GPRE moves on algae, corn oil extraction

By Holly Jessen | July 15, 2010
Posted July 22, 2010

Green Plains Renewable Energy Inc. is moving to Phase II with its algae project at one plant and planning to install corn oil extraction technology at all six of its ethanol plants.

On July 20, GPRE announced plans for a $4.5 million expansion to sequester CO2 using a BioProcess Algae Grower Harvester. The 65 MMgy GPRE ethanol plant in Shenandoah, Iowa, has been the site for pilot-scale testing of an algae project to sequester CO2 from the ethanol plant in algae since October 2009. BioProcess Algae LLC heads the project and is a joint venture between GPRE, water filtration group Clarcor Inc., BioProcessH2O LLC and NTR plc, an international renewable energy group.

Within two weeks, the company will break ground on a new building where testing will be scaled up to see if the technology will prove out for industrial use, Jim Stark, vice president of investor and media relations, told EPM. The $4.5 million project will be paid, in part, by $2 million in matching funds recently given preliminarily approval from the Iowa Power Fund.

The current reactor, now operating inside the ethanol plant, is about 18 inches in diameter and stands about 12 feet tall. Those numbers will increase to 3 feet in diameter and about 20 feet tall at the new building. "We're going to scale it up about 20 times larger," he said.

Scaling up is a key step in the quest to commercialize the technology to sequester C02 from an industrial facility, such as an ethanol plant. The focus of the testing will be to see if, on a CO2 tonnage basis, it would come at the right price for an industrial facility could invest in to reduce its CO2 emissions. "We would very much like to make Shenandoah the first commercial site," he said. "That's the intent."

Wastewater, excess heat, CO2 and sunlight—everything needed to grow algae— is accessible at an ethanol plant. Using wastewater to grow algae can also help the plant conserve water, a big "buzz point" in modern ethanol production, Stark said. For now, GPRE is studying CO2 sequestration. However, in the future, extracted algal oil can be used to make biodiesel and dried algae can be burned or used as a livestock feed additive, he said.

A few days after the algae project announcement, the company said it planned to install corn oil extraction technology at a total cost of $18 million. The corn oil extraction project is expected to be completed by the end of the first quarter of 2011. GPRE expects to enhance its operating income by $15 million to $19 million per year. "It's a very nice value added revenue stream for us and for ethanol," Stark said.

ICM Inc. will install the corn oil extraction technology at five of the company's six plants, all originally built by that company. The sixth plant, located in Superior, Iowa, is a Delta-T plant and GPRE is currently working to get that under contract as well.

Due to an ongoing lawsuit between ICM and GS CleanTech Corp., a subsidiary of GreenShift Corp., GPRE has also entered into a license agreement with GS CleanTech to utilize its patents and pending patents, Stark said.

The six GPRE ethanol plants are located in Iowa, Indiana, Nebraska and Tennessee and have a combined capacity of 480 MMgy. The company also markets and distributes ethanol for four third-party ethanol producers and owns 51 percent of Blendstar LLC, a biofuel terminal operator. Finally, it operates grain storage facilities and complementary agronomy and petroleum businesses in Iowa, southern Minnesota and western Tennessee.