIVER y

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Going Places Outside of the expo hall and panel sessions, FEW attendees enjoy the showâ&#x20AC;&#x2122;s rich tradition of visiting nearby ethanol plantsâ&#x20AC;&#x201D;before or after the main conferenceâ&#x20AC;&#x201D;and then winding down at the conferenceâ&#x20AC;&#x2122;s relaxed closing night event.

For many, attending FEW special events is an important part of the overall conference experience. Itâ&#x20AC;&#x2122;s also a great way to network, build a deeper understanding of the ethanol industry, and make the most of the week at the FEW. Here are some unforgettable extracurricular FEW moments of the past decade.

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Filtration for: Cooling Towers Heat exchangers Clean in place Plant Source water See us at the Fuel Ethanol Workshop!

Booth #633 HEY, BUD: Seeing the famous Budweiser Clydesdales may have been the highlight of the 2013 FEW special event at Anheuser-Buschâ&#x20AC;&#x2122;s historic St. Louis brewery, but connoisseurs of process were probably more impressed with the facilityâ&#x20AC;&#x2122;s giant brew kettles and beechwood aging cellars.

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MAY 2014 | Ethanol Producer Magazine | 51

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ADDITIVES

FINE TUNING: As producers have turned to chemical additives to improve mechanical corn separation yields, suppliers have learned there are multiple factors to consider when optimizing systems.

PHOTO: ASHLAND

54 | Ethanol Producer Magazine | MAY 2014

ADDITIVES

Optimizing for More Oil

With corn oil extraction widely implemented, the ethanol industry turns to improving yields and efficiency.

By Susanne Retka Schill

Spinning corn oil from syrup has become the norm in the ethanol industry. Not long after the first mechanical extraction

technologies were introduced just five to seven years ago, ethanol producers were asking chemical suppliers if there was something that would boost extraction ratesâ&#x20AC;&#x201D;if nothing else, to get the yields up to meet the necessary return on investment. The results were impressive, with some producers tripling their corn oil yields from pure mechanical means with the use of chemical additives. As a result, robust competition among the providers of additives has emerged in the ethanol industry and in the short time since the first additives were introduced, much has been learned.

MAY 2014 | Ethanol Producer Magazine | 55

ADDITIVES

SPINNING ENHANCEMENTS: Centrifuges spinning oil out of syrup streams have swept across the ethanol industry. The mechanical separation process is being enhanced through chemistry and, most recently, enzymatic approaches.

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56 | Ethanol Producer Magazine | MAY 2014

“When you think about where ethanol plants are today and where they were 20 years ago, they continue to find new technologies to achieve better ethanol yield,” says Jason Van’t Hul, senior industry technical consultant with Nalco. He points to the advancements made in enzymes that boosted ethanol yields as one example. “We’re kind of in the 1980s days of corn oil extraction,” he says.

Nalco provides chemistry and services to help producers optimize their systems.

There is a high percentage of plants pairing mechanical oil separation technologies with chemical extraction aids, says McCord Pankonen, applications and product development manager at Ashland Inc. The company has developed oil extraction aids for the ethanol industry since 2008, he says.

“A producer came to us and said, ‘We aren’t getting the oil we’re supposed to, do you have a chemistry that can help?’” The company now has five products available to meet varying situations, plus kosher options for feed bound for kosher-certified animals.

“Plants were getting 0.3, 0.4 or even 0.5 pounds of oil per bushel of corn processed with pure mechanical means,” says Todd Emslander, director of sales in the ethanol process technology group at U.S. Water Services. “They were doing pretty well, but looking to increase those yields.” He points out that a 100 MMgy ethanol plant processing 125,000 bushels per day would realize more than $1 million per year if it could increase corn oil yields by just 0.1 pound per bushel of corn. “That gave rise to a lot of companies getting into the market to provide surfactant-based chemistries to enhance those yields.”

Site-Specific Complexity

The different service providers have learned, through experience, that it isn’t as simple as just throwing a surfactant into the syrup stream. The best place to add the chemistry differs widely, and is virtually plant specific, plus getting consistent results has been a challenge for all.

“Each plant can differ in many ways, depending on design, engineering and operations,” Pankonen explains. “There’s different

ADDITIVES operational philosophies. For instance, it is important to profile evaporator operations to determine where to best draw from to extract oil, which has an astounding effect on the efficacy of a corn oil chemistry.”

“There are dozens of variables that impact oil recovery,” agrees Emslander.

“There are a few factors that affect recovery more than others. But when you have each plant running different recipes and in different geographical areas—plants running different separation technologies and different plants having different designs, it gets convoluted really fast. You have to identify those factors for each plant.” In addition, what works in one plant doesn’t necessarily work in another, he says.

“We’ve seen plants where high process pH has worked significantly better than low pH and vice versa. It’s really dynamic. There are some generalities, but every plant is different.”

Every crop is different as well. Experience is showing that recoverable oil differs from year to year, and even within a crop year. “We didn’t see it in 2012, but in 2011 and 2013, we saw early in the season that it was a little bit of a struggle to capture the corn oil. But as the crop was allowed to age, things got better,” Van’t Hul says.

The differences in corn from year to year are outside an ethanol producer’s

BEFORE

AFTER

CLEANER OIL: In addition to improving yields, additives improve quality by reducing the solids remaining in the oil, seen at the bottom of the vial.

PHOTO: NALCO

control. For those factors that can be controlled, however, the service providers are finding the interrelationships among parameters are complex and all report the learning curve has been steep. Grind size can have an impact as well as the enzyme package used on the front end. The solids loading in the front end has a big impact, as do pH and temperature. Finding the

best location to introduce the chemistry for adequate mixing and consistent results is important, and differs from plant to plant.

The length of piping between pumps and tanks can have an effect, for example. All of those nuances impacting the efficacy of the chemistry are in addition to probably the biggest one—the design of the centrifuge technology itself.

MAY 2014 | Ethanol Producer Magazine | 57

ADDITIVES

As a result, dosages of additives can vary widely, says Vanâ&#x20AC;&#x2122;t Hul, explaining that which evaporator the syrup stream is taken from to run through the oil extraction process has a big impact. â&#x20AC;&#x153;A service company can help you understand that. Sometimes itâ&#x20AC;&#x2122;s counterintuitive,â&#x20AC;? he says. â&#x20AC;&#x153;One thing Iâ&#x20AC;&#x2122;ve learned is you donâ&#x20AC;&#x2122;t go in with preconceived notions. We tell our customers, weâ&#x20AC;&#x2122;re going to try it in different locations.â&#x20AC;?

The return on additive investment can vary widely as well, he says. â&#x20AC;&#x153;If they had a very inefficient system before we started, we can really impact operations and get $10 more oil for $1 additive. In really efficient systems where you just need a little extra help to get that extra oil, you may have to spend $1 to get $2 back. But at the end of the day, there is a return.â&#x20AC;?

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Renewable Fuels | Ethanol Group 58 | Ethanol Producer Magazine | MAY 2014

Besides improving extraction rate, chemical aids have other benefits. â&#x20AC;&#x153;Less mechanical energy is needed to separate the oil,â&#x20AC;? Pankonen says, plus the oil is much cleaner. â&#x20AC;&#x153;The solids level depends upon the marketer and the final use,â&#x20AC;? he says, explaining typical specifications can range from 5 to 15 percent allowable solids. Most corn oil is destined for either the animal feed or biodiesel markets.

Another big factor that impacts oil extraction aids is the overall plant design.

Greg Smith, sales director of industrial chemicals for Croda Inc., explains that Crodaâ&#x20AC;&#x2122;s demulsifier/emulsifier works best in plants that have a stillage syrups storage tank before centrifugation, although it also performs well in continuous feed systems.

As a commodity chemical company, Croda has a slightly different role in the oil recovery enhancement field, he adds, being less involved in providing services. â&#x20AC;&#x153;Ethanol plants are welcome to purchase our product and manage their own hook ups and feed rates. We also supply surfactant to service providers who use it in their chemistry blends.â&#x20AC;?

Smith explains Crodaâ&#x20AC;&#x2122;s research indicates time, temperature and pH are the primary parameters to consider in fine-tuning oil extraction. The chemistry works best at 180 to 200 degrees Fahrenheit, and temperature can be a tool to adjust extraction rates. â&#x20AC;&#x153;You find the right feed rate, then as much residence time as you want, then you get it hotter. The last thing you do is drop the pH below 4,â&#x20AC;? he adds. â&#x20AC;&#x153;Some [syrup] is coming off at 4.8 or 5, so if you can trickle in sulfuric acid and itâ&#x20AC;&#x2122;s cost effective, people do it.â&#x20AC;?

The amount of oil ultimately extracted depends on getting the multiple factors in a particular plant right. As the industry learns more about how to get consistent results and tweaks the chemistry blends to meet varying situations, ethanol producers are increasing extraction rates, achiev-

ADDITIVES

ing around 1 pound per bushel of corn in some systems. Producers are also getting better at fine-tuning extraction to leave just the amount of oil needed for the end distillers grains market, and no more.

Enzymatic Approach

This past year, several ethanol plants have been examining a newly introduced enzymatic approach developed by Novozymes to enhance corn oil yields even further. The company introduced a new enzyme trademarked Olexa at the International Fuel Ethanol Workshop last year, says Jack Rogers, biofuel global marketing manager for Novozymes. “We’re seeing great results—an average of 15 percent increased corn oil and 2 percent increased ethanol yield. There’s an energy reduction of around 3 percent, depending on the plant, and we’re seeing a significant urea reduction.”

The enzyme works by breaking down the protein outer layer of oleosomes, which bind oil within the corn kernel.

“We’re releasing a pool of oil that chemicals aren’t able to access,” Rogers says. “It is a novel way to improve oil extraction.”

The enzyme is added directly into fermentation and no process or equipment changes are needed. In addition, a boost in ethanol production comes from another action of the enzyme in releasing amino nitrogen from the corn that is favored by yeast over other nitrogen sources such as urea. That has resulted in urea reductions as much as 70 percent, Rogers says.

There’s a lot of competition among the suppliers of corn oil extractions aids, admit those contacted for this story. That, in turn, has increased the number of trials conducted at plants as products are compared and new ideas for improvements examined. Getting a proper baseline for comparisons is important, as is collecting the right metrics and controlling all the variables but the one being tested. As a

result, the ethanol industry as a whole is improving its sophistication in trialing new technologies.

“You’re seeing a lot of innovation, mechanically, chemically and enzymatically, and you’re going to continue to see that.

It’s good for the industry, and I don’t see it slowing down any time soon,” Pankonen says. “What we’ll continue to see is a lot

of plants generating new ideas and asking vendors to look at ways they can implement them.”

Author: Susanne Retka Schill Senior Editor, Ethanol Producer Magazine sretkaschill@bbiinternational.com 701-738-4922

MAY 2014 | Ethanol Producer Magazine | 59

CO-LOCATION

SUPER PROCESS: Jatrodieselâ&#x20AC;&#x2122;s Super process, which utilizes supercritical temperatures and pressures, employs ancillary equipment like the dryers shown here.

The 120 MMgy Patriot Renewable Fuels ethanol plant in Annawan, Ill., is installing a 5 MMgy Jatrodiesel Super biodiesel production facility onsite.

PHOTO: JATRODIESEL INC.

60 | Ethanol Producer Magazine | MAY 2014

CO-LOCATION

Biodiesel:

Coming Soon to an Ethanol Plant Near You The concept of co-locating biodiesel production at ethanol plants is finally taking shape.

By Ron Kotrba

The synergies between co-located ethanol and biodiesel production have been discussed for a decade. Existing infrastruc-

ture to share process essentials, in-house feedstock with distillers corn oil (DCO), and use of ethanol rather than methanol for biodiesel reactions are the more obvious benefits. Biodiesel technology providers want contracts in this highly sought-after market. For ethanol producers, the attraction is added value through biodiesel sales and D4 RIN generation. But it’s also about diversification and fulfilling the renewable fuel standard’s (RFS) vision.

“Over the past several years, biodiesel margins have been really strong,” says Ray Baker, general manager for Adkins Energy LLC, a 50 MMgy ethanol refinery in Lena, Ill. Adkins Energy announced last fall that it has contracted with WB Services LLC to install a 2 MMgy biodiesel facility onsite with help from a $500,000 grant from USDA’s Rural Energy for America Program.

“But one of the reasons I think we really like the project and the idea behind it,” Baker says, “is that we are already producing a conventional biofuel— corn-based ethanol—and we’ll now be producing an advanced biofuel in biodiesel, and in the future we’ll have the opportunity to be producing cellulosic ethanol. So we look at all aspects of the RFS, and the growth that’s really built into that, and we see those opportunities.”

In recent years, DCO has emerged as one of the fastest-growing biodiesel feedstocks, and technologies to effectively convert DCO to biodiesel have improved. “I think once they got to that point, that helped the technology evolve and the idea behind it become more economical to install into a plant,” he says.

MAY 2014 | Ethanol Producer Magazine | 61

CO-LOCATION

Ron Beemiller, president and CEO of WB Services, says, “From my perspective, the reason this idea of integrating was never fully realized is, nobody ever had a real clear understanding of both processes enough to do the integration properly.”

WB Services has more than 10 years experience in the ethanol sector. “We’ve been working on [the co-location concept] now for two or three years,” he says.

The company is installing both a traditional acid esterification/base transesterification system at Adkins, as well as an enzymatic process—a newer technology in the biodiesel space. “Per batch, it can run either way,” Beemiller says. “We intend to run enzymatic.” Novozymes is WB Services’ commercial partner in enzymatics. DCO traditionally runs between 10 and 15 percent free fatty acids (FFA), but Beemiller says he can offer performance guarantees far above that with enzymatic technology. Rather than using what would be Novozymes’ traditional approach, WB Services “kind of took it from a different perspective,” Beemiller says. “We basically use the enzyme as a pretreatment step to lower the FFA or to convert all the way to biodiesel, and then we do a few other steps as well, whether that’s an additional reaction along with additional polishing, and a few other things.”

WB Services has a patent pending on the integration aspects with co-location of biodiesel production at ethanol facilities. “We try minimizing outside components that need to be brought in while maximizing use of existing infrastructure,” Beemiller says. “The combination of ethanol availability, coupled with the ability to blend recovered ethanol back into the plant instead of putting in all the capital equipment to collect and clean it, is one of the components that we worked on.”

In designing the plant, WB Services is using much of the same equipment, like valves and pumps, found in the ethanol plant. “That way, they can utilize the spare parts from one to the other,” he says.

Baker says the option to distill biodiesel was necessary, and only added 5 to 6 percent of the entire plant cost. “For our 62 | Ethanol Producer Magazine | MAY 2014

market here in Illinois, distillation is the preferred product,” he says. Illinois is a very biodiesel-friendly state. Any biodiesel blended into on-road diesel above 10 percent is exempt from sales tax, making B11 common.

Construction is underway but the harsh winter has delayed anticipated commissioning until second quarter.

'A lot of the emphasis in the past has been on the value of ethanol, but now the focus is edging more toward oil.'

Patriot Project

Less than two hours south from Lena is Annawan, Ill., where Jatrodiesel Inc.’s first commercial supercritical biodiesel plant, a 5 MMgy facility, is being installed at the 120 MMgy Patriot Renewable Fuels LLC ethanol refinery. “Jatrodiesel is a small company, but they have vast experience building smaller biodiesel plants that convert the harder-to-process feedstocks,” says Rick Vondra, vice president and general manager of Patriot Renewable Fuels.

“For the scale and scope of what we wanted to do, it looked like a pretty good fit.

DCO is not the easiest to convert.” While Vondra says permits are not yet in hand, he expects to have them soon. “We had an official groundbreaking although we haven’t started construction yet,” he says.

“Hopefully we’ll get that completed in a few weeks, and start putting some steel in the ground.” Vondra says the project is viable even without the now-lapsed $1-pergallon biodiesel tax credit.

“We generally see a lot of business advantages when a biodiesel plant is vertically integrated into an existing feedstockproducing plant,” says Raj Mosali, president of Jatrodiesel. In a traditional process, acid esterification is employed to convert FFA to biodiesel, and base transesterification using sodium methylate converts the triglycerides. “In the Super process, we eliminated the use of catalyst—acid or

CO-LOCATION

base, or an enzyme—altogether,” Mosali says. “In a nutshell, we send a mixture of methanol and oil and out comes the biodiesel and glycerin. The advantages are savings in catalyst costs, process simplicity, true multifeedstock and up to 100 percent FFA capabilities, and high-quality glycerin.”

While the Super process requires more energy than traditional approaches, Mosali says under a normalized comparison between traditional and Super, between 12 and 18 percent savings overall are achieved, considering utilities, chemicals, operational expenses and more. “If you consider soft costs such as training the operators, the savings are higher,” he says.

The Illinois Department of Commerce and Economic Opportunity New Generation Biofuels Production Program is providing funding and development assistance for the ethanol plant’s new subsidiary, Patriot Fuels Biodiesel LLC. Vondra says the estimated cost is more than $10 million.

MarketFlex

Another option available to ethanol producers is Cereal Process Technologies LLC’s MarketFlex, a capital-intense system of dry fractionation that separates the corn upfront to get much more—and higher quality—oil along with a traditional biodiesel process. “I think it’s strictly a matter of how much money they want to make,” says Pete Moss, president of CPT, on why ethanol producers might choose this route.

“A lot of the emphasis in the past has been on the value of ethanol, but now the focus is edging more toward oil.” Moss says while many backend extraction technologies yield a half a pound of oil per bushel, dry fracking could yield 1.2 to 1.4 pounds oil per bushel plus an additional quarter pound on the back. More oil could simply mean more profit and better economies of scale, allowing higher biodiesel production volumes. He says the spread between edible corn oil and DCO has narrowed significantly. Today DCO is approximately 33 cents per pound with up to 15 percent FFA, while crude corn oil, which is not refined, bleached or deodorized, with less

than 4 percent FFA sells for about 42 cents.

Moss says he is working to develop a pathway with U.S. EPA so biodiesel from dryfracked oil can generate valuable D4 RINs. For a 100 MMgy ethanol plant processing 36 million bushels a year, Moss says the estimated capital costs are $28 million for fractionation, $10 million for solvent extraction, and $15 million for a 10 MMgy biodiesel facility. A same-sized plant selling DCO averages $37 million earnings before

interest, taxes, depreciation and amortization (EBITDA), whereas a plant with fractionation plus solvent extraction and biodiesel production EBITDA would be $65 million.

Author: Ron Kotrba Editor, Biodiesel Magazine 218-745-8347 rkotrba@bbiinternational.com

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CARBON

Lowered Drying Costs from Corn Oil Removal Impact Carbon Accounting Managing carbon intensity values under California’s LCFS

By James M. Ramm

California’s Low Carbon Fuel Standard allows an ethanol plant to submit a Method 2B petition to the California Air Resource Board requesting a lower carbon intensity (CI) number. Jan. 8, CARB

issued guidance for ethanol producers seeking a lower CI number based on distillers grains dryness levels. The new guidance makes clear that use of default drying energy values is no longer acceptable because it may overestimate CI reductions. Going forward, petitions must be based on plant-specific, operational information on drying or overall plant energy.

The proliferation of advanced technologies for corn oil extraction systems (COES) and the increasing use of nonfood-grade (NFG) corn oil for biodiesel production contributed to the latest guidance. CARB also states it cannot prescribe a single approach because drying systems and processing parameters can vary widely from one plant to the next.

Over the past two years, the use of NFG corn oil for biodiesel production has grown tremendously. Corn oil biodiesel is eligible for a D4 RIN (renewable identification number) under the renewable fuels standard and the LCFS has assigned it a CI value of 4 grams of CO2 equivalent per megajoule of biodiesel produced. Biodiesel made from NFG corn oil is eligible for the CI value of 4 because the energy required to dry the DDGS at the ethanol plant after the corn oil is extracted is considerably lower. This energy saving is credited to the corn oil and subsequently to the biodiesel made from it.

The low CI value for NFG corn oil biodiesel assumes the DDGS is dried fully at the ethanol plant, for if the distillers grains were not dried, there would not be any energy savings to be allocated to the corn oil. Second,

it assumes that the ethanol plant selling the corn oil is not submitting a Method 2 pathway and lowering the CI of its ethanol based on lower energy consumption, as this would be double counting. Third, it assumes that the actual energy savings from installing COES is 3,070 Btu per gallon of ethanol.

Default Values

A regulated party using the CI value of 4 for corn oil biodiesel must demonstrate that the net energy savings from the extraction of corn oil at the ethanol facility is greater than or equal to the value used in the Californiaadapted model for greenhouse gases, regulated emissions, and energy use in transportation (CA-GREET) calculation: 3,070 Btu per gallon of ethanol. If the net energy savings at the ethanol plant from corn oil production is less than this value, the biodiesel producer must use the Method 2A/2B pathway option of the LCFS. In the CA-GREET default scenario for a dry mill corn ethanol plant, CARB assumes a default drying energy of 9,900 Btu per gallon of ethanol. This number is calculated from a 1998 study, which stated that the total energy consumption at an average dry mill plant is 36,000 Btu per gal of thermal energy, and 27.5 percent of that is used for drying DDGS. The assumptions that go into using the default value include: • Sensible heat effects are ignored.

• The wet cake must contain approximately 65 percent water.

• The syrup (solubles) must contain approximately 65 percent water.

• The dry DDGS must contain approximately 10 percent water.

• The drying process must be approximately 91 percent efficient.

In the latest guidance, CARB admits that

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).

CARBON the total thermal energy used by many ethanol plants has probably decreased since 1998. Dryer energy use is reduced at many plants in a variety of ways: improved dryer efficiency; drying DDGS to higher moisture content; reducing the water content of the wet cake or condensed distillers solubles (syrup); process improvements; centrifuge design alterations; etc.

Calculating Energy Savings

All of the above could cause actual energy use associated with drying DDGS to be lower than 9,900 Btu per gallon at a specific ethanol mill. If the actual energy use is less, then the savings resulting from installing COES might be lower. In order to accurately evaluate the savings, we must establish the difference in thermal and electrical energy consumption between periods when drying is occurring and when it is not.

We must also have “before COES” and “after COES” scenarios for dryer energy usage with all other parameters being held constant. The scenarios must be of reasonable duration and sufficiently representative of both present and future normal operating conditions.

CARB prefers plant-specific empirical data on the energy required to dry DDGS to average or specific levels. According to the latest guidance, the simplest and most straightforward operational data is validated and verifiable thermal and electrical energy consumption data from meters or from a plant’s automated datalogging system. If that data can definitively establish the difference in thermal and electrical energy consumption between periods when drying is and is not occurring, no further plant information would be necessary. CARB

anticipates that plant data logging will allow for a two-year analysis of all drying and energy use scenarios. A producer would then calculate the average drying energy for all drying modes including wet, dry and modified.

Estimated Savings

If such data is unavailable, the applicant must propose an approach to estimating dryer energy usage based on plant-specific information that is available. This gets tricky because there is no prescribed approach to do this. According to CARB, a dryness energy estimation approach must, at minimum, consider the following and include them in the life cycle analysis (LCA) report: • Initial wet cake water content.

• Final DDGS (or DG, if syrup is sold separately) water content.

• Initial thin stillage (solubles) water content.

• Final solubles (syrup) water content.

• Mass of corn oil extracted.

• Use of enhanced stillage dewatering (enzymatic or other).

• Dryer efficiency.

Applicants may also apply for a single CI for all distillers grains dryness levels, as long as it is based on two years of data and will be valid for foreseeable future plant operations. Applicants must demonstrate in their LCA reports that the mass and energy balances are approximately close and explain any discrepancy that prevents complete closure.

Once drying energy has been determined, that value should be used to calculate DDGS dryness-based CIs. The calculations must be

done on a dry-matter basis, and must properly account for extracted corn oil and syrup on a dry matter basis. Syrup and corn oil must be allocated proportionally (on a dry-matter basis) to all distillers grains dryness categories when CIs are calculated for the coproduct credit.

Finally, when the CIs are certified, the plant must allocate ethanol gallons produced to the dryness categories after converting all distillers grains masses to a dry-matter basis. If there are three drying modes, the producer would take the drying energy into the CA-GREET model to generate three distinct CIs to be used to calculate LCFS credits.

The LCFS is clear about placing the responsibility of compliance on regulated parties who use the credits. If plant operational data does not match the inputs in the CAGREET model that is the basis of the CI value, then the credits generated as a result of combusting the final fuel can potentially be disputed. Most regulated parties who take the LCFS or RIN credit for corn oil biodiesel don't trace the origin of the corn oil when they purchase biodiesel. They probably should.

Author: James M. Ramm, PE Senior Engineer, EcoEngineers 515-344-9715 jramm@ecoengineers.us Contributing Author: Shashi Menon, managing partner, EcoEngineers

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Prepare Now for Summerâ&#x20AC;&#x2122;s Upcoming Flowability Challenges

By Kurt A. Rosentrater

About 10 years ago, DDGS flowability became an issue as the industry began its exponential growth and ethanol plants began shipping coproducts. Flowability has

been a major challenge for transportation and logistics, not just because it does not always flow out of rail cars, but it also hangs up in trucks, storage bins, and even in on-farm storage structures. Over the years, much effort has been expended into determining why flowability problems occur, and what can be done to eliminate, or at least reduce the occurrence. Considerable progress has been made, and flowability problems have declined throughout the industry. But, it seems that every summer the problem returns as temperatures and humidities increase.

So what have we learned? Flowability (or lack of flow) is a complex phenomenon.

The most important factors are moisture content and syrup addition level (which the plant can control), and ambient temperature and relative humidity (which it cannot).

Other variables play a role, including dryer temperature and time, cooling temperature and time, cure time in flat storage, state of the residual sugars, fats and proteins after both fermentation and drying, the influence of yeast cell components, and fermentation products (such as glycerol, organic acids, acetic acid and lactic acid). Also important are corn grind size (and thus DDGS particle size), as well as vibration and compaction during transport.

What about the reduced-oil distillers products that are now available?

It would stand to reason that by reducing 66 | Ethanol Producer Magazine | MAY 2014

TAPPED VS LOOSE: Hausner Ratio and Angle of Repose can be used to estimate DDGS good vs. poor flow.

fat content DDGS flowability should improve. Unfortunately, this is not the case.

Experiments in our laboratory indicate some flow parameters do improve slightly, while others do not. Similar to traditional DDGS, the most important factors are particle size, syrup level, temperature and humidity.

What can plants do to reduce flowability problems this summer? First, and most importantly, minimize the variability in your DDGS. The more consistent your production process, and more consistent your DDGS, the lower the probability of flow issues. Second, donâ&#x20AC;&#x2122;t load railcars when the DDGS is still hot. The best practice is to allow the DDGS to cure/cool in flat storage until residual heat dissipates or, if stored in silos, to turn the material to break the bridges that may form between particles. Third, if a batch of DDGS is likely be out of spec, the best choice is to send that to a well-equipped unloading facility, if that is an option.

Even if your DDGS is in spec, it may still have issues. My research team has determined that the easiest way to predict

flow problems is to conduct some simple tests, including measuring angle of repose, loose bulk density and tapped (compacted) bulk density. The ratio of tapped-to-loose bulk densities is known as the Hausner ratio. By plotting Hausner ratio vs. angle of repose, we can estimate DDGS flow out of hopper bottoms and estimate regions of good and poor flow.

Production of ethanol is a biological process. Biomolecules such as proteins and fats will always be present, as will products of fermentation, including glycerol and organic acids. These all make DDGS a sticky product, especially in the summer when these molecules can melt and flow between particles. Now is the time to start thinking about flowability issues and taking steps to reduce their impact.

If you have any questions or need any assistance with your DDGS, please feel free to contact us. We look forward to working with you.

Author: Kurt A. Rosentrater Executive Director, Distillers Grains Technology Council 515-294-4019 karosent@iastate.edu

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BUSINESS MATTERS

OSHA Alive and Well With Budget Increase

By Eric Hobbs

The U.S. Occupational Safety and Health Administration is hard at work beefing up enforcement and making changes to its regulations and enforcement programs, both transparent and not so transparent. Several are worth ethanol producers’ attention.

For years, OSHA has been promising to streamline of its Process Safety Management Standard to reduce the burden on employers.

Unfortunately, no progress has been made or forecast. In the meantime, OSHA continues to apply its PSM National Enforcement Program, which increases the likelihood that PSM-covered chemical facilities, including ethanol plants, will be inspected. Both programs are designed to protect employees from hazardous releases of dangerous chemicals, including ethanol and certain byproducts of the ethanol production process.

PSM inspections are time intensive and can result in significant citations and proposed penalties. The proposed penalties in the BP Petroleum cases were in the millions of dollars.

Grain handling facilities of all kinds fall within the reach of OSHA’s Grain Handling Local Emphasis Program in OSHA’s Region 5, which includes Wisconsin, Minnesota, Illinois, Indiana, Michigan and Ohio. Although grain engulfment hazards are the primary target of such an inspection under the LEP, the inspections also focus on machine entrapment hazards, amputation hazards, fall hazards, auger entanglement and even combustible dust.

Grain inspections often result in significant proposed penalties for violations of OSHA’s Grain Standard, which incorporates Confined Spaces Standard requirements, OSHA’s Walking-Working Surfaces Standard, its Machine Guarding Standard and, in the case of alleged combustible dust, either OSHA’s Housekeeping Standard or the OSHAct’s General Duty Clause. A fatality or serious injury resulted from any such violation can result in very steep proposed penalties.

A sister NEP to OSHA’s Grain Handling LEP is OSHA’s Combustible Dust NEP. One of the dusts listed in the “purpose” clause of the NEP is “organic dusts such as … flour …,” and one of the “industries that handle combustible dusts” listed in the NEP is agriculture, including ethanol production.

Combustible dust has been, and continues to be, a focus of OSHA both with and without a specific standard. The accumulation of such dusts, in OSHA’s view, can result in fire or explosion. Some of the most 68 | Ethanol Producer Magazine | MAY 2014

visible and highest-proposed penalty OSHA cases in the past 10 years have been combustible dust cases.

In November, OSHA published a notice of its intention to create a new injury and illness reporting regulation. It would require employers of 250 or more employees to submit detailed data on all worker injuries and illnesses quarterly, and would require employers of 20 to 249 employees to submit reports annually. The data would include not just information from a covered employer’s logs, but also employee numbers, geographic location, hours worked, and other arguablyconfidential (to employer and employee) and proprietary information.

OSHA would publish the data on its website for public access.

The rule raises serious problems of confidentiality, accuracy and use or misuse by both innocent and not-so-innocent parties. As of now, it would not allow for the correction of any submitted data. The apparent goal of the rule is to shame employers by the publication of raw data that very often will be inaccurate and incomplete.

In another rulemaking effort, OSHA has proposed requiring employers to report any hospitalization of a single employee within eight hours. Presently, employers must report only hospitalizations of three or more employees resulting from the same incident within eight hours. The new proposal also would require the reporting of any and all amputations within 24 hours. At present, only point of operation amputations on mechanical power presses need be reported. (In fact, any point of operation injury on a mechanical power press must be reported.) And the report must be made within 30 days after the injury’s occurrence.

All ethanol producers would be wise to go through their attorneys, for privilege, to retain the services of a consulting expert to evaluate, at a minimum, their PSM programs and practices, confined spaces programs and practices, lockout/tagout programs and practices, fall protection and housekeeping programs and practices. If programs or practices need to be reformed, the producers should modify them to protect against legal exposure in the event OSHA comes knocking.

Producers also should keep an eye on developments at OSHA in the area of recordkeeping and reporting, as well as in substantive areas like combustible dust, in order to keep abreast of what OSHA is intending to require.

Author: Eric Hobbs Attorney, Michael Best & Friedrich LLP 414-225-4991 eehobbs@michaelbest.com

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