A grand opening ceremony was held June 15 at a new ethanol plant in Grant County, S.D. Members of South Dakota's congressional delegation were in attendance, and organizers gave tours of the 40 mmgy plant. The plant was designed and built by Broin Companies for the Northern Growers Cooperative, a 650-member group. It will use 14.3 million bushels of corn a year. Broin will also manage the facility and market its ethanol under Ethanol Products.

Northern Lights Ethanol opens

If Ron Miller's career had to be summed up in a single sentence, it would look something like this: 
 	
 Ron is an ethanol man, who used to be an oil man, who went to college to be an engineer, (but like most engineers in the ethanol industry) ended up in business, picked up an MBA along the way, and now leads a division of a major U.S. corporation. 
 	
 Long story made short, Ron has done well - for himself, sure - but primarily for the people he has served. And that's what counts.
 	
 He is today President of Williams Bio-Energy, a division of Williams, a company that moves, manages and markets all kinds of energy, including natural gas, liquids, petroleum, ethanol and electricity. He is ultimately responsible for all ethanol production, product marketing and sales for the company (and that's no small job these days). Ron is a dedicated company leader who has, in fact, worked for just two differnt companies in 31 years - and the one move he did make was the result of an acquisition. He has earned a reputaiton for being dependable, driven, honest and above all, committed - committed to doing business the way it ought to be done. 
 	

 Williams is a progressive company that proudly says it abides by "enduring values, strives to do the right thing by its customers, employees, shareholders and communities, and has a steadfast commitment to excellence, unyielding integrity, and a handshake that's as solid as any contract." 		
 	
 That said, it's no surprise that Ron is among their top people. His friends in the ethanol industry say he exudes the qaulities Williams admonishes.
 	
 Ron's got what he calls "a knack for sales and business," that has undeniably helped him represent Williams Bio-Energy and the ethanol industry as a whole. 
 	 
 Serving five years (1996-2001) as chairman of the Renewable Fuels Association (RFA), Ron holds the record as the longest serving chair of the ethanol industry's national trade association, a title that he sometimes jokes about. 
 	
 "I had no intention of chairing the RFA for so long," he says. "I'm just a bad succession planner, I guess."
 	
 In actuality, Ron stayed on as chair of the RFA for five years, because the industry was fighting - and winning important battles, political and otherwise, on a national stage. 
 	
 "As chairman of the RFA , Ron provided strong, steady leadership when the industry was at a crossroads. Thanks in large part to his guidance, our industry embraced a future of dramatic expansion, diversification, and cooperation," said RFA President Bob Dinneen.
 	
 Ron handed over the RFA reigns to former High Plains Ethanol President Gary Smith last year, ending an eight year run where Williams Bio-Energy executives held the top RFA seat (former Williams Bio-Energy President Jack Huggins was chairperson of tthe RFA before Ron).
 	
 "I enjoyed it very much," Ron says, "It was a pleasure to take on a leadership role with the RFA. . . although," he added, "it is nice to go to meetings now and not have to run them. . . Gary Smith is doing an extremely fine job."

 
 Early years
 Ron's "knack for sales" helped him achieve early success after college. A few years after earning an environmental engineering degree from Southern Illinois University in 1967, Ron took a job in 1971 with the company his father worked for - Texaco. For the next 10 years, Ron held a variety of roles with Texaco, largely in sales positions, responsible for certain gasoline and aviation fuel accounts within a large region of the U.S. 
 	
 He has specifically applied his undergraduate degree only one year during his entire career, he said, when Texaco placed him in a environmental coordinator's position working largely with the EPA on issues such as spills and cleanups. He eventually moved on to middle and upper-level management positions with Texaco. 
 	
 In 1986, Texaco merged with CPC Internatioanl, Inc. and became Pekin Energy Company. Ron describes Pekin Energy Company as a "nice, independent-natured business that melted together two unique cultures and worked well." Three years later, Ron earned his MBA from the University of Illinois. 
 	
 In 1995, Williams purchased Pekin Energy and Nebraska Energy (now a 35 mmgy ethanol plant in Aurora, Neb.). Ron accepted a position overseeing the production and marketing of ethanol at the facility, and so began his career in ethanol.
 	
 "This industry has gone from early childhood to early adulthood in a very short time," he said. "When I started, Archer Daniels Midland (ADM) was seven times bigger than Williams. Next year, they will be only twice as large as Williams (including all ethanol marketing contracts). So we have made significant progress."
 	
 In addition to the Aurora ethanol plant, Williams owns and operates a 100 mmgy ethanol facility in Pekin, Illinois. Working with over a dozen independent ethanol producers, Williams will bring nearly 500 mmgy to market by 2003.
 
 On the industry

 "There is no doubt that the ethanol industry will triple - or grow even beyond that size - in the next 10 years," Ron said. "I think we will eventually have 3, 4, even 5 percent of the national fuel supply and ethanol will be seen as a standard component of most gasoline.
 	
 "To make this happen, I think we need more consolidation within the ethanol iondustry. Right now, we basically have eight major oil companies in the gasoline business; these companies do not want to deal with two dozen ethanol suppliers. They can, but they would prefer not to. The ethanol industry is still very fractionized (contrary to what the media likes to portray about it in regards to ADM). I think we will see more farmer-owned cooperatives consolidating (with major marketers of ethanol) in order to sell their products through major channels in the most efficient and profitable way they can.
 	
 "The ethanol companies that survive the long term will be those that have low cost energy, low cost feedstock, good outbound logistics and are prepared to add capacity for growth. 
 	
 "Down the road, I think the ethanol industry will be balanced between corn ethanol and biomass ethanol, and that's probably the way it should be. The possibilities for growth are virtually endless right now. n

Williams Bio-Energy president was the longest-serving RFA chair

Miller enjoys leading Williams Bio-Energy, sees continued growth for ethanol

The James Valley Ethanol plant has been moved up by two months, Broin Companies recently announced. Work on the plant is already under way. Broin Companies, of Sioux Falls, S.D., is building the plant about two miles west of Groton, S.D., on U.S. Highway 12, that will produce 45 mmgy and employ about 40 people. It will be the largest ethanol plant in South Dakota to date. Broin asked the local utility to hook up water temporarily to the construction site in early June.

Broin begins James Valley Ethanol project

Since I usually crab about something in this column, I thought for a change I would take the time to highlight some of the people and events that make our job so much fun. 
 	
 First I would like to bring your attention to the profile on Ron Miller of Williams BioEnergy. Ron is not only a good friend, but also a true leader in this industry. While he was Chairman of the Renewable Fuels Association (RFA), he was instrumental in helping move the ethanol and the oil industries toward a new spirit of cooperation. It has been a privilege to work with him. You'll find his story interesting.
 	
 Please also take time to read a question and answer segment coordinated by Neonila "Augusta" Martyniuk on the development of ethanol in the Ukraine. What a story and a challenge. It is exciting to see countries all around the world begin to explore the possibilities ethanol has to offer. Germany introducing dynamic new legislation, India implementing an ethanol program, China building new plants and Australia on the verge of virtually leaping into ethanol. The unbridled enthusiasm is exhilarating to say the least. 
 	
 In the U.S., we continue to build momentum, steadily moving forward. While there are still hills and valleys, they aren't quite as steep as they were 10 years ago and perhaps a little further in between. New plants coming on line are doing so in record time and with a success rate unimagined in years past.

 	
 Finally, I would be remiss, if I neglected to mention the International Fuel Ethanol Workshop, which has become such a dynamic event. From 40 people and no exhibitors in 1986 to over 1,000 attendees and 110 exhibitors with another 30 on the waiting list just 18 years later. It is a testament to the vibrancy of the ethanol industry.
 	
 So I'll save the crabbing for the next issue and close by thanking the advertisers in the Ethanol Producer Magazine and the sponsors and partners of the Fuel Ethanol Workshop for your unwavering support of ethanol worldwide.
 
 Have a great month.
 
 Mike Bryan
 President, BBI International
 mike@bbiethanol.com

190-1292253867.jpg

190-1292430128.jpg

Good things abound this month in the ethanol industry (no complaints here)

The Way I See IT

Grand Forks, N.D. - If one conclusion had to be made about the Ethanol In Avaition Conference, held last month in Grand Forks, N.D., it was this: research and development of ethanol-based aviation fuel looks promising, but attaining certification, supply security, and industry acceptance is going to be a steep uphill climb. 
 	
 That realistic outlook, according to industry experts, is undeniable because 100 low-lead (LL) aviation fuel (avgas) has been a stable, dependable piston-engine aircraft fuel for over a century, despite the fact that 100 LL is the only FAA-approved fuel in the U.S. still allowed to contain carcinogenic tetra-ethyl lead. In fact, avgas has four times more lead than was used in leaded automotive gasoline before it was banned from use in new cars in 1973. Nearly 30 years later, leaded avgas is still getting a free ride on the basis that it is the most economical method for achieving 100-octane fuel.
 	
 However, a growing number of researchers and environmentally conscience pilots, following in the footsteps of pioneer Max Shauck, of Baylor University, believe a high-octane ethanol-based fuel could - and should - eventually replace 100 LL. 
 	
 To this end, researchers, pilots and private industry representatives gathered at the University of North Dakota School of Areospace in Grand Forks, May 21-22, to address the pros and cons of widespread use of ethanol-based aviation fuel. Specifically, the discussions were focused on the potential of AGE85, formulated at the University of North Dakota Energy & Environmental Research Center (EERC), and tested and certified by South Dakota State University in Brookings, Great Planes Fuel Development in Watertown, S.D., Lake Area Technical Institute in Watertown, and Texas Skyways of Boerne, Texas. 

 	
 The Federal Aviation Administration (FAA) has certified the fuel, which is about 85 percent ethanol and contains a high-octane petroleum product, in addition to biodiesel for its lubrication and anti-corrosion properties. In flight tests and engine teardown inspections conducted in San Antonio, Texas, AGE85 was demonstrated to meet or exceed FAA performance, materials compatibility and engine component wear specifications. It was approved for use in several different models of Cessna aircraft equipped with Continental engines. 
 	
 According to Great Planes Fuel Development Corp. President Jim Behnken, the engine wear observed following the mandated 500-hour endurance test was so minimal that the FAA has waived the test as a requirement in future AGE85 certifications for additional aircraft models. 
 	
 The current avgas market in the United States alone is not huge: about 600-700 million gallons per year. It is an attainable market for AGE85, but the challenge lies in gaining acceptance in an industry that refuses to let go of lead. 
 
 Infrastructure challenges
 "Unfortunately, the industry uses (tetra-ethyl) lead," said Phillips 66 executive J. Mark Wagner, who spoke at the conference. "We would like something to replace it, and the EPA would too. Believe me, we would all like to see lead go away, but that's not going to happen overnight."
 	
 Wagner, who said Phillips 66 is not going to "naysay" ethanol-based aviation fuel, cautioned the developers of AGE85 to be cognisant of the extensive challenges that lie ahead in terms of infrastructure, distribution, and supply. Phillips 66, which controls about one-third of the U.S. avgas market, ships its product nationwide by truck, rail, barge and pipeline. At any given time, Phillips 66 has enough 100 LL in storage to serve its distributers for up to six months, Wagner said. 
 	
 "We have 75 years of trust built up (with 100 LL)," Wagner said. "I'm telling you that supply security is needed if (AGE85) is going to work." 
 
 ‘100 LL will not last'

 "100 LL aviaiton fuel will not last. . . its demise is coming," said William Schultz, a representative of the General Avaition Manufacturers Association.
 	
 That thought in mind, Schultz outlined the challenges that must be prioritized should a fuel such as AGE85 gain industry-wide acceptance. 
 	
 "The entire general aviation industry is designed around 100 LL fuel," Schultz said. "If ethanol should come into acceptance, there will be extensive physical and operational modifications that will likely negate much of the current operation safety and reliabilty database. . . the fuel would have to be performance satisfied, attain function reliability and eventually be system certified with other products."
 	
 To achieve these enormous challenges, Schultz reccomended, the stakeholders of AGE 85 must work together, and with the owers and operators of general aviation airplanes. 
 	
 "When you stand back and look at the big picture, there is an abscence of connectivity between the groups developing ethanol aviation fuels (and other stakeholders)," Schultz said. "These activities cannot be fragmented any longer. We must remember that whatever is decided, whatever is developed, there will be one fuel, so we need increased coordination immediately."
 
 ASTM recognition
 Ted Aulich, process chemist at UND's Energy & Environmental Research Center in Grand Forks, said AGE85 (or whatever ethanol-based avgas the industry chooses to accept) should be specified in conjunction with the American Society for Testing and Materials (ASTM). He said the process could take up to three years. 
 	
 "It's important to get this recognition from ASTM," Aulich said. "This process would define the fuel, and (standardize) its chemical and physical properties and requirements."
 	

 Aulich also addressed an idea for denaturing ethanol without using gasoline. The standard ethanol denaturing process, used at virtually all ethanol plants, would fall below the standards used for fuel in the aviation industry. Therefore, Aulich proposes that ethanol used for avgas be denatured with pentane isomerate in place of unleaded gasoline. His idea seemed to be well recieved at the conference. 
 
 Approval & acceptance 
 A panel composed of Federal Aviation Administration (FAA) Fuel Specialist Mark Rumizen, Expirimental Aircraft Association (EAA) Vice President Earl Lawrence, Lycoming Senior Installation Engineer Dan Fletcher, Coordinating Research Council representative Ron Wilkinson, and Aviation Owners and Pilots Association spokesperson Andrew Werking, together presented a composition of ideas and opinions about ethanol's chance of gaining acceptance in the aviation industry. The outlook was mixed at best. 
 	
 "The FAA is not pessimistic, nor optimistic, about (ethanol-based avgas)," Rumizen said. "We are an emotionless regulator."
 	
 Werking, who said he is optimistic about ethanol, said the developers of AGE85 need to prove to prospective buyers that the fuel is safe, compatible with standard engines and equipment, and economically viable. 
 	
 "You're facing unprecedented challenges," Fletcher told AGE85 proponents. "Even with (ASTM specifications), there are still no guarantees that anyone is going to rush out and use ethanol in their planes."

Researchers, pilots and private industry representatives address the pros and cons of AGE85 at Ethanol In Aviation Conference

Will 100 LL fall to AGE85?

The answers to this EPM Q&A were coordinated by Neonila "Augusta" Martyniuk in cooperation with the following Ukrainian representatives: Petro Boyko, Head of Technical Policy at the Ukraine State Concern - UKRSPIRT in Kyiv, Ukraine; Volodymyr Khorishko, co-owner, co-director of Agro Soyuz, a private
 agri-business headquartered in the village of Majskoye in Ukraine which is planning an integrated farm energy and feed systems facility for the near future; and Roman Shpek: Head of Ukraine Mission to the EU in Brussels, Belgium. 
 	

 Martyniuk is currently working with the Project Development Group at PRIME Technologies in Pierre, South Dakota. 
 
 
 EPM: Are there any fuel ethanol producers in Ukraine currently? Where? In what capacity? 
 
 Ukrainians: The following alcohol (vodka) production facilities in Ukraine have retrofitted their units to produce anhydrous ethanol referred to as 'high octane oxygenate additive to benzene." During the period of 1999 -2000, 6 mmgy were produced as a direct response to the Parliament of Ukraine passing a law providing tax incentives for the purchase of 6 percent blended fuels. In 2001-2002, as a result of the absence of a 'legislative watchdog' the taxation code for blended fuels 'inadvertently' became the same as that for all motor fuels and the tax incentive expired (see below for further discussion).
 	
 UKRSPIRT is the Ukraine State Monopoly of Alcohol Production Group. A decree issued by the Ukrainian Cabinet of Ministers two years ago authorized 46 plants within the UKRSPIRT structure to produce fuel ethanol.
 
 EPM: What is Ukraine's total fuel ethanol production capacity today? 
 

 Ukrainians: Our total production capacity (potential) is 14,165,910 gallons/year. However, with a retrofit to produce anhydrous ethanol a 94.6 mmgy capacity could be achieved.
 
 EPM: What is the primary feedstock for ethanol in Ukraine? U.S. farmers who have visited Ukraine say it looks like "sorghum country." Will grain sorghum be an important feedstock for ethanol production as the industry develops in Ukraine? Will farmers grow more sorghum if they the demand arises? 
 
 Ukrainians: 48 percent of the alcohol production facilities within the UKRSPIRT structure use molasses from sugar beets as a feedstock; 52 percent use grain as a feedstock. Grains include: wheat (43.6 percent) , corn (20.7 percent) , rye ( 16.2 percent ) barley (9 percent). 
 	
 According to Volodymyr Khorishko, co-director and co-owner of Agro Soyuz, a private agri-business headquartered in the village of Majskoye, Ukraine grain sorghum will become an important feedstock for ethanol production as the Ukrainian farmer understands the potential market for grain sorghum in the ethanol production sector. Annual precipitation patterns similar to the western areas of the Dakotas in most of the crop production areas and limited access to irrigation makes grain sorghum a potentially interesting feedstock. 
 
 EPM: How are the government of Ukraine and/or local government officials, such as the Mayor of Kyiv, encouraging ethanol production and use in Ukraine? 

 
 Ukrainians: The Parliament of Ukraine, on July 14, 1999, passed a law where it allowed 6 percent "high octane oxygenate additive to benzene" to be used in blended gasoline mixtures. The excise tax that was applicable to the 6 percent blended gasoline was designated to be 50 percent lower then that of gasoline that was not blended. 
 	
 In the new Tax Code of Ukraine in which a consensus has been reached in the second reading that the excise tax for blended gasoline will be lower than that for gasoline that is not blended, the excise tax for 6 percent blended gasoline is expected to be set at 100 hrivnya ($1.00 = 5.32 hrivnyas ), whereas the excise tax for gasoline that is not blended is expected to be set at 300 hrivnya. 
 	
 On July 4, 2000, the Ukrainian Cabinet of Ministers issued a decree "Ethanol Program". The purpose of this program was to expand the application of ethyl alcohol as a raw material for the chemical industry (production of polyethylene, resin, etc.) and in the transportation sector, as an additive to gasoline and as a component of biodiesel. Today, a significant quantity of the technical 'spirit' (as ethyl alcohol is referred to in Ukraine) is utilized in the production of ethyl acetate.
 	
 A trial of using 6 percent blended fuel for the public transport has been initiated in the capital city of Kyiv. The Ministry of Health is taking an active role in this trial. Based on the results of the trial the Kyiv City Administration is expected to make a decision to make it mandatory for public transportation in the city of Kyiv to use 6% blended fuel. In the near future, it is planned to expand this experience to all industrial sectors of Ukraine. 
 
 EPM: Is there widespread political support for ethanol in Ukraine? Is the ethanol movement farmer-driven? 
 
 Ukrainians: Political support for ethanol use in Ukraine can be developed along two avenues: (1.) Interest amongst the gasoline processors in "high octane oxygenate additive to benzene" if the Tax Code referred to above assigns a lower excise tax to gasoline blended with 6 percent fuel ethanol than to gasoline that is not blended. (2.) Establishment of a Renewable Fuel Standard.

 	
 Directly as a result of the development of biodiesel in Europe and the market demand for Ukrainian-produced rapeseed by Europe (rapeseed is the crop of choice for biodiesel production in Europe), Ukrainian farmers are becoming aware of the potential of becoming "fuel-makers." Since independence in 1991 and the allocation of land for use by private farmers, there has been a strong emphasis by Ukrainian farmers on becoming a processor of what one produces - but only recently has there been an awareness that a producer can also process a crop into fuel. 
 	
 The Ukrainian farmer, like other farmers worldwide, is struggling with low commodity prices and understands that a local market created for the crops he/she produces can serve to increase farm income. 
 
 EPM: What incentives are in place, or soon to be in place, for ethanol production in Ukraine? Are refiners still using MTBE? Aside from environmental concerns, why would a refiner choose to use ethanol instead of MTBE in Ukraine today? What makes ethanol attractive? 
 
 Ukrainians: In Ukraine there are 6 fuel processing facilities. Two of these, located in Kremenchuk and Lysychansk, obtain high octane gasoline (95 octane rating) directly from the pipeline; therefore they do not require any additives. The remaining 4 that require high octane additives utilize MTBE. Today, both Ukraine and the other European countries use MTBE by choice since the price is cheaper as compared to ethanol or ETBE. Virtually, all of the fuel processing facilities in Ukraine are owned by foreigners. These owners are only interested in the economics of operating the facilities. The remaining environmental concerns and internal political priorities, such as support of the local producer so that there would be less dependence on foreign sources, is irrelevant to them. However, the citizens of Ukraine are very concerned about their country's 85 percent heavy dependence on oil and gas imports that translates into vulnerability to energy supply disruptions. In the last 6 weeks the price of fuel has increased from 1.33 hrivnyas/ liter to 2 hrivnyas/liter and is expected to reach 3 hrivnyas/liter (5.32 hrivnyas = 1 USD ) 
 
 EPM: Would Ukraine export ethanol to EU nations? What are opportunities and challenges associated with doing this?
 
 Ukrainians: Last year, the Commission of the European Parliament reached a consensus on the utilization of biofuels amongst the countries of the European Union. Acceptance of these bio-directives is expected on June 21-22, 2002. 

 	
 
 UKRSPRIT has signed a Memorandum of Understanding as to their willingness to export the entire annual fuel ethanol production capacity of UKRSPIRT (94.6 mmgy with retrofits for anhydrous ethanol production) to the EU. However, legislation within the EU must be passed in order for Ukrainian fuel ethanol exports to be competitive and existing production facilities in Ukraine need to be retrofitted in order to make the price of fuel ethanol more competitive. 
 
 EPM: Is there an organized legislative lobby organization (equivalent to our Renewable Fuels Association or American Coalition for Ethanol) in Ukraine that is assisting the fuel ethanol movement? 
 
 Ukrainians: No. There is a great need for such an organized legislative lobby. Coalitions need to be formed between the feedstock producers, industry, local and regional government, legislators, health and environment as they have in North America.
 
 EPM: Because there is a strong demand for high-quality, affordable livestock feed (largely for swine and also dairy cattle) in Ukraine, the distillers grains produced at ethanol plants will likely be an equally important product as ethanol itself. 
 
 Ukrainians: Yes, there is a potential market for a cost competitive livestock feed with crude protein content that ranges from 24-35 percent. In comparison, the common feed sources used in the livestock industry in Ukraine today are: (1.) feed peas with an average crude protein content of 22.6 percent. (2.) sunflower seed meal with an average crude protein content of 15-20 percent.

 	
 Feed conversion rations therefore are not as good as those in Western livestock production units. With Ukrainian agriculture no longer being subsidized, the Ukrainian producer understands that production efficiencies need to improve. The livestock sector, after a decade of decline following the breakup of the Soviet Union, is now showing an upward trend. This will result in an increased demand for feed. 
 
 EPM: Ukraine currently has 87 plants licensed to produce alcohol (although production depends largely on the demand for vodka). Are these alcohol producers considering molecular sieve technology (retrofitting) to produce fuel ethanol?
 
 Ukrainians: Currently, the alcohol producers utilize solvent extraction systems as the means of dehydration and recognize that they need to retrofit to molecular sieve technology to improve their production efficiencies. One facility located in the region of Poltava has recently signed an agreement for the installation of a molecular sieve dehydration unit. Others are seeking investors so that they could retrofit likewise.
 
 EPM: Are environmental issues driving ethanol use in Ukraine, such as the air quality concerns that helped propel the movement in the U.S.? 
 
 Ukrainians: Improvement of the environment is being promoted by individual communities and not per se on a unified national basis. Kyiv, the capital of Ukraine, has approved a program that has decreased the presence of harmful particles in the air along the most heavily traveled roadways (in addition, please refer to section above on the pilot program to use 6 percent blended fuels in mass transportation). 
 

 EPM: What do ethanol proponents in Ukraine want to see happen in the next 10 years? How much ethanol production capacity will Ukraine likely support? 
 
 Ukrainians: UKRSPIRT wants to see the export of fuel ethanol produced by their units into the EU so that they can earn hard currency which can then be reinvested into retrofitting their alcohol production units. For the time being, since there is zero tariffs for exports of fuel ethanol into the EU and consideration of tax abatements - this is a realistic plan. However, it is expected that the Unified Fuel Act will be in effect within a five year period in the EU. Ukraine is not expected to be a member of the EU within that time. Therefore, it is very important that parallel to developing an export market, Ukraine works to develop a domestic market. Since large capital investments are not yet drawn to Ukraine because of a perceived high risk environment, producers will likely need to learn from American farmers and start to form cooperatives. Then the Ukrainian farmer will understand that not only will crop prizes increase, but they will also realize a return on their investment in the farmer owned cooperative. 
 
 Neonila "Augusta" Martyniuk can be reached at PRIME Technologies, 108 E. Missouri Ave., P.O. Box 879, Pierre S.D. 57501, 605-945-1311

Farmers may lead ethanol movement in Ukraine as government looks to develop both domestic markets, export markets to EU nations

Ukraine holds vast potential for ethanol production

Someone once said, "Success is a science; if you have the conditions, you get the results." 
 	
 Adkins Energy certainly has the conditions for success, and in a matter of weeks, the $68 million ethanol plant near Lena, Illinois, will "get the results" - tanker loads of it. The new 40 mmgy ethanol plant is reaching the final phases of construction, and its 34-person staff is rapidly preparing the facility to begin grinding corn in early July. The facility is buzzing with anticipation. 
 	
 "Once we grind corn, I think we'll finally feel like part of the ethanol industry," said Adkins Energy General Manager Todd Block. "It's a very exciting time for all of us."
 	
 For Block, and others involved in the Adkins Energy project since its inception seven years ago, the work has been a true test of determination, will and character. 
 	

 The concept of building an ethanol plant in Stephenson County (40 miles west of Rockford, Ill.) was first discussed at a Pearl City Elevator board of directors meeting in 1995. Under the leadership of Block, Pearl City Elevator Vice President Mert Green, and others, the local farmers began searching for a way to boost their profits in a somewhat depressed farm economy. Ethanol seemed to be the answer to their problems. 
 	
 "We were simply looking for ways to add value to our product," Block told Ethanol Producer Magazine. "Ethanol came up in the discussions and everything progressed from there. It's been a long road from where we started at that board meeting."
 	
 A long road, yes, but well worth the trip, Block added.
 	
 The project took off with a lot enthusiasm early, attracting 350 members made up of farmers and local investors from twelve counties in southern Wisconsin and northern Illinois. However, progress waned when financing stumbled in the early years, said Scott Trainum, president of the Adkins Energy Board of Directors. Trainum explained how the Adkins project "died a couple of early deaths and had to be reformed."
 
 'Strong partnerships'
 "It was not a complete success until we invited in major partners," he explained. "The strength of these lasting partnerships made everything we have here today possible. It enabled us to carry the project over the threshold and gain the confidence of the lending community.''
 	
 Along with the Adkins Energy and the Pearl City Elevator, Memphis-based design/build contractor Lurgi PSI, which is overseeing all aspects of constructing the ethanol plant, also invested equity in the project. 
 	
 "Lurgi brought a lot of horsepower and experience to what we were trying to accomplish," Trainum said. "It's really been a great project - it's the most professionally managed construction job I've been associated with."
 	
 The cooperative found two more strong partners in Nicor Gas Company and Williams Bio-Energy (Williams Ethanol Services, Inc.). 

 	
 "Williams coming aboard was pivotal to our financing of the project," Trainum said. "We finalized the partnership structure August 31, 2001 and we secured financing from U.S. Bank a few weeks later." 
 
 The financing
 "The project represents a lot of hard work by all of the Adkins sponsors and U.S. Bank's Corporate Food & Agribusiness Group," said Curtis Schrieber, division vice president of U.S. Bank in St. Louis. 
 	
 Schrieber said the financial underwriting of ethanol plants, if done properly, is very complex. A thorough understanding of the impacts of corn availability, corn price, basis volatility and the resulting financial implications of producing ethanol is key, he said.
 	
 "Fortunately, the bank understands these risks very well, and we recognized that two of the five sponsors (Pearl City Elevator, Inc and Adkins Energy Cooperative) of the Adkins project had experience in managing the various grain risks associated with an ethanol plant." 
 	
 U.S. Bank was also fortunate in the Adkins project to find Williams Bio-Energy, a company that, he said, has vast experience in ethanol marketing. 
 	
 An understanding of the utility consumption of an ethanol plant and the impact changing utility prices can have on the profitability of a plant was also a key consideration for U.S. Bank in financing the Adkins project. 
 	
 "Again," Schrieber said, "we were fortunate that one of the five sponsors (Nicor Gas) of the Adkins project has experience in managing utilities.

 	
 "And we knew that Lurgi PSI has experience in managing large construction projects," he said. 
 	
 The bank also supplemented the construction team with several professionals from the bank's own Corporate Real Estate Group." 
 	
 "Our group (Corporate Food & Agribusiness) of the bank has spent considerable amounts time and money to fully understand the ethanol industry," Schrieber said. "We have also taken the effort to meet personally with the key players in the ethanol arena. This effort (along with our contacts and activities in other segments of Food & Agribusiness) has given us the understanding and ability to finance large ethanol projects." 
 
 Ethanol marketer
 Along with investing equity in the project, Williams will market the plant's ethanol. 		According to Williams Bio-Energy President Ron Miller, the company markets ethanol for 13 U.S. producers. Williams will soon market over 450 million gallons a year. 
 	
 `"Williams is meeting America's growing demand growth through expanding relationships to purchase and re-sell ethanol produced by third parties through the company's extensive distribution system,'' Miller said. ``Our agreements with Adkins Energy LLC, and other producers, help us meet these market needs.''
 
 Gas-fired Turbine

 Nicor, which is a major utility company in the northern Illinois area, is installing a 5 megawatt natural gas-fired turbine that will provide a portion of the energy required to fuel the ethanol plant. Along with another area utility, Nicor will also supply a portion of the natural gas required to power the facility. 
 
 ICM staff training
 In July of 2001, ICM, Inc. was contracted by Lurgi PSI to provide the process design for the Adkins project - just 45 days before the cooperative closed $45 million financing with U.S. Bank (in St. Louis). Subsequently, ICM, Inc. is also training the entire Adkins Energy staff at its Russell, Kan. ethanol plant (U.S. Energy Partners). ICM (which has teamed with Fagen, Inc. on several ethanol projects in recent years) is now providing the process designs for nearly half of the ethanol plants under construction in the U.S.
 	
 "I feel as though we will have one of the best trained staffs in the country," Trainum said. 
 
 Interstates, Siemens involved
 Interstates worked with Lurgi PSI on the project, handling the electrical and instrumentation work, as well as engineering the lighting system for the plant. Interstates has enjoyed a long relationship with Lurgi PSI and is "looking forward to another mutually successful venture," a company spokesperson said. 
 	
 Siemens Energy & Automation, Inc. supplied a complete range of power distribution equipment for the Adkins project. Siemens will supply about $300,000 in electrical apparatus, consisting of low-and medium-voltage motor control centers, panelboards, switchboards, capacitors, and transformers.
 	
 For this particular project, Lurgi choose a DDGS dryer system designed by Ronning Engineering. Along with other experienced dryer manufacturers, Ronning Engineering's Three Stage Dryer Systems produce a uniform, light-gold product desired by DDGS consumers. For this project, Ronning engineers designed a dryer system for Adkins Energy that offers maximum production, while keeping emissions low and reducing energy and maintenance costs, according to Bob Kolb, president of Ronning. Kolb said Ronning has been designing dryer systems for nearly four decades and the company now focuses about 90 percent of its resources on the ethanol industry. (During the past two years, the company has doubled its engineering staff).
 	

 "Ronning was chosen for this project because our system was a good fit for Adkins Energy," Kolb said. "We're proud to be a part of the project."
 
 State Funding
 In addition to $2 million in Illinois First Funds from the state (that has or will be provided to Adkins Energy), the Department of Commerce and Community Affairs (DCCA) provided a number of programs to the ethanol project. 
 	
 Adkins Energy received a job training grant through the Industrial Training Program (ITP), grant financing through the Business Development Public Infrastructure Program, and funds from the Alternative Energy Development Program. The project is also eligible for tax credits under the governor's EDGE (Economic Development for a Growing Economy) program and Enterprise Zone benefits.
 	
 "Among others, I must thank Dave Loos and the DCCA," Block said. "Dave was there for us every step of the way and I can't say enough about his efforts."
 
 Positive market outlook
 "The industry is certainly looking bright right now," Trainum said. "It's a great time to be entering the business. The decline of MTBE favors the industry and pending national legislation looks very promising. Things really couldn't be much better."
 	
 The Adkins Energy leaders are confident in the cooperative's ability to be competitive in its market area, largely because of the plant's ideal location - Adkins is located within a few hours of both the Chicago and Madison, Wis., markets, Trainum said.
 	
 "We feel as though we are very well placed," he said. We have the market logistics on our side, freight advantages and a solid DDGS market base."

 	
 On behalf of the entire ethanol industry, Ethanol Producer Magazine congratulates Adkins Energy LLC, and its partners, on its well deserved success.

Lurgi PSI nears completion of 40 mmgy Adkins Energy LLCnear Lena, Illinois,   Experienced partners drive success of the project

Strength in Partnerships

Nearly 75 industry representatives from 45 Midwest ethanol plants, met with EPA Region 5 Administrator Tom Skinner and other EPA representatives to discuss recent concerns over ethanol plants that have recently been found to exceed emissions levels permitted by law.
 	
 The meeting was initially only to include representatives of the Renewable Fuels Association (RFA) and ethanol producers in Region 5 (Illinois, Indiana, Ohio, Michigan, Wisconsin and Minnesota), but after Region 7 (Nebraska, Kansas, Iowa and Missouri) representatives expressed interest in attending, the meeting was extended to additional producers. 
 
 New testing procedure
 According to the industry's leading environmental consultants, the recent emissions findings stem from a new testing procedure which shows emissions from ethanol dry stacks that were not detectable using older testing methods. As a result, EPA now believes that the plants were not properly permitted and controlled. 
 	
 Whatever the reason, ethanol plants that exceed permitted levels must reach compliance by "whatever methods necessary," Skinner said. While several methods of control are available, thermal oxidizers are the most likely candidate for reducing volitile organic compounds (VOCs) associated with DDGS driers.
 	
 "We discussed several technologies that will help remedy the emissions problems," Skinner told the media after meeting with producers. "It is my understanding that thermal oxidizers go a long way toward resolving the VOC problems from driers."
 
 No Politics Involved
 The EPA went public with its concerns over ethanol plant emissions as Congress began debating a proposal to sharply increase ethanol use as part of energy legislation now before House-Senate conferees. Last month the U.S. Senate passed legislation that will require 5 billion gallons of ethanol to be mixed in the nation's fuel line by 2012. 		Skinner denied any link between the timing of the EPA's efforts with events and discussions in Washington D.C.
 	

 "I want to make one thing clear," Skinner said. "This issue has nothing to do with the national debate on ethanol and renewable fuels. . . It's something that we monitor and regulate every day. This is much like what we face every day with a number of other industries." 
 	
 EPA's action "is about emissions, and is not about whether ethanol is good or bad," he said. 
 	
 The EPA's findings were, in fact, made public "unusually early," Skinner said, in an effort to get ethanol producers "into compliance quicker" and stop "rumors" from spreading. He also said EPA wanted to bring producers into its probe early on to ensure that each company uses the right tests and that plants under construction install control technologies before going online. 
 	
 The excess ethanol plant emissions were brought to the attention of the RFA and a handful of ethanol producers in an April 24 letter from EPA. The letter outlined concerns that many ethanol plants were emitting much more carbon monoxide and volatile organic compounds than companies initially projected in the permitting process. 
 
 What was discussed at the meeting?
 Among topics discussed at the Chicago meeting were emissions controls for driers, fermenters, and both gas and coal-fired boilers, as well as other sources. The group also discussed permitting for new construction and expansion.
 	
 Skinner asked the producers to evaluate the pollution controls in place at each of the following areas: driers, boilers, fermenters, cooling cyclones and loadout. 
 	
 Specifically, Skinner said, discussions centered around five ethanol plants in Region 5 that were recently identified as plants exceeding legal levels of emissions. Of primary concern, are VOCs, which include: ethanol, acetaldehyde, methanol, acrolein, formaldehyde, lactic acid, acetic acid and approximately 25 more VOCs in small amounts. The agency has found no reported adverse health effects around the five ethanol facilities identified. 
 

 How will EPA handle these concerns?
 The first step, Skinner said, is information gathering: the agency needs to identify producers that are exceeding permitted emissions levels. 
 	
 The EPA is essentially asking the nation's ethanol producers to (1.) conduct testing to find out if they are in compliance, (2.) report those findings to the EPA as soon as possible, and (3.) take whatever steps necessary to resolve the problem before the EPA gets involved. 
 	
 "We will contact producers on a case by case basis, or they can contact us," Skinner said. "The first stage of this process is being left up to them. They know what they have to do. They have to get into compliance."
 	
 Skinner described the settlement process as "not totally voluntary," but rather "cooperative" in nature. The EPA also suggested that producers work closely with local and state agencies throughout the process.
 
 No blame, no fines 
 "We don't believe that any one did this intentionally. [Producers] appear to be as surprised as we are that this stuff exists," Skinner said. "There will be no penalties at this time. . . we don't believe it is productive to assign blame right now. 
 
 RFA responds to meeting
 Following the meeting, RFA President Bob Dinneen made the following statement: "Ethanol facilities have an admirable history of working cooperatively with federal and state regulators to achieve a high level of environmental compliance. . . As was evidenced by the attendance at (the June 3) meeting, the ethanol industry is interested in learning about EPA's and the States' concerns, and exploring opportunities to resolve any concerns in a timely and environmentally sound manner. Today's preliminary meeting set the foundation for that process to continue. 

 
 "We will review the information provided by the EPA and State officials and determine how to best move forward."

Ethanol industry will explore opportunities to resolve concerns in a timely, environmentally sound manner

45 producers meet with EPA over emmissions

Biothane Corporation recently introduced its SEAD (Shear Enhanced Anaerobic Digestion) process to the ethanol industry. The SEAD process, according to the company, is a high rate, short HRT, completely mixed anaerobic digestion process that is particularly suited for the digestion of sludge and other biodegradeable solid wastes and slurries. The SEAD reactor typically operates in a once through mode when treating sludge or slurry with total solids content of 4 percent or greater. www.biothane.com

Biothane announces its shear enhanced anaerobic digestion process

Williams Bio-Energy announced last month that it has entered into an agreement to market ethanol produced by Glacial Lakes Energy LLC, a 40 mmgy plant in Watertown, S.D., that will begin production in August. The Glacial Lakes relationship marks Williams' 13th ethanol marketing agreement, and will bring the amount of ethanol Williams markets to 450 million gallons a year.  As the second-largest producer and marketer of ethanol in the United States, Williams currently supplies ethanol through the company's ethanol plant production, business relationships and marketing agreements.  Financial terms of the Glacial Lakes Energy agreement, which recently went into effect, were not disclosed. Tom Branhan, general manager of Glacial Lakes Energy, LLC, said, "We are pleased to team up with Williams by adding our production capabilities to Williams' marketing capabilities."

Williams to market ethanol for Glacial Lakes Energy

Canadian BioEnergy Incorporated,a Manitoba firm, is set to begin building a (U.S.) $17.87 million ethanol plant in Manitoba in 2003. The company has decided to construct the operation in response to a growing U.S. demand for ethanol as a component of fuel. If the plan goes ahead, a total of 22.5 million liters of ethanol would be produced at the new plant, all of which would be exported from Canada to the U.S., a company official said. The ethanol would be derived from wheat, which would significantly benefit wheat farmers in the area who have been attempting to launch an ethanol project for eight years.

BioEnergy Incorporated to build plant in Manitoba

Construction will be under way soon on a $1 million facility that will capture and reuse carbon dioxide at U.S. Energy Partners, in Russell, Kan.  EPCO Carbon Dioxide Products, a Louisiana company, will build a pre-engineering building and compressor station next to the ethanol plant in the city's Industrial Park. Kelly Branum, city inspector, said the company currently is making some design modifications, but he expects the final plans for the single-story facility to be complete this week. The carbon dioxide will be used to recharge area oil wells south of Russell, historically one of the top oil-producing communities in the state.

Carbon dioxide facility to be built in Russell

The Renewable Fuels Association (RFA) recently congratulated the 875 farmer-owners of Chippewa Valley Ethanol Company (CVEC) on the groundbreaking for an expansion which will double the production capacity of their plant.
 	
 "Farmers continue to lead the way in expanding the ethanol industry," said Bob Dinneen, president of the Renewable Fuels Association. "I congratulate the farmer-owners of CVEC on the beginning of this project. With the demand for ethanol growing around the country, we are seeing not only new ethanol plants being built, but a series of expansions to existing facilities." 			CVEC, located in Benson, Minnesota, currently produces more than 20 million gallons of ethanol per year. Production will continue as the plant expands to a total of 40 mmgy production capacity. The expansion should be complete by March of 2003. CVEC is managing the construction project and has secured the services of Delta-T Corporation for process design.
 	
 "The owners and employees of the CVEC believe the time is right to do our part to meet the nation's increasing needs for renewable transportation fuel," said Bill Lee, CVEC general manager. "With this project, CVEC will be able to expand the many benefits we have brought to our shareholders and our community over the past six years. We are confident that our expanded facility, which will incorporate the latest processing and environmental controls technologies, will help keep CVEC a cost-competitive producer in a growing industry."

Project will double size of farmer-owned Benson, Minnesota ethanol plant

CVEC breaks ground on 20 mmgy expansion

U.S. Water Services / Utility Chemical and Insta-Pro International are in the process of licensing a novel method of adding value to DDGS created during the dry-milling ethanol process. The intention of the companies is to make this process available to all ethanol plants that utilize the dry-milling process and are looking to add value to their DDGS and local farm economy. Together, the companies have filed for a patent on both the process and the finished range of products. 
 	
 The procedure capitalizes on the technology of extrusion to add value to the entire dry-milling ethanol process in terms of reducing the energy input needed to dry the DDGS. The procedure also potentially reduces the volitile organic compound (VOC) emissions and enhances the nutritional value of the DDGS through co-extruding with oil seeds including but not limited to soybeans or any other ingredient available locally that can improve the amino acids profile, the energy values and reduce the total crude fiber. 
 	

 Adding value in the above described fashion will allow for the creation of a product that can be marketed nationally and internationally as a high quality "non-commodity" feed ingredient for inclusion in the diets of monogastric animals such as swine and poultry. Use of XDS plusTM in the swine and poultry market will significantly expand the market for the finished product when compared to the size of the current DDGS market. The use of raw soybeans as one of the options to add value to the DDGS also adds significant value to the local soybeans crop. Extrusion also stabilizes and dehydrates the products and allows for the flexibility of customizing the nutritional profile of the XDS plusTM.
 	
 The extruded product was analyzed and offered to the least cost formulas for different animal specie. The parametric analysis indicates that the XDS plusTM has a value of 15 -40 dollars over production cost. Not included in the cost of processing the XDS plus is the anticipated saving in drying costs. Current projections have the cost of the project to convert 100% of the DDGS from a 40 mmgy plant being paid back in approximately 18 months.
 	
 Research on specific ratios of DDGS to soybeans has been conducted at the Insta-Pro facility in Des Moines, Iowa. Feeding XDS plusTM to growing finishing swine indicates excellent palatability and feed intake. Feeding trials to different specie will be undertaken in the future to document the nutritional and economical advantages of the product. 
 For more information please see U.S. water Services / Utility Chemicals booth or contact our corporate office at 763-689-3636 and ask for an informational packet on XDS plusTM.

Procedure capitalizes on extrusion to add value to dry-milling process, reducing energy input, reducing VOCs, enhancing nutritional valueof the DDGS through co-extruding with oil seeds

U.S. Water Services-Utility Chemical, Insta-Pro International unite with new technology

Despite gray skies and chilly temperatures outside, inside the Grouse Mountain Resort in Whitefish, Montana, it was bright and warm at the 12th annual Ethanol Producers and Consumers (EPAC) conference. The theme was "Ethanol, Helping Achieve Homeland Security."
 	
 Surrounded by the beautiful Rocky Mountains, over 100 people gathered to discuss, explore and learn. Experts addressed the growth of the ethanol industry across the country. Discussions were held to determine how to sustain that growth - politically and technically. Jon Bjornstad, Minnesota Corn Processors, said, from a marketer's perspective, it is time to step up our educational efforts again. Bob Dinneen, RFA, and Todd Sneller, Nebraska Ethanol Board addressed national issues. Topics that are similar across the country were the marketplace, technological advancements and federal government changes, but local experts addressed legislation, economic impact and permitting that were specific to Montana. Several proposed projects in the region were represented.
 	
 EPAC executive director and founder of EPAC said she was pleased to have had the opportunity to bring an outstanding group of "ethanolics" together to discuss how to adapt to the ever-changing and dynamic environment in the ethanol industry.n

Ethanol's role in homeland security discussed at 12th EPAC summit

Shell Oil Products US announced this month that it will discontinue the use of MTBE in its gasoline supplied to California consumers by the end of 2002. The company will replace MTBE with ethanol.  Shell, the state's second largest gasoline marketer, joins California's largest gasoline marketer, BP, in committing to be MTBE free by the end of this year.  Phillips Petroleum already blends more than 80 percent of its gasoline in California with ethanol. "We applaud Shell for their commitment to protecting California's drinking water by ending the use of MTBE and embracing clean, renewable ethanol as the alternative," said Bob Dinneen, president of the Renewable Fuels Association.  "I believe California consumers will reward oil companies like Shell that make an early switch away from MTBE." By switching from MTBE to ethanol by the end of 2002, Shell will beat California's official MTBE ban deadline by one year.  Although originally scheduled for December 31, 2002, Governor Gray Davis earlier this year delayed the ban deadline until the end of 2003. Shell accounts for roughly 18 percent of all gasoline in California, making them the second largest marketer

Shell decision to switch From MTBE to ethanol in California will protect air, water, and consumers

A proposal for an ethanol plant near Aurora goes before a Brookings County board next week. VeraSun Energy wants to build a plant that could produce 100 million gallons of ethanol per year. Aurora is southeast of Brookings. 
 The Brookings County Planning and Zoning Commission held a special meeting to hear the proposal and take public testimony, said David Rusten, the county zoning supervisor. Rusten said the plant would be located on about 60 acres

Ethanol plant proposed near Brookings

A Denver company has been involved in controversial discussions about exclusive rights to four ethanol plants proposed in the province of Saskatchewan, Canada. Broe Companies, a privately held firm owned by Denver businessman Pat Broe, is proposing to build four 80-million-litre ethanol plants in the four locations. Broe, which owns and operates more than $1 billion U.S. in assets in the transportation, real estate and housing and health care sectors, would put up 60 percent of the project capital costs.
 However, Saskatchewan government officials have reportedly given an "unequivocal no" to Broe getting an exclusive deal.

Denver Company involved in Saskatchewan

The U.S. Department of Energy (DOE) is supporting the development of ethanol from lignocellulosic feedstocks as a means of building upon the energy-security benefits of corn-based ethanol and displacing conventional petroleum-based transportation fuels. DOE funds both fundamental and applied research in this area and their analysis provides a method for predicting cost benefits of proposed new research. To that end, the National Renewable Energy Laboratory (NREL) has modeled many potential process designs and estimated the economics of each process during the last 20 years. During June 2002, NREL completed a report that updates NREL's ongoing process design and economic analyses and describes a potential design and necessary targets for reaching an ethanol price of $1.07 per gallon.
 
 Private industry partners
 In a report published in 1999, NREL performed a complete review and update of the process design and economic model for the biomass-to-ethanol process utilizing co-current dilute acid prehydrolysis with simultaneous saccharification (enzymatic) and co-fermentation. The process design included the core technologies being researched under DOE funding: prehydrolysis, simultaneous saccharification and co-fermentation, and cellulase enzyme production. In addition, all ancillary areas-feed handling, product recovery and purification, wastewater treatment, lignin combustion and boiler-turbogeneration, and utilities-were included. NREL engaged Delta-T Corporation (Delta-T) to assist in the process design evaluation, the process equipment costing, and overall plant integration. Reaction Engineering Inc. (REI) reviewed the process design and costing for the lignin combustor and boiler turbogenerator and Merrick & Company reviewed the wastewater treatment.
 	
 Since then, NREL has worked with Harris Group (Harris) to perform vendor testing, process design, and costing of critical equipment identified during earlier work. This included solid/liquid separation and pretreatment reactor design and costing. Corn stover handling was also investigated to support the current focus on corn stover as a feedstock for lignocellulosic ethanol. The process design and costing for these areas were improved through vendor designs, costing, and, in some cases, vendor testing. In addition to this work, enzyme costs were adjusted to reflect collaborative efforts between DOE/NREL and enzyme manufacturers (Genencor International and Novozymes Biotech) to provide a delivered enzyme for lignocellulosic feedstocks. The June 2002 report is the culmination of NREL's work and presents an updated co-current dilute acid prehydrolysis with enzymatic saccharification and co-fermentation process.
 
 69 mmgy annually 
 The conceptual design and costs presented in the report are based on a 2010 plant start-up date and show key research targets required to achieve a $1.07/gal ethanol goal with full income tax requirements and without any applicable subsidies. The conceptual design is based on 2000 dry metric tons (2200 dry short tons) of corn stover per day and yields of 69 mmgy (approximately 90 gallons ethanol/dry short ton of corn stover). 
 	

 To achieve these design and cost goals, a 90% conversion of hemicellulose to fermentable sugar is necessary in the dilute acid prehydrolysis. The enzymatic hydrolysis section is designed for a 36 hour residence time and the necessary cellulose-to-glucose yield is 90% with a purchased enzyme cost of $0.11/gal ethanol product. The hydrolysis is followed by a 36 hour continuous fermentation where 95% of the glucose is converted to ethanol as well as 85% of all the other sugars with a contamination loss of 3% or less. The lignin residue will be combusted to provide steam and electricity to operate the facility with excess electricity sold to the grid. The economic assumptions are a 10% discounted cash flow rate of return over a 20 year plant life with 100% equity funding.
 
 Capital costs high, feedstock costs low
 The calculated total project investment is $198,000,000 ($2.90/gal of annual ethanol production) with a methodological error range of -15%/+30%. It is more capital intensive than the corn starch to ethanol process but over 25% of the capital is required for the lignin boiler and turbogenerator. The capital investment can be reduced considerably if another lignin utilization option is available. The capital costs are higher than the starch based process but, at the expected corn stover cost ($30/dry short ton), the feedstock only costs about $0.33/gal ethanol and all raw materials only cost about $0.52/gal ethanol - less than the corn starch to ethanol process. 
 	
 Full process details including process flow diagrams, stream ladders, an equipment list, and parameter assumptions are listed in the report as are full economic details including equipment costing information, operating costs, project investment assumptions, and cash flow estimates. The report is available at http://www.afdc.doe.gov/pdfs/6483.pdf or through NREL's publication Web site at http://www.nrel.gov/publications/. n

Conceptual design and costs based on a 2010 plant start-up date of 69 mmgy biomass-to-ethanol plant, calculated total project investment is $198 million

NREL releases design to reach a corn stover ethanol price of $1.07 per gallon

As with any investment, we try to maximize our returns at an ag-processing faciltiy. To this end, we look for valuable by-products that may result from the production of Ethanol. 
 	
 Carbon dioxide is a natural by-product of an ethanol production plant. Is it a valuable by-product? Market conditions determine the demand and the price. Your capital equipment and operating costs will add the remaining pieces of the puzzle needed to determine whether an investment in a by-product CO2 recovery and purification plant provides an attractive return on your investment. 
 	
 In determining the size of the plant, the method of operation of the ethanol production facility needs to be considered. The CO2 evolution from a Fermenter consists of a minimum and maximum flowrate. Typically, fermentation cycles will be completed in 18 to 24 hours. Unlike many other traditional CO2 sources, the flowrate from each fermentation vessel is not constant. A CO2 evolution chart could very well be described as a bell shaped curve. When your start at the base, the CO2 flowrate is minimal and gradually builds until you reach the maximum flowrate at the peak. During descent, the CO2 evolution decreases until you again reach the base.
 	
 When operating two or three Fermenter vessels, the CO2 evolution consists of staggered peaks and valleys. The design of the system is important to enable CO2 collection at the lower flowrates and peaks; to ensure that the average CO2 Recovery rate as required for the market is obtained. Generally, this means that a 250 STPD System must be capable of efficiently collecting at a low capacity, say 180 STPD, and again at the peak flowrate, say 280 STPD, to average a collection requirement of 250 STPD. This does increase the capital cost of the system but allows for the average recovery of liquid CO2 product that would be required in your area. 
 	
 When you increase the number of Fermenters in your process, then there is more product in various stages of maturity that will minimize the peaks and valleys near 250 STPD. This means that the equipment does not have to be oversized to recover peak CO2 evolution. An added gain, the closer the compression and refrigeration equipment is operated to maximum design, the lower the kW per S-Ton of CO2 produced (i.e., lower cost of production). 
 	
 Additionally, careful consideration has to be given to the ethanol production system employed. Many times, fermentation is enhanced with aeration of the first two or three Fermenters. This process will lower the inlet purity to the by-product CO2 recovery system. The CO2 system needs to be designed for this lower inlet purity or the amount of CO2 that can be collected is substantially reduced; only collecting the higher inlet vapor from the last two or three fermenters. 

 	
 While only collecting the higher purity inlet vapor may be a good practice initially, the market potential and equipment design needs to be carefully evaluated so that, if required, collection of the lower purity CO2 vapor can be done as the market matures. Doing this initially, will allow for increased collection capacity later without additional capital expenditures or a change in the process. 
 	
 Possibly the most important consideration is to ensure that the final product is acceptable, that is, it meets or exceeds International Society of Beverage Technologists [ISBT] Standards. This is a good starting point, but also the product must ultimately meet or exceed the various standards for the industrial gas marketer. The system has to be so designed as to protect the producer against off-spec product. Off-spec product is of no value and requires significant expense to rectify. 
 	
 Safety in design as well as sufficient analytical equipment, constantly employed, to ensure that the delivered product always meets or exceeds what the market requires is the only way to ensure against an unacceptable liquid CO2 product. 
 	
 A closing note on "CO2 credits" - a burgeoning market that may produce substantial revenue in the future - this needs to be evaluated as a separate revenue stream. 
 	
 When considering whether or not to install a by-product CO2 recovery system, careful attention to the market conditions as well as the design of your equipment will ensure that when you do install a CO2 plant, that CO2 plant will maximize your investment. n

Market conditions, capital equipment, operating costs determine whether CO2 recovery and purification plant investment makes sense

Should your ethanol plant invest in carbon dioxide?

India-based Praj has reportedly commissioned India's first fuel ethanol plant based on molecular sieve dehydration technology (MSDH-vapor phase) at Datta Sahakari Sakhar Karkhana Limited, Shirol (Maharashtra). Praj has partnered with Delta-T Corp. (USA) for the MSDH technology. For Datta SSK, Praj has earlier commissioned an energy integrated turnkey distillery based on continuous fermentation and multipressure distillation system developed by Praj.
 	
 Praj is presently executing four other projects for fuel ethanol production, including two projects for international clients. 
 	
 The spurt in fuel ethanol plants in India is in response to the announcement by the Ministry of Oil and Natural Gas to introduce 5 percent ethanol to gasoline. A firm intention has been demonstrated by provision of a rebate on the surcharge on ethanol-blended gas in the recent union budget statements. Apart from India, Thailand, Australia and a few other countries have also announced plans to introduce ethanol blended gasoline in recent months. 
 	
 Praj has made rapid progress on the international front. Recently, Praj was awarded an order for a 200,000 liters per day alcohol distillery in Thailand by Thai Alcohol, a renowned exporter of alcohol to Japan and Korea. This plant is based on multipressure distillation.
 	
 In Latin America too, Praj commissioned a continuous fermentation plant for Distelleria Unidas, Peru, which makes some of the finest rum brands in the region. 
 	
 Praj received an order in Central America from M/s. Brugal for fermentation plant modernization in order to enhance production capacity and operation of the distillery. 

 	
 Apart from these developments, Praj has achieved success in its efforts to expand raw material processing technology for ethanol production. An order for secondary juice to ethanol plant and another for beet to ethanol plant were recently awarded to Praj. In a company statement, Praj officials said the company has been "in the service of ethanol industry for the past 15 years and is committed to furthering the interest of the industry, be it potable, industrial or fuel grade alcohol." 
 	
 Balrampur, a 40,000 liters per day fuel ethanol plant will be the first plant in north India to go on stream in the month of July.

Praj commissions India's first MSDH fuel ethanol plant in Maharashtra

Australia shot down a proposal to tax all fuels based on their relative energy content because such a scheme would impose taxes on liquefied petroleum gas and ethanol, which are currently not taxed, 	treasurer Peter Costello announced last week. 
 	
 The government rejected a range of proposals put forth last year by the Fuel Taxation Inquiry, including a plan to regulate the price of fuels to avoid price fluctuation.

Australia rejects proposal to tax all fuels, including ethanol

New Zealand rolled out a new set of fuel specifications aimed at aligning its regulations with international standards, Associate Minister of Energy Paul Swain announced last week. Swain announced MTBE will be banned in the country, beginning March 2003. Coincidentally, the 
 government will now allow refiners to blend ethanol in gasoline up to 10 percent.

New Zealand rolls out new set of fuel specs, bans MTBE in 2003

With the Union Petroleum Ministry advocating the addition of 5 percent ethanol to petrol, equipment manufacturers have signed on technology partnerships with U.S. companies for the supply of molecular sieve technology since it offers savings in terms of steam and power consumption over the azotropic distillation. The fourth, and latest, to join the fray is Mojj Engineering Systems, a Pune-based supplier of turnkey drying and evaporation plants. 		Mojj has partnered with ICM, a U.S.-based fuel ethanol technology company, making it the third Pune-based company to do so, after Praj Industries (PIL) and Alfa Laval India (ALIL). 
 	
 DW Oke, director, Mojj, said it would take another couple of years before conflicting and competing interests in the area of fuel ethanol settle down and then the business should take off. 
 	
 Among those interested in setting up plants for the manufacture of fuel ethanol are some sugar factories as well as others who want to diversify into this business, Indian officials said. Mojj also signed a Letter of Intent with ICM under which the former will supply spray dryer technology for all Mojj applications.

ICM partners with Mojj

As part of a "larger import effort," Taiwan is set to buy nearly $39 million in Illinois corn and soybeans next year. In an agreement with the Illinois Department of Agriculture, a nine-member Taiwanese delegation pledged to purchase the corn along with $2 million of Illinois soybeans. Most of the corn Taiwan imports each year is used to feed livestock, while a smaller amount is used to produce ethanol. The two-year contract, signed this month, is part of a total Taiwanese commitment to buy 378 million bushels of U.S. corn by the end of 2003, said Paul Sun, chairman of Taiwan Grains & Feeds Development Foundation.

Taiwan set to buy $39 million in Illinois corn, soybeans

Dominican Republic president Hipolito Mejia has signed an agreement to allow an undisclosed Swiss firm to build a U.S. $ 80 million ethanol plant on the island, newspaper Hoy reported. The ethanol will be produced from local sugar cane, and will be mixed with gasoline for sale to the public. The announcement comes at the end of Mejia's three-day trip to Europe, where he signed agreements for over U.S. $500 million in investment in the island for projects ranging from tourism to industry.

Dominican leader signs ethanol deal with Swiss firm

The Brazilian government may ask its sugar and ethanol industry to accept a tax on sugar exports as a condition to reactivating the ethanol-powered car program, a minister said last month. 		
 
 Trade and Industry Minister Sergio Amaral said the Brazilian government is disposed to reactivate the ethanol-powered car program, known as Proalcool, but added he first needed guarantees there would be no cane ethanol shortages before it takes the plunge. The government is worried millers will divert cane from ethanol-to-sugar production when international sugar prices rise. Amaral said the easiest way to prevent this was a tax on sugar exports, imposed when ethanol stocks are seen as precarious. Other officials said the government worries that eventual shortages of ethanol were unfounded and the tax is unnecessary, although the sector would consider the proposal.

Brazil proposes sugar export tax to regulate ethanol production

Chennai-based KCP Sugar and Industries Corporation hope to soon
 start supplying anhydrous ethanol to oil companies. The government recently allowed blending of gasoline with ethanol at 5 percent. The companies have made significant investments in the Vuyyuru distillery in Andhra Pradesh.

KCP Sugar prepares to sell ethanol in India

China led a recovery in world oil demand in the second quarter but oil prices ebbed because inventory cover remained comfortable and speculators less concerned about tensions in the Middle East, the International Energy Agency said this month. Growing leakage over official output limits by OPEC, record exports from Russia, and worries about the slow pace of global economic recovery also have dulled the impact of rising oil demand, the IEA said in its monthly Oil Market Report.

Oil demand recovering

President George Bush traveled to Iowa on June 7th to speak to farmers attending the World Pork Expo. While the focus of the speech was to encourage the U.S. Senate to follow the House in making elimination of the death tax permanent, the President received his longest and loudest applause after highlighting his support for ethanol.
 	
 President Bush stated, "For the good of the economy, and for economic security, they [Congress] need to get me an energy bill -- an energy bill that encourages conservation, an energy bill that encourages reasonable, environmentally sound exploration, and an energy bill that promotes renewable sources of energy such as ethanol and biodiesel.

 	
 "When I first came to Iowa, to ask for the support of the people here, and I talked about ethanol, people's eyes tended to glaze over at times, because they said, well, this guy's from Texas. He can't possibly mean what he says about ethanol. First, I hope I proved them wrong. And secondly, you've got to understand, it's in our national interest to have more forms of energy produced at home, so we're less reliant upon foreign sources of energy."
 	
 From Washington, DC, RFA president Bob Dinneen thanked the President for his continued support. "Time and again President Bush has been a leader on the ethanol issue," stated Dinneen. "The fuels agreement including the renewable fuels standard would not have been possible without his leadership in bringing a diverse set of people to the table. It passed the Senate and with the President's support we are confident it will be a part of the final House-Senate legislation."

June 2002

Columns

The Way I See IT

Featured

Miller enjoys leading Williams Bio-Energy, sees continued growth for ethanol

Will 100 LL fall to AGE85?

Ukraine holds vast potential for ethanol production

Strength in Partnerships

U.S. Water Services-Utility Chemical, Insta-Pro International unite with new technology

NREL releases design to reach a corn stover ethanol price of $1.07 per gallon

Should your ethanol plant invest in carbon dioxide?

June 2002.css-7jxktu{position:absolute;bottom:0px;left:0px;right:0px;height:3px;border-radius:3px;background-color:var(--chakra-colors-brandBlack);}

Columns

The Way I See IT

Featured

Miller enjoys leading Williams Bio-Energy, sees continued growth for ethanol

Will 100 LL fall to AGE85?

Ukraine holds vast potential for ethanol production

Strength in Partnerships

U.S. Water Services-Utility Chemical, Insta-Pro International unite with new technology

NREL releases design to reach a corn stover ethanol price of $1.07 per gallon

Should your ethanol plant invest in carbon dioxide?

June 2002