Ethanol Industry Provides Critical CO2 Supply
Carbon dioxide sourced from corn-ethanol plants is not a waste-recovery product but a coproduct that, in many regions, can only be replaced by higher-emitting, less-economical resources. A reduction in U.S. ethanol production (for example, in response to policy changes) would inadvertently pose a significant disruption to the billion-dollar carbon dioxide industry, and the U.S. food industry.
Fermentation from corn-ethanol plants is the largest single-sector CO2 source for the U.S. merchant gas markets. A valuable commodity, it averages $95 per ton with a large number of applications led by food and beverages and dry ice applications. Light industrial users in the merchant market include metal welding, chemicals, pH reduction and CO2 fracking applications in oil and gas.
Ethanol sources have become so popular that major industrial gas companies have added new CO2 sources. Notable additions from Air Products, both completed in 2014, were the 400 ton-per-day (TPD) plant sourcing gas from Southwest Iowa Renewable Energy, Council Bluffs, Iowa, and the 250 TPD plant at Big River Resources in Boyceville, Wisconsin.
Nearly 43 percent of domestic CO2 by-product for refinement and liquefaction is derived from 48 ethanol plants, mostly in the Midwest. While several regions in the U.S. are saturated, more ethanol plants will be tapped for carbon dioxide feedstock in the future as the U.S food industry continues to expand. For example, Continental Carbonic this fall announced a new CO2 plant to be colocated with ethanol producer Pennsylvania Grain Processing in Clearfield. The Pennsylvania project is an example of a strategically located CO2 source that cannot be replaced by other sources in an affordable and clean manner.
The 2016 U.S. CO2 merchant market is estimated at 9.63 million short tons, the largest in the global 22 million-tons-per-year market. Domestic prices average $95 per delivered ton, sold in a wide range of containers from 105-ton rail cars to 24-ton, over-the-road tankers, as well as smaller 500-pound microbulk tanks and 20-pound cylinders.
The captive market is led by enhanced oil recovery (EOR) with White Energy, Russell, Kansas, the only dedicated source. Captive supply of CO2 has been evaluated for other projects such as delivery into the EOR pipeline infrastructures owned by Denbury Resources in the mid-South, and Kinder Morgan in the Southwest. Other captive markets include enhanced coal bed methane, sodium bicarbonate, methanol and, potentially, urea.
The total CO2 market is estimated to approach $1 billion, broken out by segment in the accompanying table.
Carbon dioxide sources are highly sensitive to location, shown in the accompanying map. Due to a lack of strategically located alternatives, the current ethanol plant fleet cannot be economically replaced. For example, there are not enough ammonia plants, the second-largest CO2 source, available to replace ethanol sources. The drought of 2012 illustrated the major scramble required to meet the potential disruption of CO2 supply during the peak summer-to-fall period. Ultimately the industry impact was contained to the mid-Atlantic and Eastern U.S., but large consumers of CO2, including a major food producer, considered buying or leasing a fleet of CO2 trailers until they found a suitable refrigerant replacement.
The loss of CO2 from ethanol would result initially in product shortages, driving up costs for refrigeration and other applications. Any new sources would be much more expensive due to the lack of strategic location. Many of the cryogenic freezing, chilling and allied applications now utilizing CO2 would have to go to other methods such as liquid nitrogen, requiring major reconfigurations. Nitrogen requires air separation plants with high power demands. Many other unique cases exist for CO2 application where replacing the commodity could not be achieved by conventional means.
Ethanol byproduct cleanup is generally less technology- and equipment-intensive than other sources, and there is significantly more experience in the construction of CO2 plants from ethanol than other sources in recent years. Other CO2 sources include 21 ammonia plants, 18 reformer refineries, 15 natural sources and a handful of others such as flue and natural gas.
Natural geological sources can be the cheapest of all types. When source quality and well-head pressure is ideal, the feedstock is extremely clean, requiring only minor carbon filtration, and the elimination of a feed compressor can save half the power demand. In many cases, however, natural sources also contain hydrocarbons, heavy sulfur and benzene, all of which are expensive or difficult to remove, as in the case of benzene. Natural sources are in specific limited markets and cannot replace the predominately Midwestern-located ethanol sources.
Traditional technologies for ammonia production can yield some of the cleanest raw CO2. Ethanol fermentation raw gas, in comparison, usually contains several constituents not found in ammonia, such as trace sulfur compounds and acetaldehyde. Newer ammonia technologies are said to produce an intermittent raw stream that present new engineering and production challenges, leading to higher costs. Numerous ammonia projects were slated to be constructed (usually with international principals) in recent years, but never progressed beyond the drawing board.
Power requirements are similar for ethanol and ammonia sources. Power demand at the first new commercial ammonia plant in 30 years built in the Midwest was estimated at between 145 Kwh/ton and 153 Kwh/ton of production for 540 TPD CO2 recovery. In comparison, the power demand at a proposed 400 TPD ethanol plant was estimated between 135 Kwh/ton and 142 Kwh/ton of CO2 produced. A project with a power demand of about 150 Kwh/ton is considered reasonable; scaled-down projects between 100 and 250 TPD can have a power demand between 160 and 170 Kwh/ton.
There are just two 250 TPD flue gas plants in the U.S. A federal law in the 1980s allowed qualifying independent cogeneration plants to combine the relatively expensive MEA recovery plant with the power project itself. As a result, these two currently operating CO2 plants do not have to amortize those capital costs. A flue gas CO2 recovery plant costs between $20 million and $30 million, which compares with the $3 million to $5 million cost for a similarly sized ethanol system. Power consumption for the flue gas plant is estimated to be at least double that of traditional plants.
If ethanol byproduct disappeared, large processors and other consumers would ultimately be forced to abandon CO2 utilization or to switch to higher-emitting, more costly sources.
Author: Steffen Mueller, PhD
Principal Economist, Energy Resources Center
University of Illinois at Chicago
Conributing author: Sam Rushing
President, Advanced Cryogenics