In the United States alone, more than 135 plants are producing ethanol and another 63 are under construction. Dozens more are in various stages of planning, with total domestic production capacity expected to double during the next five years. Based on expectations of increased ethanol production, farmers planted more corn in 2007 than in any year since 1944.
The rapid increase in production reflects the expanding market for ethanol, driven by growing recognition of its economic, social and environmental benefits. The Energy Policy Act of 2005 stimulated the growth of this industry by offering federal incentives and goals for replacing a portion of our nation’s gasoline requirements with a renewable fuel source by 2012. Current estimates indicate we will surpass these benchmarks well before then.
Fourteen billion gallons of ethanol per year would be required if an E10 blend was instituted in the United States. Include a strong push from state legislatures for the market adoption of E85 blends and the growing interest in Canadian and overseas markets, and it is easy to understand the high level of investment in new production capacity.
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Profit Margins, Process Control
However, strong demand represents only one part of the profitability equation, which is negatively impacted by inefficiencies in the production process, such as excess energy consumption, poor yields, wasteful use of raw materials, process chemicals and enzymes.
The cost of natural gas and other utilities is especially problematic, as these items far exceed the other major cost components, including plant construction and labor. For example, in a typical plant, the natural gas that fuels boilers, evaporators, dryers and other equipment comprises 15 percent of the cost of producing a gallon of ethanol. For a 100 MMgy plant, that translates to millions of dollars in operating costs. Conserving energy by just 1 percent can result in tens of thousands of dollars in profits.
The elevated price of natural gas is not the only financial challenge. When an ethanol production facility comes on line, the increased local demand for corn puts upward pressure on corn prices and poses problems with feedstock variability. Some ethanol producers report that ethanol yields vary as much as 7 percent, depending on the variety of corn. Lower yields add considerable financial risk—an anathema to investors.
For these reasons, achieving consistent profitability can be a tough challenge for ethanol producers, who have little influence on the market price for their product and the price of feedstock and natural gas. Ethanol producers can tightly control their own manufacturing process, and thereby produce a consistently high yield, while minimizing the consumption of energy and raw materials.
Process control depends on accurate and reliable measurement. Process improvement methodologies, such as lean manufacturing and Six Sigma, are fundamentally measurement-based strategies that seek to maximize productivity while eliminating variation. In fact, measurement is both the second and fifth step of the Six Sigma DMADV (define, measure, analyze, design and verify) process. However, implementing process control strategies requires a careful understanding of process needs, including identifying measurement challenges and applying an optimal, customized solution that takes advantage of the best available technology.
Meter Selection, Placement
Careful selection and installation of measurement devices is important for three reasons. The first is measurement accuracy. Measurement devices give visibility to the process, allowing plant operators to “see” what is going on inside the pipes and production systems, and the fill level of each tank. This is actionable information that provides the basis for planning and management systems and for real-time process control. To be useful, this information must be accurate.
The second reason is automation. Accurate and reliable measurement devices enable automation by programmable logic controllers and computer systems. Automation improves plant efficiency and production consistency. Measurement devices should have self-diagnostics and alarm capabilities to automatically monitor conditions on a continual basis and to alert operators of problem states such as changes in flow caused by solids, entrained gas or temperature changes, as well as problems with the functioning of the measurement device itself.
The final reason is maintenance costs. High-performance measurement devices may have a higher initial purchase cost, but they typically have lower total lifetime costs because of the elimination of downtime for recalibration and repair. Some manufacturers offer interchangeable components, such as a universal signal converter that is compatible with a variety of meters with different sensor technologies or different pipe diameters and flow rates. This flexibility greatly simplifies engineering, procurement and parts inventory.
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