EPM: You've been with the Renewable Fuels Association for 14 years, seven months as president. What is it like to represent the industry at such a critical time?
 
 Dinneen: "It is a true privilege to serve the farmers and investors building the ethanol industry. When I first joined the RFA, the ethanol industry produced about 600 million gallons from just less than 250 million bushels of corn. Today, there are 58 plants capable of producing over 2.3 billion gallons of ethanol per year from over 850 million bushels of corn. And 16 more plants are under construction - overwhelmingly farmer-owned facilities. So the ethanol industry hasn't just grown, its diversified. Now, as a group, farmer-owned plants are the single largest producers in the ethanol industry. The remarkable growth of the ethanol industry didn't happen over night. There are many people and companies who share the credit.
 	
 Even with all the progress, the ethanol industry has only begun to scratch the surface of its potential. This year could be key to growth for the next decade. With an energy debate in Congress, we are working to pass a renewable fuels standard. Such a law would set the ethanol industry on a track of predictable, sustained growth. The benefits to farmers, our energy security, and the U.S. economy would be enormous. The RFA is poised to play a critical role as this debate unfolds. But in reality, the ethanol industry has broad, bi-partisan support because it is a good fuel providing many benefits to this country. And the grassroots support of farmers is more important than anything."
 
 EPM: While our readers know how meaningful a renewable fuels standard is to improving energy security, protecting the environment, and boosting rural economies, most Americans don't share our view. What can we do to change their minds?

 
 Dinneen: "Quite frankly, I disagree with the premise of the question. I believe the vast majority of Americans do support policies like an RFS that reduce U.S. dependence of foreign oil by promoting domestic renewable fuels. In fact, recent public opinion polls by Newsweek magazine and the Mellman Group asked that very question and 73 percent of Americans agreed. So the public support is clearly there.
 	
 But there is strong opposition to an RFS from some in industries that rely on imported, non-renewable fuels. But what's in the best interest of this country - economically, environmentally, and for security - is to switch our "imported petroleum" energy policy to one that promotes domestic fuels like ethanol. A meaningful RFS would do just that."
 
 EPM: RFA has welcomed several new members in the last year. What do these new members bring to the RFA? How does this benefit the industry as a whole?
 
 Dinneen: "The RFA has been growing right along with the ethanol industry. We view that as an endorsement of the work we've done and encouragement to keep up the fight. The new RFA members have added new energy, diversity, and renewed commitment to seeing this industry grow.
 	
 But growing the RFA isn't important in and of itself. What's important is that the entire ethanol industry is united behind the goal of continued growth. The RFA is proud to represent everything from small investor-owned ethanol plants that produce just a few million gallons each year, to farmer-owned cooperatives that are rapidly growing in number and size, to publicly traded ethanol producers who helped establish the industry two decades ago. Big or small. Wet or dry. It doesn't matter. We all want to see this industry continue to grow. We're united behind that goal and, working together, we'll get it done."
 

 EPM: How much ethanol will be in production by 2004 in the U.S.? How about 2010?
 
 Dinneen: "That's a question we'd all like to be able to answer. What we do know is that for the last four or five years the ethanol industry has been growing at about 10 percent a year - that's pretty good for any industry. I see no reason why that won't continue in the future.
 	
 However, there is an opportunity to see the industry grow faster. Passing an RFS in the energy bill would be a big step. But questions remain. Will an energy bill pass? Will MTBE be banned nationwide? Will California and New York hold the line on their scheduled moves to ethanol?
 	
 The ethanol industry can ramp up production very quickly. We proved that over the last year. So we'll continue to work on public policies that allow rapid growth to occur. The ethanol industry could easily produce over 3 billion gallons in 2004 and over 5 billion gallons in 2010."
 
 EPM: What does California mean to the ethanol industry?
 
 Dinneen: "California was the first big reformulated gasoline (RFG) state to announce a ban of MTBE, the gasoline additive that cleans the air, but pollutes drinking water. In order to maintain their air quality, California needs to blend ethanol in their gasoline to replace the banned MTBE starting January 1, 2003.

 	
 Unfortunately, some California officials questioned whether ethanol could replace MTBE. They question whether there was enough ethanol, whether it would work in their fuels program, and things of that nature. These were legitimate concerns stemming from a lack of knowledge of the ethanol industry.
 	
 We at the RFA immediately started working with California officials to educate them about the ethanol industry. Meanwhile, farmers and investors across the country started building ethanol plants to meet the new California market.
 	
 I feel all the questions have been answered satisfactorily. California's own Energy Commission determined enough ethanol will be available to meet their requirements. Further, the transportation industries are ready to move ethanol to California. And every single gasoline refiner and terminal operator in the state says they'll be ready for the switch by the end of this year.
 	
 Just as importantly, new data presented to California from the Auto Alliance clearly demonstrated that ethanol-blended fuels will maintain, and probably improve, their air quality. That data didn't come as a shock to people familiar with other RFG programs that use ethanol. In fact, the Chicago/Milwaukee RFG area is the very first RFG area to improve air quality sufficiently to ask the EPA for reclassification. In our minds, it's no coincidence they're the only RFG area to exclusively use ethanol-blended fuels.
 	
 We want California to maintain the existing MTBE ban deadline, which opens a market for about 675 million gallons of ethanol. There simply isn't a good reason to delay the ban and continue the MTBE contamination in the state. 				
 Unfortunately, some people in California appear to be more worried about using ethanol from the Midwest than they are about continuing to use MTBE from the Middle East - a product that has already cost California taxpayers hundreds of millions of dollars in clean-up expenses." n

RFA President Bob Dinneen reflects on ethanol industry's accomplishments, and its direction

55-year-old Bill Wells is today an international consultant living with his family in Sarina, Australia. He has worked in nearly every aspect of the ethanol industry, including marketing and sales, construction management and plant management. He is a member of the Renewable Fuels Association's Technical Subcommittee and a former board member of the American Coalition for Ethanol. He is also a founding member of the Oxygenated Fuels Association. 
 
 A single evening in Washington D.C., some 20 years ago during the Reagan administration, changed the way Bill Wells thought about renewable fuels and perhaps, determined the path of his important career in ethanol. 
 	
 According the story, Boyden Gray, the Vice President's chief counsel at the time, invited Wells to dinner to discuss renewable fuels with a group of associates and staff. Wells was in his mid-30s at the time, and still unused to rubbing shoulders with powerful people in Washington. Maybe it was the nature of the discussion that evening, or the atmosphere in the room, but something was awakened in the young Wells. 
 	
 "It was a marvelous experience, brilliant conversation, and a little heady for a boy from Goose Creek," Wells remembers. "There was a point when Boyden came around the table and individually served us fish from a pan onto our plates. At some point that night I realized two things: that public policy would drive the success or failure of alcohol fuels, and that I wanted to find my niche and be part of the good fight."
 	
 Texas Education 
 Wells is a Texan if anything; his parents were both from Baytown, Texas, the closest thing he had to a hometown growing up with a father in the Air Force, he said. The family lived in Idaho, Texas, Mississippi and Colorado before Wells was a teenager. When his father finally retired from the military, the family moved back to Baytown, where Bill attended junior high and high school. 

 	
 "Going to high school in Baytown was a blessing because of the presence of Esso Research and Engineering at what is now the world's largest gasoline refinery," Wells said. 
 	
 But it was not until he took chemistry, first in high school, and later at a local junior college, that Wells was convinced a career in chemistry was right for him.
 	
 Professor & military officer
 In his early 20s, Wells attended the University of Texas at Austin, where he was a paid teaching assistant. (He eventually earned a Ph.D in Chemistry). "All the male grad students were disappearing in the (Vietnam) draft. As a regular TA, I could take classes, but the second year they promoted me to a teaching associate position, where I was a real teacher," he recalled. 
 	
 Wells stayed on until the end of the year, then joined the army, enlisting into the Officers Candidate School. Infantry Officers Candidate School seemed at the time to be the hardest and most life-changing event Wells had ever experienced. He graduated very high in his class and was proud of his new achievement, even though he was apprehensive about his future, he said. 
 	
 "Believe me, there is no motivation greater for learning a craft than the fear that poor performance in the future will lead to your death and the deaths of the men in your command."
 	
 As it was, Wells became a Rifle Platoon Leader in Panama, and while fully combat ready and "armed to the teeth," there was no action while he was there. 
 	
 "All the fireworks came before and after my time," he said. "My greatest lessons there were from dealing with people and learning from them, especially the many decorated Viet Nam veterans in my platoon. Gaining their respect meant as much to me as anything else I have accomplished. Between the experiences in OCS and Panama, I can say that leadership and handling adversity under stressful conditions were the two greatest assets I picked up."

 	
 After three years, Wells returned to UT, where he was awarded a Robert A. Welch fellowship and finished his education. Interestingly, he said, his primary professor was George W. Watt, the Plutonium Recovery Group Leader on the Manhattan project.
 	
 Oxygenated fuels start
 Wells started in the lab at Celanese Chemical Company (Dallas) and moved into field sales within three years, "exactly as Professor Watt predicted," he said. 
 	
 "I wanted to see what was going on with the chemicals we were making." Celanese sold 41 different oxygenated chemicals, most made from natural gas as a raw material, some from butane. During his last three years with Celanese Chemical Company, Wells focused on methanol as part of a "fledgling" fuel methanol development unit. 
 	
 "It was in this time that I became enmeshed in public policy aspects of alternative fuels and knew I was hooked," he recalls. "As I became aware of ethanol for fuel, I became intrigued with this product that the rest of my colleagues considered the "enemy". . . I was backing the wrong horse in this fight, and when an opportunity came to move into the ethanol camp, I took it." 
 	
 Ethanol career begins
 Wells had been involved with ethanol extensively since 1985, at Chemical Fuels Corporation and affiliate American Eagle Fuels, in Atlanta, where he did ETBE work and once briefed former President Bush.
 	
 He became president & director of marketing at Murex (Dallas) in 1990, and helped the company begin marketing ethanol in addition to MTBE. Today, ethanol marketing is among Murex's primary businesses. 

 	
 Wells made another change in 1992, taking a job with Heartland Grain Fuels, in Aberdeen, S.D. "I deliberately looked for a GM job in the manufacturing side of ethanol," he said. He came on six months before construction was finished, helped the Farmland project manager get the job done, hired all the employees, started up the plant and set all the procedures in place. 
 	
 "Back then, there was no networking possible among other co-op plants, we were pretty much on our own.," he remembers. "We stabilized production, made some improvements and got production up 25% in two years, and I left as they were in the midst of a highly profitable year. I was very involved in the local community as I never have been before or since, and I really loved that aspect. (He even performed a bit of stand-up comedy at a local night club on occasion. . . I bet you didn't know that). 
 
 Selling & building
 In 1994, Bill moved to Delta-T Corporation, as vice president of marketing, just as the "Minnesota Model" was taking shape. 
 "I was in Minnesota for five months while we finished construction and started up the Winnebago (Corn Plus) plant, and then we moved to Williamsburg, Virginia. Not too long thereafter, we did the Benson (Minn.) plant." 
 	
 With Delta-T, Wells traveled the country selling the company's plant technology and he got to know many farmer groups as the modern method of plant ownership evolved, he said. He also traveled to South America and Asia, and so widened his contacts and perspective on ethanol even further. 
 	
 "I took my first of three trips to Asia for the U.S. Grains Council with Mike Bryan during this period, I guess we were sort of Ethanol Ambassadors for America in Taiwan on that trip. It was an experience Mike and I will never forget."
 
 The Fagen Inc. years

 In 1998, Wells became Fagen Inc.'s VP of Industrial Development, a position he would stay at until he departed for Australia.
 	
 "The lure of the Midwest ethanol industry is strong, and once again I came back, this time from Virginia to Minnesota, right in middle of the biggest expansion our industry had seen to that time. I had never worked for a construction company before, but their reputation was sterling and they were playing in fertile ground. I mostly did what I like to do best, working with farmer groups who organized to build ethanol plants. I took great pride in working for a company where, when I made a promise to the farmers, Fagen could and did deliver," Wells said, adding, "Ron Fagen has done things for so many of these groups that has gone far beyond business, he has stuck his neck out, and put his company on the line, to share in their dreams and help them get into business, and it has never backfired. The people there had excellent instincts for what was a good project and the will to push it over the line. The resources were there to get the job done, and as I left we had projects ongoing and stacked up in line as this new wave of plant building broke. I guess you could say I left on the crest of a wave of plant building, and Fagen got an excellent share of that business. I am proud to have been a part of that effort."
 
 New beginning Down Under 
 Wells said he moved to Australia, in part, because his wife Robyn Wells (a New Zealand citizen) is managing the largest ethanol plant in Australia, the CSR Distillery in Sarina. He is also excited about all the current ethanol developments in Australia. 
 	
 "As part of my new business, Wells Enterprises International, I am working with a firm wishing to enter the fuel ethanol business, but who needs help countering resistance from oil companies and some negative public sentiment. Sounds familiar? All the same things being said that we had to counter all those years ago (in the U.S.), but now we are armed with so much more good information."	
 	
 Wells took off his first three months in Australia to manage the house and kids, and to get acclimated to the culture and climate, he said. 
 	
 "We have cockatoos and fruit bats in our yard trees, and some of the most beautiful beaches you have ever seen 10 miles from our house," he explains. "I miss some things about the U.S., especially my friends, relatives, and cold weather at Christmas, but not so that it really bothers me. I am really excited about our lifestyle and prospects for my business."
 
 On the industry's future 
 "I believe that U.S. fuel ethanol will continue to grow very strongly, as it has in the past; that is, in a series of "grow and plateau" cycles as events occur that drive new demand. I am unaware of any industry that has grown as sharply as ethanol has in the past two decades, especially in the Midwest," Wells explained. "Because of the size of the U.S. gasoline market, there is still great room for further ethanol expansion. The reasons this growth may not be as fast as some would like are various, but they all center around MTBE and related ethers. 

 	
 "It looks to me that fuel ethers are not dying quietly, and maybe that is as it should be." 
 	
 As for technology, Wells said he thinks the industry will move toward gasification-reforming-Fischer Tropsch synthesis. 
 	
 "This does not mean that corn kernels, as they are used today, will fall out of favor. It is my opinion that that is the perfect biomass for ethanol feedstock, primarily because of the excellent logistics network that has been developed in terms of harvest, storage and transportation. It is my opinion that corn is indeed the bridge to biomass, but the surprise is that the most successful form of biomass will be corn itself," he said. n

Former Fagen, Inc. executive Bill Wells, now living in Australia,  hangs new shingle as CEO of Wells Enterprises International

Ethanol Ambassador Down Under

In 1984, a rocket engineer had an idea to replace the problematic azeotropic distillation process for ethanol dehydration with a new generation of molecular sieve adsorption technology. Bibb Swain's molecular sieve systems helped make the ethanol manufacturing process safer, cleaner and more energy efficient - making it more economically feasible to use ethanol as an energy source. These types of molsieves quickly became the new standard for dehydration in alcohol process design. With 35 molsieves in operation and 10 others currently in construction, Delta-T has more alcohol references than all other molsieve designers in the world combined, according to a company spokesperson.
 	
 In recent years, Delta-T has been breaking new technological ground in industrial and beverage alcohol markets by utilizing its latest molsieve, distillation and purification technologies to produce high-value, ultrapure ethanol. The company designs plants that produce "ultrapure" and "ultradry" ethanol that contains less than 50 ppm moisture and single digit ppms in other product constituents (industrial-grade alcohol is nearly 100 times purer than typical specifications). Delta-T's recent projects in these high quality alcohol markets include single installations with Equistar Petrochemicals and Kraft Foods, and multiple installations with Grain Processing Corporation (GPC), South Africa Oil Company (SASOL) and The Amylum Group.
 
 Zero-process wastewater 
 On the heels of its ethanol dehydration success, Delta-T turned its attention to the design of the entire ethanol process. In 1993 Delta-T designed one of the industry's most energy efficient ethanol plants, Corn Plus, in Winnebago, Minn. This was the first ethanol plant ever to incorporate zero process wastewater technology - eliminating the need for wastewater treatment, according to Delta-T. 
 	
 Since then, Delta-T has claimed other technology firsts in ethanol plant design, including: a fermentation process that can be switched with the push of a button from continuous to batch without loss of capacity; a patented carbon dioxide recovery process that produces an ultrapure product; and a built-in deacidification system that eliminates the need for costly chemicals to pH treat the final product. 
 	
 Today, with the advent of new thermal oxidizer systems, Delta-T says it designs plants that are among the most environmentally sound ethanol facilities in production. 
 

 Capabilities
 Its current 36-person staff provides all the engineering, procurement, and construction functions needed to build a new turnkey Delta-T ethanol plant. The company also offers marketing services for both ethanol and distiller's grains products. Its technical services group provides consulting for operations, plant management services, and maintains ongoing maintenance and advanced training agreements with companies such as Equistar Petrochemicals, Kraft Foods, and GPC. 
 Delta-T VP/Operations, David Adams, recently joining the company from Foster Wheeler, stated, "The pool of talent and industrial experience is strong here. The project managers have significant prior experience with large EPCs and the engineers and technicians have a balanced mix of process and hands-on field expertise. Delta-T has partnered with corporate giants and some of the largest and brightest engineering firms-and provided original solutions for their alcohol projects, and then helped make them come to fruition." 
 	
 Forging strong relationships
 Delta-T's business development group has made strong inroads to help U.S. farmers develop their own projects, raise equity, and obtain financing through partnerships with banking centers and alternative creative ventures. They are also focused on assisting emerging fuel ethanol markets in Mexico, Australia, India, and wherever there's an interest in greener fuels. 		Larry Johnson, U.S. Business Development Manager, and a former Minnesota farmer, says his main concern is better communicating to corn growers who invest in ethanol plants about the unique advantages that Delta-T can bring to their business. 
 	
 "In my opinion, many farmer groups lack the technical resources, that the corporate segment has, to calculate and verify real performance and long-term returns," Johnson said. "A permanent association with a technology leader will enable an ownership group to profitably control and operate their own business, while contributing to profit from new Delta-T innovations and improvements as the market matures." 	
 		
 Current projects
 In the US, Delta-T is currently working on three fuel ethanol plant projects - two 20 mmgy expansions for Corn Plus and CVEC ethanol plants in Minnesota and a new 15 mmgy plant for ACE Ethanol in Wisconsin. In another transaction not yet announced to the public by the owner, Delta-T just executed an agreement for the design and equipment supply of a large fuel ethanol molsieve dehydration project for an existing ethanol facility.
 	
 In development in the U.S.; Delta-T has been selected to provide a 20 mmgy fuel ethanol plant for Algoma Ethanol in Oshkosh, Wisconsin, and expects to begin design in February 2002. Delta-T was selected to be the technology provider for a 250 mmgy ethanol plant to be located within the Foxhall Energy Park on the East Coast. This plant will be the largest ethanol facility of any type in the world and is targeted to begin construction in late 2002. Delta-T is currently vying for five other known fuel ethanol plant projects that will be awarded over the next few months.
 	

 Internationally; Delta-T is nearing completion of the design of a 120 mmly fuel ethanol plant for Commercial Alcohols, the leading producer in Canada. Construction is expected to begin mid-year. Also, the company is just completing the startup of three molsieve units for industrial alcohol applications in Europe, including the largest installation in the world for one of the largest chemical producers in Europe.
 	
 On the international development scene; Delta-T has been selected to design a 66 mmly fuel ethanol plant in Ontario, a 30 mmly plant in northern Mexico, and has been contracted to perform a feasibility study for a sugar cane feedstock ethanol plant in east-central Mexico. The company has also penned an agreement to design the first fuel ethanol plant in Australia-now in the latter stages of project development.
 	
 In October 2001, Delta-T signed an agreement with Praj Industries, the leading alcohols technology provider in India, to license Delta-T fuel dehydration technology exclusively in India and parts of Southeast Asia. Luciano Cantafio, Vice President Marketing, stated that Praj has already obtained six contracts providing the molsieve technology in six months.
 	
 Rob Swain, Vice President Finance & Business Development, said Delta-T is nearing an agreement with a large EPC organization to partner on design/build ethanol projects both in and outside the US. 
 	
 "Our alliance will bring more than a billion dollars of bonding capacity to projects, expanding the opportunities to provide turnkey solutions to nearly any size project. We are exploring other alliances related to marketing, equipment and materials supply with companies that share Delta-T's commitment to quality, customer intimacy, and market leadership. We are seeking talented, ethical partners to help us deliver better value to our customers."

‘High-tech' engineering firm has 35 molsieves in operation and 10 others currently in construction

Internationally-based Delta-T Corp. still highly focused on domestic ethanol production

Several of Minnesota's top ethanol producers say the state's plan to cut producer payments is "short-sighted," but most also say they're strong enough to take a small hit. 
 	
 A budget proposal offered by Gov. Jesse Ventura now threatens to cut the state's well-known producer payment from 20 cents per gallon to 18 cents per gallon. If Ventura's budget is accepted by the state legislature this session - and if the cut is retained through 2010 when Minnesota's ethanol program is slated to end - the state will pay $22,396 million less to its ethanol producers, cutting into shareholder dividends and "punishing" one of the nation's most successful farm-based programs. 	
 	
 Arguably the nation's most progressive, and multi-faceted ethanol state of the 1990s, Minnesota is widely credited with developing a template for small-scale ethanol production incentive programs. 
 	
 The "Minnesota Model" provides a producer payment of 20 cents per gallon, up to 15 million gallons of ethanol produced per year for a maximum of 10 years. The payment is limited to in-state producers and the small-scale requirement has resulted in the formation of a dozen farmer-owned ethanol cooperatives. 13 of 14 plants in Minnesota currently receive a payment. Aspects of the model have been effectively used by several other states that developed ethanol programs in recent years and the it has been hailed as the industry's ideal ethanol program. 
 
 What will a cut do?
 Most plant managers agree the a small cut won't bankrupt ethanol plants if it is enacted. Nevertheless, said Chippewa Valley Ethanol Company General Manager Bill Lee, the cut will certainly lower shareholder dividends and make financing plant expansions less attractive to investors. 
 	

 "We'll certainly make it. I think all Minnesota producers will," Lee told Ethanol Producer Magazine this month. "But why would a state punish a program because it's successful?"
 	
 Lee and others argue that ethanol plants have become an important part of Minnesota's rural economy, noting that ethanol operations often increase corn prices by 5 cents to 10 cents a bushel in local markets and bring additional income to over 10,000 Minnesota farmers who own shares in the facilities. 
 	
 In a recent issue of AgriNews, Tony Simpson, general manager of EXOL, in Albert Lea, Minn., echoed Lee's sentiments, saying, "We're not crazy about this. We understand the state has issues, but we want the legislature and governor to look at not cutting something that returns so much to the state. To cut (producer payments) right now is short sighted. . . We don't want to throw stones at the governor. We want to discuss ways to keep the program."
 	
 David Kolsrud, chairman of the Minnesota Coalition for Ethanol, recently told the Minneapolis Star Tribune that many of the state's ethanol producers are still seeking ways to work with the legislature on producer payment cuts. 
 	
 "As an industry, we want to work with the governor to find some solutions," Kolsrud said. "The reduction is going to hurt, but we are certainly not going to drive a stake in the ground."
 
 New state spending unlikely 
 While Minnesota's producer payment will remain relatively intact, industry analysts are less optimistic about recent efforts to expand the state's ethanol program to new groups. 
 	
 "I would guess that most of the spending in Minnesota has already happened," said Ralph Groschen, an ethanol marketing expert at the Minnesota Department of Agriculture. ". . .Most of the (new construction) appears to be going forward in other states."
 	
 So does that mean proposed ethanol projects, such as the one the Agricultural Utilization Research Council (AURI) helped research in northwestern Minnesota last year, is on hold indefinitely? Probably so, Groschen said. 
 	

 "The (state budget) certainly is not in very good shape and that will make things more difficult for those groups," Groschen said.
 	
 Last year, Minnesota state legislator Tim Finseth presented two ethanol-related bills to the House Agriculture Finance Committee. This unsuccessful legislation called for the creation of a local wheat and barley ethanol operation and encouraged the development of second-generation ethanol plants throughout the state. The first bill sought to authorize producer payments for barley or wheat farmers and would have provided funding for an ethanol project in northwestern Minnesota. The other bill would have increased available funding for ethanol producer payments and provided a competitive grant process to encourage development of second-generation ethanol facilities. 
 	
 Ethanol producer groups who were successful in developing this technology would have received preference for the expanded producer credits, according to the bill. The producer payments outlined in the bill would have allowed for the creation of up to three additional plants in Minnesota, an effort not all existing Minnesota producers agree with. Currently, two ethanol-friendly proposals are again being discussed by Minnesota lawmakers. One would extend payments to all eligible ethanol plants for two extra years (2012), and the other would give newer plants a break on the pending cut, helping them pay down debt.

Ethanol's ace state may cut its producer payments by more than $22 million through 2010, state's producers remain confident

Ethanol plant profits should remain solid in face of budget cuts

Steve Core has been named General Manager of Fagen Management, LLC, the newest of the Fagen companies. Core comes to Fagen with 30 years experience in management positions within the agricultural industry. Most recently, Core was the GM of Corn Plus Ethanol in Winnebago, Minn., where he managed 34 full-time employees and an annual production of 44 mmgy with sales in excess of $50 million.
 	
 Core is currently consulting with a Minnesota group on a proposed new ethanol facility. Fagen's first management contract will be with the KAPPA group in Kearny, Neb.

Core is GM of Fagen Management, LLC

John Ashworth, a former utilities industry executive with more than 25 years experience in energy systems commercialization, market research and energy technology management, has been hired as Team Leader, Biofuels Industrial Partnerships, at the National Renewable Fuels Laboratory (NREL) in Golden Colo. 
 	
 At NREL, Ashworth's primary responsibilities are to build partnerships with private firms for the commercialization of NREL-based technologies, such as the enzymatic hydrolysis of cellulosic biomass-to-ethanol projects. 
 	
 From 1998-2001, as president of Power & Performance Solutions, Ashworth provided technical assistance to electric and water utilities and Native American communities in building partnerships for commercializing emerging renewable energy systems. Ashworth actually started his career at NREL many years ago (when it was still SERI).

Ashworth takes position with NREL

Supporters of a third ethanol plant in North Dakota s Duane Dows, chairman of Dakota Renewable Fuels group hoping to build a third ethanol plant in North Dakota has said that project is moving forward as planned. Organizers plan to choose a construction company and engineering firm early next month and then pick a site for the plant. In March, the committee would hold informational meetings for farmers, with a membership drive to follow sometime this summer, he said. North Dakota has ethanol factories in Walhalla and Grafton, in northeastern North Dakota, that together are capable of producing 34 million gallons each year. N.D Gov. John Hoven recently mandated

N.D. group moving forward ethanol plans

Now that the first installation of a thermal oxidizer air pollution control system for DDGS dryer emission clean up is up and running, it's a good time to review how the unit has performed. Thermal oxidation technology has been applied to thousands of industrial sources in a wide variety of industries. The nation's first urban ethanol plant was also the first ethanol plant to incorporate this technology for DDGS dryer exhaust clean up, but it will definitely not be the last.

 	
 The St. Paul, Minn. facility is a maximum 20 mmgy plant. As facilities get larger, the application of oxidizer technology will allow plants to remain minor sources of air pollution with respect to Federal Title V air permit regulations. According to Todd A. Potas of the Environmental Resource Group, it is questionable whether ethanol production facilities larger than 20 mmgy can remain minor sources of particulate and volatile organic emissions without the implementation of pollution control technology.
 	
 The MMT Environmental SIGMA series thermal oxidizer was originally selected because it provides an effective method for the control of odorous emissions. However, it soon became apparent that the oxidizer's high destruction efficiency of other pollutants such as Volatile Organic Compounds (VOC's), Hazardous Air Pollutants (HAP's), opacity, condensable and non-condensable Particulate Matter (PM/PM10) offered significant benefits to the ethanol industry. While odor destruction keeps the neighboring community happy, the destruction of other pollutants keeps the regulatory agencies happy and assures plant environmental compliance.
 
 Results in St. Paul
 The results from various stack test programs conducted on the St. Paul thermal oxidizer have proven greater than 99% destruction of VOC's and opacity emissions of zero. Also, the PM/PM10 concentrations have been reduced to less than 0.01 grains per cubic foot out the stack.
 In addition to the high degree of emission clean up, the oxidizer was equipped with a waste heat recovery boiler designed and manufactured by Victory Energy Operations, LLC. As predicted, the system is providing significant thermal energy benefits to the plant compared to the existing conventional natural gas-fired boilers. The original predicted efficiency of greater than 90% was tested and confirmed in the field at the completion of the commissioning of the waste heat boiler.
 
 With the continuing need for efficient steam generation, it is essential for the equipment to operate as efficiently as possible, while maintaining an energy balance with the plant's steam requirements. The control system which monitors the fluctuating load changes and header pressure changes must be an intricate part of the system design. 
 	
 As more thermal oxidizers and waste heat boiler systems in other ethanol plants in the industry are installed, careful consideration must be given to the following key areas as a direct result of our experience with the first system installed over 8 months ago: 
 
 -Maintaining steam header pressure within +/- 5 psig range.
 -Maintain steam generation to the plant while the DDG dryer is not in operation (i.e. fresh air firing).
 -Maintain drum level control in the HRSG during fluctuating steam demands.

 -Integration of the thermal oxidizer/ HRSG control system with the plant DCS control system.
 
 The work continues
 Now with several more systems in fabrication, ethanol developers and producers will continue to benefit from the efficiency of the package system, accroding to Viskup. 
 	
 "The thermal oxidizer and the waste heat boiler package will provide guaranteed emission reduction, up to 99% destruction of odorous emissions, VOC's, HAP's, opacity emissions PM/ PM10, and steam system operation efficiencies of greater than 90%, thus lowering the overall operating costs of your plant," Viskup said.

Results show over 99% destruction of VOC's, zero opacity emissions

Tech Update: thermal oxidizer/waste heat boiler for DDGS emission control

Energy-hungry India is attracting top international ethanol industry suppliers and service providers to its shores. Design-builder Delta-T Corporation, and enzyme providers Novozymes and Genencor International are among several companies already doing business in India. 	
 
 Meanwhile, the conference division at BBI International is working with Indian producers and government officials to plan an ethanol conference in India, as the nation is encouraging the use of five percent ethanol blends nationwide. 
 	
 India's ethanol is made from both sugarcane and tropical sugar beets. Shanta Kumar, the nation's food minister, has publicly stated that the government may give low-interest loans to sugar mills so they can purchase ethanol manufacturing equipment. Already, Indian sugar factories are setting up new distilleries and upgrading plants in preparation for an ethanol boom. 
 	
 According to Reuters English News Service, India has about 450 sugar mills, but only 125-130 units have distilleries to produce alcohol. The nation produces 1.3 billion liters of alcohol per year, which is largely consumed by chemical and alcohol-based industries. India is Asia's largest sugar producer and currently has an excess distilling capacity, officials said.
 	

 Similar to the oversupply problems sugar beet growers are facing in the United States and Mexico, sugar producers in India are struggling to manage "mountains" of sugar stock and have high expectations for the nation's ethanol plan. 
 
 Praj Industries looks to U.S. molsieve technology
 PRAJ Industries, Ltd. has tied up with U.S.-based Delta-T Corporation to sell dehydration units to alcohol distilleries in order to produce fuel ethanol. 
 	
 Under a licensing agreement with Delta-T, Praj Industries will sell molecular sieve dehydration plants that will produce 99.8 percent pure anhydrous ethanol. The plants will be able to produce ethanol from both cane molasses and grains, allowing it to operate on a variety of feedstocks throughout the year, according to Praj Managing Director Pramod Chaudhari.
 
 Tropical sugar beet patent
 Furthermore, Praj Industries has started the process of filing for a patent for its sugar-to-ethanol technology, which reportedly by-passes the production of sugar in the first stage. The company, which specializes in developing alcohol technology, is stepping up its work in the area of research and development.
 	
 "Sugar beet has a growth cycle of five months as opposed to the 12-month cycle of cane sugar," Chaudhari said in a company statement last month. "(Tropical sugar beet) has more sugar in it and it requires less water for cultivation (than sugar cane)."
 	
 Chaudhari has pointed out that sugar factories could use the crop to extend the crushing season which is often curtailed prematurely due to non-availability of sugarcane. Praj Industries is preparing to start a research and development effort on the project, which could start showing results by next year. Chaudhari said the company, which has been on a downtrend since 1999, is now on the turnaround path. The license agreement with Delta-T is expected to add at least 30 percent to the company's turnover in the first year. 
 	
 Enzyme business

 U.S.-based enzyme-producing competitors Novozymes and Genencor International both have significant interest in the developing India ethanol industry, officials from both companies confirmed. 
 	
 Novozymes is making a "significant effort to develop the ethanol market in India," a company spokesperson said. In fact, one of the company's Indian employees recently spent 6 months training with its ethanol technical team in the U.S., visiting many accounts and learning the North American ethanol market.
 	 
 BBI plans world biofuelsconference in India
 	
 Colorado-based BBI International, organizer of the 2001 World Fuel Ethanol Congress in Beijing, will team up with the Confederation of India Industries (CII), during the last quarter of 2002 to present a world biofuels conference in New Delhi, India, said Angela Graf, BBI International director of conferences and international development." 
 	
 "The conference will focus on the development of a biofuels industry in India, including ethanol blended fuels, biodiesel and ethanol-diesel blends," Graf said. n
 
 For more information on the conference, contact Angela Graf at BBI International, 719-942-4353 or <a href="mailto:angela@bbiethanol.com">angela@bbiethanol.com</a>

U.S. based ethanol industry suppliers get involved early

India aggressively pusues ethanol, converts distilleries

Kabo Chemicals, Inc., longtime chemical supplier to the ethanol industry, was acquired by Lubrizol Corporation last month. Cheyenne, Wyo.-based KABO will continue to specialize in the development, manufacture and sale of antifoam and defoaming agents to the food, fermentation, mining and wastewater industries. There will be no personnel changes and Bob Hatch will remain president of the company. 			
 Lubrizol is namely a "fluid technology company" concentrating on high-performance chemicals, systems and services. 
 	
 "With this acquisition," said Kabo Chemicals Vice President of Operations Frank Magazine, "we will extend our coverage of the antifoamer and defoamer market internationally." 			KABO's sales, manufacturing and distribution centers west of the Mississippi complement Lubrizol's existing defoamer operations on the East Coast. In addition, KABO's product lines expand the defoamer offering and capabilities of Lubrizol's "fluid technologies," Magazine explained. Furthermore, Kabo will join forces with Rosschem, another U.S. chemical company recently acquired by Lubrizol, adding additional resources. 
 

 Kabo's Capabilities
 Kabo Chemicals, in its new capacity as a Lubrizol company, has increasing capabilities to serve a multitude of industries, including the ethanol industry. 
 	
 Specific to the needs of certain ethanol producers, KABO manufactures and markets specialized defoamers and antifoams, as well as de-scalants and anti-scalants that are heavily used in corn wet-milling and, to a lesser extent, in the dry-mill ethanol process. Antifoam chemicals are added during fermentation to keep foaming minimized and also to keep the broth as stable as possible. Defoamers "knock down" foam that has already formed. These chemicals are often custom designed for ethanol producing clients, Magazine said. 
 	
 Anti-scalants are designed to prevent scaling (buildup) in the evaporator systems. And de-scalants are sometimes added to remove scale that is already built up.
 	
 According to Magazine, Kabo serves every major ethanol wet-mill in the U.S., with increasing business partnerships overseas. 
 	
 "We recognize the ethanol industry is growing globally and we are building this division as an entity that serves customers on an international basis," Magazine said, adding, "Lubrizol is one of the newest members of the RFA - and Kabo is an existing RFA member. Together, we are maintaining a strong partnership with the ethanol industry. The ethanol industry is here to stay and we plan to remain closely involved every step of the way."

Lubrizol acquires KABO Chemicals, Inc.

Bratney Companies has named Larry L. Groce to a newly created position of Vice President - Business Development. Groce will be managing the development of new client services in expanding ethanol & biodiesel processing sectors, as well as developing further Bratney's agricultural engineering and construction services to traditional clients in the seed, feed, grain, food and bulk handling business sectors. Prior to joining Bratney Companies, Groce managed the Producers Alliance value-added agricultural development of the Midwest Grain Processors ethanol project in Lakota, Iowa with Ag Ventures Alliance.

Larry Groce moves to Bratney Companies

Tony Simpson, General Manager of the EXOL ethanol facility, has excepted a new position as  General Manager of a plant in Caro, Mich.  "I have been given an opportunity to grow within the Broin organization and to run a new facility. The hardest part of making this move will be leaving the wonderful people that I've come to work with through EXOL.," said  Simpson. He will be assisting the training of Rick Mummert, EXOL's new manager, through March 11.

Broin promotes Tony Simpson

The first of a two-year U.S. Department of Agriculture bioenergy program yielded an increase of 141.3 million gallons of ethanol, the agency recently announced. Under the program, which began in FY 2001, the Commodity Credit Corp. provides payments to producers to offset part of their cost of buying commodities used to expand eligible production. Payments for FY 2001 were $32.74 million for increased ethanol production.
 
 Valero to build ethanol-blending refinery 
 Valero Energy Corp. was recently given permission to proceed with construction at its Benicia, Calif., refinery that will enable the plant to produce ethanol-blended gasoline in time to meet California's looming MTBE ban deadline. The project was delayed in mid-October, after union workers challenged the company's building permit, claiming the Bay Area Air Quality Management District issued the permit without completing appropriate background reports.

USDA program yields 141 mmg of ethanol

KAAPA Ethanol LLC has announced the successful completion of an investment drive to raise funds to construct an ethanol facility near Kearney, Nebraska. "We are excited to report that all 1500 shares offered for sale have been subscribed to and that majority control of the company resides with farmer investors," stated a KAAPA press release. 
 
 With favorable construction weather production is set to begin midyear 2003. The KAAPA facility - which will be built by Fagen, Inc. of Granite Falls, Minn. - will produce 40 mmgy and employ over 30 people.

Fagen to build KAAPA Ethanol, LLC plant

We are so very proud to be able to present to you this inaugural issue of Ethanol Producer Magazine. It is only fitting that as the ethanol industry grows, so should the publication that serves it.

 	 
 Coming at the end of this month, the National Ethanol Conference: Policy and Marketing has become a mainstay in the industry. This year, over 500 will attend from countries around the world. Fuel ethanol is taking priority status on a global level and the National Ethanol Conference helps further motivate that activity. Once again, the Renewable Fuels Association has created an agenda most worthy of the your participation.
 	 
 While there is much indecision over a variety of issues relating to ethanol, plant development continues at a furious pace, with 15 new plants under construction and more than we can count in terms of proposed facilities. This is in addition to the expansion of nearly every existing facility. At the 2001 National Ethanol Conference, the industry boldly declared, "We can and will supply California," there were certainly those who doubted that statement. Now, only one year later, there should be no doubt. We can supply California and the rest of the country as well. American agriculture has always risen to the challenge and this is no exception.
 	
 2002 will be filled with decisions that will affect our future. From a Renewable Fuels Standard to oxygenate waivers, to a host of state incentives that will help support ethanol production, this will be an exciting year to say the least. Through it all, we know ethanol will prevail. Why? Because there are no other reasonable alternatives that can be implemented in time to prevent further degradation of our environment. We encourage all types of alternative forms of energy. But the fact remains, that the only large-scale, readily available, renewable liquid fuel is ethanol. This is something that no one can dispute.
 	
 Congress knows it, consumers know it, and the world knows it. All we can say about 2002 is…bring it on!

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2002 will be filled with decisions that will shape our industry's future

The Way I See IT

Considering Chippewa Valley Ethanol Company's landmark performance in 2001, it came as no surprise when the Benson, Minn.-based cooperative signed 240 new investors last fall and, within weeks, comfortably raised 45 percent of the equity it needs to double its nameplate capacity. Soon, CVEC will join Corn Plus and EXOL as Minnesota's third 40-plus mmgy ethanol plant. 
 	
 When Ethanol Producer Magazine visited CVEC late last month, the coop was moving forward with the expansion, even as the state was considering cutting its ethanol producer payment by 10 percent (see article on page 9) and ethanol prices nationwide remained marginal. CVEC General Manager Bill Lee said the cooperative's 18-person board has a unique vision for CVEC and believes the time to invest in the plant's future is now, while the industry is expanding at a record pace. 
 	
 "Together, we have prepared CVEC both offensively and defensively," Lee explained. "A good company readies its offense in good times and takes a strong, defensive position when markets aren't so favorable. An ethanol plant must be able to walk through the valleys of pain and survive. We want CVEC to be strong enough, and diversified enough, to do that."
 	
 Certainly, CVEC is among the nation's most progressive dry-mill ethanol plants. While last year's ideal grind margin (high ethanol prices coupled with low corn prices) had the greatest impact on CVEC's profitability, the cumulative effect of continued improvements in operational efficiency - new records in production, yield and energy efficiency - was significant to the plant's bottom line as well. 
 
 Expansion project

 For several months, Lee said, the CVAC board and CVEC plant managers discussed various expansion alternatives and associated levels of risk. A key factor in the group's final decision was, in fact, President Bush's denial of the California waiver and other supportive market trends that surfaced last year. In August 2001, the cooperative's shareholders voted "overwhelmingly" to expand the number of shares the cooperative could issue from 12 million to 20 million, and in doing so, endorsed the board's plan to proceed with CVEC's expansion. The cooperative's equity drive has already raised nearly half of the total cost of expansion, Lee told Ethanol Producer Magazine. Most new investment dollars came from existing shareholders, which are still mainly farmers. 
 	
 Beginning in March, CVEC will begin its expansion. Design-builder Delta-T will provide the process design; Delta-T built CVEC in 1996 and, at one time, had an ownership stake in the plant before it became "100 percent co-op-owned," Lee said. 
 	
 As reported in The Energy Independent newsletter in December, Adrian Galvez, formerly Delta-T's director of engineering, has been hired by CVEC as a technical manager. Galvez, a respected engineer and 22-year veteran of the corn processing and ethanol industries, will oversee most aspects of CVEC's expansion. 
 	
 "With the expansion," Galvez said, "CVEC will integrate design techniques that are very similar to Delta-T's original design. Again, it will be a zero-process affluent design. . . I can also say we will be installing a thermal oxidizer."
 	
 Expanding and upgrading the plant is nothing new at CVEC. Among other projects in 2001, a sixth cooling tower cell was added to the plant, providing additional cooling for the fermentation process in warm weather, helping CVEC maintain higher production rates. 
 
 Diversification 
 "Diversification" and "innovation" are more than just cliché buzz words at the Benson plant. The cooperative is clearly committed to increasing the diversity of its operation as a "key strategy" towards building long-term performance. 
 	
 "We're not going to sit still," said Kelly Davis, CVEC quality manager. "We want all kinds of products coming out of this plant, not just fuel alcohol."
 	
 Glacial Grain Spirits (GGS), the cooperative's industrial alcohol division, is in integral part of CVEC's long-term plan to market diverse products. GGS produces an alcohol that is within a specialty niche market, Lee said. "And it's our highest value product," he added. The cooperative recently installed a drumming operation in its load-out facility capable of filling 55-gallon drums. CVEC, along with its industrial alcohol partner, Corn Plus, commissioned the commercial expansion of the GGS facility last winter, and began production again in April. In September 2001, GGS also began selling denatured alcohol. The co-op now produces four different types of denatured alcohol and plans to expand its line further, as market conditions for these products are expected to improve, Lee said.

 
 Co-products & marketing
 CVEC's DDGS is effectively marketed in dairy, beef and poultry applications (with increasing efforts being pursued in the swine market) both in Minnesota and out of state. The plant also produces wet distiller's grain and condensed distiller's solubles. CVEC takes great care in achieving co-products with a high degree of specificity, and it has paid off. The plant has customers on the West Coast that solely request their DDGS, Davis said. 
 	
 CVEC is a founding member of Renewable Products Marketing Group, LLC, a company formed by Minnesota ethanol producers to cooperatively market ethanol. Other members include Corn Plus, Denco, Heartland Corn Products and Al-Corn. Together they market well over 130 mmgy, making it the biggest marketing block of Minnesota ethanol producers. 
 	
 Educating for the future
 CVEC was instrumental in developing the Process Plant Technology Program at Minnesota West Community & Technical College in Granite Falls, Minn. The first students to complete the program recently graduated and two of the recent grads are now employed at CVEC as utility operators. 
 	
 The Process Plant Technology Program was born as a partnership between the college, Minnesota Corn Processors of Marshall, CVEC and the state of Minnesota to produce trained technical workers for the agricultural processing industry.	
 
 Mitch Miller, CVEC's manager of operations, said he helped start the program not only to help CVEC build a skilled work force locally, but also to better train existing employees. 
 	

 "Almost all of these graduates will be picked up by ethanol producers or other local industries, Miller said. "The program gives these students the tools they need to contribute to the industry sooner and it puts their careers on a fast track." 
 	
 The fact that CVEC and other industries have been extremely cooperative in developing and operating the program demonstrates their hunger for trained technical personnel. American Crystal Sugar's Moorhead facility examined the curriculum and has reportedly asked to become a partner in the program as well. And Fagen, Inc., a Granite Falls, Minn.-based design-build firm, has expressed interest in program graduates to work in the start-up phase of its newly-built plants. 
 	
 Giving students the skills they will use in their future careers is an important element of providing a technical education, Miller explained. 					
 CVEC's partnership with Minnesota West Community & Technical College is another example of its progressive company philosophy: "(CVEC is). . .a socially responsible company committed to honesty, integrity and respect in its relations with customers, fellow employees, suppliers and its local and global community." The co-op and its board share a vision that looks far beyond today's market, and into the future of ethanol production. On behalf of the industry, we commend their efforts and wish them continued success.

Product diversification, employee education are key factors in Chippewa Valley Ethanol Company's long-term strategic plan

February 2002

Business Briefs

Ashworth takes position with NREL

Columns

The Way I See IT

Featured

RFA President Bob Dinneen reflects on ethanol industry's accomplishments, and its direction

Ethanol Ambassador Down Under

Internationally-based Delta-T Corp. still highly focused on domestic ethanol production

Ethanol plant profits should remain solid in face of budget cuts

India aggressively pusues ethanol, converts distilleries

CVEC prepares to double its production capacity

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Business Briefs

Ashworth takes position with NREL

Columns

The Way I See IT

Featured

RFA President Bob Dinneen reflects on ethanol industry's accomplishments, and its direction

Ethanol Ambassador Down Under

Internationally-based Delta-T Corp. still highly focused on domestic ethanol production

Ethanol plant profits should remain solid in face of budget cuts

India aggressively pusues ethanol, converts distilleries

CVEC prepares to double its production capacity

February 2002