Congressmen who have been debating the energy bill since September took a step forward Nov. 5 with a compromise over the Highway Trust Fund (HTF)/ethanol tax credit, aided by Vice President Dick Cheney.
 	
 Senate Finance Committee Chairman Charles Grassley and Rep. Bill Thomas, chairman of the House Ways and Means Committee, agreed to increase the tax on ethanol-blended fuel from 13.2 cents per gallon to 18.4 cents per gallon, the same as regular gasoline. The tax would go into the HTF, which was created by the Highway Revenue Act of 1956 to ensure a source of financing for the National System of Interstate and Defense Highways and Federal-aid Highway Program. An estimated $2 billion to $4 billion in additional revenues could be gathered from that change.
 	

 In turn, the extra 5.2 cents taken from fuel refiners would be reimbursed from the U.S. general fund, which supplies other incentive plans nationwide.
 	
 The plan, called the Volumetric Ethanol Excise Tax Credit (VEETC), would encourage oil refiners to use richer ethanol blends in fuels, and it would put money into the HTF to make up for revenue lost to the tax break. The deal also included a new tax credit for biodiesel fuel.
 	
 The stalemate had come from language in the energy bill that mandates a five billion gallon increase in ethanol production by the year 2012—the renewable fuels standard (RFS). The boost had House members concerned about the HTF losing tax credit money. If ethanol production increased, less money would go into the fund. U.S. refiners currently use about two billion gallons of ethanol per year. Grassley supported the protection of the HTF while Thomas indicated he wanted to retain the current tax system for bargaining leverage in the future.
 	
 Although a large stumbling block to the completion of the comprehensive energy bill has been removed, some issues still need to be resolved. Tax provisions for fuel cells in vehicles, RFS waivers and incentives for clean coal production were hot topics at press time.
 		 ~EPM Staff Report

Grassley, Thomas reach HTF/VEETC compromise

In the United States, about 95 percent of ethanol plants use corn to produce ethanol. Gopher State Ethanol has stepped out of that majority, using waste beverages in addition to corn, with the hope that it will cut down on emissions.
 	
 Because of its urban location, the facility has been the target of highly publicized complaints from area residents. In September, representatives from Gopher State Ethanol agreed to an out-of-court settlement to improve the plant's odor. The switch to beverage waste isn't part of the settlement, but Gopher State Ethanol CEO Jim Freeman said it would still meet the facility's permit and pollution requirements.
 	
 "The thinking is that the smell was coming from the dryer, and if you're not drying as much corn, the total amount of odor units would go down," Freeman told the St. Paul Pioneer Press.
 	
 Freeman said the company has already begun to bring in tankers of waste sugar water from expired Coke or Pepsi products, and it is piping the liquid into the fermentation process at the plant. The company could process more than half a million gallons of waste soda, syrup and other beverage byproducts, according to Freeman.
 	
 Gopher State Ethanol will also build a processor inside the bottling house to crush cans and bottles to extract the contents. The crusher would be surrounded by noise insulation and only run between 10 p.m. and 6 a.m.

 	
 Freeman told the Pioneer Press that beverage producers have difficulty legally dumping their excess product into the waste water system. The Gopher State Ethanol process would relieve producers of the burden, while also promoting recycling of excess packaging materials.
 	
 The facility's liquid storage and handling equipment from its abandoned beer brewing operations will be utilized in the process. Using waste beverages in addition to corn will also create more jobs.
 			
 ~EPM Staff Report

Gopher State using more waste soda to cut drying

Registration forms for the 9th Annual National Ethanol Conference: Policy and Marketing are now available on the Renewable Fuels Association (RFA) Web site, www.ethanolRFA.org/nec.shtml.
 	
 More details, including a prelimnary agenda and hotel information, are available. The conference will be held at the Fontainebleau Hilton Resort in Miami on Feb. 16-18. EP

Registration open for 2004 National Ethanol Conference

Cargill has announced intentions to sell its food processing plant in Sheboygan, Wis. The plant and surrounding property is being touted as a prime location for a potential ethanol plant. 
 	
 Public affairs official David Feider told EPM that the Sheboygan plant is no longer strategic to the company's North American malt business. Cargill is currently transforming from a commodity malt supplier to a customer solutions provider to the brewing industry. The company plans to move its malt production facilities further west, closer to primary barley-producing areas, such as North Dakota.
 	
 Feider said the facility would make an ideal ethanol plant site for a number of reasons, like the presence of three on-site grain elevators, two warehouses, grain cleaning and grading equipment, 42 steep tanks, off-loading railroad tracks, a highly skilled workforce and connection to the city's water system, which eliminates the need for on-site wastewater capacity. Based on preliminary analysis, the cost of building a 40-mmgy ethanol plant would be between 20 percent to 40 percent less than building one from scratch, given the existing infrastructure at the Sheboygan plant.
 	
 A number of potential buyers have contacted Cargill about the facility, Feider told EPM. Several discussions have ensued, although Feider couldn't divulge which parties had shown interest. He said potential buyers are encouraged to contact Cargill for more information. EP

Cargill: food processing plant well suited for ethanol facility

Kansas Gov. Kathleen Sebelius and State Secretary of Agriculture Adrian Polanksy headlined the official opening of a Kwik Shop on Oct. 21 in Maize, the first in the state to sell both ethanol-blended fuels E85 and E10.
 	
 ICM Inc., the National Ethanol Vehicle Coalition and the Kansas Corn Commission funded the newly built fuel station. ICM Vice President Jeff Roskam, who made the event's final comments, had proposed the idea of an E85 pump to Kwik Shop, just one day before Robert White of the Kansas Corn Commission had presented a similar idea. According to White, ICM felt the location of the fueling station was especially ideal for those commuting to work at the nearby ICM headquarters and the Abengoa Bioenergy Corporation ethanol plant in Colwich, Kan.
 	
 The opening attracted several curious consumers, who obtained information about the alternative fuel and received fuel discounts throughout the day. E10 fuel was discounted by a dime, and E85 sold for 85 cents.
 	
 "E85 is still 20 cents under regular right now," White said. "A lot of people had questions about ethanol and possible trade-ins (for flexible-fuel vehicles)."

 	
 Sebelius told event participants that the state's government is adding more flexible fuel vehicles to its fleet. She signed a bill earlier this year that requires state vehicles to use ethanol-blended fuel when possible. The event concluded with Sebelius filling up the Kansas Corn Car with E85. The president of the Kwik Shop, Mike Hoffman, also spoke.
 	
 The Maize station E85 pump is the second in Kansas, and the first site in the state to offer both E85 and E10 at one location. 
 			~EPM Staff Report

ICM, others sponsor Kansas ethanol fuel station

Iroquois Bio-Energy Co. of Rensselaer, Ind., announced it will hire a brokerage firm to help gather investors for its proposed ethanol plant, according to general manager Keith Gibson. The company needs at least $20 million in private investments to guarantee about $58 million needed to start up the 40-mmgy plant. The equity drive continues through Dec. 31, and interested parties can call Iroquois Bio-Energy at (219) 866-5990.

Indiana project to hire brokerage firm for equity drive

Utica Energy, which started up just five months ago in Wisconsin, has announced plans to double its production capacity of the 25-mmgy ethanol plant.
 	
 The construction, which starts after an air permit is issued, will bump Utica's production to at least 50 mmgy. Delta-T, which provided the original process design engineering at the facility, will handle the expansion. Construction crews started pouring concrete in early November. Utica Energy President Paul Olson told EPM that five more fermentation tanks and a new distillation building would be added among other equipment.
 	
 "We'll also be designing a cogeneration system," Olson said. "We'll be taking wet cake from the ethanol process to produce electricity. We'll have no net energy requirements, and the plant will be self-contained."
 	
 A pipeline will also be run from the plant to nearby railroad tracks at Olsen's Mill so the ethanol product can be directly loaded for transport, pending the necessary permits.
 	
 The expansion will create about 10 new jobs at the plant. Olson said the company is considering producing alcohol for products like toothpaste, mouthwash, hairspray, cosmetics and alcoholic beverages.
 	
 The expansion project was something Utica had in mind from the start. The footprint of the initial facility was larger than required, providing for future expansion.
 	

 The original expansion permit was filed on Sept. 12.

Utica Energy to double capacity, utilize cogeneration, produce industrial alcohol

MGP Ingredients Inc. is almost finished with the reconstruction of its food-grade alcohol and fuel ethanol plant in Atchison, Kan. The facility sustained an explosion Sept. 13, 2002, and has been unable to produce finished alcohol for over a year. 
 	
 MGP Ingredients' Steve Pickman told EPM the distillery should be finished in late November or early December, but startup would not begin until January.
 	
 "That's really surprising with the complexity of rebuilding on a site that's had severe damage," Pickman said. "But we've had excellent weather."
 	
 Pickman said a ribbon-cutting ceremony of some sort has been discussed but not finalized. A thank-you luncheon was given to MGP Ingredients employees near the one-year anniversary of the explosion.
 	
 "We did that to mark the progress we've made with the distillery and the rest of the company's challenges," Pickman told EPM.
 	
 The explosion occurred when alcohol vapors escaped through an open panel in a distillation column and ignited. The project's technology and engineering firm is Katzen International Inc. of Cincinnati, and the general contractor is Burns and McDonnell of Kansas City, Mo.
 	
 The rebuilt distillery will have a 30-mmgy capacity. Most alcohol produced at the plant will be food-grade. The rest will be ethanol.
 	
 The cost of damage to equipment and property was approximately $27 million, but will mostly be covered by insurance. The company also received about $12.6 million from business interruption insurance proceeds.
 	
 Since the explosion, the Atchison plant had been unable to produce finished alcohol. By December 2002, the distillery was able to produce unfinished alcohol, which was shipped to the company's plant in Pekin, Ill., for further processing.

 		 ~EPM Staff Report

Damaged Atchison plant nearly reconstructed

The Governors' Ethanol Coalition (GEC) plans to invite California and Tennessee to join its 29-member organization, according to GEC North Dakota representative Ted Aulich of the Energy and Environmental Research Center. The Coalition's vote to send the invitations to Gov. Arnold Schwarzenegger, R-Calif., and Gov. Phil Bredesen, D-Tenn., is on the GEC agenda for its meeting Nov. 12-13 in Grand Forks, N.D. Tennessee, with its A.E. Staley plant, is among the top 10 ethanol-producing states that aren't members.

GEC considers Schwarzenegger

Plans for a Williston, N.D., ethanol plant are moving forward with financing nearly confirmed, according to the head of Williston Economic Development Tom Rolfstad. Rolfstad told EPM a construction date hadn't been set yet, but a site had been proposed in Williston's Industrial Park. Makad Corporation of Oregon will join Delta-T and Monsanto Enviro-Chem in the construction process, Rolfstad said. Another proposed project in North Aulich of the Energy and Environmental Research Center. The Coalition's vote to send the invitations to Gov. Arnold Schwarzenegger, R-Calif., and Gov. Phil Bredesen, D-Tenn., is on the GEC agenda for its meeting Nov. 12-13 in Grand Forks, N.D. Tennessee, with its A.E. Staley plant, is among the top 10 ethanol-producing states that aren't members.

Western North Dakota project moving forward

The California Energy Commission (CEC) recently concluded its ethanol supply survey and released the results in a document entitled "Ethanol Supply Outlook for California." The final conclusion: nearly all of the state's ethanol fuel needs will be met by U.S. ethanol producers, at least for the next few years.
 	
 According to Claudia Chandler, assistant executive director for the CEC, the 10-month study was conducted to determine whether the United States could supply enough ethanol to the state of California after its ban on the fuel additive MTBE goes into effect in January.
 	
 "We felt there had been erroneous reports that different entities put forward that [said] there wouldn't be enough ethanol for the nation," Chandler told EPM. "This study lays that to rest. It's the most comprehensive study ever taken in this area to address current and future production."
 	
 In the two years since the CEC's first report, the organization found that ethanol production in the U.S. has increased 38 percent. Part of the increase can be attributed to states banning MTBE and replacing it with ethanol. Ethanol is currently blended in 65 percent of California's fuel.
 	 
 The survey results said California needs 760 to 990 million gallons of ethanol next year, not including federal mandates that may hinge on passage of the energy bill currently being debated in Congress. The survey also calculated that present ethanol industry expansion plans would increase production from three billion gallons per year to six billion gallons per year, indicating a healthy supply level.
 	
 The information for the study was gathered by surveys, which were sent out to current and future ethanol producers. The surveys inquired about current plant capacity and production, and future plant capacity and production through 2006.	
 
 ~EPM Staff Report

CEC says California has ample ethanol supply

Ethanol groups voiced concern after House members proposed to expand the opportunity for states to seek waivers from the renewable fuels standard (RFS).
 	
 Pro-ethanol groups wrote a letter to House Leadership, which said if the RFS waiver provisions were enacted, it would throw the whole program into "continuous turmoil by generating perennial litigation and uncertainty," the Renewable Fuels Association (RFA) announced in an e-mailed industry newsletter.
 	
 The letter was signed by the American Coalition for Ethanol, the National Farmers Union, the Clean Fuels Development Coalition, the Nebraska Ethanol Board and the American Corn Growers Association. A similar letter from the Governor's Ethanol Coalition echoed those concerns.

November 3 Ethanol groups oppose House RFS waiver

California's Kinder Morgan Energy Partners ceased shipment of MTBE-blended fuels, the company announced. The state has an MTBE ban going into effect at the end of the year. Valero Energy Corp. and Tesoro Petroleum Corp. are also expected to switch to ethanol blends in November.
 	
 "The transition from MTBE to ethanol has gone extremely well," said Bob Dinneen, president of the RFA. "The ethanol industry has proven it can reliably and affordably supply the largest gasoline market in the country. We look forward to a repeat performance in New York and Connecticut at the end of this year."

November 1 ransition to ethanol going well

The RFA is pleased to announce three new members. Rocky Mountain Ethanol LLC of Billings, Mont., is a developing ethanol project. Kleinfelder Inc. in Parker, Colo., is an environmental and engineering consulting firm, and the New Madrid County Port Authority owns and operates a slack-water harbor on the Mississippi River in Missouri.

October 20 RFA welcomes new members

The RFA would like to remind auto technicians that information on new fuels and gasoline quality related to vehicle performance and drivability is available on the RFA Web site,www.ethanolrfa.org/pubs_reports.shtml.
 	
 The resource Changes in Gasoline III, along with Year 2000 Supplement, is the most widely circulated gasoline reference manual used by the auto service community.

October 20 Changes in gasoline manual online

For farmers who wish to assess potential price impacts of a new ethanol plant, a new Internet tool is available. At the Web site www.extensionecon.

 
 Montana.edu/eplantanalyzer/, farmers can run what-if scenerios on how the size and location of an ethanol plant might impact corn prices.

October 20 New tool available for farmers

Michigan Governor Jennifer Granholm, D-Mich., recently signed legislation to remove the state's pump labeling requirement for fuel blended with up to 10 percent ethanol. The RFA supports removing pump labels to increase the use of ethanol-blended fuel. EP

October 20 Michigan removes ethanol pump labels

Typically, the legislative process in Washington is unrelentingly dull, with the tedium of Committee hearings interrupted only by the drone of floor statements and press conferences intended more for partisan advantage than lawmaking. But occasionally, a debate develops with far-reaching policy implications and passionate political conviction that will make for great political theatre. 
 Such was the case throughout the past several weeks as two titans on Capitol Hill, Senate Finance Committee Chairman Chuck Grassley, R-Iowa, and House Ways and Means Committee Chairman Bill Thomas, R-Calif., went toe-to-toe over the tax provisions in the comprehensive energy bill. At issue was whether the final bill would include the ethanol tax reforms authored by Sen. Grassley that passed the Finance Committee on an 18-2 vote and are supported by a broad coalition of highway groups, agriculture, petroleum companies and state governments across the country. Chairman Thomas, who strongly opposes the increased production and use of fuel ethanol, was resolute in his opposition. Chairman Grassley was equally adamant the tax reforms would be included. 
 	
 Chairman Grassley wrote the ethanol tax reform legislation known as the Volumetric Ethanol Excise Tax Credit (VEETC) to assure the growth in ethanol and biodiesel anticipated with the passage of a five-billion gallon Renewable Fuel Standard (RFS) did not come at the expense of highway infrastructure so important to an expanding economy. 
 	
 The VEETC replaces the current excise tax structure for ethanol fuels with a new tax credit that does not affect the Highway Trust Fund (HTF). The legislation also includes revisions to the small ethanol producer tax credit to allow farmer-owned cooperatives access to that credit and an extension of the ethanol incentive to 2010. Finally, the bill includes a new tax incentive for biodiesel that will encourage investment and commercialization of that new promising renewable fuel. 
 Simply put, Senator Grassley's VEETC represents the single most important tax legislation for ethanol since the Energy Security Act of 1978, which created the first ethanol incentive. It resolves a longstanding political dilemma for the ethanol industry created by the HTF impact. It provides refiners far greater flexibility in the blend levels for renewable fuels, and enhances the value of the incentive for E-85 and other uses of fuel ethanol. It reduces the opportunity for fraud that costs taxpayers. And it provides significant new certainty to the industry by extending the incentive through 2010. 
 	
 As Senator Grassley held his ground in the face of increasingly bitter and personal attacks, the White House recognized the need to break the impasse. Thankfully, President George Bush and Vice President Dick Cheney are strongly supportive of the increased production and use of renewable fuels, and with the help of Speaker Dennis Hastert, R-Ill., were ultimately successful in convincing Congressman Thomas to back down. 
 	
 The fight over this seemingly innocuous tax provision threatened the energy bill, and the effort to resolve it was replete with both drama and consequence. The ethanol industry, farmers, oil companies, motorists and state governors across the country should be thankful for the determination of Sen. Grassley and the leadership of the President and the Speaker for securing these important policy improvements critical to the continued development and growth of renewable fuels. 
 
 
 Bob Dinneen
 President and CEO, 

 Renewable Fuels Association

176-1292253866.jpg

176-1292430121.jpg

A View from the Hill

Ecuador-based company Petroecuador will begin production of alternative fuels to replace the country's importation of petroleum products, Oil Daily reported in November. A pilot plant near Quito would produce 18,720 gallons per day of fuel-grade ethanol utilizing 98,842 acres of cane sugar and other sugar plants, helping Ecuador save over $50 million per year in petroleum imports. The plant would expand to 144,820 gallons per day in the future.

Petroecuador introduces ethanol

Caltex Australia will extend its trial of E10 fuel in Cairns for another six months, according to an Oct. 23 report in The North Queensland Register. Sales of E10 – 90 percent gasoline, 10 percent ethanol – had been promising, but negative publicity recently caused sales to slow. Caltex ethanol-blended fuel has been available at five Caltex and Ampol sites in Cairn since May 20. Government and industry entities hope the extension will increase consumer confidence in ethanol, The Register said.

Australia extends E10 trial

Japan's Forestry & Forest Products Research Institute has developed a novel technique to derive ethanol from biomass, according to The Asia Pulse. The procedure requires water, which is converted into a supercritical fluid at 370 degrees Celsius and 22 megapascals of pressure. Supercritical fluid has properties of both a liquid and a gas. When mixed with biomass, the fluid is converted to glucose by hydrolysis. Then it is fermented with yeast to produce ethanol. The process also provides lignin, a component of plant cell walls, which can be used as a fuel to heat the boiler and power processing equipment. Currently the processing price is too high to become competitive with other fuels, but the institute hopes to build a pilot plant to conduct further tests, The Asia Pulse reported.

'Supercritical fluid' proposed for biomass-to-ethanol

Oyama, British Columbia. Construction was delayed in August and September because of forest fires in central and northern Okanagan but picked up again in October. According to PR Newswire, the building frames should be ready and on site by the time the cement floors are completed. For updated construction information, visit www.hybridfuels.com. Hybrid Fuels has developed a unique farm-scale agricultural process that will combine beef operations with ethanol production, producing high-grade beef that is free of added growth hormones or antibiotics, according to the company's Web site.

Hybrid Fuels Canada Inc. updates construction work

The Gazeta Mercantil Invest News reported that Brazil will invest $100 million in the construction of an ethanol plant in Angola, Africa. Collaboration on the project, located in Angola's capital city Luanda, will spur the opening of a Bank of Brazil branch in Angola and strengthen connections between the two countries, according to The Mercantil Invest News. Brazil is currently Angola's third biggest supplier, accounting for 12 percent of the country's imports. Last year, Brazil's exports to Angola totaled $199 million. EP

Brazilian company to build ethanol plant in Africa

Ethanol, biodiesel, biomass and wind power shared center stage at the 2003 Renewable Energy Summit on Oct. 28-29 in Mandan, N.D., where about 130 people gathered to identify goals and objectives for the state's unique renewable energy resources.
 	
 "What can, and should, we be doing," said North Dakota Agriculture Commissioner Roger Johnson, who made no secret of the state's position behind Minnesota and South Dakota in terms of renewable fuels development. The state's abundant coal resources and sparse population are often blamed for its inability to fully commit to renewable energy, but practical legislation is encouraging the development of ethanol and biodiesel plants, biomass power and wind farms. 
 	
 Johnson called for more "bold ideas" after a luncheon speech from North Dakota Gov. John Hoeven, chair of the Governors' Ethanol Coalition. Hoeven said the state needs to "balance objectives" between "energy and environment" while continuing to focus on synergistic "target industries." 

 	
 "We're excited about the future of ethanol in this state," Hoeven said after heavily praising the developers of North Dakota's newest wind farm, and before recognizing the state's promising biodiesel production capacity. 
 	
 Currently, North Dakota is home to two ethanol plants, the 23-mmgy Archer Daniels Midland Co. (ADM) plant in Walhalla, and the 11-mmgy Alchem LLP facility in Grafton. Both plants are located in the northeastern corner of the state. 
 	
 Subsequent to the state's newly legislated "counter-cyclical" ethanol production incentive program (see production incentives story on page 30), new facilities have been proposed near Valley City, in east-central North Dakota, as well as Richardton and Williston, in the west. None have broken ground, but each is uniquely promising.
 
 EERC trio opens general session 
 The Summit's general session opened with basic overview presentations on biofuels, biomass and wind energy, presented by researchers from the Grand Forks, N.D.-based Energy & Environmental Research Center (EERC).
 	
 EERC Senior Research Manager Chis Zygarlicke briefly explained the status of ethanol production and use in North Dakota, noting increased corn utilization and availability. Also, he said, North Dakota could play a key role in the biomass-to-ethanol movement.
 	"According to a report by the Oak Ridge National Laboratory, North Dakota has been labeled a prime area to grow [biomass] grasses, CRP land included," Zygarlicke said, also noting promising areas of growth for the state's fledgling ethanol industry: thermal-chemical conversion and new catalysts, hydrogen fuel cells and ethanol-based aviation fuel. 
 	
 Zygarlicke also identified the primary opportunities and challenges associated with biodiesel production and use, noting that the fuel meets EPA standards and has earned ASTM specification. Biodiesel reduces almost all harmful diesel emissions, he said, except for NOx—a challenge the industry may yet overcome. 

 	
 Zygarlicke's colleague Darren Schmidt, also an EERC research manager, focused on the utilization of biomass for energy, namely heat.
 	
 "It's here today," Schmidt said. "We can act on this today with a significant impact on our local rural communities." 
 	
 Schmidt said the first objective of biomass-for-heat efforts in North Dakota should focus on waste residue streams from industrial facilities, then residue crops. 
 	
 Biomass can be used to heat buildings—schools are the focus of many current applications—or provide a combination of heat and power for industrial processing. Co-firing with coal is sometimes practical in large-scale applications, and distributed power is sometimes viable as well. 
 	
 Schmidt provided examples: Vermont has 21 schools that are currently burning wood chips for heat, while the EERC itself is co-firing sunflower hulls with coal in Grand Forks. Alchem, the ethanol plant in Grafton, has explored ways to co-fire landfill waste and coal for energy, he said. Currently, however, only six boilers in the state are utilizing biomass power, and the state is doing little to collect wood waste. 
 	
 "North Dakota imports 100 percent of the mulch (used for landscaping), and buries its construction wood waste," Schmidt said, noting that the state's potential biomass-to-energy feedstock capacity has been estimated at more than seven million tons a year. 
 	
 "It's something we can do today, but the initiative needs to come from [the private sector]—companies that are motivated by their bottom line—and it will require incentives to get things moving forward," he said.
 	
 Brad Stevens, a research engineer in the remediation group at EERC, said North Dakota's flat topography and low-lying natural vegetation make the state ideal for wind power generation. By most accounts, the state ranks first in wind energy capacity. A Department of Energy official once called North Dakota "the Saudi Arabia of wind."
 	

 "The higher elevated areas of the state are a little better for wind," Stevens said. "The power of the turbines is a direct result of the cube of wind power. For example, if wind speed doubles, your [power generation potential] multiplies by eight." 
 	
 The state just completed a 21-mega-watt wind farm in the southeastern region of the state, near the communities of Kulm and Edgeley. Otter Tail Power Company is purchasing the energy produced at the farm, North Dakota Wind II Energy Center, which is owned and operated by the nation's leading wind energy developer, FPL Energy. 
 	
 "We began planning for this day three years ago," Hoeven told a crowd of more than 350 people who gathered at a dedication ceremony Oct. 27. "We put wind energy tax incentives in place to make sure that companies like Otter Tail Power Company and FPL Energy would recognize the advantages of investing here in North Dakota. Today we see the results in this outstanding project." 
 	
 The wind farm encompasses a four-square-mile area adjacent to the state's first utility-scale wind project, also developed by FPL Energy. MacFarlane noted that, with this wind power purchase, about 10 percent of Otter Tail Power Company's total resources come from renewable energy sources. 
 	
 Despite its potential, North Dakota still ranks relatively low, around eighth by most accounts, among states harnessing wind power. The United States ranks third among nations harnessing wind power, behind Germany and Spain respectively
 
 Federal tax credit overview
 Bob Noun of the National Renewable Energy Laboratory (NREL) led a panel that included an expert on wind, a key member of Sen. Byron Dorgan's staff and a USDA official.
 	
 John DiDonato of FPL Energy said wind energy has moved toward real viability in the last 23 years. 
 	
 "Today we have companies like GE involved," he said. "But the cost (of harnessing wind energy) is still dependent on the viability of wind resources."

 	
 North Dakota is typically a low-cost install state for wind turbines with its vast expanses of flat, soft ground. However, DiDonato noted, wind competes against very cheap—and readily available—coal in North Dakota, and faces tough transmission challenges. 
 	
 Pam Gulleson, of Sen. Dorgan's office, said the pending federal energy bill was literally "changing by the moment" and was unpredictable. However, she said, several of the 35 major provisions of the legislation affect North Dakota positively, including the renewable fuels standard with a provision to reach five billion gallons of ethanol and biodiesel per year by 2012. 
 	
 "This conference is very, very timely," Gulleson said. "North Dakota has nothing to lose. We can be a large exporter of energy."
 	
 Gulleson also highlighted legislative provisions that would eliminate MTBE, establish a renewable energy credit trading system, expand ethanol producer tax credits to include ethanol plants producing up to 60 mmgy (up from its current 30-mmgy limit), incentivize the use of renewable fuels in government fleet vehicles and increase federal research dollars.
 	
 While senators from oil states seek a liability waiver for MTBE producers, to reportedly sidestep the cost of cleaning up ground water contamination sites nationwide, Corn Belt lawmakers have proposed a solution to the increased Highway Trust Fund deficit that would result from expanded ethanol production. 
 	
 "The MTBE issue is a real hang-up," she said. "Forty-two senators recently signed a letter that called for no liability (waivers for MTBE producers)." 
 	
 Despite setbacks, Gulleson said, Washington insiders expect an energy bill passed by the end of November. 
 	
 Dale Van Eckhout, of the USDA, summarized the agencies rural development programs that affect producers of renewable fuels. Renewable Energy Systems grants—chiefly Section 9006 grants—captured the attention of farmers and rural small business owners in attendance. Depending on the type of grant sought ("efficiency" or "energy"), the agency offers $10,000 to $500,000 to eligible applicants that intend to invest in viable projects that utilize no less than 75 percent renewable energy, such as biomass, for heat or power. 
 

 Success stories in other states
 Chuck Fleming of the U.S. Department of Agriculture, moderated a four-speaker panel that included John Dunlop of the American Wind Association, Jackson Bird of the North Dakota Forest Service, Tim Gerlach of the Minnesota Lung Assocaition and Charles Hatcher of the National Biodiesel Board. The panelists presented success stories of renewable fuels production and use in other states—stories North Dakota officials seek to replicate. 
 	
 Bird spoke about a national program called "Fuels for Schools," an effort to utilize wood waste as a boiler feedstock to heat schools. The program compliments the National Fire Plan's call to mitigate forest fires by reducing fuel loads.
 	
 Dunlop gave a well-rounded overview of wind energy programs in states such as California, Minnesota and Wisconsin before Gerlach shifted the focus back to biofuels, summarizing the success of Minnesota's extensive E85 program. 
 	
 "Education is our biggest challenge with flexible fuel vehicle (FFV) owners," he said. "Most people have no clue [they can use E85 in their vehicle]."	
 	
 Hatcher, the National Biodiesel Board's regulatory director, outlined some the nation's most promising biodiesel production incentive programs, noting that over 90 different biodiesel-specific bills in 30 states have been introduced in the most recent round of legislative sessions.
 	
 He said 26 biodiesel-specific bills have passed.
 	
 Hatcher went on to explain the unique details of biodiesel legislation in South Dakota and Maine, where biodeisel must meet ASTM standards to be eligible for incentive programs. Or Kansas, where biodiesel blends must be two percent (B2) or higher to qualify for incentives. 
 
 Setting new objectives 

 A panel discussion led by Kim Christianson of the North Dakota Department of Commerce capped off the first day of the conference with a panel of professionals that summarized the state's progress with ethanol, biodiesel, biomass and wind development. 
 	
 Tim Radermacher of the North Dakota Soybean Council outlined the goals and objectives of the state's most likely future biodiesel producers—soybean farmers. He said the city of Fargo has used biodiesel in its landfill earth-moving equipment, while Mandan is using the fuel in its school buses. In addition, several farmers currently utilize B20 in their farm machinery. Radermacher said a task force has been formed to investigate the production potential of biodiesel in North Dakota. 
 	
 Jocie Iszler of the North Dakota Corn Utilization Council said North Dakota corn production has increased significantly in recent years, which is good for future ethanol producers. 
 	
 "Monsanto has just announced that it is within six years of developing a drought- resistant corn," she said. "That's big news for North Dakota producers."
 	
 The Renewable Energy Summit concluded Wednesday with interactive breakout sessions. The four breakout groups identified key legislative priorities and funding sources and returned later in the day with recommendations for the general assembly. For more information on the results of those recommendations, contact Patrice Lahlum at the North Dakota Department of Agriculture at (701) 242-7535. EP

Ethanol,biodiesel, biomass and wind energy focus of discussion

Renewable Energy Summit held in North Dakota

Although various technologies exist for VOC control, most technologies—thermal oxidation excepted—are not considered suitable for treating distillers grains dryer exhaust, mainly due to the high moisture content, elevated temperature and high particulate "loadings" of the process stream. Also, within the thermal oxidation technology domain, the catalytic oxidizers (except for RCOs) are not expected to be suitable for the dryer exhaust, due to the same process parameters described above.
 
 Thermal oxidizer 
 Thermal oxidation consists of treating the VOC "containing stream" by raising its temperature so that the VOCs are converted to harmless CO2 and H2O. There are two basic types of thermal oxidizers: those without primary heat recovery, called direct flame oxidizers, and those with primary heat recovery.
 
 Direct-flame thermal oxidizer
 The direct-flame thermal oxidizers (DFTOs) are the simplest type of thermal-oxidation system, requiring only a combustion chamber and supplementary fuel for operation. DFTOs allow no primary heat recovery to pre-heat the incoming process air. However, a secondary heat recovery system—such as Heat Recovery Steam Generator (HRGS)—can be added in the DFTO exhaust to recover the heat content of the DFTO exhaust. The HRGS can be incorporated into a new plant design to all the process steam requirement of an ethanol plant (for cooking, evaporation and distillation), or can be used to supplement the process steam requirement of an existing plant.
 
 Thermal oxidizer with heat recovery

 By far, the most attractive and most widely used form of heat recovery is the use of a primary air-to-air heat exchanger. There are two basic types of primary heat exchangers: 1) recuperative, or shell-and-tube, and 2). regenerative, or ceramic bed. (Note: A "plate-type" heat exchanger is a variation on a shell and tube heat exchanger).
 	
 Both types use the hot, oxidized gases (i.e. clean air) to heat the cold, VOC-laden air. Both save money by reducing the fuel that would otherwise be used in the oxidizer burner. 
 
 Recuperative thermal oxidizer
 Recuperative thermal oxidizers use heat exchangers that provide primary heat recoveries between 40 percent and 70 percent. These types of thermal oxidizers reduce auxiliary fuel usage, compared to DFTOs. As with DFTOs, a secondary heat recovery system can be added to the system. However, the heat available in the oxidizer exhaust is less than what would be available with a DFTO. Thus, secondary heat recovery may be limited to providing hot water or air for the ethanol plant. 
 
 Regenerative thermal oxidizer
 RTOs utilize a ceramic "media" to recover up to 95 percent of the heat contained in the exhaust. The ceramic media, which is generally temperature and chemical resistant, is placed in packed beds—also called heat recovery beds. The heat recovery beds have an alternating action: first to absorb heat from clean, hot gases, cooling them prior to discharge into the atmosphere, and then to "desorb" – or shed-heat to the incoming process gases from the distillers grains dryer, heating the gases to a near-final oxidation temperature (typically 1,500 degrees Fahrenheit). 
 	
 The RTO is not "steady state" but relies on cycling gas flows between at least two fixed packed beds, such that one is an inlet bed, and one is an outlet bed at any given point in system operation. A common combustion/retention chamber connects both heat recovery beds. The RTO is also equipped with both inlet and outlet flow control valves that act to direct the air flow through the beds. A system fan provides the driving force to push the air through the heat exchanger beds. For a distillers grains dryer, typically an induced draft fan system should be used (i.e. fan located at the RTO exhaust) so that the fan is exposed to the clean air exhausting the oxidizer.	 
 	
 One of the primary disadvantages of a 2-canister system is the release of small amounts of untreated VOCs for a very short period (usually one to three seconds every few minutes) when the air flow is reversed. This is often called a "puff." A puff occurs due to the release of untreated VOCs that remain in the cold portions of the ceramic beds and in the plenum beneath the inlet bed that are exhausted when the flow is reversed such that the inlet bed switches to the outlet mode.
 	
 In the case of distillers grains dryer exhaust, the release of "puff" every few minutes would mean there may be some odor and/or visible emissions released from a 2-canister RTO system every few minutes. This phenomenon also results in a reduction of VOC destruction efficiencies. However, with a proper design and operation, a 2-canister RTO can meet the plant permit requirements.

 	
 This undesirable "puff" can be eliminated by adding a purge system to the 2-canister RTO setup. This is typically done by adding a third canister, called a purge canister because it purges the inlet bed of the untreated VOCs and puts them back into the retention chamber where they get destroyed before exhausting to the atmosphere. 
 
 Regenerative catalytic oxidizers
 Regenerative catalytic oxidizers (RCOs) are basically RTOs with a catalyst added. By adding the catalyst, the operating temperature of the oxidizer can be reduced to around 800 to 900 degrees Fahrenheit, thereby reducing the fuel required for oxidation. Also, due to lowered operating temperatures of the RCOs, some savings in the materials of construction can also be realized. However, it should be noted that the catalyst is sensitive to certain substances, such as sulfur and phosphorus, which are known to poison the catalyst. Also, catalysts have finite lifetimes, typically five to 10 years, after which they need to be replaced. 
 	
 To attain greatest flexibility, the advantages of an RCO can be combined with the versatility of an RTO. A TCO (thermal catalytic oxidizer) is a dual mode RTO, which can operate at lower temperatures when the catalyst is new. The TCO temperature can be gradually increased, thereby compensating for the loss of catalyst activity with time, up to a point where it can operate as an RTO when all catalyst activity is lost.
 
 Thermal oxidizer installationsin the ethanol industry
 The application of thermal oxidizer technology to the ethanol industry is fairly recent, and thus, the installation base is limited. There have been only a handful of RTO installations on distillers grains dryer exhaust. The two VOC control technologies primarily used on dryer exhaust are DFTO with HRGS (heat recovery steam generation) and RTOs. 
 
 
 Challenges facing RTO manufacturers
 Although RTOs have been around for more than 20 years with hundreds of units installed in various industries, there are multiple challenges facing RTO manufacturers as they try to adapt to a growing list of applications. Some of the major challenges facing RTO manufacturers are summarized below:

 -Reducing equipment costs
 -Reducing operating costs
 -Increasing uptime
 -Reducing equipment footprint
 -Minimizing off-line operating requirements
 -Reducing the effect of particulate loading on the RTO operation
 -Selecting material best suited for a particular process stream
 	
 In addition to the list above, there are issues specific to distillers grains drying in the ethanol industry. The key issues to consider in the RTO design are the particulate loading and the moisture content in the dryer exhaust. The particulate matter contained in the dryer collects on the heat exchanger media and builds up over time, resulting in an increased pressure drop across the heat exchanger beds. Unless this is cleaned, the amount of air treated by this device would be reduced. To get rid of this problem, the heat exchanger beds are "baked-out" or "burned-out" in order to remove the organic particulate matter. This is typically accomplished off-line, but an on-line bake-out option is also available. Also, it is important to note that during the bake-out cycle, which may take a few hours every few months, the opacity of the RTO exhaust stream can be as high as 10 percent. If this is a concern, a "smokeless burnout," offered by at least one major vendor, can reduce the opacity to less than three percent. 
 	
 Due to some similarities of the DDGS dryer exhaust with the exhaust from the OSB dryers used in the wood industry, some parallels can be drawn with respect to the RTO operation under high particulate loadings (note that the RTO technology has been extensively used in the wood industry). Comparison of the exhaust stream from the two sources is provided below:
 	
 Based on the experience with the RTO installation on the OSB dyer exhaust, the typical burnout time anticipated for the DDGS dryer RTO would be six to 12 weeks with a ceramic bed washout required at least semi-annually. If the particulate loading to the RTO can be reduced to below 0.007 gr/dscf, then bake-out may not be required at all.
 
 RTO installation
 An RTO is typically pre-fabricated in a shop, shipped to the site in pieces and then assembled on site. The size of the RTO determines how many pieces are required. Due to the weight of the ceramic media, RTOs tend to be very heavy equipment and usually require specially designed concrete pads. The RTO is assembled from the ground up with the lower portion installed first followed by the middle canisters. The ceramic media is then placed in the middle canister, followed by the assembly of the top portion. Items such as fans and control panels are typically shipped loose and assembled on site.
 	

 A typical 50,000 SCFM 3-can RTO will take approximately one month to install and start up. Mechanical installation, depending on the vendor and the circumstances, will take approximately two weeks. Electrical installation can overlap the mechanical installation and 
 takes five to 15 days. Commissioning of the system takes around two weeks. Some vendors typically hire local contractors for most of the work and provide an experienced installation supervisor for the entire duration of installation, followed with a start-up technician to commission the system.
 
 Effectiveness in reducing VOCs
 One of the primary advantages of the thermal oxidation technologies is that the VOCs are destroyed in an oxidizer, as compared to some other systems where they are captured, then transported off site for destruction. Test results from RTOs have shown that they are very effective in reducing VOCs when applied by qualified oxidizer engineering companies. Destruction efficiencies of over 99 percent are common with a properly designed system. Guarantees offered by vendors depend on the type of system and application, with destruction guarantees of 95 percent or more being common. EP

A Perspective on VOC Control Technology in the Industry

The Fairmont Le Chateau Frontenac in Quebec City, Quebec, was the appropriate venue for a multinational gathering at the World Summit on Ethanol for Transportation, held Nov. 2-4. 
 	
 Thirteen countries were represented among the nearly 250 participants at this first-ever conference hosted by the Governors' Ethanol Coalition International Committee. Guests included producers, government officials, industry suppliers, bankers, researchers and growers from around the globe, all with one common link: an interest in establishing ethanol's role in the worldwide renewable energy economy of the future.
 	
 Presenters from various producing and aspiring countries held roundtable discussions on such topics as: the state of the industry, international policy, economic development drivers in developing countries and a session on myth and realities surrounding ethanol use. 
 	
 Of the nations represented at the Summit, ethanol production and use varies widely. The United States, for example, produces over 2.7 billion gallons of ethanol a year, while its neighbor to the north, Canada, approached 39 million gallons in 2002. The world's largest producer of ethanol, sugarcane-rich Brazil, has topped the 3.6 billion gallon mark with 18 million vehicles running exclusively on fuel blends of between 20 percent and 100 percent ethanol.
 
 Increased oil dependency 
 In his keynote address, Bob Dinneen, president of the Renewable Fuels Association, reminded the audience through interpreters that the overarching global benefit is ethanol's ability to reduce greenhouse gases from mobile transportation sources.
 	
 "It's not the car [that causes the pollution], it's what you put in it," Dinneen said. He went on to predict that "the Stone Age did not end for a lack of stones and likewise the oil age will end long before we run out of oil."

 	
 Despite these words, which Dinneen later attributed to Sheik Amani of the Organization of Petroleum Exporting Countries (OPEC), the United States and other nations continue to be largely dependent on foreign sources of oil.
 	
 "In 1973 at the start of the oil embargo, the U.S. was 23 percent dependent on imported petroleum at six million barrels per day. Today, we are 56 percent dependant with 11 million barrels per day," Dinneen said.
 
 Baker, Bailey define Canada's target 
 Bliss Baker, former president of the Canadian Renewable Fuels Association, provided a microcosmic look at the world scene by reviewing the Canadian ethanol industry and its vast provincial differences. Diversity of population, environmental issues, policy inclinations and feedstock availability was the backdrop for Baker's summary assessment.
 	
 "Canada has built one new plant in 10 years while the U.S. will build one per month this year," Baker said. He added that the landscape is changing rapidly and federal initiatives have been implemented to facilitate the inevitable growth of renewable fuel sources.
 	
 Margaret Bailey of the Fuels Policy and Programs Office of Natural Resources Canada illustrated Baker's point by stating that road vehicles account for 75 percent of Canada's transportation related GHG emissions. The result in Canada: a recently announced target of 35 percent of gasoline being E10 by 2010. Ontario is Canada's largest fuel market, consuming over 14 billion gallons of gasoline. A total mandate could equate almost 1.5 billion liters (390 million gallons) of ethanol.
 
 Diverse issues, common goals 
 It was evident early in the presentations, however, that while the common link was ethanol use and the development of a production infrastructure, the drivers, barriers and political issues were as diverse and complex as the languages being spoken throughout the event. 
 	

 Isabel Gomez Macias, director of the Mexican ethanol program, spoke about the new organization that has been formed to develop ethanol in Mexico, Fundacion E-mision. This interdisciplinary group will coordinate the developing ethanol program between the Secretaries of Economy, Agriculture, Property and Public Credit, and Environment and Natural Resources. 
 	
 Paritud Bhandhubanyong, Thailand's director of the Ministry of Science and Technology, estimated the financial losses from air pollution to be approaching $1 billion in Bangkok and Manila and deaths attributable to the same pollution to be more than 1.5 million. To simply replace MTBE in Thailand's current fuel supply would require one million liters (260,000 gallons) per day of production. The only plant in Thailand currently produces 25,000 liters (6,500 gallons) per day. 
 	
 The European model presents an entirely different glimpse of the issues that affect broad scale introduction of ethanol into the fuel supply. According to Jeff Passmore of Iogen Corporation, a Canadian firm developing the conversion of biomass to ethanol, the European Union has issued a directive to all member countries to develop a plan for a 5.7 percent blending of renewable ethanol into all non-diesel fuel. In Europe, 50 percent of all transportation fuel consumed is diesel. While biodiesel use in Europe is well ahead of most of the world, the use and acceptance of ethanol remains a challenge. To that end, the same directive allows for each country to develop its own taxing mechanism for ethanol use. The plans are due by the end of 2004.
 
 Feedstock assortment
 Feedstocks for ethanol plants is another indicator of the vast differences illuminated by shining a light on the global ethanol scene. While 95 percent of U.S. ethanol is produced from corn, Brazil's ethanol program is sugarcane-based. However, in western Canada an even better financial model appears when wheat is used. According to Donald O'Connor, an industry consultant from S&T2 in British Columbia, "ethanol production costs in western Canada are the lowest in North America and wheat feedstock is a significant part of the advantage." And around the world other feedstock sources like cassava, molasses, sugar beets, and barley continue to attract research attention as the opportunity to mesh the environmental, energy and economic benefits of ethanol production and use becomes more apparent.
 	
 The inability to trade ethanol as a fungible commodity continues to challenge the producers and would-be producers in Brazil, the U.S. and around the world. According to Patrick Funaro, a senior vice president at Fimat USA, the benefits of a futures market are price discovery, liquidity and leverage. The contract requirements for a qualifying contract are deliverability, standardized specifications and small quantities. 
 	
 While much of the conference was centered on transferring the current models into developing markets, discussions turned to the emerging technologies, especially converting biomass to ethanol. The massive amounts of sugars available in biomass feedstocks like switchgrass, rice and wheat straw, corn stover and many other sources are locked up tighter than in corn and require enzymatic or other chemical release to avail them for fermentation. Iogen Corporation is in the final stages of a phased startup of its commercial pilot plant, and when completed, it will convert switchgrass and wheat straw into approximately one million gallons of ethanol annually. According to Passmore, Iogen is now on a worldwide search for the location of its first full-scale production plant. 
 	
 Despite Iogen's progress, which is a combined public-private partnership of Canadian agencies, oil companies and industry, the immediate future for biomass conversion remains uncertain. Economic viability still hinges on the enzyme manufacturers quest to reduce the cost of enzymatic release to one-tenth of what it was only five years ago. Companies like Novozymes and Genencor are working feverishly to accomplish this breakthrough.

 
 Speakers share successes, dispel negative myths
 The other most active technological pursuit in the U.S. is the effort at the National Corn-to-Ethanol Research Center in Edwardsville, Ill. Director Rodney Bothast discussed the facility's ability to facilitate modifications throughout the ethanol-making process to test technologies that may improve yields, energy efficiencies and even the makeup of the corn before it is fermented. The plant soon expects to be testing processes for dry-grind plants, which remove fiber and germ before introducing the starch stream into liquefaction. This may provide additional products to market as well as increase net ethanol production levels through the plant. 
 	
 In one of the more popular sessions, industry experts addressed, and in many cases dispelled, the negative issues and "myths" which are commonly aimed at the ethanol industry regarding emissions, energy, engines and economics. Dan Santini, a researcher at Argonne National Laboratory, provided an updated look at flawed claims that ethanol requires more energy to produce than it contains. 
 	
 Ralph Groschen, panel moderator and a marketing specialist for the Minnesota Department of Agriculture, pointed out that through the years of introducing ethanol into one-tenth of Minnesota's gasoline supply, virtually every claim of vehicle or engine failure alleged to be caused by ethanol was ultimately dispelled. Groschen added, "as soon as the 'warning' labels came off the pumps, the complaints stopped altogether." 
 	
 Hosein Shapouri, an economist for the U.S. Department of Agriculture, provided a glimpse at the economics of ethanol production, wet mill and dry-grind, and pointed out the clear pattern of improving financial viability that has steadily occurred in the industry.
 	
 In the end, the theme most prevalent was the charge issued by Dinneen at the beginning: "Build coalitions!" The past and the future of ethanol in the world market will be a reflection of coalitions-public and private, research and commercial, as well as state, national and international-working together to advance renewable ethanol as a viable alternative to a limited fossil supply. To most at this World Summit the future does indeed look rosy, or better yet, green! Summit proceedings can be purchased at http://store.yahoo.com/bbiethanol, click on World Summit CD link. EP

People from around the world gather for World Summit on Ethanol for Transportation

Nations Bolster Industry Ties in Quebec City

With interest running high in federal energy legislation favorable for ethanol, the industry is on the brink of a fresh round of market growth. To support that growth, Monsanto is not only working to increase dry mill ethanol plant and corn grower profits with higher ethanol-yielding hybrids, but also working to drive increased ethanol demand and expand the ethanol fuel infrastructure to supply that demand. 
 	
 "We have chosen to take a rather 'holistic' approach to getting involved with the dry mill ethanol business," says Amy Rutherford, Monsanto Processor Preferred business manager based in St. Louis. "The ethanol industry is growing by leaps and bounds, and we want corn growers, seed companies and ethanol plants to be able to expand their business success together."

 	
 Monsanto literally began work in the ethanol industry at the ground level through development of Processor Preferred High Fermentable Corn. Monsanto's researchers worked with industry experts to develop a high throughput bench fermentation system, which simulates a commercial dry grind ethanol plant process. Corn hybrids were put through this simulated process to identify which ones had higher levels of fermentable starch.
 	
 "A rigorous set of criteria must be met before a hybrid will carry the Processor Preferred High Fermentable Corn designation," says Rutherford. "Among those criteria are a statistically required number of data points across multiple geographic locations, and fermentation ethanol yields that exceed threshold targets, in which all ethanol measurements are made by High Performance Liquid Chromatography (HPLC) meeting required consistency standards. All these criteria are met without sacrificing hybrid agronomic performance."
 	
 "We were pleased to see that some of the DEKALB elite hybrids we were growing were named to the Processor Preferred High Fermentable Corn list," says Steve Volker, a corn grower from Tarkio, Mo. "We aren't giving up anything. There's no yield drag and we are still growing corn for end-users. This will help improve the efficiency of the Golden Triangle Energy Cooperative located in this area, which is a plant where we are investors."
 	
 Rutherford says that ethanol plants can count on the fermentation data because analytical work to evaluate ethanol yield was performed in Monsanto's ISO 17025 compliant crop analytics laboratories. The ISO 17025 designation ensures that data are repeatable, reliable and consistent. 
 	
 "Monsanto has one of the only labs in the world with ISO 17025 accreditation for grain analysis," says Rutherford. "We also validated that the hybrids identified in the lab perform on a commercial scale. We worked with six ethanol plants to process over two million bushels of corn, confirming that Processor Preferred High Fermentable Corn can indeed increase ethanol concentrations in fermentors at dry mill ethanol plants."
 	
 Volker says a one-week test with Processor Preferred High Fermentable Corn at Golden Triangle did yield positive results. "There was a worthwhile advantage," he says.
 	
 Roger Hill, general manager of Golden Triangle, which is based in Craig, Mo., agrees. "We had some success with the corn hybrid we tested last year, and we are optimistic about the 2003 hybrids we will evaluate," he says. "We saw less aflatoxin in the corn last year and found the corn was easier to grind. The industry is headed in this direction, and we believe this is going to be the right direction with many benefits for dry mill ethanol plants."
 	
 Rutherford says Processor Preferred High Fermentable Corn will be offered in nearly 60 independent seed brands for 2004. John Hennenfent of Munson Hybrids in Galesburg, Ill., is one of the independent seed companies marketing Processor Preferred High Fermentable Corn. 
 	

 "Processor Preferred High Fermentable Corn provides an opportunity to add value to a product for growers, seed dealers and ethanol plants," says Hennenfent. "Ethanol plants can see improved efficiency and productivity and receive incentives from Monsanto at the same time. It is an easy decision to get involved because of the potential benefits. Local communities will also see the benefits."
 	
 Monsanto's efforts are coordinated through its "Fuel Your Profits" program. For the last several months, Monsanto representatives have been meeting with dry mill ethanol plant officials across the country to demonstrate the value of Processor Preferred High Fermentable Corn and to explain the advantages of the Fuel Your Profits program.
 	
 "We want plant managers to understand the profit potential available by utilizing Processor Preferred High Fermentable Corn and the benefits that the Fuel Your Profits program can provide to the plant, its corn suppliers and the community," says Rutherford.
 	
 Participating plants are provided a list of brands carrying the Processor Preferred designation in their area, and they receive the use of Monsanto's proprietary Near Infrared calibration tool developed under ISO 17025 compliance for the length of participation at no charge. The tool is designed so plant managers and growers can understand which corn hybrids yield more ethanol. Such data can help plants optimize efficiency and output by indicating corn fermentability at the front end of the process.
 	
 In addition, corn growers who support plants involved in "Fuel Your Profits" may be eligible to receive reward certificates redeemable for significant savings off the negotiated purchase price of General Motors' E85 vehicles. As participating ethanol plants maximize their opportunities to source Processor Preferred corn, they can qualify for a "turn-key" E85 fuel pump station to place at their plant or within their community. 
 	
 "We encourage plants to partner with us to provide solutions that are good for everyone," says Rutherford. "Improve your profitability and the profitability of corn growers through higher-yielding corn. Give growers the chance to purchase vehicles at big discounts and use the corn fuel they produce. Then, provide a place for the fuel to be accessed locally, so those in your community driving one of the millions of cars that can use E85 fuel can contribute to your local plant and corn grower business."
 	
 To date, 23 plants are participating in the Fuel Your Profits program. These plants are located throughout the country and will collectively consume grain from more than two million acres of the 2004 harvest. 
 	
 "This is a sound, sensible way to help grow the ethanol industry," adds National Corn Growers Association Chairman Fred Yoder. "The program offers a science-based analysis by which the Processor Preferred system determines a list of High Fermentable Corn. Ethanol plants and corn growers can utilize this list to their mutual benefit."
 	
 Munson Hybrids' Hennenfent encourages ethanol plants to not feel limited by the program. He says that most corn growers will only need to plant a percentage of their acres with Processor Preferred High Fermentable Corn. Farmers who are also plant member-owners are not forced to buy specific seed because Monsanto is working with so many independent seed companies to offer the hybrids.

 	
 "Even farmers or plants that use Processor Preferred High Fermentable Corn exclusively are going to find this program is a win-win situation," he says. "The advantages to growing and processing these hybrids are that good." 
 	
 Yoder sees other benefits as well. "Thousands are invested in ethanol production cooperatives that could potentially see higher returns on those investments if ethanol plants are more profitable," he explains. "Profitable ethanol plants can create significant and sustainable community benefits through jobs, and more."
 	
 Corn grower enrollment in the Fuel Your Profits program is currently underway, and it ends February 1, 2004. Dry mill ethanol plants interested in getting involved with the program should call Rob Elliott at (309) 368-0979, or Steve Petersen at (319) 560-8324. EP

Targeting Total Growth

<ul>ALASKA</ul>
 TAX EXEMPTION: Alaska offers a retail excise tax exemption of $0.06 per gallon of ethanol-blended gasoline—specifically "starch-to-ethanol." This exemption applies only to retail stations within the city of Anchorage, and only during the winter months. There's no sunset on the legislation. The state also offers an $0.08-per-gallon excise tax exemption on ethanol made from biomass. The biomass-to-ethanol excise tax exemption is offered year-round. The biomass-to-ethanol excise tax exemption sunsets five years after the startup of the state's first biomass-to-ethanol plant. 
 
 PRODUCER PAYMENT/CREDIT: None
 
 OTHER PROGRAMS: NA
 

 PRODUCTION STATS: 
 Ethanol plants in operation: 0 
 Production capacity: 0
 Plants under construction: 0
 Capacity under construction: 0 
 Largest producer: NA 
 
 <ul>CONNECTICUT</ul>
 TAX EXEMPTION: Connecticut offers a $0.01-per-gallon retail excise tax exemption on ethanol-blended gasoline. The legislation has no sunset. 
 
 PRODUCER PAYMENT/CREDIT: None 

 
 OTHER PROGRAMS: NA
 
 PRODUCTION STATS:
 Ethanol plants in operation: 0 
 Production capacity: 0
 Plants under construction: 0
 Capacity under construction: 0 
 Largest producer: NA 
 
 <ul>HAWAII</ul>
 TAX EXEMPTION: In Hawaii, fuel blends of "at least 10 percent alcohol" are exempt from the 4-percent tax on retail sales. This legislation sunsets on Dec. 31, 2006. 

 
 PRODUCER PAYMENT/CREDIT: Hawaii offers qualifying ethanol producers a $0.30-per-gallon investment credit on the first 15 mmgy produced at each plant annually. This investment credit applies for eight to 10 years—depending on the level of investment—and is capped at 40 mmgy statewide. 
 
 OTHER PROGRAMS: Highway taxes on alternative fuels are 50 percent of the effective rate (on an energy content basis) of diesel fuel. Also, a tax credit of 100 percent for investment in qualified high-technology businesses is available. Non-fossil fuel technology is included in this legislation under the definition of "qualified research."
 
 PRODUCTION STATS:
 Ethanol plants in operation: 0 
 Production capacity: 0
 Plants under construction: 0
 Capacity under construction: 0 
 Largest producer: NA 
 

 <strongIDAHOTAX EXEMPTION: In Idaho, the available excise tax exemption equals the amount of ethanol blended into a gallon of gasoline—up to 10 percent. This legislation has no sunset. The average excise tax exemption claimed is $0.025 per gallon. 
 
 PRODUCER PAYMENT/CREDIT: None
 
 OTHER PROGRAMS: NA
 
 PRODUCTION STATS:
 Ethanol plants in operation: 1 
 Production capacity: 3 mmgy
 Plants under construction: 0
 Capacity under construction: 0 
 Largest producer: J.R. Simplot, Caldwell 

 
 <ul>ILLINOIS</ul>
 TAX EXEMPTION: For ethanol blends, Illinois offers a 30-percent reduction on gasoline sales tax. Current gasoline sales tax in the state is 6.25 percent. The legislation was set to sunset June 30, 2003. 
 
 PRODUCER PAYMENT/CREDIT: None 
 
 OTHER PROGRAMS: The state had an Ethanol Fuel Research program that sunset on Dec. 31, 2002.
 
 PRODUCTION STATS:
 Ethanol plants in operation: 5 
 Production capacity: above 550 mmgy

 Plants under construction: 2
 Capacity under construction: 70 mmgy 
 Largest producer: Archer Daniels Midland 		Co. (ADM), Decatur 
 
 <ul>IOWA</ul>
 TAX EXEMPTION: Iowa has a $0.01 sales tax exemption that sunsets June 30, 2007. 
 
 PRODUCER PAYMENT/CREDIT: None 
 
 OTHER PROGRAMS: Iowa offers an additional tax credit for service stations that sell 60 percent or more of its total volume as ethanol-blended gasoline. The tax credit is $0.025 per gallon of ethanol-blended gasoline in excess of 60 percent of all gasoline sold. Iowa also offers a variety of grants and low-to-no-interest loans for development of ethanol projects.
 

 PRODUCTION STATS:
 Ethanol plants in operation: 11 
 Production capacity: above 400 mmgy 
 Plants under construction: 4
 Capacity under construction: 165 mmgy
 Largest producer: Archer Daniels Midland 		Co. (ADM), Cedar Rapids 
 
 <ul>KANSAS</ul>
 TAX EXEMPTION: None 
 
 PRODUCER PAYMENT/CREDIT: Kansas offers a $0.05-per-gallon producer payment for existing producers and a $0.075-per-gallon producer payment for new production that is capped at 15 mmgy. The program has a $3.5 million cap and sunsets July 1, 2011. 
 
 OTHER PROGRAMS: NA

 
 PRODUCTION STATS:
 Ethanol plants in operation: 5 
 Production capacity: 100 mmgy
 Plants under construction: 1
 Capacity under construction: 30 mmgy 
 Largest producer: U.S. Energy Partners LLC
 
 <ul>MICHIGAN</ul>
 TAX EXEMPTION: None 
 
 PRODUCER PAYMENT/CREDIT: None 

 
 OTHER PROGRAMS: A $5 million one-time payment was appropriated to facilitate the first ethanol production plant in Michigan.
 
 PRODUCTION STATS:
 Ethanol plants in operation: 1 
 Production capacity: 40 mmgy 
 Plants under construction: 0
 Capacity under construction: 0 
 Largest producer: Michigan Ethanol LLC
 
 <ul>MINNESOTA</ul>
 TAX EXEMPTION: Minnesota does not offer an exise tax exemption on 10-percent blends but offers a $0.058 excise tax exemption on E85. 
 

 PRODUCER PAYMENT/CREDIT: Minnesota offers a $0.20-per-gallon producer payment that applies to the first 15 mmgy per plant, per year, for up to 10 years. The program will not pay more than $3 million, per plant, per year. 
 
 OTHER PROGRAMS: Minnesota does not label gasoline pumps that contain ethanol blends. Also, the state requires a minimum of 2.7 percent oxygen in all gasoline. 
 
 PRODUCTION STATS:
 Ethanol plants in operation: 14
 Production capacity: 386 mmgy
 Plants under construction: 0
 Capacity under construction: 0 
 Largest producer: Corn Plus, Winnebago
 
 <ul>MISSISSIPPI</ul>

 TAX EXEMPTION: None 
 
 PRODUCER PAYMENT/CREDIT: Mississippi offers a $0.20-per-gallon producer payment for 10 years from the start of production for "anhydrous alcohol," including a minimum payment of $0.11 per gallon for "wet alcohol." The state requires the ethanol to be derived from Mississippi-produced feedstocks. The payment ceilings at 30 mmgy, per plant. And the state caps the entire program at $37 million per year. 
 
 OTHER PROGRAMS: The state has a biomass/cogeneration provision that allows for a payment of $0.015 to ethanol producers for each kilowatt hour of electricity generated using biomass in a cogeneration facility at the ethanol plant site.
 
 PRODUCTION STATS:
 Ethanol plants in operation: 0 
 Production capacity: 0
 Plants under construction: 0

 Capacity under construction: 0 
 Largest producer: NA 
 
 <ul>MISSOURI</ul>
 TAX EXEMPTION: None 
 
 PRODUCER PAYMENT/CREDIT: Missouri has a $0.20-per-gallon producer payment that applies to the first 12.5 million gallons a plant produces each year, and a $0.05-per-gallon producer payment for the next 12.5 million gallons produced. Producers are eligible for these payments for the first 60 months of plant production. 
 
 OTHER PROGRAMS: NA
 

 PRODUCTION STATS:
 Ethanol plants in operation: 2 
 Production capacity: 62 mmgy
 Plants under construction: 2
 Capacity under construction: 70 mmgy 
 Largest producer: Northeast Missouri 
 	Grain LLC
 
 <ul>MONTANA</ul>
 TAX EXEMPTION: None 
 
 PRODUCER PAYMENT/CREDIT: Montana has a $0.30-per-gallon "producer credit" that is capped at $3 million per year. The legislation sunsets July 1, 2005. 

 
 OTHER PROGRAMS: NA
 
 PRODUCTION STATS:
 Ethanol plants in operation: 0 
 Production capacity: 0
 Plants under construction: 0
 Capacity under construction: 0 
 Largest producer: NA 
 
 <ul>NEBRASKA</ul>
 TAX EXEMPTION: None 
 

 PRODUCER PAYMENT/CREDIT: Nebraska offers a producer payment of $0.075 per gallon for "new" capacity at existing facilities (expansions) for up to 10 mmgy produced. This payment is available to producers for three years after startup of the new capacity. Also, Nebraska has a producer payment of $0.18 per gallon for new production, up to 15,625,000 gallons produced annually. There is a 48- or 96-month sunset on the payments, depending on the production start date. No payments will be made after June 20, 2012. 
 
 OTHER PROGRAMS: NA
 
 PRODUCTION STATS:
 Ethanol plants in operation: 8 
 Production capacity: 417 mmgy
 Plants under construction: 4
 Capacity under construction: 150 mmgy
 Largest producer: Archer Daniels Midland 		Co. (ADM), Columbus
 
 <ul>NORTH CAROLINA</ul>

 TAX EXEMPTION: None 
 
 PRODUCER PAYMENT/CREDIT: None 
 
 OTHER PROGRAMS: North Carolina has a 25-percent state tax credit against corporate income tax for the cost of a renewable energy manufacturing plant and equipment. The state has not placed a cap on the amount of money available. If not fully utilized the first year, the payment can be carried over for up to 10 years.
 
 PRODUCTION STATS:
 Ethanol plants in operation: 0 
 Production capacity: 0
 Plants under construction: 0

 Capacity under construction: 0 
 Largest producer: NA 
 
 <ul>NORTH DAKOTA</ul>
 TAX EXEMPTION: None 
 
 PRODUCER PAYMENT/CREDIT: Producer payments in North Dakota are based on a counter-cyclical mechanism that pays the plant $0.001 per gallon of ethanol produced for every $0.01 that corn is above $1.80, and $0.002 per gallon of ethanol for every $0.01 cent that ethanol goes below $1.30. In addition, for every $0.01 that corn is below $1.80 there will be a deduction of $0.001 per gallon from the payment and for every $0.01 that ethanol is above $1.30 there will be a $.0.002 gallon deduction from the payment. At $1.80 for corn and at $1.30 for ethanol there are no payments and no deductions. Payments cannot exceed $1.6 million per plant, per year, or $10 million over the life of the plant. 
 OTHER PROGRAMS: NA
 
 PRODUCTION STATS:
 Ethanol plants in operation: 2 
 Production capacity: 39 mmgy
 Plants under construction: 0

 Capacity under construction: 0 
 Largest producer: Archer Daniels Midland Co. (ADM), Walhalla 
 
 <ul>OHIO</ul>
 TAX EXEMPTION: None 
 
 PRODUCER PAYMENT/CREDIT: None 
 
 OTHER PROGRAMS: Ohio offers a nonrefundable tax credit against corporation franchise or personal income tax liability for an investor in an ethanol production plant. Ethanol plants that qualify must have business plans that have been issued by the state's Ethanol Incentive Board. The tax credit is equal to 50 percent of the money invested in such a plant, not to exceed $5,000. Ethanol or other biofuel production plants are eligible for loans, grants or bonds issued by the Ohio Air Quality Development Authority. Property that is part of an air quality facility is not subject to taxes or assessments so long as the bonds or notes issued to finance the costs of the facility are outstanding.
 

 PRODUCTION STATS:
 Ethanol plants in operation: 0 
 Production capacity: 0
 Plants under construction: 0
 Capacity under construction: 0 
 Largest producer: NA 
 
 <ul>OKLAHOMA</ul>
 TAX EXEMPTION: None 
 
 PRODUCER PAYMENT/CREDIT: Oklahoma offers $0.20 per gallon for production on line between Dec. 31, 2003, and December 31, 2006. The payments apply to a producer's first 25 mmgy for five years.

 
 OTHER PROGRAMS: HB1535 extends the term of the Oklahoma Ethanol Development Advisory Committee to June 1, 2006.
 
 PRODUCTION STATS:
 Ethanol plants in operation: 0 
 Production capacity: 0
 Plants under construction: 0
 Capacity under construction: 0 
 Largest producer: NA 
 
 <ul>SOUTH DAKOTA</ul>
 TAX EXEMPTION: South Dakota has a $0.20 excise tax exemption on E10 and a $0.12 excise tax exemption on E85. 

 
 PRODUCER PAYMENT/CREDIT: The state offers a $0.20 per gallon producer credit, capped at $1 million per year, per plant. The producer credit has a $10 million total cap per plant. 
 
 OTHER PROGRAMS: NA
 
 PRODUCTION STATS: 
 Ethanol plants in operation: 8
 Production capacity: 240 mmgy
 Plants under construction: 2
 Capacity under construction: 145 mmgy
 Largest producer: James Valley Ethanol
 Note: VeraSun Energy was scheduled to 

 begin grinding corn in mid-November.
 
 <ul>TEXAS</ul>
 TAX EXEMPTION: None 
 
 PRODUCER PAYMENT/CREDIT: Texas has a producer credit of $0.20 per gallon, limited to the first 18 mmgy annually ($3.6 million per year). The payments are good for 10 years, but funding will not be available until September 2005.
 
 OTHER PROGRAMS: NA
 
 PRODUCTION STATS: 

 Ethanol plants in operation: 0
 Production capacity: 0
 Plants under construction: 0
 Capacity under construction: 0
 Largest producer: NA 
 
 <ul>WISCONSIN</ul>
 TAX EXEMPTION: None 
 
 PRODUCER PAYMENT/CREDIT: Wisconsin has a $0.20-per-gallon producer credit with a $3 million cap annually for the entire program. The program is limited to the first 15 mmgy produced. An ethanol plant must first produce 10 million gallons before any credit is issued. 
 
 OTHER PROGRAMS: NA

 
 PRODUCTION STATS:
 Ethanol plants in operation: 4 
 Production capacity: 80 mmgy
 Plants under construction: 2 (both expansions)
 Capacity under construction: 45 mmgy (expansions) 
 Largest producer: Badger State Ethanol LLC
 
 <ul>WYOMING</ul>
 TAX EXEMPTION: None 
 
 PRODUCER PAYMENT/CREDIT: Wyoming has a $0.40-per-gallon producer credit. The entire program has a $2 million per year cap. 

 
 OTHER PROGRAMS: NA
 
 PRODUCTION STATS:
 Ethanol plants in operation: 1
 Production capacity: 5 mmgy
 Plants under construction: 0
 Capacity under construction: 0 
 Largest producer: Wyoming Ethanol EP<ul>

The following list was compiled by Ethanol Producer Magazine, with assistance form BBI International Consulting, in early November. The list is intended for editorial purposes and should not be used for research, project development, financial planning or official records.   
	However, a comprehensive look at state incentives for ethanol production will soon be available through BBI International. 
	BBI International Consulting has recently partnered with the Missouri Corn Growers Association and the Missouri Corn Merchandising Council to study various state incentive programs with a goal to improve the current program in Missouri. The final report will be made available to other organizations with interest in promoting ethanol. BBI is collecting information, researching various state incentive programs and analyzing data to determine the impact—and effectiveness—of the various programs. For more information on this project contact Mark Yancey, BBI International Consulting, myancey@bbibiofuels.com.

State Tax & Production Incentives for Ethanol

The end of October offered some volatility to the corn complex while following the bullish soy complex. The corn rally sparked on Oct. 23 with nearby futures trading higher for six days to top out at $2.51, as fund-buying pushed the market higher. In addition, the demand-driven market helped the market work higher, as U.S. exports are running ahead of last year's pace. For the week ending October 30, year-to-date corn exports were placed at 691.8 million bushels versus 525.9 million bushels the same period a year ago. The major unknown in the market will be China and its export scenario. In October, the USDA left China's corn exports unchanged at 8.5 million metric tons. This figure is 6.0 million metric tons below last year's export figure. China rumors continue to be present in the market. Questions of how much, if any, exports China will be a part of and how much export business will come to the U.S., will continue to linger in the futures market until a more definite answer is discovered.
 	
 Traders received the crop production report from the USDA on Nov. 12. Private analysts will be looking for the USDA to increase production by 150 to 200 million bushels. This would place the U.S. corn production between 10.357 and 10.407 billion bushels. One big question remains: What will the USDA do to the U.S. corn export figure? Currently the U.S. corn export figure for 2003-'04 rests at 1.80 billion bushels. However, the pace is moving ahead of schedule. Not only are exports a critical demand issue but ethanol corn usage is as well. With ethanol production continuing to make records each month, what impact will this make on U.S. corn demand? The monthly average corn demand for ethanol right now is 85.9 million bushels compared to 62.8 million bushels monthly in last year's calendar year. If this pace remains at a constant, yearly calendar ethanol corn consumption should exceed 1.020 billion bushels by year's end. As new plants begin, the end is definitely not in sight. This number is bound to make leaps for the upcoming years. EP

Corn demand for ethanol remains high, China exports unpredictable

Distillers dried grains is extremely tight, with prices reflecting that fact. With soymeal and whole cottonseed at or near seven-year highs, DDGS continues to work into a lot of rations. One feature of the upper Midwest market was an explosion at the Benson, Minn., plant on 0ct. 22, which tightened up an already firm market. As of Nov. 11, prices in Minnesota were $115, with California trading at $155 for a December/March delivery. Demand is coming from both sides of the Mississippi River, and it seems that run times in the East have been pressuring Midwest plants to ship in a untraditional easterly direction.
 
 
 Export demand continues to be strong, with a bulk purchase by Cuba being a feature in the November market. The Latin American countries continue to pursue supplies, and Mexican demand seems to pick up when the peso strengthens. Vessel freight will continue to be an important component, as it has more than doubled in the last year. DDGS prices will continue to be affected by soymeal futures, with demand picking up and diminishing with the ebb and flow of CBOT activities. After prices moved up in the beginning of November, the hog producers began pulling the product out of their formulas. Should the poultry producers follow suit, values will slip-but only after the near term demand is alleviated. EP

Record high soy prices keep DDGS market firm

Sustaining growth with acceptable risk means the ethanol industry needs to continue searching for new capital, new lenders and new markets. Following up on the Ethanol Symposium for Lenders, held in Chicago last month, lending executives from CoBank, First National Bank of Omaha and AgStar Financial Services share additional perspectives with EPM.

Banking on Ethanol

Ed Stahl joined the BBI International Consulting staff in June 2003 after working on two East Coast ethanol projects.
 	
 As manager of business development, Stahl is currently securing new consulting opportunities and also working with project principals to plan, develop and generally oversee business plan implementation under the guidance of project boards or committees. EP

Stahl joins BBI team

Art Kotsybar has been named plant manager of the National Corn-to-Ethanol Research Center (NCERC) at Southern Illinois University Edwardsville. Kotsybar has over 20 years with Air Products and Chemicals Inc. He held a range of positions in operations, administration and management of industrial gas manufacturing and distribution facilities.
 	

 As plant manager, he oversees the day-to-day research operations at the NCERC.

Kotsybar joins NCERC staff

Yanhong Zhang has been named laboratory manager of the National Corn-to-Ethanol Research Center (NCERC) at Southern Illinois University Edwardsville. Zhang obtained a doctorate in analytical chemistry from the University of Arkansas in 1996. She began her academic career with the Illinois State Geological Survey (ISGS) as a research chemist and laboratory manager. 
 	
 Zhang will manage the laboratories of the Center, train students and establish intensive collaborations with clients.

Zhang takes NCERC lab manager position

The traditional natural gas storage injection season concluded Oct. 31. As Figure 1 shows, we closed the season with a record level of natural gas injected into storage fields. This is important since storage inventories are drawn upon to fill the gap between flat natural gas well production and peak winter demands (during summer periods the opposite happens). We should have an adequate amount of storage inventory to avert "crisis" pricing unless we have persistent, extremely cold weather over large parts of the country.
 	
 What about the future? Can we expect prices to continue to trend down (see Figure 2) with seemingly abundant supply, or were the high summer injections an aberration? The answer lies somewhere in between. On one hand, industrial demand was down due to the slack economy and high natural gas prices. Industrial demand could be down by as much as 800 billion cubic feet (Bcf) this year (466 Bcf during the injection season) if we assume that industrial sector demand responded to high prices by the same degree as in 2001. In addition, electric generation demand was down by as much as 200 Bcf this year due to fewer cooling-degree days nationally. Combined, summer season demand may be off over 650 Bcf. If that is the case, 650 Bcf of natural gas went into storage that typically would have been consumed in the marketplace. With a 650 Bcf reduction in storage inventories, we would be on the edge with respect to the supply/demand balance, and we'd be susceptible to price spikes. If our flush storage position is due to slack generation demand and slack industrial demand, what does that mean for winter? It means that if the economy continues to pick up and we have normal to below normal temperatures, storage inventories could erode quickly, and we may again be on the wrong side of the supply/demand balance. EP

Natural gas prices could rise with economy, cold winter

The North American Bioproducts Corporation (NABC) has started a billboard campaign to increase the awareness of ethanol, the company recently announced. Adorned with an American flag, the sign reads "Support Ethanol, Support America." According to NABC marketing director Bill Rice, two billboards are currently in place. One is along Interstate 90 in Albert Lea, Minn., and the other is north of Sioux Falls, S.D., on Interstate 29. Other sites are currently being evaluated, Rice told EPM.

NABC launches ethanol billboard campaign

Ace Technologies LLC celebrated two groundbreaking ceremonies to close out October.
 	
 On Oct. 27, Ace Ethanol near Stanley, Wis., broke ground on a $20-million expansion project. Sen. Dave Zien, R-Wis., and Rep. Scott Suder, R-Wis., spoke to a crowd of approximately 100 to 150 people on a wintery afternoon. Representatives of Sen. Herb Kohl, D-Wis., and Sen. Russ Feingold, D-Wis., read letters expressing the senators' support of the expansion while Wisconsin Gov. Jim Doyle also had a representative attend.
 	
 Funding for the project was provided by a loan from Wisconsin Business Bank and the USDA Rural Development. Ace Ethanol General Manager Terry Kulesa told EPM that the financing for the expansion of the 15-mmgy ethanol plant is in place. Once a building permit is issued, construction will begin.
 	
 On Oct. 24, Ace Biorefining LLC broke ground across the road from Ace Ethanol. Mayor David Jankoski led the event, which was visited by about 100 to 150 people including several state and local officials. Rep. Suder and Biorefining representatives Wesley Haine and Doug Van Thorre also attended.
 	
 Ace Biorefining could be the world's first biorefinery, using its patented Biorefining Process. The company hopes to convert distillers grains into specialty sugars in a low-cost way by further fractionating the corn fiber.

Wisconsin's Ace Technologies breaks ground on two projects

New magazine to launch in December 

 By December of this year, we will have published our first edition of Biodiesel Magazine. It's an exciting time for the biodiesel industry as we witness the burgeoning interest worldwide for the production and use of biodiesel. We salute the National Biodiesel Board, in particular, for its untiring efforts to bring this excellent renewable fuel to the marketplace. 
 	
 Biodiesel Magazine will feature articles of interest on biodiesel use, production, worldwide market development and technology. It will be 
 published every other month on a subscription basis, with a similar format to Ethanol Producer Magazine (EPM). Like EPM, Biodiesel Magazine will feature advertising from producers, suppliers and other stakeholders in the biodiesel industry.	
 	
 We look forward to embarking on this new endeavor and hope that you will feel free to send in your 
 comments and suggestions to help make the publication better with each edition. It is our hope that, in some small way, Biodiesel Magazine can be a tool for developing awareness of biodiesel around the globe.
 
 World Ethanol Summit a success
 In early November, the first World Ethanol Summit was held in Quebec City, Canada. What an event it was. In total, 13 countries were represented including Canada and the United States. The topics were varied and timely, and 
 networking opportunities were exceptional. 
 	
 Of course, Quebec City is one of the most beautiful cities anywhere in the world and the Chateau Frontenac Hotel … suffice it to say, it is simply spectacular. From the comments we heard, there were few, if any, who did not think it was well worth the time and expense to attend. 
 	
 Canada is an emerging entity in the ethanol industry and new federal programs will help build the industry at a very rapid pace. Some provinces already have mandates for ethanol use, others are considering the adoption of such requirements and nearly all have some type of ethanol incentive in place, in addition to the federal tax incentive. We would like to thank the Governors' Ethanol Coalition for hosting this event and would like to give special recognition to Alain Lefebvre and his colleagues for nothing short of a Herculean effort to make this event informative, educational, exciting and, without a doubt, memorable.
 
 

 Mike Bryan
 President, BBI International
 mbryan@bbibiofuels.com

175-1292253866.jpg

175-1292430120.jpg

The Way I See IT

The Department of Energy's Oak Ridge National Laboratory in Oak Ridge, Tenn., is increasing its use of ethanol in its fleet vehicles. In mid-October, the organization announced a $264,000 investment in ethanol, affording funds for its third alternative fuel station, near the federal building.    Oak Ridge public affairs specialist Frank Juan told EPM that about 33 percent of DOE vehicles are flex fuel vehicles—FFVs—that can run on ethanol blends as high as E85. Within three years, 75 percent of the department's fleet will be FFVs.

DOE to up use of FFVs

DuPont and the Department of Energy's National Renewable Energy Laboratory (NREL) have joined together to develop an integrated biorefinery that uses corn or other renewable resources to produce ethanol. The $7.7 million partnership is part of a Cooperative Research and Development Agreement (CRADA) that will develop, build and test a biorefinery pilot process that will make ethanol from an entire corn plant, including stalks, husks, leaves and the starch in corn kernels.

November 2003

Business Briefs

Registration open for 2004 National Ethanol Conference

Cargill: food processing plant well suited for ethanol facility

Stahl joins BBI team

Kotsybar joins NCERC staff

Zhang takes NCERC lab manager position

Columns

A View from the Hill

The Way I See IT

Featured

Renewable Energy Summit held in North Dakota

A Perspective on VOC Control Technology in the Industry

Nations Bolster Industry Ties in Quebec City

Targeting Total Growth

State Tax & Production Incentives for Ethanol

Banking on Ethanol

November 2003.css-7jxktu{position:absolute;bottom:0px;left:0px;right:0px;height:3px;border-radius:3px;background-color:var(--chakra-colors-brandBlack);}

Business Briefs

Registration open for 2004 National Ethanol Conference

Cargill: food processing plant well suited for ethanol facility

Stahl joins BBI team

Kotsybar joins NCERC staff

Zhang takes NCERC lab manager position

Columns

A View from the Hill

The Way I See IT

Featured

Renewable Energy Summit held in North Dakota

A Perspective on VOC Control Technology in the Industry

Nations Bolster Industry Ties in Quebec City

Targeting Total Growth

State Tax & Production Incentives for Ethanol

Banking on Ethanol

November 2003