2017 November Ethanol Producer Magazine

Page 34

INFRASTRUCTURE

CONTINUOUS CAPABILITY: Blendstar’s unit-train facility in Birmingham, Alabama, can offload a train in 24 hours. PHOTO: GREEN PLAINS INC.

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34 | Ethanol Producer Magazine | NOVEMBER 2017

ries ease supply concerns with customers.” The savings for shippers can be substantial. While transloading a train with 80 cars is going to cost 3 cents per gallon, the same as going through a state-of-the-art terminal, Bailey says, the advantage comes from reduced turn times for rail cars. “To transload a train with 80 cars is going to take three to five days to pump the ethanol into trucks,” he explains. Combining the transit time for a unit train with 24-hour unloading can shorten the turnaround time from a range of 25 to 45 days to 13 to 15 days. The savings from fewer rail cars needed is substantial. “Where terminals create value and generate return for investors like Eco is we attract more volume and shippers because they ultimately are saving money on other costs in the supply chain,” he says. Being able to unload a unit train with 2.3 million to 2.8 million gallons of ethanol in 24 hours requires adequate storage, which is attractive to the demand side of the equation, Bailey says. “People value the fact there’s inventory on hand at these terminals, rather than being fully reliant on the railroad and rail cars.” He recalls the recent winter when a polar vortex brought cold temperatures that, combined with large grain crops and increased volumes of oil shipments by rail, wreaked havoc on rail shipments. “There were numerous locations across the U.S. that had strong logistical difficulties because they solely relied upon rail and didn’t have their own storage,” Bailey says.

Rail-Ready

The companies investing in midstream ethanol infrastructure for biofuels, such as Eco-Energy and Green Plains Partners, are relatively few. “The major buyers and blenders—the Exxons and Marathons of the world—really don’t have capital allocated to biofuels infrastructure,” Bailey says. Down-


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